Sitting of 25 November 1997

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS
  The Secretary of State was asked—
  FOREIGN AND COMMONWEALTH AFFAIRS

    Amsterdam Treaty
    Mr. Hammond: If he will make a statement on those provisions of the Amsterdam treaty title on immigration, asylum and visas that allow the United Kingdom to opt in subject to national veto. [15988]
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): The United Kingdom will have the right, under the Amsterdam treaty, to take part in the adoption and application of measures proposed under new title IIIa to be inserted into the European Community treaty. UK participation in measures on immigration, asylum and visas which form part of the existing third pillar acquis is an absolute right and not subject to challenge. In the case of the present Schengen acquis, to none of which the UK is a party, the unanimous agreement of the other states is required, but that is qualified by the Council declaration that the decision shall be taken on the basis of an opinion by the European Commission, and that every country shall use its "best efforts" to enable the UK to participate.
    Mr. Hammond: Does the Foreign Secretary accept responsibility for the late-night blunder during the negotiation of this title of the treaty, which led the Prime Minister inadvertently to mislead the House on 18 June this year, when he said that, if Britain decided to enter into those parts of the treaty, no other country could block us?
    Mr. Cook: My right hon. Friend the Prime Minister was absolutely correct in what he said to the House. Article 3 of the UK-Irish protocol says:
    "The United Kingdom or Ireland may notify the President of the Council in writing… that it wishes to take part in the adoption and application of any such proposed measure, whereupon that State shall be entitled to do so."
    What the Prime Minister said to the House is accurately reflected in that protocol.
    Dr. Marek: Why did Her Majesty's Government allow this part of the Amsterdam treaty to be framed in such a way that Gibraltar will never be allowed to opt in, because, as the Foreign Secretary must know, Spain will
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    use and insist on its veto should Gibraltar ever want to join and opt into the arrangements? Is it simply that Her Majesty's Government do not care about Gibraltar and give it a low priority, or was it just a Government cock-up?
    Mr. Cook: I am grateful to my hon. Friend for his friendly intervention!
    First, I strongly resent the suggestion that Her Majesty's Government are not committed to the sovereignty or protection of Gibraltar. No part of Europe has more occupied my thoughts in the past two months than Gibraltar. Secondly, there was no cock-up during the Amsterdam treaty negotiations. Spain did propose an amendment to have the effect of bringing in unanimity for UK participation in the Schengen acquis. I did challenge it and Spain withdrew that amendment. There was an agreement that there should be an amendment only if it was submitted in writing by Spain. No such amendment was submitted during the hearings of the Amsterdam negotiations.
    The subsequent change to the treaty was a bilateral agreement between Spain and the Dutch presidency. When, a week later, we received the text that contained that change, we obtained the declaration to which I have referred, but I repeat: there is no intention on the part of Her Majesty's Government to enter the Schengen acquis. On the contrary, the main gain from the Amsterdam treaty for Britain is that it has achieved a clear legal foundation for our border controls, which was never obtained by the Conservative party in 18 years.
    Mr. Faber: The right hon. Gentleman's first and second replies clearly contradicted each other. Did not the Prime Minister boast to the House on 18 June that no other country could block our opt-in? The Foreign Secretary has now admitted that Spain can block that opt-in and he has claimed that Spain and Holland undertook some form of bilateral agreement after the summit. Was not the Prime Minister inaccurate in what he told the House on 18 June?
    Mr. Cook: The Prime Minister was entirely accurate in what he told the House and I have quoted from the UK-Irish protocol. I advise the hon. Gentleman to consult the original text, where he will find that there is a clear distinction between immigration, visa and asylum provisions under pillar 3, which are clearly provided for in the way in which the Prime Minister told the House, and the Schengen acquis, to which we are not and have no intention of being a party.

    Kyoto Conference
    Mr. Bayley: What communications he has had with the United States Secretary of State about the forthcoming Kyoto conference. [15989]
    Mr. Robin Cook: I spoke to Mrs. Albright at the end of last week about climate change and the Kyoto negotiations. I also had an extensive bilateral on those topics with Mrs. Albright in the margins of the United Nations General Assembly. My right hon. Friend the Deputy Prime Minister recently visited Washington to

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    discuss the Kyoto conference. We shall continue to be in close contact with the United States Government in the run-up to Kyoto to help ensure a successful outcome.
    Mr. Bayley: I am glad that the Government are in close touch with the United States Secretary of State. Does my right hon. Friend agree that there is compelling scientific evidence of the dangers of global warming and that quality of life—and, for some people in future generations, life itself—will be threatened if we do not take action? Does he further agree that there is a special obligation on industrialised countries such as the United Kingdom—and especially the United States, as the world's biggest producer of greenhouse gases—to enter into a binding agreement to reduce the quantity of greenhouse gases emitted into the atmosphere?
    Mr. Cook: I entirely agree with my hon. Friend on the severity and gravity of the problem. If the present trend of global warming continues, the world will face extremely unpredictable weather changes and a reduction in food-producing areas. For those reasons, it is vital for everyone that, at Kyoto, we achieve legally binding targets for reductions in CO2 emissions. I am proud to say that the British Government are playing an important part in working for a successful outcome at Kyoto. My right hon. Friend the Deputy Prime Minister has completed a visit to India. He spent the weekend in New Zealand and is currently in Australia working with those countries and taking the lead to achieve the environmental agreement that we need.
    Mr. Swayne: Will the Secretary of State acknowledge that the United Kingdom's exemplary record has afforded him a platform from which he can encourage other countries to meet their targets and that that record is largely a result of Conservative policy?
    Mr. Cook: I am proud to say that one of the Government's first actions was to ditch the Conservative target of a 10 per cent. reduction and replace it with a target of a 20 per cent. reduction. That shows that our policies are twice as good as theirs.
    Mr. McAllion: Does my right hon. Friend accept that decisions about whether to invest in energy systems that burn fossil fuels and pump CO2 into the atmosphere or systems that promote energy efficiency and reliance on renewable sources of energy are essentially matters for elected Governments? When he meets Mrs. Albright, will he stress the point that next April the Government will not sign up to any multilateral agreements on investment that would take decisions away from elected Governments and hand them to transnational corporations?
    Mr. Cook: I am happy to assure my hon. Friend that subsidiarity will certainly apply to those matters. However, Kyoto will be different from Rio in that we will be agreeing to a mandatory target that will then be obligatory on all parties that sign up to it. Although there are different ways in which that can be realised, it is important that Britain and other industrialised countries match their commitment to achieve that mandatory target if we are to have any hope of persuading developing countries to do likewise.

    Export Forum
    Ms Drown: If he will make a statement on the impact on his Department of the recommendations of the export forum. [15991]
    The Minister of State, Foreign and Commonwealth Office (Mr. Derek Fatchett): The FCO and the DTI launched the export forum in June to examine the effectiveness of Government support for UK exporters. Their recommendations were published in October. The Government accept their broad thrust. They give a positive and challenging basis for making the Foreign Office's efforts more focused on the needs of our customers—adding maximum value to their efforts and so leading to more jobs and prosperity for Britain.
    Ms Drown: I welcome my hon. Friend's reply and the initiative taken by the Government in asking the private sector what was needed to increase exports. Will the implementation of the recommendations of the export forum help small and medium businesses in Swindon and elsewhere in the country to reach out to the markets on which they are missing out?
    Mr. Fatchett: I recently had the opportunity of visiting my hon. Friend's constituency in Swindon and seeing the work of the local business link and the support that it was offering to small and medium businesses. We very much welcome that support. One of the export forum's key recommendations is to ensure that greater emphasis and focus are placed on the work of small and medium enterprises, particularly in assisting them to open up new export markets and activities.

    Information Campaigns
    Mr. Gibb: What European Commission finance is presently available in the United Kingdom to fund information campaigns. [15993]
    The Minister of State, Foreign and Commonwealth Office (Mr. Doug Henderson): General information and communication work concerning the European Union, including the Commission's information activities in the United Kingdom, is funded under chapter B3–30 of the European Community budget. For 1997, 107 million ecu—which is about £72 million at current exchange rates—has been allocated.
    Mr. Gibb: On 28 October 1997, the Foreign Secretary made it clear to the House that the Government would not apply for European Union funding to pay for a pro-single currency campaign. How is that statement consistent with the answer that the Minister has just given or with the views of the Chancellor of the Exchequer, who has made it clear elsewhere that the Government will be applying for European Union funds to pay for a euro campaign?
    Mr. Henderson: The Chancellor of the Exchequer has approached the European Commission on whether it would provide some funding for a general information campaign, so that British business and British citizens have access to information on very important matters which will be considered in the coming months and years. The difference between the previous Government and

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    this Government is that they thought that everything should be kept secret, whereas we think that information should be provided to inform people.
    Mr. Cunliffe: Does the Minister agree that, for informed debate on Europe, it is imperative that essential information is provided? Is it not clear that the Tories want a debate informed by their own prejudice, and that they are not interested in the facts?
    Mr. Henderson: My hon. Friend is absolutely right. The Commission now knows where the Government stand on the issues. Before the general election, the Commission did not know whether it should speak to one end of the Government or the other, because each gave a different answer—making it impossible to provide information.
    Mr. Streeter: Is not the point that, on 28 October, the Foreign Secretary told the House that there would be no EU funding to promote the euro? The Minister has now had to concede that there will be a general information campaign, funded by the EU, to inform people about the euro. What is the difference? Is it not merely a disingenuous play on words? Does it not come from the same stable as the Prime Minister's assurance last week that he had paid back the £1 million, only to concede five minutes later that it had not been paid back? Would it not be better if Labour Ministers adopted a new policy of telling Parliament the truth in the first place?
    Mr. Henderson: I am surprised at the hon. Gentleman. I should have thought that he would realise that there is a huge difference between the propaganda against Europe that the previous Government frequently tried to perpetrate and giving information to people, so that they can make their own assessment of the issues involved and make their own preparations—so that, when and if a referendum is held on the matter, they can make a decision based on knowledge, not prejudice.

    Japan
    Mr. Charles Clarke: If he will make a statement on the United Kingdom's relations with Japan. [15994]
    Mr. Fatchett: The United Kingdom enjoys excellent relations with Japan, which we regard as a special partner. Japan is our largest export market in Asia and a major inward investor in the United Kingdom. We work closely with Japan on a wide range of subjects, including joint science and technology projects, international peacekeeping, commercial collaboration in third markets and joint aid projects. There are also growing ties between the British and the Japanese people. We want to build closer relations in the future. The visit of my right hon. Friend the Prime Minister to Japan, in January, will be an important step towards that objective.
    Mr. Clarke: I thank my hon. Friend for his response. Will he confirm that future relations between the United Kingdom and Japan will be strengthened by an open acknowledgement by the Japanese Government of the crimes of the past? Will the Government and the Prime Minister, on his visit next year, continue to press for full appropriate compensation for Japanese labour camp
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    victims and civilian internees? Does he acknowledge that full compensation is the basis for a stronger, better and more fruitful relationship in the future?
    Mr. Fatchett: Since the Labour party was elected in May, I have had several meetings with representatives of the former prisoners of war. My right hon. Friend the Foreign Secretary and I have also had a series of meetings with Japanese Ministers and officials and we have suggested possible ways in which the wartime sufferings of the former prisoners of war could be recognised and acted on. I am sure that all right hon. and hon. Members welcomed the gesture by the Japanese ambassador in attending the Remembrance day service at Coventry cathedral the other week. That was a warming gesture of reconciliation and I hope that we can build on it in the next few months.
    Mr. Menzies Campbell: Do not events earlier today in Japan raise some profound questions about the issue of security? Is it not the case that, for a country such as the United Kingdom, economic turbulence—of the kind seen in Japan—is likely to be as disadvantageous as military threats? In the light of those circumstances, what measures have the Government urged on the Japanese Government, as a fellow member of the Group of Eight, as a means of restoring economic confidence in the domestic Japanese economy?
    Mr. Fatchett: We all recognise the global significance of the events in south-east Asia, and Japan and Korea. We know that the Governments in the region are working closely with the International Monetary Fund and others, which is the right approach to open up their trade, to liberalise their markets and to take some of the measures that are crucial for their long-term financial and economic security.
    One lesson that we must learn from the Japanese experience—much reinforced to me last week when I spoke to inward investors from Japan—is that, if we follow the Conservative party's European policies, Japanese inward investors will cut their investment in the United Kingdom. Every Japanese company that I visited told me that Conservative policies would put tens of thousands of jobs at risk.
    Ms Squire: I very much welcome what my hon. Friend has just told the House. Does he share the concern of my constituents in Dunfermline, and people elsewhere in the United Kingdom, who have benefited from inward investment from south-east Asia? What measures will the Foreign Office take to ensure that we remain an attractive destination for investment by Japan, South Korea and other south-east Asian countries?
    Mr. Fatchett: There was no doubt, during my discussions with Japanese and Korean inward investors last week, that the United Kingdom remained an attractive location. We have become even more attractive since 1 May, because inward investors know that we have political stability, and that we are committed to Europe and intend to be a central part of it. The messages from the previous Government were a strong disincentive to inward investment.
    Mrs. Virginia Bottomley: I am sure that the Minister is right that one of the reasons why Japanese companies

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    invest in Britain is our membership of the European Union. What steps will the Minister take to reassure inward investors that the very advantages that they see in investing in Britain—more flexible labour markets—will not be eroded by following the European social model?
    Mr. Fatchett: Not one Japanese company mentioned that to me last week. They saw attractive propositions in the United Kingdom and they will continue to look to this country as a suitable location for inward investment. If the right hon. Lady had a strong message on Europe, it would be attractive to Japanese companies. My wish for her is that she could win more support in her party, but she is sadly isolated in her beliefs.

    Israeli Prime Minister
    Mr. Dismore: If he will make a statement about his recent meeting with the Prime Minister of Israel. [15995]
    Mr. Robin Cook: Prime Minister Netanyahu and I had a two-hour meeting, covering the middle east peace process and other regional issues and bilateral relations. I made clear our support for Israel's security, but also set out our concerns about the current state of the peace process and the urgent need to move forward on issues such as the airport and sea port in Gaza, free passage between Gaza and the west bank, an end to the expansion of settlements and further redeployments of Israeli troops from the Palestinian entity. Britain is committed to a successful outcome of the middle east peace process on the basis of peace with security for Israelis and peace with justice for Palestinians.
    Mr. Dismore: Will my right hon. Friend assure the House that he will continue to encourage progress towards accelerated final status talks between Israel and the Palestinians? Does he agree that we can make a major contribution to the peace process by promoting the economic development necessary to underpin it?
    Mr. Cook: I entirely agree that progress towards final status talks would be desirable, but there is a lack of confidence on both sides that an offer of accelerated final status talks would be genuine. There must be some interim agreements as a gesture of good will and good faith to make it possible to proceed.
    It is vital that economic progress underpins the peace process. One of the problems in the middle east is that the income and standard of living of most Palestinians have declined during the period of peace. That must be reversed. We must show the people on the back streets of Gaza that the peace process will deliver real improvements in their standard of living.
    Mr. Fabricant: Does the Foreign Secretary agree that pressure should be brought to bear on Chairman Arafat, who made certain agreements in Oslo that have not been kept? It is unfair to expect Israel to go beyond the Oslo agreement when that agreement has not been fulfilled.
    Mr. Cook: Nobody is asking the Israeli Government to go beyond the Oslo accord. They are being asked to adhere to an agreement that, although it was entered into by a previous Government, is binding on the successor Government, as any international agreement is.
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    We repeatedly urge on the Palestinian National Authority the need to deliver greater security. To be fair, most international observers agree that there has been an improvement in the authority's efforts on that. However, the authority is not helped in its attempts to improve security if it is denied the money with which to pay its policemen for two months.
    Mr. Ernie Ross: As my right hon. Friend knows, 29 November is the 50th anniversary of United Nations Security Council resolution 181, which partitioned Palestine. As we approach that anniversary, has my right hon. Friend been able to impress on the Prime Minister of Israel the need to move towards final status negotiations, to resolve the problems with the Palestinians and to include in those negotiations the right of the Palestinians to a state?
    Mr. Cook: It has long been the position of the British Government that the possibility of statehood for the Palestinian entity should not be excluded from the final status talks. The sooner we make progress on interim agreements, such as opening the Gaza sea port and airport, which would be an immense boost to the local economy, the sooner we can reach the final status talks to consider the larger issues.

    Environmental Objectives
    Mr. Yeo: What recent representations he has received about the environmental objectives of foreign policy. [15996]
    Mr. Fatchett: I have had extensive contacts with overseas Governments and with non-governmental organisations, covering a wide range of environmental issues, including in particular the forthcoming Kyoto negotiations on climate change and the UK presidency of the European Union.
    Mr. Yeo: A few minutes ago, the Foreign Secretary accepted the urgency of the problem of climate change. As the Prime Minister is always keen to claim a close and friendly working relationship with President Clinton, why have the Government failed even to attempt to persuade the United States of the importance of at least achieving the modest carbon dioxide reduction targets set down at Rio five years ago, let alone the far more challenging targets referred to by the Foreign Secretary earlier?
    Mr. Fatchett: The hon. Gentleman failed to hear my right hon. Friend's earlier response. My right hon. Friend has already told the House of his contacts with the American Secretary of State, Madeleine Albright. I am sure that the hon. Gentleman knows that the Deputy Prime Minister was in Washington recently and has been talking to many Governments. Unlike the previous Government, we are working for success. We are committed on the environment and we shall make Kyoto a success.
    Mr. Llew Smith: Will the Minister explain how nuclear weapons, which would spread radioactive fallout throughout the world, fit in with the Government's environmental objective?
    Mr. Fatchett: Nuclear weapons will not be under discussion at Kyoto, but of course there is a process of disarmament talks, and I am sure that my hon. Friend wishes those well.
    Mr. David Heath: Has the Minister had an opportunity to read early-day motion 461, in the name of the

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    hon. Member for Putney (Mr. Colman), which deals with the activities of P and O in an ecologically sensitive area of India? In the light of the Government's environmental and ethical policy, does the Minister propose to take any action?
    Mr. Fatchett: I must confess that I have not seen the early-day motion; it is night-time reading that I look forward to this evening, and I am sure that it will be impressive. None the less, I can tell the hon. Gentleman that we would always expect large organisations to operate in an environmentally sensitive way.

    Republic of Ireland
    Mr. Barnes: If he will make a statement on relations between the United Kingdom and the Republic of Ireland. [15997]
    Mr. Doug Henderson: Relations between the United Kingdom and the Republic of Ireland are excellent. The two Governments are working closely in the Northern Ireland talks and in the European Union. Practical co-operation between Government Departments throughout the United Kingdom and their Irish counterparts has been intensified and I, like many of my ministerial colleagues, including my right hon. Friend the Foreign Secretary, have already had substantive meetings with our Irish opposite numbers.
    Mr. Barnes: Is the idea of Ireland's rejoining the Commonwealth ever discussed? Mary Robinson suggested that towards the end of her presidency. Is not the Commonwealth today very different from that which Ireland left in 1948? It no longer has imperial pretensions and is an area for tolerance, trade and democracy. Would it not also be attractive to Unionists, in terms of the peace process, to have their British identity recognised?
    Mr. Henderson: That is not a matter that I have discussed at my meetings with counterparts in Ireland; it would be a matter for the Irish Government.
    Mr. John D. Taylor: In view of the likelihood of devolved government throughout the United Kingdom, would the Minister support unilateral action by Scotland or Wales to create a council for co-operation with the Republic of Ireland?
    Mr. Henderson: That is something that I would not support.

    Visa Applications (Punjab)
    Mr. Peter Bradley: What assessment he has made of the difficulties of Punjabi people travelling to New Delhi to pursue applications for entry clearance to the United Kingdom; and if he will establish a consular service in Chandigarh. [15998]
    Mr. Fatchett: The size and location of diplomatic posts around the world are under constant review. The difficulties of travelling to New Delhi are well understood, but for logistical and resource reasons there are no plans to open a visa office in Punjab.
    Mr. Bradley: Does my hon. Friend appreciate the disappointment with which that statement will be greeted
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    by many people in the Punjab and by their relatives in this country? Does he realise what long distances people on extremely low incomes must travel to New Delhi on missions to obtain visas, which are often fruitless because of the bureaucracy and inefficiency of the service there? Will he give at least some hope to the people in the Punjab that the matter will be kept constantly under review, and that an innovative solution will be found, such as opening a consular service in Chandigarh for one day a week?
    Mr. Fatchett: We always review the possibilities and we are keen to provide the best possible service, but I meant to convey to my hon. Friend the fact that, although the process is under constant review, I cannot give any immediate hope that we will be able to open such a facility.

    Export Promotion
    Ms Shipley: If he will set out the initiatives taken by his Department to improve its role in export promotion. [15999]
    Mr. Robin Cook: Together with my right hon. Friend the President of the Board of Trade, I launched the export forum to examine the effectiveness of Government support for UK exporters. The forum reported in October, and my right hon. Friend and I have accepted the broad thrust of its recommendations.
    This morning, I hosted a working breakfast with chief executives and chairmen of some of our top companies whom I have invited to act as ambassadors for British business. Whenever on visits abroad for their companies, they have undertaken to liaise with FCO posts to carry out promotional work for wider business interests. The invitation has been well received by business leaders and should enable the Foreign Office to use their prestige and their expertise to promote British exports and British jobs.
    Ms Shipley: I thank my right hon. Friend for his full answer. Does he agree that we need speedy processing of export licences? A medium-sized company, Indentec, in my constituency of Stourbridge needs its licence application resolved, and this has particular relevance in relation to the knock-on effect on small feeder businesses.
    Mr. Cook: I can assure my hon. Friend that as soon as I return to the Foreign Office, I will inquire into what has happened to the application. She was good enough to mention before Question Time that this was a licence application for Iran. The House will understand that we need to pay particular attention to the possibility of dual-use equipment going to Iran.
    Mr. Alasdair Morgan: In relation to the promotion of Scotch whisky experts—[Laughter]—Scotch whisky exports; the Foreign Secretary will realise that that is one of the benefits of drinking Scotch whisky. What progress does he foresee towards the harmonisation of duty within the EU in the near future?
    Mr. Cook: I am happy to say that I think I can speak as a whisky expert, and I can assure the hon. Gentleman that it is one of our high priorities to continue to press to make sure that there is fair duty on all alcohol so that our

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    whisky has a fair opportunity in other markets. That will continue to be one of the major objectives of our European policy.
    Mr. Howard: Further to the question from the hon. Member for Stourbridge (Ms Shipley), is not the only practical consequence of the Foreign Secretary's posturings on these matters that the delays in clearing applications for licences for the export of defence equipment have got so bad that orders have gone elsewhere before approval has been granted?
    Mr. Cook: I am not aware of any such case.
    Mr. Mackinlay: During his visit to Warsaw and elsewhere in central Europe this week, will the Foreign Secretary take time to compare the offensive marketing and promotion of commercial enterprise by the Germans with that of British business, which is generally tardy, despite one or two flagship companies like British Aerospace and Marks and Spencer which are getting stuck in? Private enterprise in this country does not recognise the vast market potential of central Europe, which is being exploited by others but which we are being slow to pick up on. Will my right hon. Friend take some action?
    Mr. Cook: My hon. Friend tempts me to go slightly further than the brief of the Foreign Office. As regards our contribution to export promotion, since we have been in power we have carried out a major review of our export services; we have attracted 12 new short-term secondments from British business, who are now in key embassies in key markets abroad; and we are looking for more. We have today reached agreement with 37 top business people to promote British business while they are abroad.
    I will be spending three days in central Europe this week. I shall be looking for opportunities for British business, and I shall be carrying the clear message that Britain strongly supports central European countries' membership of the EU—a message which I hope will not be entirely lost on Conservative Members. The rest of Europe is queuing up to join a union from which many of them appear to wish to detach themselves.

    Gibraltar
    Mr. Tyrie: If he will make a statement on the status of Gibraltar. [16001]
    Mr. Hoyle: When he next plans to visit Gibraltar. [16007]
    Mr. Robin Cook: We stand firmly by the commitment enshrined in the preamble to the 1969 constitution. As I explained to the Spanish Foreign Minister last Friday, there can be no change in sovereignty over Gibraltar against the freely and democratically expressed wishes of the people of Gibraltar.
    Mr. Tyrie: Does the Foreign Secretary agree that it is unacceptable that the citizens of Gibraltar are disfranchised, and have no vote in European elections? Now that the Government seem hell-bent on changing the electoral law for the Strasbourg Parliament, will the
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    Foreign Secretary commit the Government to ensuring that, by one means or another, the citizens of Gibraltar get a vote in the forthcoming European elections?
    Mr. Cook: This is not a matter that can be resolved by domestic United Kingdom legislation; it would require a change in the legislation that set up the European Parliament, from which Gibraltar is expressly excluded. Had this been a matter that could have been resolved in that way, the opportunity to resolve it was in 1984, when the Conservative Government allowed the accession of Spain to the EU.
    Mr. Hoyle: Will the Foreign Secretary confirm his support for the 1969 constitution of Gibraltar? Is he as worried as I am by the hypocrisy of Spain, which has two enclaves in Morocco as well as the Canary Islands, which are further away from Madrid than Gibraltar is from London?
    Mr. Cook: I can certainly please my hon. Friend by confirming our support for the 1969 constitution, and by reasserting that there will be no change without the agreement of the people of Gibraltar.
    I am not entirely sure that it would necessarily help to bring about a resolution of outstanding matters to accuse Spain of hypocrisy, but we have been robust in defending Gibraltar's interests, and will continue to be so.
    Mr. Townend: Does the right hon. Gentleman agree that it is unacceptable that, on a number of occasions, the Spanish authorities have not recognised British passports issued by the Governor in Gibraltar—and, moreover, do not seem to be recognising the identity cards that are produced in accordance with European regulations, and are recognised by the European Union?
    Mr. Cook: The hon. Gentleman will be aware that the issue has been raised with the Spanish authorities by both the present and the last Government. Gibraltar is part of the European Union; as a consequence, its residents have the right to free movement throughout the European Union, which includes Spain.

    Employment Summit
    Mr. Pickthall: If he will make a statement about the outcome of the Luxembourg special summit on employment. [16002]
    Kali Mountford: If he will make a statement about the outcome of the Luxembourg special summit on employment. [16010]
    Mr. Robin Cook: I refer my hon. Friends to the statement made yesterday to the House by my right hon. Friend the Prime Minister.
    Mr. Pickthall: I congratulate my right hon. Friend on the positive outcome of last week's summit. Will he confirm that, while it reflects our "welfare to work" emphasis on employability and flexibility, the discussions made it clear that flexibility would not involve the worsening of conditions in the workplace or more insecurity in employment?
    Mr. Cook: I am happy to assure my hon. Friend that the text of the presidency conclusions, which were agreed

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    unanimously by those present, stresses employability and adaptability. The guidelines are entirely consistent with Her Majesty's Government's policy of providing a fresh start for young people who have been unemployed for more than six months, and a fresh start for all adults who have been unemployed for more than a year.
    The British Government's success in achieving an outcome that is entirely consistent with our policy objectives reflects the fact that the summit only happened at all because we supported the employment chapter in Amsterdam, and because we demanded a special summit through the ECOFIN meeting. The outcome of the meeting is a success for Britain, and it took place only because Britain made tackling the jobs crisis such a high priority.
    Kali Mountford: I thank my right hon. Friend for his reply. Will he tell us whether our European partners agree with the Government that the economic growth required to create jobs should be based on a highly skilled rather than an exploited work force?
    Mr. Cook: It was a frequent refrain at the summit that we must ensure that more is invested in training. For that reason, the countries involved committed themselves to making training available to 20 per cent. of the unemployed.
    My hon. Friend is right. If we are to protect jobs in Europe, we will not do it on the back of low pay and poor working conditions; we will do it only on the back of high investment, high skills and high technology.
    Mr. Letwin: Can the Foreign Secretary tell the House why the Prime Minister said in his statement that he wished to avoid old-style state intervention, and then went on to announce 1.5 billion ecu of old-style state subsidies for industry across Europe?
    Mr. Cook: First, to be precise, the sum is 1 billion ecu, not 1.5 billion ecu. The hon. Gentleman is 50 per cent. out. Secondly, it was agreed by all members of the European Union that the money would be provided by the European investment bank for investment in high technology and in small and medium-sized enterprises. We are all agreed that the future of Europe and of our economies lies in high technology, and that the future for jobs lies in the small and medium-sized sector. That is precisely why it was right to encourage investment in that sector.
    Mr. Brady: Why has youth unemployment been falling rapidly in this country for the past four years, whereas it has been rising rapidly in all the other major European countries?
    Mr. Cook: Primarily because the number of young people in Britain has been declining.
    Mr. Derek Foster: I congratulate the Government on forcing jobs to the top of the European agenda, but does my right hon. Friend agree that flexible labour markets have very little to do with macho management, hire and fire, and forcing down wages and conditions of service
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    for staff, and everything to do with high levels of education and training and with releasing the skills and creativity of staff to improve productivity and quality?
    Mr. Cook: My right hon. Friend makes a profound point. If we are to achieve the long-term aim of good training and high technology, a commitment is required from both management and work force. That is precisely what the social chapter is devised to achieve. That is why we believe that it is so important that the staff of a large enterprise should have ownership of the strategy of the company, through the right to information and consultation under the social chapter.

    Social Chapter
    Mrs. Browning: If he will make a statement on those provisions for bringing forward legislation in the social chapter which operate under qualified majority voting. [16004]
    Mr. Doug Henderson: Under the agreement on social policy, legislation can be adopted by qualified majority in five areas: health and safety; working conditions; information and consultation of workers; equal treatment of men and women at work; and integration of those excluded from the labour market.
    Mrs. Browning: If in those five areas a matter should come up that is not in the British interest, how does the Minister propose to protect our interest, now that the Government have given away our veto; or does he anticipate that the Government will automatically agree with every measure in those five areas?
    Mr. Henderson: Conservative Members are getting repetitive. Before 1 May, the hon. Lady was a member of a Government who had such bad relationships with Europe that they could make no progress on any front, and particularly on the important front of the employment agenda to which my right hon. Friend the Foreign Secretary referred. Now British people have the opportunity to influence what is happening with the social chapter. That is a big advance, and everyone knows it.

    Lockerbie
    Mr. Dalyell: What response he has received from the organisation of African states and the Arab League about his invitation to them to inspect the Scottish justice system in relation to Lockerbie. [16005]
    Mr. Robin Cook: The initial response of the Arab League and the Organisation of African Unity has been disappointing. The United Nations Secretary-General has accepted our invitation. We continue to press the Arab League and the OAU to send observers to join the visit of UN officials that we hope will take place before the end of the year.
    Mr. Dalyell: After nine long years of non-communication, is it unreasonable to ask that an incoming Labour Government should at least talk to the Libyans and hear what they have to say, not least in the light of a written answer from the Home Secretary yesterday following my interview in July with Commander

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    David Veness of Scotland Yard concerning the circumstances of the murder of Woman Police Constable Yvonne Fletcher, casting doubts—we shall put it no higher—on whether the Libyans were responsible? Before making a final decision not to talk to the Libyans, will my right hon. Friend at least have the Foreign Office lawyers consult Scotland Yard?
    Mr. Cook: I have just completed an exchange of correspondence with the Foreign Minister of Libya, in which I made it robustly clear that Britain expects Libya to adhere to the United Nations Security Council resolutions that require it to provide for trial the two men who have been indicted for the mass murder of those travelling on the Pan Am jet and those who were in the village of Lockerbie where it crashed. That remains the Government's position. I am more than happy to have dialogue with all those other countries in the Arab League and the Organisation of African Unity, to remove their doubts, and I am absolutely confident that we can convince them that Scottish justice is fair.
    The other matter that my hon. Friend raised is not currently a matter for dispute over the sanctions in relation to Lockerbie. It would help the dialogue between our countries immensely if Libya were to recognise that it has an obligation to provide the two men for trial in order that justice can be done.
    Miss McIntosh: Does the Foreign Secretary accept that it would set a dangerous precedent in international law if the trial were to take place in a jurisdiction other than Scotland?
    Mr. Cook: There are several problems with having a trial in another country. The most immediate is that there is no legal basis for a Scottish court to sit outside the Scottish jurisdiction. The hon. Lady is right that if I were to ask the House for such legal provision, there is a danger that it would create a precedent whereby terrorists could object to trial in our jurisdiction. That is a heavy consideration which we shall weigh carefully.
    Several hon. Members rose—
    Mr. Dalyell: On a point of order, Madam Speaker. Given the nature of my right hon. Friend's answer, I will attempt to get a 14th Adjournment debate on this matter.
    Madam Speaker: That cuts out further questions on this issue.
    Mr. Dalyell: I did not see my hon. Friend rise.
    Madam Speaker: Order. It is the rule.

    Ministerial Visits
    Mr. Fabricant: When he next plans to visit India and Canada. [16006]
    Mr. Fatchett: My right hon. Friend the Foreign Secretary has no plans to visit India again in the near future. He hopes to be able to visit Canada on European Union business in mid-January next year.
    Mr. Fabricant: When the Foreign Secretary visits Canada, will he acquaint himself with the events of
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    24 July 1967, when President de Gaulle visited Quebec and gave his now infamous Quebec libre speech? That might give him some useful hints about what not to say when he next visits Kashmir.
    Mr. Fatchett: The hon. Gentleman has reached new depths with that question. Perhaps we should congratulate him on his creativity in that respect. My right hon. Friend is looking forward to and will enjoy his visit to Canada, where he will strengthen our bilateral relations with Canada, as he has with every other country that he has so far visited.
    Mr. Corbett: Will the Minister assure the House that Her Majesty's Government will continue to make it clear to the Governments of Pakistan and India that we stand ready, as we are all members of the Commonwealth, to make available our good offices to enable those two great countries to try to resolve the problems surrounding Kashmir to bring peace and stability to that region and so improve the lives of people in those countries and in Kashmir?
    Mr. Fatchett: We have said throughout that we intend to make our good offices available to both parties if that is the wish of both parties, and we stand by that statement.

    Sri Lanka
    Dr. Stoate: What meetings he has had with representatives of the Government of Sri Lanka since 1 May. [16008]
    Mr. Fatchett: My right hon. Friend the Foreign Secretary met the Sri Lankan Foreign Minister, Mr. Kadiragamar, on 11 September. I also saw Mr. Kadiragamar on 5 June, and the Minister of Justice and Constitutional Affairs, Professor Peiris, on 19 June.
    Dr. Stoate: I thank the Minister for that reply. Did he discuss the situation in northern Sri Lanka, which is of great concern to my Tamil constituents?
    Mr. Fatchett: I am pleased to confirm that we discussed the situation on each and every occasion. It is important that there is a lasting and just peace for the internal problems of Sri Lanka. We always encourage political dialogue, which we regard as the best way to make progress and deal with the human rights issues that are so important to all communities in Sri Lanka.

    Iraq
    Dr. Gibson: If he will make a statement on Britain's relations with Iraq. [16011]
    Mr. Robin Cook: The UK has had no diplomatic relations with Iraq since 6 February 1991. Last week, I chaired a meeting of the five permanent members of the Security Council, which demanded that Iraq accept the unconditional return of UN inspectors. I am pleased that Iraq has now accepted the return of those inspectors, including US inspectors, but we continue to be vigilant to

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    ensure that the inspectors can carry out in full their mandate to prevent Iraq acquiring nuclear, chemical or biological weapons.
    Dr. Gibson: Can the Minister inform the House what we are doing to investigate the biological warfare programme of the Iraqi Government?
    Mr. Cook: The report that has been heard in the past week by the United Nations monitoring organisation makes very sober reading, in relation to both the biological and chemical capacities of Iraq. It was reported that Iraqi stocks of VX nerve gas keep increasing and that Saddam Hussein can currently produce sufficient anthrax for two missiles a week. Those are serious and sobering figures that stress the importance of the United Nations being able to carry out in full its mandate to inspect the suspect facilities and to ensure that the world does not allow Saddam Hussein to develop weapons of mass destruction.
    Mr. Howard: As the Foreign Secretary knows, the Government have the full support of Her Majesty's Opposition in their stance on Iraq. Is he confident that the inspectors will be able to make up the ground that they lost during the period when they were denied access to facilities in Iraq?
    Mr. Cook: We have full confidence in the inspectors: it should be remembered that they have managed to destroy more weapons in Iraq during the period of inspection than were destroyed during the Gulf war. Their continuing to achieve that will depend entirely on whether or not the inspectors get full compliance from the Iraqi authorities and we are carefully monitoring that. The right hon. and learned Gentleman is right to draw attention to the damage done by the interruption to the inspection regime. We believe that Saddam Hussein has used that period to shift material to secret sites; it might take some time to uncover those, but we are determined that it should be done.
    Ann Clwyd: Will my right hon. Friend continue to press the UN Security Council to set up a permanent war crimes tribunal, so that Saddam Hussein and his closest associates can be tried for war crimes, crimes against humanity and genocide?
    Mr. Cook: My hon. Friend will know that the Government fully support the two existing war crimes tribunals—one on the former Yugoslavia and one on Rwanda. It is also our position that a prosecution for a war crime or genocide should not depend on an ad hoc resolution of the Security Council. It is for that reason that the Government firmly support the case for an international criminal court where such crimes could be tried and where we could make sure that international law was firmly applied and that nobody could commit war crimes and genocide with impunity.

    Strategic Defence Review
    Mr. Gray: When he plans next to meet the Secretary of State for Defence to discuss the foreign policy basis for the strategic defence review. [16012]
    Mr. Doug Henderson: My right hon. Friend the Foreign Secretary will remain in close touch with his right hon. Friend the Secretary of State for Defence on the strategic defence review as on the many other matters on which we work together.
    Mr. Gray: Is the Minister not concerned that his right hon. Friend the Chief Secretary to the Treasury might well be even more diligent in meetings with the Secretary of State for Defence? Will he not accept that the strategic defence review is entirely Treasury driven? If his answer to that question is no, will he stake his reputation on that?
    Mr. Henderson: I stake my reputation on every answer to every question, but I can assure the hon. Gentleman that the defence review is Foreign Office led. When determining how to meet Britain's needs, foreign affairs dictate it and defence ensures that it happens.

    European Union
    Mr. Alan W. Williams: If he will make a statement on the responsibilities of his Department in promoting enlargement of the European Union and in drawing up Agenda 2000. [16013]
    Mr. Robin Cook: We have lead responsibility within the Government for policy towards the European Union, including enlargement. The Department also co-ordinates the Government's overall position on Agenda 2000. Tonight, I depart on a tour of Hungary, the Czech Republic and Poland to prepare for the launch under the British presidency of negotiations on enlargement and to assure those countries of Britain's firm commitment to opening the doors of the European Union to the new democracies of central Europe.
    Mr. Williams: Does my right hon. Friend agree that enlargement must involve substantial reform of the common agricultural policy? In the past, there has been a tendency to allow the CAP to be discussed only by farm Ministers, or the Council of Agriculture Ministers. Will he ensure that his Department and others are intimately involved in reform of the CAP? Sixty per cent. of the EU budget is spent on a system that is in need of dramatic reform and that money should be redirected toward other more productive uses.
    Mr. Cook: I am happy to tell my hon. Friend that the matter was discussed by the Foreign Ministers of Europe only yesterday and that it is a priority of my right hon. Friend the Chancellor of the Exchequer. It is plainly not satisfactory that we should go into the next century with 50 per cent. of Europe's budget being spent on an industry in which less than 5 per cent. of the work force are engaged. We shall continue to press for realistic reforms.

    European Co-operation
    Mr. Skinner: How many times he has met EU Foreign Ministers since 1 May to discuss European co-operation. [16015]
    Mr. Doug Henderson: I have met European Foreign Ministers on many occasions since 1 May.
    Mr. Skinner: Does the Minister agree that we—and he and the Foreign Office team in particular—should not get too starry-eyed about European co-operation? We have already heard at today's Question Time that the Common Market is in dispute over the Arab-Israeli argument and there is not agreement about Iraq or about Gibraltar. The reason why there are hundreds of people lobbying for mining jobs today is that when those in the Common Market who took the decisions had the chance to do so,
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    they never bought the cheapest deep-mined coal in Europe. Those are the facts and I think that we ought to bear them in mind.
    Mr. Henderson: I assure my hon. Friend that I am never starry-eyed about any negotiation. I also assure him that since 1 May, the Labour Government have worked diligently and hard to get a better deal for Britain on a wide range of issues, including the Amsterdam treaty. We have been able to succeed because we have been in the dialogue, making our view count. That is what has made the difference in comparison with the performance of the last Government.

Pre-Budget Statement
3.30 pm
The Chancellor of the Exchequer (Mr. Gordon Brown): The purpose of this, the first annual pre-Budget statement, is to report the Government's assessment of the economy, to outline our Budget aims and to encourage an informed debate of the detailed choices before us. To achieve our national economic objectives, high growth and high levels of employment, the next Budget must address three challenges.
The first challenge is to increase our productivity. Britain today is some 20 per cent. less productive than our main competitors and has been for years. The second challenge is that of employment. Some 3.5 million working-age households—almost 20 per cent.—include no one earning a wage. The third is the challenge of stability. For 40 years, our economy has had an unenviable history under Governments of both parties of boom and bust. Stop-go has meant higher interest rates, less investment, fewer successful companies, and lost jobs. It has been the inevitable result of a failure to take a long-term view.
So the real choice facing Britain in the coming Budget and beyond is between muddling through as we have done for decades from one stop-go cycle to another, or breaking with our past, burying short-termism and securing long-term strength through stability, sustained increases in productivity and employment opportunity for all. This is not a challenge for Government alone. It is a challenge that must also engage both the understanding and the commitment, indeed the energies, of all of us— Government, investors, managers, work forces—together.
So at the heart of this pre-Budget report is the recognition that only by greater openness and informed debate can Britain achieve that shared understanding of the tasks ahead and that shared sense of national economic purpose that has eluded us for too long.
First is stability. The major industrialised countries are expected to grow by 2¾ per cent. this year and 2½ per cent. next year, despite the recent turbulence that we have seen in Asian economies and financial markets. It is imperative that Governments and central banks around the world remain vigilant, but at all times it is the task of Government to ensure a long-term stable framework— exactly the approach that the Government are pursuing.
When we came to power, the economy was already facing yet again the very pressures that have produced the boom-bust instability of the past. Consumer demand was accelerating. It was growing three times as fast as industrial production, as more than £30 billion was released in building society windfall payments. Inflation was predicted to go far beyond its 2½ per cent. target, and was expected to rise towards 4 per cent. next year.
All that was happening because the necessary decisions on monetary and fiscal policy had not been taken. It is because the Labour Government have learnt the lessons from past instability, when interest rates rose into double figures to 15 per cent. in the last economic cycle that, starting in May, we put in place a new monetary and fiscal framework.
Following our reforms at the Bank of England, long-term interest rates have come down, and no one doubts the Bank of England's determination to achieve
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the Government's inflation target. With our five-year deficit reduction plan, public borrowing, which was £23 billion last year, is now forecast—excluding the windfall tax revenue—to be £12 billion this year and £6 billion next year.
We said in our manifesto that we would work within existing spending limits, and this we are also achieving as we promised. The deficit has fallen from 4½ per cent. of national income just two years ago to just 1½ per cent. this year, and it will be ¾ per cent. next year, well within the Maastricht criteria.
There is a risk that the structural deficit, which takes account of the economic cycle, may turn out to be larger, so we shall be both cautious and prudent. I can tell the House that we will not make the mistakes of 1988, when it was wrongly assumed that the structural deficit had disappeared, and the penalty was the return to boom and bust.
Although I recognise the concern of exporters about the exchange rate, I understand that what companies fear most of all is a return to that boom-bust instability of the past. So this summer and autumn, hard decisions have had to be taken on both interest rates and deficit reduction, and I am now more optimistic that we are on course to put the economy on track for stable and sustainable growth.
It is to reinforce our commitment to the long term that we shall publish proposals for a code of fiscal stability. We shall legislate so that there is a duty on Government to report to Parliament on how they are meeting their fiscal rules; in that way, everyone can plan for the future on a much clearer and better informed basis.
Let me explain why meeting our fiscal rules matters so much—why they are essential preconditions for long-term social and economic progress. It is because the borrowing levels that we inherited are costing the country £25 billion a year in interest payments alone, which is more than our country's total budget for schools, that we had to act. Our aim is to reduce the huge sums spent simply servicing debts, so that more of our money can be spent on meeting the people's priorities.
The prize for this country, valued especially by a Government who are committed to good public services, is sustainable public finances that allow consistent and long-term investment in our priorities.
By reallocating resources, we shall be investing an additional £2.3 billion in education over and above that planned by the previous Government; and this year we shall be investing an extra £300 million in patient care in the national health service and next year an extra £1.2 billion over and above what the previous Government planned. I can tell the House that, as our comprehensive spending review reallocates resources towards higher-priority areas, there will be real year-on-year increases in spending on front-line patient care.
The key to strong public services is long-term prosperity through higher productivity. Government, industry and people must work together to systematically remove all barriers to high productivity—in product markets by encouraging competition and innovation, in capital markets by measures to enhance investment and growth, not least for innovative small businesses, and in the workplace by encouraging the creativity and flexibility of inventors, of managers and of the work force.

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After our successful Budget initiative in July to encourage one of the most neglected of our creative industries—film—it is time to do more to encourage other creative industries where, from science, computer software and communications to design, fashion and music, our British genius for creativity has made Britain a world leader. This year, entrepreneurs in small and medium-sized companies can draw on £200 million, as we have doubled capital allowances to invest in new technology. From next year, the National Endowment for Science, Technology and the Arts will make grants available to encourage creative talents and industries.
I can also say today that, in advance of the Budget, the President of the Board of Trade and I are examining how to improve productivity, how we can help leading-edge businesses to gain funds to develop new technologies, how we can improve Britain's poor historical record of investment in research and development, and how we can make it easier for small businesses to draw on venture capital to create jobs in a more entrepreneurial culture. It is to encourage and reward long-term investment that we are completing a review of capital gains tax, the conclusions of which will be announced in the Budget.
Our poor record of investment in Britain also reflects a low level of national savings. Half the national population have hardly any savings. To encourage more people to save, we will be introducing from April 1999 new, individual savings accounts, the details of which will be put out to consultation next Tuesday in advance of the Budget.
However, there is one decision on investment that should not be delayed. In July we implemented the first stage of corporate tax reform. We cut the main rate of corporation tax by 2 per cent. to 31 per cent.—its lowest level ever. Following the abolition of payable tax credits we began to consult, as promised, on the second stage. Advance corporation tax, it has become abundantly clear, is now a hindrance to sensible business planning and investment decisions. Britain needs a reformed system that matches the needs of modern companies and favours the long term.
To allow companies to plan ahead I can confirm today that, in April 1999, advance corporation tax will be abolished. At that point we shall begin the move to paying corporation tax by quarterly instalments. Small companies will be exempt from this change; special arrangements will be made for medium-sized companies; we shall phase in the change over four years; and we shall substantially preserve companies' expectations for using their existing surplus ACT.
This afternoon the Inland Revenue is publishing full details of the proposed changes and we shall now start consultation on their implementation. In order to help ease the transitional costs and to take one stage further our pro-business and pro-investment agenda, in the Budget the main rate of corporation tax will be cut again by 1 per cent. to 30 per cent. from April 1999—that will be the lowest tax rate of any major industrialised country.
The July Budget started from the understanding that the greatest waste of our economic potential and the most serious cause of poverty is unemployment. It denies opportunity to 3.5 million working-age households where
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nobody works. In July, we said that, instead of simply compensating people for unemployment, our priority is to tackle the root causes of unemployment and poverty by providing new opportunities for work.
In the past few months, with the help of Martin Taylor, the Government have been systematically addressing all the obstacles that prevent people taking up and benefiting from work: the absence of workplace skills, the failure of the tax and benefit system to make work worth while, the poverty and unemployment traps that for too many people mean that work does not pay, the lack of employment opportunities and the scarcity of affordable child care.
We have concluded that, to help people move from benefits to wages, nothing less than a comprehensive tax and benefit reform and the modernisation of the welfare state are now required. This strategy involves three basic elements: providing skills for work, making work pay and creating new job opportunities.
First, in order to offer skill for work, my right hon. Friend the Secretary of State for Education and Employment will shortly publish his proposals for individual learning accounts and for the university for industry.
Secondly, I want everyone who can work to be better off in work than on benefit, so the Government now propose an integrated tax and benefits plan involving action at every level. In order to maximise the rewards from work, a 10p starting rate of tax and a reform of benefit tapers will be introduced when it is prudent to do so. To ensure that work pays for families with children, we propose a working families tax credit, backed up by affordable child care. To ensure that the rewards of these reforms flow directly to the employee, we are committed to a statutory national minimum wage.
We shall now consider in detail the working families tax credit—cash paid through the wage packet directly to families on low incomes, side by side with the national minimum wage. The proposal would build on the successful elements of family credit, and would involve better help through the tax system for child care costs.
We will now also consider the future structure of national insurance for the low-paid. Under the current system, some low-paid employees face marginal tax rates of more than 100 per cent. To improve the rewards from work, to simplify administrative burdens on employers, as we want to do, and to encourage them to take on more people, it is now right to consider the scope for bringing the national insurance structure for the low-paid more closely into line with income tax.
Finally, there are men and women who have been excluded for too long, and who need extra help to get back into work. In the Budget, we made our start by announcing a new deal worth £4 billion that provides jobs for young unemployed, the long-term unemployed, lone parents and the disabled. The new deal for the young unemployed will start in January in pilot, and extend nationwide in April, with the support of some of our best known companies.
I can announce today that some of Britain's leading rail and bus companies have agreed to play their part, by introducing a new travel pass for young people on our new deal, cutting by at least 50 per cent. their travel fares to work.

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Disabled men and women who want to work should also have the right to work. As the first step in implementing the £195 million programme for people with disabilities, my right hon. Friends the Secretaries of State for Education and Employment and for Social Security will now be inviting bids for the first wave of new projects to start in spring 1998.
Helping lone parents into work is the most effective long-term way to tackle their family poverty. The new deal for lone parents began in eight areas in July. Already it is yielding results where it counts—in higher living standards for lone-parent families. From next year, our welfare-to-work programme will be extended to help every lone parent who wants advice and help, and from April every lone parent coming on to benefit will be offered help to find work, if that is what he or she wants.
Lone parents need, and have a right to expect, affordable child care. Since May, my right hon. Friends the Secretaries of State for Education and Employment and for Social Security have been working with the Treasury on plans to make a reality of a national child care strategy. Paramount in this family policy are the interests of the child. Tomorrow, my right hon. Friends will announce a five-year plan to extend out-of-school child care clubs to every community in Britain.
Funds will be available to set up as many as 30,000 new out-of-school clubs, which will provide places for almost 1 million children. The total cost over five years is £300 million, which is now budgeted for in our plans and represents the biggest ever investment in child care. The cost will be shared between the Exchequer and the new opportunities fund.
To staff these new clubs, 50,000 young people across Britain will be offered training as child carers through our welfare-to-work programme. Under our plan, every lone parent who needs it will be able to find an out-of-school club in his or her community. A national child care strategy is no longer the ambition of workless parents; it is now the policy of this country's Government.
While one in five working-age households have no one working, we also, unfortunately, have extensive skill shortages throughout our economy. The proportion of manufacturing firms reporting skill shortages is up 70 per cent. on a year ago.
We will now introduce pilot projects nationwide, under which any employer who takes on and trains a young or long-term unemployed person and keeps that person on can receive up to three quarters of the new deal allocation up front, thus giving immediate help with training costs. In the case of young people, that will be about £1,700, and for the long-term unemployed, £1,500 for their training.
Those skill shortages are a clear sign of the short-term pressures in the economy that must be tackled. At around this point in every recent recovery, when inflation and interest rates have started to rise, a second wave of wage inflation has brought a recurrence of stop-go instability. Past Governments have allowed themselves to be diverted from their long-term aims because of their inability to deal with these short-term pressures.
This time, we must do everything we can to make sure that the long term takes priority. It is because the previous Government held a simplistic and over-rigid view of the relationship between levels of inflation and levels of unemployment that they told us that high unemployment was a price worth paying.
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However, there are three reasons to believe that, provided reform and responsibility go hand in hand, it is possible to lay the foundations to deliver both low inflation and high employment in the long term. First, the more our welfare-to-work reforms allow the long-term unemployed to re-enter the active labour market, the more it will be possible to reduce unemployment without increasing inflationary pressures.
Secondly, tax and benefit reforms that remove the barriers to work and structural reforms that promote the skills for work—in other words, Government intervention to create a more responsive labour market— can make possible long-term increases in employment without fuelling inflationary pressures. The more people return to the world of work and the more we tackle skills shortages, the less pressure there is on employers to bid up wages in the short term.
Thirdly, the reality of the more complex and flexible labour markets of Britain today is that pay decisions are made not by the few in smoke-filled rooms, but by millions of employers and employees across the country. The more we all take a long-term view of what the economy can afford, the more we will be able to have job creation and keep inflation and interest rates as low as possible. So we must all be long-termists now.
The reforms that we are introducing will, of course, take time, but it is in no one's interests if today's pay rise threatens to become tomorrow's mortgage rise. The worst form of short-termism would be to pay ourselves more today at the cost of fewer jobs tomorrow and lower living standards in the very near future. So wage responsibility is a price worth paying to achieve jobs now and prosperity in the long term: it is moderation for a purpose.
The choice is between responsibility and reform that would give us higher growth and more jobs, and short-sighted short-termism that will inevitably mean less growth and fewer jobs. In our forecasts for the coming two years, we demonstrate clearly the choices that we all face. If the economy works in the same way as in the past, growth might be 2¼ per cent. next year. If we can combine our reforms with responsibility across the economy, it is possible to achieve growth of 2¾ per cent. next year. Similarly, growth can be 1½ per cent. or 2 per cent. in 1999–2000. In either case, the Bank of England will ensure that the Government's inflation target is met.
So the more successful we are in tackling skills shortages and ensuring the success of the new deal for the unemployed and the more effective the exercise of responsibility in pay determination, the more we can achieve our goals of sustained growth and employment.
I have today submitted this new evidence to the public sector pay review bodies and met the chairmen to explain the choices before us. Just as the Government are offering leadership with responsibility in monetary policy and the management of public finances so that we can achieve those higher levels of growth and employment, so must business leaders and work forces match that with responsibility throughout the whole economy. That means responsibility not just on the shop floor, but from Britain's boardrooms outwards, where, in the interests of all, there must be moderation, not excess, and where an example should be set.
We recognise that, if we are to achieve our long-term goals and secure that new sense of economic purpose, fairness and openness must be at the heart of the approach

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to every Budget. Tax avoidance harms those who pay their fair share of taxes. 1 give notice today that the Budget will introduce those measures that are needed to root out tax avoidance. A fair and open approach to taxation will also be central to our Budget consultations now under way on North sea oil; on alcohol, where the review will conclude early next year; and on charities, where we are working towards a consultation document next spring.
In securing the long term, nothing is more important than our approach to the environment. On Thursday, the Deputy Prime Minister will publish a consultation paper on ways to help with water pollution, with a view to making proposals in the coming Budget. Together we are also looking at how the tax system can reflect our environmental objectives, and we shall do so in light of decisions taken at Kyoto.
In this pre-Budget statement, we are consulting in all areas where it is right and appropriate to consult, we are taking action in all those areas where action is needed immediately, and we are putting to the country the choices for debate—choices that can be made only by us all.
I promised to make one other announcement today. Following a review by Customs and Excise, which will be published tomorrow, I have decided that VAT on the installation of energy-saving materials under existing grant schemes, such as the home energy efficiency scheme, will be cut from 17½ per cent. to 5 per cent. in the spring Budget of 1998. That means that the funds under the schemes will go further and will help to insulate 40,000 more homes per year. The Government will now explore with our European partners the possibility of a reduced VAT rate for a wider range of energy-saving materials.
Our spending review, like our tax policy, is based on allocating resources according to priorities of investment, employment and fairness, so already, within the Government's tough spending limits, we have redistributed resources to priority sectors: from assisted places to cutting class sizes; £4 billion from the windfall tax paid by the utilities to creating jobs; another £1 billion to repairing our schools; from the defence and nuclear programme to the national health service. After the publication of the national asset register yesterday, there will be new scope to reallocate resources to high-priority capital investment.
I can announce one further reallocation today. I now expect our net payments to the European Union to be some £400 million lower than budgeted. Our pensions review is examining the long-term future of pension provision in Britain, including how we can do more to support Britain's poorest pensioners. We must help the thousands who do not claim benefits, but who need them most.
My right hon. Friend the Secretary of State for Social Security and Minister for Women is announcing today that she will finance several projects to find the best way in which to encourage improved benefits take-up by the poorest pensioners, so that they receive what they need.
We have already cut VAT on fuel and power to 5 per cent., as we promised, but it would be wrong to wait until we have the results of our pensions review to take action to help elderly people with winter fuel bills. Although the poorest do receive some help through cold weather
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payments, they go only to those on income support, who generally have to wait until after the cold weather for help to be available. The payments are no help at all to most pensioners, including the 1 million not receiving income support entitlements and those on the margins of poverty, and they are of doubtful help even to those who do qualify, who often do not know whether they can afford to spend extra money on fuel when it is cold.
My right hon. Friend the Secretary of State for Social Security and I are simply not prepared to allow another winter to go by when pensioners are fearful of turning up their heating, even on the coldest winter days, because they do not know whether they will have the help they need for their fuel bills. The pensions review will report next year, but we must act in the meantime to help pensioner households.
For this winter and next, every pensioner household will receive £20 extra to help with their bills and every pensioner household on income support—nearly 2 million households—will receive £50 extra. The cost will be met from reallocating the savings on our contribution to the European budget.
The money will be paid in time to meet winter fuel bills, so every pensioner household in Britain will have the benefit of the Government's cut in VAT on fuel, our abolition of the gas levy, new and tougher regulation and competition in the utilities, and the Government's new fuel payment to pensioners. As a result of those changes, the average pensioner household will be helped by up to £100 a year, and poorer pensioner households on income support will be helped by up to £130 a year.
In contrast with the previous Government, who put VAT on fuel, this Government keep their promises and are prepared to take action where it needs to be taken. It is a Government who are meeting the people's priorities, even as we confront the difficult choices that our country must make to build for the long term. In 1997, we have made a start and we will do more year on year. Our approach to the coming Budget shows that we are already setting a new course for Britain, and building a united country where everyone has opportunity and a contribution to make. I commend the statement to the House.
Mr. Peter Lilley: I begin by welcoming some aspects of the Chancellor's statement. In particular, I welcome the good economic news that underlies the Chancellor's forecasts that were published today—stronger economic growth bringing higher tax revenues, lower spending as unemployment falls and the consequent reduction in borrowing. Are they not the result of the golden economic legacy that we bequeathed the Government—the fruit of 18 years of Conservative reforms, every one of which the Chancellor opposed?
Does the Chancellor agree with the last Labour Chancellor, the noble Lord Healey, who said:
"We must remember that rarely, if ever, have a Government had such cause to be grateful to their predecessor when it comes to the economy"?
Will not the figures that the Chancellor has published today prove that his July tax-raising Budget was unnecessary? He did not need to break the Prime Minister's solemn election pledge:>
"We have no need to raise taxes at all".

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He did not need to raise 17 taxes or impose a £5 billion-a-year pensions tax on people's savings. The simple truth is that he was determined to increase taxes in July, so that he could increase spending later.
In his statement and in the document he has published today, the Chancellor has promised us a fiscal stability code. We are happy to welcome that, but can he confirm what his officials are reported as telling the Financial Times: that it will not involve him publishing any information that the Government do not publish anyway? Does not his real motive have nothing to do with what happened under a previous Conservative Chancellor but all to do with what has happened under previous Labour Chancellors, all of whom have been engulfed by the spending demands from their Back Benchers? Previous Labour Chancellors have also tried similar devices to strap themselves to the mast of fiscal rectitude. The code seems to be an even flimsier cord, which will break under the strain of the demand from the Government Back Benches.
The Chancellor hints that he will reduce taxes soon. Is not the truth that none of his proposals will do much to help the typical home-owning family facing £650 a year in higher costs as a result of his mortgage increases, the cut in mortgage tax relief that he introduced and the tax on pension funds that he announced earlier this year, to say nothing of the £1,000 in tuition fees that every family with a student at university will have to pay?
In his document, the Chancellor proposes introducing a 10p basic rate of tax. The Opposition welcome any reduction in tax from a Chancellor who, so far, has broken his clear promise not to raise taxes, and has increased 17 taxes. We shall want to see that any new tax band results in a real tax cut, and is not paid for by messing around with personal allowances.
We shall not allow the Chancellor to get away with a pretence that the reduction is focused on the poor and those on benefits. Will he confirm the figures from the Institute of Fiscal Studies which show that a 10p lower-rate band that was worth £6 a week to a wealthy couple such as the Prime Minister and his wife would be worth only 9p a week to a family on in-work benefits? What other measures does he plan to introduce to benefit those on low pay?
Why is there not more detail in the Chancellor's proposal about the earned income tax credit? Has he cleared his proposal with the Minister for Welfare Reform, who is on record as opposing the payment of family credit as an earned income tax credit because
"more money will get to children … if we pay the money to mothers rather than to fathers".?—[Official Report, Standing Committee B, 18 March 1986; c. 949.]
However sceptical Opposition Members may be about the Chancellor's make-work schemes and welfare-to-work proposals, we want to see them work. Nothing would give me greater pleasure than to have my scepticism disproved. However, will he confirm that—so far, before his scheme has even got off the ground—the previous Government's dynamic labour market reforms and the jobseeker's allowance have succeeded in getting off the dole half the young people he wanted to help?
Will the Chancellor confirm that he has now abandoned the pledge made by the then employment spokesman, the hon. Member for Makerfield (Mr. McCartney), that a
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Labour Government would abolish the jobseeker's allowance, and that that pledge has gone the way of so many others?
The Chancellor mentioned the position of disabled people. Opposition Members have always believed in getting able-bodied people into work. We realise, however, that most disabled people cannot work, and deserve extra help, through the disability living allowance, the disability working allowance and severe disability premium. The previous Government introduced those benefits, and we were proud to increase spending on the disabled to four times the level spent by the Labour party. Will he say, here and now, that he will rule out cutting, taxing and means-testing benefits for the disabled, despite the prevalent rumours that are worrying disabled people?
The statement contains remarkably little on tax reform. What it does contain is an announcement that the Chancellor is abolishing advance corporation tax for those who pay dividends, but that he is introducing advance payments of corporation tax for everyone. The announcement merely shows that the pensions tax announced in his Budget had not been thought through. Nothing in the changes will reduce by a penny the £5 billion-a-year burden that he has imposed on pension funds.
It is clear also that the Chancellor has not thought through the consequences of the pensions tax on encouraging people to opt back into the state earnings-related pension scheme. Is he aware that many pensions providers were hoping today to have an assurance from him that he will increase the rebate, to make it worth while for people to stay outside the state scheme and inside personal and occupational schemes? Is he aware that, without such an assurance, pensions providers will advise all their customers to opt back into the state scheme? Is that what he wants?
We welcome the proposals for environmental, green taxes, if the revenues he raises from them are recycled to reduce the costs of employment, and to ensure that more people get jobs.
Does the Chancellor realise that most outside observers will think that his statement today is disappointing? It contains so little detail on future tax reforms, despite what we have been promised, so little to reassure savers who have been disturbed by his proposals and so little to clarify the confusion surrounding all his welfare reforms.
Above all, home owners, savers and taxpayers will be disappointed that there is nothing in the statement to undo the cost to them that the Government have already inflicted by five interest rate increases, 17 tax rises and a cruel tax on their pension funds.
Mr. Brown: After hearing the shadow Chancellor, the country will understand how fortunate it was to get rid of the Conservative Government in May. On 1 May, the Conservatives were not fit to be the Government of the United Kingdom; after Winchester last Thursday, they are not fit even to be the Opposition. The shadow Chancellor talked about statistics deteriorating since May, but the biggest deterioration has been from minus 2 to minus 21,000 in Winchester.
The shadow Chancellor spoke for some time, but he did not mention once what the Government have done for pensioners and their fuel bills. Why does he not congratulate us on doing what the previous Government

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failed to do on tackling fuel poverty? Even now, why does he not apologise for the previous Government putting VAT on fuel?
As for economic policy, the shadow Chancellor suggested that he agreed with what I have been doing, but he opposed our monetary policy reforms and even now he cannot tell us whether he would make the Bank of England independent or stop it being independent. He opposed our five-year deficit reduction plan, and even now he cannot tell us whether he thinks that our figures are too high, right or too low. He opposed our windfall tax to pay for the welfare-to-work programme; so, much as he says that he wants it to work, he would have done nothing to make it possible.
As for stability under the previous Government and what the shadow Chancellor hopes will be achieved under this Government, the people of this country will never forget what happened during the last recession, when interest rates went up to 15 per cent. and inflation went up to 10 per cent. The previous Government squandered the surplus they had, and destroyed thousands of businesses and 1.5 million jobs through their economic mistakes. Until we hear something that persuades the House that the Opposition would not make those mistakes in the future, it is hardly worth the shadow Chancellor coming to the House to give us his views.
As for taxation, the shadow Chancellor suggested—at lunchtime today—that we are responsible for 17 tax rises. Half of those are the closing of tax avoidance loopholes that should have been closed long ago. The others, such as petrol duty rises, are supported by the Conservative party.
Will the right hon. Gentleman congratulate us on cutting corporation tax, first in May and again today? Will he congratulate us on another cut in VAT on fuel? Will he congratulate us on cutting VAT on energy-saving materials? Will he congratulate us on abolishing the gas levy? Will he congratulate us on our proposals for a 10p tax rate and on improving the tax position of low-paid workers, whom the previous Administration ignored for 18 years?
It is not the Labour party that is not trusted on tax: it is the Conservative party that will never be trusted on tax again. The shadow Chancellor should think again about his proposals before the election, which he has not withdrawn, to remove tax relief from pension contributions paid by millions of people.
Finally, I shall deal with the other points that the shadow Chancellor made. [Interruption.] I am happy to speak longer and to give the Opposition a lecture on economic policy. On the question of the unemployed, does the right hon. Gentleman not realise that 370,000 young people under 25 are still out of work? Does he not realise that 400,000 people have been unemployed for more than a year? Does he not realise that 3.5 million families have nobody working? Surely he should support not only our welfare-to-work programme but the action we took, through the windfall tax, to make it possible.
As far as the disabled are concerned, it was not the Labour party that cut invalidity benefit for the disabled and changed it into incapacity benefit: it was the Conservative party. I should have thought that the shadow Chancellor would welcome the fact that we will provide opportunities for many disabled people who were denied the right to work under the previous Government.
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On 1 May, there was a vote of no confidence in the Conservative party, which was repeated in Winchester. The Conservative party is divided and without policy. It is incapable of telling us what its policies are for the future, and it has nothing to offer the country.
Mr. Malcolm Bruce: The Liberal Democrats welcome this consultative Budget, which we think should help to improve the quality of the real Budget. We intend to submit our proposals to the Chancellor shortly, and we hope that the Conservative party will do likewise, to make this a constructive exercise.
We also welcome the code of fiscal stability, which we advocated last year; the proposals for the integration of tax and benefits, which we have long advocated; the cut in VAT on insulation materials; and the help for pensioners. I am happy to thank the Chancellor for those proposals.
There are a couple of points of concern in the Chancellor's economic forecasting. He has revised down the growth forecast for 1999–2000 by 0.5 per cent. and has revised up the inflation forecast by 0.5 per cent.— well above his inflation target. That suggests that there are some storm clouds ahead. I should be grateful for a comment on that. Should not Budgets involve expenditure as well as income? In that sense, is not this a Polo mint of a statement, with a hole in the middle where the spending plans ought to be?
Why is the Chancellor's press office briefing that the long-term objective of a 10p starting rate of tax should be delivered by next March, when the short-term pledges of bringing down NHS waiting lists and class sizes will have to wait until later in the Parliament? He has found the money for cuts in income tax and corporation tax. How can he find the money to cut taxes, but not the money to spend to stop hospital waiting lists rising or class sizes reaching a 20-year high? Are not those the people's priorities that he claimed to be fighting for?
The consultative Budget is a welcome innovation, but we need action to improve the NHS and education this year. Will the Chancellor confirm the figures that his colleague the Chief Secretary gave me last year, showing that there is £2 billion unallocated in the contingency fund? Should not that be used to meet the immediate needs of health and education? Will he also confirm that the control total is coming in lower than was planned by the Conservatives, which also gives him room to manoeuvre? Does the earned income tax credit require the ending of the independent review of taxation of husbands and wives?
I represent an area with a high engagement in oil and gas activity. Will the Chancellor accept that a review of taxation for oil and gas will not prejudice the long-term investment and financial viability of that vital industry? Will he acknowledge that, until he drops his Tory spending plans, national health service patients and those who rely on our state schools will be forced to conclude that, although the Tories are no longer in office, they are still in power in his Department? By the way, I think that he should be reminded who won Winchester.
Mr. Brown: I am grateful to the hon. Gentleman for supporting our code for fiscal stability, our reforms at the Bank of England—reforms that the official Opposition cannot support—and our intention to have an open

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consultation process on the Budget. I assure him that he and others will be able to contribute fairly to the review of North sea energy.
However, I have to part company with the hon. Gentleman when he says that we have not switched resources. We have transferred resources to health from defence and the nuclear programme—£300 million this year. We have transferred resources from the assisted places scheme to school class sizes. We are transferring resources next year to education, along with £1.2 billion to the health service.
The Liberal Democrats proposed £1 billion over two years for health. We have put in £1.5 billion— £500 million more. The Liberal Democrat proposals for the schools capital investment scheme—[Interruption.] They may be embarrassed, but they should hear this. They proposed putting in £500 million. We have put in £1.2 billion, which will rise to a great deal more with private capital. I also remind the hon. Gentleman that he opposed the windfall tax that is raising the money for education and employment.
I remind the hon. Gentleman that, during the debate on the Queen's Speech in May, the leader of his party said:
"If we tighten our belt now, we have a real opportunity to get to grips with the huge hangover of debt left behind by the Conservatives."—[Official Report, 14 May 1997; Vol. 294, c. 74.]
The leader of the Liberal Democrats said that there had to be fiscal prudence, but the Treasury spokesman goes to every by-election promising millions of pounds more, without giving anyone a clue about how the money can be raised. In their literature for the two by-elections last week, did the Liberal Democrats mention the lp extra on income tax, the 10p increase in the top rate of tax or their new environmental taxes? They have suddenly become coy about the means by which they would pay for their programme, and we do not see it in their election manifestos.
It is all very well to will the end, but if the Liberal Democrats are not prepared to will the means, by taking tough decisions about the use of resources as the leader of their party suggested he wanted to do— [Interruption.]—they are not fit even to make their presence felt in the House in the way that they are suggesting. They should go back to their constituencies and prepare to adopt reality.
Mr. Giles Radice: I congratulate my right hon. Friend on publishing a pre-Budget report. It is high time that we moved away from the doctrine of pre-Budget purdah and had a more civilised, informed and open discussion of ideas and policies. Of course, the Treasury Select Committee will want to talk to him about the issues that he has raised in his statement, but may I now warmly welcome the help that he has announced for pensioners, which will be most welcome in my constituency? May I also strongly support the idea of a code for fiscal stability, which I believe will help good housekeeping and improve accountability?
Mr. Brown: I shall be happy to work with the Treasury Select Committee, and my hon. Friend knows that he will receive whatever evidence he needs so that the Committee can make comments before the Budget.
Mr. Kenneth Clarke: Is the Chancellor aware that, after announcing some small and, on the
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whole, welcome spending increases and skipping over the spending cuts that he proposes to make in benefits for the disabled, defence and elsewhere, he has still announced public sector borrowing requirement figures that show him reducing public sector borrowing at a rapid rate, and even likely to hit a period of debt repayment that he never intended, despite the fact that we have one of the lowest debt to GDP ratios in the western world?
Does the right hon. Gentleman not accept that that underlines the fact that his July Budget was unnecessary, and that the most courageous social step he could have taken was to reverse his taxation changes affecting pension funds? That would have been the most significant announcement on social policy for the longer term that he could have made today.
As for the other changes in the forecast, has the Chancellor noticed that the Bank of England now forecasts that, as a result both of rapid increases in interest rates and the increase in the exchange rate that has resulted, and of tight fiscal policy, it expects economic growth to fall away very rapidly next year, and possibly to disappear? Does he accept that nothing he has announced today could have a significant effect on that?
Does the right hon. Gentleman really stake his reputation on the forecast of 2.75 per cent. growth next year, which seems highly unlikely? Will he stop justifying what he says with constant references to the late 1980s, when circumstances bore no relation to what we see now, earnings were running away at 8 per cent. per year, there was a balance of payments crisis, and economic growth of 4 per cent. had been running for two or three years?
Before the right hon. Gentleman revives the myth that the Conservative Government were profligate big spenders, reckless on inflation—that was not what he said in opposition—will he not accept that he inherited stable growth with low inflation, falling unemployment and public finances that have surprised him by how rapidly they are improving? Will he go back to the drawing board and consult genuinely on a more constructive long-term economic policy that might protect living standards and jobs?
Mr. Brown: I am grateful for the chance to continue my debates with the right hon. and learned Gentleman. I do not know which will happen more quickly—his reaching the leadership of the Conservative party or the Conservative party's no longer existing to be led.
As for the right hon. and learned Gentleman's three points, first I shall tell him why my July Budget was needed. First, it was needed to cut VAT on fuel, which he had refused to do. Secondly, there was the introduction of the windfall levy that was necessary for our welfare-to-work programme. Thirdly, I had to introduce measures for stability that he had failed to introduce during the three years that he was Chancellor.
The right hon. and learned Gentleman wants to create a myth about the difference between his record, which he wants to promote, and that of Lord Lawson, whom he is happy to see remain in a difficult position. I have to tell him that, when we came into office, we were told that inflation was forecast to rise way beyond the target. Therefore, it is hardly surprising that the Bank of England was telling him for six months before the general election that, on its understanding of the position, interest rates should have risen.

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I was not prepared to go back to a situation, as in the late 1980s, where interest rates had to rise late because the action to tackle inflation had not been taken, forcing the country into the stop-go instability of recession. Let us remind the Conservatives that, in 1990, interest rates went up to 15 per cent. and wages had gone up by 10 per cent.—[HON. MEMBERS: "ERM."] That was before the ERM. Inflation was at 10 per cent. We are not going back to those conditions.
The right hon. and learned Member for Rushcliffe (Mr. Clarke) said that our changes to pension funds were unnecessary. Let me remind him that his special adviser on tax before the election has written an article in the Financial Times, supporting our reforms. From what he said in that article, I believe that he will support the further reforms in advance corporation tax announced today.
The tragedy is that the former Chancellor was in power for three years and could—and should—have made these reforms in the interests of long-term investment in this country. We will take no lectures from a Chancellor who should have raised interest rates before the election, but did not do so for political reasons.
Mr. Robert Sheldon: Is my right hon. Friend aware that the costs incurred in earning a living have always been under-estimated, and are very large indeed? He should be warmly praised for what he has done to tackle the problems of child care—an essential part of earning a living. The arrangements he has made for transport are a beginning, and we should look at other areas to see how the tax system can be used to deal with some of the large costs incurred in getting work in the first place.
Mr. Brown: I am grateful to my right hon. Friend, whose work in the Public Accounts Committee on matters such as this and the use of public money has been invaluable.
I think that people will look back on today's statement, and the further announcements which will come tomorrow from the Secretaries of State for Education and Employment and for Social Security, and will say that, at last, a Government have taken on board the concerns of parents about child care costs, provision and facilities in every community of this country. The investment of £300 million over five years to do so is more than any previous Government have contemplated. Side by side with the reform of the tax and benefits system, our child care measures will ensure that child care is affordable, particularly for lone parents who need it.
My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) referred also to transport costs. Making sure that travel costs to work are low enough for young people joining the new deal will allow them to have more choice of the jobs that they take up.
Mr. Peter Brooke: If our productivity deficit by international standards is now 20 per cent., by the same calculation what was the figure in 1979?
Mr. Brown: The right hon. Gentleman makes the point about productivity.
Mr. John Bercow: Answer the question.
Mr. Brown: I am answering the question.
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As I said in my statement, this has been the case for years. We are 30 per cent. behind some of the best countries in the world, and we must do far better. The right hon. Gentleman will understand the comparison with 1979. In 1979, we were 13th in the world of industrialised countries in terms of national income per head. Now we are 18th, as a result of the failure of the previous Government to bring us up the economic league. We are prepared to take action to do so.
Audrey Wise: As someone who has campaigned loud and long for warmer homes for pensioners, may I warmly welcome the increased payments and the reduction in VAT on insulation material? May I draw my right hon. Friend's attention to the fact that his figures make it clear that it is not necessary to abolish benefits for lone parents? As the abolition of those benefits will impoverish the poorest children, deepen the poverty trap and provide a disincentive to work, will he look again at this matter, bearing in mind always the fact that not only economic growth but children's growth is damaged by poverty?
Mr. Brown: I am grateful to my hon. Friend for supporting our initiative on cold weather payments. These go to every pensioner household in the country, with more going to those in the greatest poverty. I welcome what she has said about child care, but I remind her that child benefit is rising every year under this Government. The previous Government did not increase child benefit for two of the years after 1988 in which they were in power. Child benefit will rise. We are announcing the figures: there will be an additional £250 million this year.
The priority must be to enable lone parents to obtain work if they want it. That is why we have said that the £200 million that we have spent on the employment programme for lone parents will now be complemented by millions of pounds that will be put into the child-care element, so that lone parents can choose whether or not to work. From April next year, every lone parent who starts receiving benefit will, if he or she wants it, be given advice on work and training, as well as advice on how to collect money through the Child Support Agency.
We have had to make a decision. What is the priority for this Government? The priority must be to give choice to lone parents who never had it under the last Government, because training, child care and employment opportunities were not made available. We are giving them that choice: that is our first priority.
Sir Peter Tapsell: As the Chancellor of the Exchequer has repeatedly appealed— with increasing desperation—for congratulations, may I indeed congratulate him on one of his prophetic economic forecasts? Does he recall that, this time last year, he was assuring us that a new Labour Government would reshape the British economy along the lines of the Asian tiger countries? Is that still his intention?
Mr. Brown: The hon. Gentleman may search the libraries if he wishes, but I cannot remember saying that I wanted us to be like Korea or Thailand. What I have said is that we must increase our productivity, and what I did say was that we had fallen from 13th to 18th in the world industrial league.

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As for the Asian economies, I said earlier that we must be vigilant. I believe that there are problems in relation to the disclosure of information, as well as the regulation of institutions, that will have to be dealt with on both a regional and international basis; but the most important thing we have learnt from the Asian economies, and from what has happened over the past few weeks, is that the economic fundamentals in every country must be sound.
Mr. Clive Soley: I congratulate my right hon. Friend on the way in which he has changed the terms of the debate, and not least on the way in which he has combined economic efficiency with social justice. May I add my appreciation of the way in which he has involved parenting and child care with the efficiency of the economy? Some of the measures that he has announced will take time to work, but others will work much more quickly. They bear sympathetic consideration, and I congratulate my right hon. Friend.
Mr. Brown: I am grateful to my hon. Friend, who I know has been involved in campaigning on the issues that he has mentioned for a long time.
I have always believed that the proper provision of child care is not just a good social policy, but integral to a good economic policy. It is not a side show; it is central to the way in which we conduct our economic affairs. When people look at the figures that will be published tomorrow, they will see that work is to start immediately. It is a five-year programme, providing 30,000 out-of-school child care centres in all communities. That is an ambitious target, but one for which the money is now available.
Mr. John Townend: For a green Budget, this is so short on detail that it could be described as a damp squib. Will the Chancellor reassure the many worried family businesses and family farms that, when he talks of reducing tax avoidance, he is not talking about reducing the inheritance tax reliefs that are so valuable in helping to keep family farms and family businesses in operation?
Will the Chancellor also apologise to pensioners? What he has given them back today is peanuts compared with the £5 billion that will be taken out of their pensions this year, next year and every year.
Mr. Brown: I suggest that the hon. Gentleman hold a poll among what I understand to be the 19,000 pensioners in his constituency. I urge him to ask them whether they support the last Government's policy of putting VAT on fuel, or whether they support the policy that I have announced today. I think that he will find that our policies, which have included cutting value added tax on fuel, abolishing the gas levy and introducing a new winter allowance that is far more generous than the cold weather payments scheme under the previous Government, are widely supported. He will find that his right-wing, free market views, which would do nothing to help pensioners, do not commend themselves to his constituents.
Mr. Tony Benn: The Chancellor made a great point of employment, but is he aware that press reports suggest that the Government are not prepared to help the mining industry, and that up to 50,000 jobs could be lost in mining and associated industries; that
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the Governor of the Bank of England, when he came to the House of Commons last week, said that he expected interest rates to have an adverse effect on growth, for internal reasons and because of the higher pound; that the forecasts concerning British membership of the single currency suggest that unemployment in the European Union could rise above 18.5 million if the convergence criteria were imposed; and that instability in the global markets could certainly have an adverse effect?
There is a total absence in the statement of any reference to redistribution, although over the years the gap between rich and poor has widened, and it would appear that the poor are especially targeted in some of the cuts proposed.
Mr. Brown: I do not know what my right hon. Friend means about redistribution, because we redistributed £5 billion from the excess profits of the privatised utilities to job creation in some of our poorest and most deprived communities; if that is not an example of the proper reallocation of resources, from those who did not need them to those who do, I do not know what is. He should congratulate us on it.
The Labour party has always believed in a balanced energy policy, and we have always done what we can for the mining industry.
I am glad that the Campaign group and the Governor of the Bank of England are getting together to discuss issues of mutual interest. We are determined to avoid a return to the instabilities of the past, as when we had interest rates of 15 and 16 per cent. under the previous Government. We hope that by taking early action, with interest rates having had to rise to 7¼ per cent., we can avoid a return to the situation of the past.
My right hon. Friend asked me a similar question about economic and monetary union, which I answered, during the EMU statement. One of our economic tests for EMU is the effect on jobs. I have said that we will apply the tests strenuously, considering the effect on industry, jobs and investment, and we will insist that there is a clear and unambiguous answer in favour before joining a monetary union.
My right hon. Friend should look at what we have proposed, including the help for pensioners, and go back to his constituency and support it.
Sir Peter Emery: Will the Chancellor answer a factual question: other than the reduction in the deficit, what measures in his statement does he think will lead to greater convergence in the criteria in the Maastricht treaty, and what costs will that have for employment or for the economy generally?
Mr. Brown: The meeting of the convergence criteria is in itself right for Britain. I said in the House a few weeks ago that it is a question not only of meeting the nominal criteria on interest rates, inflation and deficit but of having real, sustained and durable convergence. That means that we are seeking improvements in productivity, structural reforms that will increase our economy's ability to grow, and greater investment. Those are all important factors in judging convergence. The measures are right in themselves, and achieving convergence would be right for Britain.
Dr. Lynne Jones: May I note with pleasure that, notwithstanding our commitments on

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tax and spend, it has been possible to provide a welcome improvement in benefits to help pensioners with their heating bills, and express the hope that my right hon. Friend will use some of the resources that are apparently available to cut corporation tax to provide the small amount that will be needed to prevent the cuts in lone-parent benefits? Lone parents will get no increase in their child benefit: it has been frozen, so there will be a cut in real terms. It is essentially an in-work benefit, and cutting it is contrary to our welfare-to-work programme.
May I welcome the Chancellors's statement on research and development, and the importance that he gave it, but also draw his attention to concerns in industry and the business community about the parlous state of our public sector research infrastructure? I hope that he will look at the recommendations from Dealing and the CBI that we should consider the way in which the Treasury accounts for such investment.
Mr. Brown: I am grateful for those questions. My hon. Friend mentioned corporation tax. Of course we cut it, but people know that the pension fund reforms that we introduced in July meant a gain to the Exchequer, not a loss.
On lone-parent benefits, let me remind my hon. Friend that we have put £200 million into new measures to create job opportunities for lone parents. At the same time, we have put £300 million today into child care, which is the best in-work benefit for lone parents, to enable them to work, in addition to raising child benefit.
We have to make up our mind about our national priorities. We stopped the iniquitous housing benefit change proposed by the former Secretary of State for Social Security. We decided that it was right to use the resources we had to encourage many hundreds of thousands of lone parents to enable them to get more income in work. The average difference between out-of-work benefits and in-work wages is £50 for a lone parent. That is what we want to encourage.
Mr. William Ross: The right hon. Gentleman's proposals on cold weather payments will be much welcomed in the northern parts of the kingdom, certainly in Northern Ireland. They will at least do away with the inequities of the old system.
The right hon. Gentleman has announced a very large spending programme today. As the windfall tax on the privatised utilities and the return of extra money from Europe are one-offs, how will his programmes be financed in future years? It seems unlikely that the growth that he seeks in the economy will be sufficient to pay for them, so he will not be able to achieve a balanced Budget or repayment of capital debt unless he increases taxation. Can we take it for granted that the taxes that he intends to increase are taxes on capital? If so, will the Budget resolutions be framed so as to refer back to today rather than to the date of the Budget?
Mr. Brown: I am grateful for those questions. The payment to pensioners to deal with winter fuel bills will come out of the reallocation of money from the European Union payments, which we budgeted for but from which we can use £400 million. Those payments
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will be made this year and next year, until the conclusions of the pensions review produce results for pensioners right across the country. We levied the windfall tax this year and next year at £2.6 billion a year. Hon. Members will be pleased to learn that substantial cheques are being paid by the utilities into the Treasury this week.
That money will be used over the five years of this Parliament to create jobs. It is a fund that will be available for giving help to the young, the long-term unemployed, the disabled and lone parents to get back into work and is ring-fenced in that way.
Mr. John McAllion: I warmly welcome my right hon. Friend's announcement of extra help for pensioners this winter, which will warm not only the homes of pensioners but the hearts of all socialists, wherever they can be found in these post-modern times. On the same principle, can he confirm that the Tory spending plans that he accepted were based on the expectation that, in the first two years of this Parliament, there would be a public sector borrowing requirement of some £31.5 billion?
As my right hon. Friend has announced this afternoon a PSBR some £13.5 billion less than that, can he confirm that there is a significant sum in the current spending plans that is no longer required to service that higher level of debt? If so, can he explain why that unexpected windfall cannot be used to stop the planned cuts for lone parents, people with disabilities and students?
Mr. Brown: May I correct my hon. Friend on some points of detail? The spending totals are £266 billion for the control total, £274 billion next year. The full totals are £315 billion and £325 billion. Those are the totals that we are working within. They have not been reduced. As he would welcome, we have reallocated the money that became available from defence and nuclear programmes to the health service. We have reallocated money today from the European Union programme to help pensioners.
On the PSBR, bringing down public borrowing means that, over time, the £25 billion that we pay in interest payments—which we regard as something that should be reduced—will be reduced far more quickly. That means that, instead of one-off gains in public spending that cannot be continued, we will have sustainable public finances that will enable us to afford the regular, continuous increases in resources for health and education that we want.
Our aim is sustainable finances. We are not going to do what previous Labour Governments did: spend in the first two years, and then have to retrench in the last three. We will have sustainable public finances that allow us to improve health and education over time.
Sir Michael Spicer: Why cannot the right hon. Gentleman bring himself to say thank you to his predecessors for the extraordinarily strong economy that they left behind? What is his answer to the question put to him earlier about the fact that, according to the Bank of England, under his regime the economy is set to run downhill?
Mr. Brown: I will not thank the Opposition for what they left behind. They left behind a £23 billion borrowing requirement; they doubled national debt to £360 billion;

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interest rate payments were £25 billion; and inflation was starting to rise again. We were going back to the old British disease. It remained for us to take action to create a new monetary and fiscal framework, which the Opposition have yet to tell us whether they support.
Gillian Merron: I welcome my right hon. Friend's statement, which is all about long-term planning to improve people's lives, especially for those who need it most. I particularly welcome the announcement on out-of-school clubs, which, like the West End Kids club in my constituency, will offer a safe and constructive environment in which children can learn and be cared for. Does he agree that, if it is good for children, it is good for parents and for the economy?
Mr. Brown: I am grateful to my hon. Friend. The generosity of her welcome contrasts with the way in which Opposition Members have failed even to welcome our measures for pensioners. On child care centres, we propose to have nearly 30,000 out-of-school centres, built and available as a result of the decisions taken today; £300 million is available, and potentially nearly 1 million children will benefit.
I am pleased that the model in my hon. Friend's constituency is one, among others, that will be looked at as we expand child care throughout the country. We must learn from the successful partnerships that are making child care possible in some communities, and we must provide a nationwide service for all mothers.
Mr. John Swinney: In welcoming the consultation exercise on which the Chancellor has embarked, I hope that he is listening to points of view that are being expressed.
What does the right hon. Gentleman have to say to exporters and manufacturers who are greatly troubled by the strength of the pound and higher interest rates, and the dangers that they cause to their business prospects? Does he recognise that, as public finances have improved, there is room for additional public expenditure to deal with the fact that NHS waiting lists are not improving and that many people on low incomes will have to suffer even more under this Government?
The announcement on payments to pensioners was welcome—unlike the Conservatives, I am happy to welcome it. Does the right hon. Gentleman accept that that announcement was caused by the utter arrogance displayed by the Department of Social Security in refusing to apply the wind chill factor in cold climate payments?
Mr. Brown: We have taken the right measures to help pensioners—far better measures than were ever proposed under the previous Government. My right hon. Friend the Secretary of State for Social Security inherited a review in progress that would have made little difference. Our changes in payments mean that every pensioner household benefits: the poorest pensioner households get £50 and, taken with all the other changes—for example, in VAT on fuel—the typical pensioner household could be up to £100 better off next year.
As for the hon. Gentleman's other questions about the exchange rate, I said in my statement that I recognise the concerns of exporters, but I would put it to him that
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what they are most afraid of is a return to the stop-go instability of the past. We will not take measures that prejudice the economy as a whole and return us to the boom-bust conditions of the past. If the hon. Gentleman examines the forecasts, he will see that exports are rising in volume by 7 per cent. this year, and are expected to continue to rise by 5 per cent. next year.
As for public spending, if the situation is healthier, that is because of the action that we have taken. The hon. Gentleman should also congratulate us on reallocating resources to the health service, with £300 million this year and £1.2 billion next year; and to education, with £1 billion next year and the £1.2 billion school capital investment programme from which many constituencies will benefit. It is about time the Opposition parties, who were asking for these things—in the case of the Liberal Democrats, asking for far less—congratulated us on what we did.
Mr. Alan W. Williams: I congratulate my right hon. Friend the Chancellor on every detail of his pre-Budget statement, but may I question him more widely about interest rates? As we move towards joining the single currency, we need convergence on interest rates. How will my right hon. Friend produce the economic climate that will allow interest rates in Britain to fall from their current 7.25 per cent. to the 3.3 per cent. of Germany and the rest of Europe?
Mr. Brown: By getting stable and sustainable growth and tackling inflation, we will get interest rates down. Our interest rates will come down as we take the tough action that is necessary. My hon. Friend asks about monetary union, but we have yet to hear an answer to the question put to the Conservatives: do they support the principle of monetary union—yes or no?
Mrs. Theresa May: Is the Chancellor aware of the real fear engendered among people with disabilities and disability groups that the Government will cut disability benefits through means testing, taxing benefits or a reduction in lifetime rights? Will he answer the question asked by my right hon. Friend the shadow Chancellor, allay the fears of people with disabilities, clarify the Government's position, and state categorically that the Government will not in any way reduce disability benefits?
Mr. Brown: Our proposal is for a comprehensive spending review that is fair—that is the underlying principle. Today, I explained how we were spending £200 million on helping men and women who are disabled and want to work, to do so. Criticism of the Government comes ill from an Opposition party that, when in government, blocked the Civil Rights (Disabled Persons) Bill, and then cut invalidity benefit for thousands of people.
Mr. David Winnick: Is my right hon. Friend aware that, at the end of last year during the coldest weather, a group of Labour Members of Parliament, including me, went to 10 Downing street and pleaded for help for poorest pensioners, and were refused? I therefore welcome the announcement today, which will certainly help many pensioners. Despite the justifiable points he

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has just made about disability and the sheer hypocrisy of the Tory party, is he aware of the concern felt by Labour Members—which is genuine, unlike that expressed by Tory Members—about any taxing or means-testing of disability benefit?
Will my right hon. Friend bear in mind the comments made over the weekend by Lord Ashley and Lord Morris of Manchester—two Members of Parliament who fought bravely and honourably in the House against strong Tory opposition on behalf of the disabled? Those two men know what they are talking about, and I hope that my right hon. Friend will note their words.
Mr. Brown: I am grateful to my hon. Friend for his first comments about cold weather payments. I assure him that, if he turns up at No. 11, or indeed No. 10, Downing street, he will be invited in, rather than kept outside as he was under the previous Government.
As for the comments of Lord Ashley and Lord Morris, I and many people throughout the country have great respect for their work on behalf of the disabled. Our comprehensive spending review is designed on the principle of being fair, and we will be fair to the disabled.
Mr. Cynog Dafis: The Chancellor referred to the strength of the pound and the problems that creates. He may be aware that that is causing particular problems to agriculture by inhibiting exports, bringing in imports far too easily, and depressing the level of support payments. That, combined with the bovine spongiform encephalopathy crisis, is creating a catastrophic situation in areas such as my own in rural Wales, where livestock farming takes place. He will be aware that the European Union has a mechanism for dealing with such situations by providing compensation and that those payments have been made available by all eligible EU countries. May I plead with the Chancellor to access those funds in order to reduce the pressure on farming?
Mr. Brown: I cannot give the hon. Gentleman any promises, but I shall put his concerns to my right hon. Friend the Minister of Agriculture, Fisheries and Food.
Mr. Ken Livingstone: Will the Chancellor give some forecast about the likely risk of slipping, not only down to 1.5 per cent. GDP growth in our third year, but into recession as the high pound continues to erode our export potential? Given the now inevitable devaluation of the yen, coming on top of the devaluation of south-east Asian currencies, and the fact that the deutschmark has led all the European currencies down about 15 per cent., will we not face a major balance of payments crisis unless we do something to bring down the value of the pound, which means tackling interest rates?
Mr. Brown: I have to tell my hon. Friend that, if we had failed to take action in May and left inflation to rise without taking action on interest rates, that would have caused a recession of the sort he describes. He should therefore support our action in respect of the Bank of England and our subsequent decisions. If he thinks the matter through, he will understand that the very conditions
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he is speaking in favour of were those that led to the problems the Conservative Government got into in the 1980s.
Mr. Howard Flight: The Chancellor will, I am sure, agree that the achievement of higher productivity will require not only higher investment but higher savings. The Conservative Government introduced personal equity plans and tax-exempt special savings accounts to increase savings. Will the right hon. Gentleman tell us whether those schemes will be grandfathered in 1999—that is, the amount invested in them will remain under that contract— or whether his statement means that they will be terminated? Seven million people will be affected by the decision.
Mr. Brown: My aim is to increase the number of people with savings. As I said, half the population of this country have hardly any savings at all, and that will influence the proposals we introduce next week on the individual savings account. I look forward to discussing with the hon. Gentleman those detailed proposals, which will be published in a consultation document next Tuesday.
Caroline Flint: I welcome today's statement from my right hon. Friend. As the former chair of Working for Childcare, and on behalf of my constituents, many of whom are lone parents, I welcome the proposals on child care and reform of the tax and benefits systems and other measures to help low-income families into work rather than remaining on benefits for the rest of their life. I recently visited a centre in Doncaster for young mothers under 16 that enables them to continue their studies by providing support in child care and transport. What young parents need post-16 is policies of the future, not a re-hash of the policies of the past.
I remind my right hon. Friend that it was the Conservative party—[HON. MEMBERS: "Question."] Will my right hon. Friend comment on the fact that it was the Conservative Government who introduced a tax on workplace nurseries that put back the development of employer-led child care for 10 years? That was their only contribution to child care while they were in power.
Mr. Brown: My hon. Friend is right, and the jeers from Conservative Members show that they are not interested in child care issues. As she rightly said, there are three elements in our proposals: first, we want to help people to be able to afford child care; secondly, we want to create child care places; and, thirdly, we want to train young people to be child carers. That is why this is the first national strategy for child care, and I hope that, increasingly, hon. Members on both sides of the House will support it.
Mr. Archy Kirkwood: The Chancellor's statement contained some potentially far-reaching proposals for the integration of the tax and benefits systems. Will he confirm that it is in his mind to introduce any such changes in four months' time, in his Budget? Will he tell us how the Government will carry forward the process of consultation on that potential reform?

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A comprehensive integration of tax and benefits is an extremely complicated thing to do. The Chancellor will know that one of the reasons why the interrelationship between the two systems is so often perverse is that past Governments have gone for short-term fixes, with dire long-term consequences.
Mr. Brown: I am grateful to the hon. Gentleman, who is a renowned expert in these matters, and the Chairman of the Social Security Select Committee. The report and the comments made yesterday about the maze of benefits and the chaos in the tax and benefit system up until now mean that there is a strong case for reform. I can confirm that we are looking at these things.
I told the Committee that we would be prepared to give evidence to it. I hope that the membership of the Committee will join us in examining these issues. We need to find a solution to the poverty and unemployment traps that prevent thousands from benefiting from work. We need to provide a solution that gives as many people as possible who are currently on low pay proper rewards for work.
Mr. Dale Campbell-Savours: Is it not true that one of our priorities has been to defuse the inflationary time bomb that we inherited from the Conservative Government—and, indeed, the work of the former Chancellor of the Exchequer? What estimate has my right hon. Friend made of the impact on the British economy if we had not raised interest rates since May?
Mr. Brown: I am grateful to my hon. Friend. I see that the former Chancellor has gone from the Chamber. I should remind him that, for six months, he was advised that interest rates had to go up. For six months before the general election, he refused to do so.
When I arrived at the Treasury, it was clear that inflation was going far beyond its target range. It was for those reasons that we took immediate action. We raised
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interest rates immediately, and made the Bank of England independent. There have had to be further rises in interest rates. The reason for those rises is that action that should have been taken was not taken by the previous Government.
Mrs. Virginia Bottomley: Many will welcome the further expansion in child care facilities, but can the Chancellor confirm that what he has really done is raid the funds that the sports, arts, heritage and charities bodies were confidently expecting? Does his announcement not mark the end of the additionality and arm's-length principles? Should we now refer to the national lottery as the Chancellor's back pocket for pet causes?
Mr. Brown: I disagree entirely with what the right hon. Lady says about the national lottery. As she perfectly well knows, the mid-week lottery increased the amount of money that the lottery was able to provide for good causes by about £1 billion. [Interruption.] The right hon. Lady should listen, because we put the proposal to the electorate and they supported it at the general election. We said that we would create a new opportunities fund to provide help for fitness centres, out-of-school centres and homework centres that would not otherwise have been provided. That is why it is possible to say that the money is being put to good use.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): We must now move on. There will be other opportunities to pursue these matters.

NEW MEMBER
The following Member took and subscribed the Oath:
Mark Oaten Esq., for Winchester

Welsh Assembly
5.3 pm
Mr. Nigel Evans: On a point of order, Mr. Deputy Speaker. Could you advise the House whether the Secretary of State for Wales has sought permission to make a statement to the House, following an announcement last night that the new assembly building will now not be sited in City hall? There is also speculation that it will not be sited in Cardiff at all.
One of the main arguments during the referendum debate was that the assembly should be kept within budget. We stated that it would cost £100 million over four years. We were told that that was a gross over-estimate, and that it would cost less than that figure. If the assembly has to move into either temporary accommodation or alternative new-build accommodation, the final cost of the assembly in Wales could be far more than £100 million over four years.
Mr. Deputy Speaker (Sir Alan Haselhurst): No such request has been made. I can say only that those on the Treasury Bench will perhaps have noted the hon. Member's remarks.

Reform of Quarantine Regulations
5.5 pm
Mr. David Amess: I beg to move,
That leave be given to bring in a Bill to allow the importation of pet animals from the European Union and rabies-free countries without quarantine upon proof of vaccinations, blood tests and permanent identification by microchip; to improve standards in quarantine kennels; and for connected purposes.
The word "rabies" undoubtedly brings terror into people's minds. It is an awful disease. Each year, between £720,000 and £760,000 is spent on actively encouraging the existing system. It seemed rather bizarre, then, that when I recently visited a number of quarantine kennels I observed owners in the cages with their animals kissing and cuddling them. That seemed to me to defeat the object of quarantine.
Rabies was eradicated from the United Kingdom in 1922 and is fast disappearing from the rest of the European Union. It is often claimed that the controls that have been used for the past 100 years have served us well. However, a critical examination of the facts reveals that the current arrangements for pet quarantine, as stipulated in the Rabies (Control) Order 1974, are outdated, unnecessary and in need of urgent reform.
In the past 25 years, 1.7 million mammals, including 200,000 cats and dogs, have entered the United Kingdom. In 1983 and 1990, two cases of suspected rabies were reported in kennels in the United Kingdom, but in both cases the dogs had been deliberately infected with a live vaccine. Neither had revealed any clinical symptoms. Those facts are in the public domain. The only cases of rabies in Britain in the past 18 years have been carried here by humans.
Those who defend the present system need to answer the following question. If no cases of rabies have been detected in quarantine in the past 25 years, why are we maintaining the present system? They will no doubt argue that there is no sufficient scientific basis for reforming the existing system. Besides, they will point to the fact that the current controls have operated successfully. I believe that those points are contentious, because developments in science in recent years have presented an overwhelming case for change.
The World Health Organisation has confirmed that modern inactivated vaccines are both safe and effective for cats and dogs. According to last year's report by the Royal Society for the Prevention of Cruelty to Animals, 72 per cent. of the population believe that the vaccination system would be an acceptable alternative to quarantine. Vaccinations have a duration of one year and need to be renewed annually. Microchips, I am delighted to say, can now be implanted into a cat or dog at an early age. Microchips are now recognised according to world standards.
No argument for change can be considered without reflecting on the risk assessment. Such an assessment has not been undertaken in Britain, although I welcome the decision of the Minister of Agriculture, Fisheries and Food, announced this autumn, to establish a panel of experts headed by Professor Ian Kennedy, to look into the matter. I understand that he is the only person to have been appointed to the panel so far. We should examine carefully the assessment made by the New Zealand Ministry of Agriculture. It is particularly pertinent. It tells

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us that quarantine based on a six-month period of isolation has an 11 per cent. failure rate, whereas a method based on vaccination has only a 6 per cent. failure rate.
In the past 25 years, 170,000 families have put their pets through quarantine. A total of 2,500 pets have died during that period, which represents roughly 10 animals a month, and in the past five years, 735 cats and dogs have died in quarantine. All those animals are loved by their owners and are greatly missed.
Anecdotal evidence suggests that quarantine can cause some animals, especially dogs, to stop eating and to stop drinking. Many die when they come out, having picked up something during the isolation period. Judging by the standard of some kennels, that is hardly surprising, because there is no statutory code covering standards in kennels. There is a voluntary code, under which the Ministry makes quarterly visits and approves kennels' licences, but the emphasis on security is uppermost— certainly not welfare.
I am advised by all the interested parties that conditions in kennels vary considerably. The cost of putting an animal into quarantine varies from £1,500 to £3,000. I believe that my Bill would remedy some of those matters, especially the very high charges.
Other countries have successful rabies-free policies. Forty-eight countries are rabies-free. We should also reflect on the successful change that Sweden made in its quarantine laws three years ago.
On top of all the unnecessary cruelty of the current system, not to mention the inconvenience to pet owners, there is a complete lack of consistency because it applies only to pets, not to animals that have been brought to the United Kingdom for sale. They require only the necessary licences and vaccination certificates, just like pet passports. There are no quarantine requirements for all the cattle moving in and out of this country, which makes no sense as the animals are all warm-blooded and capable of carrying rabies. In effect, the existing system allows traded animals to enter the country and move around freely without being subject to quarantine requirements.
Responsible pet owners ensure that their pets are vaccinated against rabies, but they are still forced to put their pets into quarantine. The regulations affect tens of thousands of British people who work abroad, including diplomats, those in the armed forces, holidaymakers and the blind.
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I am obliged to the Royal Society for the Prevention of Cruelty to Animals, the pet passport organisation, the Kennel Club and many other organisations for their advice on these matters, and I suppose that I am also inspired by my black labrador puppy, Michael. Eighty-six per cent. of the population would like a change.
I am delighted to see the Home Secretary in his place. I am not challenging the Government's intentions in this matter but, with the best will in the world, it will be a very long time before effective legislation is in place so, as we approach Christmas, I appeal to the Government to reflect on what I have said, and on the views of the former Secretary of State for the Environment, Mr. Chris Patten, and of Lord Waddington. Those former colleagues seem to have changed their minds on the matter, and I was especially moved by the noble Lord, who told the other place that his dog died two days after it was released from quarantine.
I am not necessarily looking for charity in this matter, but I am looking for charity from the Government before Christmas, and I believe that this limited measure would give some relief.
I intend, not to destroy Britain's reputation as a rabies-free country, but to prevent the cruelty, suffering and inconvenience that pets and their loving families experience when they enter the United Kingdom. Pet passports should be introduced into this country. I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. David Amess, Mr. Ivor Caplin, Mr. Alan Clark, Mr. Roger Gale, Mr. Mike Hancock, Mr. John Heppell, Mr. Robert Key, Mr. Terry Lewis, Mr. Alan Meale, Mr. Colin Pickthall, Sir Teddy Taylor and Miss Ann Widdecombe.

REFORM OF QUARANTINE REGULATIONS
Mr. David Amess accordingly presented a Bill to allow the importation of pet animals from the European Union and rabies-free countries without quarantine upon proof of vaccinations, blood tests and permanent identification by microchip; to improve standards in quarantine kennels; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 12 December, and to be printed [Bill 87].
Orders of the Day

  European Parliamentary Elections Bill
  Order for Second Reading read.
  5.14 pm
  The Secretary of State for the Home Department (Mr. Jack Straw): I beg to move, That the Bill be now read a Second time.
  The Government were elected in May with firm commitments to improve the democratic process in this country. As the House knows, our programme of constitutional reform is already well advanced. It gives me great pleasure to add another item to the list of manifesto commitments that are being fulfilled.
  In the manifesto, we promised to introduce a proportional voting system for elections to the European Parliament; the Bill does just that. It will enable the 1999 and subsequent elections to the Parliament to be conducted using a proportionally based regional list system.
  The Bill has had a long genesis. Twenty years ago yesterday, a Bill to provide direct elections to the European Parliament was introduced into the House following a White Paper in April 1977. The Bill initially provided for a regional list system, but in December 1977, the House voted by about 100 votes to reject that system and instead to put in its place one based on first past the post. It is that system which has remained in place ever since.
  The first direct elections to the European Parliament took place in June 1979. Since then, for almost all of the past 20 years, the European Union has been attempting to ensure that elections to the European Parliament in each of the member states are based on common principles. The system that we are proposing in the Bill is in conformity with those principles.
  A regional list system of elections to the European Parliament has been Labour party policy for a number of years. In 1993, Professor Raymond Plant, as he then was, who is now a distinguished Member of another place, produced a report for another place—I am sorry, for the Labour party—
  Sir Brian Mawhinney: It is another place.
  Mr. Straw: Well, these days it is very easy to get a place.
  Professor Plant produced a report recommending a regional list system for those elections. That policy was endorsed by the Labour party conference the same year, confirmed by the Joint Consultative Committee on Constitutional Reform in February 1997 and included in our formal election manifesto.
  Before discussing the Bill, let me say something about electoral reform generally. I believe that it is reasonably well known that I do not have a reputation as an evangelist for proportional representation for the Westminster Parliament. However, I have never been opposed to proportional representation for elections to the European Parliament nor, in certain circumstances, for local elections.
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  It is of the utmost importance that any voting system is appropriate for the nature and functions of the body that is being elected. My arguments against proportional representation for the Westminster Parliament have been based on the mathematical and political difficulty of securing an identity between votes cast, seats gained and power secured. It is possible to devise a voting system where the seats won are proportional to the votes cast— but there follows a serious conundrum. The greater the proportionality of votes to seats, the less may be the proportionality of votes to power.
  PR systems typically give disproportionate power to the smaller minority parties, while first-past-the-post and similar systems with single-member constituencies give power to the largest plurality and so help secure a system where the proportionality, not between votes and seats, but between votes and power, may be the greater.
  However, those characteristics of proportional representation and the consequences that may go with it— unstable Governments—can apply only where a Government are being elected. There are fundamental differences between the European Parliament and our United Kingdom Parliament. The European Parliament is a representative body; it is not a Parliament from which a Government are drawn.
  Mrs. Gwyneth Dunwoody: As it is clear to those of us who have served in the European Parliament that many other European countries envy the connection between elected Members and their constituencies and understand that it has one enormous advantage over a system under which the parties control the list, will my right hon. Friend give us the real justification for the system that he is proposing this afternoon?
  Mr. Straw: I accept entirely what my hon. Friend says in terms of the Westminster Parliament. She has outlined one of the great strengths of our system of representation, based on single-Member constituencies. It is well worth remembering that the root of the word "Commons" is the French word "commune", meaning a community. I believe—and I am sure that my view is shared by anybody who has been a Minister or a shadow Minister— that one of the enormous strengths of our system is that, however high and mighty we think we may be, the fact that we have to go back to our constituency on a Friday evening, sit in a community centre and receive representations from our constituents, gives us a direct link to our constituents in a way that it is impossible to replicate under a system of multi-member proportional representation.
  However, there is a world of difference between a constituency that one can comprehend in terms of its size—such as Crewe, Blackburn and similar places or parts of cities, which broadly accord with the majority of communities—and the vast constituencies that form the basis of representation in the European Parliament, where the direct connection between the Member and his constituents is very much more tenuous.
  Sir Peter Tapsell: In the United States, Congressmen often represent districts with substantially larger electorates than those proposed by the right hon. Gentleman for the European Parliament. There is a direct relationship between those big electorates and

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  their representatives. Anyone who knows the United States well will know that people continually say, "My Congressman said this," and, "I wrote to my Congressman about that." Under the proposals, that close relationship would be lost.
  Mr. Straw: What the hon. Gentleman says is accurate, but Members of Congress in the United States have huge support—typically they have 40 or 50 staff to enable them to achieve the connection. They also have strong media backing and are constantly campaigning as the elections take place every two years.
  Moreover, there is a critical difference that strengthens the connection between a constituency and a Member of Parliament or a Member of Congress. In both cases, we are talking about people who act to form a Government— in this country, they act directly to form a Government and in the United States, they act to support and form part of a Government—and to ensure that the Government are provided with revenue. In the European Parliament, those considerations do not apply. The European Parliament does not form the basis of a Government, but is simply a representative body.
  Had the hon. Gentleman been correct in his assertion, we would have seen over the past 20 years a close connection between the European Parliament's constituencies and its Members. However, generally speaking, that is not the case.
  Mr. Douglas Hogg: Even granted the truth in what the Home Secretary is saying, it would have been possible for the Labour Government to come forward with proposals that provided for proportional representation, but maintained a constituency base for the electorate. The Home Secretary has not said why he has chosen the one PR system that ensures that there is no constituency basis.
  Mr. Straw: I shall come to that point—I have only just started my speech. If the right hon. and learned Gentleman is dissatisfied with the explanation that I shall give later, I shall happily give way to him again.
  Mr. A. J. Beith: I merely wanted to deal with a myth. The Home Secretary is making a perfectly reasonable case for the different nature of the European Parliament, but lest he should imagine that it is impossible to have a constituency link in a PR system, may I suggest that he visits the Irish Republic, where Members elected under the single transferable vote system are well aware of their link to constituencies and most certainly spend their Friday nights addressing constituency problems?
  Mr. Straw: I have studied voting systems for more than 30 years and I have kept a close eye on the politics of the Irish Republic, where the Irish have a system to which they are attached. I have always found it difficult to understand a system whereby the voters' will does not always appear to be translated into either a change of Government or the sustaining of a Government. In the Irish Republic, Governments have changed every three years with extraordinary regularity.
  We are dealing not with the election of a Parliament which then sustains a Government, but with the election of a representative body in Europe. The role of a Member
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  of the European Parliament is different from that of a Member of Parliament, yet they are both directly elected by the same method.
  The United Kingdom returns only 87 Members to the European Parliament and, quite apart from the disconnection between the constituencies and the Members, the huge constituencies that we currently have mean that disproportionate results are greatly magnified. As a result, even a small swing in the vote can lead to a substantial difference in the number of seats, as the fluctuating composition of the UK delegation to the European Parliament over the past 20 years has demonstrated.
  Members of the House who have studied such matters with care may be aware that it is easy to construct an index of proportionality of seats gained to votes cast. I should be happy to explain the method of calculation to hon. Members who are not familiar with it, either now or later. I hope that colleagues will take my word for the fact that Westminster elections and the first-past-the-post system typically score between 80 and 89 per cent. in terms of proportionality—quite a high score, bearing in mind the criticisms that are sometimes made of the first-past-the-post system in Westminster.
  In the last European elections, because of the size of the constituencies, the proportionality index score was only 70 per cent. For that reason, we believe that a simple regional list system of PR, for which the Bill provides, is the most appropriate one for electing Members of the European Parliament.
  Mr. Llew Smith: The Minister stated that he has kept a close eye on electoral reform over the past 30 years. I have kept a close eye on the document that he produced for the national executive of the Labour party a number of years ago. I shall not embarrass him by quoting from the document, but will he clarify two points? Is he in favour of proportional representation for election to the House of Commons? Following on from the point made by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), is my right hon. Friend now accepting that under a regional list system, Members of the European Parliament will not be accountable to their electorate?
  Mr. Straw: I am not sure whether my hon. Friend was present for my opening remarks, when I think that I made it tolerably clear that I am not enthusiastic about proportional representation for Westminster elections. My hon. Friend would not embarrass me if he were to quote from the document that I produced some years ago, as my views on the subject have not changed. I have always accepted that electoral systems must be appropriate for the particular political institution to which they apply. We must consider the nature of the relationships that we are trying to establish and, for that reason, I am highly sceptical of any systems that move away from single-Member constituencies for the House of Commons. However, as I am seeking to explain, different considerations must be borne in mind in relation to the European Parliament.
  Mr. William Cash: Would the right hon. Gentleman be good enough to explain why the Amsterdam treaty, which amends the European Union

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  treaty and which we shall be debating in a couple of days' time in Committee, contains a provision stating:
  "The European Parliament shall draw up a proposal for elections by direct universal suffrage in accordance with a uniform procedure in all Member States"—
  which pretty well follows the words of the arrangements entered into at Maastricht, but also adds
  "or in accordance with principles common to all Member States."?
  In other words, the treaty that the Government— and, presumably, the right hon. Gentleman himself— negotiated contains arrangements that would insist on those common principles, which are essentially proper democratic principles. Why, therefore, in the light of the Amsterdam treaty, have the Government gone down a route that is less democratic than the arrangements that could have been provided for?
  Mr. Straw: I do not accept that for a moment. The arrangements that we are putting in place—whether or not the hon. Gentleman agrees with them—are extremely similar, and in some cases identical, to those that are in place in the majority of other European countries.
  Dr. Tony Wright: May I try to make a helpful suggestion to my right hon. Friend? Many of us will be persuaded by his argument that, with regard to electoral systems, it is horses for courses, but many of us will not be persuaded by the argument that closed party lists on a regional basis are the right horse for this course.
  When the proposal first came before the House exactly 20 years ago, in 1977, at a time when there was an arrangement between the Labour party and a previous incarnation of the Liberal Democrat party, the House was offered a free vote on the kind of system with which it would feel most happy. At a time when we are offering a referendum to choose an electoral system, and when there is genuine disagreement about the kind of system that we want for the European elections, I suggest that it would be appropriate to give the House a choice of proportional systems. That would allow us to meet our obligations, and to select a system with which the House would feel comfortable.
  Mr. Straw: Today we are implementing a manifesto commitment on which all Labour Members stood. I cannot speak for the Opposition—no doubt they are as divided on this as they are on other issues—but it is fair enough for us to stick to a whipped vote.
  The vote in December 1977 was a hybrid. It was a whipped vote for the payroll vote, except that two members of the payroll were allowed a special dispensation to vote against the payroll, and other Members were able to enjoy a free vote. It is interesting to note that there are 60 Members still in the House from the more than 500 who voted in December 1977 on that matter. Two members of the current shadow Cabinet voted in favour of the proposition for a regional list system at that time. It will be interesting to see what they do this evening.
  Let me deal with a point that had been raised and was implicit in the question from my hon. Friend the Member for Cannock Chase (Dr. Wright). I refer to the referendum on voting systems for Westminster.
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  I have long believed, as has the Labour party, that it is time to bring to a conclusion the arguments over which electoral system should apply to Westminster elections. The Government do not claim a monopoly of wisdom in that regard. We hope very shortly to be in a position to honour our manifesto commitment to establish an independent commission to consider what would be the best electoral system to adopt, if we are to move away from first past the post. After that, we intend to let the people decide in an entirely free vote on the system that should apply.
  Let me deal with what the Bill does. It provides for elections to the European Parliament to be conducted using a proportionally based regional list system. The counting of the votes will be based on the "highest average" formula using the d'Hondt divisor. I intend to say a little more about divisors in a moment.
  Mr. Christopher Gill: As I came into the Chamber this evening, I received a ministerial reply from the Minister of State, Foreign and Commonwealth Office, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), who stated:
  "We take seriously our responsibilities for Gibraltar within the EU."
  I am sure that the Home Secretary recognises that there are 30,000 people in Gibraltar who, if my information is correct, are the only people in the entire European Union who do not have a vote in European elections. Given the present proposition that we should change to a regional system, it would seem simple to include Gibraltar in one of the new regions. I invite the Home Secretary to give the House an assurance that Gibraltarians will be given an opportunity to vote in the European Parliament elections in 1999.
  Mr. Straw: That is an enticing prospect. I await further advice, as Gibraltar is not my responsibility. The Channel Islands and the Isle of Man are my responsibility, and I believe that Gibraltar is in a similar, but not the same, position. Gibraltar is a dependency under the Crown, but it is not part of the United Kingdom. It is the United Kingdom that is part of the European Union, not the dependencies. People who live on the Channel Islands and the Isle of Man do not have representation in the EU, even though they are clearly affected by decisions made by it.
  Mr. Richard Shepherd: Will the Home Secretary return to the point made by the hon. Member for Cannock Chase (Dr. Wright)? It was not part of the Labour party's manifesto to propose a closed list system. That is perhaps the most obnoxious feature of the proposed arrangement. Will the right hon. Gentleman address that matter?
  Mr. Straw: If the hon. Gentleman will be a little patient, I shall come to that and hope to provide some comfort, both to him and to my hon. Friend the Member for Cannock Chase.
  A list system is used to elect Members of the European Parliament in every other member state of the EU, apart from the Republic of Ireland. The particular simple list electoral system that the Bill would introduce is the same type of system as is used in France, Germany, Greece, Portugal and Spain, so nearly two thirds of EU citizens

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  already elect their MEPs in this way, and the figure would rise to over 70 per cent. if Britain also adopted that approach.
  Under the Bill, the United Kingdom will be divided into regions. Scotland, Wales and Northern Ireland will each constitute a single region. They will return eight, five and three MEPs respectively, as they do at present. Northern Ireland already elects its three MEPs using a proportional system—the single transferable vote. It works well there and appears to enjoy wide support, so we do not propose to change it.
  England will continue to return 71 MEPs. It will be divided into nine regions. The regions, which are set out in schedule 2 to the Bill, will be the regions that are currently used by the Government offices for the regions. We have chosen those regions because they are well established and understood by the people who live in them. [HON. MEMBERS: "Oh."] It is no good Opposition Members mocking the regions or their boundaries. In an effort to be ecumenical, I have chosen those regions because they were established by the right hon. Member for Suffolk, Coastal (Mr. Gummer). I hoped that there would be no suggestion of any fiddling of the boundaries, which were established by the previous Government, following clear geographical lines, and have been widely accepted.
  Mr. Dale Campbell-Savours: If, in a particular area such as Cumbria, people feel strongly that the MEP should be part of a northern regional arrangement, will there be some flexibility in the decisions that my right hon. Friend takes?
  Mr. Straw: I regret to say that if the Bill is passed unamended—it will be open to my hon. Friend to move amendments to the schedule laying out the regions—that will not be the case. I understand my hon. Friend's concern, but if there are standard regions, it is important, in order to maintain people's confidence in the system, that we should adopt them without trying to change them.
  Had I sought to move Cumbria into the North East— although I understand the arguments for that—I would have ended up in dispute with some but not all of the local authorities in Cumbria, and I would also have been open to accusations that we were doing that for the wrong reasons. I hope that my hon. Friend will accept the reasoning behind the schedule.
  Mr. Patrick McLoughlin: May I re-emphasise a point made by the hon. Member for Workington (Mr. Campbell-Savours)? Is the Home Secretary aware that under the proposals that he is presenting to the House, the Peak national park will fall into four regions—four counties? There is therefore a case for him not to follow dogmatically the areas corresponding to the regional offices. It is nonsense that the area of the Peak national park should fall into the East Midlands, the North West, the West Midlands, and Yorkshire and The Humber, and thus have no voice at all.
  Mr. Straw: I am sure that they will write a good line about the hon. Gentleman in his local paper—and I am sure that he needs it. I have been in this place longer than him, and I never heard him speak, while a Minister, against the boundaries devised by his predecessors.
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  The only exception that we propose is Merseyside, which we shall combine with the North West region for electoral purposes. That is simply a recognition of the fact that Merseyside alone would be too small to return enough MEPs to make the system work effectively. The number of MEPs for each region depends on the number of registered electors in that region. As nearly as possible, the ratio of electors to MEPs will be the same in each region. The Bill contains provisions for the numbers to be adjusted to take account of population shifts, as schedule 1(4) makes clear. The initial number of MEPs for each region is set out in the table in schedule 1.
  Under the Bill, parties will be able to put forward a list of candidates containing up to as many names as there are seats to be filled in that region. In addition, any independent candidates who wish to stand may do so— including lots of independent Conservatives if the Opposition have arrived at that position by then. Under the proposal on the face of the Bill, voters will vote either for a party's list or for an independent candidate. They will not be able to vote for individual candidates on a party list. As now, the process will be simply to mark a single cross on the ballot paper.
  Mr. Gill: How will the electorate get rid of an MEP whom the people dislike and who they believe is failing them under the new system?
  Mr. Straw: They will do that in the same way as they get rid of any politician: by not voting for him. I shall deal with the gravamen of the hon. Gentleman's point in a moment.
  Under the system, the number of votes cast for each party and each independent is counted and the seats allocated. The seat allocation process, which is set out in clause 1, is as follows. The first seat in a region goes to the independent candidate or the party with the highest vote. If the seat is allocated to a party, it goes to the first candidate on that party's list. The remaining seats are allocated, one by one, in the same way except that, at each stage, the parties' original totals are divided by the number of seats that each party has won, plus the number one. That gives me an opportunity to say more about another scintillating subject.
  Mr. Hogg rose—
  Mr. Straw: I shall give way to the right hon. and learned Gentleman, but I ask him to hold back until I have dealt with d'Hondt and Sainte-Lague. I shall then give way to him immediately.
  I know that this question has gripped many people: they talk of little else at open-air meetings in Blackburn. The divisor is the set of numbers by which party votes are progressively divided to take account of the number of seats that a party has already won. The divisor used in the Bill is known in Europe as the d'Hondt divisor. It was devised at the end of the last century by Victor d'Hondt, a Belgian. I hope that hon. Members will take careful note of Monsieur Victor d'Hondt, as it is not often that a Minister of the Crown offers them a chance to improve their prowess at that popular Christmas parlour game, "Name 10 famous Belgians". I have contributed greatly to Christmas disputes and to the sum of human knowledge in that area by naming at least one famous Belgian.

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  Lest anyone think that the d'Hondt divisor is a highly complex mathematical calculation, I shall divulge the first few numbers in the series: one, two, three, four and five. In other words, a party's total vote is always divided by the number of seats that it has already been allocated, plus one. There has been some suggestion that the Bill should use a different divisor—specifically, the Sainte-Lague divisor. The numbers in the Sainte-Lague—
  Mr. Hogg: Who is he?
  Mr. Straw: He is not Belgian. The right hon. and learned Gentleman may be interested to know that divisors are used for council elections in Cambridge, Massachusetts. However, the d'Hondt system is called the Jeffersonian method and the Sainte-Lague system is called the Webster method.
  I must give the House more information about this interesting subject. The numbers in the Sainte-Lague divisor are not one, two, three, four and five—as under the d'Hondt system—but one, three, five, seven and nine. As I am sure hon. Members will have worked out already, the effect is that, when allocating seats, a party's total is always divided by twice the number of seats that the party has won, plus one.
  To complicate matters, there also exists a modified version of Sainte-Lague—which is generally used in Scandinavia—in which the initial number one, the divisor, is replaced by 1.4. I know that hon. Members will ask— even I did—why 1.4 is used. Those hon. Members who have studied art history will know that 1.4—which is approximately the square root of two—is the golden number that was much admired by Leonardo da Vinci, and is embedded deep in European architectural history.
  Mrs. Dunwoody: It sounds logical.
  Mr. Straw: My hon. Friend, for whom I have always had high regard, expresses some dissent about the use of the modified Sainte-Lague system. I am pleased to say that she and I are at one in rejecting it. We shall ensure that it is not used in Britain. There is a serious point to this—as there often is. Different divisors can produce different results, and there may be arguments as to which is the most truly proportional.
  Mr. Llew Smith rose—
  Mr. Hogg rose—
  Mr. Straw: I promised to give way to the right hon. and learned Gentleman.
  Mr. Hogg: I am most grateful. I think that hon. Members have enjoyed the right hon. Gentleman's presentation of the various formulae, but will he now return to the question posed by my hon. Friend the Member for Ludlow (Mr. Gill): how will the electorate in a particular region get rid of a candidate whom the people do not like? In reality, the people will simply choose one or other party and the party will appoint the MEP.
  Mr. Straw: I shall come to the issue of voter preference later. I assure the right hon. and learned
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  Gentleman that there is no difference in principle. He was chosen to stand as the candidate for his constituency, not by the voters but by his constituency association.
  Mr. Hogg: They can vote against me.
  Mr. Straw: Yes, they can—indeed, we tried to ensure that they did so, and it is one of the few constituencies where we failed in that endeavour. The electors of Sleaford and North Hykeham could vote for candidates from another party, and exactly the same situation arises in principle under any of the other systems.
  Mr. Gill rose—
  Mr. Smith rose—
  Mr. Straw: I must continue but, if time allows, I shall accept more interventions—and give way to my hon. Friend—on the fascinating issues of divisors and the kind of list system that we should introduce.
  Those who argue for Sainte-Lague say that it favours smaller parties and that d'Hondt discriminates in favour of larger parties. However, we do not believe that that is so, and we have calculated the likely effect of using all three divisors. The differences that they produce are minimal, and we have decided to use the d'Hondt divisor for four reasons. First, we believe that it will produce a fair result. Secondly, Sainte-Lague does not necessarily produce more proportional results. I have already introduced the proportionality index to the House—I noticed how hon. Members listened with bated breath. By calculating the index score for six regions using the 1994 European election vote in the United Kingdom, we found that, on average, d'Hondt scored higher than Sainte-Lague.
  Thirdly, as I hope my exposition has demonstrated, d'Hondt is simpler and more logical—I do not claim that d'Hondt is simple or logical, but it is simpler and more logical than the other two systems. Fourthly, d'Hondt is the most commonly used divisor in Europe—of the nine other EU member states that elect their MEPs using the highest average list system, eight use the d'Hondt divisor. Only one—Sweden—uses Sainte-Lague, and it uses the modified form with the golden number 1.4 as the initial divisor.
  Mr. Beith: The Secretary of State will recognise, I hope, that the effects of which divisor is used are most marked where the seats have only a small number of MEPs. If we take the example of Wales and the 1997 general election results—the most recent that we have— using the d'Hondt system, no party other than Labour and the Conservatives would have won seats in Wales, and Labour would have won 80 per cent. of the seats on 54 per cent. of the votes. That is an extreme case within the system, but it would happen, given the d'Hondt divisor and a seat with only five MEPs.
  Mr. Straw: The right hon. Gentleman and I have discussed that at some length outside the House. We have considered carefully the proportionality index that would apply in Wales in respect of d'Hondt, Sainte-Lague modified and Sainte-Lague pure. I am happy to tell him that, in the 1994 elections, d'Hondt and Sainte-Lague

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  modified would have produced a proportionality index for Wales of 88.5 per cent.—the same index—and Sainte-Lague an index of 90 per cent., but overall, there is no question about it: d'Hondt produces a marginally better proportionality relationship between seats and votes than Sainte-Lague.
  Let me deal with the issue that has perhaps been more controversial: the nature of the list system.
  Mr. Llew Smith: May I give the Secretary of State another opportunity to explain this to the House? If the electorate are dissatisfied with one Member of the European Parliament, how can they rid themselves of that MEP under the regional list system?
  Mr. Straw: I have already explained that: the electorate should not vote for the list that includes that candidate. It is a straightforward system.
  Mr. Gill: Will the Secretary of State give way?
  Mr. Straw: Let me get on; I hope to give some comfort to the hon. Gentleman. [Interruption.] It may be a matter of dispute between the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) and his colleagues, but it is not for me.
  When a party wins one or more seats, its candidates are elected in the order in which they appear on the list. The fact that voters are unable to influence the order in which candidates are on a party list has attracted some adverse comment, both outside and inside the House. Let me explain the reasoning behind that.
  The electoral regions will be very large, and individual candidates are unlikely to be known by more than a small—not to say tiny—fraction of the electorate. Voters cannot, therefore, be expected to make an informed choice between individual candidates from the same party. If the electorate were required to rank candidates of the same party, such choices could be arbitrary. I also fear that it could disadvantage women and ethnic minority candidates. I understand that Lord Plant shares that view.
  To reinforce the point, lest that is somehow presented as a radical departure, let us not forget that that is essentially the way in which hon. Members are chosen. Candidates are selected by the parties, and voters have no influence over who the representative of their chosen party will be in their constituency. If they do not like the representative of the party, they have to vote for a different party. That is the simple way in which the system operates and the way in which this system will operate.
  The system that is set out in the Bill has the great virtue of simplicity. As now under the first-past-the-post system, the elector has to mark a single cross on the ballot paper. As I mentioned, simple list systems of that sort are already used by nearly two thirds of voters in the European Union to elect their MEPs, so we are in reasonable company.
  I realise that this is an important issue that goes to the heart of the Bill, and I have listened carefully to all the representations that have been made to me on the point. In particular, it has been suggested, both by the constitutional group Charter 88 and by the Liberal Democrats, that we could introduce an electoral system of the sort that operates in Belgium and Denmark, whereby voters can vote either for the party list as a whole or for
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  an individual candidate from the party list—or, of course, for an independent candidate. Under that system, party votes and individual votes are combined to determine how many seats each party is entitled to, then seats are allocated to candidates by a method that adds party votes to those received by individual party candidates.
  As with any other system, there are arguments both ways. The modification of what we propose in the Bill would provide some more direct voter preference and may assuage the concerns even of the right hon. and learned Member for Grantham.
  Mr. Hogg: For Sleaford and North Hykeham.
  Mr. Straw: I apologise.
  On the other hand, that is marginally more complex than the present simple system that we propose, and it is possible for a candidate low down on a party list to receive many personal votes—perhaps more than those of his or her party colleagues—yet still not be elected, because the weight of party votes helps those higher up the list.
  Nevertheless, I am prepared to listen to the arguments for adopting a Belgian-type system and to give them careful consideration. To help hon. Members, I shall arrange for a brief description of how the Belgian system operates to be placed in the Library, alongside a greater description of how the system in the Bill is intended to operate, and I shall be interested to learn how hon. Members on both sides of the House perceive the system. This will therefore be a subject to which we can return at a later stage of the Bill's passage.
  Several hon. Members rose—
  Mr. Straw: I give way first to the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney).
  Sir Brian Mawhinney: I want to be clear as to what the Home Secretary has said. Has he just said that, having proposed the Second Reading of a major Government Bill, he is now signalling that he is willing to change one of the fundamental aspects of that Bill?
  Mr. Straw: It may come as a surprise to the right hon. Gentleman, as a member of the previous Government, who did so badly, that we are a party and a Government who listen to argument.
  I do not propose that we adopt the open list system that was in the European Parliamentary Elections Act 1978, because there are all sorts of disadvantages in electors simply trying to rank candidates on a list and not being able to choose a party list if they wish to do so.
  Several hon. Members rose—
  Mr. Straw: I shall give way in a moment.
  However, I am willing to look—I do not say that we have signed up to them—at the proposals that we received after the Bill's publication from the Liberal Democrats and from Charter 88 for a modification of our simple list system. Under that modification, it will be open to electors to vote for the party list as a party list, if they wish to do so. It happens in Belgium. The majority—I

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  think the overwhelming majority—of voters, offered that free choice, do so, but it will also be open to voters to vote, if they wish, for an individual candidate on the party list. When it comes to the allocation of seats within the total that a particular party has won, those personal votes are added to the votes that it received.
  I hope that we can achieve—because I happen to think that it is the House that should decide these things—a serious debate on the merits of that proposal, as opposed to the proposal in the original Bill. I have not come to a firm view. I certainly believe that the old complicated system in the 1978 Act has many disadvantages, but I can see the argument in favour of this one. I am willing to have it discussed.
  Mr. Beith: I thank the Home Secretary for taking this open-minded view after the long discussions that we have had. He should not accept criticism from those who, having criticised what he proposed, now criticise him for giving any hint of changing his mind. The merit of this system is that, although it allows the party to state its preferred order, it allows a large part of the electorate in that constituency to decide that they are not satisfied with that order and to produce what I might call the Tatton outcome.
  Mr. Straw: I understand that point, and I am grateful for the fact that the right hon. Gentleman has been generous in response to what I have said. He has come to this in an open-minded way.
  Mrs. Margaret Ewing: The Home Secretary said that he is considering the possibility of modifying the Bill. Obviously, all the political parties and, indeed, the independents are concerned to know exactly when the legislation will be on the statute book. Does he therefore have a clear timetable as to when a final decision will be taken?
  Mr. Straw: The legislation obviously needs to be on the statute book by the end of this parliamentary Session, which is October next year.
  Mrs. Ewing: The elections are in June.
  Mr. Straw: The elections are in June 1999, but I think that there is ample time within that period to discuss the matter. I shall assist the House and individual Members by ensuring that as much information as possible is made available about those different systems, before the House and the other place come to a conclusion.
  Mr. Shepherd: As the Home Secretary did not mention it in his incredible discourse to the House, does he expect turnout to improve? It is now at the extraordinary low level of 36 per cent. and it has been around 30 per cent. Why on earth does he think that the incredible system being proposed should help induce people to come out and vote?
  Mr. Straw: We are not a country that can lecture other European nations about turnout. Generally speaking, turnouts are higher in Europe. One argument in favour of change is the fact that turnouts are so low. It is difficult
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  to argue that the current electoral system has gripped the electorate. It has not. My guess—and it can be only a guess—is that turnout will improve under the proposed system.
  I should now like to make some progress. While I have been on my feet, the Chamber has filled up and many hon. Members wish to speak, so I shall refer to some more detailed points. Let me explain how vacancies will be filled. Schedule 2 empowers the Secretary of State to make regulations that will be subject to parliamentary approval by affirmative resolution. The regulations will provide that when a vacancy occurs in a seat that was originally filled by a candidate from a party list, it should be filled by the next eligible and willing candidate from that list. If, however, the list has been exhausted, or if the vacancy has been caused by the death or resignation of an independent MEP, a by-election will be held.
  To work effectively, the electoral system that the Bill will introduce—or a Belgian-type system—requires political parties to be registered. We have already announced that legislation to establish a registration scheme for political parties will be introduced during this parliamentary Session. Once such a scheme is in place, only parties that have been registered will be able to put forward lists of candidates. Of course, independents will also be able to stand.
  A registration scheme will have the added advantage that it will offer parties the protection from spoiler candidates such as the notorious case that occurred in the 1994 European elections, involving a candidate who styled himself a "Literal Democrat".
  Introducing a new electoral system inevitably involves a good deal of detailed work. New nomination forms need to be designed, new rules about election agents need to be devised and many other practical points have to be covered. All that is consequential on introducing the new system, and will be dealt with in regulations which, of course, the House will be able to approve. Schedule 2 covers the power to make such regulations.
  A new ballot paper will need to be designed. I have already produced—and made available in the Library—a sketch of what the ballot paper might look like.
  The Bill also permits regulations to be made governing candidates' and parties' election expenditure. Clearly, the old rules, which are concerned solely with controlling the spending of individual candidates at constituency level, are no longer appropriate for a system that is based on the promotion of a party list, so there will need to be limits on parties' regional expenditure. However, as it will be hard to distinguish between parties' regional and national expenditure, we shall need to consider carefully the case for placing limits on national expenditure.
  As it has been a matter of some debate since 16 October, when I published our proposals to legislate in respect of the funding of political parties, let me make it clear that paragraph 6 of schedule 2 provides regulation-making power to control national spending by political parties on European elections. I know that my right hon. and hon. Friends will welcome that.
  Mrs. Ewing: Once again, I am grateful to the Home Secretary. As there will be separate lists for Scotland and Wales, recognising the nature of the four-party system in

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  those countries, will limitations be placed on the unionist parties, so that they spend the same amount as other parties competing in Scotland and Wales?
  Mr. Straw: The usual way to place limits on spending is to use a calculation based on the number of electors in the areas where candidates are standing, but, as ever, we are open to representation. We are a listening Government.
  We said in our manifesto that we would introduce a proportional voting system for elections to the European Parliament. The system that we are proposing has many advantages. It is appropriate for the nature and functions of the body that is being elected. It will be simple for the electorate to use. It allows independent candidates to stand. It produces fair results so that in each region, a party or independent candidate will win a share of the seats proportionate to the share of the vote in that region. The Bill is another major step forward in the modernisation of our constitution. I commend it to the House.
  6.4 pm
  Sir Brian Mawhinney: I congratulate the Home Secretary on one of the most impressive performances that I have seen in the House for a long time: for a man who did not believe a word of what he was saying, he said it with great aplomb. I agree with my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) that the Home Secretary delivered his speech with great charm.
  The Home Secretary told us that the Government were elected to improve the democratic process and then signally failed to convince even his hon. Friends that the Bill would in any way achieve that aim.
  The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) and I have had a number of friendly but robust exchanges during our time in this place, particularly when I was at the Department of Health. When I was at what was then the Ministry of Transport we became more like-minded. Today we are as one. The hon. Lady put her finger on one of the major flaws of the Bill—the severing of the link between a constituency and its elected representatives. From the expression on the faces of Labour Members, it was clear that many of them agreed with her, as we did.
  I was intrigued by the Home Secretary's suggestion that because the single transferable vote works well in Northern Ireland and commands widespread support there, it does not need to be changed. I remind him that the first-past-the-post system works well in England and commands widespread support, so the logic of his position falls.
  I was also intrigued by the circular nature of the Home Secretary's argument to the effect that we want a list system so we have to have big regions and that if we have big regions we have to have a closed list system. That argument did not convince the House and it certainly will not carry the Committee, just as the right hon. Gentleman did not carry the House when he failed four times to answer questions from hon. Members, including his hon. Friends, about how electors—and elections are about electors and not party apparatchiks—would get rid of a Member who they thought was doing a poor job.
  Mr. Richard Burden: The right hon. Gentleman said that electors are the most
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  important consideration. Is he the same person who on 13 March 1996 said:
  "Even in 1983 and 1987 when we won landslide victories, a good 58 per cent. of those who voted supported other parties. We do not need to win over everyone or even most people in order to win."?
  Are those the right hon. Gentleman's democratic credentials?
  Sir Brian Mawhinney: It is interesting to reflect that the hon. Gentleman's party won fewer votes in 1997 than we won in 1992. That is the best answer that I can give him.
  This evening, we are considering a Bill that has been introduced with no justification. Bert Lance said,
  "If it ain't broke, don't fix it".
  The Home Secretary has signally failed to convince the House that there is anything wrong with the present system. He cannot be suggesting that the system is biased in our favour because his party has the preponderance of seats at the moment. He cannot be claiming that the system is too complicated because everybody understands it and is able to go into a voting booth, put a cross on a piece of paper, see the votes counted and understand who has won.
  The hon. Member for Crewe and Nantwich might have said that the Bill will not only break the link between constituencies and individual elected representatives but will prevent electors from electing individuals—which, thus far, has been another fundamental aspect of our electoral system.
  It is worth recalling that most people in democracies around the world vote with the first-past-the-post system. I therefore wondered whether there was perhaps something intrinsically better about the Home Secretary's proposals. I reflected on the fact that, in 1993, after years of unstable government, Italy moved away from a system of proportional representation. After trying PR, France switched back to its second ballot system. The Swedes are changing their PR system, because they discovered that none of their elected representatives was responsible for developments or hazards in any sphere. After introducing PR last year, New Zealand had to wait for more than two months before a Government could be formed. I suspect that the Home Secretary realises, after his private talks with Irish TDs, how much they dislike the system under which they operate.
  Therefore, there is no argument that proportional representation is intrinsically better. Consequently, the question is whether less problems—
  Mr. Straw: Fewer problems.
  Sir Brian Mawhinney:—whether fewer problems are associated with PR. I once read somewhere:
  "I have not been persuaded that under PR"
  one does not
  "end up with a disproportionate power being wielded by small parties. There is no perfect electoral system. Each has its problems and I simply do not believe that the problems"
  one gets
  "with PR are less than those"
  one gets
  "with the existing system."

  819
  I see that the Home Secretary agrees with that statement. It is a good job that he does, because they are not my words but those of the Prime Minister, who uttered those words only a couple of years ago, making it clear that he is quite unimpressed with PR and with the argument that PR provides a system with fewer problems than our current system.
  Mr. Straw: I have been following the right hon. Gentleman's speech with care; he is making an important argument. Does he accept that there is a profound difference between the Parliaments that he has described, which are national Parliaments elected to determine a Government, and a European Parliament that in no sense forms—or should form—a Government, and that is wholly and solely a representative body?
  Sir Brian Mawhinney: We are talking about the election of public representatives—that is the fundamental issue—which is a feature that is shared by the European Parliament and the House. As hon. Members and the Home Secretary know, the great unspoken aspect of the debate is that this Bill is but a dry run for another Bill which will eventually emerge, stating that the Government have decided to change the method of election to the House.
  At the risk of upsetting traditionalists, I shall depart for a moment from the normal confrontational tone of our debates in the House and pay a genuine tribute to the Home Secretary. It was courageous and typically honest of him to state quite openly what he has stated frequently in the past, and what all hon. Members know to be true: when it comes to elections to the House, he has no great love of any form of proportional representation. Hon. Members will remember that fact, which I do not mention in any aggressive sense. I pay tribute to him.
  I pay even greater tribute to the Home Secretary because of the nature of the Government. To understand the Government, one must understand two matters. The first is that the Government are determined to be re-elected—for the first time—for a second term, which is in itself a perfectly honourable objective, although it becomes much less honourable if the Government resort to changing the goalposts to achieve it.
  The second thing that one must understand about the Government is that their driving emotion is a strong dislike—I shall be diplomatic in my phraseology—for Conservatives. Ministers are perfectly happy to link up with any other party with which they think they can do business, on this or any other issue, permanently to disadvantage the Conservative party. That is a perfectly obvious motivation for the Labour party, and it is why everyone understands that the Bill is but a dry run for what will come later. We will have to proceed on that understanding.
  Mr. Beith: I should like to understand two aspects of the Conservatives' position. The first is why they accepted a treaty obligation to have an electoral system for Europe that is based on common principles, including proportionality. The second is why they have retained for all these years the single transferable vote system of proportional representation in Northern Ireland.
  Sir Brian Mawhinney: I was about to deal with that point. My hon. Friend the Member for Stone (Mr. Cash)
  820
  raised a point on article 138(3). I remind the right hon. Member for Berwick-upon-Tweed (Mr. Beith) that, although that was a treaty obligation—we signed the treaty and took on the obligation—it was one that was subject to unanimity. That aspect of the treaty was as important to us as the treaty obligation itself. I think that he will grant us that, over the years, we have consistently maintained that view.
  The Home Secretary made an important point on unanimity. Thus far, because of the need for unanimity, we have not gone along towards a single unified electoral system in Europe. The Bill is a major step in that direction, as he himself acknowledged in his speech. Will he reassure the House that we will not move from any electoral system towards a harmonised European one without the House deciding on such a move and thereby legitimising it?
  Mr. Beith: What about Northern Ireland?
  Sir Brian Mawhinney: If I may, I will return to that matter.
  Why are we considering the Bill when we know that the Prime Minister is not in favour of proportional representation? Who was pushing for it when the Prime Minister was against it? The answer is obvious—it was the right hon. Member for Yeovil (Mr. Ashdown), who realised that he and the Liberal Democrats would never be elected to govern. He realised that he had one thing in common with the Prime Minister and the Minister without Portfolio—a willingness to enter into any deal to do down Tories.
  The right hon. Member for Yeovil was willing to contemplate any secret deal to achieve that aim, and that is what he and the Government did. Off into a secret room they went—probably, given the favourite genre of the Labour party, a smoke-filled room—and did a secret deal. We still have no idea what the deal was, except that it gave the right hon. Gentleman a seat at the Cabinet table, for an hour every two or three weeks, in return for a commitment to help pass legislation that he and the Prime Minister thought would be to their political advantage and to the political disadvantage of the Conservative party. We shall see.
  The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): The right hon. Gentleman is off on a flight of fancy, and I am loth to interrupt him. He accused my right hon. Friend the Prime Minister of having dreamt up the scheme, as if it has come out of the ether. I presume that he has read the House of Commons research paper on the Bill. Does he acknowledge that, on page 17, it quotes my right hon. Friend's party conference speech, of 30 September 1993? My right hon. Friend, then shadow Home Secretary, said:
  "We will reform the voting system for the European Parliament".
  Does the Opposition Front-Bench spokesman accept that there was some precedent for my right hon. Friend's decision on the subject?
  Sir Brian Mawhinney: I do not want to upset the Minister too much, but the quotation that I gave from the Prime Minister post-dated the one that he has given the House. Mine was from 1994.
  Mr. Howarth: For reasons that I well understand, the right hon. Gentleman is confusing arguments about

  821
  PR systems for electing a Westminster Parliament with those for electing Members of the European Parliament, which is what the Bill covers. If he checks the quotation that he mentioned, he will find that it refers to the Westminster Parliament.
  Sir Brian Mawhinney: I am grateful to the Minister and to the Home Secretary because it has emerged from the debate so far—and we have been going for only an hour and 20 minutes—that the Labour party is perhaps moving further away from reforming elections to this House. That is a helpful development and I hope that it will continue. The Minister accused me of flights of fancy, but it is not a flight of fancy to say that the leadership of the Liberal Democrats and the Labour party met in secret and did deals on this country's constitution. That is a matter of record and we are now starting to see the results of those deals.
  Dr. Tony Wright: May I put it to the right hon. Gentleman that the reason why he is having so much difficulty—and attacking a Bill that does not exist to avoid discussing a Bill that does—is that he does not understand what is going on? The examples that he has given—one party having a civilised discussion with another to improve a measure, and a Home Secretary who accepts arguments about improvements to the Bill to improve voter choice—are examples of the sort of politics that people want. The politics that he is giving us are those that people wanted to boot out.
  Sir Brian Mawhinney: I shall assume from that that the hon. Gentleman is giving me a gentle rebuke and asking me to get on with my speech about the Bill. I shall be happy to move on to demonstrate its inadequacies to him.
  The Bill will sever the direct link between the constituency and the Member. For the first time it will prevent the electors having a direct vote for their representatives. No one should be in any doubt about the fundamental changes in the Bill. It will break the constituency basis of British elections. It will break the individual basis of British elections, and it will break the democratic basis of British elections. It is not new democracy, new young Britain or new modern voting: it is new cynical political control, undreamt of by old Labour.
  Let us examine the Bill. Constituencies will go and European-style regions will be in. In future, as the Home Secretary said, Members of the European Parliament will represent, say, Scotland or London, as if those were homogeneous areas. What do Swindon and Land's End by way of the Scilly Isles have as a unifying feature? That is to be a region. Hon. Members will have noticed that the regions are an amalgam of urban and rural areas. Given the Government's record, we all know that the urban voice will prevail at the expense of the rural voice. Who will argue the case for inner London or the west of Scotland? Who will argue the case for minority views in those huge regions? How can Members feel a sense of ownership of their regions or identify with them?
  Those of us who spend time, as I suspect most of us do, talking to Members of the European Parliament will know that they are already frequently criticised by their electors for not being seen around. Given the size of their constituencies, they have to spread themselves thinly over a large area. That is already a source of irritation for the
  822
  electors, but how much worse will it be when Members of the European Parliament have to cover a region that stretches from Oxford and Milton Keynes, via Portsmouth and Cowes, to Dover? The job will be impossible in any terms that we, as elected representatives, understand our job.
  Mrs. Dunwoody: I do not think that the job is meant to be done in the terms that we understand. The purpose of Members elected under a list system is to do exactly as they are told by the people who decide their position on the list. As long as that is clear, there is no conflict of interest.
  Sir Brian Mawhinney: I hope that I will not wreck the hon. Lady's reputation, but I entirely agree and I shall come on to that point shortly. The Home Secretary told the all-party electoral reform group recently that, for the Scottish Parliament and the Welsh Assembly, it was important to maintain a constituency link, but that it was not important to do so for the European Parliament. Indeed, the Home Office's press release states:
  "People do not enjoy, or need,"—
  I emphasise that word—
  "the same close links with their MEP as they do with their MP, so it is possible to elect MEPs on a regional basis."
  It is clear that the Home Secretary is determined to sever the link that has stood this country in good stead for hundreds of years.
  Mr. Hogg: Does my right hon. Friend agree that although Members of the European Parliament have a smaller constituency case load, they deal with some constituency work involving personal cases? Under the list system, it is difficult to know to whom an individual could turn.
  Sir Brian Mawhinney: My right hon. and learned Friend is correct and I agree with him. He might have added that, increasingly, businesses make representations on European matters and I know that MEPs for the area that covers my constituency spend a fair time dealing with those matters.
  The second point that arises from the Bill is that it will bring party politics into what has hitherto been a representational role. As a Member of Parliament, I act for all my constituents, whether they voted for me or not. I know that that is true of the Home Secretary, because I recently heard a complimentary story about action that he took on behalf of some constituents who probably did not vote for him. I also suspect that it is true of most hon. Members. It is certainly true of Robert Sturdy, the MEP for Cambridgeshire. However, in future, such representatives will be more indebted to their party than to their electors.
  The third point is that the Bill will throw away the personal and individual basis of our electoral process. Every vote I have cast has been for a person—a name on a ballot—to represent my interests. I have voted for an individual with strengths and weaknesses, with skills and experience, with a family and a job history. Now I will get to vote only for a party. That is a profound difference and a profoundly backward step. Of course I am proud of my party, just as the Home Secretary is proud of his. I am proud of its history, its achievements, its statesmen and

  823
  women and its beliefs. Obviously, I want people to identify with those party aspirations, but I want to vote for a person whom I can test, examine and get to know. The Bill will prevent me from doing that.
  What am I offered in the Bill? I am offered one vote for a party, which could give me up to 11 Members of the European Parliament—from four in the north to 11 in the south-east. One vote for one party will produce multiple MEPs. Of course I would want all 11 in that region to be Conservatives. The Home Secretary would want them all to be Labour.
  Mr. Straw: No.
  Sir Brian Mawhinney: Of course he would. The House does not believe the Home Secretary. The voter will not have a chance to have some from one party and some from another, if that is what he chooses. The House should be in no doubt, that is a fundamental change to the way in which we do business.
  Mr. Beith: First, under the present system, a voter cannot choose to have one Member from one party and one from another. Secondly, if he does not like the person offered by his party, as has happened to some Conservatives over the years, as well as to some in the Labour party and no doubt to some in my party, his only option is to reject the party's choice. He has no way of substituting another individual from that party whom he would prefer.
  Sir Brian Mawhinney: I understand that the right hon. Gentleman is in favour of the change. I understand that he has no prospect of getting into government unless proportional representation in Europe bounces across to this House. However, I do not accept the premise from which he is working and I am not impressed by his argument.
  Mr. Shepherd: Our politics is often dominated by great issues. In the run-up to the European elections, economic and monetary union will be central. When there are different views on that great issue within all the parties, how can we identify those on a list who are for or against it? The apparatchik rule of central party control will confuse the electorate and reduce the number of votes cast.
  Sir Brian Mawhinney: My hon. Friend makes a strong point.
  What is envisaged is even more restrictive than what we have talked about so far. The party, not the voters, will decide the order of people to be elected. Surely Ken Coates, Labour MEP for Nottingham, North and Chesterfield, was right to say that with such a system
  "We will end up with a bunch of new Labour clones. The MEPs elected under this system will not be accountable to their constituents, but to Peter Mandelson—this will be nothing but a recipe for creeping."
  Whatever Ken Coates's skills, he does not write editorials for The Times. Lest Labour Members are inclined to dismiss him, let me quote an editorial of 23 October, which says:
  824
  "The party's actions show all the worrying signs of a leadership that has become obsessed with control."
  It continues:
  "Whatever their personal interest, the dissidents are right to protest against an electoral system that puts the power of selection in the hands of the party's centre, leaving none for voters or party members. This is bad for democracy and will be bad, eventually, for the parties too. The Government plans to introduce the worst possible kind of PR for the European elections. Its 'closed list' system allows voters no say over which candidate they want: they can merely vote for a party, which will then appoint its own placemen to the Parliament."
  It concludes:
  "As it is, 1999's European elections promise to be a triumph of party manipulation over genuine voter choice."
  The hon. Member for Crewe and Nantwich put it at least as elegantly.
  What was the reaction of new Labour to the dissidents in its ranks? Open? Tolerant? Transparent? Modern? It gagged them. They were told that they could not discuss the issue, that they could not criticise the party and that they could not complain. That is new Labour.
  Mr. Straw indicated dissent.
  Sir Brian Mawhinney: There is no point in the right hon. Gentleman shaking his head. That is his party. Ken Coates has further said:
  "If an MP can be gagged and stopped, then democracy is on the way out."
  Hugh Kerr, MEP for Essex, West and Hertfordshire, East said that the gagging
  "shows that new Labour is increasingly authoritarian and centralised."
  The Sunday Telegraph tells us that the national executive committee rushed through a new disciplinary code specifically banning MEPs from campaigning against proportional representation.
  The hon. Member for Bolsover (Mr. Skinner), who is not in his place—I wish that he were—thinks that the whole thing is political suicide. The hon. Member for St. Helens, South (Mr. Bermingham) has said:
  "Many MPs are concerned about the loss of constituency identity by going for a regional list of candidates."
  It is a pity that he is not in his place today. He would have found that more of his colleagues than he realised share that concern. According to The Guardian, the hon. Member for Birmingham, Northfield (Mr. Burden) is opposed to centralism and people being barred from voting for individuals. If he were in his place— [Laughter.]
  Mr. Burden rose—
  Sir Brian Mawhinney: If he were in his place, as he is—
  Mr. Burden: I am here.
  Sir Brian Mawhinney: I know. If he were in his place, as he is, I would give him an opportunity to confirm the accuracy of that quotation.
  Mr. Burden: I know that I have shaved off my moustache, but I wonder whether the right hon. Gentleman did not notice me. I oppose the centralisation

  825
  of political parties. That is why I welcome the receptiveness that my right hon. Friend the Home Secretary has shown to the representations that have been put to him and the co-operation that there has been on the issue. As the right hon. Gentleman is obviously so concerned about centralisation and intolerance in political parties, how does he relate what he has just said to the treatment given to the hon. Member for Leominster (Mr. Temple-Morris)?
  Sir Brian Mawhinney: The hon. Member for Leominster (Mr. Temple-Morris) made his own decision. I regret that he has left the party. I hope that that answers the question.
  From Aberdeen to Eastbourne, from St. Ives and Bangor to Norwich, the message to anyone who wants to be a new Labour MEP is clear: "Don't worry about the voters; just mug up on the Mandelson mantra. Learn how to creep and surrender to Millbank thought control. Remember that the party always comes before the voters and that the party is always right."
  How will all that come about? The Bill says:
  "The system of election…shall be a regional list system"
  and that
  "A vote may be cast for a registered party".
  The Home Secretary does not want the spin doctors to refer to it as a closed list system, but it is. It is closed to the public, but open to new Labour control freaks.
  At the electoral reform meeting, the Home Secretary found it necessary to warn the Liberal Democrats not to have an argument in public about the closed list, because otherwise the Tories would capitalise on it. Now he knows that it is not the Tories who will capitalise on it, but the members of his party who are so dissatisfied with the Bill that they will want to examine it further.
  What is the redeeming feature of the new system—a redeeming feature so strong that it overrides all the arguments against the Bill that have been aired tonight? Perhaps it is its simplicity. The present system is pretty simple: one voter, one candidate, one vote; count them up and there is one winner.
  What is the new system like? I turned to the Home Office handout to find out:

  "1. The first seat is allocated to the individual or party with the highest vote. Where the seat is allocated to a party it goes to the first candidate on that party's list.

  2. The second seat is allocated in the same way except that if the first seat has gone to a party, that party's total is divided by two.

  3. The process continues until all the seats have been allocated. At all stages party totals are divided by the number of seats that party has already been allocated, plus one."

  Is that what I am supposed to tell my constituents? I wonder whether there is an easier, simpler way than one person, one vote, one winner.
  I turned next to the Library research paper:
  "The…system used aims to allocate each seat to the party which would at that point have the highest average vote per seat. The total votes of each party are divided by the number of seats it already has plus the next seat to be allocated. Thus the party totals are divided first by 1 [0 seats plus 1] then by 2 [ie 1 seat plus 1] then by 3 [2 seats plus 1] etc. The first seat goes to the party with the largest number in the table below, the next seat to the next highest number etc."
  826
  Is that supposed to be an improvement? Is that supposed to be what the Home Secretary started by telling us was a simpler system? The House does not believe a word of it.
  The Home Secretary told the electoral reform group that he was thinking of holding the 1999 European elections on a Sunday. Perhaps in his winding-up speech, the Under-Secretary will tell us whether that is still likely.
  The Bill offers to so-called new Britain, new Labour's brave new world: no constituencies, no link between an individual MEP and an area, no individual to vote for, no choice of individuals to vote for, no way in which to buck the control of the party machine, and no understanding by most people of what they are doing or why.
  In truth this is just an old-fashioned political deal, based on political expediency, between the Prime Minister and the leader of the Liberal Democrats—at the expense of the British people and of the traditional British voter's link with his or her public representative, elected personally.
  So much for openness and transparency. So much for being modern and accountable. So much for the Home Secretary's reputation; he is introducing a Bill in which even he does not believe. Like him, we do not believe in it. Unlike him, we shall vote against it.
  6.42 pm
  Mr. Richard Burden: I congratulate the shadow Home Secretary on an imaginative way of attempting to oppose the Bill. The only trouble was that he did not actually address what is in the Bill—and I found his unique interpretation of the term "secret deal" most interesting.
  I was under the impression that the hallmark of a secret deal was the fact that people did not know about it, yet the right hon. Gentleman appeared to be criticising the pre-election agreement between the Labour party and the Liberal Democrats on constitutional affairs, which was not only published but announced at a press conference and mentioned in the party manifestos. If that was a secret deal, it was rather different from my normal definition of that term.
  I welcome the Bill. Such arrangements have been a long time coming. Several treaties and other agreements in Europe, some of which have been mentioned, have already urged a more common and compatible electoral procedure for the European Parliament.
  That is different from saying that all European Parliament electoral procedures in each member state must be identical. At present, no two systems for election to the European Parliament are identical. If we want a Parliament that will hang together as a representative body—as my right hon. Friend the Home Secretary said, it is not a Government body—it is important that the essential principles of the electoral systems by which Members get to that place should be compatible.
  That seems to me a fairly elementary point, but the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney) did not mention it in his long speech. When Members of the European Parliament go to Strasbourg, the strength of the parties there should be broadly proportional to their voting strength in the elections. That fairly simple point seems to be lost on Conservative Members.

  827
  The elections to the European Parliament now reflect that principle, in one way or another, in most member states—except Britain. Today, we have the chance to begin the process of putting that right.
  The system is based on regional lists, and there have been some criticisms of that in the debate. I shall return to the subject. It is important that we also examine the system that we already have in Britain, and the distortions that it produces.
  Few systems are wholly proportional. Indeed, these days few people would seriously suggest that an electoral system should be entirely proportional. That is very difficult to arrange. The first-past-the-post system goes to the other extreme.
  Labour as a party has often done fairly well out of that system. In the most recent European elections we got about 44 per cent. of the vote—a sizeable vote and a good success for the party. However, on that 44 per cent. share of the vote we secured 74 per cent. of the seats. The Liberal Democrats secured about 17 per cent. of the vote, yet ended up with 2 per cent. of the seats.
  I realise that Conservative Members may have difficulty with my argument, because I am not putting it forward on the basis of looking at the entire political process simply by asking what will be to our party's advantage. I am trying to address a democratic issue.
  Mr. Shepherd: The hon. Gentleman should look around at his own party's Benches, when they are occupied, because the concern about his argument is shared on both sides of the House. He should also remember that this is a highly controversial measure. He has already heard interventions by his hon. Friends who do not support the method of denigrating another argument in that way, by focusing it on us.
  Mr. Burden: The hon. Gentleman has an honourable record of looking for greater democracy and openness in the House, and I pay tribute to him for that.
  The right hon. Member for North-West Cambridgeshire did not address the argument that is most important for the debate—the principle that, if a party wins seats in the European Parliament, there should be some relationship between the number of seats won and its voting strength.
  Mr. Hogg: Will the hon. Gentleman give way?
  Mr. Burden: I shall let the right hon. and learned Gentleman in soon.
  The distortions in this country's present system are extreme. No system is wholly proportional, but the distortions are so great as to require attention. The Bill attempts to deal with that.
  Mr. Hogg: I do not think that for those purposes my right hon. Friend is trying to oppose—or, indeed, that I am doing so—proportional representation as a means of electing the European Parliament. Our objection is to a particular kind of proportional representation. The hon. Gentleman needs to focus on asking why we are to have a proportional representation system that does away with
  828
  the constituency basis for choosing Members, while giving party bosses exclusive control over the candidates. That is the real issue that the House wants to discuss.
  Mr. Burden: If the right hon. and learned Gentleman is patient, I shall come to those points.
  In looking at the genesis of the Bill—and its importance to the House and to democracy in this country—it is important that we address the distortions in the present system. The right hon. Member for North-West Cambridgeshire said, essentially, "If it ain't bust, don't fix it." My view is that the present system of elections to the European Parliament is bust—or, if not bust, severely weakened by distortions.
  That is certainly the case in terms of seats won in relation to votes cast, but it also produces distortions within the European Parliament. The party group to which my party is affiliated in the European Union, the Party of European Socialists, is the largest group; that is absolutely right, given the number of votes cast. I admit that the numerical dominance of the group is out of kilter with the overall number of votes cast. The situation was reversed between 1979 and 1984, when the right-wing group experienced a similar dominance. That has developed because elections in this country have been an influence and because our electoral system is out of kilter in terms of votes cast and seats won.
  Some groups within the European Parliament are under-represented, and that will continue under the present system. I hold no brief for the Green party which, in recent elections, has secured very few votes. That was not always the case. In 1989, the Green party in this country secured one of the highest votes in a European election of any Green party in Europe—nearly 15 per cent. It has not repeated that share of the vote. Although the Green party achieved a high proportion of the vote, the UK did not elect one Green MEP. It is right that we address that problem.
  It is not as if Green parties are not represented in the European Parliament—about 27 Green MEPs were elected in that election, often on a lower proportion of the vote. It may be that the systems in other European member states are wrong. Their thresholds may be too low, which may lead to the over-representation of minority parties. I ask the House to consider whether our system—in which a party that gets a significant share of the vote does not gain one MEP—is right.
  The share of the seats won in European elections may be out of kilter with the share of the vote that a party secures. Does the British system have other compensatory benefits? In the main, it does not. One issue which could be looked at, and to which my right hon. Friend the Home Secretary referred, is participation. Does our system encourage a closer relationship between the electorate and the MEP at the time of election? Is that reflected in a high turnout? It is not. At the last European election, Britain had the third lowest turnout. In 1989, Britain had the lowest turnout. That is not a great vote of confidence for our electoral system.
  Does our system provide a greater balance? For instance, does it ensure that the right proportion of women are elected as MEPs? It does not. At the last election, only two countries in Europe—Italy and Portugal—had a lower proportion of women MEPs elected than Britain. The

  829
  argument, "If it ain't broke, don't fix it," does not stand up. There is a huge disparity between seats won and votes cast, but we do not have other compensating factors.
  Arguments have been made about whether the regions are the right kind of area from which MEPs should be elected, and these arguments deserve an answer. It is right in this House to pay tribute to the work of MEPs of all parties in Brussels and Strasbourg, as they do an excellent job. The fact is that the constituency basis for MEPs provides no great coherence. Until recently—fortunately, the name is changing as a result of the last boundary review—I lived in the Birmingham, East European constituency. That is a simple title, but there is one fundamental problem—my house is in west Birmingham. It is a strange situation.
  The constituencies are very large and the ability of MEPs to relate closely to individual constituents is limited. If we are looking for an appropriate area from which MEPs might be elected, the regional basis has a good deal going for it. In the economic life of our country, the regions are becoming more and more important.
  We are engaged in serious constitutional change in which the regional dimension in England will become increasingly important, and I look forward to the creation of regional development agencies and other initiatives. If they are to work, it is important that the economic system relates to the political system, and vice versa. The regional dimension is very important in terms of the distribution of European structural funds. Giving the European Parliament a direct relationship with the regions makes great sense.
  The new system will also be important in terms of subsidiarity. In my view, subsidiarity does not stop at a national level, and the objective of all parties should be to locate power at the lowest possible level appropriate for the functions through which any legislature or representative body exercises its power or influence.
  Whereas in most parts of Europe, the regional dimension has been recognised—regions have benefited from that recognition—this country has not done that sufficiently. We are now seeing improvements with devolution and the creation of a Scottish Parliament and a Welsh Assembly. That will devolve power from the centre here in London, and I look forward to the English regional dimension being promoted in the UK. If the European Parliament can be linked with that, it will be good for our economy and—more important, in respect of this debate—good for democracy.
  Before the Bill was published, concerns were expressed about what has been called the closed list system—in other words, the system whereby individual voters have the chance to vote for a party or an independent candidate, but not to express a preference for an individual candidate within a party. I had reservations about that as well. The British tradition of being able to vote for a person and not just a party is important, and we need to think seriously before we depart from it. It is not a one-way street.
  A multi-Member constituency system for MEPs has a down side. Different candidates from the same party campaign against each other and become involved in a kind of beauty contest to ensure that they get more votes than the other candidate from the party. That may or may not be healthy for democracy. I want to retain the voters' right to chose between candidates, but I should make it clear that there is a down side to the system.
  830
  I welcome what my right hon. Friend the Home Secretary said at the beginning of the debate. Legitimate concerns have been expressed about the closed list system. There need not be a straight choice between a system that is entirely open—in which it is left to the voter to chose between candidates, without any party role being involved—and a closed list system. I am pleased that my right hon. Friend has listened to the many representations made to him, and has said that he will reconsider. I look forward to the debates that will take place in Committee and outside.
  When they oppose the Bill, Opposition Front Benchers should take into account what was said by my right hon. Friend. It appeared from what was said by the shadow Home Secretary that he had not heard my right hon. Friend's recognition of some of the anxieties that had been expressed, and his undertaking to address them. I feel that my right hon. Friend's reassurance should be welcomed by hon. Members on both sides of the House, and I welcome the Bill.
  At times, today's debate has almost resembled a proxy debate about electoral reform of the House of Commons. I am known to support electoral reform of the House of Commons, as well as electoral reform of the European Parliament. It has been said that electoral reform of the House would inevitably destroy the link between Members of Parliament and constituencies, but that is not true. A number of proportional representation systems retain that link. The hon. Member for Poole (Mr. Syms) shakes his head, but I can tell him that the "additional Member" system retains the link between a single Member of Parliament and a constituency. The retention of the link is entirely possible under a proportional representation system.
  Mr. Robert Syms: Does the hon. Gentleman acknowledge that, under the "additional Member" system, there are two categories of Member of Parliament—those who represent constituencies, and those who are on a party list? That changes the nature of politics and representative democracy, because it involves people with different responsibilities.
  Mr. Burden: The hon. Gentleman is entirely right in that, under the "additional Member" system, Members of Parliament would arrive in the House of Commons, or whatever legislature was involved, by different routes; but I was making another point. It was said earlier that a proportional system would destroy the link between Member and constituency, and that is not so. Under the "additional Member" system, there is a link between the individual Member and the constituency. There may be another category of Members by virtue of the top-up system, but that is a different question. It may be desirable; the hon. Gentleman clearly considers it undesirable, but I believe that it could introduce a diversity and richness from which the House could benefit. I do not see why we need have any great attachment to the idea that Members of Parliament must all arrive here by one route.
  We can debate that when the time comes, of course, but I think that we need to be clear about our facts. It is erroneous to say that a proportional system inevitably means destroying the link between an individual Member and a constituency. Moreover, there are other proportional

  831
  systems based on multi-Member constituencies that retain a link between Members and the constituency. The two systems are not in conflict.
  That, however, is a debate for another time. Suffice it to say now that I will welcome—my right hon. Friend the Home Secretary reaffirmed the commitment in our manifesto—the early establishment of an independent commission on voting systems, which will examine these questions in detail. I welcome the commitment, both in the manifesto and in the agreement with the Liberal Democrats that was made before the election, for the commission to be charged with recommending a proportional alternative to the first-past-the-post system. I especially welcome the commitment to ensure that it will not be politicians, but the people, who ultimately decide the shape of our Parliament and our parliamentary elections. That is why I am so pleased about the commitment to a referendum on the voting system for the House of Commons.
  That is not what we are talking about today. We are talking about the electoral system for the European Parliament, which raises different issues. As I have said, I support electoral reform for both Westminster and Europe, but it is entirely possible and logical to support electoral reform and proportional representation for Europe and to oppose it for the House of Commons. As my right hon. Friend the Home Secretary rightly said, different representative bodies have different functions, and there is no one ideal voting system that is appropriate to all circumstances. The idea that, in principle, there should be a single Member is not appropriate to all circumstances. At times, the shadow Home Secretary seemed to suggest that he considered that to be a principle; he should look at our current system of local government, which, in most parts of the country, is based on multi-member constituencies.
  One principle strikes me as important—a principle that 1 mentioned at the beginning of my speech. If we are to be taken seriously in Europe, and if we are to have a representative body in the European Parliament that will be credible both at home and in Europe, is it too much to ask that the seats won by parties should broadly reflect the support that those parties receive in the country?
  Mr. Shepherd: We are talking about representative systems, and I am mindful of what actually happens in Europe. I personally feel that this represents the degradation of democracy, but I will cite my reasons.
  The European Parliament voted on the Maastricht treaty. All the various systems pulled together with their representatives in Strasbourg, and voted on the treaty. It was almost a hallelujah performance. They acclaimed the treaty—but what happened in the electorates that they supposedly represented when it was put as a direct proposition? The hon. Gentleman will have noted what happened in France, where the result was 49 per cent. to 51 per cent., and Denmark actually rejected the treaty. The system that the hon. Gentleman proposes is no more representative than a dance on a drum.
  Mr. Burden: The hon. Gentleman's views on Maastricht are well known, but I have witnessed debates in the European Parliament. I should point out that, although the vote in France was close, it was in favour of the Maastricht treaty.
  832
  Although there is some strength in the way in which the House conducts its affairs, it could learn one or two things from other legislatures. The confrontational "one gang against another" style that we have seen here—I am pleased that the present Government are trying to do something about it—does not feature to the same extent in the European Parliament. Of course, the European Parliament has all sorts of weaknesses—it does many things of which I do not approve, and many things that could be done better—but, if we are to improve the workings of the House of Commons, we can learn a good deal from what happens elsewhere. I know that the hon. Member for Aldridge-Brownhills (Mr. Shepherd) wants to do that, as he has commented on these matters many times. We should not dismiss the traditions of other legislatures quite so quickly.
  Let me return to the central part of the Bill. The point is to ensure that the number of seats won reflects the number of votes cast. I welcome the commitment of my right hon. Friend the Home Secretary to look again at some of the details, and I am convinced that, in the context of the wider constitutional agenda—of devolution for Scotland and Wales, the expansion of the regional dimension here in England, the creation of a Greater London authority and the ability of the people to decide the voting system that is best for the House of Commons—the Bill will prove a boost and a boon to democracy.
  7.8 pm
  Mr. A. J. Beith: The Liberal Democrats welcome the Bill. It gives us an opportunity to provide fair voting for Europe. It fulfils a commitment that successive British Governments have made through treaty obligations, and it implements an agreement that was made publicly between my party and the Labour party before the election and put to the voters at the election—an agreement that we would reform the system for European elections. Although we would suggest some improvements to the Bill, the Home Secretary has already said that he has an open mind on the key point. We applaud the determination with which the Government have produced the Bill in sufficient time to ensure that the next European elections are fought according to a fair system.
  I was amazed to hear the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney) first attacking the Home Secretary for appearing to change his mind, and then revealing that his main criticism of the Bill was the very point on which the Home Secretary had said that he was willing to listen to arguments. At no stage did the right hon. Gentleman suggest that he might actually vote for amendments, such as those that we shall table, that would achieve his objective by introducing a system with more voter choice within the regional list structure.
  At the moment, we have a closed list system of one, with no proportionality. The total outcome is nowhere near proportional, and people who strongly disapprove of their party's one candidate can effectively express that disapproval only by voting against their own party, and perhaps bringing about the election of a candidate from another. Many people are not willing to do that.
  Much as many of us like to promote the idea of the individual in politics, there is no doubt that most people, at every opportunity, make a party choice. That is a fact

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  of political life, from which many of us often gain. There is a myth surrounding the British political system, pretending that voters have nothing to do with parties. Party names used to be kept off ballot papers on that principle, but that is long gone. Parties are central to the British political system.
  We value the opportunity that can be given to voters to affect the way in which parties determine who is to stand on their behalf, and to express their views directly, as they will be able to do in the referendum on the electoral system for Westminster. We welcome the Government's commitment to that.
  The first-past-the-post system as used in the European Parliament elections produces the most outlandish outcomes, bearing no relation to the votes cast. The system applies only in England, Scotland and Wales. The right hon. Member for North-West Cambridgeshire, who comes from Northern Ireland, never explained why it was acceptable for Northern Ireland to have a proportional system, when it was anathema to him for England, Scotland and Wales to have one.
  What has the system produced in Great Britain? In 1984, the Conservatives won 45 seats on 38.8 per cent. of the vote, while Labour won just 32 seats on only 4 per cent. fewer votes. At that stage, British seats made up about one fifth of the Parliament, so misrepresentation of the votes cast in Britain could have a significant effect on the political balance.
  It is as if one county in England suddenly decided, of its own accord, to run a completely different electoral system for Westminster from that of the rest of the country, and had enough seats to make a profound difference to the balance of the parties. That clearly could not continue. We have a treaty obligation to make a change.
  Had the votes in 1984 been counted on a proportional basis, the Conservative representation in the European Parliament would have been reduced by almost one third. We won no seats at all, despite winning more than half the number of votes obtained by Labour. In the 1989 election, the Green party won 15 per cent. of the votes— a respectable tally for a party that came from nowhere, and has since returned there—and got no seats. That is not a fair outcome. The Conservatives won 32 seats on only twice as many votes as the Green party, which got none.
  In 1994, Labour got 74 per cent. of the seats on 44 per cent. of the votes. That is 25 more seats than it would have won on a proportional system. The Tories got 28 per cent. of the votes and 21 per cent. of the seats. We got 16 per cent. of the vote and 2 per cent. of the seats. The system produces the most ludicrous results in terms of the number of representatives sent to the European Parliament by each party.
  To claim that the system is retained in order to preserve a sacred link between the voter and his representative in Euro-constituencies simply flies in the face of reality. If any hon. Member goes out into the street and asks any passer-by to name his Member of the European Parliament—or, better still, to name his European constituency—he will get a pretty low tally. It can sometimes be embarrassing to do that for Westminster Members of Parliament, but we would get a much better total for them than for Members of the European Parliament, for whom the results would be derisory.
  834
  The system does not work in single-Member constituencies, because they are too large to be treated as we try to treat Westminster constituencies. Legitimate questions can be asked about the role of the voter in relation to the candidate. For example: how does one get rid of a Member whom one does not want? Earlier, I called that the Tatton question. It is significant that, in those circumstances, to avoid putting people in the dilemma of being only able to elect someone of a different party, two parties stood down.
  The scale of European constituencies is such that it is almost impossible to get rid of someone of whose financial dealings one disapproves or who represents a point of view that is completely alien to that of most of the party. That has not happened in any European constituency since the system was introduced. Members of various parties are most critical of their Members of the European Parliament, but they have never yet mounted a successful campaign to get them unseated by the electorate.
  It would be better to introduce some voter choice into the regional list system, as some other countries do. By doing so, we would involve the voters more fully in the election. We must try to increase the participation of British people in European elections. We shall not do that by giving them a system in which the outcome in most constituencies is certain, giving them no chance of securing representation for their favoured party, which is what happens now.
  Proportionality should increase the attractiveness of taking part in an election, and it would be increased further if we allowed people to use their votes to change the order of candidates. That was attempted in 1977, when options were put before the House to allow voters to have one vote only, which they would give to a candidate but which would also count as the party vote.
  The disadvantage of that system from the Government's point of view is that it does not involve the party in setting out a preferred choice. It is reasonable to say that a party should be allowed to put to the electorate its view of what the order should be, even if the electorate can then modify or disrupt that view.
  We have proposed a compromise, given our known preference for the single transferable vote system, in which people cast a party vote but can, if they prefer, choose which candidate should be ranked highest. If enough people do that, we can ensure that someone lower down the party's list has the best chance of being elected.
  It has been argued that, in such a system, it is possible for someone to get many—indeed a majority—of the preference votes and still not be elected, but that is because the majority of people have declared themselves content with the party choice by voting the straight party ticket. A successful rebellion, as it were, involves a majority of the party's voters seeking to overturn its choice. That opportunity should be there.
  I hope that the consideration launched by the Home Secretary today will lead him and his hon. Friends—and, indeed, Conservative Members—to accept that the regional list system would be better with that element of choice. We shall certainly table an amendment to that effect and, if the Government want to improve its wording or tighten it up, we shall welcome that.

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  The Home Secretary launched, perhaps unwisely, in some detail on the subject of the relative merits of different divisor systems. Suffice it to say that the Sainte-Lague system helps to ensure a more proportional result, particularly if many of the constituencies each have a relatively small number of MEPs. That is because the standard Government regions and nations have been chosen. For example, we have a five-seat constituency in Wales and a four-seat constituency in the north of England.
  It should be fairly obvious to hon. Members that a high vote would be needed to get a minority candidate elected in a four or five-seat constituency, so the way in which we deal with surplus votes is crucial. The Sainte-Lague divisor would ensure that, on the basis of the general election results, there would be at least a third party representation in Wales, for example. Representation would not be confined to the two largest parties. On the general election results, in Wales Labour would get a disproportionate share of the seats—80 per cent.—on just over 50 per cent. of the vote.
  Overall, the Home Secretary is right to say that, given a sufficient number of constituencies of sufficient size, there is not much difference between the two systems but, on the scale of the smaller constituencies, the difference is significant. That may be important, especially in Wales, northern England or other smaller constituencies. We shall press the Government to reconsider by tabling an amendment.
  I welcome the Bill's reference to a cash limit on the amount that parties can spend nationally during the European elections. In a way, a change was inevitable because we are no longer dealing only with single candidates. It is absurd that candidates in elections to Westminster are strictly limited on what they can spend— their agents can go to gaol, as happened to a Labour agent in a constituency that neighbours mine—but nationally, parties can spend as much as they can raise, by whatever means they can raise it. That must change for Westminster. We support the Government's moves in that direction and welcome the inclusion of this provision in the Bill.
  Through this Bill, or through electoral registration legislation, we may have to address the legal position of measures that parties might take to get more women on to lists. It is up to parties whether they choose to adopt the methods that Labour has used in the past, or that we have considered, to try to ensure that voters have a fair choice of both sexes, but there are legal problems, as Labour found before the general election. We should define the position more clearly to avoid legal tangles.
  We cannot go on running European elections on a system that produces outlandishly disproportionate results or go on pretending that there is some mystic union between Members of the European Parliament and every one of their 200,000 constituents. That is not the real world. We want to elect to the European Parliament Members who broadly represent the proportion of votes cast for the various parties and to ensure that, in the process of electing them, voters have as much choice as possible. I believe that the Bill is the right vehicle to do that. If it can be improved by more open lists in the way that we have suggested, it will be a very good Bill and we shall certainly support it.
  7.21 pm
  Mr. David Drew: This is an important debate that shows us along an important path towards electoral reform. As one who has long opposed the arrogance of first past the post, I find it pleasing that, on the back of Scotland and Wales, we are prepared to change our European electoral system. That is long overdue. I strongly welcome the move towards proportionality as a means of achieving that.
  I also welcome the approach of my right hon. Friend the Home Secretary, which I imagine will now be called the "Straw compromise". He is open to considering different approaches to the issue. That is important in its own right, because the history of electoral reform in Britain has been one of listening to people from different political persuasions and of no party political persuasion. That shows the strength of the movement.
  I declare an interest as a member of Charter 88 from its inception. The strength of the electoral reform movement has been borne out by the way in which we have managed to pull together across the political divide and produce a coherent strategy. What may technically be called the part-open list approach offers us the best of both worlds. We shall get a regional list system, which involves a vote for a party but offers the electorate the ability to choose the people whom they most want to represent them. I hope that we shall consider—as the Government have apparently done—how we can put together the best possible way of electing representatives by a system which I believe will be fairer and more representative, and will bring to the fore a regional perspective.
  One reason why I have always supported electoral reform is that I strongly believe in using the appropriate method for the different electoral challenges that we face. I am more than happy, and open-minded enough, to believe that we can have our cake and eat it. At the outset, we could have considered the single transferable vote. We have come down in favour of a regional list system, one of the strengths of which is that it allows checks and balances. It allows us to do things differently for Scotland and Wales from how we do things for our Westminster Parliament and our European Parliament. That is a strength of the electoral reform movement.
  Mr. Gerald Bermingham: I have listened with interest to my hon. Friend. If he is prepared to consider a single transferable vote, would it not be sensible to use it within existing European constituencies? That would retain the link between Members and constituents while keeping some idea of proportional representation.
  Mr. Drew: I welcome my hon. Friend's comment. As with anything, we must plump for the appropriate system for the assembly concerned. For all sorts of reasons, the regional list system was chosen. I would not have been unhappy to consider STV for the European elections but we have chosen an alternative system. More important than the particular system that we have chosen is the fact that it provides checks and balances in respect of the different ways in which we elect our representatives for different assemblies. As long as we can run that on a fair-minded basis, and recognise that the electorate will now get a choice of person as well as of party, we can have the best of all worlds.

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  I welcome the Bill because of the checks and balances that it offers and because I represent a south-western constituency. All too often, we have ended up in the south-west with one party, or one and a bit parties, dominant. That is neither fair nor reasonable when people want to know that their vote counts. Understandably, because their vote counts for both a party and a person, they want to have some knowledge of whom they are voting for, even though they may not get that person elected under the present system. With the alternatives that are being made available, they can make their votes count. That is why proportionality is such an important principle.
  People in the south-west will be able to vote Labour on the understanding that they will elect Labour representatives. While we may have been fortunate in the roll of the dice in the May general election, we must find systems that have checks and balances and that allow people to know that their vote counts. That is why I support this approach, which brings together alternatives that mean that people know, when they vote in different elections for different bodies, that, while their votes may count in different ways, they will bring forth a true representative democracy. I believe that that will lead to increased turnouts. People will know that their votes are being collected and used properly. Unlike previous European elections, I expect that more people will vote when we go to the polls next time because people will see that their vote counts. I welcome that.
  Finally, I should like to say something that might sound strange coming from a Labour Member. In 1989, it was a scandal that, although 14.9 per cent. of the electorate voted for the Greens—a party I have fought at parliamentary and local level, and whose principles and policies I do not support in many respects—no one from that party was elected to the assembly in Europe. The most recent election was the first in which Liberal Democrats were elected under our bizarre first-past-the-post system. Looking at my hon. Friends and the hon. Member for Somerton and Frome (Mr. Heath), who is nodding, I can say that it is wrong that, in the past, people's votes did not count. At least we have remedied that in part, albeit not well enough.
  I warmly welcome the direction in which the Government are moving. We have bitten the bullet and demonstrated that we are prepared to consider alternative ways to elect members to different assemblies. On the question of the loss of a constituency, how can anyone pretend that an MEP has a constituency? Given that the number of people an MEP represents is so large, it is a meaningless concept. On the basis of the proposals in the Bill, an MEP will represent a region and advance a regional agenda—a form of regionalism that will take forward the debate in the south-west and every other part of the British Isles. We are considering a system that is fairer, more representative and more efficient and will lead to higher turnouts. I hope that the compromise offered by my right hon. Friend the Home Secretary will be taken up so that we can find the most appropriate system—a system that the people will support.
  7.31 pm
  Mr. David Curry: The Home Secretary announced that the Bill was designed to improve the democratic process, and promptly almost collapsed in a fit of giggles. That clearly sums up his
  838
  attitude to the legislation, which is redolent of lack of belief. Had he come to the Chamber and said, "Don't blame me, Guv—I'm only here to read the speech," we would have entirely understood the attitude he displayed. He set off at a funereal tempo and became even slower as his speech progressed—it was one of the few speeches that came to a halt before it started. He also demonstrated that he understood the nature of neither the American Congress, nor the European Parliament. To be ignorant of one is remiss, but to be ignorant of both is positively inspired.
  Some of the speeches tonight have caused the House to resemble a set of engineers who are fascinated by what lies under the bonnet of the bus, but occasionally forgetful of the fact that there are passengers on the bus and that their prime concern should be to deliver the passengers to their destination, rather than to be preoccupied with the state of the plugs. We must not become completely fascinated by electoral systems.
  Although I enjoyed the Home Secretary's cheap jibe about the Belgians—I should point out that Monsieur d'Hondt was almost certainly a Fleming, rather than a Walloon, and that the correct form of address is Mynheer d'Hondt—we should address ourselves more precisely to the nature of the system we are trying to sustain and to how the electors benefit from that system, rather than simply enjoying its intricacies.
  I spent 10 years in the European Parliament and would accept that the role of an MEP is not the same as that of a Member of Parliament. The people an MEP deals with tend to be more institutional, in the sense that one's three major client groups tend to be local government and public bodies, education, and business.
  That is the nature of the European Parliament—as an organisation, it has powers to amend and now to prevent legislation, and those tend to be the groups most affected by such measures. One does not wish to ignore the important individual cases that arise, but they do not rank in the same order as they would for a Member of Parliament in the surgeries to which the Home Secretary referred. Incidentally, he is jolly lucky if his surgeries are thinly enough attended to let him get through them on a Friday evening.
  It is also slightly discouraging that the role of MEPs in their current constituencies has been simply dismissed as wholly ineffective. One of my colleagues in the European Parliament was the Minister of State, Home Office, the hon. Member for Gateshead, East and Washington, West (Ms Quin); I am not sure whether she feels that, during her 10 years' service as an MEP, she was wholly ineffective in representing Tyne and Wear.
  I am not sure whether the hon. Member for Cynon Valley (Ann Clwyd), who represented Mid and West Wales, feels that she wasted her time. I am not sure whether Mrs. Glenys Kinnock thinks that she is ineffective in representing the people of her Welsh constituency. The presumption with which we started the debate—that the present system is indefensible, by definition—is not one that we can accept if we are to have a sensible debate.
  Mr. Bermingham: If we introduce a regional system that produces, say, four MEPs for one party, two for another and two for yet another in a 10-seat area, whom should the local council—for example, the metropolitan

  839
  borough council of St. Helens, which I represent— approach for assistance in obtaining inward grants for roads and other infrastructure projects? Whose advice should be sought? At the moment, the council has an MEP who very adequately performs that service.
  Mr. Curry: That is exactly one of the points I shall address. The council might find that there is no one it can approach, because no one has been elected who has the faintest interest in St. Helens, which would be the worst possible scenario from the council's viewpoint. If individual constituencies are so ineffectual and unable to establish some sort of identity with their MEP, it is curious that our remedy is to base the system on a region with which there would be no identity of any description.
  We ask what those regions will consist of, so let us take as an example the south-west. Everybody knows that someone who lives in the Thames valley or in Wiltshire is light years from the preoccupations of the residents of Devon and Cornwall. The hon. Member for Stroud (Mr. Drew) will know that people who live in Cornwall think that the other side of the Tamar is a different country. Being lumped together in a south-west region with no MEP who is identifiable and linked to that part of the world is, as my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) said, a negation of representative democracy.
  We are told that the new system will boost the turnout, but turnouts for elections to a European Parliament will be lower than those to a national Parliament, because nothing is at stake in the same sense as it is for a national Parliament. One votes in a national Parliament election to produce a Government; but the rules of the European Parliament and its constitutional position require weighted majorities, resulting in a need for the major parties to get together across the spectrum to build a consensus. Therefore, the impact of choosing different parties is less obvious, and the incentive to vote is a lesser one, irrespective of the nature of the electoral system.
  Mr. George Howarth: The right hon. Gentleman has made interesting and valid points about the reasons why we might have lower turnouts, but in what way does that argument add to his defence of constituencies?
  Mr. Curry: At least in a constituency, electors are voting for a specific Member of Parliament, who will retain that constituency link and to whom they can go. I shall outline shortly how, under the regional system, constituents will not have the faintest idea who is supposed to represent them, and will have to take pot luck as to which MEP they end up with.
  How are we to get proper coverage in a region? The hon. Member for St. Helens, South (Mr. Bermingham) mentioned the possibility of the people elected—the top few in each list—representing only a particular part of a major region. In my own area, I would be fearful of all the MEPs elected tending to represent only the interests grouped around the large metropolitan areas of West and South Yorkshire; I would fear for the fate of North Yorkshire.
  The hon. Member for Workington (Mr. Campbell-Savours) asked the Home Secretary about the particular status of Cumbria. Cumbria is
  840
  wholly different from the regions that lie to its east or its south. It has a strong sense of identity. Its people need to feel that one of theirs is representing them in the European Parliament and is able to respond to their particular needs. How would proper coverage be achieved?
  How would the candidates be selected? That is the crucial issue. Is it to be one man, one vote? Are 30 or 40 candidates from Yorkshire and Humberside or the south-east to parade around moots throughout the region offering themselves to the electorate? Will there be party hustings? If there is a restriction on those who can present themselves to be chosen, who will choose the people who are eligible to present themselves to be chosen? Will the party apparatchiks choose them? That is what we all fear, of course. Will the electorate somehow choose them? Will electors spend a whole week interviewing person after person? Will they listen to 15, 20 or 30 candidates? Once candidates are elected, whole parts of the region could find themselves without someone to represent their interests.
  How is the order on the list to be determined? Once the list is drawn up, most of the election will be over. One might as well be realistic about it. I know that the Labour party wishes to indulge in some ethnic cleansing of its MEPs. We know that some of them have been rather difficult. Perhaps the Government will devise a system that will enable that purge to take place.
  Let us take the south-east, which has the largest number of MEPs—11 are to be elected. In the normal course of events, the first four to five Conservatives on the list will be elected. The first two or three Liberal Democrat and Labour candidates on their list may well be elected. Those at the top part of the list will be able to spend the entire election on holiday in Barbados, or go ahead to Strasbourg to sniff out the best restaurants and offices. They will not need to campaign, because they will be certain of being elected.
  Nor will the ones at the bottom of the list need to bother turning up, because they will not be elected. They may as well not take the time off work and lose pay. The only contest that will matter will be between the two or three people in the middle of the list. The real argument will be about them. Everyone else will have been elected by the party apparatchiks who decided where people were placed on the list.
  Mr. David Lock: Is not the argument that the right hon. Gentleman makes precisely the same as that which used to apply to his party in the south-east of England? I appreciate that that is a long time ago— we have had several events such as Winchester since then.
  If a candidate was selected for the Conservative party for the constituency of South Downs West, he might as well go out and buy the restaurant guide for Strasbourg. The same applied in south Wales. If someone managed to get the Labour nomination for a single-Member constituency, the result was a foregone conclusion. Is not the precise defect of single-Member constituencies the fact that the power resides with the selectocracy—the people who put forward the candidate under the party name—not the people doing the voting?
  Mr. Curry: There is a difference that the hon. Gentleman has not identified. At one minute to 7

  841
  o'clock on polling day in a Westminster election, every candidate has zero votes. Everyone starts exactly the same. We are moving to a regional list.
  The Home Secretary did not answer the question that was put to him by my hon. Friend the Member for Aldridge-Brownhills and others. If I happen to like very much the person who is first on the Conservative list and dislike the person who is second on the list—the same applies to the Labour or Liberal Democrat list— how do I ensure that I get my man elected, not t'other one? That is the crucial issue. The Home Secretary may have given us some way forward, and we wish to explore that.
  Mr. Hogg: Is there not another answer to the question put by the hon. Member for Wyre Forest (Mr. Lock)? The constituency associations—for example, in Westminster seats, but also in Euro-seats—choose the candidate they think is likely to be most attractive to the electorate in that constituency. Accordingly, if there is considerable antipathy to a candidate, it is likely that either the candidate will not be selected in the first instance or that he will be elbowed out by the association responsible for choosing him.
  Mr. Curry: I agree with my right hon. and learned Friend. The associations are often very particular in the requirements that they lay upon their candidates. Even if the candidate is not an original of that part of the world, they make jolly sure that he quickly establishes an identity with it. That is such an important part of the relationship.
  The Government are setting up a complicated paraphernalia to govern the way in which the vote is to take place. There is a much easier solution, and the Home Secretary hinted at it. It is to let each party compile a list of as many candidates as there are seats available, and let each elector have that number of votes. If necessary, the elector could vote the ticket as well.
  Such a system would not be particularly complicated. The elector could vote across the lists if he wished to do so. Instead of the cabal choosing the people who were elected, the electorate would choose them. That would still be far from perfect, because the problem would remain of who represented which part of the region and with whom people would identify, but at least it would get us off the bizarre, mechanistic approach, and would allow the electorate to make the ultimate decision, which is what our politics should be about.
  When I looked in my files, I discovered that the Home Secretary had written to colleagues a little while ago a letter with a breathtaking arrogance to it. It says:
  "The Government believes that this system is the most appropriate".
  Always beware the word "appropriate". It is the word that people use when they cannot think of any other word. In my years as a Minister, I refused to sign any letter that included the word "appropriate". Perhaps the Home Secretary meant that it was the right system.
  Mrs. Ewing: I shall check my fishing file.
  Mr. Curry: The hon. Lady may well check her fishing file. I think that she will find that I had a particular
  842
  aversion to that terminology. The Home Secretary said that the system was the most appropriate for elections to the European Parliament because
  "MEPs' links with their constituents are not as close as those of MPs and the public, for the most part, lacks the detailed knowledge which would enable them to make an informed choice between candidates on a party's list;".
  That is a blindingly patronising, paternalistic form of authoritarianism. The Home Secretary said that his system
  "has the virtue of simplicity,"—
  anyone hearing his explanation will immediately have grasped its simplicity—
  "requiring voters only to put a single cross on the ballot paper".
  I am sure that voters will be grateful for having democracy made easy. They might well resent having to use their brains in order to cast a vote. The Home Secretary's arrogant little dismissal of the electorate's capacity to think for themselves is particularly offensive. It may be a touching desire to help the poor, bemused voter, but why not trust the voter instead?
  Mr. Bermingham: Does the right hon. Gentleman agree that such a system also destroys the chance of the individual? Unless voters can vote across a regional list and choose candidates of different parties and flavours, the individualistic person who is sometimes a breath of fresh air in politics—not the machine man—has no chance whatever.
  Mr. Curry: I agree with the hon. Gentleman. The eccentric has always played an important role in politics and in defending constituents. If we moved to a machine-operated system, we would risk the quality of the people we elected, as well as the quality of the representation they offered to the electorate.
  Clause 1(3)(2) states:
  "A vote may be cast for a registered party, or an individual candidate, named on the ballot paper."
  Are those exclusive choices? As the Bill is drafted, could an elector vote for a name on the party list? This is supposed to be an accessible system, but to whom does the poor constituent write? Does he stick a pin in the list of MEPs? Does he write to all 11, or nine, or seven? Will the territory be divided up by the MEPs, like a colony, into districts? Will each MEP have a little parish or bailiwick? Will all electors write to the Minister or the Commissioner on the same subject?
  It is a recipe for either massive overkill or nothing whatever. I fear that it might well be the latter. Does the elector simply give up? Does the MEP disappear into cyberspace, leaving only a slowly vanishing dot behind?
  We then come to by-elections. The Bill envisages the promotion of the next candidate on the list, unless, I presume, a single independent has been elected and that independent has to be replaced. The measure does not recognise the changing mood of the electorate, and it provides a lovely insurance policy for a party that happens to be in government. Politics needs what my party and all parties have felt from time to time—the sharp dose of purgative that by-elections give, reflecting the changing mood in the country.
  This is a fundamentally bad Bill. I find it patronising in concept, undemocratic in its probable operation and open to cabals, cliques and cartels. It is politics by remote control, and I do not like that type of control.
  7.49 pm
  Mrs. Margaret Ewing: As you will appreciate,Mr. Deputy Speaker, I am disappointed that the amendment that I and my hon. Friends tabled has not been selected for debate, but I accept Madam Speaker's decision.
  The Bill is about proportionality; I believe that all hon. Members recognise the importance of that principle. I doubt that there is a perfect system of proportional representation. I suspect that many hon. Members, like myself, have received countless letters from school or university students, asking their opinion on PR and the most effective way of introducing it.
  I believe that the amendment that I tabled addressed the issue of proportionality. The idea that Scotland should have an additional seat in the next European elections is not new—indeed, we discussed it in 1993, when additional seats were being awarded to the United Kingdom as a whole.
  When we discuss the principle of proportionality, it is important to consider Scotland's position. Ministers should read the debate in Committee on the 1993 European Parliamentary Elections Bill, in which the current Prime Minister argued a very strong case that there were three effective reasons why Scotland should have an additional seat. He accepted the strong geographical case for increased Scottish representation, asserted that Scotland was not currently over-represented, and rejected claims that such a move would be unacceptable from an English point of view. The Labour party saw fit to back our amendment in 1993, and I am interested to know the present Government's view, now that Labour has changed sides in the House.
  At the end of that debate, the then shadow Secretary of State for Scotland, now the Minister for Film and Tourism, said:
  "the arguments presented today by the hon. Member for Moray and…by the Labour party are unanswerable."—[Official Report, 6 July 1993; Vol. 228, c. 198.]
  I wonder why it is not possible, for the purposes of proportionality, to have an additional Member of the European Parliament for Scotland under the new system.
  The arguments that were propounded from both sides of the House must be debated and explored. A great deal has been made of the link between a Member of the European Parliament and his or her constituency; that link is important, but the House must examine its conscience on that subject. The first direct elections to the European Parliament were held in 1979, and for years many of us campaigned for a much closer link between MEPs and Members of Parliament, yet only in the past two or three years have we been able to telephone Brussels and Strasbourg directly and had access to fax machines, enabling us to receive material from MEPs and to forward material to them, making possible a real dialogue between the two institutions, which take so many decisions affecting our constituents.
  The links between the House and the European Parliament are deplorable. MEPs continue to turn up in this place as "Strangers", and must wait in Central Lobby until their Member of Parliament meets them. Unlike every other Parliament in Europe, we have no effective joint committees.
  When hon. Members use the link between the MEP and the constituency as an excuse to avoid the prospect of proportional representation in future elections, they fail to
  844
  take into account their past actions. The guilt lies especially with the Conservative party, which was in government for 18 years but did nothing to create a closer connection with European institutions.
  It was ridiculous that I had to wait so long before it was possible for me to send material to my MEP in an envelope provided by the House of Commons with a European stamp on it, without having to pay out of my pocket, as I did for many years. I object not to the finance but to the fact that the House did not foster these contacts far earlier, and create a more effective link.
  The links of the House with constituents are far from perfect. I hope that the Government will put that issue on their agenda and consider creating joint committees in which MEPs can join us in debates on the series of issues that we are discussing as we look to the next European elections and to a closer union and the expansion of the Union.
  I say to hon. Members who speak about their fear of apparatchiks in Millbank, Smith square or, I suppose, North Charlotte street in Edinburgh, which is where my party's headquarters may be found, that the choice of candidates for a list system is a challenge to all the parties. Four or five people sitting in smoke-filled rooms—or, to be politically correct, non-smoke-filled rooms—must not decide the names on the list. We should have enough confidence in political party activists to allow them to help decide the candidates.
  I know that that would be difficult for the Conservative party because, as we well know, it has undergone deliberations even on how it elects its leader, about how decisions are taken about the management or design of conferences, and on how individuals can introduce resolutions so that real debates take place at the party conference. Internal democracy in parties will be under scrutiny.
  Mr. George Howarth indicated assent.
  Mrs. Ewing: The Minister nods in approval. He must know from his experience at this year's Labour party conference that the apparatchiks did not always get the results they want in the national executive committee elections. This is where the right of each member of a party to help decide which names appear on the lists is extremely important. This is not a question of "control freaks"; it is about democracy within parties, and we must look at ourselves to choose the best way to proceed.
  The right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney) suggested that the Government were considering holding elections for the European Parliament on a Sunday. May I make a particular plea against that thought, if that is what it is at the moment?
  My constituency lies in the Highlands and Islands European constituency, and we do not even count on a Sunday. It is a fairly nail-biting process waiting from the close of the poll at 10 pm on a Thursday until Monday before we get on with the count. That is done in recognition of the feelings of people in our area who have strong Sabbatarian views, and I am sure that there are many other areas in the United Kingdom where people would object to the concept of voting on a Sunday. It happens in continental Europe, but it has never been our practice in the United Kingdom, and I would make a special plea that it is not considered.

  845
  Secondly, the time scale of the legislation should be clarified. I have read the Charter 88 material. I have listened to the Home Secretary's interesting and erudite comments, the details of which I shall study when I have the Official Report tomorrow, because none of us would claim to understand all the niceties of what he was talking about. I welcome the possibility that he is considering a more open list rather than a closed list system, but it is important that we have a clear idea of the time scale.
  The Home Secretary said that he expected the Bill to be on the statute book by October 1998. I am sure that you, Mr. Deputy Speaker, will appreciate that, in 1999, we in Scotland and Wales will also be facing elections for the Scottish Parliament and the Welsh Assembly. In Scotland, we shall also have all our council elections because every seat is competed for in 1999. There may be a possibility of voter fatigue, but there may also be a possibility of political party fatigue.
  It is important that we have a clear time scale to ensure that all the mechanisms are in place; we need to have more than just a vague promise that October 1998 is the deadline—that leaves little time for those of us who are involved in the work of the elections. The pressure on the democratic body politic will be immense over the next 18 months, and I seek further clarification on that.
  I now turn to the financing of the elections and the campaigns. We shall come to the money resolution later, but there is to be no debate on it. When I intervened on the Home Secretary, he said that he was part of a listening Government. It is important, in all the regions of England and in Wales and Scotland, where individual campaigns will be run by the parties on behalf of their policies, that we know what the expenditure levels can be.
  For example, will Scotland and Wales have separate budgets for the campaigns, with all parties being equal, or will we have to face additional expenditure from Millbank or Smith square on behalf of the Labour and Conservative parties that will be seen as state expenditure? If we are talking about proportionality and equality, the subject of finance in these elections is important. I hope—my party and I shall certainly make representations—that the Government will look seriously at that matter.
  My party welcomes the Bill in principle, although—for obvious reasons, given the number of seats in Scotland— we tabled an amendment declining to give it a Second Reading. We think that it is a step forward. Over many years, the Scottish National party and Plaid Cymru have campaigned on the issue of proportional representation. People say that we have done so because we are minority parties. Existing figures show that my party achieved almost a quarter of the vote at the last general election, but won only one twelfth of the seats in this place.
  It is important that all voters should feel that their votes count; they should be able to go into the polling booth in their locality and feel that they are making a determined mark for democracy and for the representation of the beliefs they hold dear.
  8.2 pm
  Mr. Gerald Bermingham: This evening, I am faced with a dilemma. I am a democrat; I believe in the right of election. I believe that many systems are sometimes better than the first-past-the-post system, but I do not believe that the system suggested
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  tonight moves democracy one inch further forward. I say from the outset that I shall not vote against the Bill, but I have already given notice to those in my Whips Office that when the Committee stage of the Bill is taken on the Floor of the House, I propose to table certain amendments.
  Why do I take that view? I gave one of my reasons in an earlier intervention. I represent a small town called St. Helens; we have not had an easy time of it, with the loss of glassworks and the subsequent loss of jobs, the closure of our coal mines and the removal of our chemical industries. We have needed help. Where has it come from? It certainly did not come from the Conservative Government. The only help that we had came from Europe. How did we get that help? We went to our Member of the European Parliament—a very fine man called Mr. Wynn. He is from the same party as me, and he has been a very good MEP. The Under-Secretary of State, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), will know, because he is in the same Euro-constituency as me, that Mr. Wynn has fought time and again, not just for my metropolitan borough, but for my hon. Friend's.
  We knew whom to go to, but what shall we be left with in future? We shall be left with a regional list that will cover 10 seats. I have looked at the voting figures. I know a little about voting: I have stood in national and local elections since the 1970s and I have participated in a few, some of which I have won. In fact, I have won most of them and lost only one in 1979. In all those years, when I went to seek election, I went to an elector; I went on behalf of myself and my party and I was either accepted or rejected. In 1999, on behalf of whom shall I go to the elector? Do I go to him on behalf of the first on my party list? What happens if I find a good Member at the top of the party list and, at the bottom of the list, I find a chap or a lass who is superb and who I know, from experience, will make a jolly good representative for my area? How do I ensure that he or she gets elected? How do I fight? We have been given one solution tonight, but there is a much simpler and easier way: the Euro-seats exist.
  I shall explain another of my worries. I represent a small town. To the east is a rather large city called Manchester and an equally large city called Salford. To the west is Liverpool and to the north there is farmland with different interests. Who will represent me? Will it be someone with the interests of the major conurbations at heart? Whom do I go to? Whom do my electorate go to— my small companies, unions, various groupings, Churches and other bodies? We are suggesting that they will have to go to a representative who may not even be of the same political persuasion—that frequently happens now. Conservatives come to me in respect of matters in St. Helens, but at least they know to whom to come.
  I warn the House that if we adopt a regional system, the first port of call for anyone with a Euro-problem will be the local Member of Parliament. We must not kid ourselves. At present, I know exactly where to shift the problem so that it will be dealt with properly and efficiently, but if we adopt the new system, which one of the area MEPs should I contact?
  The constituencies exist. Should we have a first-past-the-post system? Our election manifesto states that there will be proportional representation for the European elections. I thought long and hard about that— for Westminster, I have always been in favour of first past

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  the post. I know that the Westminster first-past-the-post system has been described as arrogant, but it leaves us fighting for every vote—it does not matter if someone has a safe seat. Safe seats can suddenly become unsafe, as the Conservative party knows only too well. My own Labour party knew that only too well some 14 years ago, when even my seat teetered on the brink of marginality. My hon. Friend the Under-Secretary of State also knows the problems that we encountered when we were despised by the electorate, which we were—let us not kid ourselves about that.
  The essence of democracy is serving the electorate, and that cannot be done from the extremes of left or right. That is a lesson that I hope all of us in the House have now learnt.
  There is no arrogance in the first-past-the-post system, but I agree that it is not the fairest. I have looked long and hard at the systems that exist in New Zealand, on the continent and in the land of my birth, Ireland. The system there, with multi-Member constituencies, is interesting, but I can see problems with that.
  It would be fairest to say to an elector, "You have a choice. You choose which candidate you want. If you can't have him or her, choose the next one—your second choice, your third choice and your fourth choice. If you don't want to use those choices, it is a matter for you." I regret to have to admit, and I admit when I am wrong, that that system—the alternative vote system—would reflect much more broadly the wishes of the area.
  Such a system, applied to single-Member constituencies, would produce a far fairer result, and would achieve the object of the exercise of ensuring the representation of the area by someone on behalf of the area.
  To those who say to me that the constituencies are too big, I say, "Try Merseyside area. Try Cheshire. Try the rural parts. Try Manchester." My hon. Friend the Member for Manchester, Blackley (Mr. Stringer), who was formerly leader of Manchester council, used his MEP time and again to the benefit of the city of Manchester. That has been proved to work.
  Everyone says that the constituencies are very big. "Ever been to America?" say I to the critic. "Ever seen the congressional districts? Not very small, are they? However, they have one representative. Try the Senate. The areas represented are whole states. Admittedly, they may have two or sometimes three Senators, but the system works."
  When one looks across the world, one sees large tracts of land that are represented by a single person, who reflects the interests and represents the nature of the area.
  The one great check and balance is that where there is single representation for an area, whatever size it might be, there will ultimately be accountability. Regardless of party, if the person fails to represent the area, as we have all seen in this place, out he goes. After all, politics is not made for politicians. Politics is about representing the interests of the single elector.
  Therefore I urge the House, while accepting the Second Reading of the Bill, to bear it in mind that some of us have our own view about what democracy means, and about how we should select and elect the person to represent our town, village or country area in the Parliament of Europe.
  8.12 pm
  Mr. Douglas Hogg: It is a pleasure to follow the speech of the hon. Member for St. Helens, South (Mr. Bermingham). The only difference between us is that I shall vote against the Bill, and he will not, but our views are very similar.
  The Bill is small—six clauses, four schedules and 11 pages. Despite that fact, it is a Bill of far-reaching significance. It is therefore not surprising that from both sides of the House, considerable anxiety has been expressed about it. There is a sense on both sides of the House that the Bill strikes at the accountability that elected representatives ought to have to those whom they represent, and a feeling, too, that it gives far too much power to the party machine.
  I shall amplify those points in a moment, but against that background, I make two preliminary remarks. First, it is a great pity that there has been no widespread consultation about the contents of the Bill. It is true that the Plant committee established it, but the Plant committee was created by the Labour party and was part of the Labour party. There has been no Green Paper, no White Paper and no public debate.
  On a matter of great constitutional significance, that is lamentable. It is lamentable, too, when one considers that the Labour Government purport to be a listening Government. That is what the Home Secretary said in his speech, but the plain fact is that the Bill has been introduced without any substantial prior consultation and without any pressing need, now or at all.
  Secondly, it is worth reminding ourselves that the noble Lord Williams of Mostyn said on 11 June that he had no plans this Session to introduce such a Bill. That changed, but it makes the point that there is ample time to consult, and that there is no pressing need at this time. Indeed, there is no pressing need at all. While it is true that the European institutions of various kinds have expressed a view in favour of harmonisation, there is no requirement for us to implement that.
  I personally would object to harmonisation in this field. Why should we harmonise? If subsidiarity is to have any real meaning, surely we should determine our own electoral methods. We are under no existing requirement to introduce the Bill. It was hastily put into the programme, and introduced without prior consultation and without any requirement. That is evidence of the arrogance of a Government with an overweening majority.
  The Bill greatly confuses the electoral methods that we have in this country. It provides for a list system. The first-past-the-post system operates for Westminster. The single transferable system is used in Northern Ireland. There are to be devolved assemblies in Scotland and Wales, where there will be an additional member system, or something like it. Which system will be adopted for the election of a mayor for London? I understand that it will probably be the second ballot.
  Five or six different electoral systems will be in operation. That diversity of electoral systems is unlikely to reinforce the confidence of electors or encourage them to vote. I entirely agree with what my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) said on that point.
  On the detail of the Bill, I have no objection to proportional representation as a means of electing the European Parliament. For that matter, I have no objection

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  to PR as a means of electing the second Chamber, should ever we be required to do that. My objection is not to PR as such, for those assemblies. I would die in a ditch in the case of Westminster, and I may be called upon to do so, because I deeply suspect that the Labour Government will ask us to have PR for Westminster. I will die in a ditch for that.
  For the European Parliament and for the second Chamber, there could be a PR system that retains the constituency base. The alternative vote system, the single transferable vote system, the additional member vote system and the second ballot system all, to some degree, retain a constituency member base, although it might be a multi-member base. The one system that inevitably involves the destruction of at least small constituencies is the one proposed by the Labour Government.
  Let us focus, first, on the destruction of the constituency base, and secondly, on the power given to the political parties. The hon. Member for St. Helens, South argued strongly the case for retaining the constituency base for electing Members of the European Parliament. Doing away with the constituency base would disadvantage the represented, the representatives and the body politic. I shall give one example in respect of each category.
  The represented need to know to whom to turn—the hon. Member for St. Helens, South made that point graphically. Under the list system, the people will have no idea to whom to turn. The representatives need to have the authority and the status that come from direct election, otherwise, in the end, they are but nonentities and creatures on a list. All Members of Parliament in this place represent people who know of us and who have chosen us. We have the status of representatives who speak for our areas. The list system does not permit that.
  As to the body politic, what damages accountability and makes it difficult for people to become engaged in a process will also damage democracy. A system that does not have accountability between the representative and the represented and that gives undue power to the party machine—which means that, ultimately, the representatives stand for nothing—is not likely to be regarded with respect by the electorate. If people regard institutions with contempt, they will not vote in elections.
  Another issue is the power of the party. Let us be absolutely clear: the candidates will be chosen not by constituency associations, but by the party machine. I ask myself and the House, rhetorically, what kind of person will be chosen by the party machine. I can tell the House that the party will choose the safe pair of hands—the conformist who will not rock the boat. It would not choose someone like my hon. Friend the Member for Ludlow (Mr. Gill), who has always been a thorn in the side of the party, which, in many ways, is a very good thing. We shall see represented on the candidates' list not broad churches but political hacks. If the representatives do not start life as political hacks, they will surely end up that way, because their only chance of re-election will be to please the party machine.
  Mr. Gill: I ask my right hon. and learned Friend to consider another proposition. A great strength of the British democratic system is that Members of Parliament are not dependent upon their party, but are sustained by the people who elect them. My right hon. and learned
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  Friend will be aware of the circumstances surrounding the withdrawal of the party whip from me and several other colleagues which, under the party list system, would have been the end of our careers. However, we were sustained by our constituents. The great strength of the British democratic system is that there is belt and braces to ensure that the people's voice is heard.
  Mr. Hogg: I agree with my hon. Friend's point. I do not conceal from the House the fact that he and I have had the most appalling rows; we disagree quite a lot. However, I believe that parties need diversity, and I welcome broad churches. Diversity brings independence and independence brings quality—or, to put it differently, if we remove diversity and independence, we shall not attract quality. People will not offer themselves as party candidates if they will be under the thumb of the party bosses, on whichever side. It is disruptive.
  Mr. Drew: I am confused by the right hon. and learned Gentleman's argument. It is surely for the parties to choose the most democratic method of selection. The Labour party believes in exhaustive ballots: we ballot for the national executive committee and for parliamentary candidates. Who is to say that the Labour party will not decide to conduct regional ballots in order to choose its candidates? That is the proper democratic method, and it is far better than some of the stitched-up processes that existed in the past.
  Mr. Hogg: That may or may not be so, but we are discussing the Bill. The Bill severs the territorial connection between the elected representative and those whom he or she represents. What is more, it gives absolute power to the party machine as to the choice of candidate. It may be that parties will choose to temper that absolutism through some system that they dream up. However, I have been in the Whips Office and I know that elected representative bodies want a safe pair of hands who will do what he or she is told. I am sure that the Government Whip agrees: the parties want Members of the European Parliament who will do what they are told. However, the electorate do not want that because it undermines democracy fundamentally.
  Why has the Labour party produced a Bill that is so obviously untenable? My right hon. Friend the Member for North-West Cambridgeshire (Sir B. Mawhinney) suggested one reason: there has been a deal. Most Liberal Democrats have gone home, but that is one explanation. There are two other possible reasons. The first is that the Labour party knows that it will be humiliated in the 1999 election under the first-past-the-post system, and it can temper that result through proportional representation based on the single transferable vote. It can do a great deal more to reduce that potential humiliation through the list system. That is gerrymandering.
  What is the other reason for the Bill? The Government are afraid of their own party. Labour is afraid of those who would select its candidates: its voluntary party. It is also afraid of its prospective candidates, so the party bosses will choose them. Labour is afraid of the people who would be returned, so it has created a system that ensures that Members of the European Parliament will be firmly under the thumb. The truth is that the Bill is an affront to democracy. If the House were truly concerned about democracy—we are; the Government are not—the Bill would be rejected.
  8.27 pm
  Mr. David Lock: It is a great pleasure to follow the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) and his flights of fancy. If we strip away the layers of his argument, we find the cri de coeur of an unreconstructed Whip who sees the opportunity of controlling the system and having no democracy in his own party. He knows perfectly well that, unlike other political parties, the Conservatives would impose regional candidates if they were given that opportunity. As the right hon. and learned Gentleman said, it will not be up to the associations or the Members. We shall see a rerun of the Conservative leadership election in which the Leader of the Opposition was elected by a mere 169 votes—he has even less support now, as the hon. Member for Leominster (Mr. Temple-Morris) no longer sits with the Opposition.
  Mr. George Howarth: He had the whip withdrawn.
  Mr. Lock: That was another act of an unreconstructed Whip. Some of us have slightly more faith in the structure of our parties and the way in which they will exercise their power and responsibilities under the Bill.
  Much has been said today about the identification of MEPs with their constituencies. I must disagree with those who suggest that, when MEPs walk down the average high street, they are instantly assailed with concerns about 5b status, European grants and the like. The truth is that there is limited identification between the 500,000 people in a Euro-constituency and the MEP, however hard he works, and I come from a region with an exceptionally hard-working and effective MEP. I am sure that, despite all his hard work, he would be the first person to agree with me.
  I have a column in my local newspaper through which I regularly communicate with my electors. Every time I say anything remotely controversial, I receive a lot of mail in response. So there is communication. The MEP does not have and cannot have that. I pick up on the point made by the right hon. Member for Skipton and Ripon (Mr. Curry), who explained that an MEP focuses mainly on working with institutions, businesses and schools.
  There is nothing wrong with having a panel of MEPs who represent a region. That provides the answer to the question that hon. Members raised about how electors get rid of an MEP. At present, with the first-past-the-post system, it is extremely difficult, but if electors have several MEPs and one is particularly knowledgeable on grants, that is the MEP to whom electors can go to ask about grants. If they have a problem in the agricultural sector and an MEP within their list is particularly knowledgeable about agriculture, he or she will be their port of call.
  A Member of Parliament has to be a jack of all trades, and that is not a reflection on my right hon. Friend the Home Secretary. We have to deal with everything. Under the proposed system, MEPs will have the opportunity to provide a better and more specialised service for constituents in a larger constituency, so the criticism levelled against it does not bear proper analysis.
  There is a further reason why the system is to be preferred. The first-past-the-post system forces all parties to target their resources on that small group of marginal seats where control is likely to change, as happened at the
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  general election. In some places, votes do not count. Under the proposed system, the vote will count everywhere. That is a considerable improvement on the present system.
  It is a feature of British political life that support for proportional representation tends to rise and fall in inverse proportion to a party's strength. The more seats a party has in the House of Commons, the more converts it has to the first-past-the-post system. On that basis, and following the results in Winchester and Beckenham, I expect many Conservative Members to convert to proportional representation. However, I suspect that they have not quite grasped the position that they are in.
  The Bill makes a considerable stride forward in one particular respect. It provides for the first time for the registration of political parties. Political parties are powerful creatures in our democratic society and they are largely unregulated. It is one of the ironies of the previous Government that they provided for excessive regulation of trade unions but for no regulation whatever of political parties. The political party regulation system, which, under the Representation of the People Act 1983, is largely ignored, is more like a system designed to regulate a tennis club than a system to regulate a vital organ of democracy. The time has come to recognise the position of political parties within our legal and democratic structure.
  That will get rid of the scandal whereby if a "Literal Democrat" candidate runs and confuses the electorate, there is no remedy because there is no legal registration of political parties, and whereby, at the last election, Madam Speaker, not being opposed by any of the major parties— as is traditional—was faced by a "new Labour" candidate and could do nothing about it. The registration of political parties to provide clear descriptions will go some way towards alleviating that problem.
  I welcome the cap on funding. However, I ask my hon. Friend the Minister to examine one aspect in particular. At present, funding is triggered when the election is called or when a party begins a campaign. In reality, one way or another, campaigns are fought for many months before the election formally begins. A cap on party funding nationally will have no effect if it can be sidestepped in the first six months of a campaign. All the posters, whether paid for by the party or by tobacco companies, have to be taken into account if the cap is to be meaningful, and if the limit is to be observed properly and effectively.
  Subject to that small point, I strongly welcome the Bill, through which the representation of our MEPs will reflect far better the wishes of the electorate, who vote for parties in the main, not for individuals, and who are entitled to vote on a party's manifesto and to expect their views and votes to count, wherever they happen to be.
  8.35 pm
  Mr. Richard Shepherd: When I hear the twaddle that has been advanced, I think that I must be an unreconstructed, old-fashioned Member of Parliament. Where does the notion that there is an imperative to introduce the Bill come from? I listened carefully to the Home Secretary, who bedazzled me with his knowledge of Dutch pronunciation and all manner of contrived and other systems. He advanced the proposition that the Bill was based on a manifesto commitment, and I

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  note that one or two Labour Members agree that the Labour party manifesto mentioned the introduction of proportional representation for European elections. However, the manifesto did not talk about a closed list.
  I am genuinely bemused by the Labour party's constitutional change programme—which is fundamental to its concept of the modernisation of Britain—because its approach is essentially piecemeal. The approach for Scotland is different from that for Wales and for London. No Bill is ever in front of anyone and there are no regulations; it is all up in the air.
  Let us consider what a manifesto commitment amounts to. I have to confess—and I have done so for many years—that I have not always read the Conservative manifesto. It confuses me and I would not want to confuse the electorate with all its aspirations and promises. I suspect that my approach to a manifesto is not so different from that of most hon. Members. Few could attest to the contents of their party's manifesto, or pass even an O-level on its contents.
  Central to the Welsh Labour party's manifesto was a commitment to have a devolved assembly—it was the primary argument in the general election—but to show us that this was the will of the people, the Government invoked a referendum. And what was the resounding result? Seventy-five per cent. did not support the proposals. The Government's response was, "We have had a victory." Notwithstanding the fact that 25 per cent. voted for, 25 per cent. against and 50 per cent. did not vote, the Government said that it was an endorsement of their manifesto commitment. It is laughable—risible.
  The most profound objectors and commentators were Labour Welsh Members. They were harried and hounded by the Under-Secretary of State for Wales, who reminded them all the time of their election commitment. It does not matter a row of beans. In the end, we shall throw the straws into the air and unsettle something that has been pretty settled and has worked to the benefit of our country. Wales contributed to the great Labour victory of 1945 and the huge social change that commanded our nation for nearly 30 years thereafter.
  We now move to the Government's extraordinary proposal. I join my hon. Friends and Labour Members who have the greatest reservation about the profound change that the new Labour Government are setting in motion. Much has been made of the fact that the Home Secretary himself does not really have his heart in it. I am unable to comment on that, but I can well understand why that might be the case.
  The Government's proposal would break something that I consider extremely important. One of the commanding facts of our constitutional arrangements throughout British history—even in the post-war era—is the association and identification of an individual with an area and the electorate within it. First and foremost we are representatives not of a party machine but of an area.
  It used to be said—and Churchill invoked it to save his own skin before the second world war when Conservative central office was trying to unseat him for being awkward and difficult—that the duties of a Member of Parliament were first to his country, second to his constituency and third to his party. The Bill reverses all that. Now, the first duty of a Member of Parliament is to his party. I hear hon. Members asking, "But isn't that the reality of the world?" The world may sometimes have rotated on its
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  axis but the odd Member—the individual supporting a cause and standing against the great guns of his party— remains extremely important.
  Therefore, the question, "How do we get rid of a Member?" is extremely pertinent. The Government can well advise us on that subject as they did so spectacularly well at the general election.
  Identifying an individual and what he stands for—or fails to stand for—has always been a deep and important part of our process. Given the huge geographical regions proposed in the Bill, I wonder how I can go and see my MEP. According to the Bill, my region—the West Midlands—comprises the counties of Herefordshire, Staffordshire, Stoke-on-Trent, Shropshire, Warwickshire, West Midlands, The Wrekin and Worcestershire. There are eight counties and there will be eight MEPs. Where can I meet them? The first relationship for a representative is the ability to meet, argue and try to impress his constituents. I do not know where I could possibly meet the MEPs representing my area.
  I know the gibes I have made about the shortcomings of MEPs in my own area. We hardly ever see them, but I accept that it may well not be their fault. The very nature of the area makes it extremely difficult for them to serve their 500,000 potential electors. It is not impossible, but it may be difficult.
  Under the proposed arrangement, who will be responsible? Whom do I lobby and where in that vast range of counties do I go as a constituent and as a citizen to lobby my MEP? I find it an extraordinary arrangement. What happens about the individual election address? At every national election—including European elections—every candidate makes a personal address that identifies his nature and character and why one should vote for him. Under the new arrangement, that is absolutely meaningless.
  How does one encourage the sensitivities and the reflections that develop during a Parliament? How we start on day one is not always how we end up on the last day of our term of office. Experience, circumstances and other factors may change our approach, yet I do not know who the anonymous people are who are elected by a list.
  I raised another question that was not really answered. Every right hon. and hon. Member, and all those elected to represent us in the European Parliament, will have to have a position on the single currency. It is an important issue that will confront all parties. There are profound reservations within the Labour party about what amounts to a change in British democracy. Although the Liberal Democrats are 100 per cent. for everything, the polls tell us that the overwhelming majority of their supporters are against a single currency. Their manifesto will doubtless proclaim the merits of a single currency, but what about the hearts and judgments of the millions of people who believe in the Labour party yet have reservations and doubts about the single currency? What about the millions of Conservatives who do or do not believe in the merits of a single currency? In the June 1999 European election, how will they make a choice under the closed list system?
  I welcome the Home Secretary's generosity in saying that he will consider suggestions. However, my experience of the parliamentary system is that a Minister's good intentions are often overcome by the rigours and demands of the timetable and programme of the House and the other Departments' need for legislative time.

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  I make a plea to the huge majority who support the Government. We are not all nodding donkeys; we reflect on these matters. In the end, the expression of our country and our liberty has been through the individuals who represent us—often against the tides of opinion in their own parties. In the Labour party it used to be almost a mark of honour to have the whip withdrawn. One of the former leaders of the Labour party suffered that indignity. The father of the national health service also had the whip withdrawn. Are the souls and the characters that moulded our political life to be denied representation in an anonymous list system covering, in my area, all those counties—unreachable and inaccessible?
  I was schooled in part in Italy where I did postgraduate work. One of the features of the Italian political system that has marched with me all the years of my life has been the attention to impossible party lists, which were the doing down of a great country for many years. The people of Italy could never get to grips with the corruption, the back-room dealing and the favouritism.
  My hon. Friends the Members for Stone (Mr. Cash), for Rochford and Southend, East (Sir T. Taylor) and for Ludlow (Mr. Gill) all had the whip withdrawn as those then in charge of the party could not weigh up the seriousness and earnestness that huge numbers of Conservatives—and not only Conservatives—felt about the nature of the surrender of our democracy in the advancement of European treaties.
  Mr. David Watts: Might some of the hon. Gentleman's worries be dispersed by the fact that a new system could give every member of the Conservative party and every member of the Labour party a voice in the selection process for the list? Would that alleviate the problem? Although the hon. Gentleman has raised an important issue, it can be addressed by the way in which the system is put together.
  Mr. Shepherd: Yes, I am sure that we can contrive other ways of doing things. I have always believed that anyone standing for election must be accessible. I am not knocking improvements on the current system; I am trying to address the Bill which, in my view, is contrary to our traditions and our democracy and against the interests of the people of these islands.
  8.48 pm
  Mr. Ian Cawsey: I very much enjoyed the speech of the hon. Member for Aldridge-Brownhills (Mr. Shepherd) and appreciate his enlightening the House on how Conservative Back Benchers deal with their manifestos, especially their manifesto commitments. His comments went some way towards explaining how, in the previous Government, Conservative Members managed to break so many of their commitments without a twinge of conscience. We now know that it was just plain ignorance.
  It is a shame that the right hon. Member for Skipton and Ripon (Mr. Curry) has left the Chamber. He said that, in all his time as a Minister, he never signed a letter with the word "appropriate" in it. As the leader of a local authority for a couple of years, during which time he was the Minister with responsibility for local government,
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  I do not remember ever once in his letters seeing the word "appropriate". It was always something along the lines of, "After careful consideration, the answer is no." As the current Minister with responsibility for local government is pursuing the same policy, however, I shall not pursue that argument.
  I welcome this debate. The hon. Member for Aldridge-Brownhills said that a lot of twaddle was spoken in it, but I do not think that that is true. It never ceases to amaze me how, in our debates, hon. Members start with the same facts but reach different conclusions, but surely that is the nature of the democratic beast. I have not thought that any of the speeches in this debate were twaddle, and I found all of them illuminating.
  I apologise to you, Mr. Deputy Speaker, for not being in the Chamber for the start of the debate. I watched my right hon. Friend the Home Secretary on the monitor in my office and welcomed what he said. For what it is worth, I believe that it is time that we began to modernise the British constitution. Traditions are all well and good, and their history is important, but tradition by itself is no reason to stick with an electoral system. If we are to modernise Britain and our role in the wider world, surely electoral reform of some of our institutions must have a part to play.
  This is not the first time that a Labour Government have tried to implement electoral reform and proportional representation for the European elections. Some hon. Members may have been Members of Parliament when the previous Labour Government tried to do so. Even in those days when there were official Lib-Lab pacts, we failed in our attempt to implement reform, because a coalition of the Conservative party and dissident Labour Back Benchers managed to destroy it. In these more enlightened times, however, in which we have a much smaller Conservative party and Labour Back-Bench dissidents are virtually unheard of, and certainly unheard, it is unlikely that reform will be wrecked.
  The European elections give us the ideal opportunity to try to modernise the constitution and to examine different systems and ways of improving democracy.
  Mr. Tim Loughton: In this great "spirit of modernity"—that grotesque new phrase—how can the hon. Gentleman gel modernisation with the Bill's proposals, which will give the British electorate less choice? They would no longer have a choice of candidate; they would have purely a choice of party and an approved party list, devised by some anonymous party machine. How is that modernising the electoral process?
  Mr. Cawsey: I am grateful for the hon. Gentleman's intervention and, as I develop my argument, I will deal with that point. I hope that he will stay in the Chamber to listen to it, as I am sure he will think that it is deeply persuasive.
  The Home Secretary made the point that reform will give us a system that is similar to that used by most countries that elect Members of the European Parliament. Surely such convergence would in itself be an extension of democracy. I believe that MEPs across Europe should be elected by a common system. As that matter is neither the subject of this debate nor something that we can control, I will not develop it.

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  European constituencies, which are extremely large, have difficulties in links between MEPs and electors. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), who has left the Chamber also—I seem to have an effect on people; it is like a Le Mans start to the exit when I speak—spoke about the difficulty of getting rid of unpopular MEPs. I do not know whether that was a reference to the Conservative party. The difficulty with getting rid of unpopular MEPs in European elections, however, lies in the links in the electoral system.
  It would be welcome if many electors knew who their MEP was, let alone formed a conclusion on whether their MEPs are worthy of being popular or unpopular. I make no criticism of MEPs, some of whom are very good friends of mine and some of whom helped me to get elected. I do not criticise them as individuals—although we now know that they are looking forward to extremely large pay increases. As the advertisement says, "I'm not bitter."
  The size of constituencies makes it difficult to maintain the constituency link that hon. Members know and love. It is that lack of a local link, combined with first past the post that makes current arrangements so unacceptable, despite the fact that currently there is no list system and there are constituencies. Current arrangements provide a major disincentive for the electorate to vote. Electors often do not know for whom they are voting, and they are stuck with a first-past-the-post system. The results are often predetermined, irrespective of how voters cast their ballot. Turnouts in European elections have reflected those disincentives.
  A few years ago, my hon. Friend the Member for Selby (Mr. Grogan)—who, the House will not be surprised to hear, is not in the Chamber—was my candidate for the York Euro-seat. I remember seeing him speak at a public meeting, when he said that the public perception of an MEP was someone who was elected but was not seen again for five years, by which time he or she was five stones heavier. I hasten to say—in case any MEPs are listening—that those were his words, not mine. Nevertheless, he gave some credence to the difficulties of keeping MEPs accountable.
  Whatever the election, electors often need little incentive to stay away from the polls. They need only a small disincentive and they will stay away. Recently in Beckenham, a combination of formula one and formula Hague made most people decide to stay at home rather than to cast a ballot. We have to do all that we can to encourage people to cast a vote and to make them believe that their vote will lead to something.
  Local government has the closest constituency link of all. Often those constituencies, depending on the type of council, consist of only a couple of thousand people. I served on a local authority for eight years, and I am proud of the two years that I served as its leader. In the three local government elections that I faced, however, the highest—not the lowest—turnout was 36 per cent. Despite all my personal appeal and charm and constituency work, that was the turnout—[Interruption.]
  My vibrator is going off. Obviously I am too off message at this point. I should have a quick look to see what I am supposed to be saying. It says, "Carry on"; that is okay. It is my mother watching us on cable television.
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  Despite all the work that others and I put into doing very hard constituency work in a very small constituency, where many electors knew who we were, it did not lead to participation or to good democracy. Why? Because too many seats were perceived to be safe for one party or the other, and that was a deterrent to voting and to participating in the political process.
  In my glorious past, I was an executive member of the Scunthorpe Labour party. [HON. MEMBERS: "Ooh!"] Yes, heady days. I remember going to a selection meeting for a candidate for Scunthorpe borough council. The seat was very safe for Labour and the quorum of members required to choose a candidate was five. Two—a husband and wife—turned up and, under the rules, we added three executive members to make the meeting quorate. The three executive members immediately asked the two members whom they wanted. They said, "John's doing all right; we'll stick with him." John was selected as the candidate, but the seat was so safe that the Conservatives and the Liberals—and even the Monster Raving Loony party—did not bother putting up a candidate and it was a walkover.[Interruption.]I cannot believe it, but I am vibrating again—I must be seriously off message now. In safe seats, under the first-past-the-post system, there is a major disincentive for people to cast their votes, because they know that they make little difference.
  Mr. Loughton: I am fascinated by the hon. Gentleman's discourse, but on that logic why was the turnout in seats such as Kensington and Chelsea and Huntingdon as high as it was in more marginal seats in the general election? What is so different in a Westminster election from a European election? Is the hon. Gentleman resigned to the fact that being a Member of the European Parliament is a complete waste of time because of the lack of connection to the electorate whom one is supposed to represent? If that is so, Members of the European Parliament can be as anonymous, detached and unmotivated as they choose.
  Mr. Cawsey: I covered one of those points earlier when I mentioned the difficulties that Members of the European Parliament face and the sheer impossibility of getting feedback from the electorate. People in European elections vote on party lines, certainly more so than in local elections, because they do not know enough about the candidates or the constituency, which often has little relevance to them.
  The hon. Member for East Worthing and Shoreham (Mr. Loughton) asks why the turnout is lower in local government elections than in general elections. It is because local government seats are often very safe, and because the electorate perceive that local government is overcentralised. They think that it does not matter whom they elect because all the decisions are taken in Westminster and, under capping, local politicians have to impose Government policy.
  I led North Lincolnshire council for two years after it was formed recently. The budgets and capping regime imposed by the previous Government were so precise that both the Conservative and Labour parties had the same budget, not because we suddenly agreed on policy but because there was no room for manoeuvre.
  People do not vote if their votes do not make a difference, which they often do not in local government elections or in European elections; but, by gum, their

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  votes made a difference on 1 May, because the Government changed hands. That is why turnouts were higher in May than for local government elections and for European elections.
  Mr. Loughton: On that logic, the hon. Gentleman appears to have resigned himself to the fact that people will not vote in European elections because their votes will not make any difference. The European Parliament and the Commission will do what they like and impose their policies on our people. That is what he is saying. Is he in favour of that?
  Mr. Cawsey: No, I am not in favour of that and it is not what I am saying. What will make people vote is the belief that their vote counts. Too many people in too many constituencies—especially European constituencies—feel that their vote counts for nothing. Our aim must be to increase participation and thus to increase democracy.
  Mr. Drew: One of the strongest arguments in favour of a regional list system, to which I alluded earlier, is the need to create a regional identity. If regional identities are created, people will vote and take an interest in whom they are electing. Two issues already have a regional dimension—agriculture and fishing—and I can think of no better examples for the south-west, which is my part of the world. Another idea would be—
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman must be brief.
  Mr. Drew: Does my hon. Friend agree that concentration on such issues would increase turnout?
  Mr. Cawsey: I entirely agree with my hon. Friend. The argument that the electoral arrangements in this country are beyond criticism is beyond belief and stunningly complacent. We should consider reforms that would encourage participation and make votes count, because increased participation improves democracy. A more open list would give the maximum incentive to participation at the next European elections. I am pleased to commend the Bill to the House.
  9.4 pm
  Mr. Robert Syms: We have heard some good contributions from hon. Members on both sides in this important debate. There will be many more debates on electoral reform. The next few years will be a psephologist's dream. Many of those wrote obscure books many years ago will make a fortune selling books on various electoral systems.
  I am pleased to follow my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd). I had the honour of fighting Walsall, North in 1992, which is the constituency next to his. I can honestly say that he is regarded with respect and irritation by people in his area, because he is an independent-minded Member of Parliament. He is a perfect example of a party member who represents his constituency well in the Chamber. He is not the sort who would naturally be put on a party list. I mean that as a compliment. Any Parliament ought to have a broad range of opinion.
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  The first-past-the-post system has evolved over the past 150 years. It has suited us well because it suits the temperament of the British people. It is simple, it is quick, it delivers effective democratic rule and, most important, it has a strong constituency link. At every selection committee, the first question that a candidate is asked is whether he or she will live in the constituency. People put a high premium on having their Member of Parliament as part of the community.
  In many respects, first past the post is the most accountable system. Every time we vote, we are accountable. Every time we write a letter to a constituent, we are accountable. If we are not here, we are accountable. If we cannot go to the annual general meeting of the local Women's Institute this year, we know that we must go next year because people hold us to account. We are meant to represent our constituencies and we are meant to be there. That is a tremendous strength of our system.
  The Bill proposes a proportional representation closed list system. Despite what the Home Secretary said earlier about looking at other options, that is what is proposed. That will give electors no choice but to pick a political party—or an independent. They can exercise no judgment about whether the first, second, third or fourth candidate on a list has particular merits. That is bad for democracy. As has been said earlier, the first on the list could go on holiday to the Caribbean and have a lovely time while the No. 3 was working extremely hard to ensure that he or she was just above the line to be elected for that region.
  The Home Secretary has said that the size of European parliamentary seats provides a stronger argument for moving away from first past the post, but we are creating such vast regions that there will be no strong link between MEPs and their electors. Current MEPs are all linked to towns, cities or counties.
  Most of us have certain loyalties. We have loyalties to our country and sometimes to our county or the borough that we grew up in or represent. Those links are important. Most MEPs have strong links with their local authorities because, irrespective of their political character, those authorities will regularly contact their MEP for information, advice and support. As a Member of this Parliament, it is useful for me to know who represents Dorset and East Devon in the European Parliament. The seven or eight Members of Parliament in that area know him. That is what accountability is about.
  Political parties have never played a predominant role in the way in which we have organised our affairs. Only in 1969, under the Representation of the People Act, when the voting age was reduced to 18, did we put the political labels on ballot papers for both local and national elections. The suggested system will put political parties directly into the political process as never before.
  Moreover, that would lead to bad practices. We all represent our constituencies, as Members of the European Parliament do. People go to their representatives with their problems, whether they voted Labour, Liberal Democrat or Conservative, or even if they did not vote at all. In my surgery I find people of all political persuasions, so I have to see the problems that people from all walks of life have.
  If a region has two or three Conservative Members, plus some Labour, some Liberal Democrat and an independent, people with problems will go to the

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  representative who shares their political point of view. That is not necessarily progress, and is not the best way of improving political representation.
  There is also an important argument concerning the size of regions. Inevitably, however we divide the vote, the larger the region the more likely a minor party is to achieve representation. If there are 10 or 11 Members and the minor party crosses a threshold of 9 or 10 per cent., it will get representation. If there are three or four Members, minor parties will need 20 or 25 per cent. of the vote to achieve representation.
  It would be fairer if we picked an electoral system in which every constituency was the same size. The differential sizes of regions will mean that more independents will stand in some than in others. If a gentleman with deep pockets wants to stand for the European Parliament, he will inevitably go to the South East region, because the threshold for being elected will be far better there than in Wales or the North East, for example.
  That will lead to unfairness within the system. In the North West and the South East, we shall find more odd bods and a greater range of candidates, simply because the sizes of those regions will mean that such people's chances of election are far better. Meanwhile, life for candidates from the major parties standing in Wales or the North East will be relatively easy.
  The Irish experience in the middle part of this century was that under the single transferable vote system, with large constituencies of nine to 12 Members, it was almost impossible to form a Government without a mass coalition of three or four parties. Ireland reduced the size of the constituencies so that each had only three to five Members, because the arithmetic then gave the prospect of getting much nearer to a majority in the Dail. De Valera's party, which was the largest, could command an overall majority on occasions, because the size of the areas had been reduced.
  I hope that the Government will consider seriously the size of the regions that they propose. It would be beneficial if some of the larger regions were split in two, to keep at least some link with the locality, and to diminish the size of the constituencies.
  The general question of by-elections has not been much raised, although the Home Secretary talked about by-elections in certain circumstances. No doubt, under the STV system in Northern Ireland there would have to be a by-election. In regions, there would be a by-election unless the place could be filled through the list, and certainly if it was an independent who had happened to die.
  I know that we are going into new territory here, but I believe that that is an important issue. Under the Bill, regulations on such matters, although laid before the House, would not be debated. If we are to move towards a new system, we need to set out clear ground rules governing when a by-election would and would not be called.
  At present, under the European Parliamentary Elections Act 1978, the only discretion that the Government have is to set the date of a by-election. Under the existing system, that is all that they need. However, after the proposed changes there may be some discretion about whether there is to be a by-election at all. For example, whether Scotland has to turn out for a by-election on a particular Thursday—under the first-past-the-post system,
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  presumably, if there is only one vacancy—may depend on the good will of a particular Home Secretary. That would be wrong.
  This is a bad Bill and sets a bad precedent. I do not agree with the hon. Members who have said that we should have different electoral systems for different tiers of Government. We should have some regard to the electors, who have to turn out and get to know which system they have to exercise at the ballot box. We should also have some regard for the returning officers. We are sentencing them to many days in motels being lectured on how the new system will work, so that individuals can operate the various different systems that we propose. It would be far simpler to keep the first-past-the-post system.
  The Government are proposing to spend some £4 million on training, but it has been reported in the press that perhaps £20 million might have to be spent on advertising to inform people how to operate the new system. The real strength of the first-past-the-post system is its simplicity and its link with the MEP. We are moving from that down a slippery slope towards worse representation.
  9.14 pm
  Mr. David Heath: Electoral reform and changes to the voting system can sometimes be an acquired taste, and I agree with the Home Secretary that it is not the prime topic of conversation in Kingsbury Episcopi or in his constituency. Despite that, we have had a largely well-informed debate this evening. The Home Secretary was almost unnervingly flexible, accommodating, understanding and pluralistic—it quite took my breath away to hear the extent to which he was prepared to compromise his initial position to accommodate others. That is a good sign for the future. The hon. Member for Stroud (Mr. Drew) talked about the "Straw compromise". I hope that it will be called the Straw poll, which seems appropriate.
  There was a feeling that the tectonic plates of the body politic were moving a little, and that we were seeing signs of the development of a truly modern system. The only problem with that analysis was the response from the Conservative spokesman, the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney). Some movement in the tectonic plates may have occurred, but the Conservative party still seems stuck in permafrost—it was a Jurassic response to the debate.
  The right hon. Member for North-West Cambridgeshire started by saying that the first-past-the-post system could not be described as indefensible, but it is indefensible in the context of European elections. We heard about the constituency link of MEPs, but any genuine link between one individual and the 500,000 electors he or she represents remains to be proven.
  We heard how the new system would restrict voter choice, but I am at a loss to understand that argument. If one is presented with a list of possible candidates, rather than a single candidate from a party, there is, by definition, an extension of choice. We heard the argument about whom an individual elector would go to if he had a problem. At the moment, the voter has one option—to go to the one person who represents his European constituency. Under the new system, the voter will have a choice of MEP. One might meet an MEP with greater

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  empathy with the problems, say, of lone mothers than another. One might meet an expert on agriculture, or an expert on industry. The voter will have increased choice.
  We heard a comprehensive rubbishing of the region system. I find it difficult to reconcile that with the fact that the Conservative party set up those regions. The Conservative Government set up the Government office for the south-west—indeed, the right hon. Member for Skipton and Ripon (Mr. Curry) was once the Minister responsible. We used to enjoy the occasions when he trundled along the A303 and the M5 and down our country lanes to find out what was going on in the south-west.
  The most astonishing element of the Conservative argument was the patronising assumption that the voter would not be able to understand the change in the system. Never mind that every other voter in Europe can understand a different system; or that voters in Northern Ireland can do so. The right hon. Member for North-West Cambridgeshire was asked by my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) about the situation in Northern Ireland, and he signally failed to answer. I believe that what is good for every other citizen of the European Union may perhaps have something to commend it to citizens of the United Kingdom.
  We heard a level-headed argument from the hon. Member for Stroud. He said a lot of the things that I wanted to say, which is not surprising as he comes from a similar constituency.
  The hon. Member for Birmingham, Northfield (Mr. Burden) spoke of a distortion that had taken place in the European parliamentary groups as a result of the present system—of the fact that those groups fluctuated massively in terms of strength because of the first-past-the-post system in the United Kingdom. He could have gone on to say that the representation of the United Kingdom within those European parliamentary groups also fluctuates massively on exactly the same basis. That means that the United Kingdom is often under-represented in the Socialist group—or the Conservative group, or the European Liberals, Democrats and Reformers group—in the European Parliament.
  I appreciate that to be too interested in, and to express too great a knowledge of, different electoral systems displays an acquaintance with anoraks that it may not be wise to admit to in all circumstances. We could have gone on to discuss the other systems that exist—for example, the Hagenbach-Bischoff and the Hare-Niermayer systems. I feel that, in Committee, we need to return to the argument about the relative merits of the d'Hondt and Sainte-Lague systems.
  Earlier, the Home Secretary expressed the view that Sainte-Lague was probably not a Belgian but a Frenchman. He was, in fact, a French mathematician who developed, in 1910, a system that has been used successfully ever since. Opposition Members still believe that that system has something to commend it. We do not think that there is any great difference between an arithmetical progression that goes one, two, three, four, five and one that goes one, three, five, seven, nine. Similarly, one system produces a more proportional result than the other.
  864
  I believe that a much more important debate concerns the relative merits of the open and closed systems. I was gratified to hear in the Home Secretary's speech that the closed system was, at the very least, ajar. We shall want to press that. We believe that there is a great deal to commend an open system in which we give the electorate that extra dimension of choice that means that different candidates—not just the candidates selected by the party machine—are presented to the electorate, and can express their view.
  I shall end my speech shortly, but I should like to leave one more thought with the Ministers. The Committee of the Regions is not part of the European Parliament, but we have criticised it many times over the years for its lack of democratic ability. At present, it is a quango appointed by the Government, not properly reflective of proportionality. Could it be that this regional system, and this regional proportional representation, might perform the additional duty of providing a template enabling a better representation for the Committee of the Regions, so that local government could be properly reflected in those who were sent to represent the country?
  We welcome the thrust of the Bill. We shall debate the detail in Committee. We particularly welcome the cap on party spending on a national basis, which is long overdue. We shall strongly welcome a Bill that will provide for party registration in due course, especially if it prevents the "passing off" that we have seen in recent elections. It should not be necessary for a party to win with a majority of 21,000 in a particular constituency to avoid the distortions that a rogue candidate might introduce into the system.
  If the Government can deliver all those things—if the Government can honour their pre-election promises, and the accords that have been worked out between the Labour party and the Liberal Democrats—they may be assured of our support in the Lobby tonight, and our support as the Bill proceeds through its legislative stages.
  9.23 pm
  Mr. James Clappison: Although he described my party as Jurassic and coated in permafrost, I agree with the hon. Member for Somerton and Frome (Mr. Heath) that we have had a largely well-informed debate with some interesting contributions. Among Government Members, we have heard from the hon. Members for Birmingham, Northfield (Mr. Burden) and for Stroud (Mr. Drew), who made an honourable attempt to put the general case for proportional representation, although I do not agree with them.
  We also heard from the hon. Members for Wyre Forest (Mr. Lock) and for Brigg and Goole (Mr. Cawsey) and, representing the Liberal Democrats, from the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for Somerton and Frome.
  We have heard some excellent speeches from Conservative Members. My hon. Friend the Member for Poole (Mr. Syms) made some telling points. My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) is the voice of constitutional integrity and he made some important principled observations that should be borne in mind by hon. Members of all parties, especially as—some new Members may not know this— he always says what he thinks, regardless of whether it brings comfort to his own party or to others.

  865
  My right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) made a powerful speech that chimed in with that of the hon. Member for St. Helens, South (Mr. Bermingham), in which there were some important points to which the House should pay attention. My right hon. and learned Friend hit the nail on the head when he talked about the rushed way in which the matter had been introduced. We have witnessed some of the consequences of that, beginning with what the Home Secretary said about reconsidering part of the Bill.
  I take as a starting point the speech of my right hon. Friend the Member for Skipton and Ripon (Mr. Curry). His outstanding speech was made, as the House will recognise, with the benefit of 10 years' experience as a Member of the European Parliament. He was right to talk about his time as an MEP, working with organisations and individuals on a Euro-constituency basis, and about how he was able to identify with those organisations and how much more difficult it would have been for him to provide a service for his constituents if he had been merely a name on a list as part of a much larger region.
  My right hon. Friend the Member for Skipton and Ripon asked whether the proposed system would be better for the electors. The answer is clearly no. There are at least three objections. First, it is more complicated than the present system; secondly, as it stands, and is likely to remain, it will bring about more centralised party control and rob individual MEPs of their independence; and thirdly, it will create much larger constituencies or regions, in which the MEP will inevitably be much more remote from his constituents.
  Mr. Burden: The hon. Gentleman is talking about complexity for the elector. Under the proposed system, the elector would put a cross on a ballot paper, which is precisely what happens under the current system. How is that more complicated?
  Mr. Clappison: For reasons that I shall go into in a moment, the elector is given a simple choice as between parties, but if he tries to understand the new system, heaven help him. I agree with the hon. Member for Moray (Mrs. Ewing), who said that she would like to take a closer look at the Home Secretary's analysis in the morning; it will bear careful study.
  At the moment, I am clear about only three things arising from the Home Secretary's speech. First, Mr. d'Hondt was a Belgian; secondly, Mr. Sainte-Lague was not a Belgian, but if he had been in America he would have been called Webster; and thirdly, in Sweden the divisor would be 1.4.
  Following the speech of my right hon. Friend the Member for Skipton and Ripon, we found out that the Home Secretary was wrong in at least one of those, because Mr. d'Hondt should have been Mynheer d'Hondt, because he was a Fleming. The Home Secretary made various comments about Belgians. I am cautious about following him down the road of national stereotypes. The Home Secretary asked whether we could think of any other famous Belgians. The first name that sprang to my mind was that of Hercule Poirot, although even his powers would have been suffocated if he had tried to understand this system.
  My hon. Friend the Member for Poole has helpfully told me that there are at least two other systems, the Hagenbach-Bischoff system and the Hare-Niermayer
  866
  system. I am grateful to the Home Secretary for not mentioning them, although we have been threatened with them in Committee. My hon. Friend also tells me that a Mr. Hare has invented a British system.
  Mr. Beith indicated assent.
  Mr. Clappison: The Liberal Democrats know about him; he gave rise to the expression "hare-brained scheme". The proposed system is far from straightforward. The Home Secretary's claim that it has the virtue of simplicity takes a lot of swallowing.
  More seriously, there is the problem of closed lists. The Home Secretary made some comments on the course that he will take. He is wise to take that course because, to judge from the debate, there was no support, from any party, for the closed list system. The complete lack of enthusiasm among Labour Members was noticeable. Given that Labour's manifesto committed it to introducing proportional representation for the European elections— it was a bald commitment with no details—why did the Government plump for the closed list system, which can be only a recipe for central party control? That was widely commented on at the time of its unveiling. My right hon. Friend the shadow Home Secretary rightly quoted The Times saying that it would be bad for democracy and would put power in the hands of the party machine and take it away from individual MEPs.
  We are entitled to an explanation of why the Home Secretary plumped for the proposed system from all the systems that could have been adopted. Can the decision be entirely unconnected with what my right hon. Friend the Member for Skipton and Ripon described as the ethnic cleansing going on among Labour Members of the European Parliament? Is it a complete coincidence that the Labour party was trying to impose a gag on its MEPs? Labour Members would do well to consider the terms of the gag that was put on their colleagues in the European Parliament by the code of practice, which stated:
  "Members will support party policy as defined in the Labour party manifesto, including the commitment to proportional representation, and no member shall give statements to the media about any aspect of the party selection procedures, which are a matter for internal party discussion and decision."
  That was the gag. So much for open government.
  Now the Home Secretary has backed down in the face of all the adverse comments about closed lists and said that he is prepared to put in the Library a document setting out details of the Belgian and Danish systems. We await that with interest. Having taken that step in the face of a lack of support for his proposals, the Minister owes it to the House to say whether we will be allowed a little longer to consider the matter and a fuller debate. If the Government are sincere about consultation and debate, will they allow longer debate, and put off the Committee stage until after Christmas?
  I bear in mind the comment of my right hon. and learned Friend the Member for Sleaford and North Hykeham about the way that the Government rushed in. As recently as June, Lord Williams of Mostyn told the Lords that the Government had no plans to bring forward this legislation. [Interruption.] I hear the Whips saying no. Perhaps that is not a good omen for an open debate. In those circumstances, can we have more time for reflection and consultation? That would be in the Government's interest as much as anyone's, given the situation this evening.

  867
  The next deficiency of the Bill is the breaking of the link between individual MEPs and constituencies, on which several Labour Members commented. Like the Liberal Democrats, they said that it is difficult for MEPs at present to represent constituencies of 500,000 electors. How much more difficult will it be for them to represent those vast regions, coming as one on a list of Members representing 4 million or 5 million people? The hon. Member for Northfield said that his Euro-constituency of Birmingham, East was too big. Is it more difficult for an MEP to represent Birmingham, East than to represent the West Midlands region, in which 5 million electors reside in Birmingham and the counties of Warwickshire, Worcestershire, Staffordshire, Herefordshire and Shropshire?
  Mr. Burden: My point was that I found it somewhat curious that I live in the European constituency of Birmingham, East when my house is in the west of Birmingham. As for the West Midlands, it is acquiring a major identity as a region and it is an economic unit. There is a regional agenda and Europe should be part of that regional agenda.
  Mr. Clappison: Does working in such a vast area make it any easier for the MEP to do justice to his constituents?
  Mr. Burden: Yes.
  Mr. Clappison: The hon. Gentleman says yes, but I am doubtful. What about the South East region, stretching from Milton Keynes and Oxford down to Kent and Dover? Why stop there? It would make about as much sense to go on to Calais and take in part of northern France. My Hertsmere constituents will find themselves part of the Eastern region, with a total of eight MEPs on a list representing 4 million people. Would it be easier for those MEPs to represent that vast region than for my constituents to remain in the Hertfordshire European constituency, close to Hertfordshire county council, the local health authorities and all the relevant authorities? That is true up and down the country.
  As the Bill stands, electors will not even be told whom they are voting for, because there is no authority in the Bill for the names of MEP candidates to appear on the ballot paper, although I notice that they appear in the Government press pack. How can it be possible for independent candidates to attempt the feat of representing whole regions, but not for candidates representing parties? I note that the Liberal Democrat candidates appear in the press pack unzipped—by which I mean that ladies and gentlemen do not appear next to each other—and that independents are represented by David Sutch of the Monster Raving Loony party. I take that to be Screaming Lord Sutch, who will have been deprived of his peerage under the new arrangements—presumably he will be standing for the people's Monster Raving Loony party in future.
  To use the words of my right hon. Friend the Member for Skipton and Ripon, it is a piece of arrogance on the
  868
  part of the Government to say that electors do not need a constituency MEP. We are told in the Government's question-and-answer document that:
  "People do not enjoy, or need, the same close links with their MEP as they do with their MP, so it is possible to elect MEPs on a regional basis."
  Mr. Syms: Why not?
  Mr. Clappison: That is exactly my question. What have all the Labour MEPs been doing all these years of going around their European constituencies? Are they poor deluded souls who have spent years labouring under the misapprehension that they are doing something useful? All their work has been dismissed by the Government's sleight of hand. We are told:
  "MEPs' links with their constituents are not as close as those of MPs and the public, for the most part, lacks the detailed knowledge which would enable them to make an informed choice between candidates on a party's list".
  What a piece of arrogance on the part of the Government: wiping away the constituency system just like that; wiping away the link between individual MEPs and their constituents; creating a system of remote party placemen miles away from their constituency; and denying electors any opportunity to bring to account MEPs of whom they do not approve.
  The system is a bad one. It is complicated. It is a recipe for centralised party control. It breaks down the constituency link that is a valuable part of our country. The Bill is bad for democracy and, without hesitation, we endorse all that my hon. Friend the Member for Aldridge-Brownhills said. This is a bad Bill, which will undermine our system of democracy. It is bad for the country and we should not entertain it.
  9.39 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): The hon. Member for Hertsmere (Mr. Clappison) has just accused the Government of arrogance. Some accusations I am prepared to answer in detail and in full, but I am not prepared to accept an accusation of arrogance from the Conservative party, given its record in the past 18 years and even since the general election. The accusation comes from a party that has never yet revealed where one penny piece of its party funding comes from. It says that it still cannot reveal its funding for the past two general elections.
  The Conservative party cannot work out a way of electing its leader, which in some way involves the party electorate. Yet the Conservative party accuses the Labour party of arrogance, when the Labour party has devised an electoral college system to elect its leader. So we will not take any lessons from the hon. Gentleman or his party. The Conservative party has a long way to go in its internal democracy before it will be in a position to lecture anyone in the House or elsewhere on party democracy.
  We have had an interesting and, for some hon. Members I suspect, educational debate. The hon. Member for Hertsmere conceded that the more he listened to my right hon. Friend the Home Secretary, the more he understood the d'Hondt system and its variants. I have to tell the hon. Gentleman that I have sat through my right hon. Friend's explanation of the matter on four occasions

  869
  now and I am becoming, next to him, the most undisputed expert in the House on all the aspects of the lists that may be used.
  It has been a useful debate. In a moment, I shall try to deal with some of the specific questions that have been raised, but first I want to express satisfaction that at long last a system for electing Members of the European Parliament, which is appropriate, on its own merits and because it fulfils our obligation as members of the European Union, is about to be delivered. Some hon. Members—admittedly, one or two Labour Members—are concerned that the Bill is the thin end of the wedge and that once we concede the point for the European parliamentary elections, we shall end up with a system of proportional representation for the House of Commons. It is too early to say that.
  We made a commitment to set up an independent commission—not a Labour party creature, as the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney) suggested—to examine the most appropriate voting systems and proportional voting systems for the House of Commons. Once the commission has made recommendations—this is the important point— it will be up to not the House of Commons or the Government, but the electorate, to decide in a referendum on the most appropriate way of electing Members of Parliament.
  Mr. Hogg: If the hon. Gentleman is prepared to set up an independent commission and put the result to a referendum, why not adopt the same procedure for the European Parliament?
  Mr. Howarth: The right hon. and learned Gentleman should have listened to what was said earlier and what I said a few moments ago. Perhaps at this point I should bring in the right hon. Member for North-West Cambridgeshire. The difficulty for Conservative Members is the fact that we are in the process of delivering a manifesto commitment. I know that that concept is alien to them. They stand for election on a set of promises and pledges and abandon them immediately after the election, but the Labour Government have a clear understanding that we made promises to the electorate. We did not make long lists of promises. They were focused. They were promises that we knew we could deliver. The promise to introduce a new voting system for elections to the European Parliament was one that we knew we could deliver.
  The right hon. Member for Skipton and Ripon (Mr. Curry) is well respected in the House. During the period of office of the previous Government, he contributed a great deal to our understanding of regional policy and how regional boundaries were drawn. He made an interesting point in his speech—he said that he always worried when someone used the word "appropriate", which my right hon. Friend the Secretary of State had used. He went so far as to say, perhaps injudiciously, that as a Minister he never allowed the use of the word "appropriate" in correspondence. If someone digs around, they may prove him wrong on that.
  Mr. Curry: "Appropriate" is civil servant language for, "We know best."
  Mr. Howarth: I take the right hon. Gentleman's point that he is uncomfortable with the use of the word
  870
  "appropriate". Wondering why the right hon. Gentleman was so concerned, I looked up the word in the Collins dictionary and found out why. The dictionary says: "Suitable; proper; right; fitting." Of course, the right hon. Gentleman does not like anything that is appropriate. He does not like anything that is suitable, proper, right or fitting, as my right hon. Friend the Home Secretary said. The concept of the Bill is proper, right and fitting. We believe that, for the type of assembly that we are discussing, that is an appropriate way to proceed, and I do not apologise for using the word "appropriate".
  In the debate, confusion has arisen between the nature and functions of this Parliament—although my right hon. Friend the Home Secretary explained them clearly—and the fundamentally different functions of the European Parliament. In establishing an independent commission to consider possible voting systems to the House, it is our intention to study a range of systems, but those systems should be ones that are considered most appropriate for the House of Commons.
  My right hon. Friend the Home Secretary explained that the difference between the House of Commons and the European Parliament is that our system of government is drawn from the democracy of the House of Commons. Ministers either sit in the House of Lords or, in overwhelming numbers, whichever party is in power, are drawn from the House of Commons. Of course, there will be a difference and of course constituencies play an important part in that function. I shall say something about that later.
  The issues raised are important, and I shall try to deal with them in order of priority. If I miss anything out because of the time available, I am sure that hon. Members will write to me or let me know, and I shall try to make up for any deficiency at a later date.
  The right hon. Member for North-West Cambridgeshire fell into the trap of confusing the application of proportional voting systems for electing Parliaments from which Governments are drawn with proportional systems for electing representative assemblies, such as the European Parliament. I believe that he came into the Chamber with a speech against proportional representation in general and decided, even though my right hon. Friend the Home Secretary explained the considerable difference between the two cases, that he had to soldier on with the speech that he had brought, although it was not appropriate to the Bill. However, he raised some points that warrant a reply.
  The right hon. Member for North-West Cambridgeshire said that the Bill was a dry run for one to introduce a system of proportional representation for the House of Commons. He believed that a secret deal had been struck behind closed doors by an unspecified person—the Prime Minister, my right hon. Friend the Home Secretary or someone else—and that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) was involved.
  There is no hidden agenda—no dry run. An investigation will be carried out by an independent commission, and at the end of that process a referendum will be held. If we had struck a secret deal with the Liberal Democrats, it would have been right for us to bring the entire electorate into the secret, because in the end they will take that decision. There is no such conspiracy. The right hon. Gentleman may search for conspiracies as much as he likes; they do not exist. We believe that the

  871
  electorate are the most appropriate people to choose the system for electing the House of Commons, and we intend them to take that decision.
  There has been a great deal of debate on both sides of the House about constituencies. My hon. Friend the Member for St. Helens, South (Mr. Bermingham) was one of those who spoke on the subject. The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) made a passionate and at times eloquent—
  Sir Brian Mawhinney: When the independent commission comes up with an alternative PR proposal to put to the electorate in a referendum, will the Government support that proposal?
  Mr. Howarth: The right hon. Gentleman will have to wait and see what the commission comes up with. Let me be clear about this: I do not think that any Minister standing at the Dispatch Box or—if they were responsible—any Opposition spokesman would sign a blank cheque without knowing the precise terms that an independent commission would come up with. I am not prepared to do that; it would not be sensible.
  The right hon. Gentleman and several of his hon. Friends mentioned constituencies. The right hon. and learned Member for Sleaford and North Hykeham and my hon. Friend the Member for St. Helens, South both raised the subject. Let me make it clear that simply because we do not think that constituencies are necessarily the appropriate vehicle to represent us in Europe, we are not attacking MEPs. My hon. Friend the Member for St. Helens, South mentioned my MEP, Terry Wynn; I agree with my hon. Friend that Mr. Wynn is an excellent representative who has represented our area well. I do not think that if Terry Wynn were to succeed, find himself higher up the list and be elected on the North West list, he would cease to be as effective, or cease to be as concerned about issues in the north-west or about issues affecting Merseyside, which I represent.
  Some hon. Members, particularly Opposition Members, are confused. They believe that the respect in which they hold their own Members of the European Parliament is a direct product of those Members representing a defined constituency. Some of my hon. Friends may be making the same mistake.
  Mr. Harry Barnes: In terms of MEPs still being as effective under the new system, will my MEP still be as effective—his name is Ken Coates?
  Mr. Howarth: My hon. Friend is always helpful. I can confirm that his current MEP will not be as effective after the next elections, as he has already announced his retirement. Perhaps during his retirement he can be effective in other ways.
  The shadow Home Secretary, the right hon. Member for North-West Cambridgeshire, said—and this was the high point of his speech—that the current arrangements of the constituency system had stood the test of time over centuries. That is an odd reading of history, because the European Parliament has not been in existence for that
  872
  long and there were no European Members of Parliament until the late 1970s. Allowing for some licence in his interpretation of history—
  Mr. Bermingham: Will my hon. Friend give way?
  Mr. Howarth: I shall give way to my hon. Friend, but this must be the last time, as I have to make some progress.
  Mr. Bermingham: I thank my hon. Friend for giving way to a near neighbour and a fellow Member in the same Euro-constituency. If there are perhaps three or four Labour MEPs in the north-west, who will look after the little fish such as St. Helens and Knowsley and who will look after the big fish such as Manchester and Liverpool?
  Mr. Howarth: As my hon. Friend rightly says, my constituency is next to his. In fact, I live a few hundred yards from the border of his constituency, through which I often travel. I can tell him who will look after the interests of his constituents in St. Helens: he will and the local councillors will. Those who are elected on a regional list will continue to represent the interests of St. Helens, Manchester, Merseyside, Lancashire and Cheshire—there is no contradiction there. My hon. Friend is confusing his affection and respect for our MEP, which I share, with some magical connection with a Merseyside-wide constituency. The Euro-constituency in which both of our constituencies fall is Merseyside, East; it includes Garston in Liverpool and stretches to Wigan. I am not sure what the people of Garston think that they have in common with the people of Wigan, but I do not think that it is a great deal. Those issues of territoriality are already difficult, and will not be any more difficult if we move to a regional system.
  The right hon. Member for North-West Cambridgeshire said that the new system might in some way compromise the relationship that MEPs currently have with business interests in their constituencies. That is fair comment, and I do not believe that it was made for the purpose of point scoring. The right hon. Gentleman will know that Europe is increasingly a Europe of the regions. That sounds like a cliche, but it is true.
  The dialogue that takes place in Europe at Commission level, at Parliament level and at other levels is based on regions—the common characteristics of regions, deprivation and difficulties in regions, and subsidiarity. Of course, business has already responded to that. Probably in every region of the country, there is a regional Confederation of British Industry spokesperson or some kind of organisation representing the CBI. [Interruption.]
  Mr. Edward Leigh: Is the Minister saying that the system that he is proposing is simply different, or that it is better?
  Mr. Deputy Speaker (Mr. Michael Lord): Order. This is an important debate and the Minister is winding up. He ought to be heard in silence.
  Mr. Howarth: I was saying that Europe is increasingly a Europe of the regions. The Liberal Democrats have just walked in and proved that this is a Parliament of the regions.
  The final point—
  Mr. Leigh: Will the Minister have the decency to answer my question?
  Mr. Howarth: I am sorry; I did overlook the hon. Gentleman. I do not believe that the arrangements that business already has at regional level will change greatly. I do not think that there will be an improvement or that they will be any worse. It is arguable that there could be an improvement, because regions will talk to business on a regional basis.
  The hon. Member for Moray (Mrs. Ewing) raised the matters of Sunday voting and of the amount of funding that parties will be able to spend on a regional basis. On Sunday voting, we are still open to arguments, but I accept the hon. Lady's point that in some parts of the country, most notably her own, that would raise difficulties. I am minded to take that into account.
  As regards finance for region-based elections, we would have to examine the matter closely. There are legitimate concerns about how that will operate, and we want to listen to arguments and consider how it might work out in practice.
  Several right hon. and hon. Members asked how individuals would find their way on to the list within the democratic structures of the various parties. I do not know how the Conservative party will decide who goes where on the list, if the Bill ends up on the statute book. That is a matter for the party to decide, but I suspect that it will not be by the most democratic procedure ever invented. An announcement has already been made by the Liberal Democrats. Within our democratic procedures in the Labour party, we are currently considering the most effective way of doing that. It is for individual parties to decide the most appropriate way to select their candidates and how people get on to the list.
  The Bill properly represents what we said we would do. The Opposition have difficulty with it. We are in the process of delivering commitments that we made during the general election. The issue was determined by the Plant commission, passed by our conference and put in our manifesto. That is what we are delivering. It may be a novel concept for the Opposition, and possibly a first in the past few years, but this is a Government who deliver their promises, unlike the previous Government when they were in power.
  Question put, That the Bill be now read a Second time:—
  The House divided:Ayes 355, Noes 150.

  Division No. 98]

  [9.59 pm

  AYES

  Abbott, Ms Diane

  Atherton, Ms Candy

  Adams, Mrs Irene (Paisley N)

  Austin, John

  Ainger, Nick

  Ballard, Mrs Jackie

  Alexander, Douglas

  Banks, Tony

  Allan, Richard

  Barron, Kevin

  Allen, Graham

  Battle, John

  Anderson, Janet (Rossendale)

  Bayley, Hugh

  Armstrong, Ms Hilary

  Beard, Nigel

  Ashton, Joe

  Begg, Miss Anne

  874

  Beith, Rt Hon A J

  Dean, Mrs Janet

  Bennett, Andrew F

  Denham, John

  Benton, Joe

  Dewar, Rt Hon Donald

  Bermingham, Gerald

  Dismore, Andrew

  Best, Harold

  Dobbin, Jim

  Betts, Clive

  Dobson, Rt Hon Frank

  Blizzard, Bob

  Donohoe, Brian H

  Blunkett, Rt Hon David

  Doran, Frank

  Bradley, Keith (Withington)

  Dowd, Jim

  Bradley, Peter (The Wrekin)

  Drew, David

  Brake, Tom

  Drown, Ms Julia

  Brand, Dr Peter

  Eagle, Angela (Wallasey)

  Breed, Colin

  Eagle, Maria (L 'pool Garston)

  Brinton, Mrs Helen

  Edwards, Huw

  Brown, Rt Hon Nick (Newcastle E)

  Efford, Clive

  Browne, Desmond

  Ellman, Mrs Louise

  Buck, Ms Karen

  Ennis, Jeff

  Burden, Richard

  Ewing, Mrs Margaret

  Burgon, Colin

  Fearn, Ronnie

  Burnett, John

  Field, Rt Hon Frank

  Butler, Mrs Christine

  Fisher, Mark

  Byers, Stephen

  Flint, Caroline

  Cable, Dr Vincent

  Foster, Rt Hon Derek

  Caborn, Richard

  Foster, Don (Bath)

  Campbell, Alan (Tynemouth)

  Foster, Michael Jabez (Hastings)

  Campbell, Mrs Anne (C'bridge)

  Foster, Michael J (Worcester)

  Campbell, Menzies (NE Fife)

  Fyfe, Maria

  Campbell, Ronnie (Blyth V)

  Galbraith, Sam

  Campbell—Savours, Dale

  Galloway, George

  Caplin, Ivor

  Gapes, Mike

  Casale, Roger

  Gardiner, Barry

  Cawsey, Ian

  George, Andrew (St Ives)

  Chapman, Ben (Wirral S)

  George, Bruce (Walsall S)

  Chaytor, David

  Gerrard, Neil

  Chidgey, David

  Gibson, Dr Ian

  Chisholm, Malcolm

  Godman, Norman A

  Church, Ms Judith

  Godsiff, Roger

  Clapham, Michael

  Golding, Mrs Llin

  Clark, Rt Hon Dr David (S Shields)

  Gordon, Mrs Eileen

  Clark, Dr Lynda

  Gorrie, Donald

  (Edinburgh Pentlands)

  Griffiths, Jane (Reading E)

  Clark, Paul (Gillingham)

  Griffiths, Win (Bridgend)

  Clarke, Charles (Norwich S)

  Grocott, Bruce

  Clarke, Eric (Midlothian)

  Grogan, John

  Clarke, Rt Hon Tom (Coatbridge)

  Gunnell, John

  Clarke, Tony (Northampton S)

  Hain, Peter

  Clelland, David

  Hall, Mike (Weaver Vale)

  Clwyd, Ann

  Hamilton, Fabian (Leeds NE)

  Coaker, Vermon

  Hancock, Mike

  Coffey, Ms Ann

  Hanson, David

  Coleman, Iain

  Harman, Rt Hon Ms Harriet

  Colman, Tony

  Harris, Dr Evan

  Connarty, Michael

  Harvey, Nick

  Corbett, Robin

  Healey, John

  Corston, Ms Jean

  Heath, David (Somerton & Frome)

  Cotter, Brian

  Henderson, Doug (Newcastle N)

  Cousins, Jim

  Henderson, Ivan (Harwich)

  Cox, Tom

  Hepburn, Stephen

  Cranston, Ross

  Heppell, John

  Crausby, David

  Hesford, Stephen

  Cryer, Mrs Ann (Keighley)

  Hewitt, Ms Patricia

  Cryer, John (Hornchurch)

  Hill, Keith

  Cunliffe, Lawrence

  Hinchliffe, David

  Cunningham, Rt Hon Dr John (Copeland)

  Hoey, Kate

  Home Robertson, John

  Cunningham, Jim (Cov'try S)

  Hoon, Geoffrey

  Dafis, Cynog

  Hope, Phil

  Dalyell, Tam

  Howarth, Alan (Newport E)

  Darling, Rt Hon Alistair

  Howarth, George (Knowsley N)

  Darvill, Keith

  Howells, Dr Kim

  Davey, Edward (Kingston)

  Hoyle, Lindsay

  Davey, Valerie (Bristol W)

  Hughes, Ms Beverley (Stretford)

  Davidson, Ian

  Hughes, Kevin (Doncaster N)

  Davies, Rt Hon Ron (Caerphilly)

  Humble, Mrs Joan

  Davis, Terry (B'ham Hodge H)

  Hurst, Alan

  Dawson, Hilton

  Hutton, John

  875

  Iddon, Dr Brian

  Moonie, Dr Lewis

  Illsley, Eric

  Moore, Michael

  Ingram, Adam

  Moran, Ms Margaret

  Jackson, Ms Glenda (Hampstead)

  Morgan, Alasdair (Galloway)

  Jackson, Helen (Hillsborough)

  Morgan, Ms Julie (Cardiff N)

  Jenkins, Brian

  Morgan, Rhodri (Cardiff W)

  Johnson, Alan (Hull W & Hessle)

  Morley, Elliot

  Johnson, Miss Melanie (Welwyn Hatfield)

  Morris, Ms Estelle (B'ham Yardley)

  Mountford, Kali

  Jones, Helen (Warrington N)

  Mullin, Chris

  Jones, leuan Wyn (Ynys MÔn)

  Murphy, Denis (Wansbeck)

  Jones, Ms Jenny (Wolverh'ton SW)

  Murphy, Jim (Eastwood)

  Murphy, Paul (Torfaen)

  Jones, Jon Owen (Cardiff C)

  Naysmith, Dr Doug

  Jones, Dr Lynne (Selly Oak)

  Norris, Dan

  Jones, Martyn (Clwyd S)

  O'Brien, Bill (Normanton)

  Jones, Nigel (Cheltenham)

  O'Brien, Mike (N Warks)

  Jowell, Ms Tessa

  Olner, Bill

  Kaufman, Rt Hon Gerald

  Öpik, Lembit

  Keeble, Ms Sally

  Organ, Mrs Diana

  Keen, Alan (Feltham & Heston)

  Osborne, Ms Sandra

  Keen, Ann (Brentford & Isleworth)

  Palmer, Dr Nick

  Keetch, Paul

  Pearson, Ian

  Kemp, Fraser

  Perham, Ms Linda

  Kennedy, Jane (Wavertree)

  Pike, Peter L

  Kidney, David

  Plaskitt, James

  Kilfoyle, Peter

  Pollard, Kerry

  King, Andy (Rugby & Kenilworth)

  Pond, Chris

  Kirkwood, Archy

  Pope, Greg

  Ladyman, Dr Stephen

  Pound, Stephen

  Lawrence, Ms Jackie

  Prentice, Ms Bridget (Lewisham E)

  Laxton, Bob

  Prentice, Gordon (Pendle)

  Lepper, David

  Primarolo, Dawn

  Leslie, Christopher

  Prosser, Gwyn

  Levitt, Tom

  Quin, Ms Joyce

  Lewis, Ivan.(Bury S)

  Quinn, Lawrie

  Liddell, Mrs Helen

  Rapson, Syd

  Linton, Martin

  Raynsford, Nick

  Livingstone, Ken

  Reed, Andrew (Loughborough)

  Livsey, Richard

  Rendel, David

  Llwyd, Elfyn

  Robertson, Rt Hon George (Hamilton S)

  Lock, David

  Love, Andrew

  Rooker, Jeff

  McAllion, John

  Rooney, Terry

  McAvoy, Thomas

  Ross, Ernie (Dundee W)

  McCabe, Steve

  Roy, Frank

  McCafferty, Ms Chris

  Ruddock, Ms Joan

  McCartney, Ian (Makerfield)

  Russell, Bob (Colchester)

  McDonagh, Siobhain

  Russell, Ms Christine (Chester)

  Macdonald, Calum

  Ryan, Ms Joan

  Mclsaac, Shona

  Salter, Martin

  McKenna, Mrs Rosemary

  Sanders, Adrian

  Mackinlay, Andrew

  Savidge, Malcolm

  Maclennan, Rt Hon Robert

  Sawford, Phil

  McNamara, Kevin

  Sedgemore, Brian

  McNulty, Tony

  Shaw, Jonathan

  MacShane, Denis

  Sheldon, Rt Hon Robert

  McWalter, Tony

  Short, Rt Hon Clare

  McWilliam, John

  Singh, Marsha

  Mahon, Mrs Alice

  Smith, Rt Hon Chris (Islington S)

  Mallaber, Judy

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Mandelson, Peter

  Marek, Dr John

  Smith, Jacqui (Redditch)

  Marsden, Gordon (Blackpool S)

  Smith, John (Glamorgan)

  Marshall, David (Shettleston)

  Smith, Sir Robert (W Ab'd'ns)

  Marshall, Jim (Leicester S)

  Soley, Clive

  Marshall—Andrews, Robert

  Southworth, Ms Helen

  Martlew, Eric

  Spellar, John

  Maxton, John

  Squire, Ms Rachel

  Merron, Gillian

  Starkey, Dr Phyllis

  Michael, Alun

  Steinberg, Gerry

  Michie, Bill (Shef'ld Heeley)

  Stevenson, George

  Michie, Mrs Ray (Argyll & Bute)

  Stewart, Ian (Eccles)

  Milburn, Alan

  Stinchcombe, Paul

  Miller, Andrew

  Stoate, Dr Howard

  Moffatt, Laura

  Stott, Roger

  876

  Strang, Rt Hon Dr Gavin

  Tyler, Paul

  Straw, Rt Hon Jack

  Wallace, James

  Stuart, Ms Gisela

  Ward, Ms Claire

  Stunell, Andrew

  Wareing, Robert N

  Sutcliffe, Gerry

  Watts, David

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Webb, Steve

  Welsh, Andrew

  Taylor, Ms Dari (Stockton S)

  White, Brian

  Taylor, David (NW Leics)

  Whitehead, Dr Alan

  Temple—Morris, Peter

  Williams, Alan W (E Carmarthen)

  Thomas, Gareth R (Harrow W)

  Williams, Mrs Betty (Conwy)

  Timms, Stephen

  Willis, Phil

  Tipping, Paddy

  Wills, Michael

  Todd, Mark

  Wood, Mike

  Touhig, Don

  Wray, James

  Trickett, Jon

  Wright, Anthony D (Gt Yarmouth)

  Truswell, Paul

  Wright, Dr Tony (Cannock)

  Turner, Dennis (Wolverh'ton SE)

  Wyatt, Derek

  Turner, Desmond (Kemptown)

  Turner, Dr George (NW Norfolk)

  Tellers for the Ayes:

  Twigg, Derek (Halton)

  Mr. David Jamieson and

  Twigg, Stephen (Enfield)

  Mr. John McFall.

  NOES

  Ainsworth, Peter (E Surrey)

  Gibb, Nick

  Amess, David

  Gill, Christopher

  Ancram, Rt Hon Michael

  Goodlad, Rt Hon Sir Alastair

  Arbuthnot, James

  Gray, James

  Atkinson, David (Bour'mth E)

  Green, Damian

  Atkinson, Peter (Hexham)

  Greenway, John

  Beggs, Roy

  Grieve, Dominic

  Bercow, John

  Gummer, Rt Hon John

  Beresford, Sir Paul

  Hague, Rt Hon William

  Blunt, Crispin

  Hamilton, Rt Hon Sir Archie

  Body, Sir Richard

  Hammond, Philip

  Boswell, Tim

  Hawkins, Nick

  Bottomley, Peter (Worthing W)

  Hayes, John

  Bottomley, Rt Hon Mrs Virginia

  Heald, Oliver

  Brady, Graham

  Heathcoat—Amory, Rt Hon David

  Brazier, Julian

  Hogg, Rt Hon Douglas

  Brooke, Rt Hon Peter

  Horam, John

  Browning, Mrs Angela

  Howard, Rt Hon Michael

  Burns, Simon

  Howarth, Gerald (Aldershot)

  Butterfill, John

  Hunter, Andrew

  Cann, Jamie

  Jack, Rt Hon Michael

  Cash, William

  Jackson, Robert (Wantage)

  Chapman, Sir Sydney (Chipping Barnet)

  Johnson Smith, Rt Hon Sir Geoffrey

  Clappison, James

  Key, Robert

  Clark, Rt Hon Alan (Kensington)

  King, Rt Hon Tom (Bridgwater)

  Clark, Dr Michael (Rayleigh)

  Kirkbride, Miss Julie

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Laing, Mrs Eleanor

  Lansley, Andrew

  Clifton—Brown, Geoffrey

  Leigh, Edward

  Collins, Tim

  Letwin, Oliver

  Cormack, Sir Patrick

  Lewis, Dr Julian (New Forest E)

  Cran, James

  Lidington, David

  Curry, Rt Hon David

  Lilley, Rt Hon Peter

  Davis, Rt Hon David (Haltemprice)

  Lloyd, Rt Hon Sir Peter (Fareham)

  Day, Stephen

  Loughton, Tim

  Donaldson, Jeffrey

  MacGregor, Rt Hon John

  Dorrell, Rt Hon Stephen

  McIntosh, Miss Anne

  Duncan, Alan

  MacKay, Andrew

  Duncan Smith, Iain

  Maclean, Rt Hon David

  Emery, Rt Hon Sir Peter

  McLoughlin, Patrick

  Evans, Nigel

  Madel, Sir David

  Faber, David

  Maginnis, Ken

  Fabricant, Michael

  Malins, Humfrey

  Fallon, Michael

  Maples, John

  Flight, Howard

  Maude, Rt Hon Francis

  Forth, Rt Hon Eric

  Mawhinney, Ftt Hon Sir Brian

  Fowler, Rt Hon Sir Norman

  May, Mrs Theresa

  Fox, Dr Liam

  Moss, Malcolm

  Fraser, Christopher

  Nicholls, Patrick

  Gale, Roger

  Norman, Archie

  Garnier, Edward

  Ottaway, Richard

  877

  Page, Richard

  Tapsell, Sir Peter

  Paice, James

  Taylor, Ian (Esher & Walton)

  Paterson, Owen

  Taylor, John M (Solihull)

  Pickles, Eric

  Taylor, Sir Teddy

  Prior, David

  Thompson, William

  Randall, John

  Townend, John

  Redwood, Rt Hon John

  Tredinnick, David

  Robathan, Andrew

  Trend, Michael

  Robertson, Laurence (Tewk'b'ry)

  Tyrie, Andrew

  Roe, Mrs Marion (Broxbourne)

  Viggers, Peter

  Ross, William (E Lond'y)

  Walter, Robert

  Ruffley, David

  Wardle, Charles

  St Aubyn, Nick

  Waterson, Nigel

  Sayeed, Jonathan

  Wells, Bowen

  Shephard, Rt Hon Mrs Gillian

  Whitney, Sir Raymond

  Widdecombe, Rt Hon Miss Ann

  Shepherd, Richard

  Wilkinson, John

  Simpson, Keith (Mid-Norfolk)

  Willetts, David

  Smyth, Rev Martin (Belfast S)

  Wilshire, David

  Soames, Nicholas

  Winterton, Mrs Ann (Congleton)

  Spicer, Sir Michael

  Winterton, Nicholas (Macclesfield)

  Spring, Richard

  Yeo, Tim

  Stanley, Rt Hon Sir John

  Young, Rt Hon Sir George

  Steen, Anthony

  Streeter, Gary

  Tellers for the Noes:

  Swayne, Desmond

  Mr. John Whittingdale and

  Syms, Robert

  Mr. Bernard Jenkin.

  Question accordingly agreed to.
  Bill accordingly read a Second time.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 63 (Committal of Bills),
  That the Bill be committed to a Committee of the whole House.— [Mr. George Howarth.]
  Question agreed to.
  Committee tomorrow.

  EUROPEAN PARLIAMENTARY ELECTIONS BILL [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
  That, for the purposes of any Act resulting from the European Parliamentary Elections Bill, it is expedient to authorise the charging on and payment out of the Consolidated Fund of—
  (1) charges to which returning officers are entitled by virtue of that Act, and
  (2) sums required by the Secretary of State for expenditure on the provision of training relating to functions conferred on returning officers by virtue of that Act.—[Ms Bridget Prentice.]
  Question agreed to.

  EUROPEAN COMMUNITY DOCUMENTS
  Mr. Deputy Speaker (Mr. Michael Lord): With permission, I shall put together the motions relating to European Community Documents.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

  LANDFILL OF WASTE
  That this House takes note of European Community Document No. 6692/97, relating to the landfill of waste; and welcomes the intention to set high regulatory standards for landfill sites.
  TRANSMISSIBLE SPONGIFORM ENCEPHALOPATHIES: CONTROLS ON CATTLE, SHEEP AND GOATS
  That this House takes note of European Community Document No. 10040/97, on the prohibition of the use of material presenting risks relating to transmissible spongiform encephalopathies; and supports the Government's position that such controls are necessary for the protection of public health and to avoid the risk of undermining the Single Market.

  DRAFT BUDGET FOR 1998
  That this House takes note of European Community Documents Nos. 10153/97, the draft general budget of the European Communities for 1998, and PE262.699, the European Parliament's proposed amendments to the draft general budget of the European Communities for 1998; and supports the Government's efforts to maintain budget discipline in the Community.—[Ms Bridget Prentice.]
  Question agreed to.

  DELEGATED LEGISLATION
  Mr. Deputy Speaker (Mr. Michael Lord): With permission, I shall put together the motions relating to delegated legislation.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  NORTHERN IRELAND
  That the draft Industrial Pollution Control (Northern Ireland) Order 1997, which was laid before this House on 28th October, be approved.
  That the draft Waste and Contaminated Land (Northern Ireland) Order 1997, which was laid before this House on 28th October, be approved.

  CIVIL AVIATION
  That the draft Carriage by Air Acts (Application of Provisions) (Fourth Amendment) Order 1997, which was laid before this House on 3rd November, be approved.—[Ms Bridget Prentice.]
  Question agreed to.

  MT Gaul
  Motion made, and Question proposed, That this House do now adjourn.—[Ms Bridget Prentice.]
  10.16 pm
  Mr. Alan Johnson: This debate will deal with an issue that is of great concern to the people of Hull. As I discovered this week, however, the issue strikes a chord across the country, particularly in seafaring communities.
  In this very short debate, I shall try first to make a case for reopening the inquiry into the loss of the Hull trawler the MT Gaul, which disappeared in February 1974 without trace and without sending any sign of distress. I shall argue also that the inquiry should be extended to cover the arrangements that were made to find the wreck of the Gaul. Finally, I shall ask the Minister to meet representatives of the families of the 36 men—the entire crew of the Gaul—who were lost. I know that the Minister appreciates that those families are the other victims of the tragedy.
  The Gaul was a so-called super-trawler, and it was state of the art in every respect. Its design and safety features included automatic steering, a dual radar system and high-quality radio and telegraphy equipment. It was almost the first trawler to have safety equipment that 50 people could use in automatically inflatable life rafts. It substantially exceeded recommended stability criteria, and was thought to be unsinkable. It was less than two years old, and it had an experienced skipper and crew. Like all Hull trawlers, it fished in Arctic conditions, and was built to withstand such extreme weather conditions.
  The Gaul disappeared in the vicinity of the North Cape bank in the Barents sea. There were fierce storms when it disappeared, but such storms were common. There were 17 other trawlers in the area, all of which rode out the storms on that dreadful evening.
  In November 1974, the formal investigation in Hull—I make no criticism of its conclusions—determined that there was no trace of the Gaul. There had been no distress calls; no oil had been found on the surface; and no wreckage had been discovered, other than a lifebuoy that appeared three months afterwards—posing another mystery, which I do not have time to explore in this debate.
  The inquiry, dealing with a hypothetical situation, did the best it could. It dismissed the theory that water had accumulated on the Gaul's factory deck—perhaps because a door had been left open, as tragically happened some years later on the Herald of Free Enterprise. Such an explanation for the Gaul sinking was dismissed because, had it happened, there would have been time to send a distress signal.
  In the end, the inquiry concluded that the Gaul capsized and foundered as a result of being buffeted by heavy seas, when it was broadside in the midst of a turning manoeuvre against the oncoming weather. A subsequent two-year study by the National Maritime Institute concluded that the ship was so stable that that could not be the only reason it sank. It concluded that there must have been a contributory factor, such as damage being caused to the bridge by a large wave, affecting the steerage and radio contact.
  880
  Those were the results of an inquiry and subsequent examination that had only supposition and theory to guide them. I do not criticise that work, but I wish to draw attention tonight to a significant development.
  The wreck of the Gaul has now been found, 270 m down on the seabed and 60 miles off the coast of Norway, by a film crew working on a Channel 4 documentary. Using a remotely operated vehicle, the film proved three important facts. First, it established that the wreck was, beyond any doubt, that of the Gaul. Secondly, it established that there was no damage to the bridge— and, indeed, its windows were still intact.
  Thirdly, there appeared to be no damage to the superstructure of the ship, which would have been expected if it had taken a buffeting from heavy seas and fallen 1,000 ft to the bed of the Barents sea. One other fact emerged from the documentary—the wreck was facing almost directly into the weather rather than broadside, as the inquiry had concluded.
  We should be grateful to Channel 4 for finding the Gaul, but it is now the Government's responsibility to ensure that it is fully and properly surveyed. The new evidence that necessitates the reopening of the inquiry appeared in the Channel 4 documentary, and there is no good reason for delaying the announcement of its reopening.
  I turn now to the subject of the search for the Gaul, which should be part of a reopened inquiry. I am grateful to my hon. Friend the Minister for replying so quickly to my written questions on the subject. I asked how many reports had been received about the possible location of the Gaul, and in particular I asked whether the fishing protection frigate, the Mohawk, had made a report. The Minister replied that the Mohawk reported only on her involvement with the search and rescue operation, but that 13 other reports were received about the Gaul's location and they varied widely.
  It was on that basis that the Government refused to launch any search for the wreck of the Gaul. Indeed, least year, the Ministry of Defence stated:
  "because of the limited information about the Gaul's position when she went down it would be necessary to search hundreds, probably thousands, of square miles of sea bed."
  At the heart of the debate is the belief that the only thing that was limited in the search for the Gaul was the authorities' determination to find it. It has now been revealed that a Norwegian trawler, the Riaro, had reported a sonar reading showing an obstruction on the seabed some 60 miles off the coast of Norway, shortly after the Gaul was lost. Testimony has also been produced from crewmen on the Mohawk, who reported that they found the wreck in the original search but were ignored.
  How did Channel 4 track down a wreck that the full might of this maritime nation could not discover in 23 years? What time and expense was involved for the film crew? I can tell the House that the television producer involved, who has no seafaring experience, sat at home with naval charts that it is open for anybody to look at, and, using the sightings that had been reported to the authorities and the charts, established the likely location of the wreck. He then hired a boat that used to be a ferry but which had been turned into an underwater survey vessel, and found the wreck. It cost less than £50,000, and took only two days. That is very disturbing for the families of those who were lost on the Gaul. It is not true

  881
  to argue that side scan sonar technology has only recently become available. Side scan sonars were available to the military before the tragedy. They have been in widespread use since the discovery of offshore oil in 1980. The lack of available technology cannot be used as an argument.
  Mr. Gordon Prentice (Pendle): My constituent Sheila Doone is the widow of radio operator John Doone. There are fears in my constituency that there has been an official cover-up about the boat having been involved in a spying exercise. People are concerned that the veil of secrecy should be lifted after so many years.
  Mr. Johnson: My hon. Friend makes a valid point. It is a feature of the documentary that needs to be mentioned. I accept that it is not the responsibility of the Minister, but it is part of the argument for reopening the inquiry.
  In August 1974, the then Defence Minister Bill Rogers—now Lord Rogers—wrote to the relatives of the crew, saying:
  "I can assure you that the British trawler fleet is not involved in any way in any intelligence gathering."
  That denial was repeated as recently as March 1992.
  It is beyond dispute that Hull trawlers were used consistently and extensively to spy on the Russian northern fleet in the strategically vital Barents sea. The trawlermen and their skippers, who, in the best traditions of the British working class, would not risk betraying their country by broadcasting their involvement, have known that all along. It has been common knowledge among the families of Hull trawlermen.
  As a result of two television documentaries and press inquiries, we have the testimony of a scientist who worked in British intelligence, a Russian-speaking naval wireless operator specialising in interception, the managing director of a major Hull trawler company, and a former rear admiral. They, among others, have confirmed that Hull trawlers were used for espionage and counter-espionage in the Barents sea. Lord Rogers now accepts publicly that he was misled.
  The families of those lost understand the sensitivity of the operations, and accept that the Gaul may not have been involved in such work. They accept that, during the cold war, Governments could not be as open as they would have liked. They know that other trawlers from the same company were used by the British Government, and that the Government continued to deny any involvement. They say that, logically, now that the cold war is over, there can surely be openness and honesty on the issue.
  The television documentary shown on 6 November threw up a new mystery, revealing that close to the wreck of the Gaul was a cable stretched taut and running for several miles in both directions. The strong supposition is that it is a communications cable associated with the sound surveillance system—the SOSUS project— designed by the American intelligence service to monitor the passage of Russian submarines. Those points add to the case for reopening the inquiry.
  Mr. Bob Blizzard: I am grateful for the opportunity to express my support for the reopening of the inquiry. There is considerable interest in my constituency, because the Gaul was built at Brooke Marine shipyard in Lowestoft. Local people know that it
  882
  was a fine boat. Being a seafaring, fishing community, the people of Lowestoft well understand the grief that disasters at sea cause. It is most unsatisfactory that the mystery has remained open for so many years.
  Mr. Johnson: I thank my hon. Friend for that intervention. The people of Hull appreciate the messages of support that they have received from Lowestoft and elsewhere. I appreciate the presence at this late hour of so many hon. Members for this important debate. It will be greatly appreciated by my constituents and others.
  Hull is used to losing men at sea. As I said in my maiden speech, our men fish the deepest and most dangerous Arctic waters, and 900 Hull ships have been lost in the past 150 years. Hundreds of men have been swept overboard or lost in other ways in separate accidents. The hard and unrelenting cruelty of the sea has bred those qualities of stoicism, courage and dignity which characterise fishing communities the world over, and which make those communities so special.
  Not all the crew came from Hull. As my hon. Friend the Member for Pendle (Mr. Prentice) said, the radio operator came from Nelson, in his constituency. Six of the crew came from North Shields, in the Tynemouth constituency, and my hon. Friend the Member for Tynemouth (Mr. Campbell) has been extremely supportive.
  The families of the crew ask only that their grief and anguish over the past 23 years be respected by our ensuring an open and honest investigation into the circumstances of the loss of their loved ones on the Gaul.
  Mr. Kevin McNamara rose—
  Mr. Deputy Speaker (Mr. Michael Lord):Ms Jackson.
  Mr. McNamara: I believe that I have two minutes, Mr. Deputy Speaker. I have an agreement with my hon. Friend.
  Mr. Deputy Speaker: I am sorry, but the Chair is not aware of any agreement. Has the hon. Member for Hull, West and Hessle (Mr. Johnson) made an agreement?
  Mr. Johnson: I have,Mr. Deputy Speaker. I apologise for not having notified you.
  10.30 pm
  Mr. Kevin McNamara: I am grateful to my hon. Friend the Member for Hull, West and Hessle (Mr. Johnson) for letting me speak, and it is not my intention to keep the House for long. However, my right hon. Friend the Member for Hull, East (Mr. Prescott) and I are the only Hull Members now remaining in the House who also represented the port when the great tragedy happened, so I want to say a few words.
  In Hull, when we have lost trawlers we have generally been able to overcome our grief; there has been public mourning and recognition. Although there was some of that for the Gaul, the fact that the vessel went down without any trace, without any bodies and without any evidence caused many questions to be asked. Most of those have been asked by my hon. Friend, but there are many more.

  883
  The real concern is: how was it that, for £50,000, that ship could be found in two days, when at the time, despite all the appeals by the then Members of Parliament for Hull, by the Conservative Members for the East Riding and by Anthony Crosland, who was then my right hon. Friend the Member for Grimsby, it was impossible to find it? Now we just do not know what to believe.
  That is the real problem. The anguish is there, and the anger about how easily the wreck has been found is reflected in our community. We just do not know, and we are very unhappy about that.
  10.31 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I congratulate my hon. Friend the Member for Hull, West and Hessle (Mr. Johnson) on having secured the debate, and thank him for his generosity in allowing an intervention by my hon. Friend the Member for Hull, North (Mr. McNamara).
  The importance of the debate, as my hon. Friend the Member for Hull, West and Hessle has rightly pointed out, is underlined by the presence in the Chamber of so many of our colleagues, and also by the presence beside me on the Front Bench of my hon. Friend the Under-Secretary of State for Defence.
  I am confident that the whole House would wish to join me in extending sympathy to the relatives of the crew of the Gaul who were so desperately bereaved in the tragedy—a tragedy exacerbated and made a thousand times worse by the fact that, for a quarter of a century, the families did not know where the vessel lay.
  The marine accidents investigation branch is now examining the evidence provided by the television documentary team to determine whether it can clarify how the Gaul was lost. Inspectors met the maker of the Channel 4 "Dispatches" film, "Secrets of the Gaul" on 13 November to discuss their latest findings. The meeting lasted two hours and was very useful, as the programme maker was especially co-operative.
  The marine accidents investigation branch was not formed until 1989, and therefore had nothing to do with the previous investigation into the tragedy. However, the files raised during the investigation are now held in the MAIB's Southampton offices.
  My hon. Friend suggested that the loss of the Gaul may have been in some way related to intelligence gathering— a point also made in an intervention by my hon. Friend the Member for Pendle (Mr. Prentice). That is more properly a matter for my right hon. Friend the Secretary of State for Defence, but the Government are determined to be as open as possible on the subject, so as to ensure that no misunderstanding about the role of British trawlers in intelligence gathering is allowed to expand. There is no evidence that the Gaul was involved in intelligence gathering, or that Royal Navy personnel or Ministry of Defence equipment were on board. A very limited number of other fishing vessels assisted the Government in specific intelligence gathering. This practice, I must tell my hon. Friends, had ceased before the loss of the Gaul.
  Returning to the subject of the investigation into the causes of the accident, it is worth recalling that the formal investigation into the loss of the vessel was held during
  884
  September and October 1974, some seven months after the tragedy. My hon. Friend the Member for Hull, West and Hessle was correct in stating that the formal investigation concluded that the vessel capsized and foundered due to being overwhelmed by a succession of heavy seas when she was broadside to the sea. Severe weather prevailed at the time of the disappearance, with wind speeds up to force 10 and wave heights reported by other vessels in the area of over 40 ft.
  Although the Gaul was, as my hon. Friend pointed out, regarded as a stable vessel, extensive model tests and flooding experiments have shown that, in certain circumstances, water could accumulate on the factory deck and lead to a loss of stability.
  Mr. Norman A. Godman: My brother Keith was a member of the crew of the Gaul but, fortunately for him and his family, he signed off just before she sailed on that fateful trip. Is it not the case that fishermen who fish those waters have known about her location for many years, and that many of them do not believe for a moment that she was broadside on when she foundered?
  Ms Jackson: I am grateful to my hon. Friend for his intervention. The issue of where she is lying is something I intend to touch on later. In terms of the knowledge possessed by fishermen in the area, it is my understanding that, as my hon. Friend the Member for Hull, West and Hessle pointed out, the snagging of nets upon the Gaul by the Norwegian vessel Riaro in 1975 was the basis for the investigation which the makers of "Dispatches" eventually produced.
  Evidence was heard at the formal investigation from 48 witnesses, and affidavits were received from 12 others, including next of kin, expert witnesses and members of the public who had made representations to the Department of Trade, which was then responsible for marine safety. However, the investigation found no direct evidence of how the tragedy had occurred.
  A major constraint on the investigation was the absence of any evidence from the wreckage. The only wreckage recovered was, as my hon. Friend the Member for Hull, West and Hessle said, a small buoy. The exact location of the wreck was not established.
  Following the loss of the Gaul, the Department of Trade considered a number of proposals for searching for the wreck. Proposals from the Royal Navy and commercial sources were discussed, but were not pursued, as it was decided that the considerable cost of each proposal could not be justified. Departmental records show that the lack of a positively identified search area was an important factor in these decisions.
  It is important to remember that mid-1970s technology was less able than the technology available today to positively identify underwater objects from the surface. It was also less capable than current technology of surveying and salvaging wreckage at depths estimated to be 900 ft. Existing departmental records contain one report from HMS Mohawk, as my hon. Friend the Member for Hull, West and Hessle pointed out, about her involvement with the search and rescue operation conducted following the disappearance of the Gaul. Several reports on possible locations of the wreck were received from fishing vessel skippers, and six from other sources. The positions given varied widely.

  885
  An accident investigation may be reopened at any time if new and important evidence is forthcoming. However, as a general rule, once an inquiry has completed its business, no further work is undertaken unless important evidence becomes available. Although a variety of possible positions of the wreck of the Gaul became known in the years following her loss, there was insufficient positive evidence to justify mounting an underwater search. This leads on to the question why the wreck was found relatively easily in the search undertaken last summer. As my hon. Friend the Member for Hull, West and Hessle pointed out, the essential research was conducted by the producer of the programme "Dispatches".
  The search area was based partially, but not exclusively, on the position of a new wreck site identified by the Norwegian trawler Riaro—a vessel to which I have already referred—on 15 November 1975. Once it was found, the total time of video filming using a remotely operated vessel was approximately one hour and 45 minutes, of which 20 to 30 minutes constituted significant material. MAIB inspectors have viewed it all. The search was successful, and revealed that the wreck was indeed the Gaul. That positive identification rules out the possibility that she was taken into a Soviet port, as some had argued in the past.
  Only a small part of the wreck was surveyed. On the initial viewing of the material, it is not possible to confirm that she sank owing to flooding because of foundering. However, the survey showed very little damage to a funnel, the bridge front, the deck immediately above it, the deckhouse forward of the bridge, the whale back and the starboard bow.
  The fact that panes of glass were still intact, and the absence of damage to the other parts seen in the underwater video rule out an explosion, high-impact damage or attack by any form of weapon. The lack of any evidence to suggest implosion and explosion owing to pressure effects as she sank suggests that the ship had
  886
  a good deal of water on board as she left the surface. Thus, the evidence seen so far does not contradict the finding of the formal investigation that she foundered.
  The formal inquiry concluded that the most likely scenario that led to the ship's capsizing was that she was broadside to the sea. In fact, she is now lying as if facing the weather. It is difficult to determine whether her orientation at a depth of 900 ft bears any direct relationship to her orientation on the surface at the time she sank.
  On the basis of what has been seen so far, I am not convinced of the need to reopen the formal investigation. The more immediate question is whether there is a need to conduct a more detailed survey of the wreck. That could be undertaken only in the summer months, when there is a reasonable chance of an extended period of fair weather.
  We now know where the Gaul lies. We know that she played no part in intelligence-gathering activities, we know that she was not sunk by an explosive or other large impact, and we know that she must have shipped a considerable amount of water as she left the surface.
  I will consider very carefully the points raised by my hon. Friend and others. Until new and important evidence comes to light that calls into serious question the findings of the formal investigation, my decision may well be that there is no need to reopen that investigation. I will, however, very carefully consider commissioning a more detailed survey of the wreck next summer, when, as I have said, it is to be hoped that the weather will be clement.
  My hon. Friend began by asking whether I would agree to meet the families of those involved. I would, of course, be very happy to meet them: it would be a privilege. They are a testament to how to deal with a particular tragedy, without ever losing sight of the fact that what they wanted most to know was what had happened.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes to Eleven o' clock.

HOME DEPARTMENT

  Manslaughter (Custodial Sentences)
  Mr. Swinney
  To ask the Secretary of State for the Home Department what has been the average custodial sentence applied for manslaughter in England in each year since 1990; and if he will make a statement. [17087]

  Mr. Michael
  Information for 1990 to 1996 is given in the following table:

  Average sentence length1 given at the Crown Court for offences of manslaughter 1990 to 1996

  England

  Offence/year

  People sentenced to immediate custody

  Average sentence length1 (months)

  Number of life sentences

  Manslaughter (Common Law and Offences Against the Person Act 1861, sections 5, 9 and 10)

  1990

  128

  56.6

  9

  1991

  145

  53.9

  10

  1992

  200

  58.9

  10

  1993

  167

  63.3

  8

  1994

  160

  60.0

  5

  1995

  166

  58.5

  6

  1996

  196

  61.3

  13

  Manslaughter due to diminished responsibility (Homicide Act 1957, section 2)

  1990

  8

  51.0

  2

  1991

  12

  64.0

  6

  1992

  6

  72.0

  3

  1993

  11

  57.3

  2

  1994

  9

  51.0

  3

  1995

  13

  55.5

  5

  1996

  7

  61.0

  1

  1 Excludes life sentences.

  Apart from the requirement under the Crime (Sentences) Act 1997 for the courts to give automatic life sentences for people convicted of manslaughter for a second time, and within the statutory limits set by Parliament, sentences in individual cases are a matter for the courts.

  Prison Service (Medical and Health Care Research)
  Helen Jones
  To ask the Secretary of State for the Home Department if he will make a statement on the nature of the(a) medical and (b) health care research currently being undertaken within the Prison Service. [17623]

  Ms Quin
  Current medical or health care research being undertaken within the Prison Service has centred on epidemiological studies of hepatitis B and C, and HIV/AIDS, and the psychiatric morbidity of male sentenced prisoners. In addition, work is also being 452
  carried out to evaluate drug detoxification and treatment programmes, and the impact of Mandatory Drugs Testing on the pattern of drug abuse within prisons. Other work involves studies into the management and throughcare of mentally disordered offenders.

  Prisons (Disability Officers)
  Helen Jones
  To ask the Secretary of State for the Home Department how many prison establishments in England and Wales currently have a disability officer; and if he will make a statement on proposals to increase this number. [17622]

  Ms Quin
  All Prison Service establishments have a nominated equal opportunities officer whose role includes having responsibility for disability. However, in some prisons the Governor has in addition nominated a disability officer.

  Police Manpower
  Mr. Barnes
  To ask the Secretary of State for the Home Department if he will list(a) the establishments and (b) the current strength of each constabulary in England and Wales. [17199]

  Mr. Michael
  The Police and Magistrates' Courts Act 1994 removed the power for the Home Secretary to set police establishments. It was left to individual chief officers of police to determine the number of officers in their force. The strength of each force at 30 September 1997 is set out in the table.

  Police force numbers for England and Wales (provisional) As at 30 September 1997

  Force

  Number of police officers

  Avon and Somerset

  2,973

  Bedfordshire

  1,081

  Cambridgeshire

  1,228

  Cheshire

  2,029

  City of London

  836

  Cleveland

  1,481

  Cumbria

  1,162

  Derbyshire

  1,757

  Devon and Cornwall

  2,910

  Dorset

  1,279

  Durham

  1,479

  Dyfed-Powys

  1,008

  Essex

  2,944

  Gloucestershire

  1,107

  Greater Manchester

  6,908

  Gwent

  1,229

  Hampshire

  3,481

  Herfordshire

  1,738

  Humberside

  2,030

  Kent

  3,301

  Lancashire

  3,281

  Leicestershire

  1,958

  Lincolnshire

  1,189

  Merseyside

  4,222

  Metropolitan Police

  26,391

  Norfolk

  1,440

  Northamptonshire

  1,181

  Northumbria

  3,685

  North Wales

  1,370

  North Yorkshire

  1,383

  Nottinghamshire

  2,317

  South Wales

  2,990

  South Yorkshire

  3,158

  Staffordshire

  2,230

  453

  Police force numbers for England and Wales (provisional) As at 30 September 1997

  Force

  Number of police officers

  Suffolk

  1,198

  Surrey

  1,608

  Sussex

  3,040

  Thames Valley

  3,705

  Warwickshire

  914

  West Mercia

  2,031

  West Midlands

  7,079

  West Yorkshire

  5,250

  Wiltshire

  1,167

  Total

  124,751

  Europol
  Mr. Beith
  To ask the Secretary of State for the Home Department, pursuant to his answer of 12 November 1997,Official Report, column 558, what guidance will be issued to the Director of Europol on the requirement to waive the immunity of staff members of Europol where the immunity would impede the course of justice; if such guidance will be published; and if he will make a statement. [17769]

  Mr. Michael
  The need for, and content of, any such guidance will be for consideration once the Europol Convention has entered into force and Europol has taken up its activities. The Director will be accountable to the Management Board in the performance of his duties and it will be open to the Board to consider any difficulties that may arise in this area.

  Article 12 provides that the privileges and immunities granted under the provisions of the Protocol are conferred
  "in the interests of Europol and not for the benefit of the individuals themselves"
  and also that
  "Europol shall co-operate at all times with the appropriate authorities of member states to facilitate the proper administration of justice".
  Article 13 of the Protocol also provides that any disputes on a refusal to waive an immunity shall be referred to the Council of Ministers; if they are unable to reach a settlement, they shall decide on the modalities according to which they will be settled.

  Prisons (Private Finance Initiative)
  Mr. Beith
  To ask the Secretary of State for the Home Department, pursuant to his answer of 14 November 1997,Official Report, column 692, what criteria are used to assess quality and confidence in deliverability in relation to the awarding of contracts to the private sector to (a) manage and (b) design, construct, manage and finance prisons; and if he will make a statement. [17771]

  Ms Quin
  The Prison Service must satisfy itself that bidders are capable of building the prison to the required standards, opening it by the required date and operating it safely and securely with the required level of service in terms of prisoner regime or, in the case of management-only contracts, of operating it safely, securely and with the specified prisoner regime. Bids which satisfy these criteria are assessed on the basis of value for money. The methodology for evaluating bids 454
  for the first two design, construct, manage and finance prisons at Bridgend and Fazakerley, is described at paragraphs 2.7 to 2.11 and Appendix 5 of the recent Report by the Comptroller and Auditor General on those contract awards (HC 253 Session 1997–98).

  Laser Pens
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department how many prosecutions have been brought in the past 12 months for assault involving a laser pen. [16970]

  Mr. Michael
  People carrying laser pens with intent to cause injury may be liable to prosecution under section 1 of the Prevention of Crime Act 1953, as amended by the Offensive Weapons Act 1996 section 2(1).

  Court proceedings data collected centrally, under this legislation, do not record the type of weapon or article used.

  Gaol Sentences
  Mr. Peter Bottomley
  To ask the Secretary of State for the Home Department with what frequency he publishes changes in the weekly rate at which people are convicted of criminal offences carrying a possible gaol sentence of six months or more. [17577]

  Mr. Michael
  Almost all indictable offences carry a possible custodial sentence of six months or more. It is normal practice to prepare data on the numbers of people convicted of an indictable offence quarterly and to publish figures annually.

  Departmental Information
  Mr. Matthew Taylor
  To ask the Secretary of State for the Home Department if he will place in the Library a copy of the internal departmental guidance on the dissemination of information; and if he will make a statement. [16290]

  Mr. Straw
  A copy of the Home Office Departmental Procedures on the application of the Code of Practice on Access to Government Information has been placed in the Library.

  Vehicle Examinations
  Mrs. Dunwoody
  To ask the Secretary of State for the Home Department if he will encourage chief constables to ensure that police forces involve trading standards officers in the examination of vehicles. [17157]

  Mr. Michael
  The extent to which police forces develop links with trading standards officers for law enforcement purposes is an operational matter for individual chief officers. There are no plans to issue any specific Home office guidance on the subject. However, a good level of co-operation exists across the country as a whole. Trading standards officers assist the police and other agencies at multi-agency vehicle checks, for example by checking wheel and axle weights and looking for goods with counterfeit trade marks. They are also frequently involved, in conjunction with the police, in examining cars and other vehicles of uncertain origin and condition, with the aim of detecting offences under the Trades Descriptions Act 1968.
  455

  Youth Crime
  Mr. Bob Russell
  To ask the Secretary of State for the Home Department what discussions he has had with the Secretary of State for Defence about involving the Army Cadets, Sea Cadets and Air Cadets in his policies to tackle youth crime. [17140]

  Mr. Michael
  The Home Office operates a small grant scheme to cover the additional costs incurred when local Cadet Forces provide activities for children thought to be at risk of becoming involved in youth crime or who have already been involved in offending. This scheme was set up in 1995 to provide a variety of activities including providing positive alternatives to offending. I will shortly meet colleagues from the Ministry of Defence and the Department for Education and Employment to discuss the scheme and the role of the Cadet Forces in tackling youth crime.

CULTURE, MEDIA AND SPORT

  Sports Broadcasting
  Mr. Bayley
  To ask the Secretary of State for Culture, Media and Sport what progress he has made in his review of the sports events listed under Part IV of the Broadcasting Act 1996; and if he will make a statement. [17935]

  Mr. Chris Smith
  I have consulted interested parties about the principles which should guide the listing process, and I am today publishing criteria which I hope will make the process more transparent. I have also appointed an advisory group of individuals with knowledge of the sporting, broadcasting and public policy issues involved. The members of the group are:

  Lord Gordon of Strathblane (chairman)

  Mr. Alastair Burt

  Mr. Jack Charlton

  Mr. Steve Cram

  Kate Hoey, MP

  Mr. Michael Parkinson

  Mr. Clive Sherling

  Professor David Wallace

  I have invited this group to consider the issues against these published criteria:

  (a) whether events or parts of events should be removed from the list; and

  (b) whether other major sporting events should be added to the list.

  As an initial step in the process of reviewing the list, the rights holders for the events currently listed and a number of other major sports events are being formally consulted, as the 1996 Act requires. The submissions received from them will be made available to the advisory group.

  The rights holders for the following events are to be consulted:

  Events currently listed:

  The Olympic games

  The FIFA World Cup Finals

  The FA Cup Final

  456

  The Scottish FA Cup Final (listed only in Scotland)

  Cricket Test matches involving England

  Wimbledon Tennis Tournament (finals weekend only currently listed)

  The Grand National

  The Derby

  Other major sports events:

  The Cricket World Cup

  The Rugby World Cup

  The European Football Championships

  The Commonwealth Games

  The World Athletics Championships

  The British Grand Prix

  The Five Nations Rugby Tournament

  The Open (golf)

  The Ryder Cup

  The group may request that other events be included in the review and the rights holders for these events will be consulted.

  The group will begin its work immediately and I expect it to make its recommendations to me before Easter. I shall then decide what changes, if any, to make to the current list.

  Dance and Drama
  Mr. Luff
  To ask the Secretary of State for Culture, Media and Sport (1) what assessment he has made of the effectiveness of the interim schemes for the funding of dance and drama in(a) England and (b) Wales; and what factors account for the differences; [15597]

  (2) what assessment he has made of the impact of the Arts Council for England interim scheme on increasing access to training for students of dance and drama; and if he will make a statement; [15600]

  (3) what assessment he has made of the benefits of using any surplus in the allocation for the interim scheme for funding students of dance and drama to relieve hardship among students on accredited courses in dance and drama colleges; [15596]

  (4) what proportion of English dance and drama students on accredited courses in the current academic year are receiving support from the Arts Council interim scheme. [15598]

  Mr. Fisher
  The operation of the interim scheme is a matter for the Arts Council of England. I understand that full information is not yet available, but I have asked the Arts Council for a report on the effectiveness of the interim scheme and I will reply in full to the hon. Member as soon as I have it.

  New Opportunities Fund
  Mr. Maude
  To ask the Secretary of State for Culture, Media and Sport what are the management and distribution arrangements for the money currently being channelled to the New Opportunities Fund. [17595]

  Mr. Chris Smith
  Shadow accounting arrangements have been in place since 14 October 1997 whereby 13⅓ per cent. of the proceeds for good causes from the National Lottery, and any interest earned on that sum,
  457
  accrue to the New Opportunities Fund. Subject to Parliament's approval of the legislation I shall be introducing shortly, funds being held for the New Opportunities Fund will be formally transferred to it after Royal Assent. Initial funding for the National Endowment for Science, Technology and the Arts will be met from the sum allocated to the New Opportunities Fund. These arrangements will be fully reflected in the accounts of the National Lottery Distribution Fund and the Distributing Bodies.

  Blackhill Control Centre
  Ms Roseanna Cunningham
  To ask the Secretary of State for Culture, Media and Sport what assessment he has made of the impact on monitoring and maintenance of terrestrial television and radio transmission in Scotland of the closure of Blackhill Control Centre. [16699]

  Mr. Fisher
  [holding answer 20 November 1997]: The Independent Television Commission and the Radio Authority set the technical standards for the transmission of commercial terrestrial television and radio services respectively. It is for the Commission and the Authority to monitor the compliance of broadcasters and service providers with those standards.

  National Transcommunications Ltd.
  Ms Roseanna Cunningham
  To ask the Secretary of State for Culture, Media and Sport what powers he has to supervise the activities and service provided by National Transcommunications Ltd. [16698]

  Mr. Fisher
  [holding answer 20 November 1997]: National Transcommunications Ltd. (NTL) provides a range of services in the telecommunications and broadcasting fields. It has to comply with the conditions and requirements set out in the licences granted to it by the Radiocommunications Agency under the provisions of the Wireless Telegraphy Act 1949 (as amended); by the Department of Trade and Industry under the provisions of the Telecommunications Act 1984 and by the Independent Television Commission (ITC) under the terms of the Broadcasting Acts 1990 and 1996. It is for the Agency, the Office of Telecommunications and the ITC to ensure that NTL complies with the terms of these licences. NTL is also under contract to a number of broadcasters who are licensed by the ITC under the Broadcasting Acts and who are required to fulfil certain transmission obligations.

  Local Television Channels
  Mr. Ben Chapman
  To ask the Secretary of State for Culture, Media and Sport what data his Department collates on the availability of local television channels in particular areas. [16715]

  Mr. Fisher
  The BBC and the Independent Television Commission (ITC) are responsible for planning the use of frequencies for television services and hold data on the coverage of all national and regional terrestrial television services. This information is shared with my Department and with the Department of Trade and Industry's Radiocommunications Agency, which is responsible for ensuring that frequency plans for all terrestrial television services do not interfere with other spectrum users' services.
  458

  Departmental Information
  Mr. Matthew Taylor
  To ask the Secretary of State for Culture, Media and Sport if he will place in the Library a copy of the internal departmental guidance on the dissemination of information; and if he will make a statement. [16308]

  Mr. Chris Smith
  The Department for Culture, Media and Sport treats all request for information in accordance with the Code of Practice on Access to Government Information. The Code was revised earlier this year and copies of the Second Edition of the Code and the accompanying Guidance on Interpretation are available in the Libraries of the House.

ATTORNEY-GENERAL

  Mr. Philip Dale
  Mr. Swinney
  To ask the Attorney-General for what reasons he refused to overturn the sentence for manslaughter given to Mr. Philip Dale at Winchester Crown Court on 3 September 1997 on grounds of undue leniency; and if he will make a statement. [17203]

  The Attorney-General
  I declined to apply to the Court of Appeal for leave to refer to the Court for review the sentence imposed upon Mr. Philip Dale at Winchester Crown Court on 3 September 1997 on the grounds that the sentence was not unduly lenient. An unduly lenient sentence is one which falls outside the range of sentences which a judge, applying his mind to all of the relevant factors, could reasonably consider appropriate.

  Manslaughter Sentences
  Mr. Swinney
  To ask the Attorney-General on how many occasions he has attempted to increase the length of a sentence applied for manslaughter; and on how many occasions and in what proportion of manslaughter cases he has increased the length of sentence since 1990. [17086]

  The Attorney-General
  In 1991, application was made for leave to refer three sentences imposed for manslaughter to the Court of Appeal. One application was refused and the remaining two applications were withdrawn.

  In 1992, one sentence was referred to the Court of Appeal and was increased. In 1993, four sentences were referred to the Court of Appeal. Two sentences were increased and two were unchanged. In 1994, three applications for leave were made. Leave was refused in two cases. In the other case, the sentence was increased. In 1995, five applications for leave were made. One was subsequently withdrawn. Two sentences were increased and two unchanged. In 1996, three applications for leave were made to the Court. Each sentence was unchanged by the Court of Appeal.

  So far this year, there have been three applications for leave. One sentence has been increased; one remained unchanged; and the third application is outstanding.
  459

PRIME MINISTER

  Ministerial Meetings
  Sir Brian Mawhinney
  To ask the Prime Minister which representatives of business he has met at No. 10 Downing Street since 1 November 1997, excluding those attending social functions, to discuss the impact of the Government's economic and monetary policy on large businesses. [17656]

  The Prime Minister
  Since the election, I have met a large number of people from business and discussed a wide range of topics.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Hereford By-pass
  Mr. Keetch
  To ask the Secretary of State for the Environment, Transport and the Regions when a decision will be taken on the proposed Hereford by-pass; and if he will make a statement. [15964]

  Ms Glenda Jackson
  We are currently in the process of a Strategic Roads Review. The proposed Hereford Bypass is being considered within the context of that Review, the results of which we hope to announce next year. This scheme is in any event still subject to the completion of statutory procedures.

  Conservation Directive
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions what requirements Article 6(3) of the EU Directive on the conservation of natural habitats and of wild fauna and flora (92/43/EEC) places on water undertakers in respect of projects which are likely to have a significant effect on a European site. [16674]

  Angela Eagle
  Where the consent of a water undertaker is required to any such plan or project, they should, as competent authorities under the Conservation (Natural Habitats, etc.) Regulations 1994, apply the provisions of Article 6(3) of the Directive. This requires an appropriate assessment to be undertaken in view of the site's conservation objectives. They should agree to the plan or project only if the assessment shows that it will not have an effect on the integrity of the European site. Public consultation may be appropriate.

  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions if he is required to comply with Article 6 of the EU Directive on the conservation of natural habitats and of wild fauna and flora (92/43/EEC) when granting an application for a drought order which is likely to have a significant effect on a European site. [16665]

  Angela Eagle
  Yes. The Secretary of State is a competent authority under the Conservation (Natural Habitats, etc.) Regulations 1994, which transpose the requirements of the Habitats Directive.
  460

  Green-belt Land
  Mr. Fearn
  To ask the Secretary of State for the Environment, Transport and the Regions how many acres of green-belt land have been built on in the last two years in(a) England, (b) the South East of England and (c) the North West of England. [16793]

  Mr. Raynsford
  The information is not currently available. Estimates under preparation, using the Department's Land Use Change Statistics, will show the number of hectares of previously undeveloped land in adopted green belt which is developed, by calendar year. I shall write to the hon. Member when these estimates are available.

  Public Appointments
  Mr. Vaz
  To ask the Secretary of State for the Environment, Transport and the Regions how many public appointments he has made since 1 May; and how many and what percentage of these(a) receive remuneration and (b) are of (i) Afro-Caribbean and (ii) Asian origin. [16770]

  Angela Eagle
  My right hon. Friend the Secretary of State has made the following appointments to NDPBs and nationalised industries sponsored by the Department since 1 May:

  Posts remunerated

  Percentage

  NDPBs:

  Executive

  43

  40

  93

  Advisory

  31

  18

  58

  Tribunals

  59

  7

  12

  Nationalised Industries

  2

  2

  100

  Total

  135

  67

  48

  For part (b) of the question, I refer my hon. Friend to the answer given today by the Chancellor of the Duchy of Lancaster.

  Railways (Rolling Stock)
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions if he will ensure that a requirement to improve rolling stock is integral to the new franchise agreement when new franchises are let for rail services. [16854]

  Ms Glenda Jackson
  Current franchise agreements have between four and fourteen years still to run. We shall consider the terms on which franchises might be relet in the light of all the circumstances pertaining at the time.

  Roads (A65)
  Mr. Curry
  To ask the Secretary of State for the Environment, Transport and the Regions pursuant to his answer of 31 July 1997,Official Report, column 534, how much compensation must be paid in respect of the cancellation of the PFI Scheme for by-passes on the A65 road. [16932]
  461
  Ms Glenda Jackson
  Claims for compensation from the four tenderers for the Cumbria-Bradford DBFO project are being considered currently. I cannot therefore say what compensation might be paid.

  Planning Applications (Supermarkets)
  Mr. Yeo
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many planning applications for developments involving supermarkets he determined since 1 May; [16873]

  (2) how many planning applications for developments involving supermarkets he has called in for determination. [16862]

  Mr. Caborn
  Since 1 May this year, 17 applications involving retail development have been called in and 25 called-in applications involving retail development have been determined.

  House Building (Brown-field Sites)
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what research his Department has(a) commissioned and (b) evaluated in respect of the availability of brown-field sites for the construction of new homes, separately identifying that conducted by local authorities. [16918]

  Mr. Raynsford
  The Department will be going out to tender shortly on research designed to assess the future supply and location of brownfield sites. Also, as part of the Government's overall consideration of the household growth debate, the Government have evaluated several independent studies about housing capacities and location from organisations such as the TCPA, the CPRE, and the Joseph Rowntree Foundation.

  Most individual local authorities conduct their own studies of land availability for housing and other development as part of their plan preparation process. These are too numerous and varied in scope to list here. Additionally, a number of broader housing capacity and brownfield land studies have either been, or are being, commissioned by the Regional Planning Conferences to assist them in the process of drafting their Regional Planning Advice to the Secretary of State.

  Rail Network
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions if he will protect trackbeds used previously for freight and passenger rail services from development until the National Railways Authority has reviewed the strategic rail network. [16907]

  Ms Glenda Jackson
  The establishment of a new Railways Authority would require primary legislation. In the meantime, it is for Railtrack and those other organisations who own trackbed to consider each individual case separately.

  Owners' powers of disposal are limited under the Railways Act 1993 which makes provisions for the closure of railway lines carrying passenger traffic. Railtrack operates non-statutory closure procedures before disposal for freight-only lines. These involve wide consultation and consideration of strategic needs.
  462
  Railtrack and British Rail are considering those lengths of former railway line still in BR's ownership which Railtrack might wish to acquire for future railways development.

  Road Accidents
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions if he will arrange for trading standards officers to obtain information on accidents from DVLA computers on-line. [17147]

  Ms Glenda Jackson
  DVLA does not hold a comprehensive record of accident-damaged vehicles. This information is available to trading standards officers from the Motor Insurers Anti Fraud and Theft Register (MIAFTR).

  Bathing Beaches
  Mr. Fearn
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the beaches designated as bathing beaches for the purposes of European Union legislation on pollution in(a) 1987, (b) 1992 and (c) 1997. [17174]

  Angela Eagle
  There were 374,455 and 486 UK bathing waters identified within the scope of the Bathing Water Directive in 1987, 1992 and 1997 respectively. Lists are provided in the detailed summary of monitoring results which is placed in the Library each year. The summary for the 1997 season will be available early in the New Year.

  Mr. Fearn
  To ask the Secretary of State for the Environment, Transport and the Regions what data he has collated on the level of pollution on beaches not designated as bathing beaches. [17173]

  Angela Eagle
  The Environment Agency collect information on a site-specific basis in connection with their wider responsibilities for water pollution control. The information is available on the Agency's Regional Water Pollution Registers.

  Mr. Fearn
  To ask the Secretary of State for the Environment, Transport and the Regions what new steps are being taken to improve the quality of water at beaches in England and Wales. [17172]

  Angela Eagle
  In July this year, the Government endorsed Environment Agency proposals for new standards to protect bathing waters. Under the new policy, sewage treatment plants with outfalls near bathing waters will have to meet higher design standards that will contribute to more beaches meeting Bathing Water Directive "guideline" standards for cleanliness. Improvements will also result from completion of the remaining schemes in the bathing water improvement programme and implementation of the Urban Waste Water Treatment Directive. Priorities for additional investment by water companies on environmental improvements, including improved bathing water quality, will be considered next year as part of the current periodic review of water prices.
  463

  Agenda 21
  Mr. Dafis
  To ask the Secretary of State for the Environment, Transport and the Regions what timetable and deadlines he is working to for co-ordinating the drawing up and adoption of Local Agenda 21s. [17296]

  Angela Eagle
  At the United Nations General Assembly Special Session in June 1997, the Prime Minister called on all UK authorities to adopt Local Agenda 21 strategies by the year 2000. The Deputy Prime Minister will be launching a Joint Document next January, produced in conjunction with the Local Government Association and the Local Government Management Board, giving clear, practical guidance to councils showing why Local Agenda 21 strategies are needed and how to put an effective local strategy in place, building on the good practice that is being developed across the country. The document will ask all local authorities to send a copy of their strategy to the Chairman of the Local Government Association by 15 December 2000.

  Coastguard
  Mr. Viggers
  To ask the Secretary of State for the Environment, Transport and the Regions (1) if he will list the documents which will incorporate the five year strategy for Her Majesty's Coastguard announced on 17 November 1997,Official Report, columns 9–10; [17548]

  (2) if he will list the consultative processes that preceded the five year strategy for Her Majesty's Coastguard; and what consultation he now proposes on the strategy. [17549]

  Ms Glenda Jackson
  [holding answers 24 November 1997]: I refer the hon. Member to the reply I gave to the hon. Member for Orkney and Shetland (Mr. Wallace) on 21 November 1997, Official Report, columns 335–36.

  The development of the strategy was an internal matter for the Coastguard Agency. The Chief Coastguard consulted with his Regional Controllers in drawing up the details. The first closures of rescue centres are not scheduled to take place for more than 2 years which allows time to discuss fully the implications and implementation with staff and trade unions. Any personnel disruption will be kept to a minimum and it is intended to reduce staff through natural wastage and voluntary retirement.

  Mr. Viggers
  To ask the Secretary of State for the Environment, Transport and the Regions (1) whether, and at what cost, design consultants were employed in the preparation of the brochure "HM Coastguard: 5 Year Strategy"; [17603]

  (2) on what date the design and detail of the brochure "H. M. Coastguard: 5 Year Strategy" was agreed; [17604]

  (3) on what date the brochure "HM Coastguard: 5 Year Strategy" was sent to the printers; and on what date that print order was completed; [17605]

  (4) if the two pages headed "Some Questions and Answer" were printed separately from the remainder of the publication, "HM Coastguard: 5 Year Strategy"; on what date the contents of those pages were (a) approved by Ministers and (b) despatched for printing; and on what date those two pages were printed. [17606]
  464
  Ms Glenda Jackson
  On October 20 1997, the Coastguard Agency issued an information pack to provide journalists with background on the work of the Agency. Design consultants employed to advise the Agency on all its publications had some input into the provision of this press information pack, which did not contain any reference to the five year strategy. The cost of consultant advice on the press pack was around £140. The press information pack went to the printers on 7 October and the print order was returned on 15 October.

  On 17 November 1997, Official Report, columns 9–10, when I announced the 5 year strategy, the information pack was reissued with the addition of two pages headed "Some Questions and Answers". These were photocopied separately from the rest of the pack on 14 November at the Agency's office and added to the press information pack for issue on the day of the announcement. The contents of the added pages were approved by Ministers when we approved the announcement.

  Local Government Finance
  Mr. Burstow
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish figures at the time of his announcement of the local government settlement for 1998–99 which reflect the impact of his grant and capping decisions on the actual financial position of each local authority. [17812]

  Ms Armstrong
  I shall publish and place in the Library of the House tables of figures showing my proposals, for each English local authority, for Standard Spending Assessment (SSA) in total and for each major service block; and for each authority's entitlement to business rates, revenue support grant and special grant in respect of SSA reductions. I shall also publish figures showing the provisional effect on each local authority of the capping guidelines that will be announced by my right hon. Friend the Deputy Prime Minister and Secretary of State for the Environment, Transport and the Regions. My officials will also send to each local authority an explanation of how their figures are derived. Subsequent decisions on budgets and local rates of council taxes are a matter for each local authority.

  Kyoto Conference
  Ms Southworth
  To ask the Secretary of State for the Environment, Transport and the Regions what steps the Government are taking to ensure that the conference at Kyoto reaches effective conclusions. [16016]

  Mr. Meacher
  The UK has played a leading role in the negotiations to date, including through our position as part of the EU Presidency Troika in which role I and EU colleagues lobbied the US earlier this month. We are continuing to press for a successful outcome at Kyoto, which must include agreement to significant reductions in greenhouse gas emissions by all developed countries for the post-2000 period. To this end, my right hon. Friend the Secretary of State for the Environment, Transport and the Regions has recently chaired a meeting of key developed countries in Tokyo and is visiting India, Japan, Australia and New Zealand to explore their positions further.
  465

  Greater London Authority
  Mr. Burstow
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the reasons for the Government's intention not to provide a choice between options in the referendum on the government of London. [17813]

  Mr. Raynsford
  The Government are providing Londoners with a clear choice about the future government of their city. The Government were elected on a manifesto commitment that, following a referendum to confirm popular demand, they would establish a new Greater London Authority comprising an assembly and a mayor, each directly elected.

  In accordance with that commitment, we will present the detail of our proposals to the people of London in a White Paper to be published in March next year. Londoners will then be given the opportunity to vote in a referendum on whether or not they consent to us implementing these proposals. In the event that they vote yes, the Government intend that legislation should be introduced next session to implement the White Paper proposals.

  The Government are unconvinced by arguments for more than one question. The Mayor and the Assembly are not separable within the context of the Government's proposals. An authority without a directly elected Mayor would be a very different type of organisation. We do not believe that such an organisation would be capable of giving London the leadership it needs. A Mayor without an elected Assembly to hold him or her to account would be too powerful and unaccountable. Neither proposal would be in keeping with the clear manifesto commitment on which the Government were elected. It would not be responsible government to put unworkable options to the people of London.

  The Government believe that the referendum should present clear and comprehensible proposition to the people of London. The result of the referendum should be capable of delivering an unambiguous mandate. Despite the time available to proponents of more than one question, no single alternative second question has been devised which meets the concerns of all parties. Additional questions so far proposed have been numerous and contradictory. None would provide a clear mandate.

  The Government believe a single question on a well thought out package is the only fair and honest option. Voters will be able to study detailed proposals in the White Paper, make a considered judgment about the whole package on offer, and cast their vote. They will know exactly what they are voting for and what they will get. If they do not like it they can vote 'no.'

  Genetically Modified Organisms
  Mr. Tyler
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list by name for each year for which figures are available the instances of horizontal transmission of genetic material from genetically modified organism approved for(a) field testing and (b) marketing. [17735]

  Angela Eagle
  There are no figures available for instances of horizontal gene transfer for each release of a GMO which has been carried out. To date, 313 consents 466
  have been granted for the experimental release of GMOs since the regulations came into force in March 1993. Previous research by both the Department and industry has shown that the frequency of horizontal transfer of any genes to wild species is very low. Monitoring is often a statutory condition of consents for experimental releases. However, no formal arrangement exists to monitor gene transfer because the consequences of horizonal gene transfer occurring are evaluated in advance when considering all applications for consent. Consent is granted only if the consequences of gene transfer would be negligible. The Department is continuing to fund research to monitor releases of GM oilseed rape carried out under a marketing consent. This includes monitoring for evidence of gene transfer to confirm that the risk assessment remains valid.

  Driving Licences (GP Reports)
  Mr. Blizzard
  To ask the Secretary of State for the Environment, Transport and the Regions what action he is taking to resolve the dispute between the DVLA and BMA regarding payment of GPs for medical reports required to obtain driving licences. [17601]

  Ms Glenda Jackson
  The fees being paid to doctors for supplying medical information do not meet with the approval of the British Medical Association. Only a small proportion of doctors are refusing to provide information however the majority are providing the medical information for the fee offered. DVLA is reviewing the position and will be seeking to reach agreement with the BMA.

TREASURY

  Compliance Costs
  Mr. Swinney
  To ask the Chancellor of the Exchequer what estimates he has made of the future costs of compliance under the proposed Financial Services Authority relative to these presently applied. [17200]

  Mrs. Liddell
  The Government intend to publish a draft compliance cost assessment alongside a draft Bill when it is published for consultation in Summer 1998. It is intended that the Financial Services Authority should be efficient and economic and ensure that costs and restrictions on firms are proportionate to the benefits of regulation.

  CAP (Fontainebleau Rebate)
  Mr. Jack
  To ask the Chancellor of the Exchequer pursuant to his answer of 18 November 1997,Official Report, column 115, if he will calculate the effect of only one programme being underspent by £200 million and no other changes to other programmes or matters on the level of the Fontainebleau rebate in the following year. [17758]

  Mrs. Liddell
  On the assumption that the £200 million underspend took place entirely in the UK, and all other things being equal, our abatement would increase by around £110 million in the year following the underspend. This is however a hypothetical calculation. In practice numerous other factors would influence the outcome of the abatement.
  467

  Financial Services Authority
  Mr. Swinney
  To ask the Chancellor of the Exchequer what proposals he has for the relationship between the Financial Services Authority and the Scottish Parliament. [17202]

  Mrs. Liddell
  Financial regulation is reserved to the Westminster Parliament.

  Mr. Swinney
  To ask the Chancellor of the Exchequer what is the estimated cost of the proposed Financial Services Authority; what office accommodation has been secured for it; and at what cost to public funds. [17088]

  Mrs. Liddell
  The Financial Services Authority does not receive public funds. It is responsible for acquiring and meeting the costs of its own accommodation.

  Mr. Swinney
  To ask the Chancellor of the Exchequer if he will make a statement on the impact of the establishment of the Financial Services Authority on the role of professional bodies in Scotland with responsibility for monitoring the work of solicitors and accountants. [17201]

  Mrs. Liddell
  The Government intend to give the Financial Services Authority responsibility for the authorisation of all firms carrying an investment business, including those currently authorised by virtue of their certification by a Recognised Professional Body. The Government are considering enabling the Financial Services Authority to engage professional bodies to carry out specified functions on its behalf. The Financial Services Authority may also be able to refrain from making specified rules or categories of rules where it considers those of the relevant professional bodies to be adequate. The Financial Services Authority is currently consulting the professional bodies, including those in Scotland, on this matter.

  Landfill Tax
  Mr. Brake
  To ask the Chancellor of the Exchequer how much money has been raised form the landfill tax since 1996. [16883]

  Dawn Primarolo
  [holding answer 20 November 1997]: The amount of landfill tax collected to the end of October 1997 was £343 million.

  Mr. Brake
  To ask the Chancellor of the Exchequer how much money has been raised by the landfill tax from the deposition of waste taken from previously contaminated land. [16884]

  Dawn Primarolo
  [holding answer 20 November 1997]: None. Subject to certain qualifying conditions, waste arising from the clearance of contaminated land and disposed of to landfill is exempt from landfill tax.

  Newry VAT Registration Unit
  Mr. Mallon
  To ask the Chancellor of the Exchequer if he will list the(a) total agreed complement of (i) full-time permanent staff, (ii) casual fixed term staff and (iii) part-time staff and (b) total number of (1) casual staff recruited, (2) permanent staff recruited, (3) voluntary early retirements by permanent staff, (4) dismissals of permanent staff, (5) dismissals of casual staff, (6) dismissals of part-time staff, (7) contracts that expired, (8) contracts that
  468
  were extended, (9) staff on long term sick leave, (10) staff on maternity leave, (11) compulsory early retirements and (12) fundamental early retirements under fundamental economic review for Newry VAT Registration Unit of HM Customs and Excise. [17061]

  Dawn Primarolo
  [holding answer 21 November 1997]: (a) The current agreed resource allocation is:

  (i) 91 full-time permanent staff

  (ii) 10 fixed term and 5 casual staff

  (iii) 11 part-time staff

  (b) In the twelve months since November 1996:

  (1) 7 casual staff have been recruited

  (2) 17 fixed term appointees have been converted to permanent and 1 by direct recruitment

  (3) Nil—voluntary early retirements

  (4) Nil—dismissals of permanent staff

  (5) Nil—dismissals of casual staff

  (6) Nil—dismissals of part-time staff

  (7) 3 "casual" contracts expired

  (8) 6 Fixed Term Appointments were extended

  (9) 5 staff are currently on long term sick leave (exceeding 25 days)

  (10) 12 women have had periods of maternity leave

  (11) & (12) Nil—early retirements

  VAT (Passenger Transport)
  Sir Teddy Taylor
  To ask the Chancellor of the Exchequer what is his policy on value added tax levels on passenger transport fares. [16981]

  Dawn Primarolo
  It is the Government's policy to maintain the current zero rate on public passenger transport.

  Income Tax
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will estimate how may people would have a marginal rate of income tax of 10p in the pound, assuming bands for this rate were the first(a) £500, (b) £1,000, (c) £1,500, (d) £2,000, (e) £2,500, (f) £3,000, (g) £4,000, (h) £5,000 and (i) £6,000 of taxable income. [16837]

  Dawn Primarolo
  Using the hon. Member's assumptions, the estimates for 1997–98 are given in the table.

  New 10p starting rate on first1£

  Number of taxpayers who would face a marginal rate of 10 pence (millions)

  500

  0.8

  1,000

  1.5

  1,500

  2.2

  2,000

  2.8

  2,500

  3.4

  3,000

  4.1

  4,000

  5.6

  5,000

  7.1

  6,000

  8.5

  1 Assuming that the new 10 pence rate band would apply to all taxable income, so that the rates for savings income would be 10 per cent., 20 per cent. and 40 per cent.

  469

  Scientific Research Associations (Taxation)
  Mr. Jack
  To ask the Chancellor of the Exchequer if he will amend the terms of the Income and Corporation Taxes Act 1988 in respect of the definitions used to determine the tax liabilities of scientific research associations. [17579]

  Dawn Primarolo
  My right hon. Friend the Secretary of State for Trade and Industry is responsible for certifying whether a body is a scientific research association (SRA). Her department is reassessing the criteria for qualification as an SRA.

  Budget Measures (Environmental Impact)
  Mr. Dafis
  To ask the Chancellor of the Exchequer if he will include in his consultation document on the Budget, plans to publish an annual Green Book estimating the environmental impact of Budget measures. [17295]

  Dawn Primarolo
  I refer the hon. Member to the answer I gave on the hon. Member for South Suffolk (Mr. Yeo) on 10 July 1997,Official Report, column 1062.

  Indonesia
  Dr. Tonge
  To ask the Chancellor of the Exchequer what contribution Her Majesty's Government made to the IMF package for Indonesia. [17150]

  Mrs. Liddell
  There was no bilateral contribution made by the UK Government to the IMF package for Indonesia.

  European Central Bank
  Mr. Mitchell
  To ask the Chancellor of the Exchequer under what procedures and with which participants the appointment of office holders of the(a) governing council and (b) governing board, of the proposed European Central Bank will be made; what will be the principal functions of (a) and (b); and what factors determine who will be responsible for appointing office holders. [15310]

  Mrs. Liddell
  These arrangements are set out in Protocol No. 3 to the Maastricht Treaty (on the Statute of the European System of Central Banks and of the European Central Bank).

  VAT (Building Conversion)
  Mr. Brake
  To ask the Chancellor of the Exchequer how much money was raised in each of the last five financial years from value added tax paid on goods and materials used in the conversion of old buildings to residential use. [16838]

  Dawn Primarolo
  The information requested is not available.

  Somerset House
  Ms Lawrence
  To ask the Chancellor of the Exchequer what progress is being made with plans to open up Somerset House to wider public access. [17925]

  Dawn Primarolo
  A new trust, the Somerset House Trust, has been established, under the chairmanship of the right hon. Sir Timothy Sainsbury. The trust has its objective the care and stewardship of Somerset House,470
  with a view to restoring it fully and turning part of the building into an improved centre for art and culture with increased public access and use.

  The Government propose shortly to assign Somerset House to the trust on a 128 year lease. Under the terms of the lease, the trust will pay no rent to the Government for 5 years; after 5 years, it will pay 25 per cent. of the income receivable from its tenants; and after 10 years, 50 per cent. The Government will also make available to the trust an initial grant of up to £1 million a year for the first four years of its operation. Once the lease is signed, ownership of Somerset House will be transferred from the Inland Revenue to the Department for Culture, Media and Sport.

  As regards occupancy, the Lord Chancellor's Department plan to vacate the South Wing of Somerset House next year; after necessary renovation and adaptation, part of the South Wing will house the Gilbert Collection of precious gold and silver objects and the trust will seek appropriate heritage uses for the remainder of the Wing. The Courtauld Institute will continue to occupy the North Wing, as tenants of the trust, and the Inland Revenue will continue to occupy the East, West and New Wings.

  This is an important step towards the long term preservation of one of the London's finest heritage assets and its development for public enjoyment. The Gilbert Collection, generously donated by Mr. Arthur Gilbert, is the largest ever gift to the nation of works of art of this kind. I wish the new trust every success.

  Abortions
  Dr. Tonge
  To ask the Chancellor of the Exchequer (1) how many legal abortions were performed in 1996(a) with antiprogesterone and (b) without overnight stay in each (i) health region and (ii) district health authority; and how many in each case involved (1) National Health Service hospitals, (2) National Health Service agency arrangements and (3) other purchasers; [17143]

  (2) how many legal abortions were performed in (a) 1995 and (b) 1996 on women in each quinary age group, in each (i) health region and (ii) district health authority as constituted on 1st April 1996. [17142]

  Mrs. Liddell
  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 Dr. Jenny Tonge, dated 25 November 1997:
  The Chancellor of the Exchequer has asked me to reply, as Director of the Office for National Statistics (ONS), to your recent questions on legal abortions.
  The number of abortions performed in 1995 by quinary age-group in each health region and health authority as constituted on 1st April 1995 is published in the ONS publication 'Abortion Statistics 1995' series AB No. 22.
  The number of abortions performed in 1995 could only be provided to the health authority boundaries as constituted in 1996 at disproportionate cost.
  The number of abortions performed in 1996 by quinary age-groups in each health region and health authority as constituted on 1st April 1996 are being compiled at present and will be published in 'Abortion Statistics 1996' in December 1997.

  471
  Statistics for the number of legal abortions performed in 1996 with antiprogesterone and without overnight stay will also be published in the Abortion Statistics annual reference volume for 1996 (series AB No. 23).

DUCHY OF LANCASTER

  Citizens Charters
  Mr. Fabricant
  To ask the Chancellor of the Duchy of Lancaster if he will list each citizens charter currently operating and its running cost in the last available year. [17320]

  Mr. Kilfoyle
  There are 40 main national Charters, which are as follows:List of Charters

  United Kingdom

  Taxpayer's Charter (HM Customs & Excise)

  Taypayer's Charter (Inland Revenue)

  Traveller's Charter (HM CustoMs and Excise)

  Great Britain

  Benefits Agency Customer Charter

  Child Support Agency Charter

  Contributor's Charter

  Employer's Charter

  Jobseeker's Charter

  Redundancy Payments Service Charter

  England and Wales

  Charter for Court Users

  Victim's Charter

  England only

  Charter for Further Education

  Charter for Higher Education

  Council Tenant's Charter

  London Bus Passenger's Charter

  London Underground's Customer Charter

  Parent's Charter

  Patient's Charter

  Road User's Charter

  Scotland only

  Further and Higher Education Charter in Scotland

  Justice Charter for Scotland

  Parent's Charter in Scotland

  Patient's Charter

  Tenant's Charter for Scotland

  Wales only

  Charter for Further Education

  Charter for Higher Education

  Charter for Council Tenants in Wales

  Charter for Parents in Wales

  Charter for Patients in Wales

  Northern Ireland only

  A Charter for Patients and Clients

  Bus Passenger's Charter

  Charter for Further Education in Northern Ireland

  Child Support Agency (NI) Charter

  Courts' Charter for Northern Ireland

  Northern Ireland Housing Executive Tenant's Charter

  472

  Northern Ireland Railways Passenger's Charter

  Parent's Charter

  Royal Ulster Constabulary Charter

  Social Security Agency Customer Charter

  Training and Employment Agency Customer's Charter

  In addition there are over 10,000 local charters, which are not centrally controlled.

  Running Costs

  The Citizens Charter Unit in my Department had a budget of £4.8 million in the last financial year (1996–97), of which £2.9 million was spent on the Charter Mark Awards Scheme.

  Other departments are responsible for arrangements to oversee the running of their charters. These costs are not held centrally and could only be provided at disproportionate costs.

  In June, we announced that we would relaunch the Charter programme. We began a consultation exercise on 16 September and will publish the results next year.

  Special Advisers
  Mr. Edward Davey
  To ask the Chancellor of the Duchy of Lancaster what was the total paybill for all Special Advisers for 1996–97; what is the projected figure for(a) 1997–98 and (b) 1998–99; and if he will make a statement. [14103]

  Dr. David Clark
  The total paybill for 1996–97 was £1.8 million. The estimated paybill for 1997–98 is £2.6 million. The estimated total paybill for 1997–98 covers various posts, including the Standards and Effectiveness Adviser to the Department for Education and Employment, the UK anti-drugs co-ordinator and his deputy, which are not covered by the earlier paybill figure.

  No projected figures are available for future years.

  Political Advisers
  Mr. Malcolm Bruce
  To ask the Chancellor of the Duchy of Lancaster how many political advisers were employed in each Government department on 1 August, and what was the annual total salary cost of such advisers, for (i) 1992–93, (ii) 1993–94, (iii) 1994–95, (iv) 1995–96, (v) 1996–97 and (vi) 1997–98; what are the current salary scales on which they are paid; and if he will make a statement. [14806]

  Dr. David Clark
  At 1 August, Government departments employed the following numbers of paid Special Advisers:

  Department

  Number employed

  Number 10 Downing Street

  118

  Ministry of Agriculture, Fisheries and Food

  2

  Cabinet Office (Office of Public Service)

  1

  Chief Whip's Office

  2

  Department for Culture, Media and Sport

  22

  Ministry of Defence

  2

  Department for Education and Employment

  15

  Department of the Environment, Transport and the Regions

  23

  Foreign and Commonwealth Office

  2

  473

  Department

  Number employed

  Department of Health

  2

  Home Office

  2

  Department for International Development

  2

  Lord Privy Seal's Office

  2

  Northern Ireland Office

  2

  Privy Council Office

  1

  Scottish Office

  2

  Department of Social Security

  2

  Department of Trade and Industry

  2

  Her Majesty's Treasury

  4

  Welsh Office

  2

  1 Of which two part-time.

  2 Of which one part-time.

  The total salary cost for 1992–93 is not readily available. However, the paybill for those in post at September 1992 was £1.3 million.

  The total salary costs for the years 1993–96 are given in the list below:

  1 August 1993–31 July 1994: £1,133,590

  1 August 1994–31 July 1995: £1,460,733

  1 August 1995–31 July 1996: £1,512,622

  The total paybill from 1 April 1996 to 31 March 1997 was £1.8 million. The estimated paybill for 1997–98 is £2.6 million. The estimated total paybill for 1997–98 covers various posts, including the Standards and Effectiveness Adviser to the Department for Education and Employment, the UK anti-drugs co-ordinator and his deputy, which are not covered by the earlier paybill figure.

  No projected figures are available for future years.

  The current salaries in bands of £10,000 are set out in the following table.

  Salary band (£)

  Number of Advisers

  10,001–20,000

  6

  20,001–30,000

  25

  30,001–40,000

  14

  40,001–50,000

  8

  50,001–60,000

  6

  60,001–70,000

  6

  70,001–80,000

  1

  80,001–90,000

  2

  90,001–100,000

  0

  100,001–110,000

  1

  The table includes the nine Special Advisers appointed since 1 August.

CABINET OFFICE

  Millennium Dome
  Mr. Marshall-Andrews
  To ask the Minister without Portfolio, pursuant to his answer of 11 November 1997,Official Report, column 534, in relation to the procedures applied to the appointment of M. & C. Saatchi as contractors of the Millennium Dome Project, in accordance with which of the three criteria listed in the answer the contract was awarded to M.& C. Saatchi. [17452]
  474
  Mr. Mandelson
  [holding answer 24 November 1997]: The contract awarded to M. & C. Saatchi met all three of the criteria listed in my answer of 11 November. Further details about this contract are contained in my letter to my hon. Friend of 24 November which I have, with his consent, placed in the Libraries of the House.

HOUSE OF COMMONS

  Bar Glasses
  Mr. Barnes
  To ask the Chairman of the Catering Committee if he will ensure that lined glasses are used in all the bars on the Parliamentary Estate. [17204]

  Mr. Dennis Turner
  As my hon. Friend will appreciate, my Committee has no responsibility for bars in the House of Lords or for the Sports and Social Club. However, all the glasses used in this House's Refreshment Department outlets conform with current trading standards. Should any future legislation be enacted which would require all glasses to be so lined, then I understand that the Refreshment Department would phase in such glasses accordingly.

FOREIGN AND COMMONWEALTH AFFAIRS

  Mission Statement
  Mr. Burns
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from the Government of Indonesia in respect of the Foreign Office mission statement. [15990]

  Mr. Fatchett
  None.

  Nigeria
  Mr. Ian Bruce
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of Nigeria in respect of the restoration of democracy. [16003]

  Mr. Fatchett
  We have contact with the Nigerian Government through our High Commissioner in Abuja. He regularly raises our concerns about the lack of progress towards the restoration of democracy and respect for human rights.

  Kashmir
  Mr. Blunt
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement concerning his role in relation to Kashmir. [16014]

  Mr. Fatchett
  I refer the hon. Member to the replies I gave to my hon. Friends the Members for Peterborough (Mrs. Brinton) and for Luton, North (Mr. Hopkins) on 28 October 1997,Official Report, columns 795–96. My right hon. Friend the Foreign Secretary made clear to the House on the same day that Britain continues to be willing to help find a solution, but that any offer of help must be acceptable to Pakistan and India.
  475

  Israeli Prime Minister
  Mr. Caplin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent visit to the United Kingdom of the Prime Minister of Israel. [16017]

  Dr. Starkey
  To ask the Secretary of State For Foreign and Commonwealth Affairs what representations he made to the Israeli Prime Minister during his recent visit to London. [16020]

  Mr. Ivan Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent talks with the Prime Minister of Israel. [16026]

  Mr. Fatchett
  I refer my hon. Friends to the answer given to the House today by my right hon. Friend the Foreign Secretary to my hon. Friend the Member for Hendon (Mr. Dismore).

  Mr. George Atkinson
  Mr. Swayne
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the case of Mr. George Atkinson, imprisoned in Dubai. [16018]

  Mr. Fatchett
  We have been told by the Government of Dubai that initial charges have been made against Mr. Atkinson. When investigations have been completed, final charges will be made and the case referred to the court or he will be released.

  Iraq
  Mr. Hanson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the United Nations with regard to the situation in Iraq. [16019]

  Mr. Fatchett
  Following the UN Security Council's display of unanimity, I am pleased that Saddam Hussein has backed down unconditionally and allowed UNSCOM Inspection to return to Iraq. The Inspectors should now be permitted to get on with their job of uncovering and destroying Iraq's large stocks of weapons of mass destruction.

  Human Rights
  Mr. Timms
  To ask the Secretary of State for Foreign and Commonwealth Affairs what will be the role of the European Union under the terms of the Amsterdam treaty in the protection of fundamental human rights. [16021]

  Mr. Doug Henderson
  Under Article F of the Treaty on European Union, the Union is already obliged to respect fundamental rights, as guaranteed by the European Convention on Human Rights (ECHR). The Amsterdam Treaty, by an amendment to Article L, confirms the European Court of Justice (ECJ) jurisdiction to ensure that acts of EU institutions are consistent with these rights. New Article F.1 allows for sanctions against a Member State found in "serious and persistent" breach of fundamental rights. The EU's role, therefore, complements—and does not replace—that of the European Court of Human Rights.
  476
  Mr. Rowlands
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those countries to which the European Union has made representations concerning the human rights and record of that country. [17316]

  Mr. Fatchett
  The European Union has made representations to a range of countries concerning their human rights records. A summary of European human rights activities is set out in the European Union's Annual Memorandum to the European Parliament. The most recent edition of the Memorandum was issued on 16 October 1997, and is available in the Libraries of the House.

  Mr. Rowlands
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those posts which in their project work in the legal training of state officials provide human rights documentation for schools and support non-governmental organisations involved in human rights issues. [17322]

  Mr. Fatchett
  Many posts support local human rights projects. Those recently involved in legal training of state officials or provision of human rights educational material include Sofia, Peking, Prague, Islamabad, Colombo, Lusaka, Vilnius and Port Louis. Posts regularly work closely with the British Council and both UK-based and local NGOs.

  Mr. Rowlands
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those countries to which representations have been made by Her Majesty's Government on the grounds of the human rights record of that country. [17314]

  Mr. Fatchett
  We make representations to many countries on their human rights records. We do so bilaterally or with EU partners, either directly or through multilateral fora. Where we consider it to be more effective, some representations are made privately.

  Common Foreign and Security Policy
  Sir Sydney Chapman
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the United Kingdom contributions to the European Union budget activities on the Common foreign and security policy. [16022]

  Mr. Doug Henderson
  The 1997 EU budget for the common foreign and security policy makes provision for commitments of up to 30 Mecu (ie about £22.1 million). Britain's gross contribution is approximately 15 per cent. of expenditure, ie up to £3.32 million depending on the prevailing exchange rate.

  Australia (Native Title)
  Mr. Connarty
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received on Australia's proposals on native title of their indigenous peoples. [16023]

  Mr. Fatchett
  We have received a small number of letters.

  Maastricht Treaty
  Mr. Ruffley
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received on the provisions of the Maastricht treaty relating to political integration. [16024]
  477
  Mr. Doug Henderson
  We have received a wide variety of representations on the Maastricht Treaty.

  Export Promotion
  Mrs. Brinton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps his Department is taking to encourage export promotion to central and eastern Europe. [16025]

  Mr. Doug Henderson
  We provide a range of services to encourage trade with Central and Eastern Europe, including export promoters. A major campaign was launched in January 1997 to promote awareness among British businesses of the growing commercial opportunities in Central Europe.

  European Union
  Mr. Pike
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department has had with representatives of countries seeking entry into the European Union. [16027]

  Mr. Doug Henderson
  We are committed to enlargement of the EU and to ensuring that this is an all-inclusive process. Regular contacts—at all levels— with all countries that have applied for membership in the European Union are essential to this. My right hon. Friend the Foreign Secretary is visiting Hungary, the Czech Republic and Poland this week. I have travelled to Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovenia and Turkey this autumn. All this is in addition to the continuous dialogue conducted by officials and HM Ambassadors.

  China
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment he has made of United Kingdom relations with China in respect of the handover of Hong Kong. [16000]

  Mr. Fatchett
  We have entered a new, more constructive phase in our relations with China. Provided China continues to fulfill its pledge to respect the Joint Declaration, we believe Hong Kong will remain a bridge between Britain and China. When my right hon. Friend the Foreign Secretary met his Chinese opposite number in New York in September, they agreed to work together on a whole range of bilateral and global issues.

  Visa Applicants
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the case of Mr. Vaja of Leicester, Ref. R/97/3541, who has been refused a visa in Bombay. [16756]

  Mr. Fatchett
  We have asked our High commissioner in Bombay for a detailed account of the application and my noble Friend the Under-Secretary will write to my hon. Friend within one week of receiving that account.

  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the case of Mrs. Chauhan of 5 Rushey Close, Leicester, whose husband has been refused a visa in Bombay (Foreign Office ref. GV100/36904). [16846]
  478
  Mr. Fatchett
  I understand that the Migration and Visa Correspondence Unit wrote to my hon. Friend on 18 November about this case. I hope the reply has addressed my hon. Friend's concerns.

  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the average waiting time for an interview in respect of an application to join(a) a husband and (b) a wife in (i) Pakistan, (ii) Sri Lanka, (iii) India and (iv) Bangladesh in the last year for which figures are available. [16972]

  Mr. Fatchett
  The average waiting times for interviews in respect of applications to join husband/wives in the last year for which figures are available (1996) are as follows (unless otherwise specified figures are the same for husbands and wives and refer to first time application):

  Waiting time

  Islamabad

  3.5 months, to join husband

  4.5 months to join wife

  Karachi

  16 weeks

  Colombo

  10–12 weeks, depending on the conditions attached to the spouse's stay in the UK

  New Delhi

  2.75 months

  Bombay

  11 weeks

  Madras

  6 weeks

  Calcutta

  2 weeks

  Dhaka

  6.7 months

  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many(a) men and (b) women were waiting for an interview at British High Commission offices in (i) Pakistan, (ii) Sir Lanka, (iii) India and (iv) Bangladesh to join husbands or wives resident in the United Kingdom on 1 November. [16919]

  Mr. Fatchett
  On 1 November, the numbers of men and women waiting for an interview to join husbands or wives in the UK were as follows:

  Post

  Men

  Women

  Islamabad

  610

  665

  Karachi

  33

  57

  Colombo

  1

  121

  New Delhi

  33

  73

  Bombay

  86

  209

  Madras

  11

  19

  Calcutta

  1

  0

  Dhaka

  432

  151

  Entry Certificate Officers
  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many entry certificate officers were employed in British High Commission offices in(a) Pakistan, (b) Sri Lanka, (c) India and (d) Bangladesh on 1 November. [16915]
  479
  Mr. Fatchett
  The number of Entry Clearance Officers employed on 1 November is as follows:

  Officers

  Islamabad

  21

  Karachi

  4

  Colombo

  3

  New Delhi

  10

  Bombay

  8

  Madras

  2 + 50 per cent. of the time of a third officer

  Calcutta

  75 per cent. of the time of one officer

  Dhaka

  11

  Migration and Visa Correspondence Unit
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what resources he will make available to deal with the backlog of cases at the Migration and Visa Correspondence Unit. [16757]

  Mr. Fatchett
  We have taken a variety of measures to deal with the backlog of cases, including the deployment of additional temporary staff and seven day working. We are currently making arrangements to appoint five extra permanent members of staff to the Unit. Three have already been selected and are in post. We aim to fill the remaining posts within two months.

  Treaty of Rome
  Mr. Mitchell
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish as a command paper a consolidated version of the Treaty of Rome, as amended by all subsequent treaties including the Treaty of Amsterdam, with all the protocols from all of the treaties. [17300]

  Mr. Doug Henderson
  A consolidated version of the Treaty of Rome (the Treaty Establishing the European Community), as amended by subsequent treaties including the Treaty of Amsterdam (not yet in force), was published in a Command Paper on 29 October 1997 (Cm 3780). All the protocols to the Treaty of Rome which will be in force when the Amsterdam Treaty enters into force are listed in the same Command Paper. The text of the protocols annexed to the Treaty of Rome or added by the Treaty on European Union are printed in Cm 455 (1988) and Cm 2485 (1994); and those to be added by the Treaty of Amsterdam are printed in Cm 3780 (1997).

  Asia-Europe Meeting
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will ensure that human rights are on the agenda at the forthcoming second Asia-Europe meeting. [16060]

  Mr. Fatchett
  The agenda for the second Asia-Europe Meeting (ASEM) is still under discussion. The Chairman's Statement after the first ASEM in Bangkok expressed commitment to strengthening political dialogue between Asia and Europe on the basis, among other things, of equality and the promotion of fundamental rights.
  480

  Dalai Lama
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement regarding the succession of the Dalai Lama. [17309]

  Mr. Fatchett
  The succession of the Dalai Lama is a matter for the Tibetan people.

  Turkey
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will raise Turkey's activities in Iraq in the Security Council. [17576]

  Mr. Doug Henderson
  We have no current plans to do so. We have urged the Turks to withdraw their forces from northern Iraq as soon as possible.

  Torture Equipment
  Mr. Rowlands
  To ask the Secretary of State for Foreign and Commonwealth Affairs what estimate his Department has made of the value of torture equipment sold by United Kingdom companies since 1992; and if he will list those countries to which such equipment has been sold. [17323]

  Mr. Fatchett
  I refer my hon. Friend to the answer given by my hon. Friend the Minister for Small Firms, Trade and Industry to my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) on 29 October 1997,Official Report, column 825.

  East Timor
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the arrangements to ensure that the proposed European Troika visit to East Timor is able to hold private meetings with persons(a) in Dili and (b) in rural areas. [15986]

  Mr. Fatchett
  We aim for the Troika Ambassadors to talk to a wide range of people to get as complete a picture as possible of the situation. Detailed arrangements will be worked out in conjunction with our EU partners.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Indonesian Government on the recommendation by the United Nations Human Rights Commission that the United Nations Rapporteur on Torture be invited to visit East Timor, in time for him to report to the meeting of the Commission in April 1998. [15987]

  Mr. Fatchett
  We continue to encourage the Indonesian Government to implement the resolution of the UN Commission on Human Rights 1997.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the United Kingdom will support efforts by the United Nations High Commissioner for Human Rights to deploy an on-site human rights presence in East Timor. [16061]

  Mr. Fatchett
  There are no efforts by the United Nations High Commissioner for Human Rights to deploy an on-site human rights presence in East Timor.
  481

  EU Defence Co-operation
  Mr. Pound
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with his European Union Counterparts about future European defence co-operation. [16164]

  Mr. Fatchett
  The European Union itself is not responsible for defence co-operation. At the Amsterdam European Council, the UK and European Union partners agreed that the European Union would avail itself of the Western European Union to elaborate and implement decisions and actions of the Union which have defence implications. Arrangements for enhanced co-operation between the European Union and Western European Union have been discussed by the General Affairs Council of the European Union have been discussed by the General Affairs Council of the European Union and by the Council of the Western European Union.

  Burma
  Mrs. Fyfe
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the United Nations High Commissioner for Human Rights on conditions in the relocation camps within Karenni state, Burma. [17602]

  Mr. Fatchett
  My right hon. Friend the Foreign Secretary has made no specific representations on this subject to the UN High Commissioner for Human Rights. But, with strong UK support, the President of the European Council wrote to Mrs. Robinson on 6 October about the deplorable human rights situation in Burma, urging further UN actions to improve the situation and drawing attention to the EU Common Position.

  The UK played a full role in ensuring that the plight of ethnic minorities in Burma was included in the UN Committee on Human Rights resolution in April. We are playing an equally active role in negotiations on the UN General Assembly Third Committee resolution on Burma, to be adopted in plenary in December.

  Algeria
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures he plans to take in respect of human rights in Algeria; and if he will make a statement. [16584]

  Mr. Fatchett
  In our regular contacts with the Algerian authorities, we express our serious concerns about reports of human rights abuses in Algeria. We plan to continue expressing these concerns and to encourage the Algerian Government to agree an early date for the visit they have already indicated they accept from the UN Special Rapporteur on Extrajudicial Killings.

  Gibraltar
  Mr. Gill
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he will take to ensure that Gibraltar is permitted to enjoy the rights concerning the free movement of goods, capital, services and people prescribed by membership of the European Union. [17811]

  Mr. Doug Henderson
  We take seriously our responsibilities for Gibraltar within the EU. We stand up firmly for Gibraltar's EU rights to exercise free movement 482
  of capital, services and people and shall continue to do so. Gibraltarians' right to free movement will not, for example, be affected by the Treaty of Amsterdam. Provisions on the free movement of goods do not apply in Gibraltar. Since Gibraltar is outside the Community Customs Territory and the Common Commercial policy, it is treated as a third country for imports into the Community.

  Mr. Gill
  To ask the Secretary of State for Foreign and Commonwealth Affairs what restrictions are placed on civilian aircraft using Gibraltar airport in respect of their use of airspace, at take-off and on final approach to landing. [17808]

  Mr. Doug Henderson
  Spain prohibits civilian aircraft movements to the North and West of Gibraltar in a way which affects approaches to, and departures from, Gibraltar.

  Military Training Assistance
  Mr. St. Aubyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he expects his Department's review of military training assistance to be completed. [17654]

  Mr. Fatchett
  My right hon. Friend the Foreign Secretary is examining this Department's Military Training Assistance Scheme as part of the Comprehensive Spending Review. The Review is likely to be completed in the Spring of 1998.

  Tunisia
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to Tunisia on human rights violations; and if he will make a statement. [16583]

  Mr. Fatchett
  We are in regular contact with the Tunisian authorities on human rights issues.

  Hong Kong
  Mr. Mitchell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he plans to take to monitor human rights and electoral procedures in Hong Kong. [15992]

  Mr. Fatchett
  We are committed to monitoring all aspects of the implementation of the Sino-British Joint Declaration on Hong Kong, including those parts relating to human rights and the legislature.

  Contingency and Operational Procurement Exhibition
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the military, security and police officials invited to the 1997 contingency and operational procurement exhibition. [14405]

  Mr. Spellar
  I have been asked to reply as this matter falls within my area of responsibility.

  COPEX 97 was a privately run exhibition which the Ministry of Defence played no part in organising. I am therefore unable to list any of the invitees.
  483

NORTHERN IRELAND

  Paramilitary Beatings
  Mr. Trimble
  To ask the Secretary of State for Northern Ireland how many paramilitary beatings and shootings have occurred in 1997, indicating where possible the paramilitary organisation believed to be responsible. [16030]

  Mr. Ingram
  Between 1 January 1997 and 11 November 1997 the number of casualties as a result of paramilitary-style assaults and shootings was:

  Casualties as a result of Paramilitary-style attacks I January to 11 November 1997

  Attributed to Loyalist

  Attributed to Republican

  Total

  Casualties as a result of shootings

  43

  18

  61

  Casualties as a result of assaults

  69

  72

  141

  Total

  112

  90

  202

  Police Station, Coleraine
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what is the estimated cost of the new police station for Coleraine, County Londonderry. [17355]

  Mr. Ingram
  It is not possible to give an estimated cost of a new police station for Coleraine, County Londonderry as no decision has yet been taken on this project.

  Requirements for police buildings are currently being assessed against policing needs and availability of funding.

  Traffic Flows
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland (1) what is the peak traffic capacity of the Castledawson bypass; how many vehicles used it when it was first opened; what has been the number each year since opening on a daily basis; and what are the peak hourly flows this year; [17352]

  PQ 1214—Traffic Volumes on bridges across the Lower Bann River

  (1) Most recent surveys

  (2) 1992 surveys

  Name of bridge

  Year

  Average daily traffic volumes

  Average peak hourly flows

  Average daily traffic volumes

  Average peak hourly flows

  AM

  PM

  AM

  PM

  Toome Bridge

  1997

  17,667

  1,652

  1,737

  12,990

  960

  1,350

  Agivey Bridge

  1996

  3,130

  220

  300

  2,910

  n/a

  n/a

  Bann Bridge, Portglenone

  1997

  8,500

  663

  696

  n/a

  n/a

  n/a

  Sandleford Bridge

  1995

  20,720

  n/a

  n/a

  15,150

  n/a

  n/a

  Kilrea Bridge

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a = Not available.

  484
  (2) how many vehicles pass over each of the bridges over the Lower Bann each day; in each case what is the hourly peak flow; and what were the figures five years ago; [17353]

  (3) if she will list the daily number of vehicles and the peak hourly traffic flow (a) currently and (b) five years ago over (i) Swanns Bridge, (ii) Roe Bridge Limavady and (iii) Dungiven Bridge over the River Roe; [17354]

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what was the daily and hourly peak traffic flows along(a) Linen Hall Street and (b) Connell Street Limavady (i) were in each of the last five years and (ii) are at present. [17358]

  Mr. Paul Murphy
  Responsibility for these matters has been delegated to the Roads Service under its chief executive, Mr. W.S. McCoubrey. I have asked him to arrange for a reply to be given.

  Letter from W. J. McCoubrey to Mr. William Ross, dated 24 November 1997:
  The Secretary of State for Northern Ireland has asked me to respond to your recently tabled PQs about traffic volumes at various locations.
  PQ 1213—TRAFFIC VOLUMES ON CASTLEDAWSON BY-PASS
  The design capacity of the Castledawson By-pass, which opened in 1992, is 13,000 vehicles per day. Since then the average daily traffic volumes on the By-pass are as follows:

  1992: 8,800

  1993: 9,792

  1994: 10,580

  1995: 11,740

  1996: 11,860

  1997: 13,302

  In 1997 the average peak hourly flows are: 1,040 (a.m), 1,169 (p.m).
  PQs 1214, 1215, 1219
  Whilst the precise information requested is not available, I have provided details in the attached tables.
  I hope this information is helpful.
  There are five road bridges over the Lower Bann river. The following table provides details, where available, on the average daily traffic volumes and average peak hourly flows (a.m and p.m) on each of the bridges as determined by:

  (1) The most recent traffic survey carried out in each location; and

  (2) 1992 traffic surveys (where carried out).

  485
  The following table provides details, where available, on the average daily traffic volumes and average peak hourly flows (am and pm) on each of the bridges as determined by:

  PQ 1215—Traffic flows—Swanns Bridge, Roe Bridge, and Dungiven Bridge

  (1) Most recent surveys

  (2) 1992 surveys

  Name of bridge

  Year

  Average daily traffic volumes

  Average peak hourly flows

  Average daily traffic volumes

  Average peak hourly flows

  AM

  PM

  AM

  PM

  Roe Bridge

  1996

  16,180

  1200

  1380

  15,030

  No figures available

  Dungiven Bridge

  1996

  10,240

  780

  950

  8,450

  No figures available

  Swanns Bridge

  No figures available

  No figures available

  The most recent traffic data available in respect of Linenhall Street and Connell Street, Limavady are those of an 1991 traffic survey. Details, where available, are provided in the following table:

  PQ 1219—Traffic flows—Linenhall Street, and Connell Street, Limavady

  Most recent survey

  Location

  Year

  Average daily traffic volumes

  Average hourly peak flows

  AM

  PM

  Linenhall Street

  1991

  18,874

  933

  951

  Connel Street

  1991

  No figures available

  748

  1,065

  1 Based on a 10 hour count 1989.

  Farmers and Farm-workers
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what studies she has(a) commissioned and (b) evaluated into the age structure of (i) full-time farmers and farm-workers and (ii) part-time farmers in Northern Ireland; how many (A) males and (B) females there are in each such category; and what were the figures (1) five, (2) 10 and (3) 15 years ago. [17356]

  Mr. Paul Murphy
  Information on the age structure of full and part-time farmers and farm-workers is collected in periodic EU Structure Surveys, the latest of which was carried out in 1997.

  The numbers requested in part(II) of the question are:

  Full-time farmers and farm-workers

  Part-time farmers

  Year

  Male

  Female

  Male

  Female

  1997

  20,835

  1,487

  12,693

  1,886

  1992

  23,680

  3,133

  10,675

  3,334

  1987

  26,774

  3,632

  9,517

  3,029

  1982

  28,759

  4,641

  9,181

  2,902

EDUCATION AND EMPLOYMENT

  Remploy
  Miss Melanie Johnson
  To ask the Secretary of State for Education and Employment if he will make a statement on Remploy's performance against the targets set in its 1996–97 annual performance agreement. [17926]
  486
  Mr. Alan Howarth
  Now that Remploy has published its Annual Report and Accounts for 1997 and audited figures are available, I am, on behalf of my right hon. Friend the Secretary of State for Education and Employment, delighted to confirm that Remploy has exceeded its 1996–97 targets. The targets and achievements are listed in the following table. Copies of Remploy's 1997 Annual Report and Accounts are available in the Library.

  Target

  Achievement

  The average number of disabled people employed by Remploy:

  At least 9,400

  9,662

  Average number of disabled people employed under the Interwork scheme:

  At least 2,400

  2,704

  The number of disabled employees to move from Remploy factories to Interwork having been employed there for at least 1 year, or from Interwork or factories to open employment:

  At least 175

  182

  Remploy will keep within a unit cost target (operating deficit per disabled worker) of:

  £10,170

  £9,967

  The unit cost of Interwork to be no more than:)

  £4,540

  £4,230

  Remploy to keep within an operating deficit (including reorganisation costs) of:

  £99 million

  £98, million

  EU Education Council
  Ms Buck
  To ask the Secretary of State for Education and Employment what were the outcomes of the Council of EC Education Ministers held on 20 November. [17927]

  Mr. Andrew Smith
  The Council of Education Ministers, at which my noble Friend the Minister of State, Department for Education and Employment and my hon. Friend the Minister for Education and Industry, Scottish Office represented the UK, made a declaration on respect for diversity and the fight against racism and xenophobia. The Council agreed in principle the texts of a resolution on the early learning of the languages of the European Union; of conclusions on the evaluation of the quality of school education; and, subject to a UK Parliamentary scrutiny reservation, of a common position on a draft recommendation on European co-operation in higher education quality assurance. The Council gave a second reading to a European Commission proposal to increase the budget of the SOCRATES education programme. In
  487
  this it restated its view that the programme budget should be increased from 850 million ecu1 to 875 million ecu2 over five years.

  The Council heard European Commission presentations on the communication "Towards a Europe of Knowledge" and the EURYDICE publication "Key Data on Education in the European Union 1997".

  After the Council, European Union Education Ministers held a meeting with Education Ministers of the associated countries of Central and Eastern Europe to discuss matters of mutual interest.

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

  1£580 million at £1 = 0.6.825 ecu.

  2£597 million at £1 = 0.6.825 ecu.

  Higher and Further Education (Top-up Fees)
  Ms Stuart
  To ask the Secretary of State for Education and Employment if he will take steps to prohibit the charging of top-up fees by institutions of higher and further education. [17600]

  Dr. Howells
  My right hon. Friend has made it clear that top-up fees play no part in the Government's plans for higher education and that no university or college should proceed on the basis of introducing such additional fees. We are considering whether or not it is necessary to seek legislation on this issue.

  Education Authority Spending
  Mr. Laurence Robertson
  To ask the Secretary of State for Education and Employment if he will list for each local education authority in England for the three most recent years(a) actual expenditure on service strategy and regulation, (b) actual expenditure within the general schools budget on education, management and administration, (c) the outturn expenditure within the general schools budget, (d) the outturn expenditure within the potential schools budget, (e) the outturn expenditure within the aggregate schools budget and (f) the number of pupils in primary and secondary schools. [16058]

  Mr. Byers
  [holding answer 17 November 1997]: Tables containing the information requested have been placed in the Library. These are derived from (a) the revenue outturn form RO1 return collected by the Department of the Environment, Transport and the Regions, for the financial years 1993–94, 1994–95 and 1995–96; (b) to (e) the outturn statements produced by local education authorities under section 42 of the Education Reform Act 1988, for the financial years 1993–94, 1994–95 and 1995–96; (f) returns made by schools to the Department in January 1995, 1996 and 1997 (Annual Schools Census—Form 7).

  Employment Service
  Mr. Kidney
  To ask the Secretary of State for Education and Employment what exception there are to his policy of compelling employees of the Employment Service to retire at 60 years of age; and if he will make a statement. [17164]
  488
  Mr. Alan Howarth
  Responsibility for the subject of the question has been delegated to the Employment Service agency under its Chief Executive. I have asked him to arrange for a reply to be given.

  Letter from Leigh Lewis to Mr. David Kidney, dated 25 November 1997:
  The Secretary of State has asked me to reply to your question asking what exceptions there are to the policy of retiring employees of the Employment Service at 60 years of age. This is something which falls within the responsibilities delegated to me as Chief Executive.
  Age retirement policy is common across the whole of the Department for Education and Employment, including the Employment Service. The background to the policy is that, following the merger of the former Departments for Employment and Education in 1995, there was a need to ensure a common retirement policy across the new Department.
  There had, for a number of years, been a policy that staff working in the former Employment Department Group, including the Employment Service, were retained beyond their 60th birthday only where there was an operational need and the person concerned was fully fit and efficient. This same policy was adopted across the Department for Education and Employment and is a common policy across most Civil Service departments.
  If, when an individual reaches age 60, there is no ongoing need for their service they will be retired. Where, however, there is an operational need for the individual to remain in employment they are invited to do so. The criteria for retaining individuals beyond their 60th birthday are that:

  a clear operational need exists;

  the individual is carrying out their duties effectively;

  they have no known health problems;

  their retention will not lead to serious promotion blockages;

  there are no suitable surplus staff in the individual's grade/pay band or location who could be redeployed into that post.

  In addition, where there are temporary employees filling posts which could instead be filled by retaining permanent staff beyond age 60, the contracts of temporary employees will be terminated in favour of retaining permanent members of staff.

  These criteria are published in the "ES and You", the Employment Service's staff terms and conditions handbook. Since December 1996, the Employment Service has in fact retained more staff beyond age 60 than were retired at that age.
  I hope this information clarifies the circumstances in which people are invited to remain in employment beyond their 60th birthday within the Employment Service.

  New Deal
  Mr. Pickthall
  To ask the Secretary of State for Education and Employment what criteria were used for choosing West Lancashire as an area where the lead role in delivery of the New Deal would be offered to the private sector. [16864]

  Mr. Andrew Smith
  We have invited the private sector to lead the organisation and delivery of New Deal in a total of ten locations. The competition to identify private sector lead organisations in the two pathfinder areas of Hackney and City and South Humber is complete. The additional eight areas were selected on the basis of a judgment as to where a private sector led partnership would have most to contribute.

  Mr. Rowlands
  To ask the Secretary of State for Education and Employment (1) if he will list for each employment district in(a) Wales and (b) England in which he intends to contract out the management of the

  489
  welfare to work programme those contracts which will be the subject of public tender or invitation to tender; and which companies have been invited to tender; [16951]

  (2) if he will list those employment districts in (a) Wales and (b) England in which he proposes to contract out the management of the welfare to work programmes; and what is the estimated value of each contract. [16950]

  Mr. Andrew Smith
  [holding answer 20 November 1997]: The essence of New Deal delivery is partnership between a wide range of public and private sector organisations to provide opportunities to meet the needs of the local client group. Effective local partnerships have an invaluable contribution to make, whatever the lead responsibilities for delivery. Detailed delivery plans for each New Deal unit of delivery will be available in the public domain once approved. Plans for 12 pathfinder districts are in the process of being made available now, and those for the bulk of remaining districts will be available during December.

  We have specifically invited the private sector to lead the organisation and delivery of New Deal in a total of 10 locations. The competition in the first two pathfinder areas (Hackney and City and South Humber) is now complete. Advertisements seeking expressions of interest have been published for the other eight, with a view to announcing the remaining lead organisations to work with the Employment Service by the end of February 1998. In Wales, the private sector will lead in Bridgend and Glamorgan Valleys. In England, the locations are West Lancashire, Leicestershire, Solihull, Colchester, Tyneside North and Exeter and East Devon.

  We cannot say at this stage which specific organisations will compete for contracts or their potential value because these depend on responses to the various competitions, the delivery arrangements proposed and the number of young people who will participate within the New Deal.

  Mr. Alasdair Morgan
  To ask the Secretary of State for Education and Employment (1) for what reasons bidding for the contract to lead the organisation and delivery of New Deal to 18 to 24 year olds in Scotland, England and Wales is restricted to private sector organisations; [17349]

  (2) if the bidding process will allow for the management of New Deal in Scotland to be carried out separately, and by a different organisation, from that in England and Wales. [17350]

  Mr. Andrew Smith
  New Deal will be organised through a wide variety of arrangements, designed to reflect the diversity of local circumstances and the expertise of those who can help in its delivery. This means different options for the management of New Deal are welcome.

  The private sector has offered an impressive range of innovative proposals for helping young people back to work. The Government are keen to harness this creativity to provide quality opportunities through which young people can improve their employability. We have therefore invited bids from the private sector, under contract to the Employment Service (ES), to lead the delivery of New Deal in a total of 10 locations where it
  490
  is judged that a private sector led partnership would have most to contribute. I would expect the private sector organisations selected to work closely with local public and private sector bodies to make a success of the New Deal.

  The bidding process allows for the management arrangements to be separated, and for separate organisations to be involved, in each of the private sector lead locations, including in Scotland. It does not, however, require it as the bids for each area will be assessed on their merits.

  In other areas, private sector or public sector consortia may also emerge as a result of discussions amongst prospective partners at a local level. In these cases, responsibility for the overall management of New Deal in that locality may rest with any member/members of the consortium under contract to the ES. A third option is that the ES directly manages New Deal Delivery.

  In all cases, the ES remains accountable for the delivery of New Deal.

  Secondary Schools (Selection Process)
  Mr. Don Foster
  To ask the Secretary of State for Education and Employment if he will list the secondary schools which are partially selective, indicating those which band their intake; and if he will make a statement. [17762]

  Ms Estelle Morris
  The Department does not hold comprehensive information on partially selective schools or those which band their intake. Information is available only on those schools which since 1989 have had statutory proposals approved to introduce partial selection and those grant maintained schools which received approval to select up to 10 per cent. of their pupils on the basis of ability or aptitude in certain specified subjects between January 1989 and August 1996. This is provided in the following tables.

  Proposals to Introduce Partial Selection Approved since 1989

  LEA area

  School name

  Type of selection

  Grant maintained

  Barnet

  Mill Hill County High School

  30 per cent. by aptitude for technology

  Bromley

  Hayes GM Secondary School

  25 per cent. Selection by ability

  Berkshire

  Southlands School

  One selective form of entry (18 per cent.)

  Dorset

  Budmouth GM School

  10 per cent. selection by ability

  Hammersmith and Fulham

  London Oratory School

  20 boys at age 7 on musical and general ability

  Hertfordshire

  Watford Grammar School for Girls

  50 per cent. selection by ability

  Hertfordshire

  Watford Grammar School for Boys

  50 per cent. selection by ability

  Hertfordshire

  Parmiters School

  50 per cent. selection by ability

  Hertfordshire

  Rickmansworth School

  50 per cent. selection by ability

  Hertfordshire

  Chancellors School

  10 per cent. partial selection

  Kent

  Homewood School

  20 per cent. selection by ability

  Kingston

  Holy Cross School

  15 per cent. selection by ability

  Lambeth

  Archbishop Tenison's GM School

  banding including 40 per cent. of above average ability

  Lambeth

  St. Martin in the Fields High School

  Lambeth

  Dunraven GM School

  491

  Proposals to Introduce Partial Selection Approved since 1989

  LEA area

  School name

  Type of selection

  Surrey

  Roseberry GM Girls's School

  30 per cent. selection on academic ability and 10 places on aptitude for music

  Wandsworth

  Graveney GM School

  50 per cent. selection by ability

  Wandsworth

  Burntwood School

  50 per cent. selection by ability

  County

  Wandsworth

  Ernest Bevin School

  Partial Selection

  Wandsworth

  Chestnut Grove School

  Partial Selection

  Wandsworth

  Battersea Technology College

  Partial Selection

  Grant maintained schools introducing selection of up to 10 per cent. of their intake between July 1989 to August 1996

  LEA

  School

  Nature of change

  Havering

  Abbs Cross School

  10 per cent. Music

  Bromley

  Beaverwood Girls School

  10 per cent. Performing Arts (Music and Dance)

  Kingston Upon Thames

  Beverley School

  10 per cent. Art or Music

  Hertfordshire

  Bishop's Stortford School

  10 per cent. Music, Sport or Drama

  Kent

  Canterbury High School

  10 per cent. Music

  Kensington and Chelsea

  Cardinal Vaughan Memorial School

  10 per cent. Music

  Hertfordshire

  Chancellors School

  10 per cent. Music, Drama or Sport

  Kent

  Charles Dickens High School

  10 per cent. Music

  Kent

  Chatham Grammar School for Girls

  10 per cent. Music, Sport or Drama

  Norfolk

  Cliff Park High School

  10 per cent. Music

  Bromley

  Cooper's School

  10 per cent. Music, Drama, Dance or Sport

  Hampshire

  Crofton School

  Five places Music

  Hertfordshire

  Dame Alice Owen School

  10 per cent. Music or Sport

  Kent

  Dane Court Grammar School

  10 per cent. Music, Sport, Drama or any unusual talent

  Cambridgeshire

  Deacons School

  10 per cent. Technology

  Lambeth

  Dunraven School

  10 per cent. Music

  Enfield

  Enfield Grammar School

  10 per cent. Music or Sport

  Hertfordshire

  Goffs School

  10 per cent. Music, Drama, Sport or Languages

  Surrey

  Heathside School

  10 per cent. Music or Sport

  Barnet

  Hendon School

  10 per cent. Music

  Hertfordshire

  Hertfordshire and Essex High School

  10 per cent Music, Sport or Drama

  Surrey

  Hinchley Wood School

  10 per cent. Music

  Bromley

  Kemnal Manor School

  10 per cent. Technology

  Essex

  King Edward VI Grammar School

  Three places for Choristers

  Cambridgeshire

  Kings' School

  10 per cent. Music and Choristers

  Lambeth

  La Retraite School

  10 per cent. Music

  Camden

  La Sainte Union Convent School

  10 per cent. Music

  Kent

  Langley Park School for Boys

  10 per cent. Music or Sport

  Hertfordshire

  Leventhorpe School

  10 per cent. Music

  Lincolnshire

  Lincoln Christ's Hospital School

  10 per cent. Music

  Barnet

  Mill Hill County School

  10 per cent. Music

  Hertfordshire

  Queen's School

  10 per cent. Music, Art or Sport

  Kent

  Rainham Mark

  10 per cent. Music. Sport,

  Grammar School

  Drama or any unusual talent

  Essex

  Rainsford High School

  10 per cent. Music or Drama

  Kent

  Robert Naipier School

  10 per cent. Music. Sport, Drama or any unusual talent

  Kent

  St. George's CE School

  10 per cent. Music

  Surrey

  Thamesmead School

  10 per cent. Music

  Essex

  Ursuline Convent School

  10 per cent. Music

  Kent

  Westland High School

  10 per cent. Music

  Surrey

  Winston Churchill School

  six per cent. Music

  Norfolk

  Wymondham College

  10 per cent. Music

  492

  Grammar Schools (Admissions)
  Mr. Don Foster
  To ask the Secretary of State for Education and Employment (1) how many consultation letters on the future admission arrangements for grammar schools were sent out; how many responses were received; what assessment he has made of the consultation from these answers; and if he will make a statement; [17759]

  (2) how many responses to the consultation letter on future admission arrangements for grammar schools were received from (a) grammar schools, (b) non-selective secondary schools, (c) primary schools, (d) local education authorities with grammar schools and (e) local education authorities without grammar schools; and if he will make a statement. [17760]

  Mr. Byers
  The Department issued the consultation letter initially to the 164 schools which we had identified as grammar schools and to the 37 local education authorities which currently have or will have grammar schools in their areas from next April. Many LEAs circulated the letter to schools in their area. Thereafter copies of the letter were made available on request. We estimate that around 200 additional copies of the letter were issued.

  Some 1,100 responses were received. Of these:

  176 were from the headteacher and/or chair of governors of a grammar school

  30 were from other secondary schools

  16 were from primary schools

  25 were from LEAs (including shadow authorities) with grammar schools

  3 were from LEAs without grammar schools

  over 800 were from others

  We are currently considering the responses as a basis for deciding the best way of taking forward the framework we have proposed.

  School Tests (Costs)
  Mr. Don Foster
  To ask the Secretary of State for Education and Employment what was the cost of the National Testing System for seven year olds, (i) in total and (ii) broken down into costs for(a) printing, (b) postage of the test papers, (c) payments to external markers and (d) fees charged by the company which processes the results in the last year for which figures are available; and if he will make a statement. [17761]

  Ms Estelle Morris
  The estimated overall costs of implementing the 1997 tests for seven year olds in English and mathematics was some £22 million. This included:(a) printing costs of around £900,000; (b) distribution costs of around £300,000; and (c) external marking costs of around £3,000. There are no estimates for the cost of data collection; the Key Stage 1 results for maintained schools are collated by LEAs (or by an accredited agency for GM schools) for reporting to the Department.

  The Government are committed to raising standards and the National Curriculum tests for seven year olds play an important part in this.
  493

INTERNATIONAL DEVELOPMENT

  Bosnia and Herzegovina
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development if she will list the aid currently being given by her Department to entities in Bosnia and Herzegovina. [17754]

  Clare Short
  In the current financial year my Department is providing £18.75 million to Bosnia and Herzegovina, made up of £17 million in reconstruction and humanitarian assistance, and £1.75 million through the Know How Fund. Spending benefits both entities in broadly equal proportions.

  Land Mines
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what assistance her Department is giving to demining operations in (i) Angola, (ii) Laos, (iii) Cambodia and (iv) the Falkland Islands. [17750]

  Clare Short
  Since 1991, some £9.6 million has been spent bilaterally in supporting demining activities in Angola, Cambodia and Laos.

  My Department is currently supporting trials of an anti-personnel land mine detector in Angola, a composite programme of data gathering, clearance and community awareness of unexploded ordnance in Laos and several programmes in Cambodia, including support to develop national capacity in demining and projects on clearance, community awareness and assistance to mine victims. My Department has not allocated resources for demining in the Falkland Islands.

  Our projects are co-ordinated with the substantial resources allocated by the European Community, which are partly attributed to my Department.

  Technology Foresight
  Dr. Starkey
  To ask the Secretary of State for International Development in what way the Department's research priorities have been modified in response to Technology Foresight. [17462]

  Clare Short
  The first phase of the Technology Foresight Programme did not address development issues to any significant extent. I have asked that the next phase be relevant to growing markets in the developing world. I hope that Foresight will broaden its agenda to accommodate the principles of the White Paper on International Development.

  Dr. Starkey
  To ask the Secretary of State for International Development what Technology Foresight priorities are being taken into account in the forward planning of her Department's scientific research programme. [17469]

  Clare Short
  My Department is working closely with the Office of Science and Technology to ensure that the principles espoused in the Government's White Paper on International Development (Cm 3789) are accommodated in the Technology Foresight programme. My hon. Friend the Under Secretary of State for International 494
  Development will be a member of the recently announced Ministerial group which will co-ordinate the Foresight programme.

  Sierra Leone
  Mr. Hesford
  To ask the Secretary of State for International Development if she will make a statement on the timetable for the Government's release of funds for overseas aid projects through non-governmental agencies for projects within Sierra Leone. [17410]

  Clare Short
  The time scale for resumption of normal aid to Sierra Leone, provided through non-governmental agencies, will depend on progress in establishing peace and the return of the democratically elected government of President Kabbah.

  Principles and guidelines for the provision of humanitarian aid have been established by the Office of the United Nations Humanitarian Co-ordinator for Sierra Leone. Funding is being provided through the European Community Humanitarian Office and my Department is also considering bilateral support through the International Committee of the Red Cross.

  Official Hospitality
  Mr. Malcolm Bruce
  To ask the Secretary of State for International Development what is her estimate of the expenditure by(a) her Department, (b) its agencies and (c) its non-departmental public bodies on official hospitality for (i) 1980–81, (ii) 1987–88, (iii) 1990–91, (iv) 1991–92, (v) 1992–93, (vi) 1993–94, (vii) 1994–95, (viii) 1995–96, (ix) 1996–97 and (x) 1 May to 30 September 1997. [15262]

  Clare Short
  [holding answer 12 November 1997]: Expenditure on hospitality made by the Department for International Development and its agency, the Natural Resources Institute (NRI), for the years requested is as follows:

  DFID

  NRI

  Total (£s)

  1991–92

  12,375

  4,813

  17,188

  1992–93

  12,203

  4,914

  17,117

  1993–94

  12,137

  4,914

  17,089

  1994–95

  21,246

  2,566

  23,812

  1995–96

  22,742

  3,260

  26,002

  1996–97

  24,122

  —

  24,122

  1997 to 30 September 1998

  8,827

  —

  —

  NRI was transferred to private ownership in 1996–97.

  Figures for years prior to 1991–92 cannot be provided without incurring disproportionate costs.

  Former Yugoslavia
  Mr. Bruce George
  To ask the Secretary of State for International Development what was the level of spending on small community-based projects organised by IFOR and SFOR troops in former Yugoslavia in each of the last two financial years; what is the projected spending on these programmes in the current and next financial year; and if she will make a statement. [16230]
  495
  Clare Short
  In 1996–97, the first year of operating such projects, my Department spent £7 million. This financial year the budget is £2.5 million. We are currently considering the scope for a further programme next year, redesigned to focus more on support for refugee return and reconciliation.

  Aid (Human Rights)
  Mr. Rowlands
  To ask the Secretary of State for International Development if she will list those countries to which development assistance has been(a) curtailed and (b) suspended on grounds of the human rights record of the government of that state. [17317]

  Clare Short
  Since May 1997, aid from my Department's budget to Sierra Leone has been suspended, although we continue to assist the elected government which is now in exile. Aid also remains suspended through the governments of countries such as Burma, Nigeria and Sudan. In these cases, the regimes' records on human rights were one of the factors taken into account in our decisions. I have announced the outcome of my review of aid to Indonesia. In Belarus, in accordance with EU policy, we will not work through state organisations in future and will provide only humanitarian or regional support or support which directly promotes the process of democratisation. In countries where aid through central official channels has been suspended, we retain our aim of helping to eliminate poverty and will pursue this by working through NGOs and local government. We thereby also show our solidarity with oppressed peoples.

  Where we retain official aid, we may also wish to modify the pattern of aid, including possibly curtailing aid, in response to a number of short or longer term factors, including human rights. This is a continuous and general process and it is often difficult to draw out any one factor as critical to the outcome.

  Indonesia
  Dr. Tonge
  To ask the Secretary of State for International Development what assessment she has made of the implications of the US $23 billion IMF package for Indonesia for the human rights situation in that country. [16045]

  Mrs. Liddell
  I have been asked to reply.

  Indonesia's tough programme of reform marks an important step in the process of restoring confidence in financial markets in South-East Asia. It commits the Suharto government to a tight financial framework, together with a number of measures to tackle structural economic weaknesses and open the economy. We fully support these measures, which will lead to improved quality of governance and transparency in policy implementation. This should allow Indonesia to maintain its high rate of economic growth, and contribute to the benefits of growth being widely shared in all sectors of the population.

  The programme will be supported by loans of $18 billion-$10 billion from the IMF $4½ billion from the World Bank and $3½ billion from the Asian Development Bank. The remaining part of the projected $23 billion financing need will involve use of Indonesia's own external assets. We support this exceptional access to IMF
  496
  resources, particularly in view of the prudent macroeconomic policies which Indonesia has pursued over a long period of time.

DEFENCE

  Contingency and Operational Procurement Exhibition
  Ann Clwyd
  To ask the Secretary of State for Defence if the MOD inspectors who investigated the recent COPEX were provided with an attendance list of military, security and police officials and delegations; which of these delegations were from countries whose military, security and police units have records of human rights violations; and if he will make this attendance list available. [14370]

  Mr. Spellar
  MOD inspectors were not provided with an attendance list.

  Gulf War Syndrome
  Mr. Llew Smith
  To ask the Secretary of State for Defence, pursuant to the oral answer of 3 November 1997,Official Report, column 14, to the hon. Member for South Derbyshire (Mr. Todd), if he will place in the Library copies of (a) the minutes of the meeting with the joint inter-agencies on Gulf War syndrome and (b) all documents provided to his Department from the United States authorities on Gulf War syndrome. [14714]

  Dr. Reid
  The Government are committed to co-operating very closely with the US authorities on this issue and regularly exchange information with our US colleagues. We are equally committed to being open in the dealings with Gulf veterans, and have pledged to make all relevant information available. A wide range of documentation issued by the US authorities is already publicly available. However, information contained within documents received in confidence from a foreign Government is covered by exemption 1 of the Code of Practice on Access to Government Information.

  Mr. Llew Smith
  To ask the Secretary of State for Defence if, as part of his Department's investigation of Gulf War illness, he will examine the research conducted by Dr. Robert Davies at Taunton Hospital into the contribution made by exposure to organophosphate pesticide. [16848]

  Dr. Reid
  My Department will continue to take account of all research published in appropriately peer-reviewed medical and scientific journals which may be relevant in taking forward our work to address the health concerns of Gulf veterans. We have not yet seen the results of Dr. Davies' research and await its publication with interest.

  Commander John Brookes
  Mr. Alan Johnson
  To ask the Secretary of State for Defence if he will make a statement about the MOD role of Commander John Brookes in Hull. [16689]

  Dr. Reid
  It is my Department's policy to prevent the disclosure of information about any person (including a deceased person) or any other disclosure which could constitute or could facilitate an unwarranted invasion of
  497
  privacy. I am, accordingly, withholding the information requested under exemption 14 of the Code of Practice on Access to Government Information.

  Chatham Dockyard
  Mr. Shaw
  To ask the Secretary of State for Defence what were the numbers of(a) individuals, nationally and (b) ex-employees of Chatham Dockyard who (i) registered under the counselling scheme he announced on 4 June, (ii) required, initially, a copy of their past dose record, (iii) elected for counselling directly, (iv) having required a copy of their past dose record, have been advised that no dose records can be found and (v) having required a copy of their past dose record have subsequently elected for counselling. [17422]

  Mr. Spellar
  I will write to my hon. Friend and a copy of my letter will be placed in the Library of the House.

  Battledress
  Mr. Bruce George
  To ask the Secretary of State for Defence (1) what are the fire retardant standards of the standard issue battledress issued to serving troops in each of the services; [16222]

  (2) what tests were undertaken of the fire retardant standards of materials used to make the current standard issue battledress issued to serving troops; [16223]

  (3) what representations he has received as to the quality of items of the standard issue battledress issued to troops in each service; and if he will make a statement; [16224]

  (4) what estimate he has made of the cost of issuing battledress with higher fire-retardant standards. [16225]

  Dr. Reid
  I will write to my hon. Friend and a copy of my letter will be placed in the Library of the House.

  Stabilisation Force
  Mr. Bruce George
  To ask the Secretary of State for Defence what provision is made for troops serving with SFOR to phone the United Kingdom. [16219]

  Dr. Reid
  A Welfare Telephone Allowance, currently £22 per month, is paid to troops as a contribution towards the cost of their telephone calls. A very few troops in isolated locations where it is not commercially viable to install public telephones, do not receive an allowance, but use the Military MENTOR Satellite System to telephone home.

  Those troops based at Gorni-Vakuf have access to the BT Satellite Ground Terminal which has a telephone facility incorporated. The remainder make use of the service provided by Terralink Europa under a supported PFI agreement.

  The Croatian PTT is also available in Split, but it is more expensive than Terralink Europa.

  Mr. Bruce George
  To ask the Secretary of State for Defence what allowance is paid to United Kingdom troops serving with SFOR for phone calls; and what data 498
  he has collated on allowances paid to troops from other nations for this purpose. [16220]

  Dr. Reid
  A Welfare Telephone Allowance, currently £22 per month, is paid to troops as a contribution towards the cost of their telephones calls. A very few troops in isolated locations where it is not commercially viable to install public telephone, do not receive an allowance, but instead have access to Military MENTOR Satellite System to telephone home.

  Data have not been collated on allowances paid to troops of other nations for this purpose, but pay and general allowances have been researched in the past. Because of differing Terms of Service and different economic factors between nations, it would not be meaningful to compare individual elements of the allowances package such as the telephone allowance.

  Mr. Bruce George
  To ask the Secretary of State for Defence what is the(a) average cost and (b) range of costs per minute of phone calls to the United Kingdom made by troops stationed in Multi-national Division (South West) of SFOR. [16221]

  Dr. Reid
  The average cost of a telephone call from MND SW to the United Kingdom is approximately 87p a minute.

  The range of costs are as follows:

  (a) Terralink Europa—60p a minute.

  (b) British Telecom—90p per minute.

  (c) PTT (Public Telephone)—95p per minute.

  Mr. Bruce George
  To ask the Secretary of State for Defence what the average case load is of consultant-level surgeons and physicians serving with SFOR. [16226]

  Dr. Reid
  I will write to my hon. Friend and a copy of my letter will be placed in the Library of the House.

  Mr. Bruce George
  To ask the Secretary of State for Defence if he will make a statement on the average number of nights out of bed experienced by troops serving with SFOR. [16228]

  Dr. Reid
  Every night that an individual does not spend at his or her unit's permanent station is classified as a night out of bed. Technically, therefore, personnel serving in former Yugoslavia spend nights out of bed for the duration of their deployment.

  The average number of nights which troops currently serving in former Yugoslavia have spent away from their base in that country is 1.38 per week. Such absences occur for a variety of reasons, most notably the requirement to patrol.

  Mr. Bruce George
  To ask the Secretary of State for Defence how many chaplains are serving with United Kingdom troops in SFOR; if this represents a normal full complement; and if he will make a statement. [16391]
  499
  Dr. Reid
  There are currently eight Army chaplains serving alongside United Kingdom troops in the NATO-led stabilisation force in Bosnia. This represents a normal complement in relation to the number of major units and soldiers deployed there. In addition, Royal Air Force (RAF) chaplains make regular visits to RAF personnel thereby providing them with full pastoral support; and Royal Navy chaplains accompany ships and Royal Marine units when they are deployed in theatre.

  Fox Hunting
  Mr. Corbett
  To ask the Secretary of State for Defence how many times in each of the last five years the hunting of foxes with hounds has taken place in each named location forming part of his Department's estate. [17732]

  Mr. Spellar
  This information is not held centrally and could be provided only at disproportionate cost. The Salisbury Plain Training Area and the Otterburn Training Area are, however, the most frequently hunted parts of the Defence Estate.

  Mr. Corbett
  To ask the Secretary of State for Defence by what means fox numbers on his Department's estate are reduced other than by hunting with hounds. [17731]

  Mr. Spellar
  In addition to hunting with hounds, fox numbers are reduced on the Defence Estate through licensed individuals and organisations, generally through shooting.

  Mr. Corbett
  To ask the Secretary of State for Defence if he will list those parts of his Department's estate by name where most foxes have been killed by hounds in each of the last five years, giving the number of foxes so killed in each case. [17734]

  Mr. Spellar
  Although this information is not held centrally and could be provided only at disproportionate cost, we believe that a large proportion of the foxes killed by hounds on the Defence Estate are taken on the Salisbury Plain Training Area and the Otterburn Training Area.

  Mr. Corbett
  To ask the Secretary of State for Defence if he will estimate the number of foxes killed(a) by hounds and (b) by other means on his Department's estate in each of the past five years. [17733]

  Mr. Spellar
  The information requested is not held centrally and could be provided only at disproportionate cost. We estimate, however, that some 350–400 foxes are killed on the Defence Estate each year by hunting with hounds, and that approximately three times this number are accounted for by other means.

  Strategic Defence Review
  Mr. Bruce George
  To ask the Secretary of State for Defence if he will make a statement on the projected timetable for stages of the Strategic Defence Review. [16229]

  Mr. George Robertson
  In my speech to the House on 27 October 1997,Official Report, columns 609–20, I outlined the emerging conclusions of the first phase of the
  500
  Review, which looked at the foreign and security policy framework. The Review now is looking at missions of our forces, military tasks, future force structures and capabilities, procurement, and a wide range of efficiency-related issues. Once all work on the Review has been considered by Ministers we will publish a White Paper setting out our overall conclusions. I envisage that this White Paper will be published in the first part of next year.

  Porton Down
  Mr. Livingstone
  To ask the Secretary of State for Defence for what reasons the number of animal experiments at the chemical and biological defence establishment, Porton Down, has increased since 1993. [14306]

  Mr. Spellar
  This is a matter for the Chief Executive of the Chemical and Biological Defence Sector at Porton Down. I have asked the Chief Executive to write to my hon. Friend.

  Letter from John Chisholm to Mr. Ken Livingstone, dated 25 November 1997:
  I have been asked to respond to your question on animal experiments as Chief Executive of the Defence Evaluation and Research Agency which has responsibility for the Chemical and Biological Defence Sector at Porton Down.
  In the years up to 1993 there has been, in general, a downward trend in the number of animal experiments conducted at CBD. However, the number of experiments conducted each year depends o the requirements of the MOD programme, and since 1993 there has been an increase in the numbers of animals used.
  This increase does not represent any change in the policy of CBD which is committed to reducing animal experimentation wherever possible. The increase has resulted from the identification during the Gulf conflict of a heightened biological and chemical threat to UK forces, and the need to develop new and improved medical countermeasures to strengthen UK defence capabilities.
  The majority of the results arising from this work will be published in the open literature.

  UK Hydrographic Office
  Mr. Kidney
  To ask the Secretary of State for Defence what key targets have been set for the United Kingdom Hydrographic Office defence agency for 1997–98. [17934]

  Mr. Spellar
  The key targets set for the UK Hydrographic Office in 1997–98 are as follows:

  1. To process and promulgate priority safety information within stated time scales from receipt of data.

  2. To achieve 100 per cent. of the endorsed and funded Defence Programme to cost, quality and timeliness targets as defined in Tasking Authorisation ForMs (TAFs).

  3. To meet short-notice Defence operational requirements within agreed time scales.

  4. To meet market requirements for products by maintaining availability levels for charts at 98 per cent. for civil customers and 100 per cent. for defence customers.

  5. To break even taking one year with another.

  6. To achieve an average Return on Capital Employed (ROCE) during the Plan period of 7.5 per cent.

  7. To achieve efficiency savings of 13.5 per cent. of controllable costs (based on controllable costs for FY 1995–96) by 31 March 2001.

  501

SCOTLAND

  European Union
  Mrs. Gorman
  To ask the Secretary of State for Scotland what is his policy on the establishment of direct Scottish representation to the European Union institutions; and if he will make a statement. [16986]

  Mr. Dewar
  The Government's policy on the establishment of a Scottish Executive representative office in Brussels is set out in Chapter 5.10 of the White Paper, "Scotland's Parliament".

  Road Accident Reports
  Mr. Wallace
  To ask the Secretary of State for Scotland what information he has collated on the number of outstanding road accident reports requiring to be considered by each local authority in Scotland under section 39(3)(a) of the Road Traffic Act 1988, as at 1 November. [16487]

  Mr. Dewar
  This information is not collected centrally.

  Health Expenditure
  Mr. Malcolm Bruce
  To ask the Secretary of State for Scotland if he will estimate the total real level of his Department's planned expenditure on health in 1995–96 prices in(a) 1997–98 and (b) 1998–99; and what such figures were for (i) 1997–98 and (ii) 1998–99, following the November 1996 Budget on the basis of the estimates of the GDP deflator contained in that Budget. [17564]

  Mr. Galbraith
  The figures requested for expenditure on health within the Control Total are as follows:(a) £4,160.9 million, (b) 4,222.5 million, (i) 4,184.4 million and (ii) 4,194.6 million.

  Average sentence length where the main offence was the common law offence of culpable homicide, Scotland, 1990 to 1995

  Year

  Number of persons given non custodial sentences

  Number of persons sentenced to custody

  Average sentence length for those given determinate custodial sentences (months)

  Number of persons given life sentences

  1990

  13

  30

  60.0

  —

  1991

  13

  29

  90.7

  1

  1992

  9

  41

  80.6

  3

  1993

  8

  39

  68.7

  —

  1994

  7

  33

  85.8

  —

  1995

  5

  37

  69.4

  2

WALES

  Farm Incomes
  Mr. John Smith
  To ask the Secretary of State for Wales what plans the Government has to compensate farmers for the effects of currency fluctuations. [17047]

  Mr. Win Griffiths
  Paying the compensation aid for currency fluctuations would have significant implications for UK public expenditure. We are currently keeping the case for payment under review, but on the evidence currently available, have concluded that the case for payment is, at present, not proven.
  502

  Substance Abuse
  Ms Roseanna Cunningham
  To ask the Secretary of State for Scotland how many convictions there have been in each of the past five years for the common law offence of supplying volatile substances in the knowledge that they would be abused. [17288]

  Mr. McLeish
  [holding answer 24 November 1997]: Over the period concerned no one has been recorded as having a charge proved where the "reckless supply of solvents" was the main offence. The table below provides information on the number of persons with a charge proved where the main offence was "reckless conduct" and "culpable and reckless conduct", which are common law offences under which the supply of volatile substances in the knowledge that they would be abused may also be charged. It is not known how many, if any, of these figures involved solvents.

  Number of persons with a charge proved in Scottish courts where the main charge is "reckless conduct" or "culpable and reckless conduct", 1991–1995

  1991 : 72

  1992 : 104

  1993 : 104

  1994 : 100

  1995 : 124.

  Manslaughter
  Mr. Swinney
  To ask the Secretary of State for Scotland what has been the average custodial sentence applied for manslaughter in Scotland in each year since 1990; and if he will make a statement. [17085]

  Mr. McLeish
  There is no offence of manslaughter in Scotland. The corresponding offence in Scotland is the common law offence of culpable homicide. The available information is given in the table.

  Cattle Prices
  Mr. John Smith
  To ask the Secretary of State for Wales what action he proposes to take to address the recent reductions in cull cow prices. [17046]

  Mr. Win Griffiths
  The majority of cull cows go through the Over Thirty Months Scheme (OTMS). The Government will spend more than £300 million this year on OTMs compensation and disposal.

  Compensation rates, and the scheme in general, are kept under review in the light of new scientific advice, market movements and costs.
  503

  Health Expenditure
  Mr. Malcolm Bruce
  To ask the Secretary of State for Wales if he will estimate the total real level of his Department's planned expenditure on health in 1995–96 prices in(a) 1997–98 and (b) 1998–99; and what such figures were for (i) 1997–98 and (ii) 1998–99, following the November 1996 Budget on the basis of the estimates of the GDP deflator contained in that Budget. [17565]

  Mr. Win Griffiths
  The figures requested on spending plans for the NHS are as follows.

  Current planned spending on the NHS total at 1995–96 prices on the basis of the current Treasury deflator for 1997–98 and 1998–99 is (a) £2,227 million and (b) £2,262 million.

  Planned spending at November 1996 at 1995–96 prices and the deflator in use then was (i) £2,240 million for 1997–98 and (ii) £2,245 million for 1998–99.

  Further Education
  Mr. Evans
  To ask the Secretary of State for Wales what is his estimate of the number of whole time equivalent students in(a) higher and (b) further education in 2000. [17307]

  School

  Number on roll

  More open enrolment number

  Standard (approved) admission number

  Comment

  Ysgol John Bright, Llandudno

  1,019

  1,008

  180

  —

  Ysgol Aberconwy, Conwy.

  849

  817

  153

  —

  Ysgol Duffryn Conwy, Llanwrst

  706

  733

  200

  bi-lingual school

  Ysgol Y Creuddyn, Llandudno

  623

  678

  120

  Welsh medium

  Eirias High School GM, Colwyn Bay

  1,326

  1,300(1,450 on completion of building works)

  200

  Six classrooms presently closed because of extensive building work. Physical capacity of school temporarily reduced

  Emrys Ap Iwan GM School, Abergele

  1,520

  1,367

  220

  —

  Ysgol Bryn Elian GM Colwyn Bay

  867

  907

  161

  —

  1. Both the LEA Standard Admission Number and the Approved Admission Number (the equivalent for grant-maintained schools) are intended to ensure that schools admit up to the physical capacity of the school. Admission authorities may decide to admit above the number in any particular year.

  2. More Open Enrolment Numbers provide an indication only of the capacity of the school.

  Welfare-to-work Programme
  Mr. Martyn Jones
  To ask the Secretary of State for Wales what arrangements have been made to involve the voluntary sector in the welfare-to-work programme in(a) Clwyd, South, (b) North Wales, (c) South Wales, (d) West Wales and (e) Wales; and if he will make a statement. [16502]

  Mr. Hain
  Within the Government's welfare-to-work programme, activity in Wales has concentrated on:-

  1. New Deal for 18–24 year olds;

  2. New Deal for lone parents;

  3. Employment Zones

  New Deal for 18–24 year olds

  The voluntary sector has played an active role in the design and planning of the New Deal for 18–24 year olds in Wales.
  504
  Mr. Hain
  Targets for the number of student places to be funded through the Welsh Funding councils in 2000–01 will be set in the light of future resource decisions taken by the Department and the Welsh Assembly. Further places will be funded by students themselves and through Government initiatives such as the New Deal.

  European Union
  Mrs. Gorman
  To ask the Secretary of State for Wales what is his Department's policy on the establishment of direct Welsh representation to European Union institutions; and if he will make a statement. [16960]

  Mr. Ron Davies
  The Government's policy on the extent to which the Welsh Assembly would be represented in European Union institutions is set out in paragraphs 3.51, 3.52 and 3.53 of the White Paper "A Voice for Wales".

  Secondary Schools
  Mr. Evans
  To ask the Secretary of State for Wales if he will list for each secondary school in Conwy County Borough the indication admission number as calculated using the more open enrolment capacity formula. [16643]

  Mr. Hain
  The information requested is in the following table.

  Wales

  The Wales New Deal Task Force includes six representatives from the voluntary sector amongst its membership. It has also established a working group specifically on the Voluntary Sector Option of the New Deal for 18–24 year olds and this has enabled a broad range of voluntary sector interests to be engaged in advising on New Deal policy design and delivery.

  Representatives from voluntary sector organisations are involved in the strategic partnerships which are developing plans for the implementation of the New Deal in all of the Employment Service Districts in Wales. And events specifically targeted at the voluntary sector have been organised throughout Wales.

  Clwyd South

  Representatives from the two County Voluntary Councils covering the Clwyd, South constituency, the Association of Voluntary Organisations, Wrexham

  505
  (AVOW) and the Denbighshire Voluntary Services Council, are members of the New Deal strategic partnerships.

  North Wales

  Six local New Deal events have been held, involving 58 voluntary sector organisations, in the Employment Service Districts of North West Wales, North Wales Coast and North East Wales.

  South Wales

  Eleven local New Deal events have been held, involving 60 voluntary sector organisations, in the Employment Service Districts of Newport, Monmouth and Torfaen, Cardiff and the Vale, Heads of the Valleys and Caerphilly, and Bridgend and the Glamorgan Valleys.

  West Wales

  Seven local New Deal events have been held, involving 41 voluntary sector organisations, in the Pathfinder area of South West Wales and in Ceredigion, which forMs part of the Mid Wales Employment Service District.

  New Deal for lone parents

  This is being piloted in South Wales (in the Employment Service District of Cardiff and Vale). Seven voluntary sector organisations participated in the launch of the New Deal for lone parents. The Employment Service is maintaining contact with 20 voluntary sector organisations as the New Deal for lone parents is developed.

  Employment Zones

  There is a bid to run a proto-type Employment Zone in North West Wales (covering the Employment Service Districts of North West Wales and the North Wales Coast). 31 voluntary sector organisations were consulted in the production of the bid and 3 voluntary sector organisations are members of the Employment Zone Partnership.

  Student Funding
  Mr. Öpik
  To ask the Secretary of State for Wales if he will make a statement on the yearly level of university funding per student in Wales relative to England, Scotland and Northern Ireland between the financial years 1994– 95 and 1998–99. [16931]

  Mr. Hain
  The information requested is as follows:

  Financial years

  Wales1

  England1

  Northern Ireland £

  1994–95

  4,984

  4,973

  5,471

  1995–96

  4,825

  4,976

  5,178

  1996–97

  4,854

  4,803

  5,002

  1997–98

  4,699

  4,858

  4,899

  1 Including dual support transfer to the Office of Science and Technology.

  We do not have detailed figures for Scotland. According to the Garrick Report, public expenditure on teaching per full-time and sandwich HE student per year in higher education institutions is approximately 10 per cent. higher in Scotland than in England.
  506
  For all countries concerned, the level of funding per student in 1998–99 will depend upon the allocation for higher education within the various Departments' expenditure plans for next year which will be announced in the coming months.

  Welsh Assembly
  Mr. Rhodri Morgan
  To ask the Secretary of State for Wales if the Welsh Assembly will have a cabinet or a committee structure; and if he will make a statement. [17522]

  Mr. Ron Davies
  Subject to the provisions of the Government of Wales Bill, the Assembly's internal organisation will be a matter for its standing orders. The White Paper made clear that the Assembly will have both subject committees and an executive committee, but the roles of the executive committee, the Assembly leader, subject committees, and subject committee leaders will be a matter for standing orders. I will be appointing Commissioners to prepare the Assembly's first standing orders but the Assembly will be free subsequently to amend these; in so doing, and subject to the requirements of the Government of Wales Bill, it will be free to adopt such forms of internal organisation as it considers appropriate.

  Ministerial Meetings
  Mr. Ancram
  To ask the Secretary of State for Wales how many individuals or organisations, corporate or otherwise, he and his Ministers have met in their official capacities since 2 May who have or had donated £5,000 or more to the Labour Party in the last two years; and if he will list them. [17730]

  Mr. Ron Davies
  The Labour Party's policy on disclosure is to declare the identity of any individual or organisation which, in the course of any one calendar year, makes donations in the aggregate in excess of £5,000. Donations made during 1997 will be declared in 1998. Therefore, the following information refers to qualifying donors in 1995 and 1996.

  I have had meetings with representatives of Unison, the GMB and the TGWU; the Under-Secretary, my hon. Friend the Member for Neath (Mr. Hain) has had meetings with representatives of Unison and the CWU and the Under-Secretary, my hon. Friend the Member for Bridgend (Mr. Griffiths) has had meetings with representatives of Unison.

  My hon. Friends and I have met my hon. Friend the Paymaster General routinely in meetings of Cabinet Committees.

TRADE AND INDUSTRY

  EU Research Council
  Mr. Timms
  To ask the President of the Board of Trade if she will make a statement on the outcome of the European Union Research Council on 10 November 1997. [18056]

  Mr. Battle
  I represented the UK at the meeting of the EU Research Council on 10 November 1997.
  507
  The meeting made useful progress in resolving outstanding issues in the negotiations on the Fifth Framework Programme for Research and Technological Development. Agreement has now been reached on most issues of scientific and technological content.

  The Council agreed conclusions on the management of FP5 which I warmly welcome. Besides outlining the role and functions of programme management committees through which Member States oversee the implementation fo the programme, the conclusions provide for the establishment of advisory groups users of research who will advise on the detailed content of the programme and monitor it strategically as it progresses. It has been a high UK priority to involve users in order to improve the targeting and responsiveness of the programme. The conclusions also welcome the Commission's intention to set time targets for the various steps in the management process, notably proposed evaluation, contract negotiations and payments, which should provide a valuable stimulus to more efficient and streamlined administration.

  The Council discussed the question of programme structure. A large number of Member States favour five thematic programmes, on lines proposed by the UK, but consensus on this issue has yet to emerge.

  The Council considered the five options for pursuing nuclear fusion research in FP5 put forward by the Netherlands Presidency at the Council's last meeting on 15 May. Broad support emerged for further consideration to be based on the third of these options, under which EU research effort retains the goal of eventual development of a fusion reactor, with a view to the Council reaching a decision on the Commission's proposals at its next meeting in February.

  The Council gave final formal agreement to the proposal to increase funding for the Fourth Framework Programme by 115 mecu.

  In responding to a presentation by the chair of Eureka (Portugal) on recent progress, I made clear the importance of coordination between European organisations involved in research and drew particular attention to the importance of links between the Community and the European Space Agency.

  Foreshadowing the UK presidency, which will begin in January, I urged the Council to make the strongest efforts possible to reach a common position on the Framework decision at its next meeting on 12 February 1998 under my chairmanship. I made clear that the overriding task for the UK presidency in the research area is to make the maximum progress possible with the FP5 negotiations and keep the tight timetable for introducing it on track.

  Renewable Energy
  Ms Keeble
  To ask the President of the Board of Trade if she will make a statement on the outline arrangements for the fifth round of bidding for electricity from renewable sources of energy. [18055]

  Mr. Battle
  Following consultation earlier this year with the renewable energy trade bodies, and, through the Renewables Working Group, the Office of Electricity Regulation (OFFER) and the Regional Electricity 508
  Companies (RECs), I can now announce my outline policy proposals for the fifth Non-Fossil Fuel Obligation for renewables in England and Wales, NFFO-5.

  Government policy is to secure additional generating capacity from renewables in order to help them enter the commercial generating market. I am currently carrying out a review of what would be necessary and practicable to achieve 10 per cent. of the UK's electricity needs from renewables by the year 2010. NFFO-5 will therefore become the first step in our new and strong drive for renewables and I expect NFFO-5 will contribute substantially to reducing greenhouse gases and encouraging internationally competitive industries.

  I have considered the representations made to my Department on the proposed fifth Order, NFFO-5. Renewable Energy Bulletin No. 7 summarises the submissions which have been made. In the light of these representations, I propose to make a fifth renewables Order (NFFO-5) in the late 1998 in respect of the 12 RECs in England and Wales in their capacity as Public Electricity Supply Licencees. I understand that the RECs expect to initiate the competitive tendering process for NFFO-5 shortly.

  For the NFFO-5 Order, I am considering separate bands for new generating capacity from:
  Landfill Gas from existing licensed sites where tipping was being carried out prior to 25 November 1997;
  Municipal and Industrial Waste, including the use of non-gaseous sewage matter (up to 10 per cent. on a dry-weight basis);
  Municipal and Industrial Waste using combined heat and power (CHP), including the use of non-gaseous sewage matter (up to 10 per cent. on a dry-weight basis);
  Small Scale Hydro from stations with a total capacity of less than 5 MW DNC;

  On-shore Wind Energy, which may be split into separate bands for:
  (a) small-clusters/single-machines, with the split-point at 1.0 MW DNC or less, and,
  (b) other windfarms not included above.

  In setting the size of the Order I will take into account the cost and quality of the proposals received. This new competition is expected to stimulate further reductions in the electricity prices contracted under NFFO but I do not expect such a rapid rate of fall in prices as has happened to date. However, I may decide to omit a band if the cost or quality of proposals received does not justify its inclusion.

  I expect projects to demonstrate high standards of environmental performance. This will require developers to consult widely on their project proposals so that their projects meet the concerns of the community likely to be affected.

  For example, I expect energy from waste projects to encourage an integrated approach to waste management and so demonstrate that they provide environmental benefits beyond those available from alternative methods of waste management. Award of a NFFO contract does not confer any special privilege in the planning approval process which must be carried out in the normal way.
  509
  In order to promote diversity among developers of renewable energy projects, I reserve the right to limit the number of projects or the total capacity for which any particular developer can gain contracts in this round of bidding or limit the capacity of individual projects or adopt a combination of these measures.

  My intention is that the Order should run for 15–20 years. This would enable the RECs to offer generators contracts for premium payments for up to 15 years. The difference between the NFFO contract price and the pool price is financed through the Fossil Fuel Levy paid by licensed electricity suppliers and reflected in electricity bills. I understand that the RECs expect to select projects through a competitive tendering process and that contracts will be offered to successful bidders at their bid price.

  I have discussed prospective arrangements with the Director General of Electricity Supply and the RECs, to whom I am providing further guidance about my proposals in respect of the proposed NFFO-5 Order. The details of that further guidance will be published in 'Renewable Energy Bulletin No. 7' (REB-7).

  Those project developers who have not already put their name on the mailing list for REB-7 should contact:

  Renewable Energy Enquiries Bureau,

  ETSU, Harwell,

  Oxfordshire OX11 ORA

  (tel: 01235 432450 or 433601, fax: 01235 433066).

  In addition those project developers who have already done so should also register their interest in NFFO-5, by letter or fax, to:

  Non-Fossil Purchasing Agency Ltd.

  4th Floor, Block D, Portland House,

  New Bridge Street,

  Newcastle upon Tyne, NE1 8AN

  (fax: 0191 210 2888).

  Generators with existing NFFO contracts need not register with the Non-Fossil Fuel Purchasing Agency (NFPA), as they will automatically be sent a copy of the Information Notes which explain the tender process.

  OFFER has considered what site-specific evidence of the extent of the renewable energy resource it will require from developers when making their technical submissions for NFFO-5. It is understood that OFFER has decided that:
  developers of landfill gas projects will be required to submit data from on-site pumping trials over a period of not less than 30 days of continual measurement;
  developers of waste-fired projects will be required to submit data about the real and timely availability of waste, and where contracts for the fuel supply have not been agreed should provide information about the timing of any tender process, together with confirmation that the applicant will be eligible to take part in that tender process;
  developers of waste-fired combined heat and power projects will be required, in addition to the foregoing, to submit data on conditional contracts to supply heat (such contracts to be conditional upon their projects being awarded NFFO contracts and going forward to commissioning);
  developers of hydro projects will be required to submit data concerning site hydro capacity based on:

  (i) the mean flow data for the water course covering a period of at least 15 years, available from the Institute of Hydrology; or

  510

  (ii) 15-years rainfall data from a given catchment area, making due allowance for absorption, runoff and evaporation rates, to calculate the river flow at the off-take point for the generating station; or

  (iii) on-site data over a period of two years, normalised to the mean average rainfall over a period of at least ten years;

  developers of wind energy projects will be required to submit data on site wind resource over a minimum period of 12 months, which must include at least 13 weeks continual measurement on site which shall include measurements made over a winter period.

  The Government are currently reviewing their policy for new and renewable sources of energy. From work undertaken so far, it seems that the achievement of 10 per cent. of the UK's electricity from renewables by 2010 would almost certainly require bringing forward technologies in addition to those proposed to be supported under NFFO-5, including offshore wind energy and energy crops. Whilst I cannot anticipate the outcome of the renewables review, I expect to announce the outcome next year.

  Coal Mining Museum
  Mr. Hinchliffe
  To ask the President of the Board of Trade what progress has been made on resolving the minewater problems that have threatened the National Coal Mining Museum for England. [18057]

  Mr. Battle
  My hon. Friend will be aware that there has been widespread concern about the future of the Museum. I have made clear that I share that concern, and that I wish to do all I could to resolve the Museum's problems. I am pleased to say that agreement has now been reached between all those concerned on a programme of work that should, if successful, secure the Museum's underground section from the risk of flooding, and allow it to reopen in the coming months.

  Parliamentary Question
  Mr. Prior
  To ask the President of the Board of Trade when she expects to answer the question from the hon. Member for North Norfolk of 6 November relating to electricity production from coal. [17728]

  Mr. Battle
  I refer the hon. Member to the answer I gave him on 21 November 1997,Official Report, column 345.

  Single Market
  Mr. Mitchell
  To ask the President of the Board of Trade pursuant to the oral statement of 27 October 1997,Official Report, column 587, relating to completion of the Single European Market, what matters still require legislation; and what representations, and from whom, have been made in respect of each. [17436]

  Mrs. Beckett
  Legislation is required in particular on gas liberalisation, road and rail passenger transport, measuring instruments, and on certain aspects of electronic commerce. We also wish to see simplification of existing legislation. There are, of course, other non-legislative priorities for work in the area of the Single Market.

  On all of these items, representations have been made by relevant trade and business associations.
  511

  Private Finance Initiative
  Mr. Cotter
  To ask the President of the Board of Trade how many contracts have been awarded under the private finance initiative in her Department; and if she will list(a) the names of the successful bidders, (b) the time limits and cost of the contract and (c) the criteria used to award the contract. [16530]

  Mrs. Beckett
  One contact has been awarded under the Private Finance Initiative within my Department's area of responsibility. In January 1997, the Coal Authority awarded an £11 million eight year contact with Cap Gemini to design, build and operate a computer system for providing mining information. The successful bidder's tender was assessed as being economically the most advantageous taking into account technical ability, quality and technical assistance.

  Export Credits
  Mr. Flynn
  To ask the President of the Board of Trade what are the proportions of ECGD money spent on promoting and underwriting the sales of British(a) high tech products, (b) pharmaceuticals and (c) defence and defence-related products. [15979]

  Mrs. Beckett
  [holding answer 14 November 1997]: Since the privatisation of its short-term operation in 1991, direct ECGD support for new export business has been confined to the capital goods and projects field. Such business is generally "high tech" in nature.

  From information readily available, ECGD has no record of having supported exports of pharmaceuticals since the short-term privatisation.

  The proportion of new ECGD business which related to defence or defence-related products in each of the last three years was 21 per cent. in 1994–95, 23 per cent. in 1995–96, and 16 per cent. in 1996–97.

  Monitor Consultancy
  Mr. MacShane
  To ask the President of the Board of Trade if she will list(a) the nature and value of contracts her Department has entered into and (b) discussions ministers or officials have held with the Monitor Consultancy since 1990. [14953]

  Mr. Nigel Griffiths
  [holding answer 7 November 1997]: No external consultancy contracts have been let centrally to Monitor Consultancy and, as far as the Department is aware, no discussions have been held.

  Information on contracts and discussions not related to external consultancy could be provided only at disproportionate cost.

  The above information does not include contracts let by the Department's Executive Agencies, and I have asked the Chief Executives to reply separately to this question.

  Letter from P. R. S. Hartnack to Mr. Denis MacShane, dated 25 November 1997:
  I have been asked to reply on behalf of the Patent Office to your question to the President of the Board of Trade about the Monitor Consultancy. The Patent Office has let no contracts to this organisation since 1990 and to the best of my knowledge no member of the Patent staff has had official contact with it.
  512
  Letter from John Holden to Mr. Denis MacShane, dated 24 November 1997:
  I have been asked to reply to your question to the President of the Board of Trade concerning the Monitor Consultancy and comment as follows:

  (a) Companies House has not entered into any contracts with the Monitor Consultancy since 1990.

  (b) No discussions have been held with the Monitor Consultancy since 1990.

  Letter from Seton Bennett to Mr Denis MacShane, dated 24 November 1997:
  The President of the Board of Trade has asked me to reply on behalf of the National Weights and Measures Laboratory to your question about the Monitor Consultancy. This Agency has had no contact with Monitor in the period since 1990.

  Letter from Ian Jones to Mr. Denis MacShane, dated 7 November 1997:
  You tabled a Parliamentary Question to the President of the Board of Trade, for named day reply on 7 November, about contacts between her Department and the Monitor Consultancy. I have been asked to reply in respect of the Employment Tribunals Service.
  The Employment Tribunals Service became an executive agency of the DTI on 1 April 1997. It has not entered into any contracts or discussions with the Monitor Consultancy, nor am I aware of any contacts prior to our establishment as an agency.

  Letter from Peter Joyce to Mr. Denis MacShane, dated 24 November 1997:
  The President of the Board of Trade has asked me to reply to your question about contracts entered into or discussions held by The Insolvency Service with the Monitor Consultancy since 1990.
  The Service has not entered into any contract with the Monitor Consultancy since it became an executive agency in March 1990 and has no record of any discussions held with that firm.

  Letter from Jim Norton to Mr. Denis MacShane dated 24 November 1997:
  You have put down a Parliamentary Question to the President of the Board of Trade asking for information on Monitor Consultancy. As this is a day-to-day matter, I am replying as the Chief Executive of the Radiocommunications Agency.
  This Agency has had no contracts, dealings or discussions with Monitor Consultancy since we were set up in April 1990.

  Export Licences
  Mrs. May
  To ask the President of the Board of Trade what is the average time taken for dealing with export licence applications. [16356]

  Mr. Prior
  To ask the President of the Board of Trade how long, on average, it takes to obtain an export licence. [16526]

  Mrs. Roche
  The Department's Export Control Organisation (ECO) does not calculate the average length of time it takes for an export licence application to be processed. Licence applications are considered individually, there is no such thing as an average application.

  The ECO has published targets for the processing of standard individual export licence applications. These are contained in the Code of Practice for enforcement available from the ECO. The targets apply where full information is provided with the application and are:
  10 working days where the application is not circulated to other government departments for advice

  513
  20 working days where the application is circulated to other government departments for advice.

  These targets do not apply to UN Sanctions cases or to applications involving Iran.

  No targets are set for the processing of open individual export licence applications, which can involve complex combinations of goods and countries.

  Mrs. May
  To ask the President of the Board of Trade what are her Department's guidelines on the length of time export licences should take to process; and what proportion of export licences are currently dealt with within that time. [16352]

  Mrs. Roche
  The Department's Export Control Organisation (ECO) has published targets for the processing of standard individual export licence applications. These are contained in the Code of Practice for enforcement available from the ECO. The targets apply where full information is provided with the application and are:10 working days where the application is not circulated to other government departments for advice.
  20 working days where the application is circulated to other government departments for advice.

  These targets do not apply to UN Sanctions cases or to applications involving Iran.

  No targets are set for the processing of open individual export licence applications, which can involve complex combinations of goods and countries.

  For the last four week period on which statistics have been computed (22 September to 17 October 1997) these targets have been met in 71 per cent. of non-circulated cases and 48 per cent. of circulated cases.

  Mrs. May
  To ask the President of the Board of Trade what advice her Department gives to exporters on the length of time taken to process export licences. [16353]

  Mrs. Roche
  The Department's Export Control Organisation (ECO) has published targets for the processing of standard individual export licence applications. These are available in the Code of Practice for enforcement available from the ECO. These targets apply where full information is provided with the application and are:-10 working days where the application is not circulated to other government departments for advice.
  20 working days where the application is circulated to other government departments for advice.

  These targets do not apply to UN Sanctions cases or to applications involving Iran.

  No targets are set for the processing of open individual export licence applications.

  The ECO is in touch with Trade Associations and major exporters from time to time about current performance levels in respect of these targets. It also provides an exporters' Helpline.

  Mr. Paterson
  To ask the President of the Board of Trade when she expects the backlog of export licences to be cleared. [16351]
  514
  Mrs. Roche
  The Export Control Organisation (ECO) wrote to Trade Associations in June 1997 warning them that delays in export licensing were possible while the Review of Criteria, announced by the Foreign Secretary in May 1997, was in progress. This Review was completed on 28 July 1997, since when the new criteria have been applied to export licence applications. I expect licence processing times to improve in future.

  There will always be a certain amount of "work in progress" in the processing of export licences, but my Department fully understands the need for the prompt handling of licence applications for strategic goods and is committed to this, subject to the need for all applications to be considered fully and carefully.

  Ministerial Interests
  Mr. Redwood
  To ask the President of the Board of Trade if she will list those(a) companies and (b) industries which in order to avoid an actual or apparent conflict of interst, are not handled by each Minister in her Department. [17068]

  Mrs. Beckett
  [holding answer 21 November 1997]: Ministers in this Government will continue to make public statements about their involvement in specific cases where it is valuable for the conduct of the case to do so; it is not always possible to predict where conflicts of interest will arise. This approach, which reflects that of the previous administration, seeMs to the Government to satisfy the public interest.

  It has been announced that the Minister for Competition and Consumer Affairs has stood aside from consideration of the Monopolies and Mergers Commission's report on the travel trade and, because of his late father's shareholding, consideration of the MMC's report on P&O/Stena and from papers relating to the European Commission's investigation under the European Community Merger Regulation of the proposed acquisition by Dupont of certain ICI businesses. I did not handle DTI consideration of the recent Rolls-Royce launch aid case to avoid any conflict with my constituency interest.

  Coal Industry
  Mr. Redwood
  To ask the President of the Board of Trade what estimate she has made of the number of pits which will close in the British coal industry over the next year. [17069]

  Mrs. Beckett
  [holding answer 21 November 1997]: Any estimates of coal production and coal burn are resultant from the information submitted to the Department by the private mining companies and private energy generators. It is, of course, in the hands of private sector coal operators to take decisions on the future commercial operation of individual coal mines.

  Inward Investment
  Mr. Redwood
  To ask the President of the Board of Trade where the responsibility for the final decision about the level of grants offered to a potential inward investor lies when sites in more than one part of the United Kingdom are being considered. [17063]
  515
  Mrs. Beckett
  [holding answer 21 November 1997]: Decisions on the level of Regional Selective Assistance (RSA) grant to be offered to a potential inward investor are taken once a single site in the UK has been chosen. Responsibility for final decisions rests with me, as the President of the Board of Trade, if the site is in England, with the Secretary of State for Scotland if the site is in Scotland, and with the Secretary of State for Wales if the site is in Wales. The Secretary of State for Northern Ireland is responsible for the final decision on the level of Selective Financial Assistance to be offered to a potential inward investor if the site is in Northern Ireland.

  Rolls-Royce
  Mr. Laurence Robertson
  To ask the President of the Board of Trade what factors underlay her decision to invest in Rolls-Royce's new range of Trent engines; what steps had been taken by the company to secure this investment from the private sector; and if she will make a statement. [17375]

  Mr. Battle
  I refer the hon. Member to the answer I gave the House on 13 November 1997,Official Report, column 626.

  The President of the Board of Trade did not handle the case for the DTI in order to avoid any potential conflict with her constituency interest. The case was handled for the DTI by me.

  Laser Pens
  Mr. Sheerman
  To ask the President of the Board of Trade if she will estimate the number of laser pens with beams greater than one milliwatt currently in circulation in the United Kingdom. [15921]

  Mr. Nigel Griffiths
  We cannot estimate the number of laser pens with beaMs greater than one milliwatt in circulation. However, following my announcement on 28 October about dangerous laser pens, Trading Standards Departments have been tracing sources of supply of laser pens and have suspended the sale of considerable quantities of these products which were intended for supply to the general public. These inspections are continuing.

  Mr. Sheerman
  To ask the President of the Board of Trade what research her Department has evaluated into the potential hazards of laser pens with beams of less than one milliwatt. [15919]

  Mr. Nigel Griffiths
  My Department has considered the recent report by Heriott-Watt University on the optical safety of laser pointers and has had discussions with the National Radiological Protection Board regarding the safety of these devices in the hands of the general consumer. We are not aware of any evidence that laser pens up to one milliwatt are directly harmful to health.

  EU Patent Directive
  Ms Walley
  To ask the President of the Board of Trade what assessment she has made of the impact of the EU Patent Directive on developing countries'(a) attempts to
  516
  conserve genetic resources and (b) farmers' rights; and if she will make a statement. [17806]

  Mr. Battle
  The Commission's proposal for a Directive on legal protection of biotechnological inventions seeks to harmonise certain aspects of the national patent laws of the Member States. It is an Internal Market measure and seeks to eliminate current uncertainties as to what can attract patent rights in the biotechnological field, which may be acting as a deterrent to investment in the industry in Europe. Since the proposal concerns only the EU Member States' laws, and patent rights are valid only on a national basis, there is no direct read across for countries outside the Community. Other countries, including those of the developing world, remain free to determine their own national patent regimes, and to deal with conservation of genetic resources and the position of farmers as they see fit.

  Ms Walley
  To ask the President of the Board of Trade what assessment she has made of the impact of the EU Patent Directive on competitiveness within the EU Single Market; and if she will make a statement. [17805]

  Mr. Battle
  The purpose of the proposed Directive is to establish a clear legal framework for the protection of biotechnological inventions through national patent law. Although the texts of Member States' patent laws are currently closely aligned with that of the European Patent Convention (an international governmental agreement dating from 1978), there have been differences in interpretation between Member states. Although no assessment has been made as to the direct effect this proposed Directive may have on enhancing competitiveness, the clarification arising from it will reduce current uncertainty in this area of law and its possible deterrent to investment in this industry.

HEALTH

  Lariam
  Ms Corston
  To ask the Secretary of State for Health when he expects the Committee on Safety of Medicines to approve the recent recommendations of the Malaria Advisory Committee to restrict the use of Mefloquine (Lariam) by travellers. [15451]

  Ms Jowell
  The Committee on Safety of Medicines has no jurisdiction over the recommendations of the Malaria Advisory Committee but has reviewed these to determine whether they have any implications for the Marketing Authorisation and product information for Lariam.

  In order to ensure that doctors are aware of the published guidelines, the product information advises doctors to refer to them.

  E-mail
  Mr. Jenkin
  To ask the Secretary of State for Health, pursuant to the answer from the Chancellor of the Duchy of Lancaster, of 10 November 1997,Official Report, column 441, if he will list the e-mail addresses of

  517
  (a) Ministers, (b) senior officials and (c) chief executives of agencies for which he is responsible. [15871]

  Ms Jowell
  [holding answer 13 November 1997]: The Department of Health Internet web site contains e-mail addresses for contact and feedback on various subjects and projects, e.g. Open Government, and the Review of the Central Council for Education and Training in Social Work.

  Apart from the National Health Service Pensions Agency, the agencies for which my right hon. Friend the Secretary of State is responsible, NHS Estates, Medical Devices Agency and Medicines Control Agency, all have Internet Web sites containing either contact e-mail addresses or telephone numbers.

  Although none of the contact e-mail addresses currently reaches individual Ministers, senior officials or chief executives, the Department is giving active consideration to a central initiative on the handling of external electronic communications, including the electronic equivalent of paper correspondence to Ministers and named officials.

  Varicose Veins
  Mr. Martyn Jones
  To ask the Secretary of State for Health what estimate he has made of the percentage of the adult population suffering from varicose veins; and if he will make a statement. [16336]

  Mr. Boateng
  Information on the prevalence of varicose veins in the population is not available. The information in the table shows the number of completed episodes in 1994–95, the latest year for which information is available, in which an operation was carried out on varicose vein of the leg. Many people with varicose veins are treated without the need for surgery or any other invasive procedure.

  Ordinary admissions and day cases: completed episodes with an operation or procedure performed on varicose veins: NHS hospitals in England 1994–95

  Age at start of episode

  Operation

  18 and over

  Not known

  Under 18

  L85.1 Litigation of long saphenous vein

  36,857

  6

  70

  L86.1 Injection of sclerosing substance into varicose vein of leg

  2,435

  1

  5

  L87.1 Stripping of long saphenous vein

  15,211

  1

  24

  L87.4 Avulsion of varicose vein of leg

  46,233

  7

  119

  Diet and Cancer
  Mr. Jack
  To ask the Secretary of State for Health (1) what account was taken of the degree of consensus amongst members of the Committee on Medical Aspects of Food and Nutrition Policy in respect of recommendations on levels of meat consumption in 518
  determining when to make his announcement on meat consumption; [16564]

  (2) when the Committee on Medical Aspects of Food and Nutrition Policy expert group agreed its recommendations relating to levels of meat consumption; [16562]

  (3) if he will place in the Library a copy of the version of the COMA report which he ordered to be pulped, together with a copy of the final report when published; [16566]

  (4) if he will make public the areas of difference between the final report on cancer by the Committee on Medical Aspects of Food and Nutrition Policy and its predecessor version; [16574]

  (5) if he will make a statement on the circumstances which caused the report by the Committee on Medical Aspects of Food and Nutrition Policy on the development of cancer to be printed and then pulped; what was the cost to public funds; for what reasons his Department made a press statement about meat consumption on 24 September; and when he expects the final report to be published; [16565]

  (6) what reasons he announced his recommendations on meat consumption ahead of the publication of the findings of the Committee on Medical Aspects of Food and Nutrition Policy's report on cancer. [16563]

  Ms Jowell
  In 1993 the Committee on Medical Aspects of Food and Nutrition Policy (COMA) set up a Working Group on Diet and Cancer. The Working Group's report was submitted to COMA's main committee meeting on 29 April. It was accepted by COMA subsequent to the quantification of figures relating to the consumption of red meat and further clearance by COMA members.

  On 19 September the Chief Medical Officer and my right hon. Friend the Secretary of State for Health were told that some members felt that they had not had adequate opportunity to discuss the final recommendation on the consumption of red and processed meat. My right hon. Friend the Secretary of State for Health therefore ordered that the report should not be published.

  A COMA meeting was immediately convened by the Chief Medical Officer on 24 September. On 25 September, with the agreement of my right hon. Friend the Minister of Agriculture, Fisheries and Food, my right hon. Friend the Secretary of State for Health issued a press release based on the advice on the recommended intake of red and processed meat which COMA had agreed at its meeting on 24 September.

  Since then further amendments have been agreed by COMA and the Working Group. The Report now commands the support of all members of COMA and will be published shortly.

  The detailed workings of COMA and its expert groups, including the development of the various drafts of the reports it produces, is a matter for the committee. As with all COMA reports, published copies are placed in the Library and we have no intention of departing from this procedure.

  The cost of reprinting the report in its revised form is £10,000.
  519
  My right hon. Friend the Secretary of State for Health's object throughout the whole of this incident has been to ensure that reports issued by COMA continue to command the full support of its members and the respect of the scientific community.

  Medical Negligence Claims
  Mr. Simon Hughes
  To ask the Secretary of State for Health what plans he has to ensure that his proposals for legal aid reform will not prevent patients pursuing medical negligence claims. [16633]

  Mr. Milburn
  When my noble Friend the Lord Chancellor announced the Government's proposals for the reform of the legal aid system in October, he made it clear that he intends to consult widely before any changes are implemented. The position of the patients pursuing claims for medical negligence will be considered as part of this consultation.

  Health Care (Rural Areas)
  Mr. Prior
  To ask the Secretary of State for Health what proposals he has to make health care more accessible in rural areas. [16531]

  Mr. Milburn
  The Government are committed to improving quality and fairness in National Health Service care, replacing the internal market and ensuring that a greater proportion of every pound spent goes on patient services not bureaucracy. This applies equally to rural areas as it does to other parts of the country.

  Tobacco Sponsorship
  Mr. Mitchell
  To ask the Secretary of State for Health if he will exempt international yacht racing from the ban on tobacco advertising and sponsorship. [16930]

  Ms Jowell
  We have always said that the Government want to reduce the exposure of children and young people to tobacco advertising. That is why we gave a manifesto commitment to ban tobacco advertising as part of a fully developed tobacco control strategy. Our aim is to remove tobacco advertising from sports events without damaging the events themselves, and sports like international yacht racing will need time to find other sponsors.

  Discussions are under way within Government on how best to achieve this and my hon. Friend the Minister for Sport is consulting the sports concerned. Plans include a transitional period.

  Community Care (Direct Payments) Act 1996
  Mr. Burstow
  To ask the Secretary of State for Health what assessment he has made of the implementation of the Community Care (Direct Payments) Act 1996 by local authorities. [17538]

  Mr. Boateng
  The Act came into force on 1 April 1997. We will be conducting a review after the first year of its operation.

  Breast Screening
  Mr. Corbyn
  To ask the Secretary of State for Health if he will provide a breakdown by age of breast screening examinations undertaken over the past three years.[17370]
  520
  Mr. Milburn
  The information requested is available for 1994–95 and 1995–96 only and is shown in the table.

  Thousands

  Age groups

  Year

  Total numberof women screened

  45–49

  50–54

  55–59

  60–64

  65+

  1994–95

  1,040.7

  32.3

  351.4

  332.8

  292.1

  32.1

  1995–96

  1,060.0

  33.8

  372.2

  330.8

  273.4

  49.8

  Source:

  KC62. Statistics Division SD2B.

  NHS Trusts (Age Discrimination)
  Mr. Corbyn
  To ask the Secretary of State for Health what advice his Department gives to health authorities and National Health Service trusts on age discrimination; and if he will make a statement. [17371]

  Mr. Boateng
  Our commitment to promoting a fair and equitable health service is set out in 1998–99 Priorities and Planning Guidance for the National Health Service. Whatever the age of the patient, there are no exceptions to the fundamental principle that the NHS is there to provide service for everyone on the basis of clinical need.

  NHS Trusts (Shropshire)
  Mr. Gill
  To ask the Secretary of State for Health when he invites Shropshire County Council to submit names for membership of NHS trust boards. [17807]

  Mr. Milburn
  A letter was sent to Shropshire County Council on 26 June inviting nominations for trust board vacancies in 1997. The council subsequently submitted eight nominations on 3 July. A further letter was sent to the council on 18 November inviting nominations for trust and health authority boards in 1998. We are now awaiting a reply.

  Stabilisation Force
  Mr. Bruce George
  To ask the Secretary of State for Health what arrangements are made to deal with the NHS waiting lists of consultant-level surgeons and physicians in the United Kingdom while they are serving with SFOR. [16227]

  Mr. Milburn
  Consultant surgeons and physicians serving with the Stabilisation Force (SFOR) are called up from Service hospitals and from Ministry of Defence Hospital Units at National Health Service trusts. It is for the hospitals concerned to take appropriate action to manage the waiting times of any NHS patients affected by the deployment of consultants overseas.

  Hospital Waiting Lists
  Mr. Corbyn
  To ask the Secretary of State for Health what monitoring his Department undertakes of the waiting times for hospital operations for(a) under 65-year-old patients and (b) those over 65 years. [17372]

  Mr. Milburn
  Information on numbers of patients who have been admitted to hospital, analysed by age group, is contained in "Hospital Episode Statistics". This is
  521
  published annually and copies are available in the Library. The source data can be further analysed to provide information about waiting times by age group.

  Hepatitis A Immunisation
  Mr. Hinchliffe
  To ask the Secretary of State for Health what steps his Department has taken to evaluate the risks from gamma globulin used in the preparation of Hepatitis A passive immunisation. [17232]

  Ms Jowell
  The marketing authorisation (the licensing) of all medicines throughout the European Union is governed by the Rules Governing Medicinal Products in the European Union, in particular, Council Directive 65/65/EEC.

  All licensed normal intra-muscular immunoglobulin (used for passive immunisation for Hepatitis A) has been fully evaluated for quality, safety and efficacy. These products have not been associated with the transmission of any infection.

  Winter Emergencies
  Mr. Corbyn
  To ask the Secretary of State for Health if he will list the total payments for winter emergencies to each local authority and each health district in London; and what(a) conditions and (b) monitoring requirements are attached to such payments. [17373]

  Mr. Milburn
  The allocation of additional resources to health authorities in London is set out in the table. The table also shows how much each of the London HAs will be transferring to its local authority social services departments.

  London Has

  Additional resources allocated to each HA

  Amount of HA allocation for socialservices initiatives £000

  £000

  £000

  Barnet

  1,057

  367

  Barking and Havering

  1,092

  808

  Brent and Harrow

  1,419

  340

  Camden and Islington

  1,429

  171

  Ealing, Hammersmith and Hounslow

  2,919

  1,080

  East London and The City

  3,563

  1,603

  Enfield and Haringey

  1,431

  286

  Hillingdon

  1,100

  396

  Kensington, Chelsea and Westminster

  690

  282

  Redbridge and Waltham Forest

  2,121

  890

  Bexley and Greenwich

  1,097

  347

  Bromley

  650

  52

  Croydon

  969

  324

  Kingston and Richmond

  988

  195

  Lambeth, Southwark and Lewisham1

  3,980

  828

  Merton, Sutton and Wandsworth

  2,332

  528

  Information correct as at 24 November 1997.

  1 Includes an extra £300,000 allocated to London Ambulance Services to be administered by the HA.

  The allocations were made to health authorities and trusts to manage additional winter emergency service
  522
  pressures and are directed towards specific schemes which should prove of lasting benefit. Considerable investment has been targeted at developments in primary and community health services, and social services, which help care for people at home or expedite their discharge from hospital when it is appropriate.

  Both North and South Thames Regional Offices will monitor progress on all schemes via their regular contact with health authorities and trusts.

  Blood
  Dr. Harris
  To ask the Secretary of State for Health if Professor Bellingham has begun work as interim lead clinician to the Mersey and North Wales Blood Centre. [15582]

  Mr. Boateng
  [holding answer 11 November 1997]: Professor Bellingham began his work shortly after his appointment in September as Transition Director of the Liverpool Blood Centre.

AGRICULTURE, FISHERIES AND FOOD

  Specialist Advisory Committees
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food on which occasions and for what reasons his Department has disagreed with scientific advice given by specialist advisory committees in the last five years. [17756]

  Dr. John Cunningham
  I have not disagreed with any of the scientific advice which I have received from my specialist advisory committees since this Government came into office on 1 May 1997.

  Raw Cows' Milk
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food if he will publish the full details of the data considered by the Advisory Committee on the Microbiological Safety of Food in coming to its conclusions that(a) the sale for drinking of raw cows' milk should be banned and (b) its continued use in the production of cheese should be permitted. [17755]

  Dr. John Cunningham
  The ACMSF considered the safety of raw cows' milk in its Report on Verocytotoxin-Producing Escherichia coli (VTEC) which was published in 1995.

  More recently, the ACMSF saw data from the 1995–96 Government-funded Surveillance of the Microbiological Safety of Raw Cows' Milk on Retail Sale. A full report on this project is currently being prepared and will be published in the joint Ministry of Agriculture, Fisheries and Food/Department of Health Microbiological Food Safety Surveillance series.

  The Committee also saw data from a Public Health Laboratory Service Study of the Microbiological Quality of Retail Raw (Greentop) Cows' Milk. Publication of these results is a matter for the PHLS.

  The ACMSF has not recommended the continued use of raw cows' milk in the production of cheese. Rather,

  523
  the Committee has recommended research and surveillance into the prevalence of O157 VTEC in a range of raw food products, including raw milk cheeses. This is under way.

  Ministerial Meetings
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food what(a) meetings with individuals, organisations and delegations and (b) parliamentary business he has planned for 26 November. [17757]

  Dr. John Cunningham
  In addition to Parliamentary business, I will be attending a Cabinet Committee (PX) and will be undertaking a number of meetings with officials.

  Food Standards
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the factors that would be involved in determining(a) national minimum standards of food composition and (b) maximum levels of sugar and fat. [17581]

  Dr. John Cunningham
  We have no plans to introduce new statutory national minimum standards of food composition or maximum levels for sugar and fat in foods and therefore have not considered the factors that might be involved in determining such measures.

  EU Committees
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food if he will publish a list of all EU committees which his officials attend on a regular basis. [16347]

  Dr. John Cunningham
  My officials regularly attend a range of management committees considering draft Commission legislation governing the management of the Common Agricultural and Fisheries Policies. Other regular meetings chaired by the Commission include:

  Standard Committee on Animal Nutrition

  Standing Committee on Foodstuffs

  Standing Committee Organic Farming Legislation

  Standing Veterinary Committees

  Committee on Agricultural Structures and Rural Development (STAR)

  Committee for Veterinary Medical Products

  Spirit Drinks Implementation Committee

  Aromatised Wine Implementation Committee

  In addition, my officials attend the Special Committee on Agriculture and Council Working Groups examining proposed Council Legislation.

  Cattle Passports
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food what is his estimate of the number of cattle passports which will be issued by his Ministry once its cattle passport scheme is fully established. [16975]

  Dr. John Cunningham
  The cattle passport scheme is fully established. More than 3.6 million passports have 524
  been issued in Great Britain since the scheme was introduced in the Summer of 1996.

  Animal Slaughter (Religious Methods)
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food how many animals are slaughtered each year in abattoirs exclusively devoted to Jewish and Muslim methods. [17809]

  Mr. Rooker
  Information is not held on those abattoirs adopting religious methods of slaughter and the number of animals killed by those methods.

  Dairy Cattle
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what is his estimate of the number of Friesian and Holstein Friesian cows in dairy herds on United Kingdom farms. [17810]

  Mr. Rooker
  2.2 million

  Gene-manipulated Foods
  Mrs. Fyfe
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to implement controls on gene-manipulated foods. [17023]

  Mr. Rooker
  The EC novel foods and novel food ingredients regulation 258/97, which came into force on 15 May, established an EU wide pre-market approval system for novel foods and novel food ingredients, including those containing or produced from genetically modified organisMs (GMOs). All applications for approval of novel foods under the regulation will be considered in the UK by the independent Advisory Committee on Novel Foods and Processes and its advice published.

  Food Labelling
  Mrs. Fyfe
  To ask the Minister of Agriculture, Fisheries and Food if he will list the obstacles to clear labelling of foods to enable customers to choose between foods that are genetically altered and those that are not. [17027]

  Mr. Rooker
  Since I issued a press release on 7 June calling for all foods which may contain genetically modified (GM) material to be labelled clearly, considerable progress has been made. On 25 July, the European Commission announced its intention to ensure coherent labelling of GM products throughout the food chain and a Commission regulation requiring the labelling of GM soya and maize came into effect on 1 November. Detailed rules on the implementation of this regulation are expected to be agreed shortly.

  Cattle Consumption
  Mr. John Smith
  To ask the Minister of Agriculture, Fisheries and Food if he will lift the ban on the consumption of cattle aged over 30 months. [17048]

  Mr. Rooker
  No. This measure was introduced by the previous Government on the basis of SEAC advice that meat from animals over 30 months of age should be deboned under official supervision. There were practical difficulties in implementing this advice and a ban was
  525
  introduced instead. Nothing we have learned about the links between BSE and CJD in the past year suggests that that action was in any way inappropriate.

  Milk Quotas
  Mr. John Smith
  To ask the Minister of Agriculture, Fisheries and Food if he will review his Department's policy in respect of allowing dairy farmers to(a) lease and (b) sell their milk quotas. [17045]

  Mr. Rooker
  The Government have no plans at present to review their policy on the lease and sale of milk quotas by dairy farmers. The rules on transfers of milk quotas will, however, need to be reviewed in the light of the outcome of the reform of the dairy regime.

  Crop Spraying
  Mr. Pickthall
  To ask the Minister of Agriculture, Fisheries and Food what is the Government's policy on the spraying of crops with sulphuric acid; and how such spraying is monitored. [16866]

  Mr. Rooker
  All pesticides are subject to strict regulatory control and must be approved by Ministers before they may be marketed or used in the United Kingdom. Approval is given only after rigorous evaluation of detailed scientific data. Sulphuric acid is approved for certain uses and, providing it is used in accordance with its statutory conditions of approval, this use poses no unacceptable risk.

  The statutory "Code of Practice for the Safe Use of Pesticides on FarMs and Holdings", sets out precautions that farmers are required to take when spraying. These include measures to protect neighbours and workers and reduce risks to wildlife.

  The Pesticides Usage Survey, the Wildlife Incidents Investigation Scheme and the Working Party on Pesticides Residues monitor the quantity of pesticides used, possible incidents involving wildlife and residues in food respectively. The Health and Safety Executive inspectors are responsible for enforcement of the rules on spraying.

  Mr. Pickthall
  To ask the Minister of Agriculture, Fisheries and Food how many complaints have been received by his Department about spraying with sulphuric acid in the past year. [16867]

  Mr. Rooker
  Complaints over alleged ill effects resulting from pesticide use should be reported to the Health and Safety Executive's Pesticides Incident Appraisal Panel. The Panel investigated seven complaints related to the spraying of sulphuric acid between April 1996 and March 1997.

  In the past 12 months the Department has received 17 inquiries concerning the use of sulphuric acid as an agricultural pesticide.

  Press Releases
  Mr. Matthew Taylor
  To ask the Minister of Agriculture, Fisheries and Food what is his policy in respect of the faxing of press releases on the day of release to Opposition party spokesmen; what changes have been introduced since 1 May; and if he will make a statement. [16295]
  526
  Mr. Morley
  The Department will provide news releases to Opposition party spokesmen by fax on the day of release if requested to do so. The Department also issues news releases via the Internet at address http://www.maff.gov.uk/maffhome.htm. Hard copies are sent by messenger to Opposition spokesmen each day. There have been no changes since 1 May.

SOCIAL SECURITY

  Means-tested Benefits
  Mr. Webb
  To ask the Secretary of State for Social Security what estimate she has made of the number of individuals, including dependent children, who are in households receiving at least one means-tested benefit, broken down to show the combinations of benefits received. [12816]

  Mr. Keith Bradley
  The information is set out in the table:

  Beneficiaries of means-tested benefits (May 1996)

  Number of beneficiaries

  One or more means-tested benefit

  15,110,000

  Combinations of benefits including in the above:

  Income support only

  2,370,000

  Family credit only

  1,560,000

  Disability working allowance only

  8,000

  Housing benefit and/or council tax benefit only

  3,090,000

  Housing benefit and/or council tax benefit with family credit

  850,000

  Housing benefit and/or council tax benefit with income support

  7,220,000

  Housing benefit and/or council tax benefit with disability working allowance

  9,000

  Notes

  1.All figures have been rounded to the nearest ten thousand, except combined benefit figures showing disbility working allowance claimants which are rounded to the nearest thousand.

  2. Numbers are based on benefit units which may be a single person or a couple.

  3. Beneficiaries are defined as claimants, their partners and any dependants.

  4. There will be a significant overlap between recipients of individual benefits.

  5. The income support figures include a small number of cases whose entitlement to family credit or disability working allowance has not yet been lapsed. In reality these cases are dependant on income support.

  6. Housing benefit/council tax benefit information excludes second adult rebate cases.

  7. Data include estimates due to the date collection procedure.

  Sources

  1.Income Support Quarterly Statistical Enquiry, May 1996 (5 per cent. sample).

  2. Family Credit 5 per cent. sample of all awards.

  3. Disability Working Allowance 100 per cent. count of claims.

  4. Housing Benefit Mangement Information System, annual 1 per cent. sample inquiries, with and without income support, taken at the end of May 1996.

  Lone Parents (Employment)
  Mr. Viggers
  To ask the Secretary of State for Social Security what percentage of lone parents who were previously unemployed have found work in each of the last 10 years. [13104]
  527
  Mr. Keith Bradley
  The information is not available in the format requested. Such information as is available is in the table, which shows numbers of new lone parent claims to Family Credit where the claimant was on income support immediately beforehand.

  Estimated number of new awards of Family Credit made to lone parents previously on income support

  Family Credit award starting:

  Thousands

  September 1992 to August 1993

  53

  September 1993 to August 1994

  65

  September 1994 to August 1995

  73

  August 1995 to September 1996

  82

  Notes:

  1. The data used do not identify those lone parents who moved from income support to a job where they did not claim Family Credit, thus under-estimating the employment rate;

  2. As estimates are based on a matched sample of 5 per cent. of Family Credit awards with a 5 per cent. sample of the quarterly stock of income support claimants, the methodology will miss claimants who had a short spell on income support before moving to Family Credit.

  Sources:

  1. Income support Quarterly Statistical Enquiries, August 1992 to May 1996.

  2.Family Credit 5 per cent. sample, September 1992 to August 1996.

  Habitual Residence Test
  Dr. Harris
  To ask the Secretary of State for Social Security how many British citizens have been refused income support and related benefits due to failure of the habitual resident test(a) in the last year and (b) in each of the previous five years. [14008]

  Mr. Keith Bradley
  The information is not available in the format requested. Such information as is available is set out in the table.

  Numbers of adverse habitual residence tests by UK nationals

  April 1994 to March 1995

  April 1995 to March 1996

  April 1996 to March 1997

  Income support

  3,795

  6,103

  6,440

  Jobseeker's allowance (income based)

  2,608

  Source:

  Benefits Agency Management Information Statistics.

  Notes:

  1. The habitual residence test was introduced in income support on 1 August 1994. The test was carried forward to jobseeker's allowance (income based) on 7 October 1996.

  2.Information regarding the numbers of UK Nationals failing the habitual residence test in respect of housing benefit and council tax benefit is not available.

  Delegated Legislation
  Mr. Clifton-Brown
  To ask the Secretary of State for Social Security if she will list all(a) secondary, (b) other delegated legislation and (c) all deregulation orders her Department made during the summer adjournment. [14375]

  Mr. Denham
  I refer the hon. Member to the reply given by my right hon. Friend the Chancellor of the Duchy of Lancaster on 5 November 1997,Official Report, column 216.
  528

  Domestic Violence
  Helen Jackson
  To ask the Secretary of State for Social Security in what ways the issue of domestic violence victims is included in the training programmes of(a) Benefits Agency and (b) Child Support Agency staff. [14393]

  Mr. Keith Bradley
  On 6 October 1997 it was announced that, from April 1998, BA staff will be undertaking some CSA activity (the issue and completion of Maintenance Application ForMs (MAF)) on their home visits to lone parents.

  Child Support legislation has provisions, known as "good cause", which allow Parents with Care (PWCs) not to co-operate if the CSA finds that they have good cause not to co-operate. This may be because they believe there is a risk of harm or undue distress to the PWC or any children living with them which may arise from the CSA contacting the absent parent. It is therefore important that staff receive training to deal sensitively with such issues when they arise and are aware of when such problems may be an issue.

  CSA staff receive awareness training on the "requirement to co-operate" provisions of child support legislation which includes the "good cause" provisions. All CSA staff who are required to interview PWCs about an absent parent receive further training on how to manage sensitive issues, such as domestic violence, and how to deal with such cases for child support purposes.

  The BA has arranged for staff to receive the equivalent training given to CSA staff where they are dealing with similar situations at interviews. Although the completion of MAFs does not involve in-depth interviewing about good cause, BA staff need to be aware of possible sensitivities where a PWC does not wish to complete a MAF. All front-line BA staff i.e., receptionists, visiting officers, will receive the CSA MAF completion training customised for BA. BA staff who will carry out good cause interviews will receive further training similar to that given to CSA staff.

  Training courses for BA staff have been piloted and, following further quality assurance, training will begin in January 1998.

  Welfare Reform
  Mr. Amess
  To ask the Secretary of State for Social Security what plans she has for new benefits and levels of benefits differing from those in force in April 1997. [14672]

  Mr. Denham
  Our aims for welfare reform are to modernise the structure and delivery of Social Security to encourage financial independence, while simultaneously promoting social cohesion and well-being; to develop an active welfare system which supports work, savings and honesty; and to help tackle effectively unjustifiable social and economic inequalities. To that end we are reviewing all major components of the Social Security system.

  Greenhouse Gas Emissions
  Mr. Stunnell
  To ask the Secretary of State for Social Security if she will list(a) her Department's policies and initiatives designed to reduce carbon dioxide emissions and (b) the departmental policies and initiatives designed

  529
  to reduce other greenhouse gases; if she will estimate for each the annual reduction in tonnage of greenhouse gas emissions achieved in the most recent year for which figures are available compared with those for 1990; and what estimate she has made of further reductions, or increases, predicted for 2000 and 2010, assuming continuation of current policies. [15542]

  Mr. Denham
  I refer my hon. Friend to the United Kingdom's (UK) Second Report under the United Nations Framework Convention on Climate Change which was published in February 1997. It reports the UK's progress in implementing its programme for reducing greenhouse gas emissions and gives a projection of what the programme is expected to deliver by 2000. The report projects forward what the current programme is expected to achieve to 2020.

  Jobseeker's Allowance
  Mr. Pond
  To ask the Secretary of State for Social Security if she will estimate the cost of extending contributory jobseeker's allowance to people with total earnings below the lower earnings limit for national insurance contributions with a continuous record of employment of at least 26 weeks. [15507]

  Mr. Keith Bradley
  The information is not available.

  Invalid Care Allowance
  Ms Corston
  To ask the Secretary of State for Social Security how many claims for invalid care allowance were originally refused because of non-receipt of disability living allowance by the person being provided with care, which were successful following subsequent receipt within (i) three, (ii) four, (iii) five and (iv) six months of disability living allowance; and what was the total number of claims for invalid care allowance in the years(a) 1994–95, (b) 1995–96 and (c) 1996–97. [15455]

  Mr. Denham
  The information is not available in the format requested and could be obtained only at disproportionate cost. Such information as is available is in the table.

  Claims for invalid care allowance

  1994–95

  1995–96

  1996–97

  Claims

  132,369

  152,082

  165,092

  Awards

  94,066

  107,238

  102,658

  Disallowances

  32,463

  49,208

  44,781

  Notes:

  1. Disallowances can be for a number of reasons besides lack of qualifying benefit, e.g., age of carer, earnings over the limit, extent of caring.

  2. Figures may not sum because claims made in one year may be decided in a later year.

  Source:

  Monthly statistics, Invalid Care Allowance Unit.

  incapacity Benefit
  Mr. Duncan Smith
  To ask the Secretary of State for Social Security if sick and disabled people claiming incapacity benefit who make themselves available to work within the welfare-to-work scheme will be automatically switched from incapacity benefit to Jobseeker's allowance. [15742]
  530
  Mr. Denham
  The Government believe that work is the best form of welfare for people of working age. For too long, disabled people have been defined by their disabilities rather than their abilities, their incapacity rather than their capacity. We therefore wish to develop ways to give sick and disabled people the advice, help and support they need to achieve their aspirations and to move towards financial independence, as part of an overall aim of social inclusion. Up to £195 million, set aside from the Windfall Tax, will be used to test a range of options to find out what are the most effective ways to help people with disabilities and long-term health problems to move into work, to encourage employers both to employ and retain disabled people and to avoid people becoming dependent on long-term incapacity benefits in the first place. In parallel with the welfare to work proposals for sick and disabled people, we are also considering what changes might be made to the benefit system to improve work incentives and reduce disincentives.

  Industrial Disablement Benefit
  Mr. Dismore
  To ask the Secretary of State for Social Security how many new successful claims were made for industrial disablement benefit in each of the last three years. [16393]

  Mr. Denham
  The information is set out in the table.

  New awards of industrial injuries disablement benefit in each of the last three years

  Year

  New awards made during in the year

  April 1994 to March 1995

  25,256

  April 1995 to March 1996

  24,329

  April 1996 to March 1997

  23,097

  Source:

  100 per cent. count of Industrial Injuries Disablement Benefit award from DSS Central Data Unit.

  Note:

  Figures are provisional and subject to amendment.

  Mr. Dismore
  To ask the Secretary of State for Social Security which five prescribed industrial diseases resulted in the highest number of successful claims in respect of claims for industrial disablement benefit for prescribed industrial diseases in each of the last three years; and how many claims there were for each of these diseases. [16399]

  Mr. Denham
  The information is set out in the table.

  Industrial injuries disablement benefit

  Prescribed diseases with the highest number of initial assessments, with a disability assessment of 14 per cent. or higher, (1 per cent. for D1 and D3), in the last three years, and the claims received

  Prescribed disease

  Awards

  Period

  Claims received

  Period

  1996–1997

  Pneumoconiosis (Dl)

  840

  January to December 1996

  3,020

  April 1996 to March 1997

  DiffuseMesothelioma(D3)

  642

  January to December 1996

  620

  April 1996 to March 1997

  Vibration White Finger (A11)

  592

  April 1996 to March 1997

  12,370

  April 1996 to March 1997

  Occupational Deafness (A10)

  377

  April 1996 to March 1997

  6,420

  April 1996 to March 1997

  531

  Industrial injuries disablement benefit

  Prescribed diseases with the highest number of initial assessments, with a disability assessment of 14 per cent. or higher, (1 per cent. for D1 and D3), in the last three years, and the claims received

  Prescribed disease

  Awards

  Period

  Claims received

  Period

  Occupational Asthma (D7)

  365

  January to December 1996

  1,800

  April 1996 to March 1997

  1995–1996

  Pneumoconiosis (Dl)

  860

  January to December 1995

  3,450

  April 1995 to March 1996

  DiffuseMesothelioma(D3)

  683

  January to December 1995

  570

  April 1995 to March 1996

  Occupational Deafness (A10)

  557

  April 1995 to March 1996

  6,740

  April 1995 to March 1996

  Occupational Asthma (D7)

  440

  January to December 1995

  1,690

  April 1995 to March 1996

  Chronic Bronchitis and Emphysema (D12)

  259

  January to December 1995

  2,430

  April 1995 to March 1996

  1994–1995

  Chronic Bronchitis and Emphysema (D12)

  2,562

  January to December 1994

  8,418

  April 1994 to March 1995

  Pneumoconiosis (Dl)

  1,006

  January to December 1994

  n/a

  —

  DiffuseMesothelioma(D3)

  583

  January to December 1994

  n/a

  —

  Occupational Asthma (D7)

  420

  January to December 1994

  1,789

  April 1994 to March 1995

  Occupational Deafness (A10)

  402

  April 1994 to March 1995

  8,179

  April 1994 to March 1995

  n/a = Not available.

  Notes:

  1. Data for respiratory and non-respiratory awards are held for different periods (calendar years for respiratory awards and financial years for non-respiratory awards).

  2. The number of awards made in any year, are not necessarily the results of the number of claims received in that year. There will be some awards made from claims made in the preceding year, and some claims received, that are not awarded until the following year. Claims figures include those made by people making more than one claim.

  Sources:

  1. Awards figures from a 100 per cent. count of assessments (DSS Analytical Services Division).

  2. Claims figures from DSS Central Data Unit (100 per cent.), DSS BREM systems (100 per cent.) and from April 1995 rated up from a 10 per cent. sample of claims received.

  Mr. Dismore
  To ask the Secretary of State for Social Security for each of the last three years, what was the total number of claimants of industrial disablement benefit; and how many of those received benefit(a) in respect of an industrial accident and (b) in respect of a prescribed industrial disease for each of the last three years. [16398]

  Mr. Denham
  The information is set out in the tables:

  Total claims for industrial injuries disablement benefit received

  Year

  Claims received

  April 1994 to March 1995

  79,983

  April 1995 to March 1996

  83,847

  April 1996 to March 1997

  76,486

  532

  New awards of industrial injuries disablement benefit for industrial accidents

  Year

  Awards made

  April 1994 to March 1995

  19,611

  April 1995 to March 1996

  18,473

  April 1996 to March 1997

  17,101

  New awards of industrial injuries disablement benefit for prescribed diseases

  Year

  Awards made

  April 1994 to March 1995

  5,645

  April 1995 to March 1996

  5,856

  April 1996 to March 1997

  5,996

  Source:

  100 per cent. counts of IIDB claims and awards from DSS Central

  Data Unit. Figures are provisional and subject to amendment.

  Note:

  The figures are separate counts. The number of awards made in any year are not necessarily the results of the number of claims received in that year. There will be some awards made from claims made in the preceding year, and some claims received, that are not awarded until the following year. Claims figures include those made by people making more than one claim.

  Mr. Dismore
  To ask the Secretary of State for Social Security how many claimants have received industrial disablement benefit at the maximum 100 per cent. disability rate in each of the last three years. [16397]

  Mr. Denham
  The information is set out in the table.

  Industrial injuries disablement benefit assessments paid at 100 per cent. rate

  Year

  Initial assessments at 95–100 per cent.disabled in the year

  All assessments at 95–100 per cent. at the end of the year

  April 1993 to March 1994

  790

  3,782

  April 1994 to March 1995

  712

  3,757

  April 1995 to March 1996

  813

  4,095

  Figures based on a 10 per cent. sample of all Industrial Injuries Disablement Benefit (IIDB) assessments, and include a rating factor for late returns.

  Press Releases
  Mr. Matthew Taylor
  To ask the Secretary of State for Social Security what is her policy in respect of the faxing of press releases on the day of release to Opposition party spokesmen; what changes have been introduced since 1 May; and if she will make a statement. [16303]

  Mr. Field
  Press releases are delivered by hand to Opposition party spokesmen on the day of release, normally within one hour. None are faxed.

  This practice has been in place since 1 May.

  Child Support Agency
  Mr. Denis Murphy
  To ask the Secretary of State for Social Security how many cases have been dealt with by the Child Support Agency since its formation; and how many complaints regarding the CSA were received during the same period. [16167]
  533
  Mr. Keith Bradley
  We expect the Child Support Agency to provide an efficient and effective service to all its clients throughout the child support assessment process. We are looking for substantial and sustained operational improvements from the Agency, in particular on getting more maintenance paid, reducing the backlog and improving customer service.

  The administration of the Child Support Agency is a matter for the Chief Executive, Mrs. Faith Boardman. She will write to my hon. Friend.

  Letter from Faith Boardman to Mr. Denis Murphy, dated 24 November 1997:
  I am replying to your Parliamentary Question concerning the number of cases dealt with by the Child Support Agency, and complaints regarding the Agency.
  From its inception in April 1993 to the end of October 1997, the Agency has taken on over 2.2 million cases.
  During the same period, the number of written complaints received by Child Support Agency Centres (or, in a few instances, field offices) amounted to just over 109,000. This represents the vast majority of complaints sent to the Agency. Correspondence received by Ministers and the Chief Executive is not categorised, and it is not possible to say what proportion of that correspondence relates to complaints. Full figures are not available for the first year of operation, but since April 1994, all such correspondence has totalled over 37,000.
  I am very conscious that there are still far too many justified complaints about the standards of basic customer contact and the service we provide. It is a key priority of the Agency to improve the way in which complaints are handled; we have revised our training for all staff who deal with complaints and introduced a new Complaints Guide. The Guide sets out our policy and procedures for swift, effective complaints handling.
  Although the number of complaints reduced in 1996/97 (by around 20%), we are aware that as we tackle our backlog of cases, there is the potential for the volume of complaints to rise in the short term and we recognise that doing things right first time is the key to preventing complaints.
  In addition, from April 1997 the Office of the Independent Case Examiner has provided an independent complaints investigation service for those customers who consider that the Agency's internal review process has not satisfactorily resolved their grievances. At the end of September 1997, the number of cases accepted for investigation by this service was 148.
  Over the next few years, I am committed to bringing high quality levels of performance to every part of our operation as a matter of routine, thereby reducing the number of complaints received and enhancing the public perception of the Agency.

  Mr. Burns
  To ask the Secretary of State for Social Security what is the planned date of publication of the report on the review of the Child Support Agency. [17650]

  Mr. Denis Murphy
  To ask the Secretary of State for Social Security when the current review of the Child Support Agency will be completed. [17148]

  Mr. Keith Bradley
  We aim to bring forward proposals in the first half of next year.

  Child Benefit
  Mr. Kirkwood
  To ask the Secretary of State for Social Security when the report on the methodology and findings of the Benefit Review on Child Benefit will be published. [17547]
  534
  Mr. Denham
  Questions on Benefits Agency operational matters are the responsibility of the Chief Executive, Peter Mathison. He will write to the hon. Member.

  Letter from Peter Mathison to Mr. Archy Kirkwood, dated 24 November 1997:
  The Secretary of State for Social Security has asked me to reply to your Parliamentary question asking when the report on the methodology and findings of the Benefit Review on Child Benefit will be published.
  The findings of the Child Benefit Review are currently being evaluated. When the results have been finalised they will be submitted to Ministers for consideration. The full report and details of methodology will then be published. It is expected that this will be in the new year.

  Benefits Office (Grays, Essex)
  Mr. Mackinlay
  To ask the Secretary of State for Social Security (1) if she plans to provide a period of consultation with(a) the local authorities, (b) the clients, (c) hon. Members and (d) other agencies, before implementing changes in the levels of staffing and services provided at the Grays, Essex Benefits Office; and if she will make a statement; [17336]

  (2) when unions were consulted about details of plans to alter the levels of staffing and services provided at the Grays, Essex Benefits Office; and if she will make a statement; [17324]

  (3) what plans there are to alter the levels of staffing and services provided at the Grays, Essex Benefits Office; and if she will make a statement. [17325]

  Mr. Keith Bradley
  The operational organisation of benefit offices is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to my hon. Friend.

  Letter from Peter Mathison to Mr. Andrew Mackinlay, dated 24 November 1997:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Questions concerning the levels of staffing and services provided by the Benefits Agency (BA) office at Grays, Essex.
  The BA is undertaking a reappraisal of its services and the way they are provided in order to modernise service delivery and make savings for the taxpayer. Part of this reappraisal includes an analysis of the use the Agency makes of its present accommodation. The BA's Essex South West District, which includes the office at Grays, is looking at ways to rationalise its accommodation.
  The manager of the BA's District wrote to local MPs and representatives of 28 local organisations to inform interested parties of the proposed changes. As there will be no change to the service provided to the public at the Grays office, a formal period of consultation is not considered necessary.
  The proposals will have some impact on staff locally. Accordingly, the local Trade Unions were advised separately of the announcement and there will be extensive local discussions to ensure a successful implementation of the proposals.
  Some processing work currently conducted at Grays will transfer to Basildon. However, a full caller facility will be retained at Grays along with some of the existing processing work. Customers will be able to call at the office as they do now. Indeed, the proposed changes will enhance the service for disabled people who will be provided with improved access to the building.
  I hope you find this reply helpful.
  535

  Welfare to Work
  Mr. Burns
  To ask the Secretary of State for Social Security if she will make a statement on the entitlement to benefits of those who agree to participate in Welfare to Work for long-term sick and disabled schemes. [17724]

  Mr. Denham
  I shall let the hon. Member have such information as is available as soon as possible.

  Mr. Burns
  To ask the Secretary of State for Social Security if she will make a statement on the welfare to work for the long-term sick and disabled pilot schemes. [17648]

  Mr. Denham
  The Government believe that work is the best form of welfare for people of working age. We are committed to improving opportunities for sick and disabled people who want to work.

  We will use the £195 million to fund innovative schemes which will explore how best to help sick and disabled people into work. We want to encourage an imaginative approach. We do not wish to constrain ideas at this stage but schemes could for example provide services along the following lines: improved advice; rehabilitation; work trials; skills training; adaption to the workplace; job-coaching and employer mentoring; improved employer and medical services sickness management; and assessment and placement schemes. We hope to launch a tendering exercise by the turn of the year and to select the first schemes in spring 1998.

  Income Support
  Mr. Burns
  To ask the Secretary of State for Social Security if she will make a statement on the planned date of publication of the report of her Department's research into income support. [17652]

  Mr. Keith Bradley
  Department of Social Security has a wide-ranging research programme, covering a number of areas including Income Support. It is our practice to publish the results of research commissioned.

  Poverty Record
  Mr. Boswell
  To ask the Secretary of State for Social Security if she will place in the Library a copy of the Government's response to recent litigation on Britain's poverty record in connection with the 1976 UN International Covenant on Economic, Social and Cultural Rights. [17229]

  Mr. Keith Bradley
  The UK submitted its third compliance report on the 1976 UN International Covenant on Economic, Social and Cultural Rights (ICESCR) in February 1996. That report, which has been placed in the Library, has been considered by an ICESCR Committee who are now taking oral evidence from both Non-Governmental Organisations and the Government.

  Cold Weather Payments
  Mr. Corbyn
  To ask the Secretary of State for Social Security what data her Department has collated on the effects of wind chill on the heating needs of those in receipt of cold weather payments. [17369]
  536
  Mr. Denham
  I refer my hon. Friend to the reply I gave my hon. Friend the Member for Streatham (Mr. Hill) on 30 October 1997,Official Report, columns 855–56.

  Mr. Corbyn
  To ask the Secretary of State for Social Security what assessment her Department has made of the costs of introducing a winter payment system for fuel instead of the cold weather payment; and if she will make a statement. [17366]

  Mr. Denham
  I shall let my hon. Friend have such information as is available as soon as possible.

  Mr. Corbyn
  To ask the Secretary of State for Social Security what estimate her Department has made of the cost of introducing a wind chill factor in calculating cold weather payments. [17367]

  Mr. Denham
  A number of options have been considered. Full details are contained in the Building Research Establishment's report, copies of which are available in the Library.

  State Pensions
  Mr. Corbyn
  To ask the Secretary of State for Social Security if she will publish all the representations received as part of her review of state pensions. [17360]

  Mr. Denham
  I refer my hon. Friend to the replies I gave the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on 17 November 1997,Official Report, columns 85–86.

  Mr. Corbyn
  To ask the Secretary of State for Social Security when she plans to make a statement on the Government's strategy for the state pension from 1998– 99 onwards. [17362]

  Mr. Denham
  The pensions review, announced by my right hon. Friend, the Secretary of State, on 17 July 1997,Official Report, columns 239–41, is looking at the central areas of insecurity for elderly people, including all aspects of the basic pension and its value. A key objective of the review is to ensure that pensioners should have an adequate income in retirement; that they should share fairly in rising national prosperity, and that public finances should be both sustainable and affordable.

  The first part of the review ended on 31 October and we are now carefully considering more than 1,800 responses we have received from pensioner providers, employers, employees, consumers, pensions experts and pensioners themselves. The Government intend to publish an initial framework for change in the first half of 1998. There will then be a period of further consultation before final, detailed proposals are developed.

  All-work Test
  Mr. Burns
  To ask the Secretary of State for Social Security what is the planned date of publication of the report on the review of the all-work test. [17647]

  Mr. Denham
  As part of our Comprehensive Spending Review, we are looking at all aspects of current provision for sick and disabled people. Our objectives are to ensure that sick and disabled people who want to work are helped to do so and those who cannot are given appropriate support. This means that we are considering carefully the appropriateness of the All-work Test as we develop our
  537
  proposals. The Comprehensive Spending Review was announced on 11 June and is expected to take around a year to complete.

  Lone Parents
  Mr. Webb
  To ask the Secretary of State for Social Security how many of those individuals in a family headed by a lone parent where household income after housing costs is below half the national average are(a) in benefit units receiving income support, (b) in benefit units not receiving income support but receiving one parent benefit, (c) in benefit units where the head works 16 hours per week or more or (d) in benefit units receiving family credit, housing benefit or council tax benefit. [17620]

  Mr. Keith Bradley
  In 1995–96, an estimated 2.4 million individuals in Great Britain were in a family headed by a lone parent where household income after housing costs was below half the national average. Of these individuals, it is estimated that:

  (a) 87 per cent. (2.1 million) were in benefit units receiving income support;

  (b) 7 per cent. (0.2 million) were in benefit units not receiving income support but receiving one parent benefit;

  (c) 7 per cent. (0.2 million) were in benefit units where the head worked 16 hours per week or more;

  (d) 91 per cent. (2.2 million) were in benefit units in receipt of at least one of the following: family credit, housing benefit or council tax benefit.

  Source:
  Households Below Average Income (HBAI).
  Notes:
  1. The data come from the Department's Households Below Average Income(HBAI) series, based on the Family Resources Survey (FRS and covering Great Britain. The FRS data was used to achieve a large enough sample size to provide the information. All results are subject to sampling error.
  2. The income measure used is weekly net (disposable) equivalised household income. The definition of income used follows that in the published HBAI series for FRS based results.

  Social Security Bill
  Mr. Webb
  To ask the Secretary of State for Social Security what estimates he has made of the saving which would arise to the Exchequer from Clause 70 of the Social Security Bill if there were no exceptions to its provisions. [17607]

  Mr. Keith Bradley
  The estimated savings without exceptions would be around £80 million in a full year.

  Christmas Bonus
  Mr. Burns
  To ask the Secretary of State for Social Security if the Christmas bonus will be included in her Department's review of the central areas of insecurity for older people. [17727]

  Mr. Denham
  Our pensions review will look at all aspects of the basic state pension and its value including the Christmas Bonus. The review will report in the first half of next year.

  Private Pension Funds
  Mr. Boswell
  To ask the Secretary of State for Social Security if she will make a statement on recent trends in the solvency of private pension funds. [17228]
  538
  Mr. Denham
  There is no universally accepted benchmark for measuring the solvency of private pension funds. Actuaries use a number of valuation methods and assumptions when advising trustees about the funding level of their pension schemes.

  Pensions Forums
  Mr. Corbyn
  To ask the Secretary of State for Social Security what actions are being taken by her Department to promote pensions foruMs in each local authority area. [17368]

  Mr. Denham
  This Department has no plans to set up pensions foruMs in each local authority area, but we want everyone with an interest in pensions to participate in the Pensions Review announced by my hon. Friend the Secretary of State on 17 July 1997,Official Report, columns 239–41. We particularly welcome contributions from today's pensioners. That is why we were extremely pleased that Jack Jones and the National Pensioners' Convention (NPC) agreed to take on a central and specific role within the Review so that pensioners' voices can be heard at the heart of the Review process. It is open to the NPC to make representations on the further involvement of pensioners in local and central Government. The NPC is an organisation with a large number of affiliated local pensioners' organisations and over 1.5 million members across the country. To date we have received and are considering over 1,800 replies to the public consultation exercise which ended on 31 October many of which are from local pensioners' organisations.

  Statutory Services
  Mr. Corbyn
  To ask the Secretary of State for Social Security what assessment her Department has made of the effects of the Gloucestershire judgment relating to the provision of statutory services; and if she will make a statement. [17363]

  Mr. Keith Bradley
  My right hon. Friend the Secretary of State for Health has the lead responsibility for the implications of the Gloucestershire judgment. The judgment does not have any effect on DSS provisions.

  Disability Living Allowance
  Mr. Burns
  To ask the Secretary of State for Social Security if she will make a statement as to the planned date of publication of the report on the review of the disability living allowance. [17651]

  Mr. Denham
  I shall let the hon. Member have such information as is available as soon as possible.

  Wisconsin Project
  Mr. Burns
  To ask the Secretary of State for Social Security which Ministers had meetings with officials from Wisconsin during the summer. [17726]

  Mr. Keith Bradley
  My right hon. Friend the Secretary of State had one meeting with an official from Wisconsin.

  Mr. Burns
  To ask the Secretary of State for Social Security what reports have been prepared by officials in her Department on the Wisconsin Project; and if she will make them publicly available. [17725]
  539
  Mr. Keith Bradley
  Departmental Officials prepare regular background papers for Ministers on developments in welfare policy across the world. Several of these have included material on recent changes in Wisconsin.

  It is for the authorities in Wisconsin to provide information about its welfare policy.

  Pension Review
  Mr. Burns
  To ask the Secretary of State for Social Security if she will list the submissions to the Government's pension review. [17649]

  Mr. Denham
  I refer the hon. Member to the replies I gave the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on 17 November 1997,Official Report, columns 85–86.

  Mr. Duncan Smith
  To ask the Secretary of State for Social Security if changes brought into effect following the Government reviews on pensions will affect only those starting new pension schemes. [17621]

  Mr. Denham
  A key objective of the review is to ensure that pensioners should have an adequate income in retirement; that they should share fairly in rising national prosperity; and that public finances should be both sustainable and affordable.

  No decision on changes to the pension system have been made. The Government intend to publish an initial framework for change in the first half of 1998. There will then be a period of further consultation before final, detailed proposals are developed and laid before Parliament.
  540

  Benefit Claims (Backdating)
  Mr. Webb
  To ask the Secretary of State for Social Security what is the cost to the Exchequer of the exemptions to the proposed restrictions on backdating of benefit claims which were announced by the Under-Secretary on 20 November 1997,Official Report, Standing Committee B, columns 426–29. [17608]

  Mr. Keith Bradley
  The estimated cost of the exceptions is around £24 million in a full year.

  Lone Mothers
  Mr. Duncan Smith
  To ask the Secretary of State for Social Security, pursuant to her oral answer of 17 November 1997,Official Report, column 7, if she will make it her policy not to introduce compulsion for lone parents in order to get them from welfare into work. [17653]

  Mr. Keith Bradley
  Compulsion is not the issue. The real issue is effective help to get lone parents back to work. We are making significant steps to help lone parents back to work in the New Deal for Lone Parents, and by developing a National Childcare Strategy. With these policies, we are offering:

  personalised advice on jobsearch;

  training;

  help with childcare;

  and in-work benefits advice.

  We believe that with the measures in the New Deal for Lone Parents, coupled with improvements that the Government is making in childcare, lone parents will decide for themselves that work is better than life on benefit.

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

The Lord Bishop of Bradford
David James, Lord Bishop of Bradford—Was (in the usual manner) introduced between the Lord Bishop of Norwich and the Lord Bishop of Ely.
The Earl of Verulam—Took the Oath.

War Veterans
2.45 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What action they will take in support of war veterans who in later life develop disabilities as a result of injuries suffered whilst on active service.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, under the generous provisions of the War Pensions Scheme, awards may be made at any time after the termination of service in respect of any disablement due to service in the Armed Forces. Where a claim is made more than seven years after the termination of service, the claimant is given the benefit of any reasonable doubt as to whether the disablement is due to service.
Lord Molloy: My Lords, I am grateful to my noble friend for her reply, which is partially welcome. It is proving extremely costly to the Royal British Legion in terms of consultation and representation fees when these cases have to come to court. Many ex-servicemen would not be receiving pensions if it were not for the Royal British Legion. I am sure that all Members of the House applaud the endeavours of the Royal British Legion.
Noble Lords: Hear, hear!
Lord Molloy: My Lords, if my noble friend were able to make a financial contribution, we should be most grateful.
Baroness Hollis of Heigham: My Lords, I am not sure if I am being asked to make a personal contribution or a government one. I am not sure that I can afford a personal contribution; and I am not sure whether I should be allowed to offer a government one.
I do not think anyone would dissent from the comments of my noble friend. Not only are war pensioners greatly indebted, but the country as a whole is greatly indebted, to the work of the Royal British
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Legion and the Royal British Legion (Scotland) on behalf of people who, through illness or injury, are often unable to be their own best advocates.
The Countess of Mar: My Lords, is it not the case that the Royal British Legion is having to fight for veterans of various wars, mainly because medical and service records are missing? Can the Minister say whether Her Majesty's Government have learnt the lessons of the Gulf War and previous wars with regard to medical records and whether they will ensure that in future all medical records relating to servicemen are retained until their death?
Baroness Hollis of Heigham: My Lords, the noble Countess has correctly raised the serious question of records with defence Ministers because it is a matter for them. The lack of adequate records and therefore of adequate evidence has often hampered the MoD in dealing not only with Gulf veterans but with other cases as well. That is why on 14th July my ministerial colleagues, led by Dr. John Reid in another place, announced a package of measures relating to Gulf veterans, among which the quality of record-keeping was a matter of highest priority.
Lord Campbell of Alloway: My Lords, was there not at some time a six-year rule relating to the destruction of records? If so, has that been abrogated?
Baroness Hollis of Heigham: My Lords, I am not aware of that rule. If I can provide any information on that matter to the noble Lord, I shall certainly write to him.
Lord Burnham: My Lords, in view of the demise of the service hospitals, what action has been taken by Her Majesty's Government to maintain the priority of treatment for war pensioners which was promised by statute and which has been maintained by successive governments since World War I?
Baroness Hollis of Heigham: My Lords, the noble Lord is right to say that, all things being equal, war service pensioners have priority of treatment within NHS hospitals as a result of the negotiations in 1948. That agreement is respected and observed and NHS hospitals were reminded by circular recently that they are expected to respect it.
The Earl of Carlisle: My Lords, is the noble Baroness aware that when a serviceman or servicewoman leaves the service he or she must have a medical test? Those tests are often of a very perfunctory nature. Will she make representations to her opposite number in the Ministry of Defence to review the system so that full medical inspections are carried out when the serviceman or servicewoman leaves the service?
Baroness Hollis of Heigham: My Lords, I shall discuss this issue with my colleagues in the MoD. If the situation is as presented by the noble Lord, we shall try to see that the matter is properly reviewed.
Lord Molloy: My Lords, I thank my noble friend for her comments and am grateful to her for her

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consideration. Will she consider having discussions with the Royal British Legion? That is the organisation which best knows the ins and outs of the difficult cases that it is trying to help. My noble friend would be made extremely welcome because we feel that she sympathises with us.
Baroness Hollis of Heigham: My Lords, it will come as no surprise to my noble friend Lord Molloy that I see the Royal British Legion, the Royal British Legion (Scotland) and the other ex-service organisations on a regular and frequent basis. I suspect that I have had at least two or three meetings since the summer with RBL, both of a formal and informal nature. My predecessor, the noble Lord, Lord Mackay of Ardbrecknish, would be the first to say that the RBL is not backward in coming forward when there are issues affecting the service community that it feels should be drawn to a Minister's attention.

Student Fees in Scotland
2.51 p.m.
Baroness Carnegy of Lour Baroness Carnegy of Lour asked Her Majesty's Government:
What legal advice they received before making their decision on tuition fees for non-Scottish United Kingdom students taking honours degrees at Scottish universities.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, it is not the practice to reveal internal legal advice on any matter.
Baroness Carnegy of Lour: My Lords, with due respect, I did not ask the noble Lord where the legal advice came from; I asked whether the Government had had any legal advice. It is a Question that I asked on 4th November. I received no reply then and I have had no letter since. Is it possible for the Minister to tell us now whether the arrangements we are discussing are legal under the Maastricht Treaty, the equal opportunities Act, the Race Relations Act and the European Convention on Human Rights?
Lord Sewel: My Lords, I recognise the interest that the noble Baroness takes in this matter, which she has raised before. I regret that I am forced back to my original Answer, that it is not the practice to reveal the internal advice that the Government receive. The Question the noble Baroness asks specifically says,
"What legal advice they received".
I must stick by the terms of my original Answer.
Lord Taylor of Gryfe: My Lords, can my noble friend say whether it would be right and proper for other organisations, such as the National Union of Students, to take this matter to the European courts? In addition to seeking legal advice, has the Minister taken the
862
opportunity to discuss with his colleague in the other place the expression of view, which was universal in this House, condemning this specific practice?
Lord Sewel: My Lords, I do not believe that the view was universal. When I participated in that debate in your Lordships' House, contributions came from both sides of the question. On my noble friend's first point, it is clearly open, and rightly open, to any organisation or individual to take action in any court that is available to them to challenge the decision of government.
Lord Rawlinson of Ewell: My Lords, am I correct in believing that it is acceptable for the Minister to say whether or not he sought advice from the law officers of the Crown in Scotland on this matter? Yes or no?
Lord Sewel: My Lords, I am back to the conventional position that was accepted by previous governments. The Government do not reveal either the content of advice or whether or not they have sought it.
Lord Avebury: My Lords, does the Minister recall, in the days of the previous government, when challenges were made to some of the immigration legislation on the basis that it contravened the European Convention on Human Rights, the reply from Ministers was that they were satisfied that an adequate answer would be brought to the court if litigation occurred? Can the Minister at least say that in relation to this question?
Lord Sewel: My Lords, I can say that if there is a challenge in the court, the Government will be in a position to make their case to the court.
Lord Glenamara: My Lords, can my noble friend say whether the Government received any advice, legal or otherwise, before deciding to impose this tax of £1,000 a year on all undergraduates?
Lord Sewel: My Lords, I can assure my noble friend that the Government did indeed receive advice; what he may dispute is its quality.
Baroness Young: My Lords, does not the noble Lord recognise that his Answer is incredibly unhelpful to the House? After all, this is an extremely serious point. When this matter was raised by my noble friend Lady Carnegy in an Unstarred Question, the difference and the unfairness of treatment between English, Welsh and Northern Ireland students in Scottish universities compared with EU students—when we had all assumed that England, Wales and Northern Ireland were in the EU—was shown to be unbelievable. This stonewalling hardly contributes to settling what is an extremely worrying issue.
Lord Sewel: My Lords, I regret that the noble Baroness feels that I am stonewalling. I am bound by the conventions and practices in that the tradition is that the Government do not reveal either whether they have sought advice, whether they have received advice or the content of that legal advice. I recognise that the positions

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of both the noble Baronesses, Lady Young and Lady Carnegy, are deeply and sincerely held. Every opportunity will be available for noble Lords to make their contributions on this substantive issue when the Bill is before us.
Lord Beloff: My Lords, will the Minister answer a question of policy? Is it correct that Scottish students in turn are being discriminated against in the extent of the disallowance for parental income in awarding maintenance grants and in the disallowance of their right to a loan to meet costs when they go to English universities? Is that simply a way of separating Scotland from England once and for all?
Lord Sewel: My Lords, I am grateful to the noble Lord for raising that issue, though it may be slightly wide of the Question. I am grateful to be able to resolve the question and, in doing so, declare something of an interest in that one of my children may be attending a Scottish university next year.
I was slightly put off by the report that I read in one of the Scottish papers saying that the parental income figures would be different in Scotland than in England. When I investigated the matter, it became clear that the paper concerned had failed to distinguish between net and gross when looking at parental income. I can therefore assure the noble Lord that the figures in Scotland are the same as the figures in England and Wales. There will be no difference between Scotland and elsewhere in the United Kingdom.
Lord Mackay of Ardbrecknish: My Lords, has the Minister taken anybody's advice on this subject, lawyer or otherwise? Am I right in thinking that, whether they be Scottish or non-Scottish students, on top of the £3,000 or £4,000 they will have to pay in fees, if they come from modest backgrounds they will also run up a debt of £14,000 by the end of their four year honours degree course? Is the Minister and his party comfortable with that?
Lord Sewel: My Lords, of course the Government take advice. We have taken the advice of experts in higher education in coming forward with these proposals. We believe the proposals to be fair. We believe that they address the basic and fundamental issue that we cannot have a mass system of higher education paid for purely out of taxation. Those who benefit from higher education should be expected to make a fair and reasonable contribution. That is the aim of our proposals.
Lord Mackay of Drumadoon: My Lords, the Minister will be aware of the provisions of the Human Rights Bill, which includes a clause to the effect that, when a Minister introduces a Bill into this House, he should make a statement to the effect that in his view the provisions of the Bill are compatible with convention rights. Can the
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Minister assure the House that when he introduces the legislation relating to these proposals, he will be in a position to make such a statement?
Lord Sewel: My Lords, I do not know who will be introducing the Bill, but I am sure that whoever does so will do whatever is necessary in the terms that the noble and learned Lord outlines.
Lord Pilkington of Oxenford: My Lords, in view of the fact that the noble Lord said that the Government took advice, why did they reject in such a cursory manner the Dearing recommendations which did not suggest a policy the Government follow?
Lord Sewel: My Lords, in Scotland it was the Garrick Report rather than the Dearing Report. We took what we thought were the best and strongest parts of the Garrick Report and built upon them.
Lord Selkirk of Douglas: My Lords, would it not be easier for the Government to avoid any threat of legal challenge by spending the £1.5 million required for the English students and the £45,000 required for the Welsh students entering into these four-year degree courses? After all, these are very small sums relative to the total education budget.
Lord Sewel: My Lords, the Government are clearly prepared to withstand and rebut any legal challenge on this issue. The noble Lord again goes into areas of wider policy. He will have an opportunity to make his point when the Bill is before us.

EU: Tax Code of Conduct
3.1 p.m.
Lord Bruce of Donington Lord Bruce of Donington asked Her Majesty's Government:
What is their policy towards the proposals of the European Commission in its communication Towards tax-coordination in the European Union(COM(97)/495/Final) sent to the Council of the European Union on 6th October 1997, and whether they will indicate their responses to the four requests made at paragraph 23 of the communication.
Lord McIntosh of Haringey: My Lords, the Government deposited an Explanatory Memorandum on 17th November on the Commission communication of 5th November 1997—A Package to Tackle Harmful Tax Competition in The European Union—which superseded the document to which my noble friend refers in his Question.
The four questions posed by the Commission in its communication of 1st October sought the endorsement of the ECOFIN Council to its plans for handling the proposed package of measures to tackle harmful tax competition. The ECOFIN Council, at its 13th October meeting, discussed the Commission's communication, focusing on the code of conduct.

865
The UK recognised that a voluntary code might play a helpful role in tackling harmful tax competition, but would only agree to a code that respected member states' continued competence in the field of tax. The UK and other member states called for several changes to be made to the draft code. Discussion on the code has subsequently continued in the taxation policy group and in the Council working group. We expect the harmful tax competition package to be on the table for political agreement at the 1st December meeting of the ECOFIN Council.
Lord Bruce of Donington: My Lords, I am most grateful for the noble Lord's reply and his indication of the Government's caution towards proceeding in this matter. He will doubtless be aware that for the past 21 years the European Commission has been seeking to pass measures for tax harmonisation, thereby assuming some control of fiscal matters formerly in the hands of member states. Is he also aware that I have seen the latest memorandum—COM(97)/564—which supersedes the one referred to in my Question? I should like to have the Minister's assurance that he will resist any temptation to accept the agreement with guidelines as being of little policy significance. Is he aware that these guidelines can always be referred to in the preambles and recitals to individual pieces of legislation issued by the Commission and that they are used by the courts—by the European Court in particular—as indicating the drift of the legislation? Will he therefore please give the House an assurance that he will be extra cautious before leading the country into a position where its own fiscal measures in terms of taxation can be determined by the European Commission?
Lord McIntosh of Haringey: My Lords, I hoped that I had made it clear that there is no question of the Government's taxation policy being determined by Europe. That is a matter for all member states. At the same time, I have to say to my noble friend in response to his first question that there are advantages in the harmonisation of taxes between European countries because there would otherwise be the possibility of evasion by potential taxpayers moving their assets and their liabilities from one member state to another. So we do not reject the thrust of the European Commission towards tax harmonisation. However, as I made clear in my first Answer, these matters are within the competence of member states and a code of conduct is advisory only.
Lord Lawson of Blaby: My Lords, will the Minister assure the House that the Government will resist, as indeed I resisted when I was Chancellor, the move within the Community, prompted by the Commission, for a common withholding tax? Does he not agree that if there were to be a common withholding tax the effect would simply be for capital to flow away from the European Union and into tax havens in countries outside the European Union, which would be to no one's benefit within the Union? Will they resist that proposal?
Lord McIntosh of Haringey: My Lords, I recognise the force of what the noble Lord says and his long
866
standing interest in this subject. The proposals currently on the table would require member states to take action on the taxation of savings. They would have the option either to provide information—reciprocal information—or to withhold tax on interest payments. Given this choice, the United Kingdom has made it clear that it would take the first option—reciprocal information.
Lord Stoddart of Swindon: My Lords, is my noble friend aware that many people, including myself, have been very concerned about the remarks made on 20th November by M. Pierre Moscovici, the French Minister for Europe, that taxes would have to be harmonised within the next 10 years? Even if the British Government resist, is this not a further move to establish tax harmonisation through the single market, which would mean that tax harmonisation could take place by qualified majority vote and we would not have a veto?
Lord McIntosh of Haringey: My Lords, the Government are not in control of off-the-cuff statements or indeed any statements made by finance Ministers of other countries. The present position—and the only basis on which I can answer these questions—is that taxation is a matter for member states. I remind my noble friend that at the Council the question will have to be decided on the basis of unanimity.
Lord Mackay of Ardbrecknish: My Lords, am I being too suspicious when I wonder whether the decision to impose a pensions tax of £5 billion a year on pension funds has something to do with the desire to harmonise the tax on savings? Furthermore, will the so-called harmful tax competition include corporation tax? We in this country have a corporation tax level of 31 per cent. In Germany, it is 45 per cent. Will our tax be considered harmful? Will we be forced to increase it to 45 per cent.?
Lord McIntosh of Haringey: My Lords, the answer to the noble Lord's first question is, yes, he is being too suspicious. The answer to his second question is that, indeed, a lot of the thrust for the harmonisation of taxation relates to corporate taxation, but none of that implies that we can be forced to change our corporate tax levels.
The Earl of Lauderdale: My Lords, can the noble Lord tell the House whether the Government have taken or will take legal advice—
The Lord Privy Seal (Lord Richard): My Lords, I am sorry to intervene, but we have seven minutes left for the fourth Question.

Pedestrianisation: Benefits
3.9 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What encouragement they are giving to proposals for pedestrianisation in city centres in the United Kingdom.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, the decision to pedestrianise areas of city and town centres is a matter for individual local authorities rather than central government. The Government welcome the improved safety, convenience and environmental benefits a well-designed scheme can bring to local communities. Government advice in Planning Policy Guidance Note 6 encourages local authorities to give greater priority to pedestrians, including pedestrianisation in town centres. Detailed advice has also been given on planning, design and legal implications in Local Transport Note 1/87,Getting the Balance Right.
Lord Campbell of Croy: My Lords, I thank the noble Baroness for her reply. While such plans deserve general encouragement, has she visited some cities abroad where pedestrianisation has made the centres no-go areas for disabled people who are dependent on wheels? Will efforts be made to ensure access for vehicles for those who cannot do without them because the publicity and reports seldom mention that factor?
Baroness Hayman: My Lords, I have visited very few places since 1st May. However, the point the noble Lord makes as regards access for disabled people is very important. In the local planning guidance note we make very clear that the key to a successful scheme is that it achieves a sound balance between all users and that the authorities ensure reasonable access for disabled people. In fact, a well designed scheme can provide benefit for disabled people by reducing their exposure to traffic and extending their mobility.
Lord Berkeley: My Lords, has the Minister had time to visit the exhibition next door on the pedestrianisation proposals for Old Palace Yard and Trafalgar Square? I do not know whether any other noble Lords have had time to visit it as well. Does the Minister agree that if the scheme is implemented it will provide a much better environment for pedestrians, for tourists and for those of us who work in the area, and a much enhanced opportunity to view the wonderful buildings there? Does she agree that the key to a successful scheme is the restriction of most traffic except buses and, in some cases, taxis, as proposed?
Baroness Hayman: My Lords, I have indeed visited the exhibition. I know that other noble Lords have done so. There has been some lively debate about the two proposed schemes. I believe that the World Squares Initiative is very exciting; it could do a great deal to improve the central and historic areas of London which at the moment suffer from congestion and pollution. However, it is important, as in all pedestrianisation schemes, to get the balance right. That is why Westminster City Council, which
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is taking the lead in this area, is inviting comment and undertaking the consultation process.
Lord Inglewood: My Lords, can the noble Baroness confirm that a proper scheme for pedestrianisation must include a supporting part played by private vehicles and public transport?
Baroness Hayman: My Lords, I have made clear the importance of achieving a balance and of making sure that there are no unintended consequences of pedestrianisation. That can happen in ill-designed schemes, resulting, for example, in town centres that are empty at night or not available for people who need to use them. I believe that public transport is central to maintaining access to town centres.
Lord Avebury: My Lords, I recognise that arrangements for the pedestrianisation of Parliament Square are matters for the local authority. However, does the noble Baroness agree that there is a particular reason for both Houses of Parliament considering this matter and making sure that access to Parliament, especially for the disabled, mentioned by the noble Lord, Lord Campbell of Croy, is not denied? Is there any way in which the Government, without impinging on the prerogative of the local authority, can ensure that taxi drivers in particular are consulted about proper access for the disabled so that they can reach both Houses of Parliament?
Baroness Hayman: My Lords, I take the noble Lord's point. While it is the responsibility of local authorities, the World Squares Initiative is being led by Westminster City Council. The client group involved includes the Government Office for London, the Department for Culture, Media and Sport, English Heritage, London Transport and others. So we have very much taken on board that this issue is not simply a matter for one local authority. The senior officials of the Parliamentary Works Group sit on the steering group for the world squares study. The steering group is well aware of the needs and concerns of the House both in terms of access for Members and particularly the needs of disabled Members.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord McIntosh of Haringey will, with the leave of the House, repeat a Statement that is to be made in another place on the Pre-Budget Report.

Competition Bill [H.L.]
3.15 p.m.
The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): 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 Simon of Highbury.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 49 [Rules]:
Lord Lucas Lord Lucas moved Amendment No. 191:
Page 24, line 35, leave out ("may") and insert ("shall").
The noble Lord said: I believe that the purpose of these amendments is self-evident. I shall be very grateful to hear the Minister's reaction to them. I beg to move.
Lord Simon of Highbury: I am speaking to Amendment No. 191, but I take the grouping to include Amendments Nos. 192 and 193.
Lord Fraser of Carmyllie: Perhaps the noble Lord would also like to speak to the next group of amendments, Amendments Nos. 194 to 197, because, as far as we are concerned, they are all linked.
Lord Simon of Highbury: I shall try to catch up with the speedy movement of amendments. I am always encouraged to be moved along rather than hindered. I am grateful to the noble and learned Lord for giving me this opportunity to explain to the Committee our thinking on a timetable for dealing with applications, and on giving business adequate notice of the rules and the general advice and information under Clause 50. These are important matters, and as a former businessman I am well aware of the need to give business adequate time to prepare for the application of the prohibitions.
Schedule 9 to the Bill elaborates on the kind of rules that may be made under Clause 49, although it is not binding that such matters will be covered or exhaustive. Paragraph 2 of the schedule says, among other things, that the rules may make provision for an application for a decision and an application for guidance to be dealt with according to a timetable. I can confirm to the Committee that the Secretary of State intends that the director should make rules setting himself a timetable once the system has bedded down. She has a power in Clause 49(9) to direct the director to make rules about a particular matter if she thinks he ought to do so.
Turning to the question of preparation time for business, I accept entirely that the main elements of the new regime should be in place in good time before the prohibitions are brought into effect. We would not expect to commence the prohibition clauses until about a year after Royal Assent. Early in that period I would expect the rules under Clause 49 to be made.
At this point it will be helpful for me to refer the Committee to a letter I have received from John Bridgeman, the Director-General of Fair Trading, a copy of which I have had placed in your Lordships' Library. The letter concerns his office's work, in consultation with the sectoral regulators, on drawing up rules under Clause 49 and the advice and information under Clause 50. It provides useful background to the Committee's discussion of several groups of amendments today. So far as rules are concerned, the letter explains the consultation that has begun with other sectoral regulators, and confirms the director's intention to consult with business
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and its advisers on the draft rules. He says that he aims to publish a consultation draft of the rules as soon as possible, perhaps by late spring.
Given what I have said about a year's delay to the commencement of the prohibitions, this should give business adequate time to prepare for the new regime. There will, of course, also be a transitional period for agreements, but I see that there are amendments down to that schedule to the Bill and it may be best to discuss those transitional arrangements, as opposed to the period between Royal Assent and entry into the law base of the prohibitions, later in our deliberations.
The making of rules must necessarily allow proper time for consultation and for consideration of the points raised during consultation. If for any reason the rules could not be issued early in the period after Royal Assent, I would expect the Government to consider carefully the case for delaying the commencement date for the prohibitions.
To sum up, I am satisfied that the regime will provide businesses with both adequate preparation time before the prohibitions are brought into force and with a timetable by which they can expect their applications to be dealt with once they are in force. On that basis, I ask the noble Lord whether he is prepared to withdraw his amendment. I understand that he was speaking also to Amendment No. 194.
Lord Lucas: I am extremely grateful to the Minister for that explanation and for the opportunity to go through it in detail before we return to this matter after Christmas. In the context of the time that we shall have to digest what he said which, to my mind, will require going over several times before we can understand the nuances of the various let-outs which the noble Lord has allowed himself and the Government, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 192 to 197 not moved.]
Clause 49 agreed to.
Lord Ezra Lord Ezra moved Amendment 198:
After Clause 49, insert the following new clause—
CONSUMER REPRESENTATIVE
(" . The Director shall establish an office of the consumer representative which will represent the consumer interest when he carries out his duties under this Act, and in particular will—

(a) advise the Director, when he is conducting an investigation under section 25, of the impact on consumers of any possible infringement of Chapter I or Chapter II prohibitions;

(b) advise the Director, when he is making a decision following an investigation under section 30, of the impact of such a decision on consumers;

(c) advise the Director, when he is considering granting exemptions under section 4, of the impact of such exemptions on consumers;

(d) assess the impact on consumers of exemptions granted under section 4 which he considers appropriate, and at a time which he considers appropriate; and

(e) publish the results of such assessments.").

The noble Lord said: This amendment refers to the role of consumers in the implementation of the Bill. Although it could be argued that supporting the interests

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of consumers is the fundamental objective of the legislation. nonetheless there is a feeling, particularly on the part of the National Consumer Council, that in achieving that objective of supporting the interests of consumers it would be helpful if consumers were formally involved in the process of applying the legislation. Therefore, it is proposed that within the competition office there should be some consumer representation in some form or another to enable consumers to participate in the consideration of developments which affect their interests. I very much hope that the Government will take on board this attempt to formalise the position of consumers' interests and that they will give it serious consideration. I beg to move.
Lord Borrie: I fully understand the noble Lord's references to the consumer interest. As he rightly said, the whole purpose of competitive activity is, or should be, for the benefit of the consumer. If my noble friend Lord Peston were in his place, he would no doubt be able to quote appropriately from Adam Smith's words to that effect. As the noble Lord, Lord Ezra, knows (because he has often referred to the matter in your Lordships' House), existing legislation allows some form of consumer representation with regard to the specific industry regulators dealing with gas, water and electricity. When referring to these matters on other occasions, the noble Lord has stated a preference for what I think he has called "the gas industry model" whereby the Gas Consumers' Council is independent of the regulator, which is known as Ofgas. However, when it comes to the regulation of the water industry, the consumer committee or council—I forget its correct title—is part of the organisation of the regulator; namely, Ofwat, which, as I recall, the noble Lord does not find quite so satisfactory.
I find the new clause which the noble Lord is proposing slightly odd because it refers to the type of model of consumer organisation which in those other areas the noble Lord has not previously thought the most desirable. The new clause states that the director—that is, the Director-General of Fair Trading—
"shall establish an office of the consumer representative".
That suggests that it is part of the Office of Fair Trading. The noble Lord will correct me if I am wrong.
I would question the value of the new clause on certain other matters. First, in Section 2 of the Fair Trading Act, which is the governing Act of 1973 which set up the Office of Fair Trading and that of the director general, two general duties are specified. One is pro-competition and relates to examining any business matters which might adversely affect competition, and the other, which is given equal importance, is the duty to review the economy to see whether there are any practices which are adverse to the consumer's economic interest. The director general's office contains two main policy divisions. One is concerned with competition policy and the other with consumer affairs. Therefore, in a sense, the Office of Fair Trading, unlike the organisation of the regulatory bodies for the gas, electricity and water industries, already has a consumer affairs division.
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I wonder also whether the new clause is suitably worded. It refers to,
"an office of the consumer representative".
We all like to be representative, but we cannot make someone "representative" simply by calling him such. It is a little difficult to imagine an official of a government agency, such as the Office of Fair Trading, being thought of as a representative of the consumer. I was hoping that the noble Baroness, Lady Wilcox, a former distinguished chairman of the National Consumer Council, would be in her place because—I hesitate to say this—even the NCC would not really claim to be "representative". It is a body that is appointed by appropriate Ministers.
Be that as it may, there is a choice to be made in these matters. A government official, such as the Director-General of Fair Trading—and he has a consumer affairs division—ought to consult with consumer organisations to do the various things which the noble Lord, Lord Ezra, has specified as necessary if he is to carry out his functions under this new Bill. Choice is involved as to whether the director should go direct to the Consumers Association, the National Consumer Council and the various more specialised consumer bodies which now exist, or whether he should have the consumer's point of view filtered to him through some official or some part of his own office. As I see it, that is what would happen if we were to accept the new clause in its present form.
Without, I hope, overdoing it, although I greatly sympathise with the objective of the noble Lord, Lord Ezra, who wants to ensure that the consumer's interests are well understood by those who will make decisions under the Bill and that industry and consumers are consulted about the carrying out of these functions, I am not sure that this device is the best way of achieving that objective.
Baroness Oppenheim-Barnes: I apologise for arriving a few moments late and not hearing the noble Lord, Lord Ezra. I have, however, had the pleasure of hearing the noble Lord, Lord Borrie. In the absence of my noble friend Lady Wilcox, who was my distinguished and committed successor at the National Consumer Council, I must apologise to the NCC for saying that I am very much against this type of amendment, although not so much on the grounds that were put forward by the noble Lord, Lord Borrie, who has recommended the existing bureaucracy and the way in which it works in the interest of consumers. The more he explained it the more bureaucratic it sounded. I do not blame him for that because it was our legislation that created the Office of Fair Trading.
The noble Lord, Lord Ezra, spoke about placing a poultice on to the bureaucracy (if such a mixed metaphor can be used). That is not the point at all. This Bill is near to my heart. When I dealt with these matters at the Department of Trade I certainly intended to do this. My point is far more revolutionary than either of the suggestions that have been put forward. The noble Lord, Lord Borrie, knows what I am about to say.

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I believe that the whole Bill and the criteria within it should relate only to the consumer interest and not the public interest. The public interest is too diffuse and all kinds of considerations come into decisions that may or may not be in the consumer's interest. If this is a Bill to protect consumers then the basic criteria throughout should relate solely to the consumer interest. A decision would have to be made as to what was and what was not the consumer interest. I do not believe that business or industry would have anything to fear from it. Industry knows that good consumer practices mean good business. One rarely finds among successful businesses bad consumer practices, for the simple reason that they do not pay. I do not believe that business has anything to fear from those much simplified criteria. I hope that the noble Lord will be able to take a sympathetic look at this matter when he comes to reply.
3.30 p.m.
Baroness O'Cathain: Having listened to my noble friend Lady Oppenheim-Barnes, I remain unpersuaded that the National Consumer Council's suggestion that has been so well articulated by the noble Lord, Lord Ezra, should be thrown out. Even if one had a consumer interest in the Office of Fair Trading one would have the National Consumer Council, plus the consumer associations if necessary. They have a long pedigree, working extremely hard and diligently for the consumer. They are grounded in reality. They are close to the consumer and always have the consumer interest in mind. It would have been better had the Bill focused completely on the consumer. If I recall correctly, my noble friend said that it would have been better if it had dealt with the consumer interest rather than the public interest because many matters in the public interest might not necessarily be in the consumer interest. However, in the end we have the responsibility of guarding the public interest rather than just the consumer interest. I do not believe that they necessarily conflict but there is a point to be considered here.
Further, I hope that the director general gives weight to this suggestion. Both the National Consumer Council and the Consumers Association are large organisations. They have shown an openness and willingness to have a dialogue with industry. Compared with single issue groups, which tend to be politically motivated and do not necessarily speak for consumers as a whole, I believe that there is merit in getting these organisations more closely involved within the Office of Fair Trading. It is fine to say that a public servant should have responsibility for consumer interests. I do not believe that any public servant can have the same experience vis-à-vis the consumer interest as the NCC and CA.
Lord Haskel: At the risk of disappointing my noble friend Lord Peston, who is not in his place, instead of quoting Adam Smith perhaps I may quote my right honourable friend the President of the Board of Trade,
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Margaret Beckett. In her foreword to the consultation document published with the draft Bill in August she said:
"Effective and fair competition is essential to ensure value and choice for customers".
The whole purpose of this legislation is to protect competition more effectively than we do at the moment. This will benefit UK competitiveness and, as Margaret Beckett has emphasised, it will benefit the consumer.
I say to the noble Baroness, Lady Oppenheim-Barnes, that this is a Bill concerned with competition. The consumer's interests are at the heart of this legislation. As my noble friend Lord Borrie has said, the Director General of Fair Trading must take full account of the impact on consumers in assessing whether behaviour is anti-competitive. I hope that that reassures the noble Baroness, Lady O'Cathain. The same applies under the new Bill when the director is considering whether to grant an exemption from the Chapter I prohibition. Indeed, the exemption criteria set out in Clause 9 expressly require that consumers should enjoy a fair share of the benefits. The ultimate objective of the Director General of Fair Trading's work as a competition authority is to benefit consumers. In his annual report the director describes the aim of the OFT as to protect the economic interests of consumers in the UK by safeguarding effective competition. I am therefore sure that the interests of consumers will be constantly at the forefront of the director's mind.
My fundamental objection to Amendment No. 198 is that it appears to undermine these principles. A discrete consumer representative within the OFT would be a permanent question mark over the director's willingness and ability to take proper account of all the relevant factors, particularly the consumer's interests. I have no wish to undermine the director's role in this way. Moreover, if consumer interests were to be given special representation in the OFT, would not other interest groups such as trade union interests also have a case for separate representation? More prosaically, a discrete office would require additional resources within the OFT, and it would add another layer to the decision-making process. In short, I do not think that it would be right for a body charged with the enforcement of the prohibitions to incorporate specialist interest groups. But we believe that it is absolutely crucial that the consumer has a clear voice under the new regime. The Bill ensures that this will be the case. We believe it is an essential part of a fair and transparent system that there is recourse to effective appeal. We have extended this right under the Bill to consumers.
We have therefore ensured that third parties with a sufficient interest will be able to appeal to the tribunal against decisions by the director. We have gone further to ensure that organisations representing affected consumers will be able to appeal on their behalf. There is nothing in the Bill to prevent people being appointed to the appeal tribunal panel and sitting on tribunals to hear appeals on the basis that they have a particular expertise in consumer matters. We are also including provision in Clause 56 of the Bill to facilitate private actions in the courts by those harmed by breaches of the prohibition. All of this is in the new Bill. The interests

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of the consumer are at the heart of the new prohibitions and the enforcement and appeal arrangements under the Bill will ensure that the consumer has a clear voice in their application.
I hope that what I have said will satisfy the noble Lord, Lord Ezra. Knowing that he is indeed a champion of the consumer, I hope that he will feel able to withdraw his amendment.
Lord Ezra: I thank the noble Lord for his considered reply. I am however a little concerned about its main drift, which emphasised the possibilities of an appeal. The whole point of the amendment is to get in before one has to appeal against a decision which appears to be unsatisfactory. I find it difficult to understand why the Government resist the idea of a consumer advisory body. It may be that it should not be placed within the OFT as proposed; it may be that such a body can be placed elsewhere, perhaps with the competition commission. As the noble Lord, Lord Borrie, suggested, perhaps it can be set up independently, for it to be consistent with other proposals that have been made, to be consulted during the formulation of decisions reached by the director general.
I am a little worried that the emphasis should be put on appeal being available to the consumer interests rather than on consumer interests being brought into the decision-making process. Can the noble Lord, Lord Haskel, comment on that matter?
Lord Haskel: The appeal is a failsafe mechanism to which consumers can resort if everything else goes wrong. Prior to that there are all the safeguards which I explained in my response. The Director General of Fair Trading has a special department within his office for looking after consumer interests and the appeal is a failsafe process at the very end of the line.
Lord Ezra: I would like to think very carefully about this matter. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 9 [Director's Rules]:
Lord Kingsland Lord Kingsland moved Amendment No. 199:
Page 67, leave out lines 44 and 45.
The noble Lord said: This amendment refers to a matter which the Opposition raised on the second day of the Committee stage. We tabled amendments to Schedules 5 and 6 which proposed removing the power of the director general to convert unilaterally an application for guidance into an application for a decision. To be consistent with that, we have to do the same thing in relation to this schedule. That is the reason for wishing to excise paragraph (c) at the bottom of page 67.
The Minister will note that in paragraph (b) the director, having issued the guidance, can thereafter relieve a company from either the impact of Chapter I or Chapter II prohibition. However, paragraph (c) is much more onerous because it concerns a company which, having requested guidance, suddenly finds half-way through consideration of that request that the
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director has decided to convert it into a full-scale application. Not only does that situation offend the Opposition's sense of sportsmanship; it also breaks the principle that, all things being equal, if an investigation is started by the director there is a proper procedure which includes warning the potential victim that the director is going to undertake the task. That is the spirit in which the amendment is tabled. I beg to move.
Lord Haskel: I speak to Amendment No. 199 together with Amendment No. 200. Amendment No. 199 relates to the director's ability to convert an application for guidance into an application for a decision. The noble Lord referred to the Opposition's sense of sportsmanship. I refer the noble Lord to my earlier response when I gave a solemn and binding undertaking to reflect upon the issue.
Lord Kingsland: I thank the noble Lord for reminding me that he agreed to reflect upon the matter. I wonder whether his reflections have yet matured.
Lord Haskel: I am afraid that my reflections have not matured. We have been reflecting on the further amendments. The result of our reflections will be put forward at the next stage of the Bill.
Lord Kingsland: In thanking the Minister for that reflective reply, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland Lord Kingsland moved Amendment No. 200:
Page 68, leave out lines 34 to 47.
The noble Lord said: The amendment corresponds to a previous amendment to Clause 10 which sought to delete subsections (5) to (8) which gave the director power to cancel an EC exemption. This power, which is reflected in our further amendment to a different part of the Bill, contradicts what we understood to be the fundamental principle behind the Bill, namely, that our domestic provisions should dovetail with the European provisions in such a way that the minimum burdens are imposed upon British industry in order to enhance competitiveness. If these provisions dovetail and if they reflect the same kinds of obligations, we do not understand why, if the EC has granted an exemption, we should second guess them. I beg to move.
Lord Haskel: The issue of dovetailing with EC regulations will arise later in the debate. Can we leave that question until we debate the whole matter on later amendments? Amendment No. 200 relates to a discussion we had on the first day of Committee in relation to Clause 10 concerning the director's ability to impose conditions with respect to parallel exemptions or to cancel them. I made it clear then that the director should be able to take action against an agreement which was exempt.
If the noble Lord withdraws the amendment we can perhaps deal with the issue of dovetailing when we discuss the later amendments.
Lord Kingsland: I understand entirely what the Minister says. I am sure he will understand that we have

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to take the amendments as we find them. We have progressed through the Bill in an orderly fashion. I do not say that the Bill repeats itself because it is extremely well drafted, but it deals with the same issue in a number of different waysthe circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 9 agreed to.
Lord Haskel: My Lords, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Pre-Budget Report
3.47 p.m.
Lord McIntosh of Haringey: My Lords, with the leave of the House I shall now repeat a Statement being made in another place by my right honourable friend the Chancellor of the Exchequer. The Statement is:
"The purpose of this, the first annual pre-Budget Statement, is to report the Government's assessment of the economy; to outline our Budget aims; and to encourage an informal debate on the detailed choices before us. To achieve our national economic objectives—high and stable levels of growth and employment—the next Budget must address three challenges. "The first challenge is to increase our productivity. Britain today is some 20 per cent. less productive than our main competitors and has been for years; secondly, the challenge of employment: 3.5 million working age households—almost 20 per cent—have no one earning a wage; and, thirdly, the challenge of stability. For 40 years our economy has an unenviable history, under governments of both parties, of boom and bust. Stop-go has meant higher interest rates, less investment, few successful companies and lost jobs. It has been the inevitable result of a failure to take the long-term view.
"So the real choice facing Britain in the coming Budget and beyond is between, on the one hand, muddling through as we have done for decades from one stop-go cycle to another, or, on the other hand, breaking with our past, burying short-termism and securing long-term strength through stability, sustained increases in productivity, and employment opportunity for all.
"This is not a challenge for government alone; it is a challenge that must also engage both the understanding and the commitment, and indeed, the energies of all of us, government, managers, investors, and workforce together. So at the heart of this pre-Budget report is the recognition that only by greater openness and informed debate can this country achieve that shared understanding of the tasks ahead and that shared sense of national economy purpose that has eluded us for so long.
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"First, stability: the major industrialised countries are expected to grow by 2.75 per cent. this year and 2.5 per cent. next year, despite the recent turbulence we have seen in Asian economies and financial markets. It is imperative that governments and central banks around the world remain vigilant. But it is the task of government, at all times, to ensure a long-term and stable framework, exactly the approach this Government are pursuing.
"When we came to power, the economy was already facing yet again the very pressures that have produced the boom-bust instability of the past. Consumer demand was accelerating, growing three times as fast as industrial production, as over £30 billion was released in building society windfall payments. Inflation was predicted to go far beyond its 2.5 per cent. target and expected at that time to rise towards 4 per cent. next year. All this was happening because the necessary decisions on monetary and fiscal policy had not been taken. It is because this Government have learned the lessons from past instability when interest rates rose into double figures that, starting in May, we put in place a new monetary and fiscal framework. Following our reforms at the Bank of England, long-term interest rates have come down. No one doubts the Bank of England's determination to achieve the Government's inflation target.
"With our five-year deficit reduction plan, public borrowing, which was £23 billion last year, is now forecast, excluding the windfall tax revenue, to be £12 billion this year and £6 billion next year. We said in our manifesto that we would work within existing spending limits. This we are also achieving, as we promised. The deficit has fallen from 4.5 per cent. of national income two years ago to just 1.5 per cent. this year, and 0.75 per cent. in 1998-99, well within the Maastricht criteria.
"There is a risk that the structural deficit—which takes account of the economic cycle—may turn out to be larger. So we will be both cautious and prudent, and I can tell the House we will learn the lessons of 1988 when it was wrongly assumed that the structural deficit had disappeared, and the penalty was the return of boom and bust. And while I recognise the concerns of exporters about the exchange rate, I also understand that what companies fear most is a return to the boom-bust instability of the past. So this summer and autumn, hard decisions have had to be made on both interest rates and deficit reduction and I am now more optimistic that we are on course to put the economy on track for stable and sustainable growth. And it is to reinforce our commitment to the long term that we will publish proposals for a code for fiscal stability.
"We will legislate so that there is a duty on government to report to Parliament on how they are meeting their fiscal rules. In that way everyone can plan for the future on a much clearer and better informed basis. Let me explain why meeting our fiscal rules matters so much, and why they are essential preconditions for long-term social and economic progress. It is because the borrowing levels

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we inherited are costing the country £25 billion a year in interest payments alone, which is more than our country's total budget for schools, that we had to act.
"Our aim is to reduce the huge sums spent simply servicing debt, in order that more of our money can be spent on meeting the people's priorities. The prize for this country—valued especially by a Government who are committed to good public services—is sustainable public finances that allow consistent and long-term investment in our priorities. By reallocating resources we will be investing an additional £2.3 billion in education. And this year we will invest an extra £300 million in patient care in the NHS—and next year an extra £1.2 billion—over and above that planned by the previous government.
"And I can tell the House that—as our comprehensive spending review re-allocates resources towards higher priority areas—there will be real year on year increases in spending on front-line patient care.
"The key to strong public services is long-term prosperity through higher productivity. Government, industry and people together must now work systematically to remove all barriers to productivity: in product markets through encouraging competition and innovation; in capital markets through measures to enhance growth and investment, not least for innovative small businesses; and in the workplace through encouraging the creativity and flexibility of inventors, managers and workforces.
"After our successful Budget initiative of July to encourage one of the most neglected of our creative industries—film—it is time to do more to encourage other creative industries where from science, computer software and communications to design, fashion and music, our British genius for creativity has made Britain a world leader. This year, entrepreneurs in small and medium-sized companies can draw on our £200 million doubling of capital allowances to invest in new technology. From next year the new National Endowment for Science, Technology and the Arts will make grants to encourage creative talents.
"But I can also say today that in advance of the Budget, the President of the Board of Trade and I are examining how, to improve productivity, we can help leading-edge businesses gain funds to develop new technologies; how we can improve Britain's poor record of investment in research and development; and how we can make it easier for small businesses to draw on venture capital to create jobs and a more entrepreneurial culture. And it is to encourage and reward long-term investment that we are completing a review of capital gains tax, the conclusions of which will be announced in the Budget.
"Our poor record on investment in Britain also reflects our low level of national saving. Half the adult population has hardly any savings at all. To encourage more people to save we will introduce from April 1999 new individual savings accounts, the details of which will be put out to consultation next Tuesday. But there is one decision on investment that
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should not be delayed. In July we implemented the first stage of corporate tax reform, cutting the main rate of corporation tax by 2 per cent. to 31 per cent., its lowest level ever. And, following the abolition of payable tax credits, we began to consult, as promised, on the second stage.
"Advanced corporation tax, it has become abundantly clear, is now a hindrance to sensible business planning and investment decisions. Britain needs a reformed system that matches the needs of modern companies and favours the long term. So to allow companies to plan ahead I can confirm today that in April 1999 advanced corporation tax will be abolished. At that point, we will begin the move to paying corporation tax by quarterly instalments. Small companies will be exempt from this change and special arrangements will be made for medium-sized companies. We will phase in the change over four years and we will substantially preserve companies' expectations for using their existing surplus ACT.
"This afternoon the Inland Revenue is publishing full details of the proposed changes. And we will now start consultations on their implementation. To help ease the transition, and to take one stage further our pro-business and pro-investment agenda, I can announce that in the Budget, the main rate of corporation tax will be cut again by 1 per cent. to 30 per cent. from April 1999—the lowest tax rate of any major industrialised country.
"The July Budget started from the understanding that the greatest waste of our economic potential and the most serious cause of poverty is unemployment, denying opportunity to 3.5 million working age households where no one works.
"In July we said that instead of simply compensating people for unemployment, our priority is to tackle the root causes of unemployment and poverty by providing new opportunities for work.
"In the last few months, with the help of Martin Taylor, the Government have been systematically addressing all the obstacles that prevent people taking up and benefiting from work: the absence of marketable skills; the failure of the tax and benefits system to make work worth while; the poverty and unemployment traps that for far too many mean that work does not pay; the lack of employment opportunities; and the scarcity of affordable child care.
"We have concluded that to help people move from benefits to wages, nothing less than a comprehensive tax and benefit reform and the modernisation of the welfare state is required. This strategy involves three basic elements: providing skills for work; making work pay; and creating new job opportunities.
"First, to offer skills for work, the Secretary of State for Education and Employment will shortly publish proposals for individual learning accounts and for the University for Industry. Secondly, I want everyone who can work to be better off in work than on benefit. So the Government now propose an integrated tax and benefit plan involving action at every level.

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"To maximise the rewards from work, a 10p starting rate of tax and a reform of benefit tapers will be introduced when it is prudent to do so. To ensure that work pays for families with children, we propose a working families tax credit, backed up by affordable childcare; and to ensure the rewards of these reforms flow directly to the employee we are committed to a statutory national minimum wage.
"We will now consider in detail the working families tax credit—cash paid through the wage packet directly to families on low incomes, side by side with the national minimum wage. The proposal would build on the successful elements of family credit, and involve better help through the tax system for child care costs.
"We will now also consider the future structure of national insurance for the low paid. Under the current system, some low-paid employees face marginal tax rates of over 100 per cent. To improve rewards from work, to simplify administrative burdens on employers, as we want to do, and to encourage them to take on more people, it is now right to consider the scope for bringing the national insurance structure for the low paid more closely into line with income tax.
"And finally, there are men and women who have been excluded for too long and who need extra help to get back into work. In the Budget we made a start by announcing a new deal worth £4 billion that provides jobs for young unemployed, the long-term unemployed, lone parents and the disabled.
"The new deal for the young unemployed will start in pilot form in January and extend nationwide for the young unemployed in April, with the support of some of our best known companies. I can also announce today that some of Britain's leading bus and rail companies have agreed to play their part by introducing a new travel pass for young people on our new deal, cutting by at least 50 per cent. their travel fares.
"Disabled men and women who want to should also have the right to work. As the first step in implementing the £195 million programme for people with disabilities, the Secretaries of State for Social Security and Education and Employment will be now inviting bids for the first wave of new projects to start in spring 1998.
"Helping lone parents into work is the most effective long-term way to tackle their family poverty. The new deal for lone parents began in eight areas in July. Already it is yielding results where it counts—in higher living standards for lone parent families. So from next year our welfare to work programme will be extended to help every lone parent who wants advice and help. And from April every single parent coming on to benefit will be offered help to find work if that is what she or he wants.
"Lone parents need and have a right to expect affordable childcare. Indeed, since May the Secretaries of State for Social Security and Education and Employment have been working with the
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Treasury on plans to make a reality of a national child care strategy. And, paramount in our family policy, are the interests of the child.
"Tomorrow they will announce a five-year plan to extend out-of-school childcare clubs to every community in Britain. Funds will be available to set up as many as 30,000 new out-of-school clubs, which will provide places for nearly 1 million children.
"The total cost—£300 million over five years—now budgeted for in our plans, the biggest ever investment in childcare, will be shared between the Exchequer and the new opportunities fund. To staff the new clubs 50,000 young people across Britain will be offered training as childcarers through our welfare to work programme.
"Under our plan, every lone parent who needs it will be able to find an out-of-school club in their community. A national child care strategy is no longer the ambition of workless parents. It is now the policy of this country's Government.
"Today while nearly one in five working-age households have no one working, we also have extensive skill shortages throughout our economy. The proportion of manufacturing firms reporting skill shortages is up 70 per cent. on a year ago.
"We will now introduce pilot projects nationwide under which any employer who takes on and trains a young or long-term unemployed person and keeps them on, can now receive up-front three-quarters of their new deal allocation, thus giving immediate help with training costs—in the case of young people about £1,700 and for the long-term unemployed, £1,500.
"These skill shortages are a clear sign of the short-term pressures in the economy today that have to be tackled.
"At around this point in every recovery, when inflation, and interest rates have risen, a second wave of wage inflation has brought a recurrence of stop-go instability. Past governments have allowed themselves to be diverted from their long-term aims because of their inability to deal with short-term pressures. This time we must do everything we can to make sure that the long term takes priority. It is because the last government held a simplistic and over-rigid view of the relationship between levels of inflation and levels of employment that they told us that high unemployment was a price worth paying.
"There are three reasons to believe that provided reform and responsibility go hand in hand it is possible to lay the foundations to deliver both low inflation and high employment over the long term.
"First, the more our welfare to work reforms allow the long-term unemployed to re-enter the active labour market, the more it will be possible to reduce unemployment without increasing inflationary pressures.
"Secondly, tax and benefit reforms, which remove the barriers to work, and structural reforms which promote the skills for work—in other words, government intervention to create a more responsive

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labour market—can make possible long-term increases in employment, without fuelling inflationary pressure. The more people return to the world of work, and the more we tackle skill shortages, the less pressure there is on employers to bid up wages in the short term.
"But thirdly, the reality of the more complex and flexible labour markets of Britain today is that pay decisions are made not by the few in smoke filled rooms but by millions of employees and employers across the country. And the more that we all take a long-term view of what the economy can afford, the more we will be able to have job creation and keep inflation and interest rates as low as possible. So we must all be long-termists now.
"The reforms we are introducing will take time. But it is in no one's interest if today's pay rise threatens to become tomorrow's mortgage rise. The worst form of short-termism would be to pay ourselves more today at the cost of fewer jobs tomorrow and lower living standards in the very near future. So wage responsibility is a price worth paying to achieve jobs now and prosperity in the long term. It is moderation for a purpose.
"The choice is between responsibility and reform that would give us higher growth and more jobs; and shortsighted, short-termism, which will inevitably mean less growth and fewer jobs.
"In our forecasts for the coming two years, we demonstrate clearly this choice we all face. If the economy works in the same way as in the past, growth might be 2.25 per cent. next year. But, if we can combine our reforms with responsibility across the economy it is possible to achieve growth of 2.75 per cent. next year. Similarly, growth can be 1.5 per cent. or 2 per cent. in 1999-2000. In either case the Bank of England will ensure that inflation comes down to the Government's target. So the more successful we are in tackling skill shortages and ensuring the success of the new deal and the more effective the exercise of responsibility in pay determination, the more we can achieve our goals of sustained growth and employment. I have today submitted this new evidence to the public sector pay review bodies and met their chairmen to explain the choices before us.
"Just as the Government are offering leadership with responsibility in their monetary policy and the management of the public finances so that we can achieve higher levels of growth and employment, so must business leaders and workforces match this with responsibility throughout the whole economy. This means responsibility, not just on the shopfloor but also from Britain's board rooms outwards—where, in the interests of all, there must be moderation not excess and where an example should be set.
"But we recognise that if we are to achieve our long-term goals and secure a new sense of economic purpose, then fairness and openness must be at the heart of the approach to every Budget. Tax avoidance harms those who pay their fair share of taxes. I give notice today that the Budget will introduce those measures which are needed to root out tax avoidance.
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"A fair and open approach to taxation will also be central to our Budget consultations now under way—on North Sea oil, on alcohol and tobacco where the review will conclude early next year, and on charities where the review is working towards a consultation document next spring.
"In securing the long term, nothing is more important than our approach to the environment. On Thursday my right honourable friend the Deputy Prime Minister will publish a consultation paper on ways to help deal with water pollution with a view to making proposals in the Budget. Together we are also looking at how the tax system can reflect our environmental objectives, and will do so in the light of decisions at Kyoto.
"So in this pre-Budget Statement we are consulting in all areas where it is right to consult, taking action in all those areas where action is needed, and putting to the country the choices for debate—choices that can be made only by all of us.
"There is one announcement that I promised to make today. Following a review by Customs and Excise, which will be published tomorrow, I have decided that VAT on the installation of energy-saving material under existing grant schemes, such as the home energy efficiency scheme, will be cut from 17.5 per cent. to 5 per cent. in the spring Budget. This will mean that the funds under those schemes will go further, helping to insulate 40,000 more homes per year. The Government will now explore with our European partners the possibility of a reduced rate of VAT for a wider range of energy-saving materials.
"Our spending review, like our tax policy, is based on allocating resources according to the priorities of investment, employment and fairness. So already, within this Government's tough spending limits, we have redistributed resources to priority areas: from the assisted places scheme to cutting class sizes; from the windfall tax paid by the utilities to creating jobs and repairing our schools; and from defence and the nuclear programme to the National Health Service. After the publication of the National Asset Register yesterday, there will be new scope to re-allocate resources to high priority spending.
"I can announce one further re-allocation today. I now expect our net payments to the European Union to be some £400 million lower than budgeted. Our pensions review is looking at the long-term future of pension provision in Britain, including how we can do more to support Britain's poorest pensioners. We must help the thousands who do not claim benefits and who need them most.
"My right honourable friend the Secretary of State for Social Security is announcing today that she will finance a number of pilot projects so that we can find the best ways of encouraging improved benefits take-up by the poorest pensioners.
"We have already cut VAT on fuel and power to 5 per cent., as we promised. But it would be wrong to wait until we have the results of our pensions review to take action to help the elderly with winter

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fuel bills. At the moment, although the poorest do get some help through cold weather payments, the payments only go to those on income support and they generally have to wait until after the cold weather until help is available. They are of no help at all to most pensioners, including the million not getting their income support entitlements; no help to those on the margins of poverty; and are of doubtful help even to those who do qualify who often do not know whether they can afford to spend extra money on fuel when it is cold.
"My right honourable friend the Secretary of State for Social Security and I are simply not prepared to allow another winter to go by when pensioners are fearful of turning up their heating even in the coldest winter days because they do not know whether they will have the help they need for their fuel bills.
"The pensions review will report next year. But we must act in the meantime to help pensioner households. For this winter and next every pensioner household will receive £20 extra to help with their bills. Every pensioner household on income support—nearly 2 million—will receive £50 extra. The cost will be met from reallocating the savings on our contributions to the European budget and the money will be paid in time to meet winter fuel bills. So every pensioner household will now see the benefits of this Government's cut in VAT on fuel, our abolition of the gas levy, new competition and tougher regulation of the utilities and, now, the Government's new fuel payment. As a result of those changes, the average pensioner household will be helped by up to £100 a year, and poorer pensioner households on income support will be helped by up to £130 a year.
"This is a Government who, in contrast to the last government who put VAT on fuel, keep their promises and are prepared to take action where action needs to be taken. A government that is meeting the people's priorities, even as we confront the most difficult choices our country must take to build for the long term.
"This year, in 1997, we have made a start and we will do more year on year. Our approach to the coming Budget shows that we are already setting a new course for Britain and building a united country where everyone has opportunity and everyone a contribution to make. I commend the Statement to the House."
My Lords, that concludes the Statement.
4.16 p.m.
Lord Mackay of Ardbrecknish: My Lords, I am sure that the whole House is grateful to the noble Lord, Lord McIntosh, for the fairly mammoth task of repeating the Statement which took 28 minutes. Indeed, I believe that that may be close to a record for the repetition of a Statement because, of course, Budget Statements in the past have not been repeated in this House. Therefore, we can start off by being grateful to the noble Lord, Lord McIntosh. We are discussing a very detailed paper and
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one which is accompanied by an equally detailed booklet—although, I suspect, I should say a book—which outlines much of the proposals and fills in some of the detail.
I would have asked for a debate on the subject, but I was pleased to see that I have been pre-empted in that respect as the noble Lord, Lord Graham of Edmonton, has tabled a debate on economics. So we shall shortly have an opportunity—on Wednesday next, I believe—to debate the proposals in detail.
When noble Lords were sitting listening to the repetition of the Statement, they could have been forgiven for thinking that many things were missed out and that there really was not a great deal of meat in it. When the Chancellor of the Exchequer started out on this project, I suspect that he intended to share a great many ideas with us about tax rates, and so on. However, as he became more knowledgeable about the workings of the Treasury and how such things happen, he probably realised that it is not entirely safe for Chancellors of the Exchequer to do too much organised leaking of their Budget secrets something like six months before we actually have the Budget.
Here we have a Statement with, frankly, a few important bits but all held together with the cement of a great deal of waffle and much repetition of what we already know. Indeed, that struck me most. Most of the material and the paragraphs are actually repackaging of what we have already been told. Last July, the Government painted a rather blacker picture of the economy than they painted today. There was no sign last July that revenues were buoyant and that the PSBR was narrowing. In fact, if I remember rightly, they accused my right honourable friend Kenneth Clarke of being over-optimistic. Well, it turns out that my right honourable friend was not over-optimistic; indeed, he could have been much more optimistic. But there you are. That begs the question of why we needed 17 extra taxes last July if the economy was doing as well as the Government now tell us that it is.
As usual, the Government tried to paint a bit of a black picture; but, as always, they failed to note that unemployment rates in this country have been coming down for five years. I am delighted to say that they are still doing so. That is in stark contrast to our European friends many of whom are seeing their unemployment rates still rising to heights which I should have thought would be pretty well unacceptable in this country. However, they seem to be quite acceptable in the countries of many of our continental friends.
However, I wish to pick out one or two points in the Statement and ask the Minister one or two questions. Perhaps the Minister will tell me why the Government felt obliged to impose 17 extra taxes including the £5 billion hit on pensions last July when it appears that the PSBR is going into balance rather quicker than the optimistic Kenneth Clarke said it would. The code of fiscal stability is an interesting concept. I suspect that it has much to do with protecting the Chancellor from his more spendthrift Back-Benchers. He makes a rule and then says, "I am sorry this rule cannot be broken and therefore I cannot spend the extra money you want."

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That may be a clever device, but there you are. I notice there will be legislation to oblige the Government to report to Parliament on how they are meeting their fiscal rules. Will the Minister go a little further on that? Will there be legislation to oblige the Government not to break their own PSBR limits? I understand that that is what happens in the United States. Those two concepts are poles apart. The one concept consists of reporting and apologising if PSBR targets are not met; the other concept dictates that one jolly well must meet one's PSBR targets. That is an interesting question.
The first part of the Statement mentions money for education and for the NHS. However, we have heard about that money before. How many times shall we hear about that money? Dare I use an expression I have heard for 20 years: is this new money? The short answer is that it is not new money; it is the money we have heard about. I believe we first heard about it last July. I hope that none of the Government Back-Benchers think that this is extra money for health and education over and above the money that they heard about—and no doubt cheered—last July. This is not new money; it is simply the same money re-announced.
As regards productivity, perhaps the Minister would like to tell us what the productivity rates were in 1996; what the Government envisage they will be this year and to predict—given all their high-sounding policies—what they intend the productivity rates will be next year so that we can make a judgment as to whether all these fine phrases become reality. The Government intend to encourage creative industries and others, as they call it. Has that been cleared by the Commission? Is it allowed under the state aid rules? I refer to the taxation rules that we discussed at Question Time. Are the Government sure that none of these inducements will fall foul of the Commission as regards state aids?
I notice that there is to be a capital gains tax review. Shall we see the details of the review so that there can be a public debate? I was not sure about that when the Minister mentioned it. I am certainly looking forward next Tuesday to seeing the detail of the individual savings accounts. I hope that we shall also see some firm proposals about what the Government intend to do about PEPs and TESSAs as there is a huge amount of uncertainty surrounding them and what the tax arrangements for them will be in the future and how they will be linked into the individual savings accounts. I hope that the Government will put some flesh on the bones of that next Tuesday. I had rather hoped that that would be one of the concrete issues we might have heard about today.
I now turn to the extension or the repackaging of family credit. This is an interesting matter and we shall have to study the details of it. Do I take it that the proposals will go beyond child benefit and will build on the proposals that we put forward and the pilot schemes that we started to give the equivalent of family credit to couples without children and to single people? Perhaps the Minister can tell me that. He talked about bringing national insurance structures into line with income tax but he did not tell us what that comprised. We shall be interested to see how that works and to study the proposals.
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As regards the new deal for the unemployed, I was pleased to hear the Government pay tribute to the privatised bus and rail companies. That must have stuck in their throats a little as normally they tell us there is nothing worse on earth than the new privatised bus and rail companies. I am pleased to see that these new companies are showing the kind of imagination that we on this side of the Chamber have been telling the Government for some months now they are showing in every other way. They are showing imagination in helping young people with their travel to work costs. I fully agree that that is important. There are a number of pilot schemes. However—I make this serious point to the Government—there is no point in having a pilot scheme unless you have a clearly defined control group. One of the worries as regards a recent pilot scheme was that there was no clearly defined control group. I ask for an assurance that there will be clearly defined control groups for all the pilot schemes so that we can see whether a pilot scheme is either not working, is not making any difference one way or another, or is making a difference and therefore should be extended. I am pleased to see the Government building on pilot schemes as it is a concept that we introduced. We felt that it was important, especially in the social security field, not merely to believe that an idea would "fly" because it was a bright idea and we had thought about it. We believed we should test it to try to ensure that it "flew". To that extent I am pleased that the Government are continuing to use pilots, but I hope that they will ensure there are control groups.
The Labour Party has had a 20 year learning curve on the need to control wages. I suppose that some noble Lords may have wondered whether it was the Labour Party they were hearing talking this way because for the past 20 years the one thing one could be sure of was that the Labour Party was out there supporting people demanding wage increases. It did not much matter whether that involved people in the public sector or the private sector. The Labour Party used to criticise Conservative governments when Chancellors gave evidence to public sector pay review bodies and said that wages had to be kept under control. It is nice to have some converts on these matters.
Fairness in taxation is important. Next Monday I have a Question on North Sea oil taxation. Will we have a discussion about this taxation or shall we just see the results of an internal review? The noble Lord is sitting beside his noble friend who knows a little about the oil industry. I caution the noble Lord to watch the interaction between tax regimes in the North Sea and in the new oilfields to the west of Shetland and the employment prospects there as they are expensive fields to develop and taxation plays an important part in that process. I hope that the Government do not think they can obtain more tax revenue from the North Sea without considering the consequences for unemployment.
I am not a great supporter of the tobacco industry as I do not really approve of the habit. If the Minister is not aware of the research, his noble friend Lady Hollis of Heigham will certainly remind him; namely, that increased tobacco taxes fall inevitably hardest on the poorest. The previous government and this Government

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have a distinct problem as regards swingeing increases in tobacco duties because they fall hardest on the poorest.
I am not trying to compete with the noble Lord as regards the length of time I have spoken. I do not wish to speak for too long. However, if we are to have environmental taxes can I be assured that just as we tied the landfill tax into a reduction in national insurance, any increases in taxes for good "green" reasons are offset by decreases in taxes on measures which are good for the environment, such as the reduction in VAT on energy saving measures mentioned by the noble Lord, which I have no doubt will please the noble Lord, Lord Ezra? Will that be backdated as it seems to me that people may be tempted not to continue with energy saving projects between now and the Budget if they know that VAT on those schemes will be reduced from 17.5 per cent. to 5 per cent? Perhaps the Minister can answer that question.
I have probably said as much as I need to. The abolition of advance corporation tax and its replacement by quarterly payments and the reduction by another 1 per cent. of corporation tax intrigues me given the matter that we discussed at Question Time. I hope that that measure will be accepted by the European Commission and will not be seen as harmful tax competition. However, I suspect the reason the Government are introducing that measure is because of all the damage they did to industry by the decision they took last summer on ACT. However, that does not negate the fact that the pensions industry remains damaged, and will continue to be damaged, as will pensioners, by the £5 billion hike. I am sure that we are all looking forward to the debate that the noble Lord, Lord Graham, indicated. We can then perhaps get down to some of the detail. In the meantime, I thank the Minister for repeating the Statement.
Lord Ezra: My Lords, I, too, thank the noble Lord for repeating the Statement and express great pleasure that the Government have embarked on what is a fairly courageous route: to anticipate a Budget so far in advance; and to initiate a public debate on many of the issues. Unlike the noble Lord, Lord Mackay of Ardbrecknish, I was impressed by the number of practical and positive measures which the Government saw fit to announce with this preliminary Statement. I had not expected them to do more than raise issues, bearing in mind the tax implications and other implications of announcing measures in advance.
The Government are absolutely right to say that the nation faces the three challenges of productivity, employment and stability. The document logically follows on from that opening gambit. I should like to pay particular attention to the issue of investment—an area where we have fallen behind other countries over the years, and the Government are committed to putting that right. As regards investment in public services, if there was one part of this Statement which slightly disappointed me it was what it said about the reallocation of resources in public services. What we have been told is what the Government have already
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decided on. We are further told that, as comprehensive spending reviews are carried out, there will be more resources allocated towards higher priority areas. That is fine, excellent wording. But I would have hoped that we could have had more indication of what the Government have in mind for the essential public services of health, education, and let us not forget public transport, and, for those who live and work in London, the London Underground, which has been starved for so long of resources. I should like to have seen some reference to that issue among other things.
The other aspect of investment is investment in productive enterprise. The Government have already moved positively in that direction by increasing the capital allowances for smaller firms and by reducing corporation tax. There is the welcome announcement of a further reduction in corporation tax. There is no doubt that with the measures which the Government will take to encourage savings—as the noble Lord, Lord Mackay pointed out, we have to find out what will happen to existing saving schemes; no doubt that will emerge in due course—there must be measures to encourage investment in the right ways. I am glad that a start has been made. It is very necessary to have the right fiscal framework to encourage enterprise to invest.
The noble Lord, Lord Mackay, said that I would undoubtedly be pleased at the Government's announcement about reducing VAT on energy-saving materials. Indeed, I am, I have been campaigning for that for years. I never in my wildest dreams expected that we would hear today that the Government have taken this step. I must say that I welcome that very much indeed. Furthermore, I welcome what the Government are doing as regards pensioners and their heating allowances. I have spent many years seeking to improve the conditions and insulation of the homes of elderly people on low incomes. This announcement undoubtedly will be a big step forward in that direction.
I conclude by welcoming the step which the Government have taken in initiating this pre-Budget discussion. I hope that they will persevere in what they have started. I hope in due course that we shall hear more about encouraging investment in essential public services. I hope that the Government will persevere with stimulating investment in the productive sector.
Lord McIntosh of Haringey: My Lords, I am grateful to both noble Lords for their response to this Statement, as usual in differing degrees.
The noble Lord, Lord Mackay, said that this was one of the longest Statements before this House. I have to tell him that at 28 minutes it was stakhanovite. At the Budget speed of 125 words a minute, the Statement was timed at 32 minutes and 50 seconds. I reckon that the House owes me almost five minutes of time and I propose to take that up in due course!
The noble Lord was right to welcome the debate that we shall hold next Wednesday. I can confirm that all the questions he raised can and no doubt will be raised next Wednesday. That does not mean that I shall not try to answer his points today. The noble Lord warned against what he called organised leaking by the

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Chancellor. I assume that he was talking about the danger that there could be some forestalling of Budget measures if they are announced too far in advance. If the noble Lord reads the Statement, I think that he will recognise that, although there is, as the noble Lord, Lord Ezra, kindly confirmed, a great deal that is positive and practical in the Statement, I cannot identify a single occasion where any of the announcements will result in forestalling or in damage to the Chancellor's flexibility and freedom of action when he comes to the Budget itself.
The noble Lord, Lord Mackay, asked me why we put forward a blacker picture in July when we accused Mr. Kenneth Clarke of being over-optimistic. In July, when we increased some taxes, it was a fact that inflation was overshooting its targets and that we had to plan for the long term and avoid boom and bust. But since that time we can confirm, as we could not have done then, that our deficit reduction plan is on target and it is therefore possible to be—I do not use the word relaxed; one would never accuse the Chancellor of being relaxed—able to make some of the positive points to which noble Lords have referred.
The noble Lord asked me about the code of fiscal stability and whether it was going to be binding on government. I assume he meant in the sense that the Gramm-Rudman Act in the United States is binding on governments. I have to tell the noble Lord—I am sure that he and the House know—that the Gramm-Rudman Act has not worked. Over many years deficit reduction programmes have bedevilled politics but have not helped economics very much. Our model is rather different. It is that of Australia and New Zealand, where the model is one of openness and debate rather than compulsion. That model appears to work. It is that transparency in economic and fiscal debate that we seek to achieve.
The noble Lord asked me—these are different parts of his speech; I shall try to bring them together—about whether what we are doing will fall foul of harmful tax competition rules in the European Union and state aids. I can say to him without concern that they do not fall foul of the code of conduct which we discussed earlier. Indeed, I remind the House that the code of conduct which is to be debated and decided on at ECOFIN next Monday will not in any way damage the ability of this country and any member state to determine its own tax and spending policies. The removal of harmful tax competition, which is not an unworthy objective, is one which will be achieved to gain certain specific advantages in reducing tax avoidance and evasion and is not intended to lead to harmonisation of all tax policy.
The noble Lord asked me whether the capital gains tax review referred to in the Statement will be made public. The answer is yes. He asked whether the future of PEPs and TESSAs will be made clear when the Statement is made next Tuesday on individual savings accounts. The answer is yes. Therefore there will be an opportunity to debate them next Wednesday.
The noble Lord also asked whether family credit will go beyond child benefit. The answer is slightly more complicated. It could go beyond the child benefit, but it
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does not have to go beyond it. This point relates to the noble Lord's remarks about pilot schemes. We need the research from the pilots to see whether these in-work benefits affect, for example, local wage levels. We also need them to provide us with judgment not so much on levels of credit but on administration. As a social researcher myself, I entirely agree that pilot schemes are necessary before we go national with major changes in social policy. I pay credit to the previous government for having done the same on a number of occasions.
I was interested in the noble Lord's point about the need to offset increases in green taxes by decreases. I am not sure that I know the answer. If I am told anything, I will write to the noble Lord. Again, the matter can be raised in debate.
The noble Lord, Lord Ezra, was extremely complimentary about large parts of the Statement. I am tempted to say: "What else can I say, except that I love him?" The noble Lord drew attention to the importance of investment and of reallocation of resources in the public service. He is quite right. It has always been difficult for me to understand the rationale of some public investment decisions in a situation where we have cash accounting by the Treasury rather than resource accounting. The noble Lord will be pleased to be reminded—although I am sure he already knows—that within the next two years we shall be accompanying cash accounting with resource accounting in the public sector; and by the year 2001 we shall have gone over to resource accounting, with traditional cash accounting acting as a cashflow statement rather than as a substitute for an income and expenditure account.
On energy saving materials, there is nobody by whom I would rather be congratulated than the noble Lord.
4.42 p.m.
Lord Ashley of Stoke: My Lords, is my noble friend aware that I understand the financial problems of the Government and support the broad thrust of the Chancellor's policies? However, if any move is made to cut the benefits of disabled people, it will be totally unacceptable. Those benefits are to pay for the extra costs of disability. To cut them would be to place disabled people at a double disadvantage. Such a move would incur the implacable hostility of 6½ million disabled people and their supporters in Parliament. To penalise those people is the very thing that I could never countenance. They would find it impossible to believe that that is the policy of the Labour Party against many people who are unable to work as a result of severe disability. Let the Government get people to work if they can, but severely disabled people cannot work. Therefore, cutting benefits would be counter-productive.
Lord McIntosh of Haringey: My Lords, as the House knows, I respect no one more than my noble friend, particularly when he speaks on this subject. I respect not only the strength and sincerity of his argument but the degree to which it is founded on personal experience.

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I hope that he will agree that the content of the Statement concentrates more on the encouragement that is given to those disabled people and those lone mothers who wish to take advantage of it to find work for themselves.
Clearly there are wide ranges of severity of disability. My noble friend is right in saying that there are very many disabled people for whom no earning work is possible. I can only say that a very thorough review of the matter is in progress. It will be completed in the late spring. All options will be considered at that time, and no decisions have been taken.
Lord Desai: My Lords, while I welcome the Statement, perhaps my noble friend will say rather more about the fiscal framework that the Chancellor hopes to adopt. I see from the useful background document that government projections for 1998-99 are for investment of £8.7 billion in net capital spending, and the PSBR is only £4.5 billion. That would mean that we are doing better than the golden rule. Is the Government's intention to produce a surplus even by the golden rule, rather than merely a surplus by the old Treasury rules?
Lord McIntosh of Haringey: My Lords, I believe it was David Heathcoat-Amory, who, during his service at the Treasury for the Conservative Party, said that the thing about the golden rule was that it was neither golden nor a rule. I agree.
We do not deliberately seek to improve on the golden rule. The difficulty with the golden rule is that, when we say we are to be constrained by the economic cycle, none of us knows at what stage in any economic cycle we find ourselves. It is not deliberate, but there may be occasions when it may be possible to have higher investment.
Lord Clark of Kempston: My Lords, does the noble Lord agree that the present Government are extremely fortunate in inheriting a very strong economy, in fact the strongest in Europe? Will he explain why, given the buoyancy of our economy—with falling unemployment, increased production and so on—it was necessary to increase taxation by 17 taxation matters, and particularly so far as the long-term economy is concerned? There are long-term savers in pension funds—which are the long-term investors. Why was it essential to penalise them by £5 billion per year so far as income is concerned? Finally, will the noble Lord give the House an assurance that, if there is any harmonisation in taxation between this country and our European partners, there will not be an extension of VAT on food?
Lord McIntosh of Haringey: My Lords, on reflection, I am glad that both I and my right honourable friend the Chancellor refrain from the sort of "yah-boo" cross-party, cross-Chamber comment that has given rise to the noble Lord's contribution. We did not abuse the previous government. We recognised, as I have always recognised, where there was virtue in what they did. At the same time, we have to recognise that the boom-and-bust instability that was characteristic of the
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previous government resulted in the loss of thousands of businesses and millions of jobs; that we inherited productivity at a level more than 20 per cent. lower than that of our major competitors; that we inherited an economy in which 3.5 million families have no one in work; and that we inherited a tax system that is blatantly and apparently unfair and is seen to be unfair by everybody who pays tax. Under those circumstances, and for the reasons that I have already given, we believe that our judgment on tax policy in the July Budget was correct.
Lord Monson: My Lords, perhaps I may take up one small point in the Statement. One can well understand why the Government propose giving £50 a year towards the fuel costs of pensioner households on income support. Nobody would quarrel with that. But will the noble Lord, Lord McIntosh, say why the Government propose to give £20 a year, which is presumably not taxable, to all other pensioner households, including those pensioners, of whom there are a great number, who can afford to take round-the-world trips on the "QE2" or 20-minute lunch-time flights on Concorde for £350? Is not the idea that all men become poverty stricken at the age of 65 and all women at the age of 60 a relic of the days of Andy Capp?
Lord McIntosh of Haringey: My Lords, as one who is five months off the age of 65, I would say that perhaps there is some sense in which people become more poverty stricken at the age of 65. The balance between means-tested and universal benefits contained in the fuel policy announcements which I have just repeated seem to me to be about right. The biggest challenge is that so many pensioners who, because of their economic circumstances, are entitled to benefits do not take advantage of them. One of the measures which my right honourable friend proposed was increased efforts to secure better take-up of benefits. I hope that the noble Lord would agree that that is right and that the balance is right.
Baroness Thomas of Walliswood: My Lords, perhaps I may ask the Minister a question on a slightly different subject allied to the previous question. He repeated the Government's commitment to their priorities of education and health, with which I do not disagree. When will improving personal social services for the elderly become a government priority? How do the Government expect to assist that arm of social care when authorities are criticised if they do not concentrate all their care on those most desperately in need, thereby leaving large numbers of people who could be helped to a healthier lifestyle completely unattended?
Lord McIntosh of Haringey: My Lords, it is not a question of when; it has already happened. Announcements already made about further funding for the National Health Service made it clear that a considerable part of that funding is to be allocated by health authorities to the social services departments of local authorities for the needs of those who are in a better position and prefer to be at home rather than in hospital when they do not need medical treatment. The

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issue of long-term care for the elderly—to which I think the noble Baroness is referring—is not one to be solved in six months. It is one of the major problems of developed societies; we take it with a great deal of seriousness. But we are not in a position to give answers to these major questions at this time.
Baroness O'Cathain: My Lords, I welcome the openness of the Statement and the fact that there will be continuing debate on the suggestions raised in it. I look forward to reading it. I believe that the Statement included the words "pro-business" and "pro-investment". Does that mean that the Government are prepared to reconsider some of the taxation measures taken in the last Budget which are neither pro-business nor pro-investment?
Lord McIntosh of Haringey: My Lords, I challenge the premise of the noble Baroness's question. I believe that the measures that we took in the last Budget were pro-business and that there is wide acceptance among the business community that that is so.
Baroness O'Cathain: My Lords, the real point is the effect of the measures upon pension funds. Many people say they are neither pro-business nor pro-investment.
Lord McIntosh of Haringey: My Lords, I rather thought that the noble Baroness was going to return to the removal of double tax credits. I do not in any way apologise for the removal of those. They were an anomaly that had to be dealt with quickly. I believe that the announcement which I have just repeated of the abolition of advance corporation tax will be welcomed by the business community and I think that it puts our decision in July into the proper context.
Lord Davies of Oldham: My Lords, my noble friend is to be congratulated on his riposte to the Opposition. He might have added that a sense of unfairness and gross inequality has been felt by the nation over the past 18 years about the general distribution of income and wealth.
One point raised by the Opposition today deserves further consideration. The problem with an early consultation exercise is that people may make dispositions against their judgments of what the Chancellor intends to do. For example, will not the proposal with regard to reducing VAT on the insulation of houses lead people to delay such work until that proposal is implemented? Or is there an indication that the measure will be backdated?
Lord McIntosh of Haringey: No, my Lords, there is no indication that it would be backdated. But we are talking about a period of only a few months. My understanding is that most energy-saving improvements take place in the second half of the year rather than in the first half when people are expecting the weather to get better rather than worse.
My noble friend is right in saying that there has been a sense of unfairness and injustice about economic policies over a considerable period of years. The
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Government believe that the most direct way to relieve poverty and therefore to remove injustice is by getting more people back to work.
Lord Davies of Coity: My Lords, I should like to take this opportunity of welcoming the Statement, particularly with regard to the measures to increase productivity. Those measures are concerned with high technology, high skills and high levels of employment. They contrast with the productivity increases that have sometimes been gained in the past with low wages and high levels of unemployment, placing a considerable burden on the country as a whole.
The introduction of a statutory minimum wage, if not implemented correctly, could create a poverty trap in that people may obtain an increase in wages but lose whatever income support they currently receive. Can the Minister assure us that, with the introduction of a national minimum wage, any reduction in supplementary benefits would take place over a period of time in proportion to an increase in the level of the national minimum wage?
Lord McIntosh of Haringey: My Lords, my noble friend will not expect me to anticipate the results of the investigation being carried out under the chairmanship of Professor George Bain. However, he can be assured that the problem of the interrelationship between wages and benefits is at the heart of Professor Bain's inquiries. He will have noticed that there is a reference in the Statement to reforms to benefits and, for example, to the tapers on benefits which will undoubtedly be necessary when a minimum wage is introduced.
Baroness Hogg: My Lords, I wonder if the Minister can help me with a point relating to public expenditure. Normally, in the autumn Statement we receive details, programme by programme, of what is happening to the profile of public expenditure. I am disappointed that this time the supporting material contains no such detail by department. However, there is one clue in the supporting material: we are told that there has been a classification change which should have had the effect of reducing total public expenditure on the control total by some £700 million. However, in the control total this year it is reported as unchanged. The implication is clear. There must have been a discretionary increase of £700 million in public expenditure since the Budget Statement. Can the Minister explain where this net discretionary increase has taken place?
Lord McIntosh of Haringey: My Lords, with regard to the noble Baroness's first question, the nation will not be deprived of statements of public expenditure; but no final decision has been taken about whether we shall continue with the unified Budget and Public Expenditure Statement or about the timing.
Baroness Hogg: My Lords, I was referring to the autumn Statement and with it regular publication, programme by programme, of out-turns.
Lord McIntosh of Haringey: My Lords, I appreciate that. But this is not an autumn Statement in the classic

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sense and was not intended to be so. I hope that the House will have found it a good deal more wide-ranging than an autumn Statement and a good deal more conducive to constructive debate.
As to the second point regarding the gap which the noble Baroness calculated, the Statement contains a number of examples of resource re-allocation. I have not added them up. The noble Baroness is entitled to have them added up and I shall write to her in that regard.
Lord Mackie of Benshie: My Lords, I am grateful to the noble Lord for his efforts to keep me warm this winter. But can he say, if there are figures, how many pensioner families are actually in need of support in the winter and how many are not?
Lord McIntosh of Haringey: My Lords, not off-the-cuff, I am afraid. I am sure that I ought to have known, but I do not. I shall write to the noble Lord.
Lord Dixon-Smith: My Lords, the Minister has had to take us through a complex Statement and a number of phases. He began by expressing concern over the rate of GDP at present being relatively unsustainable. We will not go into the reasons why the Government are of that opinion. He then went through a series of investment suggestions which should increase productivity and therefore, one would have thought, in due course impact on GDP and give it an inclination to increase. The noble Lord then went through a further set of steps which should increase the volume of employment by taking people off the unemployment register. Those factors are extremely welcome.
However, at the end of the Statement, unless I misheard, the noble Lord came up with figures for the range of growth in GDP next year of 2.25 per cent. to 2.75 per cent., which is less than the current rate of GDP growth. Did I miss something?
Lord McIntosh of Haringey: No, my Lords. The contrast which the Statement makes is between GDP growth without the measures which we are proposing and GDP growth with the measures we are proposing. The Statement makes clear that we inherited a pattern of GDP growth which was unsustainable without further action to avoid the kind of "boom and bust" situation which we inherited and which had been the pattern for a number of years. Without subscribing in every detail to the summary the noble Lord kindly gave of what he agrees is a complex Statement, he is right in his understanding of the figures for GDP growth.

Competition Bill [H.L.]
5.3 p.m.
House again in Committee.
Clause 50 [Advice and information]:
Viscount Astor Viscount Astor moved Amendment No. 200A:
Page 25, line 16, after("practicable") insert ("and in any case not later than three months").
The noble Viscount said: In moving Amendment No. 200A, I shall speak also to Amendments Nos. 201 and 274. When one looks at Clause 50(1) the wording is:
"As soon as is reasonably practicable after the passing of this Act".
Whenever one reads the words "reasonably practicable" in a Bill, it invariably raises one's hackles. One knows that they often mean "unreasonably" and "impracticable"—the very opposite of what they are supposed to mean. We know that, as always with these matters, the words are put in the Bill with the best of intentions but that, when a director is put in place and looks at these things, he will face problems of priorities—staffing, funding and having to agree with the Department of Trade and Industry on various matters. That seems to be rather unsatisfactory.
I tabled a probing amendment with a time limit of three months. That period is not important; it was included to obtain a reply from the Minister. My noble friends on the Front Bench, being marginally more clever than I am at tabling amendments, tabled a much better amendment in Amendment No. 201, which says,
"before applying the provisions of this Act".
That is preferable because it means that the provisions do not come into force until the advice and information have been published. That is what we need. On a number of recent Bills before your Lordships we have had the problem of being faced with a Bill without any of the guidance or information necessary to make it work.
On an earlier amendment this afternoon the noble Lord, Lord Simon, said, if I heard him correctly, that the director would publish draft rules in the late spring or soon after a period of Royal Assent and, if that was not possible, he would look at the timetable again. If I am right, the rules must be published first and advice and information can be published afterwards.
Can the Minister say when he replies how the timetable will work and when we can see it? There is anxiety in industry that it is to be faced with a Bill which has an important effect on trade and industry but that the information to make the whole thing work may not be available. I beg to move.
Lord Kingsland: I want to speak on Amendment No. 274. I would have said something in relation to Amendment No. 201 were it not for the fact that my noble friend Lord Astor expressed himself so well in introducing the amendment that it would be superfluous for me to add anything. Amendment No. 274 is extremely important because it refers to the transitional provisions that ought or ought not to be allowed to industry and commerce before the Act bites.
The transitional period ought to be generous. If it is not, we shall not only be faced with a period of confusion and uncertainty, but it will also have a potentially costly impact on both industry and the OFT. Industry will have to protect itself by making a series of unnecessary notifications and the OFT will have to cover many eventualities which will ultimately turn out to be imaginary.

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The scheme of my amendment is as follows. First, the rules of procedure should be in place; then the guidance should be in place; then any exemptions on a block basis should be in place; and then a period of a year—it may be longer or shorter—should elapse before the provisions bite. That will give everyone a chance to get themselves ready.
In addition to that—here I anticipate an amendment that will not be taken until the end of the day but that is germane to Amendment No. 274 certain classes of agreement as set out in Amendment No. 273 ought to be allowed to survive the remaining term of the agreement before the director general turns his attention to them. I listed them in Amendment No. 273 and we will come to them when we deal with that amendment. They fit in with the concept that underlies this amendment.
Baroness Nicol: I support what the noble Lord, Lord Kingsland, has just said about the need for generosity in the time allowed. What is being proposed will impose a severe burden, particularly on small businesses. Larger businesses, which may have had to meet this kind of exercise before, particularly in relation to European legislation, will be familiar with the exercise. However, it will be quite different for smaller businesses which have not had to do it before. They quite often have complicated agreements which they need to examine in detail. I hope that the Minister will look kindly on this amendment and will try to be as generous as possible with the time allowed for businesses to prepare.
Lord Simon of Highbury: I am in sympathy with what I believe to be the intention behind Amendment No. 200A and also with the general intention of Amendment No. 274. It is important that the main elements of the regime should be in place in good time before the prohibitions start to apply.
Clause 50 and these amendments deal with the preparation and publication of advice and information. I hope that Members of the Committee will forgive me if I refer to such advice and information as guidelines. That seems to be the more generally accepted term. Indeed, it is the one used in the letter from the Director General of Fair Trading that I referred to in the discussion on Clause 49. It may be helpful if I repeat my remarks made in relation to Clause 49, since we have had the break and the Statement, on the Government's proposals in this area.
First, if the Bill is granted Royal Assent, there will be a period between Royal Assent and the coming into force of the prohibitions. I would expect this period to be about one year. I would also expect rules under Clause 49 and guidelines under Clause 50 to be issued early in that period. The OFT has already begun this task and is focusing on drawing up the guidelines which will be of most interest to business. That is stated in the letter placed in the Library. The director general has committed himself to full consultation both with the other regulators and with business and practitioners on guidelines and procedural rules. The director general says that it is his firm intention to issue consultation drafts before Royal Assent where practicable. He goes
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on to say that he would want to concentrate on those guidelines which would be of most immediate use to business. It is essential to recognise that the guidelines will not be a single publication. They will be a developing series. The director general is focusing on getting the more important guidelines out first and getting them out in good time.
The issuing of the guidelines must necessarily allow proper time for consultation and consideration of the points raised in consultation. If, for any reason, adequate guidelines could not be issued early in the period after Royal Assent, I would expect the Government to consider very carefully the case for delaying the commencement date for prohibitions. I should perhaps add that, as a general rule, the transitional period from the Chapter I prohibition will not begin until the prohibition itself has been brought into effect. The transitional period itself will be one year for agreements generally, subject to the points in Paragraphs 9 and 10 of Schedule 13.
Accordingly, the transitional period will not in any case start until a date after the rules, advice and information are issued. On the basis of those commitments, I believe the amendment is unnecessary and I invite the noble Viscount to consider withdrawing it.
Viscount Astor: I am extremely grateful to the Minister for his constructive and helpful reply. However, there is one point I do not quite understand. I wonder whether he can enlighten me. He said, very reasonably, that if the consultation period were delayed, the Government would consider delaying commencement. What powers does the noble Lord have to do that? How will that happen under the Act? What is the mechanical process and how will it work? Perhaps the Minister will briefly explain that.
Lord Simon of Highbury: I cannot explain it now, but I shall write to the noble Viscount and explain it very carefully.
Viscount Astor: I am grateful to the noble Lord. I cannot speak for my noble friend Lord Kingsland and his amendment but I have no intention of pushing mine. We have cast some light on a rather foggy situation but more answers are certainly required from the Government. If the noble Lord is right in what he says about the process happening and the timetable he laid out, it begs the question of why my noble friend's amendment is not acceptable. However, I shall leave it for my noble friend to make that point. In the meantime, unless my noble friend wishes to intervene, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 201 not moved.]
5.15 p.m.
Lord Ezra Lord Ezra moved Amendment No. 202:
Page 25, line 28, at end insert—
("( ) In preparing the advice and information required by this section the Director should consult interested parties including those representing industry, consumers and enforcement bodies.").
The noble Lord said: The purpose of this amendment is to ensure that, in preparing the advice and information required by this clause, the director should consult interested parties, including those representing industry, consumers and enforcement bodies. I may well get the answer that, "Of course he will do that: he would be out of his mind if he did not". Nevertheless, I would feel happier if it were on the face of the Bill.
I am particularly concerned with enforcement. One of the things that the director will have to do in this general advice and information is to include the details on the enforcement of these prohibitions. The enforcement of anti-competitive measures has tended to be very much not only in the hands of the OFT but also in the hands of the trading standards officers. Both the noble Lord, Lord Borne, and I have been closely involved in the work of the Institute of Trading Standards Administration. There is also a body called LACOTS, the local authorities' co-ordinating body on trading standards, which was set up in 1978 to try to get some co-ordination in the way in which enforcement in this area is carried out.
The problem that the Bill raises in the matter of enforcement is that there are so many enforcement authorities. There is the OFT itself, there are the regulators in the utilities and there are the various layers of local government which have their own trading standards officers. Therefore, it seems to be highly desirable that there should be some attempt at co-ordination in this area of enforcement. In my opinion, that could best be achieved if the director had, as a matter of course, to be in regular consultation, particularly for the purposes of this clause, with the enforcement organisations.
I very much hope that the Government will see fit to accept this modest amendment. I beg to move.
Lord Kingsland: Two other amendments have been joined to this amendment—Amendments Nos. 204 and 205. I have nothing to add to what the noble Lord, Lord Ezra, said.
Lord Borrie: Perhaps I may associate myself with the remarks of the noble Lord, Lord Ezra, as he mentioned my name. I had the honour to succeed him as president of the Institute of Trading Standards Administration, a post which I gave up last year, to be succeeded in turn by the noble Baroness, Lady Wilcox. So three political parties have represented it and all of us highly value its work.
As a result of this Bill the Office of Fair Trading does not have, and will not have, any local or regional resources of any kind. Therefore, when it comes to enforcement it may be no more than information or quite a lot more in terms of identifying what has taken place in respect of local cartels or anti-competitive practices. It will be reliant on local officials who are trading standards officers. I specially mention that point although I anticipate, like the noble Lord, Lord Ezra,
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that since the director general will do all sensible things in the way of consultation, there is a degree to which this amendment is not absolutely essential.
Lord Simon of Highbury: I feel a certain force in the directions from which the amendments are being supported. This is perhaps the first time that I have felt a 360 degree force on a matter. However, at this stage the director general's letter, to which I have already referred, helpfully addresses a number of the issues raised by these amendments. I recognise the points made by the noble Lord, Lord Ezra, and by my noble friend Lord Borne in terms of the real value that representative organisations have and place into the arena of consultation.
Effectively, Amendments Nos. 202, 204 and the new subsection (9) of Amendment No. 205 would require the director, in preparing guidelines, to consult interested parties. In his letter the director general says that it is vital to get the guidelines right and that this can only be achieved by thorough and timely consultation with industry representatives and practitioners. He also says that he intends to place the consultation drafts in the Libraries of both Houses as soon as they are ready. The director general has committed himself to full consultation. So I do not believe that there is no need for a provision in the Bill to require it.
The first part of Amendment No. 205 would require regulators to consult the director general and to ensure that their guidelines do not conflict with his. The DGFT in his letter refers to the joint working arrangements with regulators for the production of guidelines. A joint working party of the Office of Fair Trading and regulators, chaired by OFT, is being set up and will establish a programme. Clause 50(7) of the Bill already requires a regulator to consult the director general as well as other regulators in the preparation of guidelines. I believe that the joint working arrangements are a better way to proceed than any further formal requirements in the Bill.
The last part of Amendment No. 205 would enable the Secretary of State to make an order requiring guidelines to be treated as if they were rules made under Clause 49. I do not agree with that. What is appropriate for procedural rules will not be appropriate for what the director general describes as,
"interpretation by the sector regulators and myself of the legislation and associated jurisprudence".
He also rightly says that guidelines do not have legal effect or determine the scope of what is prohibited. They need to evolve and change over time, to reflect case law and developments in EC jurisprudence. This sort of evolution is not consistent with an order-making process. Indeed, any attempt to give legal force to guidelines might risk the UK prohibitions getting out of step with EC case law, with a consequent increase in burdens on business.

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Despite the 360 degree pressure that I felt coming across the Chamber, I hope that with these explanations and particularly with the director general's helpful assurances, the noble Lord will be willing to withdraw the amendments.
Lord Ezra: I am most grateful to the noble Lord, Lord Simon, for that answer and also for drawing our attention to the director general's letter. However, as regards his quotation from the letter, although there was reference to the intention of the director general to consult with industry and practitioners—I believe that those were the words used—there was no reference to enforcement agencies. I hope that that omission will be repaired and that the director general will feel a special responsibility for being in touch with the two bodies that I mentioned; namely, ITSA and LACOTS. They are the co-ordinating bodies for local enforcement agencies upon which, as the noble Lord, Lord Borne, pointed out, the director general will be dependent for local enforcement as he will be unable to carry it out himself. Can I have an assurance that that will be so? If I can have that assurance, I shall be very happy to withdraw the amendment.
Lord Simon of Highbury: I shall take the noble Lord's suggestions back to the working party and the director general for their consideration.
Lord Ezra: I thank the noble Lord. With that assurance I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness O'Cathain Baroness O'Cathain moved Amendment No. 203:
Page 25, line 28, at end insert—
("( ) In preparing general advice and information in accordance with this section, the Director shall, notwithstanding the exclusion of any cases pursuant to sections 4 and 20, take into account the effect of vertical restraints on competition on the relevant market, in particular where suppliers independently or collectively have significant market power.").
The noble Baroness said: I need to declare an interest in that I am a director of Tesco. The amendment applies not only to that company because it is very wide-ranging. In fact, it is supported by the National Consumer Council.
In moving the amendment, I greatly welcome the provisions of Clause 50 which require the director to prepare and publish general advice and information about the prohibitions. It is imperative that business is provided with certainty and this can only be enhanced by clear, authoritative and early guidance from the director on the interpretation of the prohibitions.
It is worth noting that the widely recognised Dobson and Waterson Report on vertical restraints and competition policy, which was commissioned by the OFT, contained detailed economic analysis of effects on the market. I would commend this report to the director when he in turn is giving guidance.
While recognising the generality of the provisions of Clause 50, I believe that the director should be specifically required to have direct regard to the economic effect on the market of these agreements.
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That would be particularly valuable to the director when considering the effect of selective distribution arrangements and in exercising his right to vary, remove or cancel parallel exemptions under the provisions of Clause 10(5).
Is the Minister satisfied that the prohibitions within the Bill enable the director to deal effectively with selective distribution arrangements that act contrary to the consumer interest? I suppose that he will say yes. If that is so, does the Minister accept that the time and cost of pursuing such a claim, without clear guidance, could be extremely damaging to business, particularly to small and medium-sized enterprises? I fear that this is a replay of my old record about costly burdens.
While acknowledging that certain selective distribution arrangements may result in a consumer benefit in those product sectors where technical or specialist sales advice or after service are required—that has been referred to already in discussions in Committee on this Bill—does the Minister agree that where those agreements are concerned only with the preservation of "image", or "allure" as I referred to it on the first day of Committee on 13th November, they are, in reality, acting contrary to the consumer interest? I beg to move.
Lord Haskel: We have already had many discussions on the subject of selective distribution agreements and on vertical agreements generally. We had such discussions on the first day of Committee stage. I believe that the noble Baroness is trying to ask how advice and information from the director might bear on the issue of vertical agreements. I think that that is the point of the amendment.
Baroness O'Cathain: I thank the noble Lord for giving way. The amendment seeks to ensure that we take account of the economic effect. That is very important.
5.30 p.m.
Lord Haskel: I thank the noble Baroness for that elucidation. We have said that we hope to exclude vertical agreements from the scope of the Chapter I prohibitions. We will only be doing this, however, on the basis that any harmful competition problems associated with them can be considered under the Chapter II prohibition or the Fair Trading Act. As my noble friend Lord Simon explained on the first day of Committee:
"A refusal by a dominant supplier to supply certain outlets, a problem sometimes associated with selective distribution agreements, would, if found to be abusive, remain subject to the Chapter II prohibition. Equally, I am advised that there is EC jurisprudence that differential pricing by dominant firms which is abusive may be tackled under Article 86 … such jurisprudence will apply in the interpretation of the Chapter II prohibition as a result of Clause58".—[Official Report, 13/11/97; col. 284.]
We are confident, therefore, that the problems the noble Baroness has described would be dealt with under the Chapter II prohibition. In framing his advice and information in respect of the Chapter II prohibition, I have no doubt that the director will be covering the definition of relevant markets and how market power may effectively be exercised, whether independently or

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collectively, both issues having been raised by the noble Baroness. In view of these assurances and our earlier discussions, I hope that the noble Baroness feels that we have her concerns very much in mind and that she will feel able to withdraw her amendment.
Baroness O'Cathain: I am glad that the Minister has these concerns very much in mind, but quoting the continental European experience has not benefited us in terms of this problem. The European Commission has allowed special exemptions to the competition rules for both Yves St. Laurent and Givenchy in respect of fine fragrances despite the fact that those agreements can impact on price competition between retailers. That happens to be a fact. The Commission has not come down strongly enough. I suppose that I am trying to make our competition legislation stronger than the European legislation because, although the European legislation looks strong, it is not being supported.
There are issues at stake which militate against consumers. I shall not run through again all the arguments that I have put previously, but this is a question of the economic effect. I can see no evidence to date that competition authorities are having serious regard to the economic effect and I honestly feel that there would be advantages in the director being specifically directed to have regard to the economic effect, hence this amendment. Does the noble Lord wish to reply? As he does not, I shall read in Hansard what has been said, but I must alert the noble Lord to the fact that I shall return to this matter at a later stage if I feel that the point has not been properly covered. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 204 and 205 not moved.]
Clause 50 agreed to.
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 205A:
After Clause 50, insert the following new clause—
RELEVANT TRIBUNAL TO HAVE REGARD TO RULES OR GUIDANCE BY DIRECTOR
(" .—(1) In determining any matter under this Act a relevant tribunal shall take account of any—

(a) rule made by the Director under section 49; or

(b) advice or information prepared and published by the Director in accordance with section 50.

(2) For the purposes of this section "relevant tribunal" means any court or the Competition Commission Appeals Tribunal.").
The noble and learned Lord said: This is essentially a probing amendment. It may be that the noble Lord, Lord Simon, in answering the Committee on Amendments Nos. 202, 204 and 205 has at least partially answered my concerns, but it would nevertheless be helpful to know from the Government just what status there would be in legal proceedings attaching to rules made by the director under Clause 49. I doubt whether there is much difficulty about the rules. In Clause 50 I would prefer to use the language of the Bill, which is "advice and information" rather than "guidelines". We are keen to discover also what legal status, if any, such published
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advice and information might have in any subsequent legal proceedings either before the appeal tribunal of the competition commission or any other court.
The purpose of the amendment is to introduce an express requirement on the relevant tribunal to take into account such rules or advice and information when determining matters before it. Accordingly, I should be grateful if the Government could spell out exactly what they intend if such legal proceedings should occur and if such rules, advice and information are before the court. I beg to move.
Lord Haskel: As the noble and learned Lord said, Amendment No. 205A returns to the issue of the status of the rules made by the director under Clause 49, and of the information and advice issued by the director under Clause 50. Perhaps I may deal first with the question of the director's information and advice and then with the tribunal. We have already discussed the reasons for not giving legal force to his general advice, and I will not restate them here. However, if I am correct, the purpose of this amendment appears to be only that the tribunal and the courts should "take account of" this information and advice, and not that they should be bound by it.
I entirely agree that the appeal tribunal and the courts should have to take account of the general information and advice issued by the director, when assessing cases. However, I am advised that this is the position under the Bill as it already stands. The director's views, as expressed in his general advice, would have considerable persuasive effect in the tribunal and the courts. This being the case, it would be unhelpful to make express provision in the Bill. Such a provision would only beg the question as to the intention behind the provision, over and above what the Bill would do anyway.
I turn now to the question of the procedural rules issued by the director. It is already the case under the Bill that the tribunal or the courts would be able to overturn a decision of the director on the grounds that he had failed to follow the rules, if that failure was material to the decision.
Turning to the question of the tribunal, the tribunal and the courts would be expected to take account of the information and advice issued by the director under Clause 50. Moreover, the tribunal or the courts must have regard to the guidance issued by the director under Clause 37 on the appropriate level of penalty. We would expect such guidance to say that if a firm had been acting in accordance with the general advice issued by the director under Clause 50, little or no penalty should be imposed on it, even if it is eventually found to have infringed one of the prohibitions. I hope that that explanation satisfies the noble and learned Lord and that he will be prepared to withdraw his amendment.
Lord Fraser of Carmyllie: I shall certainly seek to withdraw my amendment. However, the answer just provided by the noble Lord invites a further amendment when the matter gets to Report stage. I had not appreciated before that guidance was used in some parts of the Bill and advice and information was used in others. Perhaps at a later date one might usefully probe

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the fine distinction to be drawn between the activities of the director in providing guidance on the one hand and advice and information on the other. I am grateful to the noble Lord. He will appreciate that this is a matter to be taken into account. Some concerns have been expressed to us on this matter and it is as well to understand and have on the record what the Government propose to do in the Bill. With those remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 [Fees]:
On Question, Whether Clause 51 shall stand part of the Bill?
Lord Borrie: I should like to ask a question on Clause 51 which is not subject to any amendments. My question is concerned with fees. Can the Minister say how fees will affect firms of different sizes and whether the size of the fees will reflect ability to pay?
Lord Haskel: The question of any fees under Clause 51 relating to a person's ability to pay has been put to us by the Competition Law Association. We are considering whether the power in the clause might be broadened, in particular to allow different charges to be set for different persons, for example relating to their turnover. This matter is under consideration.
Clause 51 agreed to.
5.45 p.m.
Clause 52 [Regulators]:
Lord Ezra Lord Ezra moved Amendment No. 206:
Page 26, line 6, leave out from ("10") to end of line 7 and insert ("makes consequential provision in relation to the functions of regulators.").
The noble Lord said: We come to the important question of the concurrent exercise of functions under the Bill by the utility regulators. The essential amendment is Amendment No. 206. A rather impressive array of amendments is grouped with it but all of them are consequential amendments in Schedule 10. The key amendment is Amendment No. 206. The purpose of this amendment is to ensure that the functions of the director general under the Bill are not exercised concurrently by the seven sectoral regulators referred to in Paragraph 1 of Schedule 10. The effect of these amendments is to separate the statutory regimes for the regulation of water, electricity, gas, rail and telecommunications from the new competition law introduced by the Bill. The amendments would not affect the substantive provisions in the Bill.
There are three main reasons for these amendments. First, there is a need to promote consistency and avoid overlapping jurisdictions. With eight different UK authorities exercising jurisdiction under the Bill there would undoubtedly be a risk of inconsistent interpretations and applications of the Chapters I and II prohibitions. The likelihood of overlapping jurisdictions would cause not only inconsistency but also uncertainty and possible conflict.
Secondly, the Government are now conducting a review of legislation. Their conclusions are unlikely to be published before the early part of next year. A consultation period will follow and important changes in the regulatory system may ensue. It would surely not be desirable to give regulators within the existing regime additional powers under the Competition Bill until the regulatory system had been clarified by this review.
Thirdly, there is the question of conglomerates. With the opening up of the utilities market a number of companies cover more than one sector. For example, there are companies that now cover electricity, gas and water. It is quite possible that they will also cover telecommunications and railways. The emergence of these conglomerates can well raise questions about which particular regulator should act in connection with the Competition Bill. It may well be that the competitive problem will stray over the boundaries of one sector into the areas of one or more other sectors. How do they set about deciding who should deal with it? Do they just have an informal lunch and decide that A, B or C should take it on? Do they deal with it jointly or promptly hand it back to where I believe it should belong anyway—the Director General of Fair Trading? Clearly, this uncertainty, which I believe will grow as time goes on with the evolution of the market, would be avoided if the amendment proposed were agreed to.
If the director general were given this authority—which I believe properly belongs to him—he would necessarily consult the regulators when it was appropriate. If a conglomerate was being dealt with he would consult more than one regulator. I suggest that this is an amendment that will improve the effectiveness of the Bill and take account of the realities of the evolving market place. I beg to move.
Lord Desai: Although my name does not appear on the face of this amendment I rise to support it. During Second Reading I said that sooner or later in the competition field we would need an overarching structure. I drew an analogy with the FSA. For a while we messed about with SROs in different parts of the City. We finally found that overlapping jurisdiction and other matters required us to go for an overarching structure. I know that that analogy is not exact, but I believe that we are entering the same kind of phase in the Competition Bill.
The amendment in the name of the noble Lords, Lord Ezra, Lord Kingsland and Lord St. John of Bletso, is not a positive accumulation of power. It is being said that we should sort it out nicely at the initial stage of the Competition Bill so that we do not have a problem in the future. I believe that from that point of view it is very desirable because it introduces an element of co-ordination and avoids overlap. But, given the pace of technological innovation in this field. sectoral boundaries are bound to become very peculiar indeed. One will have conglomerates, changing technologies and many more overlaps. If the Government are minded to accept this amendment it will make life in future

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much easier; otherwise, they will have to introduce more primary legislation at a later stage in this Parliament, which would not be a good thing.
Lord Mottistone: I am very concerned about another aspect—the telecommunications field. Together with other noble Lords, I was very much involved in the passing of the Telecommunications Act 1984. My concern then was that it did not go far enough in ensuring that British Telecom was properly competitive. I found it strange that 3 per cent. of the market which was specifically provided for Mercury had such a far-reaching effect. Indeed, it changed British Telecom from one of the doziest public affairs into a quite competent—but not yet competent enough—telecommunications business.
I am concerned about all of the amendments linked with Amendment No. 206, those linked with Amendment No. 207 and many others in this part of the Bill. I understand the arguments put by the noble Lord, Lord Ezra. Perhaps this is something to which the Government should give very careful thought. I suspect that they have done so already in that they have endeavoured to draft the Bill so that it goes as far as it can at this stage in this particular area. It will take time for this new legislation to take full effect. It is important to realise that it would be exceptionally dangerous if the regulators' powers were diminished, particularly as a result of the amendment of the noble Lord, Lord Ezra, Amendment No. 210, which strikes at the very powers of Oftel.
We should not arrive at a situation where British Telecom could happily say: "We are the experts in this field; we do not have a regulator with any powers left; we know our subject, and the Office of Fair Trading will listen to us because we are the only experts". I detect that that kind of feeling will arise if these groups of amendments are accepted by the Government. Therefore I hope that the noble Lords will withdraw their amendments and think again about how important the regulators are at this moment. That is the point.
There may come a time when they will not be necessary. Amendment No. 211 talks about powers existing until 2001. That is four years away. In 2001 we shall see whether the regulators have too much power, and that will be the time for further legislation to restrain them, if necessary. Now is not the time and I hope that the amendments will not see their way onto the statute book.
Lord St. John of Bletso: A recurring theme in several amendments, and one which was emphasised by the noble Lord, Lord Ezra, is that legal certainty is essential and that those applying the law must do so in a consistent fashion. The prohibitions in the Bill contain wide discretions and it is vital that those discretions are applied consistently. That is why Clause 58, the general principles clause importing European jurisprudence, is very important.
That, however, does not solve the problem. In our deliberations on Clause 50, on guidelines, we heard it suggested that neither will remove the problem. For
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those reasons, I am concerned that Schedule 10 gives powers of adjudication to sectoral regulators in addition to the courts and the DGFT.
The problem is compounded by the fact that Schedule 10 makes the objectives of the sectoral regulators matters to which they may have regard when they apply the regulations. That statement departs from the European approach, where competition policy is centralised in DGIV.
Those features of the Bill will mean more uncertainty and inconsistency rather than less. Even if the Minister demonstrates a case for complexity and duplication in the utility sectors, I do not believe that such a case should be brought in the information technology field. I and several other noble Lords at Second Reading stressed that the communications, computing and broadcasting industries are of vital importance to the economy and to international transactions. The right body to apply competition law in this field is the United Kingdom's national competition authority and not a regulator of a particular sector. For those reasons, I support the amendment.
Lord Borrie: The noble Lord, Lord Ezra, made a powerful case, particularly on consistency, for there being one regulator, the Director General of Fair Trading, instead of eight regulators, to exercise significant powers with important penalties attached to the prohibitions.
At Second Reading I drew attention to one important area of competition policy which is not covered by the Bill, namely mergers and takeovers, where consistency is achieved by the Director General of Fair Trading being the sole channel through which advice is given to the Secretary of State for Trade and Industry for making references to the Monopolies and Mergers Commission. If a problem arises relating to a merger or takeover in the field of water, telecommunications or mixed utilities, then the different regulators express their points of view. Those views are encouraged and welcomed by the Director General of Fair Trading, they are fed in to the process of advice and, if the Secretary of State agrees, there is a reference to the Monopolies and Mergers Commission. That is a very strong case.
We want to achieve consistency not only with actions but also with advice and guidelines. I have had a few more days than your Lordships to think about the letter that was quoted by the Minister today because it was referred to at a conference that I attended last week on the subject of the Competition Bill. I was impressed by the fact that the Office of Fair Trading is already engaged, through a working party, in consultation and discussions with the other regulators to try to achieve consistency now in terms of advice and information. There will therefore be no lack of consistency.
The other arguments put forward by the noble Lord, Lord Ezra, were also strong. There are now multi-utility conglomerates. We already have a problem when there are several different utility regulators, let alone the Office of Fair Trading, concerned with companies like United Utilities and HYDER.

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I do not think that I can support the amendment because, like the noble Lord, Lord Mottistone, I feel that the noble Lord, Lord Ezra, is before his time. We do not yet have the report, let alone the outcome, of the Government's review of the utilities.
Since Second Reading I have thought about whether we should wipe out all other regulators in terms of their having any powers under the Bill or allow them to have concurrent powers which are subject to the review, and, in the light of that, for reasons of conglomeracy and other reasons that have been argued, whether some of those regulators should be merged. It might be desirable to reduce the number of different regulators. All the Bill does is to preserve the status quo until the review of the utilities is completed. If the Minister can say that the Government reserve the right to revise and amend what will be in the Competition Act 1998 in the light of the utilities review, I would be satisfied if the specific regulators were to retain concurrent jurisdiction in these matters. They have concurrent jurisdiction under the existing law on competition policy matters apart from mergers. I would prefer that course rather than to go along with the view of the noble Lord, Lord Ezra, that the Bill should bring all of these powers into the hands of the Director General of Fair Trading.
6 p.m.
Lord Fraser of Carmyllie: Although my name is not attached to the amendment, I associate myself with the remarks of the noble Lord, Lord Ezra. As he said, this is an important group of amendments. It relates to one of the central themes within the Bill which, I have no doubt, for the public good we must resolve as best we can. Having said that. I am hound to say that I agree in large measure with the noble Lord, Lord Borrie. It is difficult to reach a settled view about overlap or concurrence when we do not know what will be the outcome of the utility review. In such circumstances, I would not be inviting the noble Lord to take the mood of the Committee on the amendment, but that does not make it any the less important.
As the noble Lord rightly pointed out, we are seeing almost on a daily basis a greater and greater involvement of a number of conglomerate companies across a wide range of utility activity. If that is the case, there may be problems in trying to determine who should or should not undertake the necessary investigations and do the necessary work. If these matters are to be settled over lunch, I have no doubt that it would have to be a table for more than two if we look at the way that things are now developing.
At the same time, I am conscious that there are powerful, effective and formidable regulators who are confident that, as things are proposed in the Bill, there is such a scheme that there would not be problems. From time to time I regard myself as courageous, but I do not cross swords with Clare Spottiswoode in any foolhardy fashion. She has indicated that she is satisfied with the powers that she has and is confident that in the way the scheme is settled there will be no risk of double jeopardy or duplication.
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There is a question I should like to ask the Minister which stems from my correspondence with Clare Spottiswoode. She states:
"Concurrent powers will not lead to the Director General of Fair Trading and the DGGS both taking action under the new legislation in relation to the same conduct because the Gas Act will specifically require them not to do so and to consult before exercising their concurrent powers".
I shall take her word for it that such powers exist under the Gas Act, but what I do not know—I should he grateful for an answer—is whether in all the other statutes establishing such regulators in particular sectoral utilities there is the same power.
There is not just that problem. Even were I to be wholly satisfied that between the director general and the regulators there was no such problem, part of the scheme of the Bill is again to give powerful rights to third parties. That still troubles me. We started on this debate on Second Reading. Even if a satisfactory agreement is arrived at between the regulator and the director general as to who should take the matter forward, that would seem not to be an end to the matter because third parties could intervene. I should again be grateful if the Minister could give some explanation and contradict me on that or, if I have understood it correctly, acknowledge that that is indeed a complication in the scheme of things.
I do not follow my noble friend Lord Mottistone into the world of telecommunications because, as he correctly identified, there are subsequent amendments which deal with telecommunications. For the reasons others have given, I believe that telecommunications should be dealt with separately. With the way telecommunications have expanded, it is difficult to see how having just one regulator attempting to deal with all that might be described as telecommunications remains as valid as it was when Oftel was first set up. I should be grateful to the Minister if he would reply on that point. I should like to return to this matter at some later stage, and acknowledge that because of the expected utility review, the publication of which I hope we shall still see in January before we reach Report stage, this is not something that we could hope to settle this evening.
Lord Desai: I should like to ask a question on what the noble and learned Lord, Lord Fraser, and my noble friend Lord Borne have said. They know much more about practical things than I do. It seems to me that we are being told that the time is not right. But that we should not worry because it soon will be because the utility review will be published. Given all that we have said about the pace of technological change and the overlap, the balance of probabilities suggests to me that the review will more or less come to the conclusion to which we are now coming. For once a little foresight will not hurt in the area of legislation, because with the previous government every year we had either an education Bill or a crime Bill to obviate the mistakes of an earlier Bill.

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I want to ask my noble friend the Minister, my noble friend Lord Borrie and the noble and learned Lord whether it is not now time to anticipate future developments a little, give the amendment a fair wind and save ourselves a great deal of time.
Lord Fraser of Carmyllie: Perhaps I may say to the noble Lord, Lord Desai, that if I anticipated that the utility review was going to drift away from a January publication date and disappear into the middle of the year, or later, I should have greater sympathy with him. It is a constructive approach to say at the end of November that we are at least prepared to see what comes out of such a review, although I agree with him, especially in the area of telecommunications, that I have grave doubts whether it is possible to so define the activity that we can see Oftel continuing to regulate indefinitely. Indeed that is why we have what might be described as the "sunset" clause in Amendment No. 211.
Lord Skelmersdale: I rather feel today as though the scales have been lifted from my eyes, not so much as a result of this debate but because I am no longer an adviser to BG plc. That means that I can contribute on these subjects in a fuller and less inhibited way than I have been doing in recent months, if not years. It occurs to me that there is another reason to wait for the review; that is, there is another mischief which has not been mentioned in the debate so far today, although I believe that it was mentioned in my absence on Second Reading. It is that where under the current legislation a reference is made as a result of a disagreement between the regulator and the utility to the MMC, and it makes its decision, writes its report and we all see it, on occasion the regulator can virtually ignore that report, as happened in the cases of Transco and Northern Ireland Electricity. I accept that that has nothing to do with the Bill, but it is a good reason for delaying the subject until after the review when all these matters can be wrapped up together.
Lord Simon of Highbury: We have certainly had a wide enough debate for this to be considered to be a most important part of the Bill. I agree with that. For that reason, I really do not wish to leave doubts in people's mind at this stage.
This group of amendments would remove from the Bill the provisions for the sectoral regulators—telecoms, water, electricity, rail and gas—to apply and enforce the prohibitions concurrently with the Director General of Fair Trading. Let us be quite clear on the purpose.
Let us be clear also that that would represent a major change from the established policy, adopted under the previous Administration, that sectoral regulators should be able to exercise functions concurrently with the Director General of Fair Trading under general competition law. In the Government's considered view, it would be quite inappropriate to use the present Bill—dealing with the general competition framework—to make such a major change to the arrangements for
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sectoral regulation, least of all while the Government are engaged in a general review of utility regulation, as many Members of the Committee have commented.
I should like to confirm to the noble and learned Lord, Lord, Lord Fraser, as I did in a previous reply to him, that we expect the review to be available early in the new year. Perhaps that is a slightly wider definition of "winter scope" than he would wish at this stage, but that is consistent with my earlier advice.
This subject is sufficiently important for me to set out a little more background about the issue of general competition. Whatever the merits of the original privatisations and their structures, strong sector regulation has played a major part in securing consumer benefits in the regulated sectors. That has been possible only because the sectoral regulators have had the powers they need to do the job: to regulate in order to protect the consumer now; and, where feasible, to promote competition in order to protect the consumer in the future. It is implicitly recognised in the privatisation statutes through a duty on the sectoral regulators to promote or facilitate competition. That is the general issue.
Consequently, there is no clear distinction between sectoral regulation and the promotion of competition in those sectors. The one merges seamlessly into the other and the sectoral regulators are drawn inevitably into competition issues. That is reflected in the regulators' responsibilities to enforce certain licence conditions which are aimed at market power issues. For example, there are licence conditions concerning price caps and prohibiting undue discrimination.
It is reflected also in the concurrent functions conferred on the sectoral regulators under certain aspects of general competition law; namely, the monopoly provisions of the Fair Trading Act 1973 and the provisions of the Competition Act 1980 which relate to the control of anti-competitive practices which this Bill repeals. Clarity about the responsibility for applying the legislation in the sectors—ensuring no regulatory gap or overlap—has been achieved through bilateral "concordats" or understandings between most of the sectoral regulators and the Director General of Fair Trading, by which the sectoral regulators are responsible for the application of the relevant provisions of general competition law within their own sectors.
In the Government's view, and that of the regulators, the availability of those powers has been an important fall-back which has added to the credibility and therefore to the effectiveness of the regulators. One remembers the example of President Teddy Roosevelt who extolled the virtues of speaking softly while carrying a big stick. Indeed, that may have been the impression which the noble and learned Lord, Lord Fraser, had of Clare Spottiswoode. He did not use those words but she does indeed speak softly. The sectoral regulators' general competition functions are indeed a stick without which they would be severely hampered.
Let us now deal with the question of consistency. I would echo many of the statements made by Members of the Committee that consistency is important in the issue. It is part of the debate when it is asked why we

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cannot achieve more consistency by lumping everything together and having one person involved. That may indeed be—I hate to say it—the nirvana of the noble Lord, Lord Desai. We may reach the position of having an over-arching great power which is all-seeing and all-powerful; but we are not there yet. These are dynamic and changing markets. I never hesitate to remind the Committee that I have come lately from a field in which I was able to observe those markets developing in extraordinary ways. In my view, to try to have an overarching capacity to master all those specialties in one fell swoop is not credible yet. One day I may stand at this Dispatch Box, if I am a lucky and privileged man, and be able to say that an overarching structure is desirable, but I do not see it yet.
But in terms of the ability to promote an answer to questions on consistency, I say to the Committee that there is already a systematic body of law with which the regulators must ensure that they do not act inconsistently. Consistency in the applications of the prohibitions by regulators is thus built in from the outset. It will be supported by a single set of procedural rules to be drawn up by the director general and by a process for the director general and the sectoral regulators to work together. As my noble friend Lord Borrie has already emphasised, they are already setting up the working group. In developing advice and information about the application and enforcement of the prohibitions, we shall gain more insight into the developing capacity to achieve consistency. The tribunal will also have an important role as all appeals from directors and regulators' decisions will end up there.
In saying that there will be consultation between the regulators and the director general on cases where concurrency is an issue, I do not believe that I am minimising the importance of the informal debate. It may not be a lunch or dinner table; indeed, it may be something as boring as a meeting room. But there must be an informal capacity for concurrency to be dealt with. As has already been intimated by the noble and learned Lord, Lord Fraser of Carmyllie, there is already a requirement under each of the utility statutes that there must be only one way to apply and follow-up a dispute. There cannot be overlap and two cases running at the same time. The noble and learned Lord pointed out that that was the case in the gas regime. It is true of all regimes. That is a protection.
Furthermore, I have already indicated (on 17th November at col. 415 of the Official Report) that I would reflect on whether an amendment to the Bill may be needed to provide flexibility for a regulator and the director general to work together on investigations where both agree that that would be helpful. I very much take the point made by the noble Lord, Lord Ezra, about the widening of the scope of companies where two or three utility sectors may be in the ownership, in some form, of one company structure—a conglomerate of utilities. I do not believe that the Bill would rule out action by the director general, no doubt in the light of agreement between the director general and the regulator or regulators concerned that action would be taken at the level of the director general rather than of one of the utility
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regulators or three of the utility regulators. There is nothing in the Bill which would prevent the process of informal consultation.
Therefore, in the developing process of consistency, by way of advice, procedures and rules, I believe that we will understand better how there is a development of the ability of the director general and the sectoral regulators both to co-ordinate their capacities to understand and, at the same time, their individual ability to act. As I said, there is already a great deal in the body of the law to ensure that they do not act inconsistently.
I move on now to the point made by the noble Lord, Lord Mottistone. I very much agree that in some sectors—the telecommunications sector in particular—it is absolutely vital, given the structure of the market, that we do not hamper the capacity of the director general and of the telecommunications regulators to ensure that competition is still in place and developing. It needs a great deal of care.
In general, when talking about the role of the regulators in relation to the concurrency debate, there has been wide acceptance of the fact that there should be a continuation of the expertise and no blurring of the lines which currently exist. However, if I may say so, it has not been an issue in many of the sectors where we have had a response, but it has certainly been an issue in the telecommunications sector. That is why I wish to underline the remarks made by the noble Lord, Lord Mottistone. I believe that it is instructive to quote the words of a respondent that we have had from within the telecommunications industry:
"The principle of concurrency should he supported. It is likely to he opposed only by those who have a strong interest in weakening rather than strengthening competition law".
That is specifically in the telecommunications sector, which is probably less balanced in competitive terms than some of the other markets given the dynamic of the general market place.
Against a very clear background, I have tried to reflect on what I believe is the rather too accelerated view of how we can develop the capacity to protect competition and, at the same time, develop a different structure of regulatory powers to protect consumers in the market place. There are many interesting ideas of where we may go in the future. However, my basic response to the noble Lord, Lord Ezra, is that the ideas are premature bearing in mind the state of the developing markets.
There are two central points that I commend to Members of the Committee. First, not conferring concurrent functions in relation to the prohibitions would be a major policy change which would inevitably weaken the roles of the sectoral regulators at this time. Secondly, conferring concurrent functions would enable the sectoral regulators' specialist expertise and knowledge of their sectors to be directly tapped as the key asset in applying the prohibitions leading at this stage to a better quality of sectoral regulation all round.
I therefore submit that this is not the time or indeed, if I may say so, the Bill to make a major reduction to the sectoral regulators' functions, least of all while the Government are reviewing the whole area. Irrespective

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of the timing of the utility review, I do not believe that it would be wise to prejudge the issues that that review will bring forward. There will be a time when we will debate the matter further. However, on the basis of my two submissions and for the reasons I have given, I invite the noble Lord to withdraw his amendment.
Lord Ezra: I should like to thank all noble Lords who have participated in the discussion. I believe that each contribution has been most important. We have covered different angles of the issue and it is clearly an essential part of the Bill. While I am most grateful to the noble Lord, Lord Desai, for his very firm support, which I welcome—indeed, I only wish that the Government were swayed by it—I gain the impression that the feeling is that, while this could come, this might not be the right time. The question that then arises is: when will the right time be? Will it be when the Government's eagerly waited review of the regulatory system is completed and has been discussed? Am I to take it that we shall then return to the issue? Is it the Government's intention to reconsider the whole question of concurrent jurisdiction in the light of the conclusions which will be reached in that review? If that is so. I am happy to wait until then, assuming that it will be sometime next year. That means that we will return to the matter.
Regrettably, the weakest part of the Minister's response was where he dealt with the conglomerate situation. He said that no doubt they would all get together and that, possibly, they could leave it to the director general to deal with. That immediately injects an area of uncertainty. If I were the chairman of one of those conglomerates—and I rush to point out that I am not—I would be in a state of grave uncertainty as to whom I should be dealing with in such matters.
Let us assume that I am covering all the utility sectors—indeed, that is perfectly conceivable—the lines and the operations are being merged, gas and electricity are indistinguishable in my operations, and railways are coming into it, with telecommunications overarching the whole lot. I would be in difficulty as regards knowing to whom I should turn for advice, let alone knowing who would finally decide whether or not I was contravening the legislation. I find that a rather unsatisfactory situation.
When this particular section of the Bill was drawn up, it does not seem to me that sufficient attention was paid to the way in which the market is developing. I have but two thoughts in my mind. The first is that I gain the impression that we shall return to the matter when the review is complete; and, secondly, I feel grave concern as to how the developing number of conglomerate companies will be dealt with. However, this is not the time to be pressing Members of the Committee for a decision on the matter. We have had an extremely useful debate. I shall reflect carefully on everything that has been said, while leaving those two thoughts in the mind of the noble Lord, Lord Simon. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ezra Lord Ezra moved Amendment No. 207:
Page 26, line 7, at end insert—
("(1A) When exercising the functions under this Part which a regulator has concurrently with the Director, the regulator shall consult and follow the advice of the Director in order to ensure consistency in the application of this Part.").
The noble Lord said: The amendment brings us back to the question in a different way. Whereas the amendment that we have just debated proposed that there should not be concurrent jurisdiction, Amendment No. 207 assumes that there will be such jurisdiction but suggests that the risk of overlap could be overcome by requiring the regulators on the face of the Bill to consult and follow the advice of the director general when exercising their functions under the legislation. The director general would thereby take a leading role which would ensure consistency in the application of the legislation. The obligation to consult and to follow the advice of the director general would also apply when the regulators exercise their functions under monopoly provisions of the Fair Trading Act 1973.
I hope that even though the Government were not prepared to accept a more far-reaching proposal in Amendment No. 206, they will, in the interests of trying to avoid overlap—which they say they want to avoid—accept the less far-reaching proposal in Amendment No. 207. I beg to move.
6.30 p.m.
Lord Mottistone: I trust that the Government will resist this amendment with the same strength as they did the previous amendment because it seems to me that it just says the same thing all over again and weakens the power of the regulators at the wrong time.
Lord Simon of Highbury: I find it difficult to resist the urge to be brief that was revealed in the statement of the noble Lord, Lord Mottistone. I shall not resist it. I feel that I have made the arguments before. We think that overlap is inevitable. Indeed it may be helpful under certain circumstances. Therefore we do not believe that the amendments are necessary in the light of the arguments that I made with regard to the previous amendments.
Lord Ezra: This is all part of the same debate. I shall take on board what the noble Lord. Lord Simon, has just said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 207A:
Page 26, line 8, after second ("in") insert ("paragraphs (a) to (g) of").
The noble Lord said: In moving Amendment No. 207A I wish to speak also to later amendments standing in my name, Amendments Nos. 236A. 240A, 242A and 252A. These amendments do no more than rectify minor drafting deficiencies in the Bill. Amendments Nos. 207A and 252A clarify the definition of "regulator". Amendments Nos. 236A, 240A and 242A correct cross-referencing errors.
In moving these amendments I should like to add that we may also wish to make minor amendments to those provisions in Schedule 10 which make consequential amendments flowing from the establishment of the new competition commission. There are further matters on which we may wish to bring forward amendments to Schedule 10 at Report stage. The first of these concerns the way that the disclosure provisions of this Bill and the utility statutes interact in governing information obtained by regulators exercising concurrent functions. Some clarification may be needed on this.
The Bill provides for regulators to be able to exercise concurrent functions in relation to Part I of the Bill. However, it does not at present provide for them to exercise concurrent functions in relation to the transitional arrangements in Schedule 13, even though some of these are related to functions under Part I. I believe that the Bill needs to be amended in this regard and accordingly I would expect to come forward with amendments. I beg to move.
On Question, amendment agreed to.
Lord Ezra Lord Ezra moved Amendment No. 208:
Page 26, line 9, at end insert ("other than the Director General of Telecommunications").
The noble Lord said: This amendment again forms part of the various amendments relating to a concurrent jurisdiction. We have already debated that matter and I shall speak briefly. This measure deals specifically with the concurrent powers of Oftel. It is considered by many that the massive expansion of telecommunications in its various forms is such that it will be difficult to draw the line where the concurrent authority of the Director General of Telecommunications ends and the functions of the Director General of Fair Trading begin.
Almost every large concern, and indeed the majority of small ones, are involved in one way or another in telecommunications. Therefore it is felt that this matter requires a different treatment. I can guess the kind of answers I will receive on this matter because I am sure that, if nothing else, the noble Lord, Lord Simon, is consistent today, although what we are aiming for is to obtain consistency in the application of this legislation. He seems to be consistent in rejecting that desirable objective. When he replies after other Members of the Committee have spoken, as I hope they will, I hope he will tell us how this issue is treated in other countries of the European Union. How do they treat the telecommunications industry in relation to competition law? Is it handled by the government organisation set up to deal with competition law, or is handled by a separate directorate? It would be interesting to know what others do in this matter before we come to a conclusion. I beg to move.
Lord St. John of Bletso: I also wish to support this amendment. We have already debated the position of regulators generally. Amendments Nos. 210 and 213 are particularly relevant to Amendment No. 208. As I said on Second Reading, I am interested in a simple and workable competition law. I support the centralisation of the application of the new law in the DGFT, who has wide experience of competition matters in all sectors,
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including his dealings with mergers and acquisitions. That point has already been made by the noble Lord, Lord Borrie.
As I mentioned when we discussed Amendment No. 206, I am not convinced, however, that the information technology field should be the subject of sectoral rather than national scrutiny as regards competition. The IT field is a dynamic and evolving field with strong international features. The DGFT's expertise and experience in this field are already strong and should be built upon. However, this Bill seems to envisage that the de facto competition authority for this field would be Oftel. It appears to me that that is not the best way forward, despite the concerns of the noble Lord, Lord Mottistone. The arrangement would possibly undermine the effectiveness of the DGFT's position. I support the comments of the noble Lords, Lord Ezra and Lord Desai, on Amendment No. 206 that these important decisions should not be taken before the results of the Government's review of the utilities are known. As the Minister has mentioned, it is hoped that we shall have those results by the end of January next year. Oftel's submission on the review of utility regulation states on page 3:
"The changes in competition law will have the most profound impact on the work of the DGT".
One reason for this might be that under Clause 10, the Bill proposes to change fundamentally the current position under the 1984 Telecommunications Act.
Under that Act competition powers—that is, the powers to exercise the Fair Trading and Competition Acts—are kept separate from the Telecommunications Act powers. Under Section 3 of the Telecommunications Act, Oftel is not allowed to take into account its telecommunications objectives when exercising its competition law functions. Despite the anxieties of the noble Lord, Lord Mottistone, and the strong words of rejection by the Minister, I have received information about a number of concerns, and support, from a number of organisations. The Federation of Electronics Industries has expressed its concern and broad support, along with a number of its members. They include—I mention a few—Erikson, ICL, Digital, IBM, Intel, Norton, Phillips, BT, Racal, Fujitsu and Xerox. I hope that these concerns are taken into consideration and that we shall receive a more encouraging reply from the Minister.
Lord Mottistone: I need hardly say that I hope the Government do not accept the amendment. I understand that Amendment No. 211 was also spoken to. As I said, Amendment No. 211 is premature. We do not know what the situation will be in January 2001. No doubt it will be a suitable time to have another look at this Competition Bill. I hope therefore that Amendment No. 211 will be rejected.
I am somewhat surprised at the large companies which are ganging up against the very skilful management by Oftel of the telecommunications position. I suspect that those companies are not giving attention to the basic point: that we have to make certain that the large telecommunications companies are made properly competitive. I think that they would agree with

921
that, as will the noble Lord, Lord St. John. I find the noble Lord's great effort to take Oftel out of the picture very strange.
Lord Fraser of Carmyllie: I entirely agree with my noble friend Lord Mottistone, as I think we all do, that without the powerful presence of regulators—in the case of telecommunication it is Oftel—the competition in that industry which we now see would not have been established as quickly and effectively as it has been. There is no dispute about that. We recognise the value of those who have held the office.
However, the real issue was neatly encapsulated in a remark of the noble Lord, Lord Ezra. Do we know where the line of concurrency will be drawn? If we know now, will we know it in a year's time; or, if we know now, do we believe that it falls at a worthwhile point? Such has been the speed of change that clearly telecommunications is no longer a discrete sector, as the noble Lord, Lord Ezra, said. It is for that reason that we believe that it is right to explore this issue now; and I have no doubt we shall explore it again at a later date.
We must be clear that the issue will be properly covered for all the anti-competitive purposes of the Bill. There is a powerful argument for saying that, as regards competition provisions, so broad is the activity of telecommunications now that authority is better invested in the Director General of Fair Trading.
Amendment No. 211 is grouped with Amendment No. 208. It is the "sunset" provision. It restricts the functions of the Director General of Telecommunications until 1st January 2001. I accept that there is no magic about the year 2001 in terms of telecommunications. However, as I see it, the amendment signals the realisation that even at the time of the passage of the Bill there may yet be arguments about the continuing value of having Oftel in place over competition. It must be obvious to anyone with even half an appreciation of the change that has been undertaken, that sooner or later we would wish to see the industry subject to broader competition and not restricted in this sectoral way.
Even if the noble Lord, Lord Simon, cannot give us comfort tonight—I should be surprised if he were to do so—I hope that, nevertheless, he will be in a position to recognise that the concerns on this issue are more keenly felt than they might be on the broader issue of concurrency which we dealt with in the earlier, larger group.
6.45 p.m.
Lord Simon of Highbury: I can start with a positive statement. It is not on any of the amendments, in case anyone becomes overexcited. It is on the question of regulators in Europe. I answer in general to the noble Lord, Lord Ezra.
It is my experience in general that, in particular in the telecommunications field, we are way ahead. I find that an extremely good position for our industry. The capacity of our regulators and the effective communication in the market place have put us in a
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strong position. If the noble Lord wants more detail, perhaps he will apply to me separately. But we are effectively leading the world in the regulatory process in creating competition in the market place. I would not defer even to our American friends in a number of sectors on the way that we have increased the dynamic of the market.
Perhaps I may respond to the noble and learned Lord, Lord Fraser, as to where the guidelines are drawn. Where is an industry regulator relevant in his field? As I said earlier in talking about the development of guidelines from the director general and the sector regulators, it has to be a moving series. The guidelines have to reflect the dynamics of the market place. They will not be cast in stone. Therefore we shall have to adjust to an understanding that the process of advice and guidance can change over time as the market place changes over time. Those are general points that are worth making.
I can offer a less warm response on the specific amendments. The amendments concern Oftel's concurrent powers. Amendment No. 208 in the name of the noble Lord, Lord Ezra, excludes the Director General of Telecommunications from the list of regulators mentioned in Schedule 10 who are able to exercise concurrent functions under Part I of the Bill. The purpose would seem to be to remove the ability of the Director General of Telecommunications to exercise concurrent functions under the prohibitions, under Part I of the Bill. The effect of Amendment No. 211 would be to limit Oftel's concurrent functions under the Fair Trading Act and the Competition Bill to the period until January 2001.
The reason for this choice of regulator, and the terminal date of 2001, in relation to Amendment No. 211 is not entirely clear. It may be related to the development of competition in the telecoms retail market, and to the fact that the Director General of Telecommunications has said that, in view of this, he expects BT's current retail price cap to be the last one. It will expire in August 2001.
Implicit in the amendments seems to be the assumption that the central competition function of the regulators is imposing price caps, and that when the need for price caps falls away so will the case for the sectoral regulators to be involved in wider competition issues. Amendment No. 208 in fact implies that the sectoral regulators can retreat from wider competition issues even while price caps still apply.
With respect, this is not the Government's view. As I have explained in the earlier discussion on concurrency, it is appropriate that the regulators, including the Director General of Telecommunications, should have concurrent functions under general competition law because there is no clear distinction between sectoral regulation and the promotion of competition in those sectors. The regulators have competition-related duties so that sectoral regulation merges seamlessly into competition issues and the regulators are inevitably drawn into competition issues.
One of the purposes of price caps is to prevent one kind of abuse of a dominant position—namely, excessive, exploitative pricing. The policy of the

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Director General of Telecommunications is to remove retail price caps as quickly as possible as competition develops. In fact BT's current retail price cap already applies to only about 40 per cent. of BT's services in terms of the revenue generated. But abuse of the dominant position can also take other forms which could be relevant, even after retail price caps no longer apply. Predatory pricing could easily be used to squeeze people out in this sector. The telecommunications system is a mosaic of interconnecting networks, and access to networks is an area where it will be market power that can be exercised. There is no doubt a whole variety of other ways, subtler than network access or the retail pricing or predatory pricing strategies, and therefore more difficult to foresee in advance. The range of potential strategies, particularly in this sector, is limited only by human ingenuity, which is not currently a great limiting factor.
The broad position remains that sectoral regulators have certain duties under the utility statutes to promote competition where that is feasible. This issue goes wider than the price cap. It is an issue which—
7 p.m.
Lord Fraser of Carmyllie: I understand the Minister's point that, under the existing scheme of arrangement, the sectoral regulator has a duty imposed upon him to examine competition issues. As the scheme of the Bill is presently laid out, that is a concurrent jurisdiction.
What we are trying to probe is the issue of what is his sector, and whether there is a risk that in the foreseeable future, if Oftel sought to exercise those competition powers to examine the conduct of some player in what the regulator believed to be the telecommunications sector, it might then be met with the complaint, "This goes beyond your statutory powers". Our concern is that it would be no fault of the regulator and no criticism of him, but such is the speed of change that trying to maintain a definition of that sector is becoming an increasingly artificial exercise. Since it is so artificial, it would be safer in the public interest simply to vest investigation of competition law, anti-competitive practice and abuse of dominant market position in the director general himself rather than take the risk of there being any challenge to the Director General of Telecommunications.
Lord Simon of Highbury: I thank the noble and learned Lord for his intervention. But I still see at this time that the special capacities of the Director General of Telecommunications, as specified, must be maintained. If there has to be testing of the limits, it can be handled in other ways. But it is not an appropriate approach now to ask him to give up his special capacity powers on the way to developing the new legislation.
Lord Kingsland: There is nothing to prevent the Minister, in any one of the separate utility regimes, inserting a simple clause stating that where, in the judgment of the utility regulator, one regime is preferable to another he can opt for that regime, and to cast that clause so clearly that, at some given moment
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in the application of competition law or the licence conditions, the regulator has to take a position. From that moment he goes down whichever one of the two paths he selects. Surely, not only is that not beyond the technical abilities of the parliamentary draftsman, but also it cannot be beyond the Minister's vision for a system which is as certain and clear as possible for the companies concerned.
Lord Simon of Highbury: Again, I thank the noble Lord for his inventiveness. It seems to me that the appropriate locus for addressing this question is precisely the working group for the director general and the existing sector regulators. If during the process of consultation after the guidelines have been published we find that many people say, "This is a new sector of industry developing under the broad aegis of telecommunications which needs to be regulated by a different regulator", or indeed, "We wish to redefine what the telecommunications director general is responsible for", that is the appropriate time for that to be done. I would note the point and put it to the working group that that is a test for the particular sector.
Lord Kingsland: In a few amendments' time, in relation to another sector, this point will arise again. By implication, the amendment proposes a much more clear-cut way of dealing with the situation than that proposed by the Minister. I am sorry to anticipate an amendment, but I have to shoot at my pheasants when they fly over me. I hope that I do it rather more effectively with respect to this legislation than I do in other circumstances. I submit that there are ways of doing this under the Bill that are preferable to simply hiving matters off for discussion under a working party and delaying a decision which, if it is not taken before the Bill comes into effect, will undoubtedly result in a great deal of uncertainty.
Lord Simon of Highbury: The noble Lord leaves me all of a tremble at the thought of yet another discussion around this matter on an amendment that I cannot yet foresee. I was racking my brains. However, perhaps dinner will intervene. I await the argument when it comes.
Currently, the idea that we should specify in the Bill that markets are developing in such a static way (in fact, "static" and "development" are not words that go well together) that we need to re-define already on the face of the Bill how this particular market place—telecommunications—has differed in applying the new prohibitions seems premature. I would let the people who are expert in the sector, who are expert regulators, and the director general, take account of this debate and consider whether, in issuing guidelines and advice, they need to revise the scope of the sector in any way. I certainly do not think that we can do it here on the Floor of the House. Under those circumstances perhaps the noble Lord is prepared to withdraw the amendment at this stage.
Lord Ezra: Once again, I express appreciation for the lively debate we have had on this issue. It is clearly

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not the last time during consideration of the Bill that we shall debate this subject. What has emerged clearly is the jurisdictional uncertainty which covers these issues. With market places evolving, conglomerates forming up and technology in telecommunications developing rapidly, the situation is far from static. It is difficult to see where the lines will be drawn today, tomorrow and the day after. Undoubtedly, we shall need to return to this issue from time to time.
I wish to study carefully the remarks of all noble Lords, and in particular the contribution of the noble Lord, Lord St. John, who referred to a number of matters stated by Oftel. I got the impression from the noble Lord's clearly devoted reading of the background material that, far from the existing situation continuing, the powers of Oftel could be considerably strengthened under the new arrangements, and that could add to the degree of uncertainty. I should like to study that matter. I do not wish to detain the Committee any longer and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 209 not moved.]
Clause 52, as amended, agreed to.
7 p.m.
Schedule 10 [Regulators]:
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 209A:
Page 69, line 25, leave out ("64") and insert ("65").
The noble Lord said: Amendment No. 209A is a consequential amendment to Schedule 10 which flows from the substantive amendments which I have tabled to Clauses 63 and 65. With the leave of the Committee, we shall speak to those substantive amendments when we reach Clause 63. In the meantime, I beg to move.
On Question, amendment agreed to.
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 209B:
Page 70, leave out lines 4 to 8.
The noble and learned Lord said: The purpose of the amendment is to increase certainty regarding the scope of Part I functions and their application by the Director General of Telecommunications to clarify the purposes for which the functions under Part I, in particular the prohibitions, may be applied by that sectoral regulator to achieve a better alignment of Part I of the Bill with EC law and principles and a better consistency of decision-making. The amendments would not prevent the director general from exercising functions under Part I but would simply remove the bridge created in Schedule 10 between the objectives of the relevant sectoral statute and the prohibitions in Part I. They would therefore maintain the present position—they would not introduce the change to which the noble Lord, Lord St. John, referred a moment ago—under which the Director General of Telecommunications wears two
926
hats, as regulator and as a competition authority, but those hats would have to be kept separate and would not be worn simultaneously. I beg to move.
Lord Simon of Highbury: The question of regulators' general duties under their utility statutes and their relationship to concurrent functions under the Bill takes us into the territory of conflict. The provisions that these amendments would delete have two purposes. The first is to make clear that in applying the prohibitions a regulator must regard his functions under the Bill as paramount. In other words, in carrying out his functions he must act in accordance with the governing principles set out in Clause 58. That is vital to ensure that the principles upon which the Bill rests are not undermined and that they are to be followed by each of the regulators when applying the prohibitions. That may well be the effect without specific provision in the Bill, but it is such an important issue that we wish to put beyond doubt that that is the prime function.
The second purpose is to enable, but not to require, each regulator to have regard to his general duties in the utility statutes, subject to the crucial point about functions under the Bill being paramount. We consulted the regulators in the development of this provision and received differing views as to whether they should be required to have regard to the general duties in their utility statutes or whether those duties should be disapplied. We decided that the right course was to enable a regulator to have regard to those duties, where appropriate, but not to require him to do so. The effect of the amendments would be to require a regulator to have regard to his utility statute duties without making clear that he is to regard his functions under the Bill as paramount. That would create a risk of conflict and inconsistency.
A particular area that we are reflecting upon is the interaction between the duties in the Channel Tunnel Rail Link Act and those in the Railways Act 1993. I may wish to return with an amendment on that point on Report.
I hope that the noble and learned Lord, Lord Fraser, finds this explanation helpful and is under those circumstances prepared to withdraw the amendment.
Lord Fraser of Carmyllie: I am grateful to the noble Lord for anticipating what I was going to say about the Channel Tunnel Act. I say more seriously to the noble Lord that I shall reflect on what he said. I am not sure that it is quite an answer to the point that concerns us. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 210 and 211 not moved.]
Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde moved Amendment No. 211A:
Page 70, line 17, at end insert ("and activities preparatory or ancillary thereto").
The noble Baroness said: In moving the amendment, I wish to apologise to the Committee for not being present at the Second Reading of this important Bill. It was impossible for me to attend. I shall not kid you that it was business; it was actually a holiday abroad.
My amendment deals with the concurrent powers and the application of those powers by the Director General of Telecommunications. The amendment is specifically in the area of telecoms regulation. I almost hesitate to use the word "telecommunications" because the impact of the amendment is to face the challenges of much of the convergence of which we shall enjoy the benefits now and in the future.
As presently worded, the Bill will limit the regulator's powers to the area of,
"commercial activities connected with telecommunications".
I suggest that those words are almost outdated in their general usage. I am aware too that my noble friend Lord Cocks of Hartcliffe complained at Second Reading of the Bill that those powers were too wide. I approach it from a different direction and think that they are too narrow and too restricting for the director general to ensure access and true competition in this sector.
The words are from the Telecommunications Act 1984. The world has moved on a long way since 1984. We are now seeing convergence as between telecoms and broadcasting; it is with us and is poised to take off in a big way. The advent of digital transmission technology and the developments in information technology software provide us with the opportunity for our television sets to deliver interactive, on-line services, with the use of telecommunications too. Already our PCs in our homes and offices deliver live sound and pictures to users, again on-line services. The two are converging. It is for this reason that I propose my amendment.
Some may argue that these services will not be widely available for a number of years yet at prices which the public can afford. I suggest that that is debatable. The average shelf-life of a competition Act seems to be about 15 years. I am trying to project us not into the immediate future but a little further on. That is necessary when we consider the speed at which technology is developing. On past experience, the words in the Telecommunications Act 1984, which are repeated in the Bill, have been interpreted very narrowly by lawyers. I suggest that in the best interests of competition, of the consumer and of the developing industries we can no longer afford a very narrow interpretation.
I am drawn to the amendment from debates that we had during the passage of the Broadcasting Bill 1996 which clearly brought out the concern that we could face an increasing possibility of dominant market players—they now exist—determining for the consumer future availability of access to the emerging services from the set-top box on the television. Though the Broadcasting Act, as it became, recognised that it would probably have a short shelf-life, developments in the sector made many feel that the problem had been alleviated by the powers which the DTI sensibly granted to the DGT at Oftel.
We hoped that those powers would ensure that access to information about proprietary technology was readily available to the people who wished to enter the market. I suggest that experience over the past year fell short of
928
our expectations. For instance, I gather that the information on what is called the "applications programme interface" only recently became available, despite new players in the sector wishing to have that information to plan their involvement in the medium and longer term. That demonstrates clearly that, where gateways are controlled by organisations which are content providers, there are significant commercial incentives for anti-competitive behaviour. The Director General of Telecommunications had no power to force the release of that information in the face of protected anti-competitive behaviour.
I put forward a simple analogy. When privatisation of telecoms took place, no one imagined that the privatisation would permit or prevent any of us using a handset to make a telephone call to any number in the land irrespective of who the service provider or network operator was. Legislation ensured that the public, and indeed business, had that access. This is not a dissimilar situation. It is the principle of access in a way that ensures that the regulator has the authority to take steps which will enable a competitive situation to exist.
The powerful position of the controllers of gateway technology was recognised by the DTI when it established the system of class licences for the running of telecommunications services for the provision of conditional access services. Those licences, which are issued and regulated by the DGT, place on the holders a "duty to co-operate with" content service providers wishing or entitled to use their network to reach audiences in order to prevent the abuse of a dominant position of network controllers who are also content service providers.
That narrow definition of conditional access services includes encryption services and subscriber manager services. Those were two issues debated in this Chamber during the passage of the Broadcasting Bill. The wider definition that the regulator has rightly chosen to interpret includes software and middleware which support the navigation and selection of services for the public. Amendment No. 211A will put on a statutory basis the broad interpretation of those powers to ensure that we have competition in this sector. It is a competition amendment.
The amendment is consistent with EC jurisprudence in this area. It reflects the approach of the advanced television services regulations in the UK, jointly sponsored by the DTI and the Director General of Oftel. And it echoes the sentiments of the Minister, my noble friend Lord Simon, in our considerations on this Bill on 13th November when he pointed out that it is wrong to make the assumption that a utilities company licence conditions deal with all competition concerns which can arise,
"particularly in a dynamic market place".—[Official Report, 13/11/97; col. 334.]
In that same contribution my noble friend went on to say that if anti-competitive conduct takes place which is not covered by explicit licence conditions, the prohibitions contained in the Bill should be applied as rigorously and effectively as elsewhere. My amendment is designed to achieve just that in what is probably the most dynamic market place in our country today. It

929
ensures that effective action can be taken in relation to activities which are preparatory or ancillary to licensed telecommunications activities in their widest sense.
I appreciate that in not being here for the Second Reading the Minister has not had prior indication of my general anxieties in this matter. It may be that he will wish to consider the points that I put forward. If so, I fully accept that. And if that is the case, might I suggest that when he considers the amendment he might also consider that Section 50(3) of the Telecommunications Act grants the Director General of Telecommunications concurrent powers under the Competition Act 1980—the Act which will be superseded by this Act—and it would be worth including more words from that Act into this Bill. That would give us legislation which truly provides competition both for the consumer and for the emerging players in this sector. It will also prevent dominant market players from taking full advantage, as I am sure they would wish. I beg to move.
7.15 p.m.
Lord Mottistone: I support in principle the amendment of the noble Baroness, Lady Dean. I am told that the Director General of Telecommunications has a certain anxiety about the definition of his powers under the Competition Bill and believes that the amendment raises an important point. However, he is not sure that the wording is quite right and suggests that the Government may like to study the point to see whether better wording can be achieved.
In the same connection, the director general believes that the scope of his powers as currently defined in the Bill probably also need amending to match Oftel's scope under the Telecommunications Act, to which the noble Baroness referred. I am not sure whether the noble Baroness was on the same point as myself, but the Government may wish to consider it so as to ensure consistency between this Bill and the Telecommunications Act regimes. I hope that the Minister will feel that that is something he can willingly take up.
Lord Simon of Highbury: I certainly recognise the general points made by my noble friend Lady Dean in relation to the pace of redevelopment in this marketplace and the fact that, not only we in this Chamber, but also the regulators will probably always be just behind the game rather than ahead of it.
I particularly recognise the anxieties that prompted the amendment. However, I can assure my noble friend that proposals are already in hand to extend the regulatory regime for conditional access services—a key point in the specific issue raised by my noble friend. The DTI and Oftel issued a joint consultation document in July of this year on this issue, and a new version of a draft standard telecommunications class licence has just been circulated for comment. That includes licence conditions to provide a similar regulatory framework for access control gateways to non-broadcast and non-television broadcast digital services, as already applies to broadcast digital television services. The process of consultation is already under way on that point.
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The amendment as drafted could be a significant widening of the scope of the concurrent functions of the director general in respect of prohibitions. That was a point made by my noble friend Lady Dean and was also perhaps behind the intervention the noble Lord, Lord Mottistone. I believe I have already argued that it would be wrong to pre-empt the outcome of the utilities review or indeed any sector specific consideration of the future of regulation by provisions in this Bill that would undermine the Director General of Telecommunications' functions as they now stand. By the same token it would be wrong to pre-empt the outcome of the review by provisions that could significantly widen the scope of his concurrent functions.
We took a great deal of advice from the director general in the consultation process. I note from that consultation process that the Director General of Telecommunications has, as the noble Lord, Lord Mottistone, pointed out, argued that the scope of his concurrent functions under the Bill is narrower than the scope of his existing concurrent functions in relation to the Competition Act 1980. I am not convinced that any change is needed to the provisions of the Bill, but I would certainly be willing to reflect further on this matter as part of the consultation process.
In the light of my specific response on the conditional access position and the general wish not to prejudge at this stage the sector review, and in the light of the fact that we are in consultation with the director general, I hope that my noble friend will be willing to withdraw the amendment.
Baroness Dean of Thornton-le-Fylde: I thank my noble friend for that response. I am aware of the consultation document which came out some months ago from Oftel. I am heartened by the Minister's assurance that he will reflect on the debate. This is a key part of what is a dynamic market. There are tremendous opportunities in this sector. It would be sad if the Competition Bill did not ensure competition in the sector. I shall willingly withdraw the amendment. However, I would ask the Minister to consider some of the points that have been put forward in the debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Skelmersdale): I understand that Amendments Nos. 212 to 218 are not to be moved. Therefore, unless any noble Lord objects, I declare them not moved.
[Amendments Nos. 212 to 218 not moved.]
[Amendments Nos. 219 to 236 not moved.]
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 236A:
Page 76, line 6, leave out ("6") and insert ("1").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question. amendment agreed to.
[Amendments Nos. 237 to 239 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 239A:
Page 77, line 45, at end insert—
("( ) In section 25 (orders for securing compliance), in subsection (5)—

(a)after paragraph (b), omit "or";

(b)after paragraph (c), insert "or

(d)that the steps which he is taking, or proposes to take, under the Competition Act 1998 will be more, or equally, effective to secure compliance with the relevant licence obligation.".").

The noble Lord said: This is another episode in the saga of concurrent powers, this time, the Committee will be relieved to know, not in the field of telecommunications but in the field of electricity. The point can be fairly simply put. Under Section 25 of the Electricity Act the DGES has an obligation to take enforcement action against a relevant company that is in breach of its licence conditions. The matter which is enforced against might also breach Part I or Part II of the Competition Bill, no doubt soon to become the Competition Act. The director general may take the view that the better way of dealing with the situation is to pursue the procedure under Part II of the Competition Bill rather than the procedure under Section 25 of the Electricity Act. However, except in very limited circumstances, he cannot do that because he is obliged to act under Section 25. That is the background against which my amendment must be assessed.
It is true that under Section 25 of the Electricity Act there are certain limited circumstances in which the director general can forgo his obligation to enforce. However, in my submission, those are too limited. Therefore, the amendment seeks to add a further heading (d). This is the formula that provides the option for the director general to choose which course he thinks is better pursued in the public interest. It states,
"that the steps which he is taking, or proposes to take, under the Competition Act 1998 will be more, or equally, effective to secure compliance".
In fact, in the amendment I use the words "with the relevant licence obligation". However, if the Minister were prepared to accept the amendment, it might be better concluded with the expression "with the relevant condition or requirement".
This is a concrete example of the general proposition to which I alluded about half an hour ago when I intervened in the general debate on telecommunications. It is an extremely attractive way of dealing with the problem of concurrent powers because one can see it extended not just to telecommunications but to the operations of all the other regulators as well. To have to face both the procedures together is confusing not only for the regulator but for the regulated party. I beg to move.
Lord Simon of Highbury: The noble Lord has now arrived at what he announced a little earlier. I waited with great pleasure because I am now able to say that I am truly grateful to him for elucidating the earlier point and for putting down an amendment which seems to make an extremely valid point about the interaction between Section 25 of the Electricity Act and the enforcement of prohibitions. However, as he will be aware, the
932
amendment was put down only yesterday. I should therefore like to reflect on the issue it raises and come back to the matter at Report. It is a valid point but we want to consider it more widely, as the noble Lord intimated. With that consideration in mind, perhaps he will be willing to withdraw the amendment.
Lord Kingsland: I am most grateful to the Minister for that response. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 240 not moved.]
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 240A:
Page 78, line 6, leave out ("6") and insert ("1").
On Question, amendment agreed to.
[Amendment No. 241 not moved.]
Baroness Farrington of Ribbleton: I beg to move that the House do now resume. I suggest that the Committee stage of this Bill be resumed not before half past eight.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Supreme Court (Offices) Bill
7.30 p.m.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I beg to move that this Bill be now read a second time. The office of Lord Chancellor, of which I am the 258th holder, is more than 1,000 years old. The office of Permanent Secretary to the Lord Chancellor does not have quite as long a heredity. It has existed a mere 100 years or so, and the present incumbent is only the eighth holder.
Qualifications for the office of Permanent Secretary are prescribed by the Supreme Court Act 1981. Those provisions are unique for a Permanent Secretary post. They have the effect of barring from appointment any person who is neither a barrister nor solicitor of at least 10 years' standing, nor a civil servant with at least five years' experience in the Lord Chancellor's Department. The purpose of the Bill is to remove these restrictions so that future appointments may be made from as wide a field as possible from all the talents.
When the present restrictions were discussed on 5th February 1990, in Committee on the Courts and Legal Services Bill, the noble and learned Lord, Lord Ackner, described the Permanent Secretary to the Lord Chancellor as "the permanent head" of an "immensely powerful department." The noble and learned Lord added. however, that,
"a civil servant who has served at least five years in that department qualifies. I imagine that includes from the tea boy upwards".—[Official Report, 5/2/90; col. 631.]

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This change is necessary because the present restrictions limit unreasonably the field of candidates from which future appointments may be made. I doubt that there are tea boys as such in the Lord Chancellor's Department but the noble and learned Lord's point is well made in principle. There are over 1,000 members of the Government Legal Service, and many more members of the Lord Chancellor's Department, of whom hundreds are likely, formally, to fulfil one or both of the statutory criteria.
But the Lord Chancellor's Department itself has a staff of nearly 12,000, a budget of £2.25 billion and an estate of nearly 500 buildings. Its responsibilities are wide ranging. They include the administration of the entire court system of England and Wales; the legal aid budget; the appointment of judges and lay magistrates; and the reform and modernisation of the civil law. Also, the Lord Chancellor is responsible for the Public Record Office, the Land Registry and the Northern Ireland Court Service, whose combined staff total over 9,000. So the Lord Chancellor is ultimately responsible for 20,000 employees.
To lead this organisation, the Permanent Secretary must have the ability, experience and all the qualities required of the official head of a major department of state. Proven experience and ability in management of strategic policy development and implementation is obviously desirable; a successful track record of leadership and management at the head of a large organisation would be useful; and familiarity with, and perhaps, preferably, direct experience of, the processes of government at the highest level. There are at any time few who could qualify. But the additional requirements of 10 years' standing as a lawyer or five years' experience in the Lord Chancellor's Department reduces their number to a tiny handful.
Very few members of the Government Legal Service have the standing and experience to be contenders for this post. Nearly all of them have been exclusively occupied with pure legal work for the whole of their careers and have little or no management experience. In my own department the staggering fact is that there is only one official of the requisite experience who also meets the existing statutory criteria. I am advised that, over the whole senior Civil Service, only one other candidate has so far been identified who is similarly eligible for appointment. In years gone by, the existence of only one or two candidates might have sufficed. Successive Lord Chancellors have been served well by Permanent Secretaries, appointed subject to the existing restrictions. But nowadays it is held, rightly in my view, that a wider field of choice is necessary for so senior a post, so that there is sufficient competition to ensure that a really strong candidate is appointed.
It may turn out that the best candidate is a lawyer, who could come from the professions, or a person with five or more years' experience in the Lord Chancellor's Department. The statutory requirement that all candidates be one or the other, however, can only be justified if the duties of the post are such that they cannot properly be performed without one or other of the mandatory qualifications.
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The Lord Chancellor's office was originally very small, comprising only five officials, and the Permanent Secretary performed many legal duties. As long as this was so, it was justifiable that the Permanent Secretary should be required to be a lawyer. After the Courts Act 1971, however, the Lord Chancellor assumed overall responsibility for the administration of the court system as a whole, and the organisation was restructured as the Lord Chancellor's Department. The department has since developed increasingly along the lines of other major departments of state. Following on further changes in the last decade, it is now structured around an administrative and policy-making core receiving advice from a separately managed group of legally qualified civil servants headed by a legal adviser answering directly to the Permanent Secretary.
The old arrangement, under which a small number of legally qualified staff undertook all duties whether legal or administrative, has disappeared. Along with it has gone the historical reason for requiring the Permanent Secretary to be a lawyer. The Permanent Secretary is no longer responsible for providing legal advice to the Lord Chancellor. This was recognised in part by changes made by the Courts and Legal Services Act 1990 which allowed a non-lawyer with at least five years' experience in the department to be considered for the post.
The Lord Chancellor is at a critical cusp in the separation of powers between Parliament, government and the judiciary. He is the natural conduit for communications between the judiciary and the executive, so that each fully understands the legitimate objectives of the other. Under the previous government the public were disturbed that the separation of powers was not alive and well because the judiciary and the executive appeared to be at war. It is for the Lord Chancellor to ensure that the public can have continuous confidence that our system, based on the separation of powers, is working. I am referring of course in particular to the well-publicised unhappy relations between the former Home Secretary and the judiciary. That kind of thing will not happen under this Government. I believe that the higher judiciary would be the first to agree that since 2nd May strong co-operative arrangements have been in place which are working well in practice.
It is also a major duty of any Lord Chancellor to uphold the independence of the judiciary upon which the rule of law depends. It is the fact that Ministers' or governments' strongly held views, and their judgment of the interests of their departments, or of the interests of government, or of the public interest, can easily conflict with the judgments of the courts within the courts' independent sphere. That is why any Lord Chancellor, supported by a Permanent Secretary who must be fully conscious of these crucial values, is the guardian within government of judicial independence.
The Permanent Secretary to the Lord Chancellor has a major role in maintaining contact between the Lord Chancellor and the judiciary. He must have a lively awareness of the unique, pivotal position of the Lord Chancellor and the importance of upholding judicial independence. The Permanent Secretary must fully comprehend legal, judicial and constitutional

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values, as well as those of government and Parliament. No person will be appointed to be my Permanent Secretary who does not have the fullest appreciation of these traditions and values. I firmly believe, however, that this breadth of appreciation is not limited to those with legal qualifications or who have served for five years in my department. No such rigid statutory restriction exists within the department serving the judiciary in Scotland.
This vacancy is being filled under the established procedure for open competition and selection on merit. In accordance with published practice for posts of this kind, I have approved the specification of the post and the qualities required of the successful candidate. The process will be presided over by the First Civil Service Commissioner who is entirely independent. I have no doubt that he would not place as a high order candidate for this position anyone who did not possess the qualities and values which I have specified. The process will proceed independently and will result in advice to the Prime Minister. I, as the responsible Minister, will be involved and, in the last resort, I could decline to accept the lead candidate. Without interfering with the independence of the appointments process, I am therefore able to ensure that my future Permanent Secretary will have the qualities and attributes that are so essential to this important post.
There is some concern that, if the Permanent Secretary to the Lord Chancellor is not a lawyer or someone with extensive departmental experience, the Lord Chancellor and Permanent Secretary should continue to have the benefit of advice from a senior official or officials who have those qualifications. It was even suggested in another place that the Bill should be amended to introduce a statutory requirement that if the Permanent Secretary does not meet the existing statutory criteria, the Deputy Permanent Secretary should meet them.
I understand the proposal—and the thinking behind it—but it is not practicable. In the first place, there is no Deputy Permanent Secretary in the Lord Chancellor's Department. There has been no such position since the Lord Chancellor's office became a department following the Courts Act 1971. General deputies are generally regarded as contrary to modern management practice, and they are now very rare in government departments. A post of Deputy Permanent Secretary is particularly impracticable in departments of significant size and wide-ranging responsibilities, such as the Lord Chancellor's.
Also, to require any one post within the senior management structure to be held by a lawyer would put in place the very kind of shackle the Bill aims to remove. It would tie the hands of a future Permanent Secretary in seeking to appoint the best possible senior management team. It would also undermine the position of the Permanent Secretary. To require the Permanent Secretary to have a deputy who is a lawyer, simply because he himself is not a lawyer, will inevitably raise expectations that the Permanent Secretary would be second-guessed by his deputy.
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That is not to say that I would begin to disagree with the proposition that there should be available to the Lord Chancellor and Permanent Secretary a senior team in which long-standing legal and departmental experience feature strongly. At present, five group heads, including the Legal Adviser to the Lord Chancellor, answer directly to the Permanent Secretary, together with two agency chief executives. Five of these posts are presently held by qualified lawyers. Four are held by officials with lengthy experience within the department. I do not envisage any significant change in these arrangements under me or any other Lord Chancellor. I am completely confident that there will always be a strong legal element in the upper reaches of the Lord Chancellor's Department.
The Bill operates simply by removing from Schedule 2 to the Supreme Court Act 1981 the reference to the Permanent Secretary to the Lord Chancellor and Clerk of the Crown in Chancery. This has the effect of removing from that office special provisions which are, by virtue of Sections 88 and 92 of the 1981 Act, applied to certain offices of the Supreme Court set out in Schedule 2. The provisions which are removed concern not only restrictions on appointment, but also tenure of office. The Bill will thus also bring the provisions governing the retirement age of the Lord Chancellor's Permanent Secretary into line with those applicable to other permanent secretaries.
Some concern was expressed in another place that this would result in the Permanent Secretary to the Lord Chancellor having to retire at 60 when it might be in the interests of the Lord Chancellor and the department to benefit from his experience for a longer period. I can assure the House that in these circumstances it will be possible to arrange for the Permanent Secretary to remain in post for up to another year or two with the agreement of the Head of the Civil Service. It is right that there should be this degree of flexibility, as there is for all other permanent secretaries. There is nothing inherent in the post of Permanent Secretary to the Lord Chancellor, however, which justifies its holder being given, by statute, a later retirement age than any other permanent secretary.
The Bill does not affect the office of Permanent Secretary to the Lord Chancellor in any other way. The Permanent Secretary will continue to hold the office of Clerk of the Crown in Chancery. In that capacity he will continue to be the head of the permanent staff of the Crown Office, which supports the Lord Chancellor in his capacity as Keeper of the Great Seal. The duties of that office will be unchanged. The only change for that office is that its holder will no longer be required to be a lawyer or a civil servant with experience in the Lord Chancellor's Department. That requirement arose solely because the office was joined with that of Permanent Secretary in 1885.
Finally, your Lordships may ask why this Bill commenced its passage in another place when at first blush it would certainly have been more appropriate for me to bring it before your Lordships first. I would myself have preferred it to start here had that been practicable. The reason it did not was simply one of timing. The present Permanent Secretary, who has

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already been persuaded to remain in office longer than originally planned, is to retire next April. For his successor to be properly selected, the existing statutory restrictions must be removed by the end of the year. It was necessary, by convention, for the Bill to have passed through another place before a selection process seeking applications from a wider field of candidates could be commenced prior to the passage of the Bill. The same despatch is not required in your Lordships' House, and your Lordships will have a further opportunity to consider the Bill in Committee and on Report if appropriate. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
7.48 p.m.
Lord Woolf: My Lords, this is a Bill of modest physical dimensions, but the considerable care with which my noble and learned friend the Lord Chancellor has introduced its Second Reading perhaps indicates that it contains a point of some significance.
I fully understand the desirability of having available the widest possible pool of suitable candidates for the post of Permanent Secretary to the Lord Chancellor. There is no doubt that the modern Lord Chancellor's Department, with its increased functions and supporting a Lord Chancellor with greater responsibilities than any other Lord Chancellor in recent times, needs to have at its head a Permanent Secretary of the highest quality and experience. However, it must be remembered that the Lord Chancellor's constitutional position is unique. Nowhere in the world is there a similar office. Among his other roles, he is head of the judiciary as well as of his great department of state.
The relationships between the judiciary and the courts and government are extremely sensitive. The office of Lord Chancellor itself can be justified only if the distinction between the Lord Chancellor and other Ministers is meticulously observed. This distinction is at present supported by a statutory restriction on the person who can fulfil the role of Permanent Secretary to the Lord Chancellor. The Bill proposes to remove that statutory distinction and bring into line the permanent secretary's appointment with that of other permanent secretaries to other departments. Until 1990 the Lord Chancellor's permanent secretary had to have a 10-year legal qualification which required that he should be able to act as an advocate in the higher courts.
In 1990 the restriction was amended so that a civil servant having served at least five years in the Lord Chancellor's Department could be appointed. That statutory restriction recognised the importance of the permanent secretary of the department either having experience of the court system which service in the department would give or having a right of audience for 10 years, which would also provide experience of the court system. It recognises the need for the Lord Chancellor to have the advice of a permanent secretary who has an acute awareness of the sensitive and pivotal position which the Lord Chancellor and his department occupy in the constitution. It underlines the Lord Chancellor's unique position.
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This Bill removes that restriction. By doing so, it will open up the field of candidates to follow in the distinguished footsteps of Sir Thomas Legg when he retires. I understand and accept the need for a successor of the highest calibre to be found. But removal of the restriction does not alter the fact that the position of permanent secretary to the Lord Chancellor is exceptional. In selecting the best possible person for this unique position, I believe that the desirability of that person having appropriate experience to enable him or her to advise the Lord Chancellor on matters affecting the relationship between the Executive and the judiciary is of great importance. I emphasise that this does not arise in relation to other permanent secretaries.
With time, a high-flying civil servant could certainly acquire the requisite experience. But it would be a disadvantage to have to acquire the experience in office rather than before taking up office. Bearing in mind the position of the Lord Chancellor as head of the judiciary, the judiciary have a real interest in who is to hold the office.
The permanent secretary is the permanent head of a department which, to use the words of the Lord Chancellor, is at the cusp of the department and its relationship with the judiciary. It is the responsibility of the holder of the office to tell the Lord Chancellor—discreetly of course—that he should remember which of his many hats he is wearing at any particular time. I am sure that in future there will be a safeguard if there is then the very close consultation that now takes place between the Lord Chancellor and the senior judiciary on all issues that can seriously affect the judiciary.
I have no doubt that the current Lord Chancellor appreciates the need for care to be taken in selecting the right person for this position. He is well aware that he is not only a minister of justice but also head of the judiciary. We are in agreement that appropriate experience will be an important factor to consider in deciding on Sir Thomas Legg's successor.
My concern is not with any appointment that is to be made through the appropriate procedures to which the Lord Chancellor has referred but with appointments in the future. Once this constitutional safeguard has been removed, it is most unlikely that it will ever be restored. To have a situation where a Lord Chancellor is without the benefit of an experienced permanent secretary with the necessary qualifications to give the appropriate advice can have serious implications for the sensitive relationship between the judiciary and the Executive.
I hope that a file will be opened in the Lord Chancellor's Department labelled "Appointment of the Permanent Secretary" and that it will have a non-removable cover that expresses the sentiments which the Lord Chancellor has recognised and which I have expressed about the importance of the constitutional position of the permanent secretary. I am opening a file in which the words that I have uttered today will be included, together with the views expressed by the Lord Chancellor. I hope that it will be passed to my successors in office and that they

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will take the interest in the appointment to this very high office of state that I believe all members of the judiciary should take.
7.55 p.m.
Lord Ackner: My Lords, I too should like to emphasise that the Lord Chancellor's Department is a very special department of state. It is headed by a Minister, the Lord Chancellor, with unique constitutional characteristics. He is in a very different position from Ministers who are responsible for services such as education and health matters—hence the special provision as to the qualifications of a permanent secretary.
In many common law countries the independence of the judicature is protected by a written constitution. In this country its independence depends upon a combination of rules and conventions and parliamentary practice backed by the force of public opinion and the important tradition that it is the duty of the Lord Chancellor to prevent any interference with that independence by members either of the legislature or the Executive.
Quite by chance, I came across a reference in The Times of 25th September 1963 to an address given to members of the West German Federal Court in Karlsruhe by Lord Dilhorne, then Lord Chancellor. He rebuked Mr. Harold Wilson, then Leader of the Opposition, for alleging that the British Government had improperly influenced the judiciary. He said:
"In my country the judges are independent of the Executive and not subject to the influences of the Executive. If I were to be asked what I thought was the Lord Chancellor's chief job I should tell you without hesitation that it was to preserve the independence of the judiciary to make absolutely certain that judges of the land are completely independent and to protect them from every attempt, however indirect, to undermine that independence".
A similar note was struck by the noble and learned Lord, Lord Hailsham, the pre-eminent Lord Chancellor of the post-war years, in a lecture given by him in 1989 when he observed:
"The essential function of the Lord Chancellor in the working of the constitution remains the same. He is in the business of defending and preserving the independence and integrity of the judiciary. If he does it well then he is a good Lord Chancellor, whatever his other defects; if he does it ill, whatever his other qualities, he is not".
Thus it would appear that everyone supports judicial independence. It is, after all, the judges and the judges alone who stand between the power of the state and the freedom of the individual under the law. But does everyone support judicial independence? That very question was answered by my noble and learned friend Lord Hailsham in the selfsame lecture in these terms:
"Certainly not the public or the Back-Benchers in the House of Commons, who constantly revile, frequently from inconsistent standpoints, individual judges on particular decisions, or what they imagine to be judicial qualities, and daily demand that individual judges be directed or rebuked, presumably by the Executive Government, to move in this direction or that or even that they should be removed from office; certainly not the Opposition, whatever party happens to be on the Speaker's left; certainly not party conferences of any hue, and least of all, I assure you, individual members of the Cabinet whose departmental interests from time to time basically conflict not only with the view of the judiciary where they arc entitled to differ but in the provision of the means necessary to enable the courts to discharge their functions."
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Those revealing observations give strong support to the reservations expressed by my noble and learned friend the Master of the Rolls, with whom I agree.
There are occasions when Homer himself nods, and that is why such particular care has to be taken. I remind your Lordships of a clause in the Judicial Pensions and Retirement Bill which came to be debated in this House in 1992. Under Clause 25 power was to be taken by the Lord Chancellor at his sole discretion to continue the senior judiciary in office beyond a new compulsory retirement age of 70 from year to year up to a period of five years, a system which has been described critically as "judges on contract". That proposal, which the Executive can so easily abuse to the detriment of the judges' independence, as has occurred in warmer climates, was emphatically rejected some 60 years ago by a Royal Commission, the Peel Commission, of which Sir Claud Schuster, later Lord Schuster, an outstanding Permanent Secretary in the Lord Chancellor's Department, was a member. Homer nodded. The Lord Chancellor and/or his department was apparently unaware of its existence and the views of the commission.
In the debate on the report my noble and learned friend Lord Simon expressed his astonishment "that this unconstitutional provision ever appeared in the Bill". The Lord Chancellor had second thoughts and ultimately withdrew the offending clause.
I hope that among the compulsory reading that a Sir Humphrey would wisely accept was essential if he arrived in my noble and learned friend's department at its very top without prior experience, will he this copy of today's Hansard.
Lord Simon of Glaisdale: My Lords, I follow three speeches of great constitutional moment with which I respectfully agree. I support the Bill as a measure of necessity in the circumstances described by my noble and learned friend the Lord Chancellor.
We often speak of the constitution being one of separation of powers. That is true of the American constitution. Strictly speaking it is not true of ours; our constitution is based on something much more delicate and much more frangible in the end, unless it is a balance of powers. At the point of balance stands the Lord Chancellor and his Permanent Secretary. That is why the post is of such importance, as has been recognised by every speech this evening.
I only desire to add one thing. The American legal system is in one respect superior to ours, namely, in the greater flexibility with which people can move from academic life to judicature, to government service, to private practice, and so on. An extreme case would be a very bright young lawyer from the Harvard Law School who might spend a few years in private practice, then go into government legal service and then on to the Bench, and then back again into the government legal service and finally end up as a judge of appeal. I do not know whether he is still in office, but quite recently the Professor of Laws at the University of San Francisco was appointed Chief Justice of California. I know that my noble and learned friend is sympathetic to that kind

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of flexibility because he has told me so in a letter. I would, with respect, ask him to do all that he can to encourage that in our system. In the meantime, the measure proposed by my noble and learned friend the Lord Chancellor seems to be necessary.
Lord Hooson: My Lords, we support the Bill because it seems to he necessary and a matter of common sense. The noble and learned Lord, Lord Ackner, referred to the fact that the Lord Chancellor's Department is a unique department, and so it is, but it is also now a major department of state. It has grown as much in size during my parliamentary career as any department proportionately. It would be contrary to conventional wisdom not to have the widest choice in the selection of a future Permanent Secretary because the administrative experience and on overall appreciation of the skills that are necessary in government seem to be more important than legal background.
Having said that, the growth of the Lord Chancellor's Department is also indicative that the Bill is necessary at this time. The Master of the Rolls, the noble and learned Lord, Lord Woolf, has mentioned the problems that that situation creates.
In a wise move the noble and learned Lord the Lord Chancellor sent to various people interested in the Bill a covering letter outlining his view concerning its necessity and explaining the reasoning behind it. He said, and virtually reiterated today:
"No person would be appointed to be my Permanent Secretary who did not have the fullest appreciation of these traditions and values".
He spelt out those traditions and values in his letter and in his speech this evening. That is a matter that is fully appreciated. No one could possibly think that he would not respect them. The concerns expressed today do not relate to what the noble and learned Lord the Lord Chancellor will do, but what might be done in the future after his day.
The noble and learned Lord, Lord Woolf, said that he was sure that safeguards would exist in the future if there were a continuation of the close consultation which now takes place between the Lord Chancellor and the senior judiciary on all issues which might seriously affect the judiciary. I understand that informal discussions take place now and that they are important. The noble and learned Lord, Lord Ackner, also referred to the conventions which have guided the Lord Chancellor and his department in their relationship with the judiciary.
The time may be approaching, if it has not already arrived, when we must consider whether some of those conventions should be institutionalised; that there should be an institutionalised meeting between the Lord Chancellor and senior members of the judiciary. If we have reached the stage where it is no longer necessary, as I do not believe that it is, for the Permanent Secretary to the LCD to be a lawyer, we may later reach a stage, with the great expansion of the LCD, when it may be argued that the Lord Chancellor himself need not be an eminent legal figure.
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Therefore the time is rapidly approaching when we may have to rationalise the relationship between the two hats, as it were, which the Lord Chancellor wears: that which he wears as a head of an important and rapidly expanding department, and that which he wears as head of the judiciary, and as the conduit between government and the whole judicial system.
My noble friend Lord Lester of Herne Hill wanted to be here this evening. As the noble and learned Lord the Lord Chancellor knows from correspondence, he was anxious to raise the possible institutionalisation of relations with regard to certain aspects of his department. It is my party's policy, and until recently, if not still, that of the Labour Party, that there should be a judicial appointments commission. It would reassure those who have taken part in this short debate, and who approve of the move being made by the Lord Chancellor this evening, if he could indicate that there will be wider discussions on an all-party basis, and a non-party basis, to consider the LCD and what safeguards there will be, not when the department is in his hands—we know of his own dedication to the independence of the judiciary—but in the future.
8.14 p.m.
Lord Kingsland: My Lords, in the context of the many other government initiatives in the constitutional area, this seems a remarkably modest one. I am aware that the Conservative Party, when it was in government, in 1990 introduced legislation to ensure that in future the permanent secretary need not be a lawyer. So I accept that from where I am coming in this debate, I am not in a strong position to argue that the permanent secretary's status as a lawyer should be restored. I am further aware that everything the noble Lord the Lord Chancellor said about the LCD today is true: it is a big department, employing many people, with an immense budget, and with huge administrative tasks.
The other day I glanced at the introduction of Professor Heuston's great book on the lives of the Lord Chancellors. He tells us that just before the first permanent secretary was appointed in 1885, the Lord Chancellor had four or five employees. It was customary, when each Lord Chancellor surrendered the Great Seal, that one of them should destroy all the papers in the Lord Chancellor's office on the grounds that his successor should not see the way in which his patronage was exercised. The LCD has, in that sense, now become a department of state like any other.
On the other hand, as so many noble Lords, especially the noble and learned Lord, Lord Simon of Glaisdale, have said, the LCD is constitutionally unique. It is at the hinge of the constitution, particularly in the context of the separation of powers. It seems to me that the separation of powers in our country depends upon mutual self-restraint between the legislature and the judiciary. The legislature restrains itself from interfering in the judicial process, and equally the judges restrain themselves from questioning the contents of any Bill as it works its way through Parliament. That self-restraint depends for its successful operation upon the personalities of the people who are, on the one hand, in Parliament, and, on the other hand, on the Bench. It is

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of course the Lord Chancellor's responsibility to select those who are on the Bench; to guarantee their independence; and to ensure that the decisions they take respect our tradition of the separation of powers.
The modern Lord Chancellor is a busy man. He is a Cabinet Minister. Indeed, he is the only Cabinet Minister who can call into question any decisions that his colleagues are about to take that might breach constitutional or legal rules. He has the obligation—pleasant, I hope—of presiding over your Lordships' House. He also administers the court system and, above all, chooses our senior judges. With all those responsibilities, it is usual for the Lord Chancellor, even our present Lord Chancellor—bearing in mind that he has practised regularly at the Bar and has a good knowledge of those who are ready for promotion to the Bench—still to need good and fearless advice from his department.
I am not suggesting that members of the LCD who are not lawyers are not capable of being fearless. I make no such suggestion. But the Lord Chancellor needs fearless people in his department who know what is going on in the courts; who know what is happening at the Bar; and who know people of the stature to be promoted to the High Court Bench and above. He needs therefore high quality, able, dedicated, and, above all, independent-minded officials at a senior level to give him that good advice.
My right honourable friend the shadow Attorney-General in another place introduced an amendment which provided that if the Permanent Secretary of the Lord Chancellor's Department is not to be a lawyer, then the next senior person in that department should be a lawyer. That was an imaginative amendment but I can see the force of the objections of the noble and learned Lord the Lord Chancellor. For example, for very practical reasons, it would be difficult to ensure that at the point when the permanent secretary changed over from lawyer to non-lawyer, the deputy permanent secretary, or whatever he is to be called, changed over from non-lawyer to lawyer. Indeed, that would be undesirable because one would not wish to see a coincidence of change between the two. It would be better for one to overlap the other.
The noble and learned Lord pointed out that of the five department heads who answer to the permanent secretary, one is the department head who personally advises the noble and learned Lord. I can see that that was a reassuring point for him to make. But the person who advises the noble and learned Lord on legal matters is not the person who is responsible for judicial appointments. I wonder whether the noble and learned Lord the Lord Chancellor would consider this possible approach. I assume that one of the five people who answer to the Lord Chancellor is the head of judicial appointments. If I am right in that assumption, surely it must be right, except in the most exceptional circumstances, which I trust would need justification to your Lordships' House and indeed to another place, that that individual should be a lawyer and indeed a lawyer who has great experience of, and regular contact with, the kind of people one would expect to fill the higher reaches of the judiciary in this country.
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I recognise the difficulties of the noble and learned Lord the Lord Chancellor in the modern world, managing his great department. I respect his judgment in this matter. I hope that in making this new appointment, which I understand will have to be made by the middle of next year, he will bear in mind the other comments made in this debate, and not just by me; in fact, perhaps less by me than by anyone else because so many noble and learned Lords have spoken with such distinction and authority. I hope that the noble and learned Lord will bear in mind the concerns which have been expressed in the way that he approaches appointments during his tenure of office.
Lord Ackner: My Lords, before the noble Lord sits down, I wonder whether he is aware of the extent of the consultation which goes on between the Lord Chancellor's office and the senior judiciary with regard to appointments. It would be wrong to take the view that an official in the Lord Chancellor's Department is making the major input as to who should be appointed. As I understand it, having been a judge, like other judges, who was consulted when I was a judge, that input comes from regular consultation with the senior judiciary and then further consultation with the heads of division, as I understand it, supplemented by the views of the senior presiding judge and any other judge whom the Lord Chief Justice considers should form that group.
I should not like it to be thought for one moment that the appointment owes its recommendation to an official in the Lord Chancellor's Department because that would be, as I understand it, quite wrong.
Lord Kingsland: My Lords, I thank the noble and learned Lord, Lord Ackner, for his very helpful intervention. He will be relieved to hear that I am aware of the extensive consultations which the noble and learned Lord the Lord Chancellor, and his predecessors, wish to take, and have taken, with senior judges. I am aware that the Master of the Rolls is here this evening.
However, I remind the noble and learned Lord that sometimes the advice which the noble and learned Lord the Lord Chancellor will receive from his senior judges will conflict; and that conflicting advice will have to be resolved in some way. I should reflect also that since the noble and learned Lord the Lord Chancellor has so many other matters to which he must devote his scarce time he will need somebody to co-ordinate the process of consultation. That figure will be aware of many matters in respect of the views of senior judges which the Lord Chancellor will need to hear from him.
Therefore, while I entirely take the point made by the noble and learned Lord, nevertheless I believe that the point which I have sought to promote in my speech remains important and one of which I hope the noble and learned Lord the Lord Chancellor will take account.
8.26 p.m.
The Lord Chancellor: My Lords, we have had a good and important debate, to which I believe a good deal of attention will be paid in future. I can respond directly to what the noble and learned Lord, Lord Ackner said. Of course the judiciary is involved

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as a result of quite massive and extensive consultations with it in the consideration of those who should be elevated to judicial office. Certainly the Heads of Division are involved in regular meetings. The presiding judges are involved. The judiciary in general is involved as is the profession. The fact is that one of the most impressive aspects of the work of my department which I have learned about in close detail over the past seven months is the quality and extent of that consultation.
However, any Lord Chancellor has to be very hands-on himself in relation to that process to ensure its integrity and that it is full and comprehensive and not affected by any bias of any kind at all. It is an extremely important function of a Lord Chancellor effectively to make all those judicial appointments. So far, I have been concerned in the elevation of one Law Lord, four Lords Justice, five High Court judges and 10 circuit judges, and all that in a very short space of time. As the years roll on, I dare say the turnover will become more daunting. But one is entirely dependent upon maintaining a constant flow of reliable information which must primarily come from the judges who sit daily in the courts.
I well appreciate that all your Lordships who have supported the Bill have done so, understandably, with a greater or lesser sense of caution and have given that support basically on the basis that it is a measure of necessity and common sense. Along with the noble and learned Lord, Lord Simon of Glaisdale, I could wish that there was the ease of movement within our legal profession which allowed distinguished lawyers to move easily and comfortably from practice into government, into the Civil Service at high levels and then away from the Civil Service and back into the profession, so that there was a wide pool of lawyers who were well qualified to fulfil all the obvious and natural criteria for the important office of permanent secretary. But that is simply not the way of the world which we inhabit in this country and I was faced with a very limited pool of candidates for this extremely important post.
I am enormously conscious of the constitutional significance of the office which I occupy. It can perhaps only be occupied by someone who is both a minister of justice and head of the judiciary. Otherwise, that confidence in the free flow of information in both directions so as to create mutual understanding between the judiciary and the Executive could not take place—unless through a single individual who commanded the confidence of the professional judiciary at the same time as the confidence of his Cabinet colleagues.
I believe that tonight's debate will be paid close attention to by those to whom it must naturally be most closely directed. I cannot think that the first Civil Service Commissioner himself will do anything other than pay close regard to our debate and the important statements which have been made in it about the appreciation of the constitutional significance of my office and the attendant constitutional importance of the office of Permanent Secretary to the Lord Chancellor.
I also believe that it would indeed be imprudent and highly unlikely if all those who aspire to be appointed permanent secretary were to do anything other than pay
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close attention to this debate and the strong statements that have been made in it in support of the values which must be adhered to by any candidate who is to succeed.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Competition Bill [H.L.]
8.32 p.m.
House again in Committee on Schedule 10.
[Amendment No. 242 not moved.]
Lord Haskel Lord Haskel moved Amendment No. 242A:
Page 79, line 12, leave out ("6") and insert ("1").
On Question, amendment agreed to.
[Amendments Nos. 243 to 246 not moved.]
Schedule 10, as amended, agreed to.
Clause 53 [General restrictions on disclosure of information]:
Lord Kingsland Lord Kingsland moved Amendment No. 246A:
Page 26, leave out lines 30 and 31.
The noble Lord said: The amendment deals with the confidentiality and immunity from defamation provisions in the Bill. Clause 53(1) sets out the general rule that information which has been obtained under the Bill's provisions relating to the affairs of a particular individual or undertaking and which has been disclosed in the course of investigation will be treated as confidential. That provision matches the general rule in the European Community.
However, Clause 53(1) subjects that general rule to very wide exceptions. I would draw the Minister's attention in particular to subsection (3) which says that subsection (1), which is the general rule,
"does not apply to a disclosure of intbrmation…facilitating the performance of any relevant functions of a designated person".
If the Minister looks at subsection (4) of Clause 53, he will see that the definitions of "relevant functions" and "designated person" are given in Schedule 11. If the Minister then turns to Schedule 11, he will see that both definitions cover virtually every competition provision on the statute book operated by nearly every person who is authorised to oversee the application of those provisions.
We are talking about very wide exemptions. In particular, bearing in mind Clause 58 of the Bill, they do not conform with the jurisprudence of the competition authorities in the European Community. The Minister will be aware that the competition rules are contained in Regulation 17 (1962). He will be aware that information which is required as a result of an application of Articles 11, 12, 13 and 14 of that regulation can only be used for the purpose of the relevant part of the investigation.
The Minister will also be aware that the European Court of Justice and the European Court of first instance have extended that rule to Articles 2, 4 and 5 of Regulation 17 to which I have just referred. He will also be aware that any information falling under those articles of that regulation which is passed on to member

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states also obliges those member states to respect that rule. In my submission, in order to meet the requirement in Clause 58—namely, that the Bill respects the jurisprudence of the European Community in general and the European Court of Justice in particular—the exemption contained in Clause 53(3) will, at least in respect of that paragraph, have to be substantially modified and narrowed. I beg to move.
The Deputy Chairman of Committees (Lord Ampthill): No doubt Members of the Committee, and certainly noble Lords on the Opposition Front Bench, are aware that if this amendment is agreed to it will pre-empt Amendment No. 246B.
Lord Haskel: Clause 53 prohibits the disclosure of information obtained under the Bill, except with consent or for the particular purposes specified in the legislation. It states that unlawful disclosure of information will be a criminal offence. As drafted, Amendment No. 246A would prevent all disclosure of information for the purposes of functions under the Bill, except with consent.
The amendment would delete the gateway for disclosure for information contained in subsection (3)(a)(ii). The noble Lord mentioned subsection (3)(a)(i), and I am not quite sure of its relevance. The gateway to which I referred enables disclosure of information obtained under the powers in Part I of the Bill to the persons listed in Schedule 11 and for functions listed in that schedule. The noble Lord says that the exemptions are very wide. I am not sure that we agree with that. This provision enables, for example, disclosure of information between the Director General of Fair Trading and the Competition Commission to assist the commission to hear appeals. It also enables the director general to include relevant information in his published decisions or his draft decisions. The Committee will therefore readily see that without this gateway the new regime would be unworkable.
We have already debated the principle of concurrency at length and I do not see the need to rehearse these arguments again now. However, I shall deal with the question of disclosure of information between the regulators and the Director General of Fair Trading. The first point to make is that enabling disclosure of information between the regulators and the director general is clearly necessary for the principle of concurrency to work. The different authorities need to be able to exchange information on cases in order to determine which is best placed to deal with potential infringements of the prohibitions and to ensure that there is no unnecessary duplication of work between them.
The gateway which this amendment would remove also enables information obtained under the Bill to be used in relation to different regulatory functions. This is standard practice in the UK regulatory environment. There are, for example, similar provisions in the Fair Trading Act, the Competition Act, the Restrictive Trade Practices Act, the utility statutes, the Financial Services Act and the Companies Act, to name but a few. Clause 53 therefore provides gateways for the disclosure of information obtained under the Bill between the
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Director General of Fair Trading, the utility regulators and the other regulatory authorities listed in Schedule 11.
I make no apologies for this. The noble Lord thinks that the provisions are rather wide, but they are necessary. Information may be disclosed only in order to assist the recipient to perform his statutory functions. If one of these regulators has evidence of a potential infringement of, say, a licence regime supervised by another regulator, it would be quite wrong to require him to keep the information to himself. We need to ensure that the different regimes work coherently and efficiently together.
The noble Lord referred to EC information. We do not believe that the EC precedent in this respect is relevant to UK circumstances. There are not the equivalents of the utilities regimes and regulators at EC level. It is important that the UK regulatory regime viewed as a whole operates in a coherent and sensible fashion. Preventing the disclosure of information between regulators, and its use for different statutory functions, would frustrate that objective.
I wish to correct an earlier statement. The noble Lord was absolutely right to refer to Clause 53(1).
If I may summarise my remarks, this amendment attacks the principle of concurrency—we have given that question a good airing—but also risks undermining the coherent and efficient co-existence of the utility regimes with general competition law. I hope that the noble Lord will accept this argument and see fit to withdraw his amendment.
8.45 p.m.
Lord Kingsland: First, I wish to thank the noble Lord for his elucidation of this part of the Bill. I thank him also for bravely correcting his earlier assertion.
In looking at the text it seems to me—notwithstanding the point that the noble Lord makes about concurrent responsibilities and the need for regulators and other regimes to see what information the director general has—that the drafting of this provision goes way beyond what he has said. In my submission, as the provision is drafted it would remove any restriction on the director general to disclose this information to anyone.
Lord Haskel: This is a complex area. Perhaps the best course would be for me to write to the noble Lord about it.
Lord Lucas: I wish to make a point in support of my noble friend. It seems to me that the way this provision is drafted gives all these designated persons listed in Schedule 11 access to the immense powers which are contained in this Bill and which they do not have under their own Acts. Effectively it enormously enlarges the powers of these regulators, because if information is produced using the enormous investigative powers under this Act, it then becomes available to the regulators and it therefore becomes a channel, which they did not have before, through which to obtain information and effectively to act in ways which Parliament had not allowed them to do.

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If that is to be the case, it requires the closest scrutiny. I would much prefer to see this clause drafted more narrowly so that the kind of information which these Schedule 11 designated persons can obtain has not been obtained by means which they would not normally have access to under their own regulations.
Lord Haskel: But this clause prohibits the disclosure of information obtained under the Bill except with consent or for the particular purposes specified in the Bill. As I said at the beginning, unlawful disclosure of information will be a criminal offence. Surely that is a safeguard.
Lord Kingsland: I am grateful that the noble Lord is prepared to take the trouble to write to me on this matter. However, I hope that before he writes to me he will reflect again on the points that I have made, not just with respect to the breadth of the interpretation to which I believe the words used in the clause are subject, but also the wider issue of the EC law. If Clause 58 means what it says, in my submission the confidentiality ingredients of the Bill cannot go wider than those contained in EC law.
The Minister has already spoken on this matter and I do not wish to weary him with the prospect of having to respond again. In writing his letter to me I should be much obliged if he will cover that point too. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 246B
Page 26, line 31, at end insert ("other than those of the Director General of Telecommunications under the Telecommunications Act 1984").
The noble and learned Lord said: In view of the offer by the noble Lord to write to us about this matter I think I would be labouring the point if I were to address any argument to him now. This matter depends not only on the argument which has already been addressed to the Committee by my noble friend, but also carries further the argument we addressed earlier this evening about the separation between the regulatory and competition functions of the Director General of Telecommunications. I suggest that the noble Lord needs to say nothing more to me than, "Yes, he will", if I invite him to add, when he writes to my noble friend, the response he would otherwise have provided to me on the Floor of this Chamber. I beg to move.
Lord Haskel: Yes, I will.
Lord Fraser of Carmyllie: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland Lord Kingsland moved Amendment No. 247:
Page 26, leave Out lines 32 and 33.
The noble Lord said: In moving the amendment, I wish to speak also to Amendment No. 248. The amendment again deals with the issue of confidentiality under Clause 53(3). We are not considering subsection (3)(a)(i) but subsection (3)(a)(ii) which provides for,
"facilitating the performance of any functions of the Commission in respect of Community law about competition".
in the context of subsection (3)(d),
"which is required to meet a Community obligation".
Is there some overlap between those two provisions? If not, what is the distinction between the two?
Amendment No. 248 refers to subsections (5) and (6) of Clause 53. It is intended to be a probing amendment to find out what the Minister has in mind. Subsection (6) states,
"'specified' means specified in an order made by the Secretary of State".
In what circumstances does he envisage the Secretary of State making that order? I beg to move.
Lord Lucas: Perhaps I may raise a point on subsection (3)(a)(ii). One of the dangers in this and the previous subsection is that once the information is released to other parties without guarantee by them that they will respect the confidentiality in their turn, it is effectively releasing the information to the world. I know that the Commission keeps confidences sometimes, but under the regulations set out in the Bill it would have no obligation to keep confidences. It would not be bound by anything in the Bill, unless we have a requirement in the Bill that anyone receiving information will express themselves bound by the confidentiality provisions contained in the Bill.
The clause continues to worry me. I shall appreciate it if at the very least the noble Lord, Lord Haskel, will "copy me in" on his letters.
Lord Haskel: I can promise that we shall copy the noble Lord in on the letters. We dealt with confidentiality on the last amendment. It is a criminal offence to misuse such information. I turn to the question of European law. The amendment deletes subsection (3)(a)(ii) which enables information to be disclosed to the Commission to help the Commission perform its functions under European law. We believe that it is right to give the director the power to help the Commission to enforce Community competition law. After all, this law is directly applicable in the UK too. If the UK authorities have information about possible contraventions of EC competition law, is it right that they should have to keep the information from the Commission? Surely they should be free to give this information to the Commission. If they had to withhold the information from the Commission, the result would be that the Commission would have to duplicate the work by the UK authorities. The Commission would have to use its own investigation powers to obtain the information. All that would create a lot more work. Frankly, that outcome would be contrary to the sensible

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dovetailing of the UK and the EC regimes that we intend to achieve, a point which the noble Lord, Lord Kingsland, raised earlier.
Clearly, we need to be able to disclose information to the Commission where that is required to meet a Community obligation in order to ensure that we are able to meet our duties under the EC treaty.
We considered carefully whether the power in subsection (3)(a)(ii) was needed in addition. We concluded that it was, partly because of the experience under the Fair Trading Act. This is because, as I said, there may be circumstances where it would be sensible and right for the director to give to the European Commission information about a case which he has obtained under his powers in the Bill. While there may be situations in which the UK's Community obligations would require the director general to provide the information, that may not always be the case. Further, it would not always be clear whether there is a Community obligation to provide particular information. We do not wish to place the director at risk of committing the criminal offence in making disclosures about which I spoke earlier. On the one hand, unlawful disclosure of information is a criminal offence under the Bill. On the other hand, if the director got the judgment wrong, the UK might find itself in breach of its Community obligations. I am sure that Members of the Committee do not want that to be the case.
On Amendment No. 248, the noble Lord, Lord Kingsland, asked about subsections (5) and (6). These enable the Secretary of State to specify additional persons and purposes to whom and for which disclosure is to be permitted. However, this power is exercisable by order subject to annulment by either House. So there is some protection to deal with the noble Lord's concerns. The purpose of the power is to ensure that there is sufficient flexibility in the Bill to respond to development in regulatory and competition policy without need for fresh primary legislation. I hope that that explanation will satisfy noble Lords.
Lord Lucas: The noble Lord has not addressed in the slightest the point that I raised. In case the Box has not had time to send an answer, the question is this: does the duty of confidentiality under the Bill extend to the Commission if the Commission is given information obtained under the Bill? If it does not, there should be provision in the Bill to ensure that it does.
The same argument applies to people specified in Schedule 11 who receive information under the Bill. It does not appear obvious that they are bound by the confidentiality provisions under the Bill. As they are UK entities, perhaps they are. But the Commission surely is not, because it is not subject to the Bill. Therefore there is need for the safeguard that information given to the Commission will be treated confidentially.
Lord Haskel: I am sorry if I did not address the noble Lord's question. If the information is given to the
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Commission, as the noble Lord, Lord Kingsland said, it will be subject to European law which will restrict its disclosure by the Commission.
Lord Lucas: Perhaps the noble Lord would like to specify exactly which sections of European law will provide that function, and exactly how that function will be exercised. What action would an aggrieved party be able to take were information that he had given to the director disclosed by the Commission? I am sure that the noble Lord will be able to write a letter to me on that subject.
Lord Haskel: I am not sure that I need to write a letter. The European law under which this is done will surely be Articles 85 and 86 which are the items we are debating.
Lord Kingsland: In considering the various answers given by the noble Lord to my amendments on Clause 53, I must confess to being extremely unhappy about them. Despite the firmness of his response to me, I hope that the noble Lord will reflect nevertheless on what he and I have said. Bearing in mind the context of European Community law, and the European Convention on Human Rights which is about to be incorporated in our law by this Government, on sober reflection on the clauses, does he really believe that they conform with those international obligations? I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 248 not moved.]
9 p.m.
Baroness Nicol Baroness Nicol moved Amendment No. 249:
Page 27, line 8, at end insert—
("( ) Subsection (3) shall not apply to disclosure of information by a person other than a person who is party to an agreement which offends against the Chapter I prohibition or Chapter II prohibition.").
The noble Baroness said: I must remind the Committee that I have declared an interest as chairman of the All-Party Retail Group.
The purpose of my amendment is to safeguard commercially sensitive information which is provided by innocent third parties. None of the very interesting debates so far has covered particularly the interests of innocent third parties which may emerge during an investigation. The amendment reflects a concern that the British Retail Consortium has in relation to the Bill and the sweeping powers that it gives to the director general to order the production of documents considered relevant to the investigation. As the Committee knows, the director general can require persons to give an explanation of the documents. By virtue of those provisions, a director could obtain a considerable amount of commercially sensitive information provided by third parties who are not party to the agreement or course of conduct which infringes either of the prohibitions.
Although Clause 53(1) provides for such information to remain confidential, as we heard several times from my noble friend, Clause 53(3) permits disclosure in a wide range of circumstances. The amendment would require

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the exception in Clause 53(3) not to apply to commercially sensitive information provided by innocent third parties. Those arguments also apply to Clause 63, which we shall debate later and to which I have not tabled an amendment. I hope that the Minister will take these arguments on board in relation to Clause 63 as well, so that we need not return to the matter on Report. I beg to move.
Lord Graham of Edmonton: I hope that the Minister will listen sympathetically to the points made. I, too, declare an interest as an officer of the All-Party Retail Group; I also declare my Co-operative interests, which are registered. I do not speak directly on behalf of any of those interests.
It is undesirable that information given in the strictest confidence in order to assist the director to reach a view should then appear, be referred to and be publicised by the director in his findings. I can well imagine people considering exactly to what extent they are prepared to disclose information to the director. They may well think twice. Not being party to the action and acting as good citizens they are in the position of knowing that anything they say—not at their own discretion but at the discretion of the director—could find itself in the public domain.
The Committee is well aware of the extreme sensitivity of commercially sensitive information. It is right and proper that the director should have power to seek it. But in exercising his discretion, the director ought also to recognise that the free flow of information given by good citizens may well dry up unless an undertaking is given. Information given by people innocent of any charge (that does not mean to say that others are guilty) who are trying to do what is best may find that the information that they have given, which is not only helpful to the director but might be helpful to a great many of their competitors, appears publicly in print. Perhaps the Minister will recognise the point that we are making.
The amendments may not be well enough drafted to take care of the precise point. However, if the Minister will indicate that he has sympathy with the point made, I am sure that my noble friend will be very happy to be collaborative.
Lord Haskel: I assure my noble friends that I have sympathy with the point that they are making. The issue of innocent third parties is a very difficult one. I fully appreciate the concerns that businesses have over the confidentiality of commercially sensitive information. However, at the same time it is important that the operation of the new legislation is transparent. We have tried to take great care in balancing those two imperatives.
The Bill contains two clauses to protect information obtained under the new regime. Under Clause 53 it prohibits the disclosure of any information obtained under the Bill except to specified persons for specified purposes or with consent. Criminal sanctions attach to unlawful disclosure.
Clause 54 imposes duties on the Secretary of State and the Director General of Fair Trading in relation to that information where disclosure could damage the
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legitimate interests of businesses or individuals. The clause requires the director general to have regard to the need to protect such confidential information and the extent to which disclosure of such information is necessary to achieve the purpose for which disclosure is proposed.
Therefore, before disclosing information obtained under Bill, the director general will have to give careful consideration to the factors set out in Clause 54. He will have to balance the need for disclosure against the public interest and the significant harm which innocent third parties might suffer. He will need to take a long, hard look at how necessary it is to do so.
Schedule 8 provides that the tribunal rules may provide for a tribunal to sit in private when information of the kind to which Clause 54 applies is being considered. The provisions in relation to appeals also provide for a tribunal to apply Section 54 in respect of its written decisions if they are to be published. So there are clear safeguards to protect innocent third parties and to protect confidential and commercially sensitive information.
At the same time, however, it would be wrong absolutely to forbid the disclosure of confidential information even where it was provided by firms which had not infringed the prohibitions. It may, for example, be necessary to disclose information so that an undertaking which is accused of having infringed the prohibitions is aware of the case against it. Further. it may be needed to make reasoned decisions understandable. Reasoned decisions will be a key part of the transparency of the new regime and will be an important indicator for business as to the application of the prohibitions.
Disclosure of information may also be important to facilitate civil actions by third parties to obtain redress under the prohibitions. Firms and individuals who have been harmed by infringements of the prohibitions ought to be able to obtain redress. We believe that, where the director has information which would help them to do so, he should be able to release it to them. That would again be subject to the test in Clause 54.
I sympathise with my noble friends for raising this important issue but I assure them that there are protections within the Bill. I hope that my explanation will satisfy their concerns and that they will be able to withdraw the amendment.
Lord Graham of Edmonton: I am grateful to the Minister for the care he has taken in giving an explanation. However, I have been told that it has come as a shock to third parties to find information which they gave in confidence appearing in public print. In other words, they assumed, wrongly, that the information that they gave in confidence would remain confidential.
The Minister tells us that there are careful checks and balances and that it is a matter of judgment as to how much is disclosed. Is there within the mechanism a procedure whereby the director who intends to disclose confidential information would advise a third party of his intention before the information was published? To that extent, the person would be forewarned and might be able to take some measures to militate against it.

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I am sure that some individuals would think twice about willingly responding, or responding 100 per cent., to an invitation to disclose frankly all that they know. We do not want to get into a situation where people are hedged in with potential actions, inquiries, tribunals and appeals. I hope the Minister wants something which is seen to he fair.
I do not think that the general public—whom, after all, we represent—and business would think it fair that something given in all innocence and in confidence should be revealed without their having the opportunity to reflect or to withdraw the information. Many people will say things in confidence that they would not be prepared to see in public print. That may well condition the veracity and integrity of the information. I hope that when my noble friend responds she may say that the matter ought to be revisited.
Lord Haskel: This is indeed a very difficult issue. I should have thought that, if a third party were involved in an investigation, they would receive some kind of notice that the information would be disclosed. I understand that the Bill does not provide for that and I think we should reflect on the point about disclosing to third parties if information which they provide is to be disclosed.
Baroness Nicol: I am greatly encouraged by my noble friend's last sentence; before I heard that, I was feeling distinctly uneasy. The point arose because, even under existing legislation, problems have been caused to third parties in this kind of investigation where information has not been treated as confidential by those to whom it was disclosed. I am grateful for the ray of hope contained in my noble friend's final sentence and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 agreed to.
Schedule 11 agreed to.
Clauses 54 and 55 agreed to.
Clause 56 [Findings of fact by Director]:
On Question, Whether Clause 56 shall stand part of the Bill?
Lord Graham of Edmonton: Can the Minister confirm that findings of fact made by the director in decisions resulting from complaints would benefit from this clause?
Lord Haskel: I thank my noble friend for raising that point. I confirm that it is the Government's intention that Clause 56 should apply to findings of fact made by the director in all decisions. It should not be limited to decisions resulting from a notification for a decision. The Government intend to bring forward an amendment at Report stage to address this point.
As I explained to the House on 17th November, third parties have a right of private action. Our clear intention in framing this Bill is that third parties may seek injunctions or damages in the courts if they have been adversely affected by the action of undertakings in
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breach of the prohibitions. This is an important element of the regime. There is no need to make explicit provision in the Bill to achieve that result. Third party rights of action under the domestic regime are to be the same as those under Articles 85 and 86.
Clause 56 has been included in the Bill in response to comments made in the consultation process. There were calls for measures to ensure that private actions in the courts should work as far as possible in tandem with the application of the prohibitions by the director.
Therefore, for example, parties who have obtained a decision that their agreement is not restrictive of competition will not have to prove again findings of fact made by the director if there were ever court proceedings attacking the agreement under the prohibition. Such facts could not be contested in such court proceedings. The court does, however, have a discretion to require the facts to be established in the normal way.
In explaining the private right of action under the Bill, I hope now to have answered one of the questions posed by the noble Lord, Lord Lucas, at the end of the second day in Committee. I should also like to take this opportunity to answer his second question, as to whether a minor allegation of error of fact would trigger, in his words, the full "panoply" of a commission investigation. In such a case, it would be the alleged error of fact which would be re-examined. It would not have to involve a re-hearing of the entire case. Paragraph 3(1) of Schedule 8 provides for the appeal to be determined by reference to the grounds of appeal.
More generally, I believe that there are adequate powers in the Bill to safeguard against unmeritorious appeals. As we said last Monday, the competition commission may reject an appeal because there is no valid ground of appeal. In addition, paragraph 7(2) of Schedule 8 would enable vexatious appeals to be dismissed. Paragraph 8 of Schedule 8 is also relevant. It would enable the competition commission to demand "up-front" security before allowing an appeal to proceed. In other words, we intend the tribunal to have the ability to require an appellant to "put his money where his mouth is". That could be very sobering for someone with weak grounds of appeal. I believe that these powers, together, will provide an adequate safeguard against unmeritorious appeals.
9.15 p.m.
Lord Graham of Edmonton: I am grateful to the Minister. I never realised that such a little question would bring such a big answer and, in the same way as I support the Co-operative movement, the dividend is much appreciated.
Lord Lucas: I too thank the Minister for his unexpected answer to a question which, for the moment, I had forgotten I asked.
Clause 56 agreed to.
Clause 57 [Interpretation]:
[Amendments Nos. 249A and 250 not moved.]
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 251:
Page 28, line 37, at end insert—
(""the EEA Agreement" means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as it has effect for the time being;").
The noble Lord said: This amendment has already been debated. I beg to move.
On Question, amendment agreed to.
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 252:
Page 29, line 5, leave out from second ("premises") to end of line 10.
The noble and learned Lord said: Amendment No. 252 seeks to limit the interpretation or definition of what are "domestic premises". Without unduly repeating what has been previously said as we have gone through the earlier stages of the Bill, our view is that this is an excessive power. It goes too wide. It is not available to EU level and the ECJ has already recognised that fundamental rights exist in respect of the inviolability of the home.
I ask the Minister to reflect on this: at any time while he was a senior executive or indeed the chairman of BP, can he think of any place where he put down his weary head at night which could not have been included within the description of premises also used in connection with the affairs of an undertaking? That description is so wide that, should the noble Lord take home a briefcase full of papers and sit in front of his television set with his briefcase open looking at his papers, it would be permissible to enter those premises.
I suggest that, before we return to this matter on Report, the draftsman should look at it again to see if he can secure a more narrow definition of what are "domestic premises". I understand the circumstance where people have an office attached to their home, in which case it may be desirable to enter it. But it seems to us to be an extraordinarily wide definition and it ought to be restricted in some way. I beg to move.
Lord Borrie: A few weeks ago it was reported that the President of Iraq, Saddam Hussein, was putting into his private palaces a number of weapons of destruction, no doubt with the aim of ensuring that they would not be subject to inspection by United Nations observers and certainly would not be attacked from the air at any time in view of the fact that there were women and children in those palaces.
That may seem a long way from our discussions today but Saddam Hussein is certainly not the only person who would wish to hide in domestic premises or put in domestic premises material which might be important evidence for an inquiry made under the Bill, in accordance with the provisions we discussed earlier, by the Director General of Fair Trading or his officials. It would seem to be quite a crazy hobbling of the powers of the director general if the only premises which could ever be investigated were those 100 per cent. used for trade, industrial or commercial purposes.
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What the clause allows for is an investigation of domestic premises which are in part used for business purposes or where documents relevant to, perhaps, anti-competitive practices or cartel agreements are to be found. To accept the amendment moved by the noble and learned Lord would be to restrict the powers of investigation and simply encourage people not just to leave their briefcase but regularly to leave on a semi-permanent basis any documents of any materiality relating to malpractice in relation to competition.
Lord Lucas: Given the breadth of the way the clause is drawn, I would be intrigued if the Minister could give the Committee an example of a domestic premise which might be excluded. If, as is my understanding, the dog kennel is possibly the only part of a building which is likely to be excluded under the clause, why is the clause here at all?
Lord Simon of Highbury: I have acknowledged before in these debates the concern about the strength of the investigation powers in the Bill. I can only underline again the words carefully used by my noble friend Lord Borrie. The Bill would allow entry to any premises during an investigation. But "premises" does not include domestic premises unless

"(a) they are also used in connection with the affairs of an undertaking, or

(b) documents relating to the affairs of an undertaking are kept there".

It is true that on one's travels one is likely to take a briefcase. I agree with the noble and learned Lord on that. But I do not want to be dragged into this. I would never have taken any documents that would ever have caused me to have a moment's guilt. I want to put that on the record since it was nearly put on the record that I might have done.
Seriously, the Government have considered carefully the case for these powers. They have not been included in the Bill lightly. We are, as my noble friend Lord Borrie reminded us, talking here about the secrecy which is needed to operate cartels or to engage in anti-competitive practices. In particular, individuals may strive to keep relevant documents and information out of the hands of anyone investigating what would normally be considered to be a business site. That is how these things are organised.
In the debates on the Bill I have stressed the need for strong powers to enable the director to get access to information. I think my noble friend Lord Borrie would confirm that one of the key reasons why the current regime is unsatisfactory—I think that that is universally acknowledged—is that the director does not have these powers currently. I fear that in accepting the amendment that would be stepping back into an ineffective regime. It would signal to those concerned who are prepared to go to the limit in order to make these cartels effective that an investigation process was in place which could be easily defeated by the simple expedient of asking someone to take papers home and put them there for a

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period of time. On that basis I believe that the power is justified. I urge the noble Lord to reconsider and to withdraw the amendment.
Lord Fraser of Carmyllie: I find that a rather unsatisfactory answer. What I really object to is that a rather phoney libertarian exception is being offered here. Page 29, line 5 of the Bill states,
"'premises' does not include domestic premises".
It continues by saying,
"unless—
"(a) they are also used in connection with the affairs of an undertaking".
I hope that the noble Lord was being lighthearted and appreciated that I offered no imputation of his conduct while he was chairman of BP. I am absolutely certain that there could scarcely have been a night when he did not take home with him papers in connection with the affairs of the undertaking of which he was chairman. If that is what the Government want to do and if they are going to say, "We consider this to be such a problem that we are going to allow people to enter premises of all types and in all circumstances" then they should say so. There should not be this rather false idea that domestic premises are to be excluded. With this particular definition it seems to me that the government advisers are saying that if one has papers relating to a cartel when one goes home, one should leave them in the motor car. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 252A:
Page 29, line 13, leave out ("in paragraph 1 of Schedule 10") and insert ("by section 52").
On Question, amendment agreed to.
Clause 57, as amended, agreed to.
Clause 58 [Principles to be applied in determining questions]:
Lord Kingsland Lord Kingsland moved Amendment No. 253:
Page 29, line 20, leave out from ("that") to end of line 25 and insert ("all those having functions under this Part discharge those functions so as to ensure that so far as is possible questions arising under this Part are dealt with and determined in a manner which is consistent with the treatment of corresponding questions arising in Community law").
The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 254 to 257. The purpose of these amendments is to clarify the nature of the relationship between Part I of the Bill and European Community law. Clause 58(1) is more preambular in content rather than dealing with a specific obligation. The amendment seeks to rectify that situation.
In particular Amendment No. 253 deals with a number of concepts which seem excessively vague. The expression "compatible" is not explained; nor is the expression "corresponding questions". A need for consistency is rehearsed, but consistency between what differing regimes?
There are four particular matters to which I wish to draw the attention of the Committee. First, the expression, "to decide matters with a view to securing
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consistency" seems to us to be much better stated by the expression, "to ensure consistency." That makes the obligation absolutely clear.
The expression "corresponding questions" is too vague. Why not simply say that "The application of Part I must conform with the jurisprudence of the European Court of Justice in relation to Article 85 of the Treaty"? That is what I understand is being said.
In our submission the Bill must make it plain when Parliament intends to take a different approach from the European Community and Article 85. The expression used in the Bill is "incompatibility", but we believe that that is too loose-limbed; in other words, where the Minister is asking the Committee to accept that we differ, he ought to say so. The principles of European Community law comprise certainty, non-discrimination. objectivity and proportionality. Those principles ought not just to be enshrined in the substance of the law relating to the competition regime; they ought also to infect the way in which it is drafted. I beg to move.
9.30 p.m.
Lord Simon of Highbury: I shall respond to Amendments Nos. 253 to 257 as a group. Indeed, in responding to the amendments of the noble Lord, Lord Kingsland, I think it would be helpful, first, if the noble Lord will bear with me, to explain the purpose of Clause 58 and how it is intended to operate.
The purpose of the governing principles clause is to ensure as far as possible that the UK and EC prohibitions are interpreted and develop consistently with the EC competition law system. This is of critical importance in minimising burdens on business. The problems for business in having two similar, but in their detail different, prohibitions interpreted according to two different bodies of case law could be very burdensome.
The clause will, subject to one qualification I shall discuss further, require those determining questions under Part I to avoid inconsistency with Community law. They are also to have regard to the decisions and statements of the Commission. This will also apply to interpretation of the rules made by the DGFT under Clause 49. This importation extends not only to the substantive law but also to the general procedural safeguards developed under EC law; for example, the right against self-incrimination. That right developed by the European Court of Justice in Orkem v. Commission will be available to individuals who are asked by the DGFT for an explanation of a document under the powers in Clauses 26 to 28.
However, this principle of Community law importation will apply only to the extent that the provision of Community law in question is not inconsistent with the provisions of the Bill or the rules made by the DGFT under Clause 49. Let me give an example of a departure on the face of the Bill. Clause 29 confers a greater degree of legal professional privilege against production of documentation than exists under EC law. This is deliberate. Indeed, such an approach has wide-ranging support in this House as we debated earlier.

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In making the procedural rules, the DGFT is not obliged to secure that there is no inconsistency with EC procedural law since he will not be "determining a question" under Part I. The Bill provides that the rules made by the DGFT are not to come into effect until they have been approved by order made by the Secretary of State. These orders are to be subject to annulment by a resolution of either House.
That was by way of a general introduction and I turn now to the specific amendments tabled by the noble Lord, Lord Kingsland. I must start by saying that I believe that there is much common ground between us. I have considered the alternative language proposed, but I still feel that our objectives are best served by the clause as it is drafted—despite the excellence of the proposals. Let me try to explain why.
Turning first to Amendments Nos. 253 and 254, it is quite right that business should be granted as much certainty as possible about the application and interpretation of the prohibitions. The governing principles clause forms a central plank in achieving this objective. We have been clear on the face of the Bill where we are departing from the EC model; for example, the UK appeal system is clearly different from the EC system since appeals are not limited to the narrow judicial review-type grounds applicable to European Commission decisions.
Outside these specific areas of departure, business can look to the EC system for the interpretation of the prohibitions. I believe that the language in subsection (2) requiring the director and any court or tribunal to act with a view to securing that there is no inconsistency with Community law is a sufficiently tight test. It meets our objective of ensuring that the UK and EC prohibitions remain on parallel tracks.
I do not believe that the test should be made yet tighter as proposed by the noble Lord, Lord Kingsland. It is not possible to create an exact copy of the EC system. EC competition law has certain elements which cannot simply be transposed into the domestic system. For example, the Community objective of ensuring a common internal market for 15 different national states simply does not make sense in a purely domestic context. Therefore, those applying the prohibitions must be able to produce a sensible translation of the EC rules into the domestic system. This explains the reference to consistency between questions arising in relation to "competition within the UK" which correspond to those arising in Community law in relation to "competition within the Community". Once again I emphasise that the language in subsection (2) is very tight, and rightly so. In addition, those applying and interpreting the prohibitions must always act with the purpose set out in subsection (1) in mind; that is, consistency with the EC approach. Subsections (2) and (3) must therefore be read as a package together with the purpose in subsection (1). Finally, to put the matter beyond doubt the duty on the director or UK court or tribunal under subsection (2) is to apply not only the principles applied in a corresponding question but also any relevant decision of the Court.
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Amendment No. 257 seeks to give precision to the meaning of corresponding questions of Community law. However, I consider this to be far too narrow a definition. By way of example, I refer to the study prepared by Professor Whish which I mentioned when we debated Clause 9. I have placed copies in the Library of this House. As Professor Whish has noted in the study on the breadth of Article 85(3), the exemption criteria are interpreted against the backdrop of the underlying principles and objectives contained in the EC Treaty. Treaty objectives such as those to protect the environment contained in Article 130 may be relevant in considering whether an exemption can be granted. If we adopted the narrower definition proposed, the director might not be able to grant an exemption in respect of a type of agreement which the Commission would have had power to exempt. Such a definition could therefore lead to divergence with EC law and, worse still, prevent the director from exempting restrictive agreements which had worthy countervailing benefits.
As for the question of importation of the general principles of Community law such as the principle of proportionality, I can confirm to the noble Lord that it is our clear intention that they are included within the principles applied by the European court referred to in this clause. I am advised that this is the effect of the clause as drafted and that there is no need for specific reference to them.
I turn now to Amendment No. 255 which deletes the reference to the relevant EC principles and decisions being those applicable at the time the UK decision is being taken. The reference to "as applicable at that time" is to make clear that if there is a decision of the European Court which conflicts with the latest interpretation of the point by the UK courts, those applying the prohibition must follow the EC interpretation. It is also the case that if, as can happen, the jurisprudence of the ECJ changes over time it is the latest decision which prevails. We cannot rely on the European Communities Act to achieve either of these results because we are borrowing, not applying, EC law. Amendment No. 255 might therefore force the courts and the director to apply the prohibition inconsistently with the EC approach and thereby defeat the very objective of the governing principles clause.
Finally, I deal with Amendment No. 256 which makes the Secretary of State subject to the governing principles clause. We did not apply Clause 58 to the Secretary of State simply because we considered that she did not have functions under the Bill where it would be relevant and right to apply EC law. For example, the power of exclusion under Clause 3 might often involve doing something different to EC law. That is the main purpose of the clause. We want to have the right, for example, to exclude vertical agreements. The Bill provides for that by secondary legislation. I know that the noble Lord, Lord Kingsland, pressed for such an exclusion to be on the face of the Bill and, as I said, I shall reflect most carefully on that point. However, in the event that such an exclusion is written into the Bill there will

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remain a need to vary or fine-tune it by secondary legislation and make further exclusions as appear necessary.
Our view is that the exercise of exclusion powers would not be "determining a question" for the purpose of Clause 58. However, applying the clause to the Secretary of State could cast doubt on the way she could exercise that power. That is a detailed response to a matter where I started by saying that there would be a lot of common agreement. I hope that in the light of that explanation the noble lord, Lord Kingsland, will reconsider his amendment.
Lord Kingsland: I am relieved to hear that the noble Lord did not apply this section to the President of the Board of Trade because he thought that she was above the law. I thank the noble Lord for his response. However, I would like to probe one passage in the text to see whether I have understood the spirit, if not the letter, of his reply. In the penultimate sentence of Clause 58(2) there is the expression "with a view to securing that there is no inconsistency between". Am I right in thinking that as a result of his reply, that expression can be taken to be the equivalent of the expression "to ensure consistency?"
Lord Simon of Highbury: I admit to the noble Lord, Lord Kingsland. that they seem to be saying very much the same thing.
Lord Kingsland: I am much obliged. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 254 to 257 not moved.]
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 257A:
Page 29, line 43, at end insert—
("( ) When adjudicating upon the application of the Chapter I and Chapter II prohibitions, the Director or a regulator shall be regarded as a court or tribunal for the purposes of Article 177 of the Treaty and may make requests to the European Court for preliminary rulings as provided for in that Article.").
The noble and learned Lord said: All we are hoping to have confirmed for us is that when adjudicating upon the application of either Chapter I or Chapter II prohibitions either the director or a regulator shall be regarded as a court or a tribunal for the purposes of the important Article 177 of the Treaty and will accordingly be in a position to make requests to the European Court for preliminary rulings as provided for in that article. If the Minister's answer is that they will be able to do so, I shall immediately withdraw my amendment.
9.45 p.m.
Lord Simon of Highbury: I am able to confirm.
Lord Fraser of Carmyllie: That is the most satisfactory answer the Minister has given all evening. I am pleased to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 58 agreed to.
Clause 59 agreed to.
Clause 60 [Power to enter premises: Commission investigations]:
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 258:
Page 30, line 38, leave out ("A justice of the peace") and insert ("The President of the Tribunal").
The noble and learned Lord said: At the risk of irritating some Members of the Committee this amendment relates to the deletion of the words "A justice of the peace" and the insertion of "The President of the Tribunal". This is a theme that we have explored previously. I hope the Government appreciate that in the circumstances of this complicated legislation we feel that it would be appropriate to upgrade the status of those to whom application should be made. So long as we are confident that the Government are appreciative of our desire to return to this point at the next stage of the Bill, I hope that the Minister will feel able to deal with it briefly.
Lord Haskel: I can deal with the matter briefly. As the noble and learned Lord will recall, on 17th November I undertook to consider the amendment to provide for the issue of warrants by a High Court judge rather than the president of the competition commission tribunal. I see no reason to go over the same ground again. The same principle applies. We will consider it within the same context.
Lord Fraser of Carmyllie: I am grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Haskel Lord Haskel moved Amendment No. 258A:
Page 31, line 2, leave out ("prevented from doing") and insert ("unable to do").
The noble Lord said: For the convenience of the Committee I shall speak also to Amendments Nos. 261 A and 263A. These are amendments to ensure that Clauses 60 and 61 reflect the corresponding provisions relating to investigations under the domestic regime. It is a matter we have already debated. I beg to move.
Lord Lucas: I should like to know whether the new phrasing incorporates the old one; in other words, if I am standing at the door of the offices and preventing the poor man from coming in, presumably, if he were to push past me, he would be able to get in. However. he chooses not to do so. So he is able to do so, but chooses not to do so. I am preventing him. I am not sure that the new wording is an improvement on the old. I appreciate the attempt that is being made to turn the active into the passive but the word "unable" begs the question whether an official, who is able but chooses not to, will find that this clause no longer applies to him, whereas the previous clause would have done.
Lord Haskel: It will apply, because the purpose of Amendment No. 261A is to ensure that not just the commission official who is being obstructed but any

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other commission official who has been authorised to conduct the investigation can carry it out and can be named on the warrant.
On Question, amendment agreed to.
[Amendments Nos. 259 to 261 not moved.]
Lord Haskel Lord Haskel moved Amendment No. 261 A:
Page 31, leave out line 20 and insert—
("(c) any official of the Commission authorised for the purpose of the Commission investigation,").
On Question, amendment agreed to.
[Amendment No. 262 not moved.]
Clause 60, as amended, agreed to.
Clause 61 [Power to enter premises: Director's special investigations]:
[Amendment No. 263 not moved.]
Lord Haskel Lord Haskel moved Amendment No. 263A:
Page 31, line 44, leave out ("prevented from doing") and insert ("unable to do").
On Question, amendment agreed to.
[Amendments Nos. 264 to 267 not moved.]
Clause 61, as amended, agreed to.
Clause 62 agreed to.
Clause 63 [Monopoly investigations: general]:
Lord Haskel Lord Haskel moved Amendment No. 267A:
Page 33. line 6, leave out ("subsections (2) and (3)") and insert ("subsection (2)").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 267B to 267G, 269A to 269E, 271A to 271C, and 276A and 277A. My remarks also cover Amendment No. 209A, which is a consequential change to Schedule 10 flowing from these amendments. These amendments relate in substance to Clauses 63 to 65 of the Bill.
The Government's amendments are intended to achieve four goals: first, to remove redundancies resulting from the Bill as currently drafted; secondly, to clarify the intended scope of the powers; thirdly, to maintain consistency between the Director General of Fair Trading's powers to require information under the Fair Trading Act and those of the Monopolies and Mergers Commission, or the competition commission as it will become; fourthly, to reflect changes already made to the investigation and enforcement powers provided in Clauses 26, 27 and 41 in relation to the prohibitions.
I shall go through these changes briefly. Amendment No. 267D repeals Section 44(2) of the Fair Trading Act. We have concluded that the powers in Section 44(2) will become redundant with the introduction of the wider powers provided by Clause 63.
Amendment No. 271A repeals Section 45 of the Fair Trading Act. As with the previous amendment, we have concluded that the investigation powers in Section 45 will become redundant with the strengthening of the powers under Section 44. The
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amended Sections 44 and 45 would therefore be duplicatory. While this would not be unworkable, it would not be good legislation.
The Committee will, I am sure, appreciate that with the deletion of Section 45 of the Fair Trading Act, Clause 64 of the Bill becomes redundant. Clause 64 was intended to enhance the powers provided for the director under Section 45. As a result of the amendments I have tabled, therefore, we propose that Clause 64 should not stand part of the Bill.
Amendments Nos. 267B and 269A are intended to clarify that the director may use the investigation powers provided by Clause 63 to help him to decide whether he should either make a monopoly reference or propose undertakings in lieu. The powers are not intended to be limited to when the director is deciding one or other of these things. It was always the intention that this should be the case, but it is clearly important that the drafting of the legislation is not ambiguous on the point.
Amendments Nos. 267E to 267G and 269E are needed to make the powers provided by Clause 63 consistent with those provided in relation to the prohibitions. They are analogous to changes we had previously made to the prohibition powers but which we had not had time to reflect in Clause 63. So Amendment No. 267F deletes the power to search for documents, which is a change we made in light of the consultation responses, in relation to the powers of entry without a warrant when investigating suspected infringements of the prohibitions. Amendment No. 267G replaces the power to require persons to produce such information as the director may require, with the requirement to provide an explanation of documents. Amendment No. 267E enables the director to specify categories of document that he requires to be produced. That is in line with the power in Clause 26. And Amendment No. 269E amends the sanctions and the defences provided in relation to non-compliance in line with those in Clause 41.
Amendment No. 269B provides, with Schedule 10, paragraph 1, that the amendments made to the director's powers under the FTA also apply when those powers are being exercised concurrently by the regulators. Amendments Nos. 271B and 271C amend the MMC's Fair Trading Act powers to require information and documents to maintain alignment with the director's powers.
Finally, Amendments Nos. 267A, 267C, 269C and 269D are consequential changes to Clauses 63 and 65. Amendments Nos. 209A, 276A and 277A are consequential amendments in Schedules 10, 12 and 14 and in the Long Title of the Bill.
Perhaps I may now return to the purpose of these clauses. The powers of investigation currently provided under the Fair Trading Act are widely agreed to be unsatisfactory. The changes introduced by the Bill are needed to ensure that the director's powers under the FTA are adequate for him to establish quickly and effectively what action needs to be taken.
In particular, we consider that the director should be able to require the production of relevant information on due notice, as provided for in the Bill. We also believe that the director general should have a right of entry in pursuing his enquiries under the Fair Trading Act, although, as I have said, we do not believe that this should extend to a right of forcible entry. It is also right that parties under investigation should be under a statutory duty to give all reasonable assistance to the director general in carrying out his functions.
In short, these clauses put right a widely recognised weakness in the Fair Trading Act regime. They fit within the Government's overall determination to establish a modern and effective system of competition law. The amendments that I have tabled tidy up various loose ends in the clauses. I beg to move.
On Question, amendment agreed to.
Lord Haskel Lord Haskel moved Amendments Nos. 267B to 267G:
Page 33, line 7, leave out ("taking any") and insert ("determining whether to take either").
Page 33, line 15, leave out subsection (4).
Page 33, leave out line 21 and insert ("For subsection (2) substitute—").
Page 33, line 26, after ("documents") insert ("or
(ii) any document which falls within a specified category,").
Page 33, leave out line 35.
Page 33, line 39, leave out from ("premises") to ("as") in line 40 and insert ("to give the Director such explanation of the documents").
On Question, amendments agreed to.
[Amendments Nos. 268 and 269 not moved.]
Lord Haskel Lord Haskel moved Amendments Nos. 269A and 269B:
Page 34, line 37, leave out ("taking") and insert ("determining whether to take").
Page 34, line 43, at end insert—
("(6) The amendments made by this section and section 65 have effect in relation to sectoral regulators in accordance with paragraph 1 of Schedule 10.").
On Question, amendments agreed to.
Clause 63, as amended, agreed to.
Clause 64 [Investigations: complex monopolies]:
On Question, Whether Clause 64 shall stand part of the Bill?
Lord Fraser of Carmyllie: I must record this first minor victory in the course of the Committee stage of the Bill. I congratulate the Government on shooting our fox.
Clause 64 negatived.
Clause 65 [Enforcement]:
Lord Haskel Lord Haskel moved Amendments Nos. 269C to 269E:
Page 35, line 28, leave out subsection (2) and insert—
("(2) Omit subsections (1) and (2).").
Page 35, line 32, leave out ("44(3) or 45(4)(b)") and insert ("44(2)").
Page 35, line 37, at end insert—
("(5) If a person is charged with an offence under subsection (4) in respect of a requirement to produce a document, it is a defence for him to prove—

(a) that the document was not in his possession or under his control; and

(b) that it was not reasonably practicable for him to comply with the requirement.

(6) A person who intentionally obstructs the Director in the exercise of his powers under section 44 is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the prescribed sum;

(b) on conviction on indictment. to a fine.

(7) A person who wilfully alters, suppresses or destroys any document which he has been required to produce under section 44(2) is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the prescribed sum;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both." ").

On Question, amendments agreed to.
Clause 65, as amended, agreed to.
Clause 66 [Services relating to use of land]:
10 p.m.
Lord Haskel Lord Haskel moved Amendment No. 270:
Page 35, line 40, at end insert ("made by statutory instrument").
The noble Lord said: This amendment relates to Clause 66. I am aware that Members of the Committee opposite have given notice of their intention to oppose the Question that this clause stand part of the Bill. It may therefore be helpful if—
Noble Lords: No, we shall not.
Lord Haskel: In that case, I beg to move.
On Question, amendment agreed to.
Clause 66, as amended, agreed to.
The Viscount of Falkland The Viscount of Falkland moved Amendment No. 270A:
After Clause 66, insert the following new clause—
TRADE MARKS, NAMES ETC: UNFAIR COMPETITION
(" .—(1) Any of the acts and practices referred to in sections (Trade marks, names etc: confusion) and (Trade marks, names etc: damage to goodwill or reputation) of this Act shall constitute an act of unfair competition and shall be actionable as such.
(2) In an action for unfair competition under this Act all such relief by way of damages, injunctions, accounts or otherwise shall be available to the plaintiff as is available in respect of the infringement of any property right.
(3) Nothing in this Act affects any of the laws relating to passing off or malicious falsehood or to the protection of any intellectual property right.").
The noble Viscount said: In moving Amendment No. 270A I wish to speak also to Amendments Nos. 270B, 270C and 270D. I speak on behalf of my noble friend Lord McNally, who has important business tonight at the Liberal Democrat ball. I hope that I am not a Cinderella on this occasion because if I am dragged off to the ball I shall go reluctantly.
These amendments tackle the problems of manufacturers and retailers when they are faced with look-alike products which have been placed on the market by competitors. Look-alike products seek unfairly to gain market share, usually but not exclusively for retailers, through copying the packaging of a brand leader. They cause confusion among consumers and thus represent unfair competition.
The Committee will know that the issue has been raised in the Chamber on other occasions, most notably during the passage of the Trade Marks Bill. At that time the then government urged that the problem might be resolved by the changes made by that Bill. However, the measures introduced at that time have proved inadequate. Unfair competition has continued and the year 1996 in particular saw a rash of look-alike products launched onto the market, which included Tesco's assault on Kellogg's products and Asda's Puffin biscuit which is clearly modelled on the Penguin biscuit which is familiar to the Committee. In addition, the Nestle company spent many millions of pounds entirely repackaging its brands to escape from the ever closer mimic brands being launched by its competitors.
We feel that no one can deny that look-alikes represent unfair competition and that they are a competition issue. The adoption of a close imitation of another's trade dress to boost sales surely cannot be fair competition. As well as being a blatantly parasitic practice which distorts effective competition between competitors, it also damages consumers directly. A recent poll by NOP showed that 41 per cent. of consumers believe that look-alike packaging indicates that the product probably has the same origin as that of the brand.
The Department of Trade and Industry appears not to know who is responsible for the issue. After quite adamantly informing brand owners during the passage of the Trade Marks Act in 1994 that this was a competition issue in 1994, my noble friend understands that the department has recently told the British Brands Group that this is, after all, not a competition issue and that it should be dealt with by trade mark law. Amendment No. 270A establishes the notion that unfair competition will be actionable in the same way as any infringement of property rights. Amendment No. 270B tackles the problem of confusion. It outlaws unfair competitive practices which are likely to cause consumer confusion, in particular in relation to the products and services of another.
Amendment No. 270C prohibits practices which will dilute the good will and reputation of an enterprise. Look-alikes copy the general trade dress and appearance of brands, seeking to suggest that they have the same qualities and values of the brand being copied and that the product shares its origins. By using look-alike packaging and product identification, some products trade on a reputation which has been established by leading brands over a number of years—a reputation built on continued positive consumer experience of those products. Amendment No. 270C would prevent such parasitic trading on brand goodwill and reputation.
We believe it essential that the Government accept that this is a significant issue. Current legal remedies have failed. Brand owners through the British Brands Group have expressed their concern about the lack of legal protection under current laws. There is ample evidence of consumer confusion about the origin of look-alike products. My noble friend's past included a period working for the British Retail Consortium. My noble friend Lord McNally would not be party to any measure which damaged the ability of retailers to compete vigorously with own-label products against brands. That would be normal and acceptable. But look-alikes are not a legitimate business practice. Other European countries have laws against the use of look-alikes, and that does not inhibit the growth of own-label products. We seem to be the odd ones out in Europe in not giving protection to consumers and brand manufacturers, many of whom are major inward investors, against unfair business practices of this kind.
In the absence of effective remedies through trade mark law, passing off or competition law, we ask that the Government use this Bill as an opportunity to tackle these problems.
Recent governments of both hues have been looking at this issue for some time. There seems now little excuse for inaction on the ground of lack of forewarning about the issue. The United Nations World Intellectual Property Organisation has produced model law on the issue, on which these amendments are based, which are being considered by the DTI Standing Advisory Committee on Intellectual Property. However, we have yet to learn the department's response. Brand owners have been pressing Ministers for some time on the issue and would like to see some action. I hope that the Minister will prove forthcoming in his response. I beg to move.
Baroness O'Cathain: This issue has been running and running. I wish to make two points. The National Consumer Council does not seem to have as much concern as the noble Viscount expressed. Indeed, a recent survey by the Consumers' Association confirmed that customers are not confused by look-alikes. I think that we all realise that most customers consider price. Mechanisms are already in place for resolution of the issue. I do not deny that there was a period when this sort of thing occurred. But the industry supports the Standing Advisory Committee on Intellectual Property's contention that the Trade Marks Act 1994 needs time to work. There are mechanisms for the registration of distinctive signs and packaging. Tort provides measures for the passing-off issue.
As I am sure the noble Viscount knows, a strong, informal relationship between manufacturers and retailers has resulted in a code of practice. I believe that the issue should not be dealt with in this Bill. The mechanisms under the Trade Marks Act 1994 should be given time to work.
Lord Borrie: There is no doubt that it is a difficult question. There is the matter of what is fair and unfair competition. For many years as Director General of Fair Trading I laboured under the disadvantage that people would often make complaints to me ending with the

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question, "Is this fair?" When I studied the Fair Trading Act, there was no definition of fairness. Indeed, there was mention of the word "fair" or "fairness" in only two places: one was in the title of the Fair Trading Act; and the other was in the title of the office which I held, the Director General of Fair Trading. Otherwise there was no mention of, and no powers to deal with, what people might call fair or unfair trading. What is anti-competitive under the Bill, as indeed has been anti-competitive in terms of previous legislation, has never gone as wide as anything that could be regarded as unfair.
Yet the noble Viscount has a point in pushing the amendment; namely, that if customers are confused between two goods, one produced by one manufacturer, another produced by a different manufacturer, and they are made to look alike in terms of packaging, an anti-competitive practice may arise out of the confusion and certainly a form of conduct that might be regarded as reprehensible.
However, it does not automatically follow that, because goods look fairly alike in the way they are presented by way of their packaging, that is necessarily anti-competitive or even unfair. Many consumers, when searching in the supermarket for a packet of cornflakes or a particular form of liquid, will be looking for a certain type of package, because that is the way in which, over the years, that particular article has been packaged. It is in a bottle of a certain shape, or a certain type of cardboard package, indeed with a certain colour. If any manufacturer were to produce a bottle or package of an entirely different colour, that would not be competitive or very successful.
There are certain cues which a consumer has in his or her mind when shopping which prompt him or her to look for packaging of a certain type. It is what tells a customer that that is the product that he or she seeks. Part of the penalty of success, as in the case of, for instance—if I dare use the name of one manufacturer—Kellogg's is that anybody who wants to produce cornflakes. in order to make any kind of impact on the market, will almost certainly have to produce cornflakes with a package that looks rather like the Kellogg's packet. So there is a certain inevitability in there being a look-alike package. That is the difficulty in the case made by the noble Viscount.
However, I am tempted to say, since the previous speaker quite properly declared an interest as a director of Tesco, that I have examples in front of me of which Tesco ought to be ashamed. The packaging is not merely similar to the packaging of well-known manufacturers but is so incredibly similar that I do not believe it is entirely a matter of chance—or is entirely a matter of "cue", as I mentioned. The noble Baroness said that there may have been a problem in the past, but not at present. I hope that she is right. I hope that the information I have received from the British Brands Group is not entirely up to date and therefore there is no need for any change in the law. In any case, I agree with the noble Baroness that I do not believe that this is the appropriate Bill for the introduction of any such change. The law of trade marks, the law of passing off and so on, is far more appropriate than this particular vehicle.
10.15 p.m.
Lord Graham of Edmonton: As the noble Baroness said, we have discussed this matter before. My noble friend Lord Borrie quoted Kellogg's. This is a cereal that will run, and run, and run! While we do not welcome having to be here at a quarter-past 10 at night, the noble Viscount has done the Committee a service—although I think that going over the top or being too precipitate puts the issue out of court.
We in this House are great believers in taking careful note of committees of some standing and authority. I am told that the Standing Advisory Committee on Intellectual Property recently indicated that in its view it was too early to take a decision on this point—not that there may not be a case or that there are not things which need to be put right. I do not rest on the argument that this may not be the right Bill. If there were a general view that something needed to be done, this would be the right Bill.
I am indebted for background information to the British Retail Consortium, which has a direct link with the All-Party Retail Group, of which my beloved Co-op is a part. It has not advised me directly, but we all have our own experience. I am bound to say that in Edmonton, or in Loughton, where I live, they do not talk of little else but this issue. However, this is undoubtedly an issue to those in the trade who aim to expand their sales and their profits. Whether it is looked upon by the general public with humour, ridicule or interest is a difficult balance.
I understand where the noble Viscount and the organisation to which he referred are coming from. They refer to damage as included in the dilution of good will and reputation which precludes the necessity of demonstrating consumer confusion. I am not at all certain about it. These people firmly believe in fair competition but the nexus that motivates them is the desire to drive their competitors out of business. That is how they become bigger. They are not in the business of retaining what one might call a perfect market; they are in the business of becoming bigger, fatter, more profitable and more loved by the public. Therefore they ought not to be too upset at competition that I would call maybe a little shady, maybe a little on the margin.
We know all about the trademarks legislation in this country. We also know that the design of packaging is already governed by a number of factors to ensure that passing off is very difficult. Standard EC sizes, acceptability, technology, protection, portability, ease of opening and storage all condition what one can and cannot do. With regard to this aspect of competition one needs to look at the register of marks that we already have. The category of unregistered marks has also been raised. I do not believe that there should be no differentiation between the quality or acceptability of goods which are registered and those which are unregistered. If there were no difference, it would prove a disincentive to anybody—manufacturers or producers—to register a trademark. At one time a trademark was a very limited thing, almost a logo. Now there is a range of things which can be included in a trademark.
In what it has said tonight, the Committee is not denying that there is an area which needs to be teased out. As the noble Lord said with regard to the recent Trade

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Descriptions Act, a run was given in. This is a further one. No doubt the matter will come back again. In the meantime, my suggestion is to keep taking the tablets but be sure of where you get them from.
Lord Fraser of Carmyllie: Perhaps I may make a few remarks in support of the noble Viscount on the clauses he proposes should be added to the Bill. I am bound to say that this is a serious matter and your Lordships' Chamber would not do a great deal of good or enhance its reputation if we were to attempt to conclude discussion on it this evening. If the noble Viscount wishes to return to it at a later stage, I signal to him our support for such an approach.
I shall be interested to hear about one technical matter from the Government Benches. If there is an argument on their part that the inclusion of such clauses within the Bill would be beyond it, it would be helpful to know that now. I shall be surprised if that is the case, given the fact that Amendment No. 270A refers to the action of unfair competition. In such circumstances it ought to be permissible for such clauses to come within the Bill.
All I wish to say at this stage is this. With my noble friend sitting behind me and the noble Lord sitting opposite, I generally agree that the British Retail Consortium provides your Lordships with sensible, helpful briefing. However, on this occasion it does not seem to me to be the most satisfactory briefing that I have ever received from that organisation, for this reason. It seems to me that the BRC is prepared to undertake the risk of confusing the issue of own brands with look-alikes. Nobody would suggest that supermarkets or anyone else should not avail themselves of the opportunity, often if not invariably, of providing own-brand goods at a price cheaper than better known brands—Kellogg's cornflakes or whatever it may be. But I am not prepared to accept that there is no distinction between the issue of own-brand goods and look-alikes.
The noble Lord, Lord Borrie, clearly has in his possession a set of photographs which I too possess. I shall not detain the Committee with them at this stage, but from looking at the photographs, it is not simply a matter of providing the product in the type of packaging which gives the customer a cue to the range of goods within which it is dealing. It is pretty conclusive, even from a superficial examination of the photographs, that the intention must be to try to convey to people that it is the same product. If that is not the intention, then legislation should be put in place to ensure that people are never misled.
With those few remarks, I simply indicate to the noble Viscount that we should leave the matter now. But it is an important issue. It affects some important companies in this country and we should not dismiss their concerns lightly.
Lord Haskel: I begin by saying to the noble Viscount that he should listen to the advice he receives from the Department of Trade and Industry. It is good advice. It is advice that works. The advice from the Department of Trade and Industry was that either the Trade Marks Act
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1994 dealt with the problem that he raised or the common law tort of passing off could be used. Those avenues have proved effective.
The noble Viscount mentioned the case Penguin v. Puffin. In that case Mr. Justice Walker found in favour of United Biscuits on passing off and an injunction was granted to restrain Asda from selling the Puffin biscuit in any get-up which amounted to a passing off of the Penguin biscuit. The legislation worked, so the advice from the DTI was probably sound.
Equally, the noble Viscount mentioned the Nescafe jar. Shapes are protected under the provisions of the Trade Marks Act 1994 and since the introduction of that Act there has been an increasing number of applications for shapes and trade dress. For example, the Nescafe jar is based on a registration for the shape of the jar and that is its protection. Invariably it takes time for brand owners to establish such marks as distinctive by use, but some delay is needed to ensure the quality and value of the trade marks registered.
The House debated this matter during proceedings on the Trade Marks Bill in 1994. On that occasion the House decided that the measure should not be included and that a full consultation had not taken place. Since that time opportunities to discuss unfair competition have arisen, notably before the Standing Advisory Committee on Industrial Property. The committee has considered the need for unfair competition legislation. Its members consist of organisations with a cross-sectorial interest in industrial property and its membership can be enlarged to address specific issues if that is the will of the committee. I draw the Committee's attention to the fact that this issue was touched on at the recent hearing of the Select Committee on Trade and Industry on 4th November. The president, when asked at the hearing whether she thought that further legislation was required in this area, replied:
"There is not a consensus yet that further legislation is required".
Our problem with the amendments is that they would add a substantial new dimension to the Bill. This issue is really outside the scope of the Bill. The noble and learned Lord, Lord Fraser, asked me about this. I say to him that this matter is very different from the Bill as it is currently drafted. The Bill is primarily concerned with the introduction of prohibitions on anti-competitive agreements and abuse of a dominant position. The amendments tabled address a rather different concern. Indeed, Amendment No. 270C in particular goes well beyond providing protection for branded goods from look-alikes. It would create a new intellectual property right of an extremely wide scope. It would define unfair competition as any action or practice likely to damage good will and reputation, even when this did not cause confusion among consumers. The amendments would effectively make redundant almost all existing trade mark legislation because of the much larger range of activities that would be actionable than is currently the case.
In view of the implications the amendments imply, and on the basis of my explanation, I invite the noble Viscount to withdraw his amendment.
Lord Fraser of Carmyllie: Before the noble Viscount does whatever he wishes to do, perhaps I may say that

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I am a little surprised by the Minister's response. I carefully avoided using the word "scope". My understanding of the procedures of the House is that if the set of amendments had been outwith the scope of the Bill, that would have been communicated in one way or another and we might not have been permitted to debate it at all. I hope that the noble Lord will reflect on that point and that if there is a rather more refined argument than simply whether an amendment is within or outwith the scope of the Bill, we shall have that communicated to us.
The Viscount of Falkland: The hour is late. I shall take the advice of the noble and learned Lord and recommend that to my noble friend Lord McNally. We shall certainly come back to it again. I particularly note what the Minister said. I thank all noble Lords who have taken part in what has been a fascinating debate. I am glad that I was here and not at the Liberal Democrat ball. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 270B to 270D not moved.]
Lord Simon of Highbury: Because Clause 58 is central to the Bill, I wish to put something on the record. In my haste to respond quickly to Amendments Nos. 257A and 272F, to which the noble and learned Lord, Lord Fraser, spoke in place of the noble Viscount, Lord Trenchard, I said, in order to move on, that I confirmed. I believe that was my answer. I want to put on record that I confirm that we believe that the tribunal and the commission would come within the scope of Article 177 of the EC treaty but we do not believe that the Director General of Fair Trading or the regulator necessarily would. I believe that was the purpose of the amendment. I answered too quickly because I was thinking of the tribunal. I shall naturally write to the noble and learned Lord if he needs further information on that.
10.30 p.m.
Lord Fraser of Carmyllie: I say immediately to the Minister how much we appreciate his courtesy in returning to the matter so quickly. If he says only that they do not necessarily fall within the definition of being a court or a tribunal to enable them to seek a preliminary ruling under Article 177, we might engage in some correspondence about it subsequently.
Clause 67 [Regulations and orders]:
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 271:
Page 36, line 14, at end insert—
("( ) The power to make rules which is conferred by section 47 is exercisable by statutory instrument.").
The noble Lord said: This amendment corrects an omission in the Bill. Clause 67(1) provides that any power to make regulations or orders under the Bill is exercisable by statutory instrument, but that provision does not cover the rules the Secretary of State may make under Clause 47 with respect to appeals and appeal tribunals. The amendment provides that the power to make such rules is also to be exercisable by statutory instrument. I beg to move.
On Question, amendment agreed to.
Clause 67, as amended, agreed to.
Clause 68 agreed to.
Clause 69 [Crown application]:
On Question, Whether Clause 69 shall stand part of the Bill?
Lord Borrie: It seems particularly refreshing that a major Bill of this sort should be specifically said to bind the Crown. Have Her Majesty's Ministers any comment on that and is it something that we may look forward to as regards other major Bills?
Lord Simon of Highbury: I do not particularly want to generalise in responding to my noble friend Lord Borrie. The Government believe that it is right that the prohibition should apply to some bodies where they are acting as undertakings. They should not be treated differently from normal commercial undertakings in that respect. I should add that Crown bodies are already subject to Community competition law if they are undertakings. We are reviewing the extent to which it is necessary or desirable to have entry powers in relation to the Crown. I may wish to come back with an amendment on this matter at Report stage.
Clause 69 agreed to.
Clause 70 agreed to.
Schedule 12 [Minor and consequential amendments]:
Lord Simon of Highbury Lord Simon of Highbury moved Amendments Nos. 271A to 271C:
Page 84, line 14, at end insert—
("( ) Omit section 45 (power of the Director to require information about complex monopoly situations).").
Page 84, line 14, at end insert—
("( ) In section 85 (attendance of witnesses and production of documents on investigations by Competition Commission of references under the Fair Trading Act 1973), in subsection (1)(b)—

(a) after "purpose", insert "(i)";

(b) after the second "notice", insert "or

"(ii) any document which falls within a category of document which is specified, or described, in the notice,".").
Page 84, line 14, at end insert—
("( ) In section 85, after subsection (1), insert—
"(1A) For the purposes of subsection (1) above—

(a) "document" includes information recorded in any form;

(b) the power to require the production of documents includes power to take copies of, or extracts from, any document produced; and

(c) in relation to information recorded otherwise than in legible form, the power to require it to be produced includes power to require it to be produced in legible form, so far as the means to do so are within the custody or under the control of the person on whom the requirement is imposed."

( ) In section 85(2), for "any such investigation" substitute "an investigation of the kind mentioned in subsection (1)".").
On Question, amendments agreed to.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 272:
Page 84, line 17, at end insert—
("(6) In Schedule 7, Part II (which lists goods and services partly excluded from monopoly references), omit paragraph 12 (potatoes to which no process of manufacturer (other than dressing or dyeing) has been applied.").
The noble Lord said: This is a technical amendment, or at least I believe it is. The intention behind it is to ensure that the potato industry, as mentioned in Schedule 7 to Part II of the Fair Trading Act 1973, is open to the same level of competition as other parts of the agriculture industry.
As I understand it, the Director General of Fair Trading does not have the power to intervene with any non-competitive action under the 1973 Act in the case of the potato industry whereas he does, for instance, in the milk industry. It may be that most cases of possible non-competitive action would be subject to this Bill. However, it seems to me to be inconsistent to exempt the potato industry from the 1973 Act by itself and it could lead to misunderstanding and possible litigation.
I have a sneaking feeling that that inconsistency may have been aided and abetted by an amendment which the Minister's present Chief Whip and I moved during the passage of the Agriculture Act, for which I apologise profusely and also, I hope, on behalf of the noble Lord, Lord Carter. I beg to move.
Lord Simon of Highbury: I have been waiting for some help from my Chief Whip but I see that he is nobly on his Bench. I thank the noble Lord, Lord Stanley, for highlighting the treatment of certain forms of supply of potatoes under the Fair Trading Act. I agree that this treatment should be reviewed in the light of the fact that the potato marketing scheme has now been revoked. I will therefore reflect further on the position in conjunction with relevant ministerial colleagues.
There are already powers in the Fair Trading Act itself to remove the limitation on the director making monopoly references by secondary legislation. If it is to be removed, use of such power would be more appropriate than an express removal on the face of the Bill.
Of course, the Bill will introduce new powers to tackle anti-competitive practices; for example, if a potato seed grower were dominant and was abusing such a position it could be dealt with under the Chapter II prohibition. In addition, the Chapter I prohibition could apply to anti-competitive agreements in the potato sector. However, in applying the Chapter I prohibition, account would have to be taken of any exclusion which the Government might bring forward following the discussion of the amendment tabled by the noble Lord, Lord Stanley, on the first Committee day. As I said on 13th November, there is a good case for providing an exclusion based on EC Regulation 26/62. I also said that I would consider the matter between Committee and Report. That consideration will need to include whether or not to allow the exclusion to be brought to an end in individual cases if there were good reason to do so. Finally, of course the current special treatment of potatoes under the Fair Trading Act does not prevent a monopoly
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reference being made by relevant Ministers. I therefore invite the noble Lord, Lord Stanley, to withdraw his amendment.
Lord Stanley of Alderley: Yes, but not quite, in so far as I still think that paragraph 12 should be omitted in common with other provisions in the 1973 Act: otherwise we shall have confusion. If the noble Lord, Lord Renton, were here, I know that he would quote what I call his "rule" which is that if one matter is removed—I refer to the 1981 Act when we removed certain birds from the provisions—it is assumed that the others stay in.
Therefore, I very much hope that the Minister will recognise that the position with regard to the 1973 Act should be regularised. I hope that he will do that by statutory instrument. Indeed, I gathered from his remarks that that is what he will do. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Simon of Highbury Lord Simon of Highbury moved Amendments Nos. 272A to 272E:
Page 84, line 34, leave out ("19(2)(a)") and insert ("20(2)(a)").
Page 85, line 38, leave out ("paragraph (d)") and insert ("paragraphs (d) and (e)").
Page 85, line 40, leave out ("(p)") and insert ("(q)").
Page 85, line 41, leave out ("(q)") and insert ("(r)").
Page 86, line 46, at end insert—
("The Financial Services Act 1986 (c.60)
In Schedule 11 to the Financial Services Act 1986, in paragraph 12—

(a) in sub-paragraph (I), Omit "126";

(b) omit sub-paragraph (2).").

On Question, amendments agreed to.
[Amendment No. 272F not moved.]
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 272G:
Page 88, line 20, leave out ("(6)") and insert ("(7)").
On Question, amendment agreed to.
Schedule 12, as amended, agreed to.
Schedule 13 [Transitional Provisions and Savings]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 272H:
Page 90, line 13, at end insert—
("( ) On the commencement date continuing proceedings under the RPA shall automatically be discontinued").
The noble Lord said: In moving this amendment, I should like to speak also to the other amendments grouped with it. As colleagues will see, these relate to the interests of community pharmacists. At an earlier

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stage I spoke about the problems presented by the Bill. Although the matters that I raise now are not directly related to those problems, they still affect their interests.
I deal now with paragraphs 5, 8 and 9 of Schedule 13 relating to continuing proceedings. The purpose of this group of amendments is to ensure that the Bill minimises the risk of a community pharmacy facing the double jeopardy of both court proceedings under the Resale Prices Act 1976 (RPA) and proceedings soon after under the new competition regime to be established by this Bill. I cannot believe that that is the intention if the department and Minister on reflection see that that point has validity.
The provisions in paragraphs 5, 8 and 9 of Schedule 13 allow for court proceedings initiated by the Director General of Fair Trading under the 1976 Act begun prior to the commencement date of the new Bill to be continued after it comes into force. This provision made better sense when the initial Competition Bill was drafted by the previous administration, as it was then anticipated that proceedings in the Restrictive Practices Court would be well under way by the time this House considered proposals for a new competition regime.
However, the Director General of Fair Trading has not yet commenced proceedings. It now seems somewhat onerous and oppressive to require a community pharmacy to face two sets of proceedings in quick succession, one under the old regime and another at the end of the transition period under the new regime. Supporters of RPM on over-the-counter medicines would prefer, if no specific exemption for the arrangement were included in the Bill, to move straight to consideration of the matter under the new regime at the end of the five-year transition period. This would avoid the unnecessary expense of fighting two sets of proceedings, the first under the 1976 Act, which all sides in this debate recognise is out of date, and the second under the new competition regime.
The Community Pharmacy Action Group, of which Co-op Pharmacy, with 400 branches scattered throughout the country, is an integral member, will fight both cases if necessary. However, it believes that it would make better sense to concentrate its efforts on fighting to protect a viable network of community pharmacies under the new competition regime rather than under a regime which the Government have signalled they no longer support. There are also resource implications for the Government in allowing lengthy and expensive court proceedings to be carried on by the Office of Fair Trading under an Act which is said to expire the moment those proceedings end.
I hope that the Minister will look closely at these amendments. They can easily be incorporated in the Bill and will go some way to reassure community pharmacies that the Government are alive to their concerns. They also recognise the change in circumstances since the initial draft of the Bill was published; that is, the fact that court proceedings have not yet commenced.
Within the second group are amendments directly related to the issues raised in the first group of amendments. In the preamble to the draft Competition Bill published in August 1997, the Department of Trade and Industry stated:
"We believe the following arrangements should benefit from a transitional period of five years. These are … agreements to the extent they relate to goods which at the time the prohibition conies into force are exempted under Section 14 of the Resale Prices Act 1976";
that is. RPM on OTC medicines.
The inclusion of an extended transition period for RPM on OTC medicines was in recognition of the fact that the arrangement had been explicitly sanctioned by the Restrictive Practices Court and had,
"already been investigated and favourably assessed against public interest criteria".
A guaranteed five-year transition period under the new regime is essential if the community pharmacy is to adjust to changes in the current arrangements of RPM on OTC medicines. It is clear from the above statement that Ministers intend the five-year transition to he secure. However, the Bill provides the Director General of Fair Trading with the power to investigate the five-year transition period and bring it to an end prematurely. Putting this power in the hands of the director general, who has already indicated that he is not personally committed to RPM on REC medicines, only achieves the opposite of the reassurance that Ministers were clearly seeking to give.
The amendment would guarantee that the five-year transition period for RPM on OCT medicines could not be terminated early by a premature challenge from the director general.
I hope Ministers will consider the amendment favourably. The reassurance that is intended by the granting of a five-year transition will only be achieved if it is made clear that the transition period cannot be threatened. I am advised that, given the reassurance of a fixed five-year period, community pharmacies can work hand-in-hand with the Government to prepare for the challenges that lie ahead as the revolution in primary health care services continues. I beg to move.
Lord Fraser of Carmyllie: I need say little more than that at an earlier stage we indicated considerable sympathy for the position of community pharmacies, not least because in our view, as a matter of health policy, to allow for a special position for community pharmacies would meet the priorities that this. Government are continuing with in their development of primary care in the National Health Service. I do not think we need to consider this matter in any great detail at this stage, but it is one of the more important issues that has been raised during the Committee stage of the Bill.
10.45 p.m.
Lord Simon of Highbury: I listened with great interest to what my noble friend Lord Graham and the noble and learned Lord, Lord Fraser, have said. It is very clear that this is an important issue. We have already discussed it in general terms, and the arguments

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were well taken on the first Committee day. I do not intend to repeat our balanced arguments, but I would like to focus on the transitional arrangements for agreements, decisions and concerted practices which are the subject of proceedings before the Restrictive Practices Court under the Resale Prices Act 1967 at the commencement date. Under the Bill, if there are continuing proceedings—and as my noble friend has said the director has announced his intention to ask the court to review resale price maintenance in over-the-counter medicines so there are likely to be such proceedings—the transitional period will begin when the proceedings have been brought to a conclusion. The transitional period applies if the continuation of resale price maintenance is found to be in the public interest. I should, perhaps, add that if resale price maintenance were not found to be in the public interest there should be no entitlement to a transitional period. The Bill as drafted is not clear on this point and I believe that it should be amended accordingly. This is a matter which we will wish to return to on Report.
I note carefully the point made by my noble friend Lord Graham about the burden of subjecting the industry to two regimes in quick succession. However, I believe this concern is—subject to one point which I shall make in a moment—dealt with by ensuring that the traditional exclusion from the scope of the Chapter I prohibition commences after the conclusion of proceedings, assuming that the continuation of resale price maintenance is found to be in the public interest.
Although the director general has not yet sought leave to make an application to the court to review the exemption, the director has already announced his intention to initiate proceedings. In those circumstances I do not believe it would be right for me to intervene, in effect to say that nothing further should be done for the next six years when the transitional period would expire. That would be the result of the amendment.
I would, however, like to deal specifically with the issues raised by Amendment No. 275A, which would deprive the director of his ability to investigate during the transitional period certain agreements, decisions or practices and to issue a notice proposing a date on which the transitional period is to end.
I emphasise that that power which applies generally in the transitional period is intended to be a reserve one which we would expect the director to use in limited, serious cases only. Moreover, the power is subject to veto. The Secretary of State will be able to cancel the director's proposal to terminate the transitional period. The Secretary of State may, for example, consider that the competition concerns are not of sufficient gravity to outweigh the presumption that the transitional exclusion should apply and should be capable of being relied upon in normal circumstances.
While I am satisfied that that reserve power is right for the generality of agreements which are to enjoy a transitional period, I can see some force in my noble friend's concern that following a court ruling in favour of resale price maintenance for those medicines, that reserve power could in principle lead to it being looked at again at an early date. That is not my intention. I
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believe I should therefore reflect again carefully on whether retention of that power is appropriate in the case of resale price maintenance in over-the-counter medicines. In the light of that response, I hope that my noble friend will be able to withdraw the amendment.
Lord Graham of Edmonton: I am grateful to my noble friend. I listened carefully to what he said. It sounded hopeful. It is not that there is an open door, but I gather that my noble friend understands some of the points made. I will take advice from colleagues who will reflect upon what he has put on the record. Consultations can take place if necessary, and we may need to come back at a later stage. I am grateful to my noble friend; I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 272J to 274A not moved.]
The Viscount of Falkland The Viscount of Falkland moved Amendment No. 275:
Page 91, line 14, at end insert ("or until the expiry of such agreement, whichever is the later").
The noble Viscount said: I speak on behalf of my noble friend Lord Ezra. The purpose of the amendment is to preserve the existing legal validity and prevent unnecessary uncertainty arising by correcting what otherwise would be retrospective legislation in respect of a number of contracts relating to the UK gas business.
The amendment will also avoid the unnecessary review and notification of those existing agreements thereby removing significant, unwarranted burdens on the industry and the Government. It is recognised in the UK and internationally that joint arrangements between competitors are necessary to allow the efficient development and production of petroleum resources. Companies form joint operating arrangements from their initial application for offshore petroleum licences to develop fields and transport gas to the shore.
Until the early 1990s British Gas was effectively the monopoly purchaser of gas. It insisted on joint sales contracts for those jointly owned fields. Those gas contracts, known as depletion contracts, are typically for the full life of a field and can last for over 20 years. The Gas Act 1986 recognised the special features of the gas industry and provided in a related exemption order for the exclusion of gas contracts from the notification and registration requirements of the restrictive trade practices legislation.
The Act and order covered both existing and new gas contracts of any description referable to offshore gas fields The Bill does not renew the current exclusion for gas contracts. Instead, in Schedule 13, it proposes a five-year transitional period of continuing validity for existing contracts. The loss of the Restrictive Trade Practices Act exclusion amounts to retrospective legislation. There will be several hundred contracts affected by the denial of the current exclusion since the majority of those will continue beyond the proposed five-year transition period. If companies have to apply for individual exemptions for such contracts, the burden on business and government will be immense. Companies will wish to make individual contract

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applications since the regime created by the new legislation; that is, the risk of such agreements being declared void and the scope for investigations and the potential for significant fines could not be ignored.
The amendment—to use my noble friend's term—will "grandfather" contracts already excluded under the 1986 exemption order from the provisions of the Bill until their expiry date.
I turn now to the position of new contracts which are also covered by the existing 1986 exemption order, as mentioned. Chapter I, Clause 6 provides for the possibility of block (or individual) exemptions, although it specifies neither conditions nor terms. In order to avoid the need for individual contract exemptions for new gas contracts, a block exemption would be the most appropriate method of ensuring certainty and continuing validity. Given the long-term nature of the gas business, such an exemption would need to be for a long period, certainly for no less than 15 years. I would therefore seek an assurance or statement from the Minister that the Government will be willing to grant a block exemption for gas contracts for a minimum 15-year period.
The breadth of the prohibition contained in Chapter I, Clause 2 does not include any "appreciability" test. That will create uncertainty over the status of all current and prospective joint contracting arrangements across the oil as well as the gas industry. Such joint arrangements are common worldwide and are entered into primarily to provide operational efficiencies. I would therefore also seek some assurance from the Government that the new prohibitory regime would only apply to such arrangements where there was an "appreciable" (and adverse) effect on completion.
In summary, to avoid wholesale uncertainty in an important United Kingdom industry, with the attendant burdens on that industry and government, I seek assurances in respect of the need for a long-term block exemption for new gas contracts and that the Government accept the need for an "appreciability" test in viewing joint arrangements in the oil and gas industry. I beg to move Amendment No. 275, which will have the effect of "grandfathering" existing gas contracts.
Lord Simon of Highbury: I am aware that Amendment No. 273 was not moved but Amendment No. 275 was moved. Before I turn specifically to the question of the gas industry, I should like to say a few words about the schedule.
Had both the amendments been placed before us, they would have given extended traditional exclusions from the Chapter I prohibition in respect of certain classes of agreement. It would be helpful to make some general points about that.
I turn first to those cases where agreements have been determined under Section 21(2) of the Restrictive Trade Practices Act not to be of such significance to call for investigation by the court. There is a good case for exclusion in that regard. As I have indicated already, we believe that an exclusion for the generality of agreements which have received directions under
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Section 21(2) is the right approach. However, I said that there is a possibility that there may be agreements which have received Section 21(2) directions but which turn out in practice to have anti-competitive effects. That is why I said an exclusion should be subject to a power for the Director General of Fair Trading to claw back the exclusion in certain circumstances. If that amendment had been before us, it would not have included this important protection.
For some time after the new regime is in operation it will be important for interested parties to be able to inspect the register of agreements and determine the status of agreements under it. Keeping the register is resource intensive. It would not be sensible to maintain it in perpetuity. At present, the Bill does not make explicit provision for the register: we will need to correct that omission on Report.
A second area where exclusion is merited is in relation to electricity and gas agreements from which the RTPA has been disapplied by the use of powers under the Electricity Act 1989 or the Gas Act 1986. In this area, Amendment No. 275 is relevant. Like Amendment No. 273, it would extend the exclusion of agreements in this category to the expiry of the agreement.
The Government's position is that a permanent exclusion is inappropriate. Unlike cases dealt with under Section 21(2) which have been examined and found not to contain significant restrictions, these other types of agreements may contain restrictions which are significant in effect but for other reasons are exempted. Those agreements need to be scrutinised under the new regime after an appropriate transitional period. We have set this at five years.
It has been put to us that exclusion of these existing agreements (under the electricity and gas Acts) does not cater for the natural evolution and change that are necessary for many of the key agreements in these sectors. I believe that this is a valid point. I therefore believe that we should improve our proposals in the area by continuing the current arrangements for scrutiny in orders which are made before commencement but providing for the effect to be disapplication of the Chapter I prohibition rather than the RTPA; and by providing a power to make new orders. I am prepared to come forward on Report with a government amendment to that effect. I believe that that will be welcomed by the industries concerned.
However, additional flexibility of that nature for a transitional period—which we have set at five years—makes it all the more important that in due course there should be a proper examination under the new prohibition. Neither of the two amendments would permit that additional flexibility.
Another area that we have already debated relates to the professions. Here the Government's position is that the wide-ranging exclusion of professional services should not be continued. Instead, we have proposed a narrow exclusion relating to professional rules. Here we have proposed in paragraph 5 of Schedule 4 a mechanism for withdrawing the exclusion if in an individual case there is good reason to do so.

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I should also like to take this opportunity to mention two other areas of the schedule where minor amendments are, I believe, needed. First, the Bill currently provides that the director may give guidance in relation to an agreement made between Royal Assent and the coming into force of the prohibition of anti-competitive agreements. However, as the Bill is drafted, such guidance would not confer immunity from penalty. I believe that it should confer immunity and I expect to bring forward an amendment on Report to that effect. Secondly, consideration needs to be given to whether explicit provision is needed in the Bill to provide for orders by the restrictive practices court to lapse when the prohibition comes into force.
Finally, I turn to the issue of special arrangements for long-term gas purchase contracts. Gas purchase contracts which contain restrictions necessary, for example, to enable the efficient development of the field should in principle be capable of exemption if the exemption criteria are satisfied. The Bill provides for classes of agreement to be given block exemptions. Gas purchase agreements may well merit an early block exemption. I do not, however, see any need to make special provision for those agreements in the Bill. Consultation is under way with the industry. I believe that we need to await the maturing of that process.
For the reasons that I have given, I hope that Members of the Committee will feel slightly more widely instructed on Amendment No. 273 which was not moved. I also hope that the noble Viscount will see fit to withdraw Amendment No. 275.
11 p.m.
Lord Fraser of Carmyllie: Before the noble Viscount withdraws the amendment, perhaps I may express my sorrow that I did not move Amendment No. 273. Indeed, if I had known that the noble Lord would be in such a positive and constructive mode, I may have done so. However, I am grateful to him for his response and shall read carefully what he said. I also welcome the proposals that he made.
As regards the other amendments, I was most interested to hear the Minister's comments. I am sure that he will realise that I did not intervene because it might have been necessary for me to declare an interest. I shall nevertheless read what he had to say on that, also with keen interest.
The Viscount of Falkland: I thank the noble Lord for his complete and helpful response to the amendment which I moved. I am sure that his remarks will be scrutinised with great care by my noble friend Lord Ezra and he and other interested parties will no doubt consider the noble Lord's remarks and we shall return to the matter at a later stage as appropriate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 275A not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 276:
Page 91, line 44, at end insert ("; or
(c) any of the parties concerned have appealed to the Competition Commission within the 28 day period.").
The noble Lord said: Paragraph 10(3) of Schedule 13 gives the director general power to issue a notice terminating the transitional arrangements in respect of an agreement which the director general believes would, but for the transitional period, infringe the Chapter I prohibition. The transitional period will end in respect of that agreement on the date proposed in that notice unless the director general withdraws the notice or the Secretary of State cancels it. The date specified in the notice will be a date not earlier than 28 days after the service of the notice.
The amendment I move would suspend the operation of the director general's notice if a party to the agreement appeals to the commission, thus keeping the agreement in force and valid during the period of the appeal. I beg to move.
Lord Simon of Highbury: Schedule 13 provides for transitional periods to ensure a fair and orderly transition to the new prohibition based regime. For example, most agreements made before the Chapter I prohibition comes into effect would have a transitional exclusion from that prohibition for one year.
The purpose of paragraph 10 of the schedule is to ensure that the transitional period is not abused. As I argued in speaking to the amendments of my noble friend Lord Graham a few minutes ago, if a seriously anti-competitive agreement came to light it is not right that it should be allowed to continue unchecked. I note, incidentally, that the investigation powers in paragraph 10 do not include those of Section 27; nor do the offences provided for in Clauses 41 to 43 apply to them either. We shall need to correct those omissions at Report.
As I have said, the power to end the transitional period early is a reserve power for the director which we expect him to use only in limited, serious cases; and, as I also said, the Secretary of State has a power to veto the director's proposal to terminate the transitional period early. Amendment No. 276 would prevent the director from ending the transitional period early if any of the parties had appealed to the competition commission. I believe it is right that the Secretary of State rather than the competition commission should determine whether to over-ride the director's proposal to terminate the transitional period early. I have explained how I expect the power to be used.
However, any decision—which one might expect to follow the termination of transitional period—that the particular agreement infringed the prohibition or as to whether it merited an exemption would be appealable to the commission. This decision would be an assessment against the terms of the Chapter I prohibition. It is therefore appropriate that it should be appealable to the tribunal. The Bill provides that the rules that may be made under paragraph 13 of Schedule 8 may provide for a tribunal to suspend the effect of a decision of the

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director on an interim basis. Similarly, any interim measures under Clause 34 or directions under Clause 31 made by the director would be appealable to the competition commission.
I am satisfied that the combination of these measures provides the proper route for protecting the rights of undertakings alleged to have infringed the prohibition during the transitional period. I believe, however, that the amendment prompts a wider question relating to the expiry of the transitional period in normal circumstances, rather than in serious cases where early termination of the transitional period is at issue. I can see that there could be a case for the transitional period to be extended in cases where appeal has been made against a decision by the director—for example, an appeal against a decision to refuse an exemption. I shall review the provisions on the extension of transitional periods with a view to returning to the matter on Report. I therefore invite my noble friend to withdraw the amendment.
Lord Graham of Edmonton: I am grateful to the Minister for what he said. He is understanding and I believe that he has taken the point. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 13 agreed to.
Schedule 14 [Repeals and Revocations]:
Lord Simon of Highbury Lord Simon of Highbury moved Amendment No. 276A:
Page 94, line 13, column 3, at end insert—

("Section 45")

On Question, amendment agreed to.
Schedule 14, as amended, agreed to.
Clause 71 agreed to.
Clause 72 [Short title, commencement and extent]:
Lord Fraser of Carmyllie Lord Fraser of Carmyllie moved Amendment No. 277:
Page 38, line 16, at end insert ("but does not extend to Scotland").
The noble and learned Lord said: This appears to be a small, innocuous amendment at the end of a long and complex Bill. However, it is clearly one of some considerable constitutional significance. When I reflect how over the summer months I worked on a referendum campaign, when the rest of the world was away with its bucket and spade, I have some temptation to hold the Committee for as long as it took me to discover some of the details of what was proposed for Scotland! However, even with the Chief Whip in his place, I shall not exercise that right too extensively. But it is our view that as we try to untangle and unravel what is proposed to be reserved, and what is to go to the Scottish parliament, every piece of legislation which comes before this House will be subjected to this separate and new form of scrutiny.
This is a particularly interesting Bill on which to start. I would accede immediately to the view that nothing was clearer in the Government's White Paper on Scotland's government than that competition law was to be reserved for Westminster. It would accordingly
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apparently follow that anyone who was in the least bit interested in where the division of future legislative or executive power lay would be able to set aside this Bill, once it is a statute, with no concern that any part of it would ever be within the powers of the Scottish parliament.
I believe—it is one of the matters with which we shall have to concern ourselves—that that happy hope will never be realised. There are extremely complicated provisions. I understand now that we shall not see the proposed Bill until at least Christmas and probably later. If the Chief Whip wishes to intervene I shall of course, as always, give way to someone of such a high and mighty office in Government. However, even if he cannot give us that information, we shall still wish to scrutinise these matters whenever the Bill arrives.
I can think of a number of matters where there will be political tensions over what is contained within the Bill. I shall not go over again the issues of community pharmacies. But if community pharmacies are an issue of some political sensitivity in England, they are an issue of keen sensitivity in Scotland and, from what was said earlier, in Wales. That is the kind of issue on which we shall have concern as regards the Scottish parliament. In dealing with such matters as small agreements, there will also be some keen interest in knowing whether the Scottish parliament will have powers. I turn at random to Clause 63(7)(a) and find a provision which relates to what is or is not required of an individual appearing before the Court of Session.
I wish briefly to focus on one issue. It is the issue of warrants. As noble Lords know, if there is one aspect of the Bill that has caused us concern, it is the warrants that are allowed for under its provisions.
Under one of the provisions, where warrants are granted in Scotland, they are to be granted by a sheriff. If we have indicated at this time that in the way the warrants have been put together they are far too extensive in their terms, it might be hoped that, even if there is a lack of libertarian zeal in this present Government, at one point a Scottish parliament might assert the right to restrict the powers of those who enter domestic premises or empty premises and so on. If we are dealing with warrants, that would undoubtedly fall within the power of a Scottish parliament—giving the Scottish parliament the right to restrict the circumstances in which a warrant is to be exercised.
If I am wrong in that, and if the circumstances in which warrants are granted and the basis on which they are issued are not to fall in future within the remit of the Scottish parliament, it is incumbent on the Government to make that clear at the earliest possible stage. Otherwise, if their genuine intention in this constitutional change is to strengthen the Union rather than weaken it, they should at least make clear where they believe powers are to lie.
Otherwise, I keenly fear that if the Scottish parliament believes it has a wide range of powers, and then subsequently discovers that it has no right to change or influence what is going on, far from there being a strengthening of our Union, the consequence of it all will be that separation will become a matter of

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inevitability. That seems to be the most obvious example in the Bill, in an area of policy which the White Paper quite specifically spells out as a matter to be reserved for Westminster. Nevertheless, even a brief examination of the Bill's provisions reveals that there is one key area in which there a real prospect of conflict with the proposed Scottish parliament.
I propose to leave the matter there for now. However, there are other aspects of the Bill—what falls within the remit of a Scottish parliament and what falls within the remit of Westminster—which I have no doubt could be explored at great length. I hope that the Government appreciate that we want these matters to be clearly and carefully analysed. However, the Chief Whip may go home to his bed now. I promise him that under no circumstances do I have any intention of dividing the House. I beg to move.
Lord Simon of Highbury: At this very late hour I do not wish to risk even a hint of division between two people who over three days of debate in Committee have spoken in a spirit of co-operation in an attempt to bring a good Bill before the House. I should like to thank the noble and learned Lord, Lord Fraser, and his team, and also the noble Viscount, Lord Falkland, and the noble Lords, Lord Ezra and Lord McNally. We have greatly appreciated the spirit in which the whole of the Bill has been debated and the way in which the arguments have been conducted. There is more to come, but we have enjoyed our opportunity for three days of debate.
Having laid all the roses on this large table, here come the thorns. I can appreciate the sentiment behind the noble and learned Lord's amendment. At this late hour, I think that there only two points to be made. I have always felt that one of the great benefits of the way that our countries within these islands have operated is that they have had a single market. I have often heard from the other side of the Chamber that even in Scotland they regard Europe as a single market in a more progressive manner than some of us south of the Border have been given to understand of late. I believe both of us understand that the impact of the Bill should be felt across Border, in toto, to enhance the qualities of the single market in these islands and indeed to enhance the qualities of the single market with our European
990
partners. I know that that does not answer the questions of where all the legal niceties lie between who will and who will not issue warrants for going into what premises, and I am sure that we shall return to that point.
To finish on a high note, I celebrate our single market and its improvement and I celebrate our European market, in which I hope we shall play a greater part. With these fine thoughts to send us to bed, I hope that the noble and learned Lord will see fit on this occasion to withdraw the amendment.
Lord Fraser of Carmyllie: I shall certainly do so. The noble Lord will undoubtedly have recognised that my amendment was a device. Far from wishing this Bill not to extend to Scotland, I wish almost all legislation passed by Westminster in the years ahead to extend to Scotland without interruption by some small puppet organisation in Edinburgh.
If it is not seen by the noble Lord as being paradoxical, I join with him in celebrating what I regard as being the most successful political and monetary union in the history of the world. With those words, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 72 agreed to.
In the Title:
Lord Haskel Lord Haskel moved Amendment No. 277A:
Line 5, leave out from ("information") to the first ("to") in line 7 and insert ("which may be required in connection with investigations under that Act;").
On Question, amendment agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with amendments.
Lord Carter: In moving the adjournment of the House, may I, as Chief Whip, congratulate noble Lords on all sides of the House on the extremely efficient and expeditious way in which they have conducted the Committee stage of the Bill, particularly today, with 43 groups of amendments, interrupted by a long government Statement. It is an example which I shall draw to the attention of other noble Lords on other Bills.
House adjourned at twenty-two minutes past eleven o'clock.

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