Sitting of 27 April 1998

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

    Disability-related Benefits
    Mr. Elfyn Llwyd: How many meetings she has had in the past three months to discuss disability-related benefits with organisations representing the disabled; and if she will make a statement. [38475]
    The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): During the past three months, my ministerial colleagues and I have met on 10 occasions with national organisations and umbrella groups representing people with disabilities.
    Mr. Llwyd: I welcome the belated conversion of the Secretary of State and her Ministers to engaging in reasonable dialogue with disability groups. In the light of the admission by Ministers and civil servants to the recent Social Security Committee that there had been some bad errors of judgment in respect of decisions on the benefit
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    integrity project, will the Secretary of State confirm that every single decision involving the withdrawal or lowering of benefits before 9 February will now be reviewed?
    Mr. Denham: Yes.
    Madam Speaker: I call Mr. Duncan Smith.
    Mr. Iain Duncan Smith rose—
    Mr. Denham rose—
    Mr. Duncan Smith: I have not asked a question yet. Perhaps the Minister would like to hear it before answering. During his meetings with various disability groups, was the subject of taxing disability living allowance raised and, if so, what was his opinion as to what should happen?
    Mr. Denham: A wide variety of topics were discussed at those meetings. The hon. Gentleman will have seen that there is no such proposal in the welfare reform Green Paper.

    New Deal (Disabled People)
    Mr. Mark Oaten: What estimate she has made of the number of people with disabilities who will be helped back to work as a result of the new deal programme. [38477]
    The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman): The new deal for the long-term sick and disabled aims to help the 1 million disabled people who are not in work, but who want to work.
    Mr. Oaten: Does the Secretary of State agree with me and many disability groups that the £195 million allocated to the project is not enough to get disabled people back

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    to work? Does she accept that, although the numbers involved vary greatly, on average just £100 per disabled person will be made available? Will she give the House a commitment that if the project fails to get people back to work, in a year's time she will allocate more resources so that more disabled people can return to the work force?
    Ms Harman: I welcome the hon. Gentleman's support for the aim of trying to help people with disabilities back to work. The £195 million that has been allocated is intended not to help all disabled people back to work, but to finance pilot projects to ascertain what works best to help people with disabilities or health problems get into work and stay there. However, I can give the hon. Gentleman and the House the undertaking that, when we find out what works, we shall roll it out nationally. It is seedcorn money for pump priming and its purpose is to find out what will work with a view to making it national.
    Mr. Malcolm Wicks: Does my right hon. Friend agree that we must be ambitious about the programme? In the borough of Croydon, people with serious learning difficulties, including young women with Down's syndrome, have been successfully placed in employment. Does my right hon. Friend agree also that we must consider the poverty traps that can affect people with disabilities, particularly those in residential care? Will her Department study the particular poverty traps facing people with severe learning difficulties who want to re-enter work?
    Ms Harman: I thank my hon. Friend for making that point. We should be ambitious about the opportunities for people with learning and other disabilities to work when they want to do so. It is not good enough for us to write people off and not consider their capabilities and abilities. The Keyring project in my constituency helps people with learning disabilities to do what they consider an important job. The Shaw trust also provides a number of projects, as does Mencap, to help people with learning difficulties have the shape, self-respect and dignity of work in their lives. At present, the benefits system traps people with health or disability problems out of the labour market. In the Social Security Bill, we are taking powers to strip away the benefit disincentive and recognise, as we do for people on the jobseeker's allowance, the ambitions of people on incapacity benefit to work.
    Mr. Nick Gibb: When the Minister for Welfare Reform came before the Social Security Committee a couple of weeks ago—he came on his own on that occasion, which may, in retrospect, have been a mistake—he said that the Department of Social Security was conducting a survey into the incomes of recipients of disability living allowance. The Minister said that the reason for the survey was to assess whether it was worth while taxing DLA. Does the right hon. Lady agree with that approach? What is her opinion about whether DLA should be taxed?
    Ms Harman: The hon. Gentleman is not engaging in the constructive opposition that we should like to see, as some hon. Members are. My right hon. Friend the Minister of State is being completely misquoted—he did not say that we were considering taxing DLA; he said that we needed the fullest information about people on benefits and their income levels. That is our responsibility, and one which we are discharging.
    Mr. Dennis Skinner: Is my right hon. Friend aware that, for many years, there has been a system of providing welfare to work for disabled people, known as Remploy? During the 18 years of Tory Government, I went on marches with those disabled people round towns such as Alfreton, in an effort to prevent the Tory Government from closing Remploy factories. I suggest that, in her review, my right hon. Friend considers building more Remploy factories in other parts of Britain. There is no doubt that they work, and disabled people like to attend.
    Ms Harman: I pay tribute to Remploy. In the years when the previous Government were not interested in concerns about opportunities for people with disabilities to work, Remploy carried forward that flag and provided much-needed opportunities. We are determined to build on the good work of Remploy. With the new deal for long-term sick and disabled people, Remploy's work will be to provide new challenges for people with disabilities.
    Mr. Iain Duncan Smith: Given that the right hon. Lady has talked a great deal about what the Government are planning to do to bring disabled people back into work, and in the light of her comment about constructive opposition, will she tell us whether, given the new deal plans, she will be measured by whether unemployment among disabled people is lower at the end of this Parliament than it was at the beginning?
    Ms Harman: We want to be judged on the success of our programme to help people with disabilities tackle the barriers between them and the world of work, so the answer to the hon. Gentleman's question is yes. We have four ways of dealing with that: first, active help to get people into work through the pilot projects that we have announced; secondly, removing discrimination in the benefits system against people on incapacity benefit; thirdly, the disabled persons tax credit, which will help to make work pay for people with disabilities; and fourthly, making the workplace disability friendly. Through that package of four thrusts of policy change, a greater percentage of people with disabilities will go into the world of work. Obviously, we must aim for a greater percentage because the figure will depend on how many disabled people there are.

    Income Support
    Mr. Richard Burden: What assessment she makes of housing costs in setting levels of income support. [38479]
    The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): Help with housing costs for people receiving income support is given through specific allowances within income support, mainly for mortgage interest, and through housing benefit and council tax benefit. Those are assessed according to the circumstances of the individual concerned. Housing costs are not met through personal allowances and premiums within income support, and are thus not taken into account in setting the levels of those payments.
    Mr. Burden: I thank my hon. Friend for that reply. I have been corresponding with him over the past few months concerning the non-dependant deduction rule whereby, if tenants in receipt of housing benefit have someone come to stay with them who does not qualify for housing benefit but is in receipt of income support, they could stand to have their housing benefit reduced by up to £7 a week. That is an anomaly; it implies that the personal element of income support contains an element for rent, which it does not. That can increase poverty among many of the families affected. Will my hon. Friend re-examine the interrelationship between housing benefit regulations and income support regulations, with regard to that particular rule?
    Mr. Bradley: I am grateful to my hon. Friend for again raising that matter with me. As he rightly says, he has been in lengthy correspondence with the Department on the matter, and I assure him yet again today that the interrelationship between income support and housing benefit will be reviewed in the light of our general review of housing benefit and housing policy. I assure him that the matter that he has brought to my attention will be included in that review.
    Mr. Archy Kirkwood: In the spirit of constructive opposition, and on behalf—I guess—of the whole House, I acknowledge the Government's positive work on welfare to work generally. After the introduction of the working families tax credit, housing benefit, as currently constructed, will be the biggest obstacle to getting people off benefit and into work. The Minister said that there is a benefits review. When will the housing benefit review be completed? Will he give a guarantee that housing benefit will be reformed before the working families tax credit is introduced?
    Mr. Bradley: I am grateful for the hon. Gentleman's constructive contribution. He is absolutely right to say that housing costs represent a significant barrier to a successful return to work under the welfare-to-work programme. I assure him that further work is continuing as fast as possible to ensure that we investigate clearly the implications of that barrier and the way in which housing benefit is structured. As soon as we have completed that analysis, we shall feed it through the housing review so that it is harmonised with other reform programmes, especially welfare to work, to ensure that any impediment to people moving successfully from welfare into the workplace is removed.
    Mr. Dale Campbell-Savours: Are controls or further restrictions on rents in the private and voluntary sectors being considered as part of the housing and social security reviews? If they are not, tenants will be further punished at the end of the exercise.
    Mr. Bradley: The review that we are undertaking is, as my hon. Friend is well aware, a joint review with the Department of the Environment, Transport and the Regions. I assure him that all aspects of housing benefit, and crucially the interrelationship between housing benefit and housing policy, will be considered. That obviously includes the level of rents. I assure him that his point will be brought to the attention of the review.

    Poor Pensioners
    Mrs. Betty Williams: If she will make a statement on Government actions to assist the poorest pensioners during the last year. [38481]
    The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman): We have taken steps to help today's poorest pensioners, and want to ensure that all pensioners share fairly in rising national prosperity. Our pensions review is looking at how we can meet that objective.
    Mrs. Williams: My right hon. Friend will be aware of the plight of pensioners and the problems that they face. I am sure that she is also aware of unnecessary worry caused to them by some inaccurate press reports, particularly over Christmas. Will she confirm that the basic state pension will remain the bedrock of future pension provision under this Government?
    Ms Harman: I am happy to give my hon. Friend that assurance. The basic state pension will remain the foundation of income in retirement. We promised that in our manifesto; that is yet another of the promises that we are keeping. We also said that we would uprate the basic state pension at least in line with prices—and we have kept that promise, too. We have gone further than that to help pensioners with their income. We have cut VAT on gas and electricity, helped all pensioners with the cost of their winter fuel and, in particular, given extra to the poorest pensioners on income support. I know that one of the reasons why my hon. Friend is concerned about the matter is that about 80 per cent. of the poorest pensioners are women. She has been very concerned about that, in her constituency and in Wales.
    Sir Sydney Chapman: The right hon. Lady has talked about the reduction in the cost of domestic fuel. Will she confirm that poorer pensioners—indeed, all people—have received far more help not so much from the reduction in VAT on domestic fuel, which I reckon to be in the order of a third of 8 per cent., but from the significant decreases in gas and electricity prices since the privatisation of those industries?
    Ms Harman: With the abolition of the gas levy, we have reduced costs even further. I should expect someone who wanted to increase VAT on gas and electricity to 17.5 per cent.—as the hon. Gentleman did—simply to brush to one side the problem many pensioners have with paying their fuel bills. One of the big problems is not fuel bills, but pensioners not having enough money in their pockets—even money to which they are entitled. As you will know from your work with your constituents, Madam Speaker, many pensioners who are entitled to income support do not claim it because they find the 35-page form too complicated, or because they are too proud to fill it in. We are also making progress in helping pensioners with their costs by ensuring that, at the very least, they get the income to which they are entitled.
    Ms Claire Ward: Does my right hon. Friend agree that, although she has outlined important measures, many pensioners in this country, and in my constituency in particular, are concerned about the basic state pension

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    and want security now, and not just in the future, because they are living from day to day? When will the pensions review be completed? Will it provide for pensioners today, and not just for those of tomorrow?
    Ms Harman: I set up the pensions review—a manifesto promise—in July, and it has been proceeding. The voice of pensioners has been at the heart of the review, and we have consulted with Jack Jones of the National Pensioners Convention and many other pensioners' organisations.
    I am happy to confirm that today's pensioners are never off our agenda. We are not only keeping our commitment to uprating the state pension, but are looking at other ways in which we can help pensioners make ends meet. We are concerned about today's pensioners, and we reaffirm our commitment to the basic state pension. For the future, we want to be sure that people do not retire into poverty—as too many have done—when retirement means having to ask for benefits, rather than simply receiving the good pension to which everyone is entitled.
    Mr. David Rendel: The Secretary of State said that a number of pensioners are not claiming the income support to which they are entitled. Does that number include a large number of our most elderly pensioners? Would not the best way to help the poorest pensioners be to take up the suggestion of my hon. Friend the Member for Northavon (Mr. Webb) that an extra amount should be paid to the most elderly pensioners—those over 75, perhaps? Will the hints that we have been given by Ministers that the Government have this in mind come to fruition; if so, when?
    Ms Harman: The hon. Member for Northavon (Mr. Webb) has played an important part and has made constructive proposals about how we can best target our help at those who need it most without giving people a sense of stigmatisation. The issue of the oldest pensioners—those who did not have a good occupational pension, or whose occupational pension has run out—is a problem which we are bearing in mind in our research project. We have set up nine pilot projects to discover which pensioners are not claiming their income support and how we can best get help to them. Focusing extra help on people when they reach a certain age is very much on the agenda.
    Having looked at the 35-page form which pensioners of all ages are required to fill in to receive income support, I am amazed that as many as 1.5 million pensioners do claim income support. It should not be a case of asking people to put out their hands to prove that they are poor. Retired people feel that they are entitled to a decent income and that they should not have to prove that they are poor to get a decent standard of living. That is why we have the pilot projects; to get more automatic help to the poorest pensioners.
    Ms Diane Abbott: The Secretary of State has acknowledged the low take-up by some of the poorest pensioners of income support to which they are entitled. Does that not illustrate the problems of means-testing in the welfare system; not only do many people who need extra money not get it,
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    but it encourages fraud and stigmatisation? Should we not be moving away from means-testing in the benefits system?
    Ms Harman: We should be moving away from stigmatisation. People will not claim what they are entitled to if they feel that that will be embarrassing or humiliating and that they will have to go through hurdles and hoops. We are considering more automatic ways—which would avoid the stigmatisation of the means test—in which to help the poorest pensioners.
    The Benefits Agency, the Contributions Agency, local authorities and the Department of Social Security have much data about people, but we have never put them together to ask how we can help the poorest pensioners. Using information technology and all the data that are stored, we can ask who is falling through the net and how we can help them without making them feel stigmatised. People should be entitled to the payments automatically; they should not have to jump all the hurdles. We may be able to achieve the objective, which I share with my hon. Friend, of getting more help to the poorest pensioners without stigmatising them.
    Mr. John Swinney: In response to the question asked by the hon. Member for Watford (Ms Ward), the Secretary of State said that the needs of today's pensioners were never far from her mind. Did her Department make any representations to the Treasury before the March Budget to increase the basic state pension beyond the commitment to link it with prices?
    Ms Harman: Hardly a day—no, an hour—passes without my Department making representations to, and holding discussions with, the Treasury.
    Mr. Phil Hope: When the Green Paper on pensions reform is published, will there be the widest possible consultation on its findings? When the Government took office nearly a year ago, they discovered that 1 million pensioners had been abandoned—they were not claiming their pensions—by the previous Government, who had failed to provide a decent pension. Taking into account the cut in VAT on fuel and the extra winter fuel payments, have we not done more in the past 12 months than the previous Administration did in 18 years?
    Ms Harman: We have already received 2,000 responses to the pensions review, which will be drawn together in a Green Paper. The publication of that Green Paper will signal an important round of consultation, which we intend to hold with hon. Members from both sides of the House and organisations outside the House.
    Pensions reform cannot be done on the back of an envelope—it is a long-term issue. One of the problems that we inherited was that pensioners felt insecure—today's pensioners feel insecure and, because of the pensions mis-selling scandal, people who are still at work feel uncertain that their pensions will be sufficient to help them in retirement. We shall welcome constructive proposals from all sides, and consultation will be as full as possible, so that we can arrive at a proper settlement for welfare reform on pensions.
    Mr. Iain Duncan Smith: Given the right hon. Lady's comments on income

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    support, measuring poverty and the means test, will she now—finally—take this opportunity to say whether the Government will means-test the basic state pension, regardless of whether it is universal?
    Ms Harman: We said in our manifesto that the basic state pension would remain universal—it would remain the foundation of income in retirement for all. Therefore, it will be not means-tested, but uprated at least in line with prices. The hon. Gentleman constantly creates scares. Pensioners lost out by up to £20 a week as a result of the way in which Conservatives treated the basic state pension. We want to tackle the legacy of poverty and inequality.
    Mr. Duncan Smith: Given that answer, will the right hon. Lady say whether she agrees with the Minister for Welfare Reform, who said, as recently as last week, that the attempts of Labour Members before and after the election to link poverty to take-up figures for income support were "cheap and futile"? Does she believe that she falls into that category?
    Ms Harman: My right hon. Friend the Minister for Welfare Reform said neither thing. In his work on the Select Committee on Social Security when he was in opposition, he pointed out the number of pensioners who were falling through the net—we, too, highlighted that when we were in opposition. We shall proceed by ensuring a universal basic state pension and focusing more help on the poorest in retirement—that is what people think fair.

    Good Parenting
    Mr. Alan W. Williams: What initiatives her Department is taking to promote good parenting. [38484]
    The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman): One of the key issues for parents, both mothers and fathers, is balancing work and family responsibilities, so family-friendly employment is a top priority for the Government. We are already taking action to provide high-quality child care for all families, and we shall ensure that parents can take time off from paid work to spend with their children.
    Mr. Williams: The Government's rhetoric over the past few months has concerned lone parents who work, but does the Secretary of State accept that, in many couples with children, one parent, usually the mother, gives up work to look after them, and that those responsibilities fall doubly heavily when there is only one parent? Can she reassure me that the Government are fully supportive of couples in which one parent devotes the whole of her—it is usually her—time to looking after children and the family home?
    Ms Harman: I can certainly give my hon. Friend that reassurance. We want to offer lone parents, and indeed all parents, more opportunities to work. One of the problems was that, although married women, who are not trapped in the benefits system, are able to return to work, particularly after the youngest child has started school,
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    lone parents are often trapped into remaining on benefit, even though many have not been receiving any income from the father and have wanted to go back to work to increase the income for their children.
    There is no question of our trying to compel women to do the best for their children by going out to work rather than staying at home. We want them to be able to decide what is best for their children, and we shall back them in whatever choice they make. In the past, they have not had sufficient choice.
    Miss Anne McIntosh: Is the Secretary of State saying that she has no plans to introduce any element of compulsion whatever? Is she aware that her ministerial colleague, the hon. Member for Manchester, Withington (Mr. Bradley), said in a written answer on Friday that there were no figures for the control areas of the pilot scheme for lone parents? Is it sensible to proceed without having tested the figures, and on what basis do the Government plan to proceed in those circumstances?
    Ms Harman: The hon. Lady raises two points. On the first, the new deal for lone parents is entirely voluntary. The previous Government simply said, "Stay on income support until your youngest child is 16. We don't assume that you've got any interest in going back to work and we're not going to give you any help." Our policy is to extend help to get lone parents into work and to provide child care so that, particularly once the youngest child is of school age, they can return to employment.
    The second point concerns the evaluation of the new deal for lone parents. We have spent the best part of £1 million on an independent academic evaluation. The very choice of the eight areas in which we piloted the new deal was made so that we could match them with eight other areas where there was no new deal. The hon. Lady can look forward to the results of that academic evaluation later in May. We can measure the success of the new deal, and we have done so. I am sure that the results will be very encouraging for all those who are concerned that lone parents and their children should have a better standard of living.

    Unemployed Home Buyers
    Mr. Steve Webb: What is her Department's long-term policy on the involvement of the state in funding the mortgage costs of unemployed home buyers. [38485]
    The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): We made it clear in the Green Paper on welfare reform that we are working with the industry to provide better protection for all home buyers, including the unemployed. We aim to develop a sustainable policy, in line with the eight principles underpinning the Government's approach to welfare reform. We shall consider state involvement in the provision of help with mortgage costs as work on reforms proceeds.
    Mr. Webb: Is the Minister aware that the Minister for Welfare Reform said to me a month ago that the best form of protection for all home buyers is private insurance? Does he agree that that is a mistaken view, that there are many people for whom private insurance is not

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    appropriate and whom private insurers would not touch with a barge pole, and that there needs to be a continuing role for the state?
    Mr. Bradley: There is an awful lot of quoting, or rather misquoting, going on today, which we shall examine carefully. Let me make it absolutely clear that we are working with the industry to ensure that products that are appropriate to meet the needs of people to protect their homes, and to protect themselves in their home ownership, will continue. We shall introduce proposals in line with that work as our welfare reform programme unfolds.
    Mr. Peter L. Pike: Does my hon. Friend accept that, in the short term, people still have problems under the present system, which often does not provide the correct range of interest because of standardisation and the fact that the standardisation update follows some time after a mortgage rate increase? Another problem which still exists is that we pay the benefit four-weekly, whereas most mortgage interest is paid on a monthly basis, making it difficult to calculate whether the correct payments are received.
    Mr. Bradley: I understand the concerns of my hon. Friend and many others. The difficulty is in managing the complex administrative procedures and ensuring that people get help and support with mortgage housing costs. I am pleased to be able to tell my hon. Friend that the standard interest rate will increase from 7.97 to 8.34 per cent. from 24 May.

    Social Security Tribunals
    Helen Jones: What plans she has to reform the system of social security tribunals. [38486]
    The Minister for Welfare Reform (Mr. Frank Field): Our plans are detailed in the Social Security Bill.
    Helen Jones: I thank my right hon. Friend for that reply. Does he agree that the present system imposes totally unacceptable delays on people? I shall give two examples from my constituency. One constituent lodged an appeal on 20 January and is still waiting to hear something. In an even worse case, an appeal was lodged on 8 July last year and was not even acknowledged as accepted by the Independent Tribunal Service until 8 January this year. Does my right hon. Friend agree that, in those cases, justice delayed is justice denied? As well as considering reform for the future, will he urge the ITS to do something to clear that backlog of cases, which is imposing a terrible burden on some of the poorest people?
    Mr. Field: The answer to the first question is yes, as is the answer to the second question. Our proposals in the Social Security Bill are aimed at drastically speeding up the length of time that people have to wait between lodging an appeal and its being heard.
    Mr. Dafydd Wigley: Does the Minister recall a case which I discussed with him and about which I wrote to the Secretary of State—that of a constituent who, sadly, died earlier this month having been waiting
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    18 months for an appeal to be heard about a disability benefit for a disability from which he died? Is it not an absolute disgrace that the resources that should have been available to that person while he was alive were denied? What will the right hon. Gentleman do urgently to get that sorted out?
    Mr. Field: The right hon. Gentleman makes the case for reform more effectively than I could.
    Mr. Simon Burns: Has the right hon. Gentleman had an opportunity in the past few months to read the Hansard Standing Committee reports on the Social Security Bill from last autumn? What change between then and now has led his Department in another place to accept amendments tabled by the Conservative Opposition in Committee, which the Government refused to accept then, concerning having someone with legal representation as a member of a tribunal? In the spirit of constructive opposition and government, are the Government now also prepared to accept the important principle which we put forward in amendments—that we should not have one-member tribunals, in the interests of natural justice?
    Mr. Field: I am grateful to the hon. Gentleman for illustrating to the House what a listening Government we have. I should have thought that he would congratulate the Government, rather than trying to carp.
    Mr. Burns: What has changed?
    Mr. Field: I will give the answer for a second time: this is a listening Government.

    Landlord Fraud
    Dr. Brian Iddon: What action she has taken to tackle organised landlord fraud since 1 May 1997. [38487]
    The Minister for Welfare Reform (Mr. Frank Field): We made it clear in our election manifesto that rooting out fraud is an essential part of our reform of welfare. We have already introduced regulations that give local authorities tough new powers to tackle fraudulent landlords and tightened the rules on paying benefit direct to landlords. That is another election pledge being fulfilled.
    Dr. Iddon: I thank my right hon. Friend for that reply. In Bolton, up to 80 per cent. of rents paid to private landlords are paid directly by cheque, and I suspect that the figures are similar in other towns and cities. That creates the problem that tenants often leave premises without informing the local authority and the landlord does not inform the authority, for convenience or for other reasons. Does my right hon. Friend agree that we need tighter inspections of such premises to ensure compliance?
    Mr. Field: I do. My hon. Friend's local authority concentrated its £20,000 challenge money on landlord fraud and has doubled its weekly benefits savings. I congratulate it on that.

    Pensions
    Mrs. Virginia Bottomley: When she last met representatives of the National Association of Pension Funds to discuss the Government's proposals for pensions. [38488]
    The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): My right hon. Friend the Minister of State and I have met representatives of the National Association of Pension Funds on a number of occasions since the pensions review was launched last July, most recently at the annual council dinner on 11 February.
    Mrs. Bottomley: Did the Under-Secretary hear the chairman of the Association of Consulting Actuaries warn recently of the damage inflicted by the Government on industry's willingness to support pension schemes? A year ago, the Government promised to support occupational pension schemes, but the result was a £5 billion raid without consultation. Was that another election pledge being delivered?
    Mr. Denham: I should have found it difficult not to hear the comments of the chairman of the Association of Consulting Actuaries, as I sat next to him when he spoke. In my own remarks to that organisation, I made it clear that this country's future ability to pay pensions—in whatever form—depends critically on our developing sound economic policies, avoiding boom and bust and achieving the long-term investment needed to create wealth.
    The measures taken in last July's Budget, including the cut in corporation tax, and our commitment to sound fiscal policies will produce the economic circumstances in which pensioners can be paid in future.
    Mr. Edward Leigh: The Minister for Welfare Reform told me in the Select Committee last week that the state retirement pension would remain universal for the lifetime of this Parliament. I am sure that the Under-Secretary will want to avoid any doubt on that point, which can perhaps be cleared up once and for all: will he confirm that the Government will not, in any circumstances, means-test the basic state retirement pension?
    Mr. Denham: I do not think that the hon. Gentleman has been listening to earlier exchanges. Let me make it clear that we will honour the manifesto on which we were elected, as we have done on uprating and maintenance of the basic state pension as the foundation for retirement and on the many other measures that we have taken to help pensioners.
    Mr. Paul Flynn: Did the National Association of Pension Funds agree that the best-value pensions in this country are paid by the state earnings-related pension scheme? Did it agree that the previous Government got away with damaging the value of SERPS because that was not appreciated by the general population and that our best way forward is to ensure that SERPS is well understood—as is the pensions points scheme in France—to pay index-linked pensions of superb value? Would the association also agree that the
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    worst way to go forward with stakeholder pensions would be to entrust them to those who wickedly mis-sold personal pensions to millions of people?
    Mr. Denham: In fairness, the National Association of Pension Funds would be more anxious to stress that the majority of those who enjoy security in retirement have a good second pension from an occupational scheme. However, I agree that one of the critical challenges for the pensions review is to ensure that each individual has the fullest possible understanding of his or her pension provision and of the available alternatives. The pensions education working group established by my right hon. Friend the Secretary of State in September is considering that and we hope to receive its conclusions shortly.

    Winter Fuel Payments
    Mr. Desmond Swayne: How many people have not received their winter fuel payments. [38490]
    Mr. Ben Bradshaw: What steps her Department has taken to help pensioners with their fuel bills since 1 May 1997. [38499]
    The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): All payments should now have been sent to eligible pensioners' homes or bank accounts, or issued to post offices for collection. An estimated 100,000 girocheques have not been collected from post offices. That may be for a variety of reasons, including death, hospitalisation and holidays, but the Benefits Agency will follow up each case to make every effort to ensure that the proper entitlement is received. We have committed a total of £400 million for last winter and the next to make winter fuel payments to help eligible pensioners with their fuel bills. This is the first time that any Government have provided automatic help to more than 7 million pensioner households with fuel bills to pay.
    Mr. Swayne: The £850,000 television advertisement gave pensioners the impression that the cheques would drop through their letter-boxes. When they discovered that that was not the case and that they had to collect them, many people discovered that they could not cash them because they were already out of date. Why were the cheques issued with a four-week time limit on them?
    Mr. Denham: For obvious security reasons, girocheques for Benefits Agency payments are normally time-limited. The advertising scheme was necessary to ensure that pensioners had the confidence to keep their heating on, and not be cold in the winter, because help was going to arrive.
    Mr. Bradshaw: Will my hon. Friend confirm that the amount spent by the Government on winter fuel payments is larger than we would have spent had we restored the link with wages so scandalously abandoned by the Conservative party, with the added effect that the help has gone to those who need it most? Given that, will my hon. Friend consider extending the scheme beyond next year?
    Mr. Denham: My hon. Friend is right to draw attention to the scale of the support that the Government have given

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    to pensioners. In doing that, we have given priority to the poorest pensioners, as we promised in our manifesto. We made a commitment to the operation of winter fuel payments last winter and next winter. A variety of initiatives is under way across government, examining, for example, utility regulation and energy conservation. We will take stock as the reviews come to conclusions on the best way to ensure that pensioners can heat their homes in winter.
    Mr. Tim Collins: Given that the Under-Secretary mentioned the advertising campaign, will he say why the contract for it was awarded, without going out to competitive tender, to an agency that just happened to have a close link to the Labour party?
    Mr. Denham: The reason is that that agency was extensively used by the Conservative party in government. Since 1989, the agency has had a standing contract—I forget the technical term—with the Department, properly agreed under EC procurement regulations. We merely continued to use the same agency that the Conservative party used when it was in government.

    Welfare Reform
    Mr. Tim Boswell: What representations she has received on the Green Paper on welfare reform since 26 March. [38491]
    Mr. Andrew Mackinlay: What representations she has received from the Churches about the results of the Government's review of the social security benefits system. [38494]
    The Minister for Welfare Reform (Mr. Frank Field): More than 100.
    Mr. Boswell: I thank the Minister for Welfare Reform for that reply. As the Government's mood music accompanying their papers has suggested that those currently in receipt of benefits will not lose out, does it not follow that any process of welfare reform risks increasing the costs of an already expensive system? Has the Minister told the Chancellor or is the mood music unsustainable?
    Mr. Field: At the end of last week, I wrote to all hon. Members to ask them to take the ideas of the Green Paper to their constituencies to consult party activists and other stakeholders in their areas. I look forward to receiving the hon. Gentleman's replies.
    Mr. Mackinlay: Does the Minister recall in the correspondence that all candidates got in the general election the report of the Churches' inquiry into unemployment and the future of work? Will he take on board in the welfare review the strong message contained in that document that, although the right to work is inalienable—a right neglected by the previous Government—implicit in that is quality of work? People should have a right to work appropriate to their aspirations, skills and needs. That must be the objective of the Government. Will the Minister be mindful that people
    16
    should have the right to safeguard and look after their families? There should not be a presumption that people must work while neglecting their other obligations.
    Mr. Field: The Government believe that those who can work should work. We also believe that we have a duty to help people to achieve that objective. The Chancellor made it plain in his Budget that those who work would be better off in work. Although it is desirable that people find work that fulfils their talents to the full, their primary duty is to earn a wage to look after themselves and their families.
    Ms Dari Taylor: I ask my right hon. Friend to consider the response from some of my constituents in respect of reform of the welfare state. First, it is coming through loud and clear that both providers and users believe that reform is well and truly overdue; but, secondly, they are explicitly asking for an assurance that benefits staff will not only effectively administer reforms when those are in place, but do so with compassion.
    Mr. Field: I was in my hon. Friend's constituency on Saturday. I was able to give her that assurance then and I give it to the House now.
    Miss Julie Kirkbride: Does the Minister agree that one of the main objectives of the Government's welfare reforms ought to be to encourage more people to save more money for their old age? He has asked what our constituents think about his proposals and I can tell him that in Bromsgrove one of the major concerns among hard-working decent people who have saved hard for their old age is that they see others who are similarly elderly, but who spent their money during their working lives and now receive considerable benefits from the state to which those who did save are not entitled. They are angry about that and they would like to know what the Government's proposals are for reform in that respect.
    Mr. Field: People saving adequately is one of our objectives in welfare reform. I very much agree with the second part of the hon. Lady's question.

    Child Maintenance
    Mr. Bill O'Brien: What proposals she has to include capital from the sale of the matrimonial home in the assessment of child maintenance; and if she will make a statement. [38493]
    The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): Money from the sale of the matrimonial home that has been earmarked for a new home or to acquire furnishings is ignored for a year. Any interest and dividends received from other capital are taken into account in the calculation of assessable income. We are looking at all aspects of the child support scheme to see where improvements can be made, in line with our manifesto commitments. We intend to consult widely on the issues raised by our reform of child support.
    Mr. O'Brien: I thank my colleague for that reply. I appreciate what he and the Secretary of State are doing to try to erase the bristling anomalies arising from the Child Support Agency which we inherited.

    17
    On the issue of capital derived from the sale of the home, the parent with care has to use that capital to provide a new home for the children, whereas, in many cases, the absent parent is allowed to retain their part of the capital without any expenditure or commitment. That anomaly, which acts against the care of the children, should be addressed and erased. I appreciate the Under-Secretary's saying that he will address that issue in the review, which I hope will be completed quickly.
    Mr. Bradley: May I take this opportunity to thank my hon. Friend and many other hon. Members for their significant contribution to our review of the child support system? Their knowledge and experience from individual case work in their constituencies are extremely important in guiding us as we try to unravel the problems of the Child Support Agency. I assure my hon. Friend that his point is extremely important and it will be considered as part of the general review.
    Mr. Nicholas Winterton: The Under-Secretary referred to the CSA, but does he accept that it was set up with support on both sides of the House—not only the previous Conservative Government, but the Labour party, the Liberal Democrats and every other party in the House? Will he ensure that, in dealing with the matter, the House has more time and can consider what is to be done in a more measured way, so that we do not make the same prize error as we did when the House—not just the Government of the day—established the Child Support Agency?
    Mr. Bradley: It is clear that the House agreed universally with the principle behind the Child Support Agency, but not with the way in which it has been set up and administered. I assure the hon. Gentleman that we shall take views from all sections of the House on the reform of the CSA. We shall take particular account of the views of the Select Committee on Social Security, which will have a valuable role in examining the proposals which we bring forward. We want to ensure that there is full consultation on the proposals so that we can try to unravel the mess that we inherited.

    Fuel (VAT)
    Mr. David Heath: If she will calculate the impact of the measures contained in the Budget relating to VAT on fuel, and the consequent adjustments in benefits including the state pension, on the weekly income of a typical old-age pensioner not in receipt of income support. [38495]
    The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): One of the first actions of the Government was to implement our manifesto promise to cut the rate of VAT on fuel, an issue which has been of particular concern to pensioners. As a result, on average, a typical single pensioner receiving the basic state pension will be 20p a week and a couple 25p a week better off.
    Mr. Heath: Is not the import of what the Under-Secretary has just told us that the actual benefit for the average old-age pensioner of this much-fanfared
    18
    measure is paltry? Is it any wonder that many people are saying that, whatever other merits this year's Budget may have had, it was not a Budget for the old-age pensioner?
    Mr. Denham: I do not agree with the hon. Gentleman. The Conservatives in government attempted to establish VAT on fuel at 17.5 per cent. We carried out that manifesto commitment, but, in addition to carrying it out, we introduced winter fuel payments, at a cost of about £200 million this winter, and the same again next winter. Those were significant commitments to today's pensioners.
    We have a wide-ranging pensions review, looking ahead at ways in which problems facing today's pensioners can be tackled in future, but I do not believe that anyone can fairly say that, in the months in which we have been in power, the Government have not done significantly more for pensioners than the previous Administration did.
    Mr. John Bercow: What estimate has the hon. Gentleman made of the effect on the lives of old-age pensioners who do not receive income support, and who live in rural areas, of the Chancellor's decision to increase excise duty on petrol in the Budget?
    Mr. Denham: The issues of transport will be addressed in the forthcoming transport White Paper. As I have said, we have taken action—[Interruption.]
    Madam Speaker: Order. The hon. Member for West Chelmsford (Mr. Burns) has already asked a question. He should let the Minister answer.
    Mr. Denham: The Conservative party has already forgotten its determination to make pensioners pay VAT on domestic fuel at 17.5 per cent., and no amount of trying to side with those in rural areas will divert pensioners' attention from that fact. The issue of rural transport will be addressed in the forthcoming transport White Paper.

    Housing Benefit
    Mr. Crispin Blunt: What are the terms of reference of her Department's review of housing benefit. [38496]
    The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): Housing benefit is under consideration in the housing comprehensive spending review. The full terms of reference for the housing review were included in the press release issued by my right hon. Friend the Deputy Prime Minister on 24 July, which covered all the reviews being undertaken by the Department of the Environment, Transport and the Regions. Copies of the press release have been placed in the Libraries of both Houses.
    Mr. Blunt: Earlier this afternoon, in reply to a supplementary question on Question 3 by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), the Under-Secretary gave the illuminating reply that the housing benefit review would be published as soon as it was completed. I wonder whether, without being intrusive, I may press the Under-Secretary a little more.

    19
    Will the review be completed by July this year, or some time next year? Will Under-Secretary be a little more specific than "as soon as it is completed"?
    Mr. Bradley: It would be extremely difficult to publish it before it was completed, but we shall complete it later this year.

    Child Support Agency
    Mr. David Hanson: When she expects to publish the review of the Child Support Agency. [38497]
    Mrs. Anne Campbell: What representations she has received about the reform of the Child Support Agency. [38498]
    The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): We believe that all children have the right to support from both their parents, wherever they live. That is why we are looking in detail at all aspects of the child support scheme to ensure that it provides an efficient and effective service to all our clients, as we promised in our manifesto.
    In our consideration of child support, we have received representations from hon. Members, members of the public and a number of stakeholder groups. We aim to publish a consultation document setting out our proposals later this year.
    Mr. Hanson: I thank my hon. Friend for that reply. Does he accept that the current child support system is
    20
    failing children, parents and the staff who must administer it? Will he ensure that, whatever else comes out of the review, the system is simplified and made efficient, and that promptness in delivery of service to consumers is paramount?
    Mr. Bradley: I should like to answer five loud yeses to those questions. I can assure my hon. Friend that, as I have said previously, all aspects of the Child Support Agency are under consideration, and we value the contributions made by hon. Members from both sides of the House.
    Mrs. Campbell: Will my hon. Friend join me in deploring the appalling mess left behind by the previous Government which has caused untold damage to many of the most vulnerable people in society? When an absent parent abandons more than one family, the CSA as it is currently set up is unable to cope with the children of the second or the third abandoned family. Does my hon. Friend agree that that matter must be addressed urgently?
    Mr. Bradley: My hon. Friend rightly highlights yet again the detailed complexity in the system. It needs simplifying and presenting in such a way that both partners understand not only the CSA formula, but its administration. We shall consider those matters carefully as the review continues.

UK Atomic Energy Authority
3.30 pm
Mr. Matthew Taylor(by private notice): To ask the President of the Board of Trade whether she will make a statement regarding the resignation of Anthony Pointer as chief constable of the United Kingdom Atomic Energy Authority, and the reported threat to security at United Kingdom atomic energy installations due to staff shortages.
The Minister for Science, Energy and Industry (Mr. John Battle): I should inform the House that the chief constable of the United Kingdom Atomic Energy Authority constabulary, Mr. Anthony Pointer, resigned in late January, though the resignation takes effect from the end of this week. It occurred while discussion was under way in the UKAEA on the need for six extra police to be added to existing UKAEA numbers at Dounreay to increase the effectiveness of armed response capabilities at the site. At no stage has the chief constable expressed concern about the effectiveness of security at any other nuclear site.
Mr. Pointer tendered his resignation some months ago. The UKAEA and the adviser to the police authority, Sir John Woodcock, a former chief inspector of constabulary, attempted to dissuade him from resigning; but he resigned while the question of the constabulary complement was still under discussion in the UKAEA. Agreement to the six extra police that he had requested was concluded shortly thereafter. The agreement was reported to the police authority meeting in early February, where the chief constable, Mr. Pointer, declared himself satisfied with the extra staff numbers. The additional six police agreed are already in place at Dounreay and have been since March.
Mr. Taylor: Does the Minister agree that the information should have been brought to the attention of the House at an earlier stage—especially about the security concerns that the chief constable had about British nuclear installations? Can he confirm that that comes on the back of previous expressions of concern, not least in the previous year's annual report of the chief constable, about a one-third decline in numbers in the constabulary? Can he say whether the chief constable's concerns on staffing, which were expressed not only in January but on previous occasions, have been met?
Given the expression of concern by the British intelligence and police services and by the American Government about security at British nuclear installations, not least Dounreay, was it not incumbent on Ministers to give such information to hon. Members when a statement was made last week on the import of weapons-grade material to Dounreay?
Is not it time for a full inquiry—perhaps through a Select Committee or through Privy Council members, because of the sensitive nature of the issue—which should report to the House so that we can be satisfied that British nuclear installations are safe and secure as one of the world's largest depositories of plutonium?
Mr. Battle: We cannot call for a full inquiry when there is no problem. The chief constable agrees with that.
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These are operational matters for the UKAEA, but it was in the public domain some time ago that the chief constable had tendered his resignation.
Of course UKAEA constabulary numbers are lower than they were some years ago. The constabulary is at its full complement—the agreed strength of 470. That is the figure required for security to be in full command of the situation. The numbers are lower because there are now fewer nuclear establishment sites, so they do not need the numbers that there were in 1987.
Security is maintained in full conformity with international recommendations and requirements and with national standards. Those standards are kept under constant review by the Directorate of Civil Nuclear Security. The Director of Civil Nuclear Security who is responsible for the setting of standards of physical security on all sites and for auditing security overall has confirmed that he is content with the standard of security now in place at Dounreay and at all the other nuclear sites. I am sorry to disappoint the hon. Gentleman, but there is no problem.
Mr. Tim Boswell: The House will accept that the detailed consideration of security matters is not best rehearsed in this place. However, does the Minister accept that we have a duty to ask, and he to give assurances in general terms, about the security of nuclear installations, the more so as the Government have this week taken on themselves the rescue of the material from Georgia and its transfer to Scotland on a non-returnable basis, in the interests of the security of that material and of the global community?
Can the Minister give the House these explicit assurances? First, is he satisfied that nuclear security at Dounreay and other establishments is and will remain adequate for any anticipated threat? Secondly, is the staffing of the Atomic Energy Authority police at the various establishments at all times maintained at an adequate level to deal with any perceived threat?
Thirdly, what considerations—again, in general terms—led to a recent increase in staffing levels, including the appointment of six extra officers at Dounreay? Did that proposal have the support of the UKAEA board, and will the board or the Department carry the cost of the extra staff? Did the proposal have anything to do with any paper or real exercises conducted on the security at Dounreay or other establishments?
Fourthly, did Mr. Pointer resign because of the staffing sproblems? If he thinks that they were being rectified, why did he not stay? It seems strange that a chief constable is being lost after only 18 months in the post.
Fifthly, is there not a case, which I hope the Minister will consider, for some further measure of independence and a higher profile than hitherto for the independent Directorate of Civil Nuclear Security? The director could then, in principle, draw attention to any failures whose disclosure he considered to be in the public interest, at least on the restricted basis with which we are becoming familiar in the case of security matters—for example, on a Privy Councillor level.
Finally, as the Government are fond of simplifying issues, will the Minister tell us explicitly which he is prepared to put first—nuclear security or the cost of securing that installation?
Mr. Battle: Security and safety at those establishments are paramount, as I made plain. The hon. Gentleman asked whether we are satisfied with security arrangements. The answer to his three questions is yes, yes and yes. We attach the utmost importance to security at Dounreay and all other sites.
The Directorate of Civil Nuclear Security is the standard setter and auditor of security in the civil nuclear industry. It works closely with the Department of Trade and Industry on a regular, almost day-to-day if not hourly basis from time to time, as the ultimate regulator of security in the industry. That is why I believe that matters are well under control.
I referred earlier to the full complement of 470 constables. That is regarded as satisfactory by the Directorate of Civil Nuclear Security. Of course, standards are kept under constant review.
As to the hon. Gentleman's question about the resignation of the chief constable, he was pressed to withdraw his resignation. Why he did not do so is obviously a matter for him. His request for extra police officers at Dounreay—which was under review by the UKAEA at the time—was agreed by the UKAEA management within days of the chief constable's resignation. At a police authority meeting this February the chief constable, Mr. Pointer, said that he was satisfied with the outcome of that review. Therefore, his failure to withdraw his resignation is obviously a matter for him.
Mr. Tam Dalyell: Does my hon. Friend know whether the hon. Member for Truro and St. Austell (Mr. Taylor) who asked this mischievous question—and whose constituency is located some 700 miles from Dounreay—has taken the trouble to visit that facility and talk to Roy Nelson or the trade unions involved? Does he understand that trade unionists and others who work in those plants are extremely proud—and rightly so—of what they have achieved for Britain and what they can achieve for all people on the face of the planet? Is it not right that their case should be put properly and their pride in their industry registered by the House?
Mr. Battle: I am extremely grateful to my hon. Friend for that contribution—not least because he used the word "mischievous". I believe that it is irresponsible to be mischievous in this area. I have visited the site at Dounreay—I do not know whether Opposition Members have—and, on my recent visit, I saw the new inner security fence that has cost more than £1 million and the new state-of-the-art alarm systems that were installed last year. Judging from some comments in recent days and hours, one would think that there is no security. However, I am confident that the security systems are in place.
Mr. Douglas Hogg: Will the Minister tell the House why we were not told in last Wednesday's statement about the chief constable's anxieties? Will the Minister tell the House whether the Prime Minister was aware of those anxieties when he entered into the secret agreement with President Clinton? Does the Minister understand that many of us find it difficult to reconcile his statement that all is well at Dounreay with the chief constable's determination to resign?
Mr. Battle: During negotiations about the number of constables at Dounreay, the chief constable proposed an extra six officers. It was agreed that those six officers would be put in place, and in February the chief constable declared that he was happy with that arrangement. Therefore, I cannot for the life of me understand why he persisted in resigning. That is why it is a matter for him and not for me.
It was well known at the time—it was in the public domain—that the chief constable had tendered his resignation. That was seen as an operational matter within the UKAEA as to how it organised its staffing complement in consultation with the Directorate of Civil Nuclear Security. The directorate has underpinned the decisions that were taken before this information came to light and before we accepted the Georgian high-enriched uranium. That uranium is being guarded properly at Dounreay—there should be no doubt about that—because the arrangements were put in place before it arrived.
Mr. Dale Campbell-Savours: For the second time in two weeks, there has been a reassuring statement to Parliament about these matters. The tabloid press reported at the weekend that an assault was carried out against a nuclear installation somewhere. Can the Minister confirm whether that report is true? If it is not, the record should clearly be put right.
Mr. Battle: There were many bits of information in the press and commentaries in the media during the weekend that were not true. Of course, security is tested and reviewed regularly. Fiction is occasionally reported—for example, that the Special Boat Services' report was ignored. That was absolutely fallacious. The service never participated in any security scenarios.
Mr. John Swinney: Does the Minister understand the public concern that will exist when, at a time when Ministers were conducting negotiations with the American Government about the transfer of enriched uranium to this country for storage and reprocessing at Dounreay, there was concern within the UKAEA at the level of security at Dounreay? Does the Minister not understand the public's difficulty in reconciling these two factors? Does he not believe that having made this statement, there should be some further independent scrutiny of the evidence that he has brought to the House, to guarantee that public concern can be fully allayed by an independent inquiry?
Mr. Battle: What was received from Georgia was a fragment of what was already stored, as I think was spelt out in previous answers. I would not be standing here if I felt that what was already stored was not securely and safely guarded. It is so guarded. There have been no security questions about Dounreay in recent months and weeks. The only issue was the complement of the constabulary, which was raised by the chief constable. The chief constable's advice to increase that complement by six was taken into account and implemented. I therefore do not believe that there is a need for a public inquiry into this matter.

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To be as fair as I can to the hon. Gentleman, of course we must do our best to allay public fears and to ensure that nuclear establishments are properly secure. That is why security is regularly reviewed and tested in consultation with the civil nuclear security people.
Mr. Andrew Mackinlay: Is my hon. Friend aware that both in the previous Parliament and this one I raised the question of non-Home Office police forces and the fact that there is concern that, albeit perhaps unconsciously, commercial or quasi-commercial considerations can come into operational decisions relating to these forces? Is there not a case for a review of them and their stewardship?
Secondly, if, as my hon. Friend protests from the Government Dispatch Box, the chief constable resigned voluntarily after being persuaded to stay, can we be assured that no public money will be put up front in so-called compensation? If I take the Chiltern Hundreds or if someone resigns from the Daily Mirror or The Daily Telegraph, we go without compensation. If the chief constable has gone, presumably he is not going with a penny extra. He has resigned. He has quit his job, which he is entitled to do. There should be no additional emoluments. Can my hon. Friend confirm that that is so?
Mr. Battle: The chief constable's contract is with the UKAEA, not with the Department of Trade and Industry. It is a matter for the UKAEA contractually to sort out the arrangements when people resign. I simply leave it at that.
I share my hon. Friend's view in that I do not think—the point has been raised by Opposition Members, to be fair to them—that we should be engaged in a cost-cutting exercise. Rather, the opposite should apply. Security is paramount. I have checked the facts and figures and I am reliably informed that the overall funding for the constabulary has continued to rise year on year, even though numbers have fallen because there are fewer establishments.
Mr. Tim Collins: I welcome the reassurances that the Minister has been able to give the House. Will he confirm for the record that he is entirely satisfied with the level and adequacy of security at Sellafield, near my constituency in Cumbria?
Mr. Battle: The answer is yes. To the best of my knowledge, no one has even raised that question. I give the hon. Gentleman the assurance for which he asks.

Drugs
3.48 pm
The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): With permission, Madam Speaker, I should like to make a statement on the Government's new anti-drugs strategy.
I am pleased to lay before the House today the Government's White Paper, "Tackling Drugs to Build a Better Britain", which sets out our strategy for the next 10 years.
I hope that there is no need for me to have to persuade the House that more effective action against drugs must be a priority. Illegal drugs are now more widely available than ever before, and children of all ages are increasingly exposed to them. Drugs damage health as well as education and employment prospects. Drug problems wreck families and relationships. Drugs are a major contributing factor to the crime that undermines communities and gets in the way of progress and prosperity.
Much has been done in recent years. The previous Government's strategy for England, "Tackling Drugs Together", was an important step forward, particularly in the creation of drug action teams, which were set up to create partnerships across the country to tackle the problem. Important progress has also been made in Scotland, Wales and Northern Ireland, which have their own distinctive strategies.
We will build on that valuable work. There are some signals that levels of drugs misuse are relatively stable across England and Wales as a whole. That suggests that drug misuse is neither inevitably bound to increase nor irreversible, but the problems remain acute, and a fresh long-term approach is now needed to galvanise our efforts and bring new energy and action to these challenges.
Drug problems are complex. There are aspects that require responses at different levels. Responsibility for action lies with many different Government Departments, statutory services, voluntary agencies, businesses, community groups and individuals. A partnership approach is therefore essential, and we must be consistent in the messages that we send out.
Drugs are often only part of a range of problems facing individuals or communities which have to be addressed. Too often, however, action is patchy, unco-ordinated, too short term or based on inadequate knowledge of what works or of what others are doing.
That is why the Government appointed Keith Hellawell as the UK anti-drugs co-ordinator, to pull together a more strategic response. He was an experienced senior police officer with considerable anti-drugs expertise. He and his deputy, Mike Trace, are providing a fresh perspective and ensuring that action against drugs is effective and consistent. They have spent the first few months of this year in an intensive review of existing drugs activity, consulting more than 2,000 organisations and individuals. The new strategy is based on their rigorous assessment of the problem, of what works, and, of course, what needs to be done to have a real impact.
The new strategy has four main aims: first, to help young people resist drug misuse to achieve their full potential in society; secondly, to protect our communities from drug-related, anti-social and criminal behaviour;

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thirdly, to enable people with drug problems to overcome them and live healthy and crime-free lives; and, fourthly, to stifle the availability of illegal drugs on our streets.
This year, we shall draw together clear, consistent and rigorous national targets against which to measure progress towards these aims. One of our early priorities will be to establish clear baselines for these targets.
Action will be comprehensive, combining firm enforcement with prevention. It will be linked to our wide-ranging programme to get people off benefit and into work, with reforms in the welfare state, education, health, criminal justice and the economy, and with work to tackle social exclusion. Enforcement against all illegal substances will continue, focusing, as necessary, on those who cause greatest damage.
The programme of action will include education for all young people, including primary-age children, to give them the knowledge and skills to resist drug misuse; information and support for parents; and programmes for young people who may be at high risk because of other social factors. It will include action to cut drug-related crime, including the piloting of drug treatment and testing orders; the disruption of local drugs markets; and crime reduction partnerships in local neighbourhoods. It will also include improvements to services for people with drug problems, especially young people, through health and community care; and it will include enhanced efforts to reduce the availability of drugs, with a focus on the activity that has most impact on our streets, using all our international and domestic resources.
The Government currently spend more than £1 billion on tackling drug misuse. Most of this is reactive—it tackles the consequences of drug misuse, not its causes. The White Paper proposes that, in the long term, the emphasis should shift towards prevention. We have to stop drugs problems before they start.
A detailed resource framework, building on this strategy, will be announced later in the year, but the Government have already shown their clear commitment to resources for fighting drugs. Last year, we extended the life of the drugs challenge fund. We reversed the proposed cut of 300 front-line Customs officers involved in anti-drug work, and, last month, we announced support from the single regeneration budget for 44 projects, which include prevention of drug misuse as one of their objectives. These range from a five-year drug prevention and regeneration scheme in the black country, to a seven-year partnership between the public and voluntary sectors in Kent, which aims to tackle the growing problems of drug and alcohol misuse.
In addition to this valuable activity, I can announce today that, for the first time, a proportion of assets seized from drug barons will be channelled back into the anti-drugs programmes. These assets have amounted to at least £5 million in each of the last five years. It is right that the profits from this evil trade should go back into tackling the problems that it generates.
The White Paper represents only a beginning. Continued development will be needed to translate its ideas into actions and achievements. Keith Hellawell and Mike Trace will oversee this programme, but their co-ordinating role does not take away from others the
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responsibility for tackling different aspects of the problem. We must all work together to tackle the scourge of drugs.
This week, the co-ordinators will embark on a nationwide tour to explain the radical new measures to those in the field, and to ensure that everyone is working together. They will, of course, be involving drug action teams who will be responsible for implementing the strategy on the ground. The co-ordinators will continue to work with Government Departments and key figures from the private and voluntary sectors, and they will keep in touch with parents, teachers and young people themselves to listen to their views and to learn from their experiences. They will ensure that anti-drugs work is relevant and effective. From 1999 onwards, the UK anti-drugs co-ordinator will present to Ministers an annual report and plan of action, setting out the progress made and the work still to be done.
This strategy is ambitious but realistic. It sets out clear and challenging new objectives, but it builds on good practice and on what we know works in the fight against drugs. It has partnership and common purpose at its heart. It will require commitment, effort and energy from everyone involved in its implementation. It provides an opportunity to make real progress over time against a destructive social problem, and I commend the White Paper to the House.
Mrs. Ann Winterton: I begin by thanking the Leader of the House for her kind consideration in letting me have a copy of the new White Paper at lunchtime. It was very helpful indeed.
The Opposition welcome the publication of the White Paper "Tackling Drugs to Build a Better Britain", which outlines the Government's strategy on drugs for the next 10 years. We recognise that drug misuse is a huge, complex social problem. There are growing concerns about increases in drug trafficking. For example, recent figures revealed a 30 per cent. rise in drug-related offences in London, against an overall fall in crime. It is estimated that the increases in drug misuse and drug-related crime accounts for 50 per cent. of offences.
I believe that it would be helpful to establish common ground between both sides of the House and to reaffirm our support for a continuing commitment to legal deterrents and firm enforcement of the law by the police and Customs and Excise. There should be no soft message on drugs promoted from the House of Commons. We reaffirm our opposition to the legalisation of any currently controlled drug—such a move would send out the wrong signals and open the floodgates.
We welcome the fact that the Government are building on the undoubted success of the drugs strategy introduced in 1995 by the previous Leader of the House, who is now in another place, and supported by the right hon. Lady as shadow Leader of the House. "Tackling Drugs Together" provided a firm foundation on which to build, setting out, as it did, to take effective action by vigorous law enforcement, to provide accessible treatment, to place new emphasis on education and prevention, to increase the safety of communities from drug-related crimes and to reduce the acceptability and availability of drugs to young people and the health risks and other damage related to drug misuse.
When the appointment of the UK anti-drugs co-ordinator was announced last October, the point was clearly made that the same themes would be continued

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and that the Government wished to build on the success of "Tackling Drugs Together" and not to demolish it. Against the background of the undoubted growth in drug misuse and the recent record seizures of heroin, there are high expectations of proposals in the new White Paper and a need not only for a clear long-term strategy, but for more immediate action.
As many hon. Members will wish to ask questions, I shall be as brief as I can. However, I have some questions for the right hon. Lady. The strategy that she has announced today involves many different professionals as well as those from the voluntary and charitable sector. What training will be made available, especially for those in education? How and on what time scale will it be delivered?
The programme of action includes young people at high risk. Who will be responsible for that action and by what means will it be achieved? What impact will the inclusion of drug education as part of the national curriculum have on other subjects? In other words, what will be lost as a result?
The right hon. Lady announced that national targets will be introduced in all priority areas and clear baselines will be established against which progress can be measured. How soon will that important information be available? Are there no comparable statistics available now that might prove useful?
How much money will be allocated to each target, and whence will this come? Will the Government provide any new money other than those extra funds from assets seized from drugs barons? Although I warmly congratulate the right hon. Lady on getting the Treasury to loosen its iron grip on such receipts, will she acknowledge that £5 million in each of the past five years is not a huge sum, bearing in mind the size of the task, and that a proportion of that sum is even less? What proportion will be made available and will she give an undertaking that if receipts rise, that proportion will not fall?
How will those resources be divided between education and enforcement? For example, will the enforcement agencies such as the police and Customs and Excise receive a share for their operational successes?
Will the right hon. Lady clarify the Government's policy on cautioning drug offenders, particularly for class A drugs?
Great store is placed on the drug treatment and testing orders, which are to be piloted before being introduced. Will the right hon. Lady confirm that they will not be available for at least two years? What action is being taken in the meantime, especially against drug pushers?
As drug abuse is a chronic, relapsing condition, will the right hon. Lady ensure that waiting lists for detoxification and rehabilitation programmes are reduced and that appropriate residential care, which has a measurable impact, is available, as well as care in the community from which the problem has often arisen?
What evidence can the Government produce to back up their claim that levels of drug abuse have stabilised?
The Government have asserted that they intend to be tough on crime and the causes of crime. If they are tough on drugs and those who push drugs, they will deserve and receive our full support for the measures that they introduce.
Mrs. Taylor: May I first welcome the hon. Lady to her Front-Bench responsibilities and thank her for her general
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comments and her welcome for the White Paper? On what is clearly common ground, I pay tribute to my predecessor, Tony Newton, who introduced the previous Government's strategy, which set the framework for us to build on.
The hon. Lady said that this is a huge, complex social problem, and we can all agree on that. She also mentioned the difficulties in London and the vast mushrooming of drug-related crime in certain areas. It is true that, overall, there has been an increase in drug-related crime and, in recent years, there has been an increase in drug taking, but the problems are concentrated in certain areas. We must be realistic and recognise that there are very few parts of the country that we could claim were free from the problems of drugs and drug-related crime.
The hon. Lady asked about legal deterrents and said that there should be no soft messages from this House. I agree. I have said that we should send out clear and consistent messages. We must remember that drugs ruin the lives not only of many young people and families but of people who live in those communities and who are secondary victims because they are the victims of crime, to which many young people turn to fund their drug taking.
The hon. Lady asked me specific questions about how we will implement the White Paper. In certain respects, she asked me to prejudge the next stage in consultation and implementation. She can rest assured that the professionals have been widely consulted and are very much in line with our thinking and the way in which we wish to take things further.
The hon. Lady specifically mentioned education and the need to train teachers, which we, of course, recognise. People undergoing teacher training are being told about the problems and are being helped to explain the issue to young children. Teacher training is, of course, an on-going process. We know from different experiences in different parts of the country that some areas have already developed very effective education packs. I visited a school in London this morning, where Project CHARLIE—Chemical Abuse Resistance Lies in Education—was being used to good effect. We can use and promote best practice so that all schools are able to get the benefit of experiences thus far.
The hon. Lady asked about targets, when they may be set and why we could not start immediately. We looked at the possibility of establishing targets as part of the White Paper, but the baseline information was simply not available in a way that would have given us confidence that targets would be realistic. It is always possible to set targets that can be met, but whether that means anything at the end of the day is another matter. We thought that it was right to spend time ensuring that the targets were relevant and realistic before jumping in. As a result, it is impossible to answer her question about how much money will go into each specific type of work, just as it is to give details of how seized assets may be used. However, I accept her recognition that allowing seized assets to be used in such a way is a significant step forward.
The hon. Lady asked about resources generally. Of course, resources are important in dealing with these problems. We must be realistic and acknowledge that this is the first time that any Government have had such a clear investigation into what is being spent on tackling the

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problem of drugs. We are trying to ensure that we have the full picture, because we want to know what works, what provides value for money and what kind of treatment is most effective. There is still some way to go in assessing all that, although, as I said in my statement, the Government have made their commitments on resources very clear by extending the drugs challenge fund, reversing cuts in front-line Customs officers, ensuring that drug projects are a priority in the single regeneration budget and, now, by the proposals on seized assets. Once the comprehensive spending review is complete, more can be said on the matter. We have laid out our principles, and they will guide us in future.
The hon. Lady asked about cautioning. Although we would not want to interfere with the way in which the police make decisions in any area or on any case, we would like more consistency—as, indeed, would many police officers. We recognise that cautioning has a part to play. We must ensure that we provide the most effective mechanisms for dealing with the problems. There must, therefore, be a degree of flexibility.
The hon. Lady asked me where the figures on possible stability in drugs problems had come from. They are from the previous British crime survey. Although there are signals that there may be some stabilisation in trends of drug taking, we must all be aware that the nature of drug taking may still be changing, which, in itself, may pose extra dangers for many young people.
Mr. Stephen Timms: I warmly welcome my right hon. Friend's statement and the response of the hon. Member for Congleton (Mrs. Winterton), whom I welcome to the Opposition Front Bench.
Does my right hon. Friend agree with the all-party group on drug misuse about the importance of starting drugs education at primary schools, building up young people's resistance to drug misuse at an early stage? She made explicit—and I welcome that fact—the link between tackling drugs misuse and the Government's wider assault on social exclusion. How does she expect the Government's urban regeneration policy to boost the fight against the most damaging drugs in inner-city areas, such as the one I represent in east London?
Mrs. Taylor: I am grateful for my hon. Friend's comments, and I know that the all-party parliamentary group has been looking at the issues. I am glad that he welcomes what we have said about education in primary schools, as it is important that we integrate an awareness of drugs into school curricula at an early stage. That will not have an adverse impact on other parts of the school curriculum, because youngsters of that age already receive education about medicines, their bodies and respect for themselves. Drug education can be integrated into that, although it must be appropriate for the age group that any teacher is dealing with. As I have said, there are examples of projects that seem to work.
My hon. Friend asked about urban regeneration. We have incorporated drugs projects into the criteria for single regeneration budget money. The announcements we have made on SRB money show that we are serious about encouraging drug work in that field because, on many occasions, the people who take drugs are the same
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people who play truant, are excluded from school and do not get jobs. We need an integrated approach to the problem.
Mr. Simon Hughes: I join other colleagues in welcoming the White Paper and the Leader of House's statement. The White Paper is clear, comprehensive and does not sensationalise. Although my party continues to believe that a standing royal commission would have benefits in terms of giving non-political advice, this first report from the new drugs tsar is a good start and shows a promising way forward—particularly in pointing out the importance of moving the agenda from dealing with the causes of drugs misuse to the consequences.
Does the right hon. Lady envisage an increase in the amount of drugs treatment? Will she make sure that those who come to treatment through the health route do not find that their opportunities are blocked by those who are referred for treatment through the criminal route? Will drugs education be a matter of core curriculum teaching in primary and secondary schools? If so, how soon does she envisage that beginning? Can I push her on resources? If £5 million a year has been the amount collected—as it were—from drugs barons in past years, can she give any figure for the amount to be committed from that income to the anti-drugs battle? When will that begin? Will that amount be protected in the future? Is it new money?
Mrs. Taylor: I thank the hon. Gentleman for his welcome. He used the word "sensationalise", and it is important that we have sensible discussions about the problems without sensationalising them. I am glad that the House has reacted in that way today. He asked about treatment, and, clearly, there are pressures in terms of existing capacity. We want to ensure that those people who need treatment can get it at an appropriate stage. That is particularly important for younger people. If we can intervene earlier, it will be beneficial.
The hon. Gentleman mentioned the criminal route. My right hon. Friend the Home Secretary is piloting schemes to try to make sure that prisoners, or those who come into contact with the criminal justice system, can get the treatment they need. That will help individuals, but it will also help the communities that they may have been attacking to get money for their drugs habit.
Drug education should be incorporated into the existing national curriculum. The House should be aware that there is scope in the core curriculum—even at key stage 1—for young people to learn about medicines and about respect for themselves. Incorporating drugs education into that phase is important.
The money from seized assets will provide new resources. That will be not only useful—the money can be spent on extra treatments, for example—but important, as it will send out signals about how seriously we take the problem.
Mr. Paul Flynn: Does my right hon. Friend recall my writing to her a few months ago following a report in which doctors claimed that cannabis had unique medical benefits and that seriously ill people should be able to use it? Does she also recall the three people who came to the House some four years ago—a lady suffering from cerebral palsy who was taking

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cannabis to alleviate her pains, the mother of a 20-year-old girl dying from cancer who had discovered that the available chemical drugs were turning her daughter into a zombie, but that she was lucid on cannabis, and a woman who was using cannabis to deal with the pain and indignities of multiple sclerosis?
My right hon. Friend said that the Government intend to continue to inflict the same punishments on cannabis users. Does not she agree that the message that the House is sending to those tens of thousands of seriously ill people who are using cannabis as a unique medicine is that they should either continue to suffer or go to a market that is controlled by irresponsible criminals, in which they have no control over the quality or the purity of what they take? Is not that message unfair and cruel?
Mrs. Taylor: We all sympathise with anyone who has a serious and debilitating illness, but the Government take the view that, at this stage, there is insufficient evidence to demonstrate the effectiveness of cannabis or cannabis derivatives as therapeutic agents—that view was also expressed by the British Medical Association in its recent report.
Research into both cannabis and cannabinoids can take place within existing Government policy and the legislative framework, in which procedures are laid down. Over the past year, the Home Office has received 27 applications for licences to carry out such trials—25 have already been approved. If people believe that some cannabis derivatives have therapeutic or medical benefits, they can follow procedures to take the situation further.
Mrs. Angela Browning: Will the Leader of the House put in the Library details of the primary school projects that she has identified as successful? Will she confirm that the Government are examining best practice and results from primary education abroad? I am sure that she would agree that deciding what is appropriate for children of different ages is a sensitive and difficult issue.
Mrs. Taylor: I am grateful to the hon. Lady, and I am happy to provide any extra information that is required. She gives me the opportunity to mention the fact that we are today publishing guidance notes on some of the best practice and information that has been drawn up by the UK anti-drugs co-ordinator and his deputy on what is thought to work in different circumstances. She rightly says that we must be sensitive in dealing with the problem, as children do not react in the same way. We do not want to make drugs seem attractive, because they are daring, but we shall do children a grave disservice if we leave them in ignorance—we must provide appropriate education for all children and, indeed, for their parents.
Mr. Lawrence Cunliffe: Has my right hon. Friend studied what some of us consider to be the resounding success of the American drug courts, which deal exclusively with drug addicts and users of all ages? There is a highly specialised network of professional advisers and therapists to make recommendations to the drugs judge, who, for many years, has investigated drug addiction. That seems to be the right way in which to proceed—there has been a 34 per cent. success rate in rehabilitation, partly through short, stiff sentences, which have proved to be a great deterrent to users. Will she, with
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the Home Office, set up an experimental court to establish whether such a system would be practicable in this country?
Mrs. Taylor: My hon. Friend mentioned drug courts. It is always difficult to take a feature from another country and simply translate it here, without taking account of the different systems and cultures. The drug testing and treatment orders that my right hon. Friend the Home Secretary is piloting are a British version of part of what my hon. Friend is talking about. We are piloting those schemes because we think that they could be important, but the long-term outcome must be our priority.
Mr. Nicholas Winterton: I welcome the statement and the White Paper. I congratulate my hon. Friend the Member for Congleton (Mrs. Winterton) on her extremely robust performance at the Dispatch Box—I am sure that it will be the first of many—and the Leader of the House made an excellent statement.
Macclesfield is fortunate in having the Barnabas centre, which has had great experience as a drop-in centre and tries to wean young people, in particular, off drugs and to start the rehabilitation process. My local paper, the Macclesfield Express Advertiser, said that some young people in Macclesfield spend up to £1,000 a week to fund their drug addiction. Will additional resources be put into residential establishments, as I believe that they stand the best chance of explaining the evils of drugs and helping people to get rid of an addiction that costs this country so dear?
Mrs. Taylor: I thank the hon. Gentleman for his generous comments to both Front-Bench spokesmen. I am not surprised that we have heard about Macclesfield today. He referred to the important issue of some young people spending up to £1,000 a week to fund their drug habit. Of course, it is rarely their own money: the victims of crime fund the habit, and that is one of the reasons why we must give the problem a high priority.
The hon. Gentleman asked about residential establishments, which are, of course, an integral part of the treatment provision that must be available, but they are not the only answer and we must remember that those who are successfully treated in them must still be prepared to go out and live in the real world again. One problem is that people often go back into their old communities and some of the work is undone. Residential establishments have a role to play, but so do many other types of development, because the problem is extremely complex.
Mr. John McDonnell: This morning, I visited the Mount prison in Hemel Hempstead, which detains two of my constituents. Like every other prison in the country, it is bedevilled by a sizeable drug problem, but I was pleased to note the attempts that the governor and prison officers are making to introduce mandatory and voluntary drug testing, to have drug-free wings and to prepare prisoners for release in a drug-free state.
I was concerned to see that there were only two staff provided by Druglink in support of that initiative in the prison. There needs also to be greater support for the

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probation service when prisoners come out of a prison drug free and return to the community, where they are again susceptible to drug dealers.
Mrs. Taylor: I do not know the prison to which my hon. Friend referred, but I am glad that he thinks that good work is being done there. Clearly, both mandatory and voluntary testing have a role to play. He mentioned Druglink staff and the probation service. A review is being conducted into how people can work together, and I assure him that when we were drafting the White Paper, the Prison Service staff, probation officers and link workers were all consulted, and they will be consulted on implementation in the future.
Mr. Julian Brazier: Will the right hon. Lady confirm that central to all that must be securing convictions against drug barons? I see the Home Secretary in his place. Will the right hon. Lady tell us whether the Government are studying the rules of evidence, in particular the use of intercept evidence in trials and the present abuse whereby defence lawyers can demand to know the names of informers, even when their clients have been caught in possession? Surely the civil liberties of the accused cannot be allowed to override the desperate need of the wider community to tackle this evil.
Mrs. Taylor: I think that we would all like to be more successful with the drugs barons, who are clearly the evil people driving the trade and encouraging and tempting young people into drug misuse. The hon. Gentleman mentioned the rules of evidence; some of his points about disclosure have been covered. Intercept evidence is a complicated area, although I know from my right hon. Friend the Home Secretary that it is being looked into, along with other matters.
Mrs. Anne Campbell: May I warmly welcome my right hon. Friend's statement, in particular the part that dealt with the introduction of drugs education into the primary curriculum? However, does she agree that by the time children reach secondary school age, they are often more knowledgeable about and familiar with drugs than their parents? Will she ensure that drugs education and awareness are made available not only to children and teachers, but to parents, grandparents and other people who come into contact with young children?
Mrs. Taylor: My hon. Friend is right to say that parents need extra information. Schools have a part to play in that, but so does everyone else. We propose to issue a new leaflet to parents, prepared by the Health Education Authority. That will go out later this year. Also, conferences are proposed in different parts of the country, aimed at involving parents. As parents, we all have significant responsibilities. It is important that we understand the situation and, perhaps, become aware of it as soon as our children enter school. Some parents may be learning with their children, but, far too often, children know more than their parents.
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I welcome what my hon. Friend said about the primary curriculum and I hope that she will be pleased that the first port of call for the anti-drugs co-ordinator in the next phase of consultation about the White Paper will be Cambridge in the near future.
Mr. Douglas Hogg: The right hon. Lady has commended to the House the value of an integrated approach to the drug problem, and I agree. What will happen after devolution, particularly in the context of Scotland? As this is a multi-agency strategy, I assume that responsibility for health and the police and education authorities in Scotland will be the exclusive responsibility of the Secretary of State and then a Scottish Minister of a Scottish Parliament. How will the Government maintain an integrated approach to fighting drugs if responsibility in Scotland is a matter for the Scottish Parliament and Scottish Ministers, and the same applies in Wales and perhaps in Northern Ireland?
Mrs. Taylor: I do not see that there will be any difference after devolution. At the moment, there is a separate but related Scottish strategy. My right hon. Friend the Secretary of State for Scotland has been working with the United Kingdom anti-drugs co-ordinator, and that co-operation will continue.
Mr. Ronnie Campbell: I congratulate my right hon. Friend on the statement, which is a step in the right direction. It would be remiss of us if we did not congratulate United Kingdom Customs officers on the way in which they have done their jobs and on the number of seizures that they have been getting. I remind my right hon. Friend that the number of Customs officers was halved by the previous Tory Government during the past few years. I heard what she said—she is reversing that trend. I hope that it is reversed and that Customs officers get back to full strength. If they do, we will see the number of drugs seizures double.
Mrs. Taylor: I thank my hon. Friend. Customs officers have an important role to play. The Financial Secretary to the Treasury, into whose remit they fall, is on the Government Front Bench and will pass on the congratulations of the whole House.
My hon. Friend will be aware of initiatives for disaffected youth in Blyth Valley, mainly focusing on drug abuse, that have been included in a single regeneration budget grant. I hope that that will help him to fight the problem in his constituency.
Dr. Brian Iddon: I regret that there seems to be little evidence in Greater Manchester that the problem of misuse of drugs is stabilising. Indeed, there has been a frightening change of culture, as heroin prices have collapsed and young people have moved straight to heroin without experiencing soft drugs. That has happened in spite of many excellent projects and the work of the previous Government. I sincerely hope that the Government can get to grips with the problem. I know of their serious intent and welcome the statement. Misuse of drugs is the third largest industry in Britain. It makes £8 billion internationally, so spending £5 million is a drop in a large ocean.
Are the Government prepared to keep an open mind on misuse of drugs? The Police Foundation has held an excellent two-year inquiry and the House of Lords

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Science and Technology Committee is taking evidence on cannabis. My right hon. Friend said that there would be an annual report on the subject, which I welcome, but the Government must listen to all opinions so that together we can overcome a major problem.
Mrs. Taylor: The Government are always willing to listen to all opinions. I hope that my hon. Friend will listen to the opinion of the World Health Organisation, as its most recent report stated that cannabis has an adverse effect on human cognitive, motor skill and reproductive functions, that smoke from cannabis contains up to 50 per cent. more carcinogens than tobacco smoke, that cannabis is a risk factor in schizophrenia, and that up to 50 per cent. of regular users develop dependence that they are unable to control. I hope that those who take a different line from that of the Government will bear all those factors in mind.
Several hon. Members rose—
Madam Speaker: Order. To be helpful to the House, I should like to call all Members who are standing. Will they help me by making questions and answers very brisk?
Mr. Nigel Evans: When I was chairman of the all-party drugs misuse group, I welcomed the appointment of the drugs tsar, and I welcome the right hon. Lady's strong, clear announcement today, which is one in the eye for the Independent on Sunday and its irresponsible campaign on the decriminalisation of cannabis.
Will the right hon. Lady send a congratulatory message to Kennington Road primary school in my constituency which announced at the weekend that it would involve itself in getting the message across to primary school children on the dangers of drug and solvent abuse? There is an important job for the primary schools to do. Will she ensure that there is proper support for teachers, particularly in rural schools, which are not insulated from the drug problem? Will she ensure that all parents—not just targeted or high-risk parents—get information about what is being taught to their children, so that they, too, can get involved?
The right hon. Lady mentioned £5 million. Will she consider using all the assets of drug dealers for her campaign, as that would send a very clear message? Finally, may we debate in the House of Commons the drugs report that is to be issued every year, so that we can all have our say on how the problem is being tackled?
Mrs. Taylor: I thank the hon. Gentleman for his remarks and am happy to send my congratulations to Kennington Road primary school. It is important that we provide information to help schools to present these problems to children, but that they should have the independence to judge what is most appropriate in each case. He is right that other problems should be considered, such as solvent abuse, which is a real problem in many areas.
The hon. Gentleman asked for support for teachers. I said that it will be provided. He made the valid point that rural areas, like urban areas, need advice, information and support. He is also right that all parents need information. No parent can complacently ignore the problem.
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The seized asset figure that I gave was the figure for seizures. What might be available will depend on what can be seized. We are serious about trying to ensure that as much money as possible is recycled into treatment provision. As I resist so many calls for debates from other hon. Members, I must be wary of his request for a debate each year, but I shall bear it mind from time to time.
Mr. Bob Blizzard: My right hon. Friend's statement will be welcome in my constituency, where the police and the community have to deal with more cases of heroin abuse than cannabis abuse. Does she accept the message given to me over many years by the pupils whom I taught in several high schools, that education about the dangers of drugs needs to start much earlier, before children come to high school? It must start in primary schools. Does she agree that all the education in the world will not be effective unless it is backed up by adequate enforcement, and that enforcement requires adequate resources, but that ultimately there will be a return on those resources through fewer burglaries and fewer neighbours from hell who terrorise neighbourhoods because of drugs?
Mrs. Taylor: My hon. Friend is right that all those aspects must go together. We need education, not only for secondary children but for primary school children. Of course, that must be done in the context of strict enforcement. He is also right that many people become victims when drugs take hold of an area. My right hon. Friend the Home Secretary has already made statements about anti-social behaviour, and we are very conscious that whole communities can suffer when young people in an area start taking drugs. That is why we have a responsibility not only to young people but to the community in which they live.
Mr. Donald Gorrie: Will the Government consider extending their drugs programme to include the misuse of alcohol? Under-age and excessive drinking causes as great—if not greater—social problems, as do drugs in terms of domestic violence, violence in the street, social breakdown and so on. The misuse of alcohol would fit well with the educational and social aspects of the Government's programme.
Mrs. Taylor: My hon. Friend the Parliamentary Under-Secretary of State for the Home Department chairs a ministerial group on alcohol misuse. We are very conscious that there are many problems. Many of the youngsters who abuse alcohol are the same ones who abuse drugs and who are truanting or excluded from school. That is why we cannot look at these problems in isolation and why we are trying to ensure better co-ordination to tackle the problems together.
Mr. Syd Rapson: Should not we all embrace this statement with great enthusiasm, as it will be embraced in my constituency, not least because my wife is chair of the crime prevention committee? I live on a council estate where the evidence of youth involvement in drug crimes becomes greater every day. We should welcome it unreservedly and not be churlish or seek to water it down.
Mrs. Taylor: I am grateful for my hon. Friend's support. From his personal experience, he understands the

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extent of the problem in Portsmouth, which is to receive nearly £3 million over seven years from the single regeneration budget. Part of that project is aimed at diverting disaffected young people from crime to education and employment. That reinforces the need not only to tell young people that they should not take drugs but to be able to offer them a positive alternative. We need to be firm in our message that young people should not take drugs, and firm in respect of what we have to offer young people by way of better opportunities.
Mr. Edward Leigh: As a result of today's statement, what extra resources are being made available to the Prison Service to enable judges to impose more and longer deterrent sentences on drug pushers?
Mrs. Taylor: My right hon. Friend the Home Secretary has already increased resources for this year. The answer to drug problems does not only involve sending appropriate people to prison. Many other options are often more appropriate. We must ensure that we have sufficient flexibility. If we can divert people from prison and criminal behaviour by providing effective treatment, that is one of the options which should always be considered. There are no hard and fast rules about what works in any individual case. The hon. Gentleman is wrong if he thinks that there are simplistic answers to the problem.
Mr. David Hanson: May I broadly welcome my right hon. Friend's proposals? Will she confirm that they cover solvent abuse, which involves the widespread abuse of products that are legally available and results in the deaths of more than 100 young people, mostly under the age of 16, every year?
Mrs. Taylor: I know that my hon. Friend has a long-term interest in the problem and has raised the issue on other occasions. He is right that we should not simplistically separate the different strands of this problem. As I said earlier, the young people who take drugs are often those who have taken alcohol or been involved in solvent abuse. In some places, drug action teams take a more comprehensive approach, but we have left it to those teams to decide the most productive approach and the best way to co-ordinate locally.
Mr. Colin Breed: The right hon. Lady rightly emphasised the need for clear and consistent messages. Is she aware that governing bodies with a policy of excluding any pupil found with drugs on school premises find it difficult when local police then only give a caution? The penalty visited on the pupil by the governing body is often seen to be greater than that under the law of the land, and governors find it difficult when they confront the parents of the children involved. There a need for a clear and consistent approach both at governor and school level and at local police level.
Mrs. Taylor: I am sure that there is a need for clear and consistent approaches. The hon. Gentleman mentioned the responsibilities of governing bodies. At the end of the day, provision must be found for any child who is excluded temporarily or permanently. We must try to ensure that the various agencies work together so that
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fewer children are excluded, not least because excluded children are more likely to get deeper into drug taking and criminal activity. That is one of the prime reasons why we must have as much co-operation as possible.
Mr. Ivan Henderson: Does my right hon. Friend agree that one of the most important strategies for stopping drug misuse is preventing people from bringing drugs into ports? Will she join me in congratulating the Customs at Harwich International port on its great results in detecting drugs and preventing them from entering the country? Will the strategy for education include the use of professionals such as Customs officers in schools close to ports to help educate young people, as happens in Harwich?
Mrs. Taylor: I am happy to join my hon. Friend in congratulating Customs officers in his area. They play a critical role in all this, and their work should be recognised, along with that of many other agencies, including the police, the Prison Service and probation offers. Many people are already involved in the fight against crime. Much co-operation is taking place, and we have to build on that.
My hon. Friend asked about education and whether it was possible for Customs officers to go into schools as part of the drugs education programme. In some areas, Customs officers do that; in others, police officers and others involved in the fight against drugs participate in that co-operative way. We should look at what works in any particular area and always be ready to build on that, learn from best practice and ensure that best practice is spread throughout the country.
Helen Jones: I also warmly welcome my right hon. Friend's statement, especially the proposals to tackle drugs-related crime, which makes life hell for many decent people in parts of my constituency. Does she agree that an important part of tackling the problem is what goes on in our prisons? Does she welcome what is being done by officers and nurses in HM prison Risley in my constituency, who have put forward proposals to set up a drugs detoxification unit? Will she aim to ensure that the Prison Service gives priority to similar proposals throughout the service, given that someone who goes into prison addicted to drugs and comes out addicted is highly likely to commit further crimes?
Mrs. Taylor: I agree with my hon. Friend. Someone who goes into prison addicted to drugs and comes out addicted to drugs will almost inevitably get caught up in crime. I have not visited the unit at Risley, but I have seen the unit in Strangeways and heard of various prisons' success in ensuring that prisoners who are willing to take the first step to kick a drugs habit are given the support and help they need. I am sure that the Prison Service will generally welcome my hon. Friend's comment and be happy to try to move in the direction she recommends.
Fiona Mactaggart: I apologise to other hon. Members, whose questions I did not hear; I did hear the statement. May take this opportunity to thank the Government for the £2 million in support for the anti-drugs work of the single regeneration budget partnership in Slough? May I urge that, in tackling this

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problem, we work carefully with parents of different communities and cultures? The Sikh community in Slough are extremely anxious about young people's involvement in drugs, but they feel that, in the past, many of the programmes have not been sensitive to their concerns. They would be grateful for the assurance that their needs will be clearly at the centre of the strategy.
Mrs. Taylor: I am grateful for my hon. Friend's comments. She is right to say that all parts of the community need help in this respect. She mentioned the SRB projects in Slough, which are unusual in including peer-led drugs education as well as outreach workers. It is important that we use all possible means to get the message across. She also mentioned minority communities and the Sikh community in Slough: we have to face the fact that no community is immune from the problem of drugs and that if we are to get the message across to different communities, we may have to use different ways and be sensitive to the reaction of the communities. The problem is so serious that all parts of the country and all communities must get the necessary information so that, together, everybody is as well equipped as possible to face the challenge and to equip our young people for a better future.

Point of Order
4.53 pm
Mr. Tam Dalyell: On a point of order, Madam Speaker. As some of us know only too well, you are, quite rightly, very stringent about your selection of subjects for private notice questions. My point of order, on one level, might seem a bit impertinent and cheeky in relation to the Chair, but it is not meant that way.
Before accepting a subject for a private notice question, should there not be some assurance by the hon. Member asking the question, if he is not the constituency Member, that, if he is going to criticise people and an institution, he has had the courtesy at least to attempt to contact them?
It was a bit odd that this afternoon's question should come from the hon. Member for Truro and St. Austell (Mr. Taylor). I wondered whether he had consulted his right hon. Friend the Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan), because it became quite clear that he had not bothered to contact Dounreay. Do you, Madam Speaker, think that it is any part of the Speaker's duty to contact the institution involved before criticism is made, to determine whether an hon. Member has had the courtesy to hear the other side of the story before taking up the time of the House of Commons and causing great damage?
Madam Speaker: It is no duty of the Speaker to question the fact that an hon. Member, wherever he represents, has put a private notice question to me. My only concern is to ensure that it meets the criteria of urgency or emergency or, as in this case, whether I am able, by bringing a Minister to the Dispatch Box, to give what I thought the public needed in terms of reassurance. It was on that point that I determined to bring the Minister to the Dispatch Box. I have nothing further to say on that matter.
Mr. Simon Hughes: Further to that point of order, Madam Speaker.
Madam Speaker: There can be no further point of order. I have made it quite clear what the position of the Speaker is, and I have given a reason, which is unprecedented, but I thought that it was important that the people should be reassured about the situation. I believe that they have been reassured today, and that was my reason for bringing the Minister here.

Orders of the Day

  Finance (No. 2) Bill
  (Clauses 1, 7, 10, 11, 25, 27, 30, 75, 119 and 147)
  Considered in Committee.
  [MR. MICHAEL J. MARTIN in the Chair]
  Ordered,
  That the order in which proceedings in Committee of the whole House on the Finance (No. 2) Bill are to be taken shall be: Clause 30, Clause 75, Clause 147, Clause 1, Clause 7, Clause 10, Clause 11, Clause 119, Clause 25, Clause 27.—[Mr. Geoffrey Robinson.]

  Finance (No. 2) Bill
    Clause 30

      CORPORATION TAX: DUE AND PAYABLE DATE
      4.56 pm
      Mr. Peter Lilley: I beg to move amendment No. 2, in page 15, line 25, at end insert—
      'Provided that a draft of the first set of regulations made under this section shall be laid before Parliament and the regulations shall not be made until the draft has been approved by resolution of the House of Commons.'.
      This is a tax-raising Bill: it adds to the taxes raised by the previous Finance Bill introduced last July, and the bulk of those taxes fall on business and on the savings available to businesses to finance their investment. Before the election, the Chancellor repeatedly promised that, apart from the windfall tax, the Labour party's programme would not require any extra taxation at all. The Labour party went out of its way to claim that it would be friendly to business in particular, to try to allay the fear business rightly had of a Labour Government.
      Labour gave us a test to judge its tax policies. Labour's manifesto stated:
      "How and what governments tax sends clear signals about the economic activities they believe should be encouraged or discouraged, and the values they wish to entrench in society."
      That is the test that we can use to establish, on the basis of their tax record so far, what activities the Labour Government wish to discourage and what values they wish to oppose in society. What is clear is that business has been singled out for extra taxation; almost all the extra taxation introduced so far falls either directly on companies or on savings that will finance business and investment. We want confirmation from the Government today that it is their intention deliberately to send clear signals that the economic activities they believe should be discouraged are the activities of business and of saving for the purpose of financing investment, because it is on those activities that they have loaded all their taxes.
      Mr. Barry Gardiner: If the Government are seeking to punish businesses, why do we now have the lowest ever rate of corporation tax for small businesses?
      Mr. Lilley: Because the Government have raised taxes massively with their right hand and given back a small amount with their left hand. Perhaps I should say it the other way round; it is, of course, the left hand that raises taxes, and a very small amount is being given back in the form of a lower corporation tax rate.
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      In total, nearly £20 billion is being raised from the business sector as a result of the extra taxes introduced in the Government's two Budgets—and that is after allowing for the reduction in corporation tax rates announced in both Budgets. That is why we say that there is an extra load on business. We should like the governing party to be more frank and honest about what it is doing. That £20 billion burden on business means that business has £20 billion less to invest, £20 billion less with which to generate jobs and £20 billion less with which to enhance the growth potential of the British economy.
      5 pm
      Clause 30 introduces a quarterly payment system for corporation tax. It is an unplanned baby, conceived by accident in July 1997. Its progenitors were thinking of other things when they brought it about. They had not thought what, nine months later, would flow from their actions. They thought that they were simply abolishing tax credits—an enjoyable activity for socialists, because it was a stealthy way in which to raise a huge amount of tax from savers and companies—but one thing leads to another.
      Abolishing credits in July 1997 meant that foreign income dividends had to go in the Finance Act 1997. That meant that advance corporation tax ceased to be tenable, and, during the summer, the Government decided that that, too, had to go. Then they realised that they had to replace that with a quarterly payment system on corporation tax, which they announced in November 1997; and because they got that wrong, too, they had to revise it in March 1998.
      We welcome the mitigation of the measures announced by the Government in November 1997, and the improvements for small companies that were introduced when they finally brought this child to birth in March. However, like the Confederation of British Industry, we condemn the overall impact of the Government's changes on the cash flow of the company sector, and of major companies in particular.
      According to the Government's figures, clause 30 will raise £6.8 billion from companies this Parliament. The accompanying 1p rate cut in corporation tax will return to companies just £1.7 billion of that £6.8 billion. The net impact of the clause on corporate sector cash flow will be £5.1 billion. I should be grateful if the Paymaster General would confirm that figure now, or when he gets back to the Dispatch Box. He may not be listening, but can he confirm that the net effect of the clause is to lift £5 billion from the cash flow of the corporate sector and take it to the Treasury, as a result of bringing forward payments that companies would have to make, through the advance system of corporation tax payments, on all their profits?
      Let us have no more from the Labour party about the supposed reductions in corporation tax because of changes in the corporation tax rate, such as those that the hon. Member for Brent, North (Mr. Gardiner) just mentioned. Let us have a clear statement today that, when the Prime Minister denied that there was any increase in corporate taxation, he was misinformed and was, therefore, misinforming the House. Let us have a clear admission that the Government are adding further to the burden of business, on top of the previously announced taxes, on top of the high interest rates that have been introduced in this Parliament and on top of the crippling exchange rate,

      45
      all of which are already precipitating manufacturing into recession. These burdens of taxation will make it spread all the more rapidly to the rest of the business sector.
      Mr. Ross Cranston: Is it not the case that the quarterly system of corporation tax payment operates in the United States, Germany, France, Australia, Canada, Japan and a host of other countries, and that we are simply coming into line?
      Mr. Lilley: I was just about to say that we have no objection in principle to a quarterly payment system; it is the use of that system, by arranging the transition to bring forward into this Parliament payments that previously would have been made years ahead, that is so iniquitous and devious. If the hon. Gentleman had had the courage to admit that it was being done to raise extra taxation rather than to smooth spending over the year, I should have had more respect for him and the Labour party.
      We have no objection to a system of quarterly payments—something like that became inevitable once credits, foreign income dividends and the advance corporation taxation system on dividends went—but we object to it being used as a back-door method of increasing taxes on the business sector by stealth.
      Mr. Dale Campbell-Savours: In the right hon. Gentleman's view, could we have had reduced revenue coming into the Exchequer while we had the reduced interest rates that the right hon. Gentleman has been calling for? Could we have had both together?
      Mr. Lilley: I believe that, if we had encouraged, not discouraged, saving, it would have made it easier for the Bank of England to achieve a given inflation target with less emphasis on high interest rates and high exchange rates. By not taking steps to encourage consumers to save, but allowing the burden of taxation to fall on business and savings, the Government have exacerbated the problems that they diagnosed when they came to power.
      Our amendment No. 1, which has not been selected for debate, would have required the Government, in introducing a quarterly payment system, to ensure that it did not result in any net take-out of companies' cash flow. It would have ensured that the effects of the system were fiscally neutral, and that the Government adjusted the timings and the transition period to ensure that.
      As amendment No. 1 has not been selected, we shall vote against clause 30, and I shall invite the Committee to join us. Apart from the fact that clause 30 raises taxes by stealth, the most objectionable feature of the Bill and the clause is that they rely on the wholesale use of regulation-making powers, so that the Government can introduce complex but important measures in a way that cannot be amended, and which, in many cases, will not even be debated.
      Hardly any of the key parameters of the new system of corporation tax payments are spelt out in the Bill. The Institute of Directors rightly protests:
      "The dates on which tax is payable and any associated penalties are fundamental matters, which should be dealt with in primary legislation:'
      They are not. Why have not the Government spelt out in primary legislation the key parameters of the system that they are introducing, to allow hon. Members the
      46
      opportunity—preferably on the Floor today, but if not, later, in Standing Committee—to examine and consider the proposals. and to reflect in that debate representations from outside the House about the detailed proposals?
      Mr. Cranston: Will the right hon. Gentleman give way?
      Mr. Lilley: I shall continue with this point, if I may.
      It is essential that we find out the Government's intentions, or that we ascertain that, in this respect, too, they have not yet thought out their plans, just as, when they announced the abolition of tax credits, they had not thought that it would make necessary a new system. Is it further evidence of their botched, muddled failure to think through their taxes when they make their announcements?
      I shall happily give way to the hon. Member for Dudley, North (Mr. Cranston). If he is true to his duty as a Back Bencher, he will want to debate such measures in detail rather than pass them on the nod in the contemptuous way in which the Government sideline Parliament whenever they have the opportunity.
      Mr. Cranston: I thank the right hon. Gentleman for giving way again. Did he in his long experience, including at the Treasury, never propose legislation containing a regulation-making power?
      Mr. Lilley: I cannot remember proposing a clause containing 11 separate regulation-making powers. Not a single detail of the Bill has been spelt out or published previously so that the Committee would know what regulations would be made under the clause. The amendment would ensure that Parliament saw drafts of the regulations and voted on a resolution before the regulation-making process was completed.
      Labour Back Benchers are numerous and could use the time on their hands to good effect by considering legislation properly and in detail, which is what their constituents sent them to Parliament to do, rather than letting Ministers bypass them and Parliament by taking general regulation-making powers that suggest that they do not even know what they intend to do. We shall listen intently to the Paymaster General for evidence that he knows what he intends to do any more than he and his colleagues did when they started the process nine or 10 months ago.
      Mr. Malcolm Bruce: The right hon. Member for Hitchin and Harpenden (Mr. Lilley), who leads the Conservative Treasury team, has worked himself into a synthetic stour about the clause. The Government's basic proposals have been out for consultation for several months, and, although hon. Members are entitled to ask for clarification of the legitimate concerns to which the right hon. Gentleman referred, I do not get the impression that there is enormous fulminating opposition to a measure that most business people acknowledge as reasonable in principle.
      The Government's claim to want to open up the Budget process to greater debate, consultation and transparency is a genuine issue, however. The Chancellor announced the abolition of advance corporation tax and the introduction of quarterly payments in his pre-Budget statement, but did not say that there would be a substantial cash flow benefit.

      47
      The Paymaster General will have to acknowledge that there will be a net flow of funds into the Treasury in the lifetime of this Parliament, and of the order of that to which the right hon. Member for Hitchin and Harpenden referred. In the interests of transparency and genuine debate, the Chancellor should have been more forthcoming about the cash flow benefit that the Government would achieve compared with the overall effect of the reduction in tax rates.
      The measure will have a more severe impact on some businesses than on others. As regulations will be made, the Minister should say whether variations or adjustments will take account of the skewed revenue flows of some businesses, which could make quarterly payments a hardship. Most ordinary taxpayers who pay tax as they earn appreciate that paying tax substantially in arrears is beneficial because a company has use of the money on which it is liable to pay tax for a considerable period before paying it.
      The Paymaster General should give hon. Members guidance, because it is difficult for some businesses to determine the outcome on which they would pay tax. Some businesses will pay additional tax over and above their liability, so it would be useful to know what negotiation and flexibility there may be in calculating quarterly rates to take account of variations.
      5.15 pm
      My plea to the Government is to follow through what I accept as a sincere intention to have a more genuine, open debate about taxation priorities. They have not got the balance right yet, and I had hoped for more consultation on other issues in the Bill. In their first Budget and in the pre-Budget statement, the Government introduced two substantial taxes on the corporate sector from which they have benefited substantially in revenue flows without being up-front in the Red Book or in overall projections, which would have enabled us to have had the sort of debate to which we are entitled. The Government would help hon. Members and business if they set out the real effects of the tax changes and how the balance between personal taxation and business taxation will settle.
      The Paymaster General cannot be surprised that there is criticism of and cynicism about the fact that the Government thought that they could get away with substantial extra taxes on business while standing by their assurance that they would not increase the basic or higher rates of income tax. He and hon. Members will know that my party takes a different view and believes that both rates should have been increased by an agreed amount for specific purposes. [Interruption.] We have said specifically what we would do.
      The Paymaster General may not have read our publication, though it must have been passed to him many times. I shall repeat what it says, at the risk of detaining the Committee—even the Prime Minister would benefit from reading the Official Report occasionally. We proposed a rate of 50 per cent. on personal incomes in excess of £100,000 and an additional 1p on the standard rate of tax to fund a reduction in tax for people on lower wages by raising thresholds and extra investment in
      48
      education year on year throughout this Parliament. Labour Members would do themselves and their party good if they accepted my argument.
      Mr. Campbell-Savours: Will the hon. Gentleman give way?
      Mr. Bruce: Not until I have finished this point.
      The Government are on record as saying that they want genuine public debate, but they are not happy when other people hold a different view from theirs and they do not always explain the full implications of their policy changes, let alone the forward projections.
      The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): Order. The hon. Gentleman is going wide of the amendment. Government policies are not being debated; there is an amendment before us.
      Mr. Bruce: I accept your ruling, Mr. Martin. The amendment asks for a statement of impact, and I am balancing the argument. The Government should state the net effects of the changes and their forward projections.
      Mr. Campbell-Savours: The hon. Gentleman said that 1 p should be put on the standard rate of tax and that the rate should be 50 per cent. on incomes of over £100,000 to fund a lower threshold and education spending.
      The First Deputy Chairman: Order. We have the amendment before us, although it is perhaps different from the one being discussed by the hon. Gentlemen. The amendment that we are discussing mentions a draft of regulations being laid before Parliament. We should talk about that, not about what the Liberal Democrats wanted to do at the last election, which is nothing to do with the issue before us. The hon. Member for Workington (Mr. Campbell-Savours) should be seated.
      Mr. Bruce: I take your strictures, Mr. Martin. I may have strayed somewhat, but I think that the Paymaster General has got the drift of my argument. The right hon. Member for Hitchin and Harpenden said that he wanted detailed regulations because he was concerned about the impact of the change and the Government's lack of transparency in introducing it. I do not think the amendment very practical; when the Conservatives were in government, we had debates on similar amendments, only they were tabled by the opposite quarter.
      I hope that, from now on, the Government will recognise the need for people to know the precise impact of measures on their businesses, as well as the likely impact on the national finances. In the interests of open government and of wider debate, it would help us to have more information from the Paymaster General.
      Mr. Nick Gibb: The hon. Gentleman describes the need for a wider debate on Finance Bills. May I take it from that that he and his colleagues will attend each and every sitting of the Finance Bill Standing Committee? During last year's one,

      49
      they flitted in and out at whim, and I rarely saw the hon. Gentleman take part. Will he and his colleagues play the part of a proper Opposition this time round?
      The First Deputy Chairman: Order. That has very little to do with the amendment.
      Mr. Bruce: On a point of fact, I was not a member of the Finance Bill Committee last year, so I would have found it difficult to take part.
      May we have some specific assurances from the Minister on how the regulations will affect the businesses that may encounter problems? Secondly, what will the overall impact of the regulations be?
      Mr. Charles Wardle: Before the hon. Member for Gordon (Mr. Bruce) outlined the shape of a Liberal Democrat Budget, he seemed to chide the Minister gently for not disclosing the cash flow benefit to the Treasury of these changes. What my right hon. Friends and I object to are the cash flow disadvantages over the next few years to companies bigger than small and medium enterprises, or SMEs.
      I hope that the Minister will help to clarify a certain definition. When looking at clause 30 it has been helpful to look also at the glossy version of the Red Book, "New Ambitions for Britain". Paragraph 4.19 says that the Budget will exempt SMEs from quarterly corporation tax payments to improve their cash flows, but paragraph 4.18 implies that that refers to companies with 50 employees or fewer. The paragraph states that the Treasury says that 99 per cent. of the UK's 3.7 million businesses have 50 or fewer employees, and that those businesses account for 46 per cent. of jobs and 42 per cent. of aggregate turnover. That immediately precedes the point about exemption, but I believe that I saw in a press release at the time of the Budget a suggestion that the definition of a small company was one with profits of up to £300,000 before tax, and that a medium-sized company was one with pre-tax profits of between £300,000 and £1.5 million. I see the Minister nodding, but it would be helpful to have that clarified. It would be boring to have to wait for regulations which we may or may not have the chance to debate before finding out precisely who will benefit from the exemption.
      I should like to outline two types of management problem which might affect a large number of businesses in the transition period. I accept that quarterly corporation tax payments are made in many other countries. What concerns us today is the transition period, the hit on companies, and the hitherto hidden benefit which my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) has so admirably disclosed.
      The Minister and other hon. Members with management experience will appreciate the examples that I am about to describe, but I hope that they will bear with me because it is important to illustrate what problems might arise in the next four years.
      My first example refers to the rapidly expanding company. Let us assume that it has got off the ground with great success. It has shot past the upper limit definition of an SME and has continued to expand rapidly. There is not a business person who does not know that the risk of company failure and receivership is at its greatest when companies embark on ambitious programmes of
      50
      expansion without sufficient capital backing. Business history is littered with examples of entrepreneurs who got off to a good start with a great marketing idea for a new product that attracted sudden and rapid demand.
      That company buys in more raw materials and puts more into work in progress and finished stock. As it expands, it finds that it has more money tied up in accounts receivable—in debtors—and that its suppliers are still insisting on tough terms. The company does not have a history long enough for a good credit standing, so the terms of payment for raw materials are still tough. Moreover, the bank insists on a tough overdraft limit; doubtless, the company does not have a freehold property, so there is little on which to secure an overdraft.
      It is a familiar story. If companies in a period of rapid expansion are to risk becoming over-extended, cash flow is critical. Some of those companies will find that their overdraft limits are broken and that the banks are not tolerant, because they see little in the way of underlying assets. The companies will therefore be faced with receivership. Such circumstances are not uncommon.
      That type of company will now be spending more management time on dealing with quarterly assessments of corporation tax payments in months seven, 10, 13 and 16—more time dealing with inquiries just when they should be fighting to consolidate themselves on a new plateau of stability following their rapid success.
      Mr. Geraint Davies: Is the hon. Gentleman suggesting that the taxpayer should bail out high-risk, fast-growth companies in circumstances when no high street bank would dream of doing so?
      Mr. Wardle: I am suggesting nothing of the sort. Indeed, I am saying that the banks take their fair share of risk. I also say that this is not the time for a Government who insist that they are business-friendly to impose further pressures on rapidly expanding companies.
      My second example concerns the established company with a remarkable success in export markets—there are many of them about. Because of the persistently strong pound, they find those markets eroded; whereupon, they do all the right things: trim their sales prices, suffer lower margins, trim their overheads, and possibly even let some staff go rather than tie up cash flow in stock and finished goods.
      Such companies, facing those pressures in an increasingly competitive export market, will find the requirement for quarterly payments of corporation tax, introduced so rapidly, an additional burden.
      Mr. Cranston rose—
      Mr. Wardle: I shall give way to the hon. Gentleman, provided that he will tell us about his business experience. I understand that he is a solicitor.
      Mr. Cranston: I am not a solicitor: I am a member of the Bar. Only 2.8 per cent. of companies, 20,000 of them, will have to make the quarterly payments. It seems to me that the hon. Gentleman is making a good argument for a regulation-making power, not a piece of bland legislation, to cover all these different types of company.
      5.30 pm
      Mr. Wardle: No. With the typical skill of a barrister, the hon. Gentleman does not illustrate to the Committee the sort of companies involved. Those 20,000 companies represent the engine room of Britain. It is vital that companies that have been successful in export markets and are now feeling the pinch, or companies that have been expanding rapidly on the back of a good idea and have gone beyond the protection that the Minister rightly intends to provide for SMEs, should be examined by the House of Commons to see the proposals' effect on them in the crucial next three or four years.
      How can the Minister justify quarterly payments that add to paperwork and intrude on management time that should be devoted to market success? How can he justify the hit of £1.6 billion in the first year and £2 billion on company cash flow in the next two years, if the Government are supposedly business-friendly?
      Finally, I draw the Minister's attention to a point that was raised time and again on Second Reading, as well as in the financial press. Long though the Bill is, it is full of references to regulations that are to be made subsequently. Clause 30 is a classic example of that. Ministers and the Inland Revenue will have a free hand to be as creative or as repressive as they choose in making regulations. By not writing into the Bill the substance of those changes, the Government make a mockery of their accountability to the House.
      Mr. Quentin Davies: Before I deal with the substance and the merits, or otherwise, of the amendment and the clause, I draw to the attention of the Committee and, I hope, of an increasing number of people outside who have not yet focused on what is going on, the extraordinary degree to which the drafting of the Bill represents an invitation to Parliament to abdicate its responsibility for deciding on the taxes to be levied on the British people.
      As you know, Mr. Butterfill, I have served on Finance Bill Committees for several years. On many of those Committees, I had the pleasure of serving with you. I have never read clauses that were so open-ended in providing for the Revenue to make up our tax laws as it goes on.
      Clause 30 states:
      "The Treasury may by regulations make provision, in relation to companies of such descriptions as may be prescribed, for or in connection with treating amounts of corporation tax for an accounting period as becoming due and payable on dates which fall on or before the date on which corporation tax for that period would become due and payable".
      What does that mean? It simply means that the Treasury can write its own tax laws after Parliament has finished with the Bill.
      Subsection (2) states:
      "The Treasury may by regulations make provision for or in connection with the payment to the Board of an amount or amounts determined by or under the regulations".
      What can be clearer than that? The Treasury may by regulations make provision for amounts to be paid to be determined under the regulations. In other words, we give a blank cheque to the Revenue.
      52
      Similarly, schedule 4, which refers to new section 59E, states:
      "The Treasury may by regulations make provision modifying section 826(2) in relation to companies of such description as may be prescribed."
      In other words, the Treasury will have the right to change existing tax law—in this case section 826(2)—and substitute more or less whatever it wants.
      That is not hyperbole. It is what the Bill would allow. Such arbitrary taxation is associated with the Turkish empire, perhaps, but not with a free society and a regime in which the representatives of the governed discuss in detail, debate and determine the basis on which the public should be taxed. Parliament cannot pass the clause this evening and look itself in the face tomorrow morning.
      When I read these clauses, I thought that it might be much easier if the new Labour Government, with a majority of 179 over all other parties, decided that they could do what they pleased with the House, and introduced a one-line Bill allowing the Treasury to impose such taxes as it wishes. [Interruption.] That is what is happening under the clause, which states that the Treasury shall impose such corporation taxes as it wishes.
      I see some of the Labour Members who make up that absolute majority of 179 over all other parties sitting in the Committee this afternoon, not trying to take part in the debate—we have heard three contributions from the Opposition, without any interruption—but laughing. Perhaps they think that they were sent to this place to do whatever Walworth road or the Whips or No. 10 tell them, and not even to look at the implications.
      The clause represents a sad and dangerous precedent. In a sense, it does not much matter what taxes we have, whether they are too high or too low, whether they are good or bad, if Parliament has considered them in detail and Parliament can subsequently amend them. However, we are invited this afternoon to hand over our own judgment to unelected officials in the Treasury and the Revenue.
      We must read the Bill in conjunction with press releases from the Revenue, telling us what it might be minded to do if it were given the powers which, with the Government's majority, we know that it will be given. If one examines the Government's intentions under the clause, serious pragmatic issues for British business arise.
      I reinforce the comments of my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) about the way in which the corporation tax provisions in the Bill are used to impose a surreptitious and covert increase in the burden of corporate taxation. The figures are in the Red Book produced by the Government.
      The Paymaster General (Mr. Geoffrey Robinson)indicated assent.
      Mr. Davies: I see the Paymaster General nodding. I wonder whether he will have the courage to quote the figures. In all the discussions that we have had on the Bill since the Chancellor's Budget speech, the Government have never done so. They have never drawn attention to the actual increase in the burden of corporation tax. They have disingenuously implied that the Budget relieves the burden of corporation tax. It does not. Although there is an apparent reduction in the rate of corporation tax, that

      53
      relief, as my right hon. Friend pointed out, is more than compensated for by the cash flow effect of introducing quarterly payments of corporation tax.
      The Paymaster General is leafing through his papers. I can tell him what the figures are. In the first financial year in which the provisions will apply, 1999–2000, the net burden on industry will be £1.6 billion; businesses will pay more in corporation tax, taking into account the apparent relief through reduction of the rates but the increase in the burden because of the acceleration of payments through quarterly payment. In the following financial year—I shall give way to the Paymaster General if I am wrong in quoting from the Red Book, but he knows that I am not—the net incremental burden on business will be £2 billion. If the Labour party has the slightest respect for the facts and the slightest inclination to be straight with the British people, it should not claim that the Budget reduces the corporate tax burden. This Budget increases that burden by a significant amount of money.
      Let us turn to the merits in principle, irrespective of what is raised as a result of levying corporation tax on this new basis. I agree with my right hon. Friend the Member for Hitchin and Harpenden: I do not object to quarterly payments in themselves, but quarterly payments of what? The Government are introducing for the first time in tax law quarterly payments of tax for which a company is liable in the current year. In other words, companies will have to predict their profits for the current year and pay—not just make notional provisions in their accounts—those sums of money during the year in which those profits are earned.
      That is an extraordinary state of affairs. At present, income tax payers who come under schedule D make payments twice rather than four times a year, on the basis of the profits on their earnings for the previous year. They know what the position is: they have closed their books for the year in respect of which they are making payments. They know the profits or the earnings on which they will make payments and they have received those profits or earnings. That is not the position here: this is a dramatic step and a dramatic change in British tax law.
      The Temporary Chairman (Mr. John Butterfill): Order. I hope that the hon. Gentleman will start to address the substance of the amendment, as he is ranging rather wide of it at the moment.
      Mr. Davies: When we are debating amendments to the Finance Bill, there is always slight confusion as to whether the Chairman will permit a subsequent clause stand part debate. If he decides not to do that because the discussion of previous amendments has ranged fairly widely and one has points that relate to the principles of clauses, one may find that one has lost the opportunity to put those points. I am in a difficult position as I know that Chairmen are sometimes reluctant to give guidance in advance as to whether they will allow a clause stand part debate. Perhaps you can help me, Mr. Butterfill.
      The Temporary Chairman: I shall make that decision when I have heard what has happened during the debate. It is normally my practice to give guidance earlier if hon. Members have demonstrated that they wish to speak fairly widely on the amendments. At present, I propose that we have a clause stand part debate. Perhaps the hon.
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      Gentleman could confine his remarks a little more closely to the clause under discussion—although I shall show a certain amount of tolerance.
      Mr. Davies: I am grateful to you, Mr. Butterfill. I was trying to be guided in the extent to which I went wide of the amendment by the precedents that have been set in the discussion. I thought that I was not exceeding the margins that were established by earlier contributors, but perhaps I am in error. Nevertheless, I am sure that you would agree, Mr. Butterfill, that the essence of the clause and every amendment to it is that we are facing a dramatic—and, I believe, an extremely damaging—change to the way in which companies are taxed.
      There are certain specific and pragmatic reasons why the concept cannot work in practice. That point has been made already, so I shall add to it. It will do even greater damage to the interests of British industry because it is not possible to predict what one's profits will be in the current year. Even in a relatively non-volatile market, such as retailing, one does not know whether one will have successful January or July sales. One does not know whether the car market will turn up or down: it can be affected by unpredictable changes in interest rates or in Government policy.
      In other areas of business that are inherently much more volatile, profits are even more difficult to predict. For example, how could a company that has been exporting to Asia in the past year have predicted the collapse in the Asian markets? That will have had a dramatic effect on its profits. How will an insurance company know whether extraordinary claims will be made on it? It is like predicting the weather—and if a company is in the property insurance business, the weather will determine the claims on it to some extent.
      There is something particularly curious about the concept of quarterly payments of corporation tax that is assessed on current year profits. It is an established fact that companies are very cautious about making profit projections for the current year. If they must pay tax to the Revenue on their profits in the current year, they cannot disguise their position from the market or from their shareholders. It is an established principle in financial markets that it is extremely dangerous to make those kinds of profit announcements, yet it follows that all British companies will have to make yearly statements on the stock exchange about their anticipated profits for the current year. As it is in the nature of things that companies will not achieve those profits—their actual profits may represent a substantial increase or shortfall on the figure predicted—the stability of financial markets will be undermined. False markets will occur and people will drive company share prices up or down for no reason. I shall give way to the hon. Member for Croydon, Central (Mr. Davies) who shares my name.
      5.45 pm
      Mr. Geraint Davies: I am honoured. I thank the hon. Gentleman for giving way. Is he aware that the 20,000 companies—or 2.8 per cent. of companies overall—that will be affected are large, sophisticated companies? Is the hon. Gentleman aware that the system allows a certain amount of flexibility—profit projections and re-evaluations will be conducted each quarter on a rolling basis? Companies of that magnitude of sophistication and

      55
      success will obviously have their own accountants and will be able to accommodate quite easily the sorts of changes that the Government are introducing. Therefore, the single point that the hon. Gentleman has made for the past five minutes is wrong.
      Mr. Quentin Davies: I think that the hon. Gentleman's comments would cause surprise—and possibly even derision—in most boardrooms in this country with which I am familiar. One is able to predict one's profits not because one has sophisticated company management but because one is able to predict the factors that will determine those profits. I have given several illustrations of that point already—I can give more, but I might go slightly beyond the margins that you have laid down, Mr. Butterfill.
      The Temporary Chairman: Order. The hon. Gentleman has already gone so far outside those margins that the chances of a clause stand part debate are diminishing by the minute.
      Mr. Davies: I see that I shall be blamed for anything that goes wrong in the debate. However, I am at least released from some of the constraints that were imposed on me a few moments ago.
      The fact is that no company can predict what will happen in its markets. Every company deals with uncertainty. Companies may have complete control of everything that it is in their power to control, but they cannot control the behaviour of their customers, what happens to interest rates or the general economic and physical climates. Few companies feel able to make profit projections for their shareholders—or for any other purpose—or public statements of what their profits are likely to be 12 months ahead. The reference to the 20,000 companies that will be affected has cropped up several times in the discussion: several Labour Members have intervened to cite that figure. I suppose that it must be in the Walworth road handout about this clause. It represents a certain naivety.
      If the clause were designed simply to impose a new corporate tax regime on the Financial Times 100 companies—the top 100 companies-it would have a considerable economic impact. Those companies already deliver a substantial proportion of the United Kingdom's gross domestic product. However, the provision is not confined to the FT 100, 500 or 1,000; it applies to the top 20,000 companies. If a Government want a particular tax regime to have a major economic effect, they will want to levy it on the top 20,000.
      It is extraordinary that the hon. Member for Croydon, Central should have been deceived by the Walworth road handout into asking such a question. The hon. Gentleman knows well that the majority of companies are one-man or one-woman businesses, and that the output of such companies may be very small.
      The clause is drafted so as to undermine the responsibility of Parliament for the aspect of taxation to which it relates. It is—
      Mr. Cranston: Will the hon. Gentleman give way?
      Mr. Davies: I shall not give way. I want to encourage the hon. Gentleman, if he really has something to say in
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      this debate, to say it in his own speech. Labour Members have come to the Chamber with a Walworth road handout and have made, in many instances, ill-thought-through comments. They have not yet made a substantive contribution to the debate. Indeed, they have not shown the slightest inclination to want to do so.
      We are faced with extremely bad tax law. If Parliament accepts the precedent that has been put before it, Parliament should be ashamed. The clause will lead to an additional general burden of corporate taxation, which is the last thing that the country needs. It will also impose on companies the complete absurdity and artificiality of having to predict their profits, when, by definition, profits cannot be predicted because they are subject to uncertainties outside the control of companies. That is, by definition, unreasonable and unfair. I look forward to hearing whether there is a rationale for any of the extraordinary proposals that are set out in the clause. Will Labour Members tell us what that rationale is?
      Mr. Gibb: Clause 30 is the latest stage of incompetence in a saga that stems from the July Budget, when the Chancellor of the Exchequer decided to abolish the repayment of dividend tax credits to taxpayers generally and to pension funds in particular.
      That decision was designed to raise about £5 billion a year by the back door, and in a way that the Government hoped would not be noticed by the public. However, it has been noticed by the public, because it is the public who have to pay. They will have to pay, on average, an extra £200 a year in higher pension contributions. Gavyn Davies, in his evidence to the Treasury Select Committee in March, said that the abolition of dividend tax credits has been paid for by the household sector. He said:
      "The ACT change has fallen, eventually I believe, on the household sector. We have scored that as a household tax increase in our rankings."
      Clause 30 has been introduced to clear up the problems that have been created by that decision.
      When the Government announced the end of the repayment of dividend tax credits they realised that it would lead to a spate of payments of foreign income dividends. That was because if pension funds were no longer to receive the tax credit, they might as well receive FIDs. As a result, FIDs were introduced to enable companies to pay dividends to their shareholders out of foreign earned profits without having to account for ACT. This ACT could not generally be offset against a company's mainstream corporation tax liability because there is generally no UK tax that is payable on such profits as a consequence of double tax relief.
      As no ACT is paid on FIDs there is no tax credit available to the recipient of a FID. Until last July, therefore, pension funds were not very keen on receiving FIDs. They needed to be able to claim the tax credit. However, after July, FIDs became attractive since the repayment of dividend tax credits has been abolished in any event.
      The Government recognised that there was a potential long-term problem. That being so, they announced that FIDs would be abolished. There was an outcry from Britain's multinational companies. Already there are £7 billion of unreclaimed ACT at cost to British industry. The Government are effectively saying now that those moneys can never be reclaimed.

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      After various non-starter proposals made by the Paymaster General in the debates that followed the Government's decision, the only solution that the Government could come up with was to abolish the entire ACT system—the entire imputation system that had been in place since 1972. That, of course, would lead to a huge cash-flow cost if companies' advance payments of corporation tax were abolished. That is why we had the consultation document in November on the proposals that we now see in clause 30 for quarterly payments of corporation tax.
      Unfortunately, that is not the end of the tale of incompetence and of ill-thought-through proposals. I believe that there is a serious shortage of competent Ministers in this Government. Those who are competent find themselves doing more and more work so as to carry their less able colleagues. Thus mistakes, or errors, proliferate even among the few competent Ministers that the Government have. I see the Paymaster General nodding. I wonder which category he sees himself falling into.
      The supplementary memorandum from the Treasury is to be found at page 82 of the fourth report of the Select Committee on the Treasury. It points out that the Treasury had underestimated the number of FIDs that would be paid instead of normal dividends as a result of the July changes in ACT. The memorandum reads:
      "Although the July 1997 forecast allowed for a rise in the use of FIDs by companies with surplus ACT, following the abolition of tax credits to pension providers the subsequent use of FIDs was greater than expected."
      It was clear to everyone—
      Mr. Quentin Davies: I listened to my hon. Friend's quotation with some interest. It is obvious that the Revenue is not particularly good at forecasting the revenue that it will receive at the end of any given current year. That being so, why does my hon. Friend suppose that the Revenue should expect companies to be better at forecasting their revenues?
      Mr. Gibb: My hon. Friend makes a telling point. It is incredible that the Revenue failed to predict that there would be more FIDs paid as a result of the decision that was made last July. Everyone knew that there would be more and more FIDs and that there would be a rush to use FIDs as it was no longer possible to reclaim tax credits on ordinary dividends. Why did the Government underestimate the effect of their decision?
      Mr. Cranston: Will the hon. Gentleman comment on a quotation from an accountant, John Whiting, tax partner at Price Waterhouse, who commented on the point raised by the hon. Member for Grantham and Stamford (Mr. Davies) when he would not let me intervene. Mr. Whiting said:
      "This is a pain—but the whole scheme is much fairer. It does show that they"—
      the Government—
      "have listened to some of the arguments put during consultation."
      What is the comment of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) on that?
      Mr. Gibb: The hon. Gentleman will be aware of other leading tax accountants, who say that we are getting perilously close to some constitutional issues by the fact that the Government are legislating a major reform to the corporation tax system through regulation. Such a reform is unprecedented, and the accountancy profession is dismayed at what is happening.
      The underestimate of the amount of FIDs paid is not tiny or minor. Indeed, it amounts to about £2 billion. Errors or mistakes seem to proliferate in clause 30 and in the consultation document that heralded it. Paragraph 4.28 of that document refers to charging interest to taxpayers from the date that the Inland Revenue receives funds from taxpayers. Should not that be interest charged until the Inland Revenue receives the funds? That is a minor error, but one which is indicative of the competence level and lack of attention to detail that reflect on the Government and on the consequences of what they are proposing. Perhaps that is why clause 30 contains no details of the workings of the new corporation tax system but only paves the way for future Treasury regulations. The Chancellor hyped the reform to the corporate system as a once-in-a-lifetime, fundamental reform, so it is astonishing that it is not included in the Finance Bill.
      6 pm
      The Government's intention to legislate for a new corporation tax system through secondary legislation, subject only to the negative resolution, is a disgrace. It is unprecedented for changes in tax legislation, other than details of administration, to be enacted other than directly through an Act of Parliament. The introduction of a new corporation tax system does not constitute merely an administrative matter but goes to the very heart of how much a company will pay and when.
      Legislating through statutory instruments on this matter is widely condemned by leading figures in the accountancy profession, the tax faculty of the Institute of Chartered Accountants in England and Wales, by the Institute of Directors and others. My former boss, Mr. Ian Barlow, head of tax at KPMG, said that regulations were normally used for detail and:
      "This sort of material should be in primary legislation."
      Richard Collier-Keywood, a partner at Coopers and Lybrand, said:
      "I think we are getting perilously close to some constitutional issues."
      The Institute of Directors said:
      "The dates on which tax is payable and any associated penalties are fundamental matters which should be dealt with in primary legislation. Only if they are in primary legislation can Parliament debate them properly and make amendments as appropriate."
      According to the Financial Times, the reason for wanting to use regulations is that Ministers do not want to be seen to be making U-turns, but it is a bit late for that. However, what does that say about the competence of Treasury Ministers? Proposals, flawed as they are, were announced in a consultation document in November, some six months ago. Is not that an admission that the Government have yet again produced tax proposals which are not acceptable to those whom they affect, just as they are not acceptable to those who administer and understand the tax system or to the wider public?
      If the Government believe that the corporation tax proposals in the consultation document, as amended, are flawed, and if they wish to change them, they should do

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      so. A change on the lines urged by Conservative Members and by industry would be widely favoured. Sneaking changes through by statutory instrument will not reduce criticism that the Government have yet again produced an ill-thought-out proposal which they were forced to change. If, on the other hand, the Government do not intend to change their proposals, legislating through regulation will not enable them to get away with introducing bad law without public criticism from the Opposition and from industry. They will achieve nothing from these antics, so I urge them to stop undermining the House, stop listening to their spin doctors, to put democratic procedure before presentation and sheen, and to accept the amendment.
      Mr. Cranston: The hon. Gentleman is generous in giving way a second time. Has he consulted the draft regulations, which are available, and will he be commenting on them?
      Mr. Gibb: I have not yet consulted the draft regulations, but, like industry, I look forward to examining them in great detail.
      The errors that I have catalogued have led eventually to the quarterly corporation tax system and the abolition of ACT. When the repayment of dividend tax credits was abolished, FIDs had to be abolished. Their abolition has been causing huge problems with unrelieved ACT, and the only answer that the Government could come up with was the abolition of ACT. How were the Government to solve the problem that that created—the cash-flow cost to the Treasury arising from no more advance payments of corporation tax?
      The answer, for the Government, is the quarterly corporation tax payment system set out in the consultative document, "A Modern System for Corporation Tax Payment". Of course, it is not modem at all; it has been a long-established practice in several countries. The proposals have been widely condemned, as one might by now have been expected, judging from the Government's track record on their tax proposals.
      The Institute of Chartered Accountants said of the abolition of ACT:
      "We accept that in order to maintain Government revenues there will have to be a compensating acceleration of the payments of companies' normal corporation tax liabilities. We are, however, concerned that the detailed procedure for payment of corporation tax by instalments, as proposed in the consultative document, would be neither fair nor practical."
      They are the words of the body that represents chartered accountants in this country.
      The Government have already performed one U-turn on this issue by exempting small and medium companies from the burdensome proposals, but large companies remain subject to them. As my hon. Friend the Member for Grantham and Stamford (Mr. Davies) said, the consultative document and the notes on clauses state that the term "large" includes those companies whose profits are £1.5 million a year or more. That means 20,000 companies, some of which most people would not regard as being especially large.
      Those companies will have to pay their corporation tax bills in four quarterly payments, beginning halfway through months seven, 10, 13 and 16. Therefore, for a
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      December year end company, which is the most popular accounting period, the first instalment will be on 14 July and the second on 14 October, both payments being before the year end. The third and fourth payments will be in January and April after the year end. There are transitional rules in place which limit the amount of corporation tax payable, but the changes will have serious cash flow effects on companies, notwithstanding the fact that they are being phased in over three years.
      The new rules will affect accounting periods ending on or after 1 July 1999. For example, a December year end company will have to make the first quarterly payment, representing 60 per cent. of its annual tax bill, on 14 July 1999. On 1 October 1999, it will have to pay the whole of its corporation tax bill for 1998, and on 14 October—14 days later—it will have to pay the second quarterly instalment of its 1999 tax bill. That represents 130 per cent. of the company's annual tax bill being paid within just one year. That is why the Government are not only making up their cash flow shortfall as a result of the abolition of ACT, but accelerating its cash flow for the next four years as my hon. Friend the Member for Grantham and Stamford said—by £1.6 billion in 1999–2000, by £2 billion the following year, and by £3.1 billion the year after. It is cash that British industry will have to find and, in most instances, will have to borrow. As the Institute of Chartered Accountants said in response to the consultative document, this proposal
      "would require the company to pay tax on profits which it has not yet earned in cases where profits increase sharply towards the end of the accounting period. This would be a particular problem if there is a large capital gain close to the year-end, for example on disposal of a major subsidiary. Even if such an event could be predicted in month 7 (which is unlikely), we regard it as unreasonable to expect the company to pay tax on the gain, or to charge interest if it does not, before the proceeds have even been received."
      The Red Book figures, which reveal £6.8 billion extra revenue for the Government over the lifetime of this Parliament, show just how the Government are using the change surreptitiously to raise further taxes, and significant further taxes. It is one of Labour's stealth taxes, and it will do nothing to help investment, nothing to encourage enterprises and nothing to encourage the creation of new jobs but everything to reduce investment and destroy jobs. Before the regulations are passed by an overwhelming majority, I hope that these criticisms will be taken into account.
      Mr. Gardiner: Will the hon. Gentleman confirm that for small and medium companies that have been paying dividends—companies that he has been careful not to mention—the abolition will mean a net cash flow benefit of £1 billion?
      Mr. Gibb: I did not refer to that point because we are debating large companies which constitute a substantial proportion of British industry. If one were to examine the aggregate turnover of those companies, I suspect that one would find that it represented more than half the turnover of all companies in this country.
      One of the worst aspects of the proposed system is that it is based on a company's current year profits. Companies will have to calculate their first two instalments on the basis of their annual profits when the year has not been completed.

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      As the Institute of Chartered Accountants said,
      "The difficulty with this arrangement is that it is, of course, impossible to predict the tax liability for the current accounting period with any accuracy, at least until the period has ended. The problem is particularly acute for businesses such as property investment companies, whose profit is liable to rise to a significant extent from a small number of large transactions, whose timing relative to the next year-end may be unpredictable."
      Of course, such unpredictable events can affect any company. It would make far more sense to base the quarterly payments on the company's prior year results and the statutory instrument should specify that, as does the income tax system for the self-employed and for sole traders.
      The consultation document and the notes on clauses cite a number of overseas jurisdictions as examples of quarterly payment systems—Australia, Canada, France, Germany, Japan and the United States. However, the systems used in all those countries except Australia and the United States base instalments wholly or mainly on the previous year's tax liability.
      Even in Australia and the United States, the system is not as uncompromising as that proposed in the Bill. For example, in the United States there are options to base instalments on the prior year's results with a top-up when the company files its tax return. There are also other methods for determining quarterly payments when companies have uneven revenues and expenses throughout the year. For example, there is what is known as the annualised method and the seasonal adjustment method for companies that generally earn at least 70 per cent. of their income in the second half of the year.
      Mr. Quentin Davies: My hon. Friend will correct me if I am wrong, but is it not the case that in the United States there is no suggestion under any regime that chargeable gains would be included in the estimate on which quarterly tax payments had to be made? However, the new Labour Government appear to have included that in their proposals.
      Mr. Gibb: I defer to my hon. Friend's expertise on that issue and I hope that the Paymaster General will note his comments, albeit that the regulations appear already to have been published.
      It may be asked what difference will it make if a company underpays or overpays based on an inaccurate estimate as it can always increase or decrease subsequent payments accordingly. However, there is a penalty in that interest will be charged on any underpaid tax. Of course, it will also be paid on any overpayment, but there is a difference between the rates.
      The consultation document originally referred to a gap of 3.5 percentage points. That gave rise to widespread criticism and the notes on clauses now say that
      "the interest on overpaid and underpaid corporation tax will be brought more closely into line with commercial rates of interest".
      However, I understand that the interest charged on underpaid tax will still be 2 per cent. above base rate, which is very high, particularly for large companies that can usually borrow much more cheaply. Of course, the proposals apply to large companies. I hope that the Government will reconsider the issue and announce a more realistic commercial rate of interest, although the regulations have been published.
      Mr. Geraint Davies: I have two quick questions for the hon. Gentleman. First, is he suggesting that it would
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      be better to base the taxation of a company on the figures for the previous year than on the forecast figures? If so, under the hon. Gentleman's proposals, a company facing declining profitability due to exchange rates, for example, would face penal taxation. Secondly, does he agree that an interest rate differential is a good idea as it encourages large companies to make accurate returns instead of giving them an incentive to underestimate their profits and, therefore, gain cash flow benefits from the taxpayer?
      Mr. Gibb: I am grateful to the hon. Gentleman for that intervention. If a company's profits were less than those of the previous year, it could opt for the current year basis. The Government's proposals are uncompromising as they are based on current year profits and that is the end of the story. As for the percentage gap between the two interest rates, there will be a tendency for companies to overpay their corporation tax as a cushion against penal rates of interest. That will provide more revenue to the Government and put more of a cash flow burden on industry.
      Basing quarterly payments on current year profits will clearly be unworkable and cumbersome for many companies. It will involve considerable uncertainty. The experience of jurisdictions that have a quarterly payment tax system is that companies tend to cushion the payments by paying more than they would otherwise to avoid penal rates of interest. The Government should avoid that.
      Why are the Government so determined to go ahead with a system based on current year profits? Is it because they want to raise more revenue from the cushion, or is it because Treasury Ministers simply will not stand up to the Inland Revenue?
      6.15 pm
      The Financial Times says that tax experts believe that the Inland Revenue's large company anti-avoidance division has been instrumental in resisting pleas from companies not to shift to the current year basis.
      It goes on to explain:
      "Tax inspectors are likely to monitor the payments, and sudden drops in tax liability will trigger investigations. This will act as an early warning system to spot anti-avoidance schemes."
      In other words, the determination by the Government and the Inland Revenue to base payments on current year profits rather than the previous year's figures is driven by convenience. All the burdens and cash flow problems it will impose on British industry are simply to make the job of the Inland Revenue that much easier.
      Mr. Gardiner: Will the hon. Gentleman give way?
      Mr. Gibb: No. I have given way a number of times and I want to finish my speech.
      We all want tax avoidance clamped down and companies to pay their tax according to the legislation, but there must be a balance between facilitating Inland Revenue inquiries and placing burdens on business. Requiring a quarterly payment to be calculated on the basis of current year profit is too great a burden.
      One of industry's main concerns about the use of current year profits is that of market sensitivity, and calculating quarterly payments on the basis of estimated and unpublished future annual profit figures may well

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      result in information leaking into the public domain and increase the scope for insider dealing. Companies may not prepare taxable profits estimates except to calculate their quarterly payments. Giving such figures to outside bodies such as the Inland Revenue may well have that result. That is not my concern but that of British industry, including the British Retail Consortium.
      There is enormous concern right across industry about the proposal to use current year profits and I hope that the statutory instruments will take that into account. I hope that the Government will listen to the Institute of Directors, which points out that a small underestimate of profit can lead to a failure to pay instalments because a company did not regard itself as large. When it eventually reaches the year end, it suddenly finds that it has made more than £1.5 million in profit. If it is a large company and does not make the quarterly payments, it is liable to pay a very large amount of interest. That view is echoed by the Institute of Chartered Accountants which states:
      "the definition of 'large' could itself be related to the size of the current-year tax liability and hence a relatively modest but unforeseen increase in profit close to the year end could result in a company being treated retrospectively as having been liable for payments on account of months seven and ten."
      I wish to make one final point on the proposals that I hope will be borne in mind when the regulations are drafted. Although the Chancellor gave a commitment during the Budget statement that he would not raise corporation tax above the new 30 per cent. rate, we are all aware of the commitments that he gave before and during the general election campaign and the ease with which they were breached, rewritten and reinterpreted. "We have no plans to raise tax" became a commitment not to raise income tax when the July Budget revealed a £5 billion a year pensions tax. A commitment not to raise income tax became a commitment not to raise the basic and higher rates of income tax once a decision had been made to reduce the value of the married couple's allowance which increased millions of people's income tax bills.
      The commitment on the rate of corporation tax is hardly worth the paper on which it is printed, particularly in view of the Treasury's surreptitious decision not to fight the European Commission's proposals to harmonise business taxes. The only commitment that Treasury Ministers now give is to harmonise personal tax rates. They have dropped any reference to business taxes.
      My concern, which is shared by the Institute of Chartered Accountants, is that calculating quarterly payments is rendered uncertain not only because it is based on future results but because, under the current proposals, its payments on account could be rendered insufficient retrospectively if an increase in the tax rate is announced that affects all or part of the current accounting period. Other changes in tax law could have the same effect. Will the Paymaster General confirm that if an under-payment is a result of a change in the rate of corporation tax or a change in the law, no interest, overdue tax or other penalties will be charged? Will he ensure that that is incorporated in the statutory instruments?
      I have raised one or two concerns that are shared by those outside the House. It is wrong that a major change should be introduced through secondary legislation.
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      I hope that the Paymaster General will confirm that the regulations will be debated on the Floor of the House, as proposed in the amendment, or, at the very least, in Standing Committee. I hope that the concerns raised by me and others about the proposals set out in the consultation document will be reflected in the statutory instruments.
      Mr. Geoffrey Robinson: I fear that I shall be unable to reply to all the points that Opposition Members have raised, although if such a wide-ranging debate on the amendment means that we are not to have a clause stand part debate, I could range more widely.
      The Temporary Chairman: In view of the wide-ranging speeches that we have heard, it would not be appropriate to have a clause stand part debate.
      Mr. Robinson: In that case, I can reply more widely. I am grateful for your guidance, Mr. Butterfill.
      The right hon. Member for Hitchin and Harpenden (Mr. Lilley) bemoaned the fact that amendment No. 1 has not been selected. I congratulate him on tabling an amendment on this occasion. When we started proceedings on our first Budget and were debating the windfall tax, it was beyond the competence of the Opposition to table even one amendment.
      The hon. Member for Gordon (Mr. Bruce) made the point, which was reiterated several times by other Opposition Members, that there is something surreptitious about the way in which we are introducing the measure.
      Mr. Malcolm Bruce: There is a lack of transparency.
      Mr. Robinson: The hon. Gentleman may say that, but all the figures were published not only in the Red Book but in the pre-Budget statement in November, when we set out clearly, for consultative purposes, our plans for advance corporation tax. I refer the hon. Gentleman to section 9 on page 19 of that consultative document, issued by the Inland Revenue on 25 November 1997. I also point out that the figures in that document were higher than those subsequently published in the Red Book.
      The hon. Member for Grantham and Stamford (Mr. Davies), who has not been on top form this afternoon, said that there was something surreptitious or covert about the introduction of this legislation; but that could not be wider of the mark. We not only consulted but gave the figures on which we would consult so that there would be no lack of transparency and no misunderstanding. We reached broad agreement on that proposal.
      Mr. Lilley rose—
      Mr. Quentin Davies rose—
      Mr. Robinson: I shall give way first to the right hon. Member for Hitchin and Harpenden, and then to the hon. Member for Grantham and Stamford.
      Mr. Lilley: If the Paymaster General is being open and transparent, will he confirm here and now, on the record, that the net cash raised for the Treasury over the next four

      65
      years—the lifetime of this Parliament—as a result of the clause will be just over £5 billion? Or he is trying, like his colleagues, to slip out of putting that on the record?
      Mr. Robinson: The right hon. Gentleman is being nothing short of ridiculous. We published higher figures for the cash flow impact in the transitional period. There is bound to be a cash flow impact when moving from the present system of advance corporation tax to an instalment system. We made that clear and did not try to dodge the issue. We discussed the matter with the CBI and industry, and with international as well as domestic companies. They could see that it was a principled reform with inevitable consequences in the transitional period. They understood that we had a long-term interest in stability and low taxation rates and that reducing the rate of corporation tax for large companies and small companies to 30 per cent. and 20 per cent. respectively—the lowest figures ever—would have a major net present value to the companies. That is why we have had considerable support for our proposals.
      Mr. Davies: My complaint was not that the figures were not published in the Treasury's document—I said in my speech that they were in the Red Book, which I quoted—but that although the figures were there for those who wanted to find them, the Government, and not only the Paymaster General, were disingenuously pretending that the effect of the Budget was to relieve the corporate sector of part of the existing burden of taxation when the reality was the exact reverse. My complaint was not about the figures in the Treasury's document, but about the deceptive spin put on them by the hon. Gentleman and his colleagues.
      Mr. Robinson: The hon. Gentleman misses the point. Not only did we try not to present the measure in that way, but we consulted on figures that clearly showed what the transitional impact would be. One could not be more straightforward or transparent than that.
      Mr. Lilley: The Paymaster General could be more straightforward and transparent and not dodge the question. Is it correct that the extra tax raised as a result of the clause will be £5.1 billion over the next four years? Is that true or false? Will he confirm that? Why is he dodging the question? Why is he refusing to put that answer on the record?
      Mr. Robinson: Even the right hon. Gentleman can read. He can read the Red Book, just as everyone else can—although he may not know the difference between cash flow and tax. To be precise, this is not a tax. The taxes are being reduced and the cash flow impact is negative. We made the effect clear back in November. That gives the lie also to Conservative Members' claim that the two parts of the major corporate tax reform were not seen as a whole.
      Mr. Lilley rose—
      Mr. Robinson: I shall not give way again because the right hon. Gentleman will only repeat, ad nauseam, the silly little point that he is trying to make. He knows that it is a silly little point and he knows that the figures were published and consulted on. He hates the fact that we have
      66
      the CBI's agreement for the measure and that our relations with industry are very good, and much better than those of the Conservatives in opposition or in government, but he must accept that. The right hon. Gentleman should be aware that the director general of the CBI wrote praising us for the fact that we had consulted and that we had removed medium companies from the instalment systems and made other adjustments.
      The director general is clear that the principles of the reforms are accepted and supported by the large majority of companies in this country. That is what the right hon. Gentleman hates, but I regret to tell him that the Opposition have to learn that the Government—as we will discuss later when we come to individual savings accounts and other matters—are prepared to consult, to listen and to change policy, as we have done. That is nothing of which we should be afraid or ashamed. We recommend that the Opposition learn from that. Had they behaved more properly in that respect when they were in government, they would not have suffered such a disastrous defeat.
      Mr. Quentin Davies: Will the Paymaster General give way?
      Mr. Robinson: I have given way several times. I shall do so once more, but I hope that it will be a relevant point.
      Mr. Davies: It is a relevant point, and I hope that the Paymaster General will deal with it. There is no point in the Government consulting unless they are prepared to explain why they are introducing measures. Why have the Government decided that it is appropriate for income tax under schedule D to be charged on a previous year basis, but corporation tax on a current year basis?
      6.30 pm
      Mr. Robinson: We took that decision because we felt that, on the whole, it would be much more reliable and more appropriate for companies to forecast quarterly on a revolving basis. I do not know on which boards the hon. Gentleman sits or used to sit, but the idea that a company does not make a clear annual forecast against which there is monthly and quarterly reporting is just unbelievable.
      Mr. Davies rose—
      Mr. Robinson: I have given way an awful lot and we must move on. I always give way to the hon. Gentleman, as he knows—although, quite honestly, I found some of the things that he said today utterly amazing. I shall now deal with some other points that were made in the debate and need some attention.
      The hon. Member for Bexhill and Battle (Mr. Wardle) mentioned rapidly growing companies. There are precise provisions—I shall point them out—for rapidly growing companies that relate to whether they were smaller companies in the previous year or whether profits were as high as £10 million. That is a totally adequate provision.
      I hasten to add that the hon. Member for Bexhill and Battle should not be seen as encouraging overtrading by companies. It is wise to be prudent in such respects. The question is again only one of cash flow impact. If a company were in so much trouble that it had to borrow from the Inland Revenue at 2 per cent. over base—

      67
      I would not wish it on any company—it would not get a bad deal at that rate. It is worth pointing out that we have reduced the differential between the borrowing and lending rate of the Inland Revenue and companies from the 5 per cent. that prevailed under the Conservative Government for 18 years and was never touched, to a much more reasonable 2 per cent. At that rate, there is not a great deal for the Opposition to grumble about.
      The general mix that we have come up with reflects what we thought was the best judgment of the situation. I do not think that anyone in the House—at least, no hon. Member has declared himself in such a light so far—rejects the principle of what we have done. The Opposition are trying to accept it in principle, but, having willed the end, they will not will the means. That is why the amendment is confusing.
      We cannot make regulations under clause 30 without first laying them before the House of Commons. The regulations published on Friday are already in the Library and available to hon. Members. They have to be laid before the House so that we can scrutinise them before they come into effect. Not surprisingly, we do not need the amendment to require that.
      The second reason anybody who looks at the amendment is bound to be very puzzled is that it will require instalment regulations to be made under the affirmative resolution procedure. That is the point that the right hon. Member for Hitchin and Harpenden is trying to make in tabling the amendment. Indeed, he went on to say, when challenged, that he could not remember in his experience in the Treasury—I think that he served successively as Financial Secretary and Economic Secretary—the Conservative Government doing anything of the kind that we are proposing. Perish the thought.
      In the light of that damascene conversion, why, if the Conservatives did not like regulations being made under the negative resolution procedure, did they not change it during the 18 years that they were in office? I shall tell the right hon. Member for Hitchin and Harpenden what the Conservatives did in those years and give a few figures to substantiate my comments.
      The Conservatives were responsible for hundreds of sets of tax regulations that were introduced under the negative resolution procedure, including nearly 200 on direct taxes over the three years to March 1997. The right hon. Member for Hitchin and Harpenden said that the Conservative Government never did any such thing. Perhaps he did not know what they were doing. Perhaps he did not know what he was doing when he was in the Treasury. Above all, perhaps he did not know what the right hon. and learned Member for Rushcliffe (Mr. Clarke) was doing when he was Chancellor. I am sure that the right hon. and learned Gentleman very often did not know about such detail.
      In 1993, the Conservatives quite happily made new regulations covering the deduction from the pay-as-you-earn scheme—tax from employees' wages and salaries—under the negative resolution procedure. What does the right hon. Member for Hitchin and Harpenden have to say about that? Those regulations affected tens of millions of people and tens of billions of pounds of tax. The simple fact is that the right hon. Gentleman did not know what he was talking about then,
      68
      did not know what the right hon. and learned Member for Rushcliffe was doing, and neither of them knew what the Government were doing.
      The amendment is inappropriate and unnecessary and I of course urge the Committee to reject it.
      Mr. Lilley: I shall endeavour to be brief so that we can move on to the other two amendments to clause 30.
      The hon. Member for Gordon (Mr. Bruce) said that there had been relatively little detailed criticism of the clause. The reason is, of course, that there is rarely detailed criticism until regulations and details are published. They were not published until Friday, they are not yet in the Vote Office or available to hon. Members, and they have not been seen by the outside world ahead of this debate. Consequently, there was no possibility of people making informed submissions that could be considered by Conservative Members or, if they were remotely interested, by Labour Members. That is what is so wrong with the procedures and mechanisms that the Government are pursuing in this matter.
      There has been quite a lot of opposition to the fact that the Government are proceeding with the use of regulations on an unprecedented scale. Regulations have always had a place, but when everything is delegated to regulations and none of the detail is in the Bill or published in time for consideration in Committee, that is wrong. My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), in a powerful speech that will pay the Paymaster General dividends if he reads it, quoted a series of accountants to the effect that what is proposed is perilously close to a constitutional abuse—and so it is.
      My hon. Friend the Member for Grantham and Stamford (Mr. Davies) made a characteristically compelling speech in which he asked the Government why they had not simply drafted a one-clause Bill stipulating that the Treasury should have the power to introduce any tax by whatever measures it thought appropriate in the appropriate regulations. I fear that he is putting ideas into their heads. I saw many of them perk up at the thought.
      The process moves from paying tax in arrears to paying it in advance. Inevitably, that involves a period of double taxation. After beginning blusteringly by saying that he would be transparent and open, the Paymaster General dodged answering the question of how much extra tax will be raised by the clause. We are used to his dodging his taxes; now he is dodging telling us how much other people will have to pay in taxes as a result of his measures. That is not satisfactory. We will come back to this time and again. He pretends that industry is happy with the proposals. The CBI welcomed the mitigation of his original, more onerous proposals—
      The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): Order. The right hon. Gentleman has just mentioned tax dodging. I am not sure that that is the right phraseology to use, and I would be grateful if he withdrew it.
      Mr. Lilley: Of course I withdraw. The Paymaster General is well known for dodging answering questions about either his own taxes or the taxes that he is imposing on others. That is a well-established fact.

      69
      We believe that the Government should come clean on the amount of tax involved and recognise that industry does not welcome the extra tax that it is having to pay. What they propose will be welcomed even less when it accumulates with the other burdens they are imposing on business, which threaten a manufacturing recession that is likely to spread in due course to the whole economy.
      Amendment negatived.
      Mr. Lilley: I beg to move amendment No. 3, in page 16, line 29, at end insert—
      '(c) for special payment arrangements for companies making seasonal profits, enabling such companies to pay instalments based on actual tax-adjusted results for the previous six month period.'.
      The quarterly process will inevitably increase taxes on business by requiring companies to forecast their future profits and pay taxes on them before they have been earned. If companies underestimate, they will have to pay interest on the underpayment at a rate designed to discourage understatement. That is a particularly tough requirement on the many firms with highly seasonal business; retailers, for example, who depend on the Christmas season to make any profit at all will have to pay taxes on quarters three and four before they have earned anything at all. The amendment would allow such companies to pay less in the first half of the year.
      International experience shows that corporation tax systems can be reformed to help seasonal businesses. In the United States, for example, businesses pay tax by quarterly instalments, but the system is modified to allow seasonal traders to pay each instalment of tax according to the proportion of annual profits earned at each payment date, using previous years' estimates. Seasonal businesses are not looking for any preferential treatment, but for a corporation tax system that acknowledges their distinctive trading patterns.
      It must be wrong to force seasonal businesses to pay tax in advance of earning enough revenues to have any profit at all over the year as a whole. Retailers have come to me with detailed suggestions about how to resolve the problem. The Paymaster General should listen to them and act on what they have to say.
      To be eligible to use the method we propose, retailers suggest that a company's profits earned in the first six months of the accounting period must be consistently less than their profits earned for the complete financial year. In the US, the proportion is set at 30 per cent. or less of total profit for the year. It would be easy to determine the estimates by looking at established trading patterns over the previous five years, as disclosed in published interim reports. I hope that the Paymaster General will seriously consider the amendment, which should not be costly for the Treasury to accept and introduce and would meet a valid concern of which he should take due note.
      Mr. Malcolm Bruce: I support the amendment. Some companies—in agriculture, farming and fruit, for example—have business that is exclusively summer or Christmas related, and it is reasonable to suggest that the Bill should take some account of that. Otherwise, the cash flow benefit to the Treasury may be significant, but the difficulties for individual companies may be real. If the Conservative party intends to divide the Committee on the amendment, we will support it.
      Mr. Dafydd Wigley: I, too, support the amendment. I represent a constituency where there is a considerable seasonal distortion to economic activity. Tourism is one of the major industries in my area; agriculture—when it is not going through a depression, as it is now—is the other.
      The fact that major companies in the tourism sector have large amounts of money coming in over a limited period and then have low levels of activity the rest of the year leads to knock-on effects on a host of service industries associated with the demand from the tourism sector. In Llandudno, for example, the population goes up from 20,000 to 200,000 in the summer. That gives an indication of the impact of seasonal business on the business fraternity in the area. The amendment would be helpful in terms of cash flow for such companies, and I hope that the Government will seriously consider it.
      6.45 pm
      Mr. Geoffrey Robinson: The Committee is rightly considering the amendment in a reasoned tone. Like the right hon. Members for Hitchin and Harpenden (Mr. Lilley) and for Caernarfon (Mr. Wigley), the Government have received representations on it. We met the British Retail Consortium, which suggested something similar to the amendment; it would confine the measure to companies consistently making less than 30 per cent. of their profits in the first half of the year.
      The amendment might help a few large companies, but there cannot be too many firms that make upwards of 70 per cent. of their profits in the second half of the year. The Committee will realise that the amendment would add considerable complexity to the rules. The right hon. Member for Hitchin and Harpenden refers to the American situation, but I am sure that he is aware that, in other respects, the American system is less favourable. The whole of the tax, as opposed to half, is paid in the year in question. I do not think that the British Retail Consortium, or anybody else, would want that because it would be so disadvantageous. We would not have received the support that we have received for the changes over a four-year transitional period if we were to move to the American system as a whole.
      It is unwise to cherry pick—to have one bit from America and another bit from France—as we would end up with a mish-mash that would not achieve the principled reform we are looking for. I am not inclined to accept the amendment or the proposal from the British Retail Consortium, but we will consider the matter carefully and return to it.
      Mr. Lilley: I am grateful to the Paymaster General for that assurance; we will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Lilley: I beg to move amendment No. 4, in page 16, leave out lines 37 and 38.
      We have drawn attention to the fact that clause 30 in particular—like the Bill in general—makes excessive use

      71
      of regulation-making powers. I invite the House to consider particularly the proposed new section 59E(5), which states:
      "Regulations under this section—

      (a) may make such modifications of any provisions of the Taxes Acts, or

      (b) may apply such provisions of the Taxes Acts,

      as the Treasury think necessary or expedient for or in connection with giving effect to the provisions of this section."
      It is, in short, a Henry VIII clause—a clause that enables the Government, by regulation, to change primary law elsewhere without proper consideration by the House.
      We know that the other place has found such legislative provisions particularly abhorrent, but it will not have the chance to vote on the Finance Bill. We should eliminate that subsection and ensure that if the Government want to change primary legislation, they must bring the change to the House in an open and democratic fashion by the normal procedures of the House and may not publish regulations that cannot be amended or debated.
      Mr. Geoffrey Robinson: This is, quite simply, a wrecking amendment, and the right hon. Gentleman is again suffering from a fairly severe bout of amnesia. It is quite normal for tax regulation-making powers to permit modifications of this sort. Given the authors of the amendment—people who have served in distinguished positions in the Treasury—the House may be interested to learn that the previous Government's last three Finance Bills provided more than a dozen sets of regulation-making powers covering direct taxes alone, three quarters of which included the power to modify existing provisions of the Taxes Acts.
      The only practical effect of the amendment would be to prevent regulations from being made to introduce quarterly instalment payments of corporation tax by large companies. If that is the Opposition's intention—clearly it is—I recommend that we proceed to a vote on the clause as a whole.
      Mr. Lilley: The Paymaster General said that the Conservative Government's last three Finance Bills contained 12 sets of regulation-making powers, but this clause alone has 11 and includes the obnoxious subsection that the amendment would delete. On any basis, that should make the Committee wary of allowing the clause to stand part of the Bill—we shall recommend that it votes against doing so.
      Amendment negatived.
      Question put, That the clause stand part of the Bill:—
      Committee divided:Ayes 275, Noes 121.

      Division No. 255]

      [6.49 pm

      AYES

      Abbott, Ms Diane

      Atkins, Charlotte

      Adams, Mrs Irene (Paisley N)

      Ballard, Mrs Jackie

      Ainsworth, Robert (Cov'try NE)

      Banks, Tony

      Alexander, Douglas

      Bayley, Hugh

      Allan, Richard

      Begg, Miss Anne

      Allen, Graham

      Bell, Martin (Tatton)

      Anderson, Janet (Rossendale)

      Bell, Stuart (Middlesbrough)

      Armstrong, Ms Hilary

      Benn, Rt Hon Tony

      Ashton, Joe

      Bennett, Andrew F

      72

      Benton, Joe

      Galloway, George

      Best, Harold

      Gardiner, Barry

      Betts, Clive

      George, Bruce (Walsall S)

      Blackman, Liz

      Gerrard, Neil

      Blizzard, Bob

      Gibson, Dr lan

      Borrow, David

      Godman, Dr Norman A

      Bradley, Peter (The Wrekin)

      Godsiff, Roger

      Bradshaw, Ben

      Golding, Mrs Llin

      Breed, Colin

      Gorrie, Donald

      Brinton, Mrs Helen

      Griffiths, Jane (Reading E)

      Brown, Rt Hon Nick (Newcastle E)

      Griffiths, Nigel (Edinburgh S)

      Brown, Russell (Dumfries)

      Hall, Mike (Weaver Vale)

      Bruce, Malcolm (Gordon)

      Hall, Patrick (Bedford)

      Burden, Richard

      Hanson, David

      Burgon, Colin

      Harris, Dr Evan

      Butler, Mrs Christine

      Heal, Mrs Sylvia

      Byers, Stephen

      Heath, David (Somerton & Frome)

      Campbell, Mrs Anne (C'bridge)

      Henderson, Ivan (Harwich)

      Campbell, Ronnie (Blyth V)

      Hepburn, Stephen

      Campbell-Savours, Dale

      Heppell, John

      Canavan, Dennis

      Home Robertson, John

      Cann, Jamie

      Hoon, Geoffrey

      Caplin, Ivor

      Hope, Phil

      Casale, Roger

      Hopkins, Kelvin

      Caton, Martin

      Howarth, George (Knowsley N)

      Chapman, Ben (Wirral S)

      Howells, Dr Kim

      Chidgey, David

      Hoyle, Lindsay

      Chisholm, Malcolm

      Humble, Mrs Joan

      Clark, Dr Lynda

      Hurst, Alan

      (Edinburgh Pentlands)

      Hutton, John

      Clark, Paul (Gillingham)

      Iddon, Dr Brian

      Clarke, Charles (Norwich S)

      Jackson, Helen (Hillsborough)

      Clarke, Eric (Midlothian)

      Jamieson, David

      Clelland, David

      Jenkins, Brian

      Clwyd, Ann

      Johnson, Alan (Hull W & Hessle)

      Cohen, Harry

      Johnson, Miss Melanie

      Coleman, lain

      (Welwyn Hatfield)

      Connarty, Michael

      Jones, Barry (Alyn & Deeside)

      Cook, Frank (Stockton N)

      Jones, leuan Wyn (Ynys Môn)

      Corbyn, Jeremy

      Jones, Ms Jenny

      Cotter, Brian

      (Wolverh'ton SW)

      Cousins, Jim

      Jones, Jon Owen (Cardiff C)

      Cranston, Ross

      Jones, Martyn (Clwyd S)

      Crausby, David

      Jowell, Ms Tessa

      Cryer, Mrs Ann (Keighley)

      Kaufman, Rt Hon Gerald

      Cummings, John

      Keeble, Ms Sally

      Cunliffe, Lawrence

      Keen, Ann (Brentford & lsleworth)

      Cunningham, Jim (Cov'try S)

      Kennedy, Jane (Wavertree)

      Dalyell, Tam

      Kidney, David

      Darling, Rt Hon Alistair

      Kilfoyle, Peter

      Davidson, Ian

      King, Andy (Rugby & Kenilworth)

      Davies, Rt Hon Denzil (Llanelli)

      Kingham, Ms Tess

      Davies, Geraint (Croydon C)

      Kirkwood, Archy

      Davis, Terry (B'ham Hodge H)

      Ladyman, Dr Stephen

      Dean, Mrs Janet

      Lawrence, Ms Jackie

      Denham, John

      Laxton, Bob

      Dewar, Rt Hon Donald

      Lepper, David

      Dobbin, Jim

      Leslie, Christopher

      Drew, David

      Levitt, Tom

      Drown, Ms Julia

      Livingstone, Ken

      Eagle, Angela (Wallasey)

      Llwyd, Elfyn

      Eagle, Maria (L'pool Garston)

      Lock, David

      Edwards, Huw

      Love, Andrew

      Ellman, Mrs Louise

      McAllion, John

      Ennis, Jeff

      McAvoy, Thomas

      Etherington, Bill

      McCabe, Steve

      Fatchett, Derek

      McCafferty, Ms Chris

      Feam, Ronnie

      McCartney, lan (Makerfield)

      Fisher, Mark

      McDonnell, John

      Fitzpatrick, Jim

      McGuire, Mrs Anne

      Flynn, Paul

      Mclsaac, Shona

      Foster, Rt Hon Derek

      McKenna, Mrs Rosemary

      Foster, Michael Jabez (Hastings)

      Mackinlay, Andrew

      Foster, Michael J (Worcester)

      McNamara, Kevin

      Foulkes, George

      McNulty, Tony

      Fyfe, Maria

      McWilliam, John

      73

      Mallaber, Judy

      Savidge, Malcolm

      Mandelson, Peter

      Sawford, Phil

      Marsden, Gordon (Blackpool S)

      Sedgemore, Brian

      Marshall, David (Shettleston)

      Sheerman, Barry

      Marshall—Andrews, Robert

      Sheldon, Rt Hon Robert

      Maxton, John

      Simpson, Alan (Nottingham S)

      Meacher, Rt Hon Michael

      Skinner, Dennis

      Michael, Alun

      Smith, Rt Hon Andrew (Oxford E)

      Michie, Bill (Shef'ld Heeley)

      Smith, Angela (Basildon)

      Michie, Mrs Ray (Argyll & Bute)

      Smith, Miss Geraldine

      Mitchell, Austin

      (Morecambe & Lunesdale)

      Moffatt, Laura

      Smith, John (Glamorgan)

      Moonie, Dr Lewis

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

      Moran, Ms Margaret

      Southworth, Ms Helen

      Morgan, Ms Julie (Cardiff N)

      Spellar, John

      Morris, Ms Estelle (B'ham Yardley)

      Starkey, Dr Phyllis

      Morris, Rt Hon John (Aberavon)

      Steinberg, Gerry

      Mudie, George

      Stevenson, George

      Murphy, Denis (Wansbeck)

      Stewart, David (Inverness E)

      Murphy, Jim (Eastwood)

      Stewart, lan (Eccles)

      Murphy, Paul (Torfaen)

      Stinchcombe, Paul

      O'Brien, Mike (N Warks)

      Stott, Roger

      Olner, Bill

      Strang, Rt Hon Dr Gavin

      O'Neill, Martin

      Straw, Rt Hon Jack

      Organ, Mrs Diana

      Stringer, Graham

      Osborne, Ms Sandra

      Stuart, Ms Gisela

      Palmer, Dr Nick

      Stunell, Andrew

      Pearson, lan

      Swinney, John

      Perham, Ms Linda

      Taylor, Rt Hon Mrs Ann

      Pickthall, Colin

      (Dewsbury)

      Pike, Peter L

      Taylor, Ms Dari (Stockton S)

      Plaskitt, James

      Taylor, Matthew (Truro)

      Pond, Chris

      Temple—Morris, Peter

      Pope, Greg

      Thomas, Gareth (Clwyd W)

      Pound, Stephen

      Thomas, Gareth R (Harrow W)

      Powell, Sir Raymond

      Timms, Stephen

      Prentice, Ms Bridget (Lewisham E)

      Tipping, Paddy

      Prentice, Gordon (Pendle)

      Trickett, Jon

      Primarolo, Dawn

      Truswell, Paul

      Prosser, Gwyn

      Turner, Dennis (Wolverh'ton SE)

      Purchase, Ken

      Turner, Dr George (NW Norfolk)

      Quinn, Lawrie

      Twigg, Derek (Halton)

      Radice, Giles

      Tyler, Paul

      Rammell, Bill

      Walley, Ms Joan

      Rapson, Syd

      Welsh, Andrew

      Raynsford, Nick

      White, Brian

      Reed, Andrew (Loughborough)

      Wigley, Rt Hon Dafydd

      Rendel, David

      Williams, Rt Hon Alan (Swansea W)

      Robertson, Rt Hon George (Hamilton S)

      Williams, Alan W (E Carmarthen)

      Robinson, Geoffrey (Cov'try NW)

      Williams, Mrs Betty (Conwy)

      Roche, Mrs Barbara

      Willis, Phil

      Rooker, Jeff

      Wise, Audrey

      Ross, Ernie (Dundee W)

      Wood, Mike

      Roy, Frank

      Wright, Anthony D (Gt Yarmouth)

      Ruane, Chris

      Tellers for the Ayes:

      Russell, Bob (Colchester)

      Mr. John McFall and

      Sanders, Adrian

      Mr. Jim Dowd.

      NOES

      Ainsworth, Peter (E Surrey)

      Cash, William

      Arbuthnot, James

      Chapman, Sir Sydney (Chipping Barnet)

      Atkinson, David (Bour'mth E)

      Atkinson, Peter (Hexham)

      Chope, Christopher

      Baldry, Tony

      Clappison, James

      Bercow, John

      Clark, Rt Hon Alan (Kensington)

      Beresford, Sir Paul

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Boswell, Tim

      Bottomley, Peter (Worthing W)

      Clifton—Brown, Geoffrey

      Bottomley, Rt Hon Mrs Virginia

      Collins, Tim

      Brazier, Julian

      Colvin, Michael

      Browning, Mrs Angela

      Cormack, Sir Patrick

      Bruce, lan (S Dorset)

      Cran, James

      Burns, Simon

      Rt Hon David

      74

      Davies, Quentin (Grantham)

      Major, Rt Hon John

      Davis, Rt Hon David (Haltemprice)

      Malins, Humfrey

      Day, Stephen

      Maples, John

      Dorrell, Rt Hon Stephen

      Maude, Rt Hon Francis

      Duncan, Alan

      Mawhinney, Rt Hon Sir Brian

      Emery, Rt Hon Sir Peter

      May, Mrs Theresa

      Evans, Nigel

      Moss, Malcolm

      Faber, David

      Nicholls, Patrick

      Fabricant, Michael

      Ottaway, Richard

      Fallon, Michael

      Page, Richard

      Forth, Rt Hon Eric

      Paice, James

      Fowler, Rt Hon Sir Norman

      Paterson, Owen

      Fraser, Christopher

      Pickles, Eric

      Gale, Roger

      Prior, David

      Garnier, Edward

      Randall, John

      Gibb, Nick

      Redwood, Rt Hon John

      Gorman, Mrs Teresa

      Robathan, Andrew

      Gray, James

      Robertson, Laurence (Tewkb'ry)

      Green, Damian

      St Aubyn, Nick

      Greenway, John

      Sayeed, Jonathan

      Grieve, Dominic

      Shephard, Rt Hon Mrs Gillian

      Hague, Rt Hon William

      Shepherd, Richard

      Hammond, Philip

      Simpson, Keith (Mid—Norfolk)

      Heald, Oliver

      Soames, Nicholas

      Heathcoat-Amory, Rt Hon David

      Spelman, Mrs Caroline

      Horam, John

      Spicer, Sir Michael

      Howard, Rt Hon Michael

      Spring, Richard

      Jack, Rt Hon Michael

      Steen, Anthony

      Jackson, Robert (Wantage)

      Streeter, Gary

      Johnson Smith,

      Swayne, Desmond

      Rt Hon Sir Geoffrey

      Syms, Robert

      Key, Robert

      Tapsell, Sir peter

      King, Rt Hon Tom (Bridgwater)

      Taylor,lan (Esher &Walton)

      Kirkbride, Miss Julie

      Taylor, John M (Solihull)

      Laing, Mrs Eleanor

      Taylor, Sir Teddy

      Lait, Mrs Jacqui

      Towned, John

      Lansley, Andrew

      Tredinnick, David

      Leigh, Edward

      Viggers, Peter

      Letwin, Oliver

      Wardle, Charles

      Lidington, David

      Widdecombe, Rt Hon Miss Ann

      Lilley, Rt Hon Peter

      Wilshire, David

      Lloyd, Rt Hon Sir Peter (Fareham)

      Winterton, Mrs Ann (Congleton)

      Loughton, Tim

      Winterton, Nicholas (Macclesfield)

      Lyell, Rt Hon Sir Nicholas

      WoodWard, Shaun

      MacGregor, Rt Hon John

      Yeo, Tim

      McIntosh, Miss Anne

      Young, RT Hon Sir George

      MacKay, Andrew

      Maclean, Rt Hon David

      Tellers for the Noes:

      McLoughlin, Patrick

      Mr. John Whittingdale and

      Madel, Sir David

      Mr. Nigel Waterson.

      Question accordingly agreed to.
      Clause 30 ordered to stand part of the Bill.
      Mr. Gibb: On a point of order, Mr. Lord. During the debate on amendment No. 2, the hon. Member for Dudley, North (Mr. Cranston) referred to some statutory instruments relating to clause 30 that he said the Government had already published and placed in the Library, and I believe that that was confirmed by the Paymaster General. I asked Library staff for the reference number of the draft regulations; they can trace no sign of any such regulations being published on Friday, and there is no mention of them in the list of draft regulations or on today's Order Paper. Is not it a gross discourtesy to the Committee that the regulations were not published before the debate, and is not something odd going on, when Labour Back Benchers can see them before other hon. Members?
      The Second Deputy Chairman: I was not in the Chair when those exchanges took place, but I have no doubt

      75
      that Ministers will have heard the point of order. If the documents ought to be in the Library and are not, I assume that Ministers will take the appropriate action.
      Mr. Geoffrey Robinson: Further to that point of order, Mr. Lord. I hope that the hon. Gentleman asked for the right things when he went to the Library.
      Mr. Gibb: Yes.
      Mr. Robinson: If that is the case, we are at a loss at the moment, but we will seek to rectify any error as quickly as possible.

    Clause 75

      USE OF PEPS POWERS TO PROVIDE FOR ACCOUNTS
      Mr. Lilley: I beg to move amendment No. 5, in page 60, line 30, leave out 'subsection' and insert 'subsections'.
      The Second Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 7, in page 60, line 36, at end insert—
      '(IB) The regulations to be made under this section shall provide that investors over the age of 55 shall not be restricted, within the overall annual contribution limits, in the amount that they may choose to invest in the form of—

      (a) cash, or

      (b) life insurance.'.

      No. 8, in page 60, line 36, at end insert—
      '(IC) The regulations to be made under this section shall provide that the charges made for administering an account such as is described in subsection (1A) above shall be no greater than the average charge made for administering a PEP in financial year 1998–99, such average to be calculated by the Treasury.'.
      Mr. Lilley: The original plans for individual savings accounts were not only badly thought out but wrong in principle. The original proposals revealed Labour's true intentions on private savings. Labour wanted to tax prudent savers, in effect retrospectively: those who had saved most prudently would face higher tax.
      We forced a U-turn on the issue. In a debate some weeks before the Budget, we won the argument, even though we could not win the vote, and the dismay on the faces of Labour Back Benchers was clear when Ministers were unable to put up any coherent defence of the proposals. We welcome the U-turn, humiliating though it may be for the Government.
      Unfortunately, the damage has in part been done, because, by publishing their intention to introduce retrospective changes in the taxation of savings vehicles already in existence and savings already accumulated, the Government have made people concerned that, at some future date, a Labour Government might behave in a similar fashion, when they think that they can get away with it. That has increased reluctance to save in the relevant forms. That is doubtless part of the reason for the decline in the savings ratio that is forecast in the Red Book.
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      Labour originally wanted to reduce the annual amount that people could save in tax-advantaged forms. Alas, that aspect remains in the revised proposals announced in the Budget and in the Bill. The maximum of £10,800 a year of tax-exempt savings will be reduced to only £5,000 a year.
      That is especially onerous on those approaching retirement. If they have not made sufficient provision earlier in their life, they will not get the benefits of compound interest that enable people to save lesser sums. Having fewer years to go, they may need to put more money aside. We should prefer a higher amount to be permitted to savers in, say, the last 10 years of their working life.
      Thinking that the Government were unlikely to respond to such a sensible measure, which breaks the very principle to which they are wedded, we have made, in amendment No. 7, a suggestion that came originally from Saga, which caters specifically for the over-50s and over-55s, to allow people in that age group greater flexibility on how they deploy their investments, within the —5,000 limit, so that they can do so in less risky ways if they feel that to be appropriate as they approach retirement and have less chance to ride out the ups and downs of the stock market over a longer period.
      The Government also wanted to cut the incentives. The cut in the July Budget remains, alas, in the current proposals. Under our Conservative tax system for people saving in personal equity plans, for every £80 net dividend, people got a £20 tax credit, whether they were non-taxpayers or basic rate taxpayers. Under the Government's scheme, the non-taxpayers£those with the lowest incomes£will get no tax credit at all. That will penalise the least well-off relative to the tax regime that we used to have. I will be interested to see whether any Government Members stand up and defend that.
      Instead of getting £20 tax credit for every £80 of net dividend, basic rate taxpayers will get only £8.90, and that credit will disappear entirely after five years. The main beneficiaries from investing in equities in individual savings accounts will be top rate taxpayers. Is that what the Labour party envisaged when it was elected? Did it expect Ministers to introduce a scheme in which the primary benefits fall to top rate taxpayers and which limits any tax benefit to those on the lowest incomes and more than halves the benefit to basic rate taxpayers? Unfortunately, the costs of the scheme will absorb most of the tax benefit for basic rate taxpayers. The fourth characteristic of the Government's proposals was that they were reckless about the costs of schemes. The £50,000 lifetime limit would have had the most adverse consequence on providers of savings vehicles, and we are delighted that, at least on the face of it, that has disappeared.
      Other complex rules persist and the sheer change in the rules from the previous system will require all suppliers to modify their systems£and incur costs in so doing. That will enhance costs and mean that a basic rate taxpayer with a modest tax credit will find much of the credit is absorbed by the extra costs imposed by that unnecessary change, unless the provider absorbs the costs; unit and investment trust providers sometimes do so.
      Our amendments would deal with some of those problems, but, alas, many of the problems inherent in the changes that the Government announced in November or

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      early December persist in the proposals in the Bill. We can only hope that the Government will be willing to make further changes in addition to the massive changes that they have already been forced to make in response to our arguments and widespread criticisms from the financial and savings community.
      Mr. Gibb: Despite all the changes that the Government have made in ending the absurdity of a lifetime limit, perhaps the Paymaster General could tell us the advantages for a basic rate taxpayer of holding equities through an individual savings account, given that any capital gains are likely to absorb his capital gains annual allowance anyway and it is unlikely that such a taxpayer would be able to generate in a normal, average year gains exceeding the annual limit. The 10 per cent. tax credit over five years is unlikely to exceed any charges made by a managed fund scheme, so what are the advantages of a basic rate taxpayer holding equities through an ISA?
      If there are no advantages, how can the Government claim that introducing the ISA is any great advance on the TESSA and PEPs regime that already existed? Many outside commentators, including Gavyn Davies, I think£I will stand corrected if I am wrong£have said that all the Government's objectives could have been achieved by simple changes to TESSAs, for example, by removing the ending of the five-year, locked-in period.
      The Institute of Directors said of the regime:
      "We remain concerned about the low level of the annual limit (£5,000 compared with the £7,800 a year which can now be put into a general PEP plus a TESSA). We are also concerned about the £1,000 sub-limits for cash and insurance products which will increase administrative costs and may also tempt people saving, say, £2,000 a year into inappropriate equity investments."
      Will the £5,000 limit be increased to reflect inflation as years go by, or will it stay at £5,000 and thus diminish over time as inflation eats away the value of that figure? Will the Minister confirm which of those two options the Government will pursue?
      The main criticism by the Institute of Directors again concerns how the legislation has been put before the House. It said:
      "None of this detail is in the Finance Bill itself. We are concerned that matters which should be dealt with in primary legislation, allowing Parliament to make detailed amendments, are being relegated to secondary legislation. If, for example, Parliament were to decide that the limits mentioned above should be changed, it could only achieve this by the very crude method of indicating to Ministers that the regulations for ISAs would be rejected if they did not contain different limits."
      Perhaps the Paymaster General will respond to those points.
      7.15 pm
      Ms Sally Keeble: I am grateful to have a chance to speak in this debate because the amendments are mean minded and petty, and their aim is to undermine the purpose of introducing the ISA in the first place. In view of the time, I will be brief.
      On amendment No. 7, the main aim of the ISA is—and always was£to encourage people who do not already have savings to save. The scheme and the way in which it was to be made available were constructed particularly with that group in mind. At present, young people, especially people with children, have the fewest savings. The family resources survey showed that a third of
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      pensioner couples had £20,000 or more in savings, and one in five of all couples without children had savings at that level. Those are the people who have the most money in savings and who might not look to the ISA to encourage them to start saving. In comparison, a third of all couples of working age with children and 70 per cent. of single parents with children had no savings at all.
      An amendment that would change the regulations to encourage people of over 55 to save and to provide a savings regime that is more suitable for them runs against the entire purpose of the ISA.
      Mr. Tim Loughton: The hon. Lady is referring to those 6 million elusive investors who are to be attracted into ISAs. Which feature of the ISA will attract those virgin investors with no savings into becoming savers?
      Ms Keeble: I am grateful to the hon. Gentleman for making that point. People may not save with the mainstream financial institutions, but that does not mean that they have no savings at all. They might well have savings in credit unions or the myriad other informal savings schemes. It is extremely important that those people are attracted into the mainstream so that they can get access to a wider range of financial services. If they have savings accounts, they might also be able to get access to loan accounts.
      I take the hon. Gentleman's point about which elements of the ISA are the most attractive. I suspect that they will be the points of access, which is why the supermarkets are so important, and the fact that complex services will be offered, but with ease of access so that people can take their money out as well, which will encourage them to start putting money into savings.
      Mr. Loughton: I think that the hon. Lady is actually saying something different. If she is alluding to current savings in non-mainstream schemes, such as credit unions or small bank accounts, and saying that those savings could be transferred into the new ISA regime, that will not add a single penny in additional savings. The existing bank arrangements with supermarkets are perfectly accessible and are available to any shopper. Why will ISAs be more attractive and induce people to save more?
      Ms Keeble: I am not merely thinking of small banks. Credit unions are one such scheme, certainly, but there are many other informal schemes such as Christmas clubs and so forth, in which people save small amounts of money over a short period. Those provide savings schemes for the people who have the least money of all. I do not know the extent of such schemes, but I am certainly thinking of those people. The hon. Gentleman is right in that we do not merely want people to shift their savings from one scheme to another. I have dealt with the aspects of the scheme that will probably be most attractive to people who do not save in mainstream savings accounts.
      The Government need to stimulate savings most among people of working age who have children still living at home. Amendment No. 7 would not primarily help such people. In addition, it would give tax incentives to people who are already relatively wealthy for their cash savings, which would not be a prudent use of tax incentives.

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      It would, in some ways be silly to produce a new PEP with cash by the back door. The over-55s are already the most likely to own a PEP; the British Household Panel survey found that 31 per cent. of the richest over-55s and 43 per cent. of the richest over-60s have at least one PEP. A PEP with cash by the back door would not achieve the purpose for which the Government produced the scheme.
      On Tory amendment No. 8, it is of course desirable that administration costs are as low as possible. The Labour party has—quite rightly—criticised the high administration costs of, for example, private pensions. The Government plan to introduce benchmarking of costs for the individual savings accounts. That, combined with careful monitoring, is the right way to control administration costs and ensure that people with relatively low incomes get good value for money in their savings.
      Mr. Philip Hammond rose—
      Mr. Loughton rose—
      Ms Keeble: I have an embarrassment of choice.
      Mr. Hammond: Does the hon. Lady think that costs can be equated with value for money?
      Ms Keeble: People who do not have much money clearly need savings that provide as much return as possible and are best served by keeping administration costs low. The question is how to do it. I shall deal later with why the proposals in your amendment are not right.
      The Second Deputy Chairman: Order. The hon. Lady must be aware that I have not put anything in any amendment.
      Ms Keeble: I apologise, Mr. Lord. I mean that I will deal later with the amendments tabled by the hon. Gentleman's party, which I do not believe are the right way to control costs.
      The Government's proposals rightly provide flexibility and the means to ensure that mainstream financial institutions will control administrative costs and pass on as much as possible of the benefits to people on low incomes.
      Mr. Loughton: I am grateful to the hon. Lady for taking a multi-volley of interventions.
      The hon. Lady has raised benchmarking. Is she saying that cost of a product is the only aspect of benchmarking essential to ISAs? Can she distinguish between benchmarking and kite marking? Labour Members have used both terms—but have inter-used and wholly confused them.
      Ms Keeble: At the risk of further confusion, I shall give my understanding, which is that kite marking involves approval for particular ways of doing things whereas benchmarking is about criteria for an aspect of a scheme. Certain percentages might be set for
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      administration costs, for example. That differs from kite marking, which says that this, that or the other is an approved scheme.
      Administration costs must be examined and are likely to be a difficult area of the scheme. Accounts in which people make frequent, small deposits and can withdraw money fairly easily have high servicing costs. That is why the Government must set a benchmark in this area and provide a real incentive to financial institutions to provide such schemes. The institutions will not think up such schemes on their own. Some institutions are not providing particularly good services at present.
      Artificially capping administration costs would probably make it extremely difficult to deliver such accounts, at least in a way that makes them attractive to people who have not previously saved in mainstream savings accounts. Some of the factors likely to make ISAs attractive to people on low incomes—such as frequent withdrawal and ability to make small deposits—will make them difficult to service.
      The amendment would undermine the success of the scheme. I believe that that is what the Opposition want. Having failed to win the argument in open debate, they are trying to scupper the individual savings accounts by their mean-minded measures, which would do nothing to provide tax breaks to people with less money and would do everything to protect the incomes of the top 10 per cent. of income earners aged over 50. That is another way of saying that the Tory party is simply trying to look after its own, not the wider interests of the country and the public. I urge the Committee to reject the amendments.
      Mr. Loughton: First, I must declare an interest, which is in the Register of Members' Interests. I worked for a company that administered PEPs and have run PEPs for 10 years, since their inception.
      The amendments tackle problems in the Bill for older people. Like my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), I welcome the climbdown on PEPs. We wish ISAs well and we need them to work, but they must be the right product in the right formulation. We also welcome the tacit admission—at last—that the Government will have to forgo tax relief in order to encourage savings. The net effect of the new proposals will mean forgoing much more tax relief to the Treasury than ever happened under PEPs, as the Paymaster General has had to admit in various answers to written questions.
      It is a shame that the ISA proposals contain a major missed opportunity to encourage the elusive 6 million people to save for the long term by not linking a savings scheme with the benefit system and stakeholder pensions. Time and again, we are faced with these 6 million people. We do not know who they are or where they come from. If they are shyly revealing themselves, where are they hiding?
      It is a complete fantasy to say that 6 million people are queuing to throw money at the doors of the Treasury. Six million lower-earning people are not remotely attracted by a capital gains tax concession, as they would get nowhere near the current —6,800 limit. They are not attracted by a tax credit that, on an average yield on a —5,000 equity investment, would amount to just —14, which would be more than gobbled up in charges.
      As the hon. Member for Northampton, North (Ms Keeble) admitted, the only real attraction of the scheme will be to the Christmas club-type cash element.

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      What will really happen is that people who have existing small amounts of money in various pots may shift it to more convenient pots within an ISA. That will not add a single penny to savings, which surely is not the Government's underlying intention. Far from the scheme being a temptation for 6 million new investors, it would be easier for the Paymaster General to feed the 5,000.
      The Bill completely misses the need to look after people with existing PEPs. Although PEPs will be allowed to continue, flaws remain that would have had to be changed even if PEPs had remained without an alternative. For example, why should PEP holders be unable to have the full range of overseas investment that new ISA investors may have?
      Holders of single-company PEPs from their inception should not have to have six completely ring-circled deposit accounts for different years. If they have had one particularly good PEP—perhaps worth £20,000 or £30,000 now—they must reinvest it in only one stock, which puts a disproportionate exposure on a single equity or fund.
      Ms Keeble: Does the hon. Gentleman accept that even reasonably wealthy people who save tend to invest money for a shorter time than they can afford—for five years rather than 10? The real challenge is not to get non-savers to save for one, two or three years but to save at all. Having got them used to that, with the confidence that they can get access to their money in a crisis, the aim is then to get them to save for longer periods. Does he accept that people with money do not always put it into great long-term investments, because they want access to it?
      7.30 pm
      Mr. Loughton: I agree with the hon. Lady's aims, but, with the greater flexibility of ISAs and enabling people to take out cash and, in a confused way, refund it later—whether it is capital or accumulated income that is taken out and replaced is not clear—the Government are not encouraging longer-term investment. That is a fallacy. There was an inflexibility with PEPs, but one advantage of that was that people were committed to longer-term saving.
      The real problem is that time is ticking away, especially for older investors, as my right hon. Friend the Member for Hitchin and Harpenden said. The ISA regulations are not even out yet and are not due before 10 May, but ISAs will start in 11 months. City firms and independent financial advisers will have to set up systems ready to work by the end of this year, but we do not have full details of how the scheme will work. It will cost a vast fortune in personnel, time and new computer equipment at a time when financial institutions are juggling with self-assessment, corporate tax self-assessment, the euro, the millennium bug and everything else.
      Mr. Hammond: Does my hon. Friend agree that financial institutions face a major task in persuading existing regular savers in PEPs to sign the necessary paperwork to convert their contracts to continue saving regularly in ISAs, and that it is vital that we do not allow those people to slip through the net?
      Mr. Loughton: That is right. Will we need to have completely new client agreements for PEP holders who
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      will hold ISAs? There is much paperwork still to be done. Six months on from the original disastrous consultation document, many questions remain, and we have no idea of the answers.
      Will the money that can be transferred from TESSAs after their maturity be the capital or the capital and the interest? No answer has been given. Will TESSA holders be able to transfer the cash from the cash component of an ISA to the equity component? We do not know. There is a raft of questions on regulation and monitoring, which is of particular concern to older people who do not want the hassle and confusion of changes and much more paperwork. How will the reporting of what people have got in ISAs happen? Whom will they report to? How will we cope with the different components of ISAs being run by different plan managers in the same year? Who will monitor the multi-provider component parts to avoid the risk of over-subscription in one year or five years or whenever it will be?
      When will we get details about the proposed maxi or mini ISAs that have been dangled in front of us by Treasury representatives? What happens when ISA holders reach the cash, insurance or equity ceiling when they have different plans with different managers over several years? What will happen with withdrawals? Will capital or accumulated income be taken out? Who will monitor it when it is put back a few years later? Who will oversee best advice on a continuing basis, particularly with the insurance element, which demands a higher degree of best advice?
      When a 55-year-old goes to Tesco, which has a link with a large Scottish pension and investment product company, and decides among his frozen peas and bargain yoghurts to put money into his ISA, it is likely that he will be offered an ISA linked to that company's plan. That is fine; he may go back a few months later and add more money. He may have a regular savings plan. When that investment is no longer the most appropriate—it may have fallen from the first to the third or even fourth quartile—whose is the responsibility to advise that investor to move to a different product? What onus is there on a supermarket, whose major responsibility and profit centre is flogging groceries, to ensure that that investor continues to have the best and most appropriate investment?
      That brings me to benchmarking, which was mentioned by the hon. Member for Northampton, North. When will we get the consultation document on benchmarking or kite marking? Whenever the Revenue opens its mouth, it leaves open more questions than it answers. The Paymaster General knows that the head of regulation at the Treasury, Paula Diggle, gave one of her many presentations on the subject at a recent meeting of the Personal Equity Plan Managers Association. She likened benchmarking to the pure new wool mark on jumpers or the real dairy cream mark on dairy products. It sounds simple, but wool shrinks and cream is full of clots and can go sour if it is not looked after properly. Investments can go wrong and markets can go down, but the Government want to attract 6 million virgin investors without making them properly aware of the risks of equity or insurance investment and no idea yet of how investors will get on-going best advice to ensure that they get the best deals. It is unclear how ISAs will work, how they will be regulated and how on-going best advice will be guaranteed.

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      Benchmarking is important because of its ability to make the market in ISAs grow fast, if it is to be successful. People will look for benchmarks, if that is how the Government are going to mark things, but what is benchmarking? I asked the hon. Member for Northampton, North about that earlier. It represents the replacement of advice and suitability tests with the judgment of the Government. It inherently means that the Government, through the Treasury, endorse the product as having a wide-ranging suitability for almost everyone. Before long, everyone will be shuffled into tracker funds. No doubt it will be called the people's tracker fund. All our 55-year-olds and younger investors will be encouraged to save in it by a nice little Government-approved benchmark, but if it goes wrong who is to blame? Where does the investor go for compensation?
      Mr. Gibb: What would happen if all investors generally put their money into tracker funds, which track the stock exchange index? Would not that have a distorting effect on the stock market's top 100 or 200—depending on which index was being followed—companies?
      Mr. Loughton: That would depend on what the fund was tracking. An artificial amount of money could go into one index that was being tracked. Inherently, tracker funds are fully invested. All the proposals have been formulated in a period in which markets have gone up by at least 20 per cent. over the past few years. At some stage, that bubble will burst. Growth may be more modest or markets may go down and tracker funds will track the relevant index down. Someone sucked into the Tesco hype by the ISA marketing glitz promulgated by the Paymaster General, who—
      The Second Deputy Chairman: Order. The hon. Gentleman is straying wide of the amendments. I would be grateful if he returned to them.
      Mr. Loughton: I apologise. I have almost finished. Benchmarking is a key issue and was raised by Labour Members.
      I fear that if investments go the wrong way, as is highly possible, we will have a misbuying scandal that will make the Albanian pyramid selling scheme and the pensions business so often mentioned by Labour Members look like a tea party.
      Ms Keeble: Will the hon. Gentleman give way?
      Mr. Loughton: May I just make this point, as I am sure that the hon. Lady will take me up on it?
      What is benchmarking actually benchmarking? Is it against charges—that someone is or is not offering a good-value product? Is it against the soundness and financial credibility of the investment manager handling the ISA products? Is it against the past investment performance of the products offered by that investment manager?
      Ms Keeble: The hon. Gentleman has made much of the fact that people on low incomes who invest in ISAs
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      might suffer because tracker funds, into which some of the money may go, track the market downward as well as upward. Does he agree that one of the attractions of PEPs is that they allow entrance into an extremely lucrative market and that, by and large, stock market investments have gone up faster than the interest rates obtainable on conventional savings accounts? Part of the ISA's attraction is that it gives people on low incomes who cannot afford to go trundling off to a stockbroker access to the stock exchange and to the greater returns that that can give, accepting that there is of course a risk. Does he accept that—
      The Second Deputy Chairman: Order. That is an extremely long intervention of a very general nature. I should be grateful if the hon. Member for East Worthing and Shoreham (Mr. Loughton), who is about to respond, is not drawn in that general direction, but returns to addressing the amendment.
      Mr. Loughton: I shall indeed, Mr. Lord—I have almost finished my remarks. The hon. Lady makes an interesting point; the Paymaster General himself in Committee last year said:
      "There is no logic that I am aware of in share price movements."—[Official Report, Standing Committee A, 17 July 1997; c. 19.]
      There is no guarantee that the stock market is a one-way bet, as the Lady suggests.
      The Second Deputy Chairman: Order. The hon. Gentleman is an hon. Gentleman and the hon. Lady is an hon. Lady.
      Mr. Loughton: I meant no disrespect—I do apologise to the hon. Lady and to you, Mr. Lord.
      Earlier, I was asking what benchmarking is all about. We have no clear definition at all, which could lead to a false sense of security among the 6 million-strong army of virgin investors on whom the scheme is targeted. In a letter to the Independent Financial Advisers Association, the Treasury stated that ISAs were about encouraging ethnic minorities, families on low income and women to save. On that basis, is the benchmark to be based on the "Woman's Own" seal of approval, or on the endorsement of the Commission for Racial Equality? We simply do not know.
      ISAs must succeed—we must get them right. We should by now have cleared up all those important questions, of which the largest and most worrying is that of benchmarking. If that is not resolved, it could result in the biggest ever misbuying scandal. Time is ticking away, yet, even at the Committee stage of the Bill, we do not have the consultation documents or some of the proposals on the mechanics of ISAs and how they are to work, and the ISAs themselves are still too complicated.
      Mr. Nick St. Aubyn: I am grateful to my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) for carrying out such an effective demolition job on ISAs, because that will save me from having to repeat a number of points. However, I have several points I wish to make.

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      Drawing on my hon. Friend's point, the capital gains benefit for small savers simply does not exist within ISAs, nor does the income tax benefit. The Government have already knocked that away with their changes to the system of corporation tax. There is not only a new pensions tax, but a new ISAs tax, in that distributions by companies will already have suffered corporation tax and there will be no offsetting credit. It is contradictory for the Government to claim that what is primarily an equity investment vehicle will be attractive to lower rate taxpayers and, at the same time, to say that they have made the changes to corporation tax in order to encourage companies not to make distributions and to invest the money in the company for capital gain instead.
      The Second Deputy Chairman: Order. I have to remind the hon. Gentleman quite firmly that the amendments before the Committee are tightly drawn and he must direct his remarks to them.
      Mr. St. Aubyn: What I am coming to is that the amendments propose to relax the rules relating to ISAs, so that small-scale savers, for example, are not obliged to invest in equities, but can invest most of their ISA in interest-bearing accounts, where they can at least gain the full income tax benefit without the offset of corporation tax.
      Ms Keeble: The hon. Gentleman says that the amendment would relax the rules so that people could put more money into interest-bearing savings accounts, yet the amendment applies only to savers over the age of 55. What he is saying is not borne out by the amendment, because that would impose a restriction on ISAs and not relax the rules.
      7.45 pm
      Mr. St. Aubyn: The whole system of ISAs is flawed, because the Government are yet again changing the rules and making saving more complicated. That alone will deter investment by the very people whom the Government claim they want to encourage to save—the 6 million so-called potential savers.
      The Financial Secretary is mistaken to think that the fact that PEPs and TESSAs give most advantage to relatively well-off people somehow goes against the interests of the less well-off. When people in this country save, it is to the benefit of the entire economy; when people save, it is to the benefit of the overall level of investment in our economy. The reason why the Opposition oppose the Government's measures is that they discourage saving in many ways—we see that in the Red Book projections—and discourage investment.
      The Government claim that they want small savers to save money, but, by their policies, they cannot even save such people's jobs because we are on the threshold of a recession in manufacturing. It is unrealistic of the Government to think that those who have no spare cash will start to save discretionary sums, not only in deposit accounts, but in higher risk equities. That is simply to misunderstand the needs and aspirations of the very group of people whom they claim to represent. They do not do so. At least the amendments will increase the flexibility of the ISA scheme, so that those who aspire to participate
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      in it will know that it is slightly more open ended than the Government intend. That is why I support the amendments.
      Mr. Gibb: I rise again to correct something I said earlier when speaking to amendment No. 8. I referred to Gavyn Davies, whereas I meant to refer to Andrew Dilnot, which puts a completely different complexion on my remarks—indeed, some might argue that it adds credibility to my remarks, given that Andrew Dilnot is director of the Institute for Fiscal Studies. In his evidence to the Treasury Select Committee in March, he made some powerful points and was quite damning of the Government's proposals. He said:
      "Almost all of the objectives that will now be achieved by the ISAs could equally have been achieved by abolishing the five year lock-in period on TESSAs and leaving things as they were. If we really thought we wanted to have some life insurance in a tax free regime, we should have allowed £1,000 life assurance into PEPs. While the consultation period has allowed some of the undoubtedly extremely problematic suggestions made last December to be removed and we are left with something which is broadly sensible, we could have got there with a great deal less sound and fury. Now we are in a rather peculiar position where by the year 2000 we can have people with at least six different sorts of savings schemes: a PEP, a TESSA, a maxi ISA, a mini cash ISA, a mini life assurance ISA, and a mini stocks and shares ISA. This does seem to be an unnecessary proliferation of schemes."
      While I am on my feet, I should mention that the Institute of Chartered Accountants is of the same opinion, believing that the new regime of ISAs and the costs that will be borne by those taking out an ISA are completely unnecessary. The Institute of Chartered Accountants says:
      "It is our conclusion that it would be more straightforward to amend the existing PEP and TESSA savings schemes rather than introduce a wholly new scheme, particularly as the proposed ISA does not appear to offer improved savings incentives, and in fact may well discourage many individuals from saving."
      Mr. Geoffrey Robinson: As you said, Mr. Lord, the amendments are tightly drawn. However, our debate has been slightly wider. In effect, amendment No. 5 is a paving amendment, leading into amendment No. 7, which would allow those aged over 55 to invest more than £1,000, during the lifetime of the scheme, in cash. One might equally argue that younger people should be encouraged in that direction, but to argue in favour of the amendment, as the right hon. Member for Hitchin and Harpenden (Mr. Lilley) did, is to misunderstand what the revised savings scheme is about.
      Surprisingly, the hon. Member for East Worthing and Shoreham (Mr. Loughton) says that he has parliamentary written answers in which we say that the new scheme will cost more than the previous PEPs and TESSAs regime. I should like to see them. I shall hasten to be corrected if I am wrong, but I believe that we said in the Budget and in the Red Book—the Red Book figures show this to be the case—that, in the first year, the new scheme would cost the same as the previous scheme, then it would cost plus £30 million, then minus £30 million, giving broadly the same cost in terms of tax relief for the new system as for the old system. [Interruption.] I shall give the hon. Member for Sevenoaks (Mr. Fallon) the page reference if he needs it. I do not recollect—although I stand to be corrected—that we have ever said that the cost would be any more than that.

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      The entire effort of the new scheme is directed at re-balancing the tax relief to encourage the half of the population who have, and make, no savings at all to save. Although the hon. Member for Guildford (Mr. St. Aubyn) may think it derisory, it is a worthy aim, and it has found widespread support. We should not be as pessimistic as he is about its eventual success. I believe that the Conservatives cannot bear the tremendous welcome that the revised proposals are receiving. They cannot bear the fact that we have consulted and that we have such a wide measure of support for our present proposals.
      My hon. Friend the Financial Secretary received from Lloyds bank a rather good document, entitled "The new Individual Savings Account (ISA)", because she happens to hold a present PEP—I am proud that she does. It says:
      "Lloyds Bank is dedicated to providing customers with good savings products and we believe that ISAs will offer customers many benefits."
      I would try your patience, Mr. Lord, if I were to quote the many welcomes that our revised proposals have received. None of those people has come to us with the bizarre proposals that we have received from the official Opposition.
      Mr. Loughton: I do not want to be flippant; I just wonder what advice the Paymaster General has received from his own bank, whether he has a PEP and whether he will take out an ISA.
      Mr. Robinson: I cannot give advice to anyone on these matters, but I can tell the hon. Gentleman that we have had a warm welcome from his organisation. I shall not embarrass him by reading the letter that I have in my pocket from his chairman, a most distinguished City figure, congratulating us on our consultation process. Indeed, the chairman of Autif said that it was a model of consultation. It did not always feel like that from my side of the—
      Mr. St. Aubyn rose—
      Mr. Robinson: If the hon. Gentleman wants to make a point on the amendments, I give way to him.
      Mr. St. Aubyn: Is the Minister telling us that the process is a model of consultation because he listened to Conservative representations to lift the cap on the size of ISAs?
      Mr. Robinson: It was a model of consultation because we listened and acted on what we heard, and because the Government are not afraid to consult, to change their mind and to improve things in the light of consultation. That is what it is all about. Two or three things came out of the consultative phase—nothing that relates to the amendments, or to much that Conservative Members have said about them today.
      The sole purpose of the proposals was to re-balance the system within the existing tax costs and, in doing so, to encourage those who do not save, to save. There is, therefore, no point in focusing on 55-year-olds and over any more than on anyone else. We are focusing on the half of the population who make no savings. That is why
      88
      it is so encouraging that Schroder, Safeway, Halifax, Pepma, M & G, Fidelity, Virgin and Barclays, to name but a few, say that they will offer the ISA programme—the cash ISA in particular. If we are to make a breakthrough in savings, it must be through the cash ISA, and at £1,000 a year, with £2,000 extra in the first year if it is taken up in that way, it is already at a more than adequate level at which to target those who do not save.
      Mr. Loughton rose—
      Mr. Robinson: I shall give way once more, but I must make progress.
      Mr. Loughton: On a technical point, will the Paymaster General admit that the policy that a 55-year-old could buy with his insurance money within an ISA would be substantially less attractive than the amount that a 25 or 35-year-old could buy because of his age, health and so on, so there is good reason for giving him extra favourable treatment later in life?
      Mr. Robinson: Conservative Members do not seem to want to take the point that we want to encourage the half of the population who do not save at all to save. That is the sole criterion; that is what we are trying to encourage. The hon. Gentleman, unlike the hon. Member for Guildford, welcomed the ISA—they might decide where they stand on this matter—and raised a raft of valid technical points. I assure him that the draft regulations will be published next month, and that we shall get down to the hard work that is needed in that regard. I can reassure him on one point now, however, and that is that the TESSAs to be transferred will be capital only, as was the case, as he will readily concede, when the Conservatives were in government. That is what they did in rolling over TESSAs.
      Amendment No. 8 deals with charges. We can see no point in the official Opposition's proposal that costs should be limited to the average of those currently charged for administering PEPs. We are trying to drive down costs, and we are driving them down; that is the point of benchmarking. However, it is a free market, so if people want to offer a complicated product, it is up to them, and it is up to sophisticated investors who would be tempted by it to decide whether to take it. To be prescriptive in that way runs so counter to the Opposition's usual thinking that I am surprised by the amendment.
      For all those reasons—
      Mr. St. Aubyn: Will the Paymaster General give way?
      Mr. Robinson: I give way one last time.
      Mr. St. Aubyn: The Paymaster General has told us that he believes in a free market in charges. Will he explain why, under the Bill, those who have PEPs—which, as he says, will now be frozen—will be unable to switch their frozen PEP to another fund manager, to allow competition to continue on charges for those on-going PEPs?
      Mr. Robinson: We have arranged that a very good system of competition will apply to the ISA product, and

      89
      that is the important benefit on which we must concentrate, which seems to be lost on Conservative Members.
      I have done my best to explain our reasoned opposition to these interlinking amendments, which have rightly been taken together, and I must advise the Committee to resist them.
      Mr. Michael Fallon: First, I should declare that I, too, have a PEP, but I have not received the glossy leaflet that the Financial Secretary has had. Perhaps we should christen her bank the crawling bank—the bank that likes to say, "Yes, yes". I look forward to hearing from my PEP provider in similar vein.
      We tabled amendment No. 8 simply because it is important to get some control of the administrative costs of what the Paymaster General, I notice, now calls the RSS—his revised savings scheme. I do not know whether he is officially christening it in that way. As he is aware, the PEP rules run to more than 100 pages. They were composed under an efficient, benevolent Government. What is the point of having a new set—another 100 pages—of administrative rules for the ISA?
      Would it not be better if the Paymaster General accepted that the Government have got all this wrong? Why should not the ISA simply be a PEP 2, or why did he not allow an instant-access TESSA? If he is going ahead with this bureaucratic new savings account, it is important that we reduce costs.
      We have other concerns about costs, which is why we want a statutory cap on them. First, will the ISA lie inside or outside the provisions of the Financial Services Act 1986? Perhaps the Paymaster General will help us on that point. If the ISA lies outside the 1986 Act, there will, presumably, have to be a compensation scheme if ISAs are mis-sold, and those who are inside the provisions of the 1986 Act will presumably have to fund such a scheme. Will advisers who come under the provisions of the 1986 Act be allowed to retail ISAs under the same rules as non-regulated retailers, or will the Paymaster General regulate covertly those who retail ISAs generally? We have heard in speech after speech on financial services and from the Paymaster General that the Government want to drive down costs. The best way in which to do that is to put a statutory cap in the Bill, which is the purpose of amendment No. 8.
      8 pm
      We had a brief but revealing debate on amendments Nos. 5 and 7. Almost nothing in the Bill does anything for pensioners. The Red Book devotes only six lines to them, three of which repeat part of the pre-Budget report. We knew that the Bill ignored the interests of pensioners, but this is the first time since the Budget that pensioners have been attacked.
      In an extraordinary speech, the hon. Member for Northampton, North (Ms Keeble) described the pensioners' amendment as mean minded. Was she describing Saga as mean minded? Was she describing those who want to protect the interests of older pensioners who have never saved before as mean minded? If she examines her speech in the cold light of tomorrow, she will see its illogicality. She rightly went on to argue that she wanted ISAs to be most attractive to those who have no other savings. To achieve that, the ISA must be right for older new savers as well as for younger new savers.
      90
      Our amendment would not reduce the attractiveness of the ISA for younger savers; it would deal with the position of those who are getting on and are over 55—the hon. Lady is one of the younger members of the Committee—who will not be able to take the same advantage of an ISA as she might. The life assurance limit of £1,000 offers far less protection for a 55-year-old than for a 35-year-old. The account would be held for a briefer period, so people of that age would have less time to ride out market fluctuations and build up an account that would serve them well in retirement.
      The amendment would ensure that, within the annual limit that is being imposed, the proportion that goes into life assurance could be greater for older people than is prescribed by the Bill.
      Ms Keeble: Does the hon. Gentleman accept that I referred to over-55s in the top decile of income earners?
      Mr. Fallon: Some over-55s will be in the top decile of income earners, but we are both discussing helping those with no savings. We must encourage some of the people in that group to take out an ISA, which is why the life assurance limit must not discriminate against people who happen to be 55 or over. I hope that the hon. Lady will support us on the amendment.
      The Paymaster General should reconsider his view on the amendment, for three reasons. First, he will be 60 next month, so he has an interest in it. He may not have had time to concentrate on his life assurance policy, among his other investments and financial affairs. We want to ensure that he is not disadvantaged against other hon. Members, so I hope that, for his own sake, he will reconsider and speak up for pensioners.
      Secondly, the Paymaster General has repeatedly said that he will listen. The £1,000 limit is not in the Bill; like almost every other matter that we are debating, it will be dealt with in regulations. I hope that he is prepared to reconsider, because those who are getting on in life will not be able to take the same advantage of the £1,000 limit as those who are younger.
      Thirdly, the Paymaster General has listened before, which is why we hope for a change of view. The previous time that he faced us over the Dispatch Box, he was still defending the £50,000 limit. On the surface, that limit has disappeared. Other aspects of the ISA have gone as well—we have not heard much of the proposed annual raffle—but the internal limits remain, and they deeply discriminate against the over-55s. For those reasons, I invite the Committee to support the amendment.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 118, Noes 275.

      Division No. 256]

      [8.6 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Bruce, Ian (S Dorset)

      Arbuthnot, James

      Chapman, Sir Sydney

      Atkinson, David (Bour'mth E)

      (Chipping Barnet)

      Atkinson, Peter (Hexham)

      Chope, Christopher

      Baldry, Tony

      Clappison, James

      Bercow, John

      Clarke, Rt Hon Kenneth

      Beresford, Sir Paul

      (Rushcliffe)

      Boswell, Tim

      Clifton—Brown, Geoffrey

      Brazier, Julian

      Collins, Tim

      Browning, Mrs Angela

      Colvin, Michael

      91

      Cormack, Sir Patrick

      MacKay, Andrew

      Cran, James

      Maclean, Rt Hon David

      Dafis, Cynog

      McLoughlin, Patrick

      Davies, Quentin (Grantham)

      Malins, Humfrey

      Davis, Rt Hon David (Haltemprice)

      Maude, Rt Hon Francis

      Dorrell, Rt Hon Stephen

      Mawhinney, Rt Hon Sir Brian

      Duncan, Alan

      May, Mrs Theresa

      Emery, Rt Hon Sir Peter

      Moss, Malcolm

      Evans, Nigel

      Nicholls, Patrick

      Ewing, Mrs Margaret

      Ottaway, Richard

      Faber, David

      Page, Richard

      Fabricant, Michael

      Paice, James

      Fallon, Michael

      Paterson, Owen

      Forth, Rt Hon Eric

      Pickles, Eric

      Fowler, Rt Hon Sir Norman

      Prior, David

      Fraser, Christopher

      Randall, John

      Gale, Roger

      Redwood, Rt Hon John

      Garnier, Edward

      Robertson, Laurence (Tewk'bry)

      Gibb, Nick

      St Aubyn, Nick

      Gill, Christopher

      Sayeed, Jonathan

      Gorman, Mrs Teresa

      Shephard, Rt Hon Mrs Gillian

      Gray, James

      Shepherd, Richard

      Green, Damian

      Simpson, Keith (Mid—Norfolk)

      Greenway, John

      Soames, Nicholas

      Grieve, Dominic

      Spelman, Mrs Caroline

      Hamilton, Rt Hon Sir Archie

      Spicer, Sir Michael

      Hammond, Philip

      Spring, Richard

      Heald, Oliver

      Steen, Anthony

      Heathcoat—Amory, Rt Hon David

      Swayne, Desmond

      Hogg, Rt Hon Douglas

      Swinney, John

      Horam, John

      Syms, Robert

      Hunter, Andrew

      Taylor, lan (Esher & Walton)

      Jack, Rt Hon Michael

      Taylor, John M (Solihull)

      Jackson, Robert (Wantage)

      Taylor, Sir Teddy

      Johnson Smith,

      Townend, John

      Rt Hon Sir Geoffrey

      Tredinnick, David

      Jones, leuan Wyn (Ynys Môn)

      Viggers, Peter

      Key, Robert

      Wardle, Charles

      King, Rt Hon Tom (Bridgwater)

      Waterson, Nigel

      Kirkbride, Miss Julie

      Welsh, Andrew

      Laing, Mrs Eleanor

      Whittingdale, John

      Lait, Mrs Jacqui

      Widdecombe, Rt Hon Miss Ann

      Lansley, Andrew

      Wigley, Rt Hon Dafydd

      Leigh, Edward

      Wilshire, David

      Letwin, Oliver

      Winterton, Mrs Ann (Congleton)

      Lidington, David

      Winterton, Nicholas (Macclesfield)

      Lilley, Rt Hon Peter

      Woodward, Shaun

      Lloyd, Rt Hon Sir Peter (Fareham)

      Yeo, Tim

      Young, Rt Hon Sir George

      Llwyd, Elfyn

      Loughton, Tim

      Tellers for the Ayes:

      MacGregor, Rt Hon John

      Sir David Madel and

      McIntosh, Miss Anne

      Mr. Stephen Day.

      NOES

      Abbott, Ms Diane

      Blizzard, Bob

      Adams, Mrs Irene (Paisley N)

      Borrow, David

      Ainsworth, Robert (Cov'try NE)

      Bradley, Peter (The Wrekin)

      Alexander, Douglas

      Bradshaw, Ben

      Allan, Richard

      Breed, Colin

      Allen, Graham

      Brinton, Mrs Helen

      Anderson, Janet (Rossendale)

      Brown, Rt Hon Nick (Newcastle)

      Ashton, Joe

      Brown, Russell (Dunfries)

      Atkins, Charlotte

      Bruce, Malcolm (Gordon)

      Ballard, Mrs Jackie

      Burden, Richard

      Banks, Tony

      Burden, Colin

      Bayley, Hugh

      Butler, Mrs Christine

      Beard, Nigel

      Byers, Stephen

      Beckett, Rt Hon Mrs Margaret

      Coborn, Richard

      Begg, Miss Anne

      Campbell, Alan (Tynemouth)

      Bell, Martin (Tatton)

      Campbell, Mrs Anne (C'bridge)

      Benn, Rt Hon Tony

      Campbell, Menzies (NE Fife)

      Bennett, Andrew F

      Campbell, Ronnie (Blyth V)

      Benton, Joe

      Campbell —Savours, Dale

      Best, Harold

      Canavan, Dennis

      Blackman,Liz

      Cann, Jamie

      92

      Caplin, Ivor

      Howarth, Alan (Newport E)

      Casale, Roger

      Howarth, George (Knowsley N)

      Caton, Martin

      Howells, Dr Kim

      Chapman, Ben (Wirral S)

      Hoyle, Lindsay

      Chidgey, David

      Humble, Mrs Joan

      Chisholm, Malcolm

      Hurst, Alan

      Clark, Dr Lynda

      Hutton, John

      (Edinburgh Pentlands

      Iddon, Dr Brian

      Clark, Paul (Gillingham)

      Jackson, Ms Glenda (Hampstead)

      Clarke, Eric (Midlothian)

      Jenkins, Brian

      Clelland, David

      Johnson, Alan (Hull W & Hessle)

      Clwyd, Ann

      Johnson, Miss Melanie (Welwyn Hatfield)

      Cohen, Harry

      Coleman, lain

      Jones, Barry (Alyn & Deeside)

      Connarty, Michael

      Jones, Ms Jenny (Wolverh'ton SW)

      Cook, Frank (Stockton N)

      Corbyn, Jeremy

      Jones, Jon Owen (Cardiff C)

      Cousins, Jim

      Kaufman, Rt Hon Gerald

      Crausby, David

      Keeble, Ms Sally

      Cryer, Mrs Ann (Keighley)

      Keen, Ann (Brentford & Isleworth)

      Cummings, John

      Kennedy, Jane (Wavertree)

      Cunliffe, Lawrence

      Kidney, David

      Cunningham, Jim (Cov'try S)

      Kilfoyle, Peter

      Dalyell, Tam

      King, Andy (Rugby & Kenilworth)

      Darling, Rt Hon Alistair

      Kingham, Ms Tess

      Davidson, Ian

      Kirkwood, Archy

      Davies, Rt Hon Denzil (Llanelli)

      Kumar, Dr Ashok

      Davies, Geraint (Croydon C)

      Ladyman, Dr Stephen

      Davis, Terry (B'ham Hodge H)

      Lawrence, Ms Jackie

      Dean, Mrs Janet

      Laxton, Bob

      Denham, John

      Lepper, David

      Dewar, Rt Hon Donald

      Leslie, Christopher

      Dobbin, Jim

      Levitt, Tom

      Dowd, Jim

      Livingstone, Ken

      Drew, David

      Lock, David

      Drown, Ms Julia

      Love, Andrew

      Eagle, Angela (Wallasey)

      McAllion, John

      Eagle, Maria (L'pool Garston)

      McAvoy, Thomas

      Edwards, Huw

      McCabe, Steve

      Ellman, Mrs Louise

      McCafferty, Ms Chris

      Ennis, Jeff

      McCartney, Ian (Makerfield)

      Etherington, Bill

      McDonnell, John

      Fatchett, Derek

      McFall, John

      Feam, Ronnie

      McGuire, Mrs Anne

      Fisher, Mark

      Mclsaac, Shona

      Flynn, Paul

      McKenna, Mrs Rosemary

      Foster, Michael Jabez (Hastings)

      Mackinlay, Andrew

      Foster, Michael J (Worcester)

      McNamara, Kevin

      Foulkes, George

      McWilliam, John

      Fyfe, Maria

      Mallaber, Judy

      Galloway, George

      Marsden, Gordon (Blackpool S)

      Gardiner, Barry

      Marshall, David (Shettleston)

      George, Bruce (Walsall S)

      Marshall-Andrews, Robert

      Gerrard, Neil

      Maxton, John

      Gibson, Dr lan

      Meacher, Rt Hon Michael

      Gibson, Dr Norman A

      Merron, Gillian

      Godsiff, Roger

      Michie, Bill (Shefld Heeley)

      Golding, Mrs Llin

      Michie, Mrs Ray (Argyll & Bute)

      Gorrie, Donald

      Milbum, Alan

      Griffiths, Jane (Reading E)

      Mitchell, Austin

      Griffiths, Nigel (Edinburgh S)

      Moffatt, Laura

      Hall, Mike (Weaver Vale)

      Moonie, Dr Lewis

      Hall, Patrick (Bedford)

      Moran, Ms Margaret

      Hanson, David

      Morgan, Ms Julie (Cardiff N)

      Heal, Mrs Sylvia

      Morgan, Rhodri (Cardiff W)

      Heath, David (Somerton & Frome)

      Morris, Ms Estelle (B'ham Yardley)

      Henderson, lvan (Harwich)

      Morris, Rt Hon John (Aberavon)

      Hepburn, Stephen

      Mudie, George

      Heppell, John

      Murphy, Denis (Wansbeck)

      Home Robertson, John

      Murphy, Jim (Eastwood)

      Hood, Jimmy

      Murphy, Paul (Torfaen)

      Hoon, Geoffrey

      O'Brien, Mike (Warks)

      Hope, Phil

      Olner, Bill

      Hopkins, Kelvin

      Organ, Mrs Diana

      93

      Osborne, Ms Sandra

      Smith, Miss Geraldine

      Palmer, Dr Nick

      (Morecambe & Lunesdale)

      Pearson, Ian

      Smith, John (Glamorgan)

      Perham, Ms Linda

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

      Pickthall, Colin

      Speller, John

      Pike, Peter L

      Squire, Ms Rachel

      Plaskitt, James

      Starkey, Dr Phyllis

      Pope, Greg

      Steinberg, Gerry

      Pound, Stephen

      Stevenson, George

      Powell, Sir Raymond

      Stewart, David (Inverness E)

      Prentice, Ms Bridget (Lewisham E) Stewart, Ian (Eccles)

      Prentice, Gordon (Pendle)

      Stinchcombe, Paul

      Primarolo, Dawn

      Stott, Roger

      Prosser, Gwyn

      Strang, Rt Hon Dr Gavin

      Purchase, Ken

      Stringer, Graham

      Quin, Ms Joyce

      Stuart, Ms Gisela

      Quinn, Lawrie

      Stunell, Andrew

      Radice, Giles

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Rammell, Bill

      Rapson, Syd

      Taylor, Ms Dari (Stockton S)

      Raynsford, Nick

      Taylor, Matthew (Truro)

      Reed, Andrew (Loughborough)

      Thomas, Gareth (Clwyd W)

      Reid, Dr John (Hamilton N)

      Thomas, Gareth R (Harrow W)

      Rendel, David

      Timms, Stephen

      Robertson, Rt Hon George

      Tipping, Paddy

      (Hamilton S)

      Trickett, Jon

      Robinson, Geoffrey (Cov'try NW) Truswell, Paul

      Roche, Mrs Barbara

      Turner, Dennis (Wolverh'ton SE)

      Rogers, Allan

      Turner, Dr Desmond (Kemptown)

      Rooker, Jeff

      Turner, Dr George (NW Norfolk)

      Ross, Ernie (Dundee W)

      Twigg, Derek (Halton)

      Roy, Frank

      Tyler, Paul

      Ruane, Chris

      Walley, Ms Joan

      Ruddock, Ms Joan

      White, Brian

      Russell, Bob (Colchester)

      Williams, Rt Hon Alan

      Sanders, Adrian

      (Swansea W)

      Savidge, Malcolm

      Williams, Alan W (E Carmarthen)

      Sawford, Phil

      Williams, Mrs Betty (Conwy)

      Sedgemore, Brian

      Willis, Phil

      Sheerman, Barry

      Wise, Audrey

      Sheldon, Rt Hon Robert

      Wood, Mike

      Simpson, Alan (Nottingham S)

      Wright, Anthony D (Gt Yarmouth)

      Skinner, Dennis

      Smith, Rt Hon Andrew (Oxford E)

      Tellers for the Noes:

      Smith, Angela (Basildon)

      Mr. Clive Betts and

      Smith, Rt Hon Chris (Islington S)

      Mr. David Jamieson.

      Question accordingly negatived.
      Mr. Lilley: I beg to move amendment No. 6, in page 60, line 32, after 'account', insert
      'which may (if the investor so wishes) be retained for the remainder of his life'.
      One of the most significant proposals in the original plans that the Government announced for individual savings accounts was the one to introduce a lifetime limit of £50,000 as the maximum amount of tax-exempt savings that people could put into their replacements for PEPs and TESSAs. That was punitively low by comparison with the amount necessary to buy a modest pension. Indeed, I have already pointed out how small the amount is compared with what a long-serving Member of Parliament, such as the hon. Member for Bolsover (Mr. Skinner), who raised the issue, would be entitled to by way of a pension. To buy a pension equivalent to the hon. Gentleman's would cost about £350,000, so setting a limit of £50,000 for people's savings was a damaging threat.
      It was especially offensive that the proposals came from the Paymaster General, who has such large amounts in tax-favoured forms in the Channel Islands. That is why
      94
      there was such outrage in the country at the suggestion that this limit should be imposed. It was also wrong because it was unworkable in practice, in that following through people's ownership of ISAs over a lifetime would be very difficult; monitoring and maintaining the requisite records would have imposed a great cost on the providers. We are therefore glad that the £50,000 limit has gone.
      The suspicion remains, however, that the Labour party would like to bring back the limit through the back door. The Government have promised to guarantee ISAs only for 10 years. In a possibly Freudian slip, the Paymaster General earlier today referred to people being allowed to invest £1,000 a year during the lifetime of the scheme. He clearly continues to think that there is to be a lifetime limit on investments in the scheme. The 10-year guaranteed life effectively means that people can put £5,000 a year aside for 10 years: we are back at the £50,000 lifetime limit, by the back door.
      Our suspicions are fuelled by the fact that the Government refused to put their so-called guarantee in legislation. Nowhere in the Bill is there to be found any assurance to those who take out ISAs that they will be able to keep them for any period, let alone 10 years. We believe that a period of 10 years is grossly inadequate. People want to be sure that, when they put money in such schemes, they can keep them for the rest of their lives. They are saving, by and large, for retirement. They do not want their tax exemptions to disappear after 10 years.
      We have therefore specified in this important amendment that, not just for 10 years but for the rest of their lives, people will be able to keep the ISAs that they have taken out. We should be interested to hear from the Paymaster General any reasons he has for opposing the amendment. We will look closely at his words, as we look suspiciously at his Freudian slip earlier today, to see whether the Government are suggesting that there should be some limit on the duration of the rather minimal tax reliefs available under the legislation that they propose.
      Mr. St. Aubyn: I support amendment No. 6. No one who saw the success of PEPs and TESSAs would honestly claim that there was a good case for changing a successful system. I am not a keen supporter of ISAs, because they are second best. We had a thoroughly good scheme before. If we are to have ISAs, however, let the Opposition's success in arguing for the lifting of the cap on ISAs be written into the Bill, as my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) urged.
      It is extraordinary how much power the Bill leaves to the discretion of the Treasury. In so many of the areas touched by the Bill, the Government want to keep all their cards up their sleeve. That is characteristic of this Government in so many aspects of their policy. Now we see it in their Treasury policy.
      There are only two reasons for rejecting the amendment. The first is that the Government wish to preserve the cap of £50,000 by the back door. The second is that they want to keep to themselves as much discretion and power as possible, and leave as little as they must for debate and scrutiny in the House of Commons.
      Amendment No. 6 would encourage people's wider aspirations. We have heard the Government argue that the point of ISAs is to redirect savings incentives to those on lower incomes. We must all encourage those on lower

      95
      incomes to save, but, if they have very little discretionary money available for saving, the amount that we can encourage them to save through a discretionary scheme will be limited.
      If the Government want those on lower incomes to save more—for example, to provide more for their own needs in the future, particularly for their retirement needs—the Government should be honest and set out their proposals for a more rigorous and disciplined system for people to save for the long term. They would thereby make it clear that they want people to save for their future needs, not just for their future aspirations—additional spending opportunities over and above their needs.
      That is why most people would put money into ISAs, as they put money into PEPs and TESSAs. They put the money in because they did not need it immediately. In many cases, they did not need to save all the money, but they saw that, by saving it through that mechanism rather than spending it immediately, they might have wider spending opportunities. They might be saving towards a daughter's wedding, a world cruise on their retirement or a second honeymoon. Such were the objectives of many people who put large sums into PEPs and TESSAs.
      Now the Government are changing the nature of the scheme and encouraging those on much lower incomes to get involved, but they cavil at the suggestion that people should put in more than £50,000. They do not want to give even that encouragement. They do not want people to venture even that far in their hopes and aspirations. It says a great deal about the Government that they are not prepared to make such a commitment.
      Mr. Gardiner: I had no intention of speaking on the amendment, but I feel compelled to do so because of the cavalier way in which the Opposition insist on confusing a guarantee with a manacle. It is clear that the Chancellor has offered a guarantee that the scheme will continue for at least 10 years, because the Government appreciate the need to give long-term security to investors. It is to be welcomed, especially as it far exceeds any guarantee on PEPs made by the Conservatives when in government.
      Mr. St. Aubyn: Is not the difference between the present Government and the previous one that the previous Government did not break the promises and undertakings they made before an election, in the context of PEPs and TESSAs? Because the Government sought to break their word, they must now give more cast-iron guarantees.
      Mr. Gardiner: I am delighted to respond to that question. It is breathtaking to be lectured by the Opposition on a Government breaking their word. The Conservatives were indicted year on year for breaking their word in government, particularly their tax pledges. The categorical pledges on VAT made before the general election in 1992 were consigned to the waste paper bin within weeks afterwards. We will take no lectures on that.
      On clause 75, it is clear that the Chancellor sought to give some long-term security to investors who might be induced to come into ISAs. That was not previously done.
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      No Government would seek to manacle themselves in terms of tax for an indefinite period. That period might be as long as 70 years.
      Mr. Gibb: The Government have caused enormous damage to the confidence of savers. The first colossal damage was done in the July Budget, when the Government decided to abolish the repayment of dividend tax credits. That took £5 billion a year out of the nation's pension funds and dented people's confidence in pension funds as a vehicle for savings. It dented the concept of savings.
      The Government then decided to announce the abolition of PEPs and TESSAs during the Finance Bill discussions in July and the months that followed. That, too, damaged people's confidence in savings. The nonsense of the initial proposals for the £50,000 limit added to the lack of confidence in the savings tax regime. It is odd that the Chancellor feels the need to guarantee the survival of the ISA scheme for 10 years. When the Conservative Government introduced PEPs and TESSAs, they announced no such guarantee. Nobody believed that it was necessary to specify the length of the reliefs provided, because everyone assumed that they would last indefinitely. The purpose of those schemes was to encourage people to save for the long term, and those schemes were enormously successful.
      Mr. Hammond: Does my hon. Friend agree that the difference is that people believed that the last Government were genuinely committed to the principle of encouraging long-term savings, whereas they believe that this Government have merely embarked on a cosmetic exercise?
      8.30 pm
      Mr. Gibb: My hon. Friend makes a very valid point. I have asked myself why the Government have decided to abolish TESSAs and PEPs and replace them with ISAs, which are a pale facsimile. Why did the Government not simply tinker with TESSAs and PEPs? The only possible reason is that the Government want to be rid of a successful, Conservative-inspired policy for purely vindictive, political reasons.
      Mr. Loughton: Does my hon. Friend agree that the Government's proposal is in complete contrast to the message that we usually hear from Ministers? They claim repeatedly that they cannot commit a future Government to current measures. Therefore, there is no guarantee that this proposal will survive. What will happen in five years—
      The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): Order. The hon. Gentleman must be brief.
      Mr. Loughton: What will happen in five years if the Government decide that too much tax relief is lost? That is what they did in this case, and they tried to penalise PEP holders retrospectively until we objected.
      Mr. Gibb: My hon. Friend makes a valid point. Labour right hon. and hon. Members have given commitments that have subsequently been breached. The Labour party

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      gave a commitment during the election campaign that there would be no increases in taxation, yet, within two months of coming to power, Labour introduced measures that would raise £5 billion a year from the nation's pension funds. It is clear that the Government have decided to abolish the successful TESSAs and PEPs and replace them with the less successful ISAs for purely dogmatic reasons. That decision will return to haunt them in the future.
      The Treasury Select Committee examined the 10-year guarantee, and its conclusions are quite damning. It makes the same point that my right hon. Friend the Member for Hitchen and Harpenden (Mr. Lilley) raises in the amendment. The report states:
      "The abolition of the life-time limit was mentioned in the FSBR but not announced by the Chancellor in his speech; he did announce that the ISA system would continue in place for an initial ten years, with a review after seven years. As the annual investment limit is £5,000 (£7,000 in the first year), the effective total investment (apart from TESSA capital) would amount to only £52,000 after ten years."
      It is there in black and white in the report of the Treasury Select Committee, which comprises a majority of Government Members. The report states that the total investment would be only £52,000 after 10 years. It sounds as though the members of the Treasury Select Committee agree with my right hon. Friend that this is a lifetime limit by the back door because the amount one can invest is limited to
      "only £52,000 after ten years".
      Will the Paymaster General confirm that the Government do not intend to end the scheme after 10 years or to review it after seven years with the possibility of not continuing it after 10 years? If he provides that confirmation today, it will begin to redress the damage to savings that the Government have caused, and which they acknowledge in the declining savings ratio that is set out in a table in the Red Book.
      The Treasury Select Committee raised another issue regarding the prize draw, to which my hon. Friend the Member for Sevenoaks (Mr. Fallon) referred. Footnote 75 on page xi of the Treasury Select Committee report states:
      "Another proposal which was dropped without mention in either the Chancellor's speech or the FSBR was the monthly prize draw".
      The Government have made another U-turn, sneaked out via a Budget press release and hidden in footnote 75 of the Treasury Select Committee's report.
      Mr. Geoffrey Robinson: I find the Opposition's argument on this amendment bizarre. The Conservatives were in office for 18 years, and PEPs and TESSAs ran for much of that time. Every document relating to those schemes always stated clearly—although not always in bold or in headlines on the front cover—that tax rates and reliefs could change and that the investor should be aware of that fact. That degree of uncertainty existed. Indeed, the view was put around the City towards the fag end of their tired Administration that the Tories were looking seriously at ways of curtailing the cost of tax reliefs.
      In this proposal, we are trying—I confirm to the Committee and to the right hon. Gentleman that the regulations will make it absolutely clear—to guarantee a minimum 10-year period in which tax reliefs will remain as they are now and cannot be reduced. That is an unprecedented guarantee for any Government to make. The Tories did not give similar assurances when they
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      were in government. We give that guarantee in order to ensure certainty in the market, long-term stability and a genuine incentive to save. Our proposal has met with an extremely strong response during the consultation period.
      Mr. Lilley: The Paymaster General says that the regulations—which are not before the Committee and which are not available to inspect—will guarantee no reduction in tax relief during a 10-year period. Is he then saying that, after five years, the tax relief available to basic rate taxpayers will be extended and will continue for a full 10 years? In that case, the previous announcement that relief would end after five years is no longer valid.
      Mr. Robinson: We mean exactly what we have said: tax reliefs will remain at at least their present levels for a 10-year period and we shall review the scheme.
      Mr. Lilley rose—
      Mr. Robinson: I shall give way in a moment: I know the point that the right hon. Gentleman wants to make. What we have said is quite clear, and that is all we are saying: reliefs will last for 10 years and they will be reviewed after seven. The Government's commitment carries considerable weight because everyone knows that this Government will review the scheme in seven years. It is totally irrelevant whether the Opposition decide to join us in that commitment or threaten to change or withdraw the scheme and reduce the tax relief, because everyone knows that the Tories will not be in office to do that. Our position is quite clear. There is sourness on the part of the Opposition that the measure has been so well received by the financial savings institutions in the City of London.
      Mr. Lilley: I am sorry that I did not make myself clear to the Paymaster General, but this is an important point. The Chancellor of the Exchequer said that the 10 per cent. tax credit for basic rate taxpayers taking out ISAs and investing in equities would disappear after five years; the Paymaster General has said that tax reliefs would remain unchanged for 10 years—which statement is true?
      Mr. Robinson: We have made it clear that tax reliefs will be phased out after five years, and that remains the case.
      I turn to some points raised by the hon. Member for Guildford (Mr. St. Aubyn), who was trying to be his usual helpful self but got into a terrible muddle. The proposals have been received extremely well. We are working for long-term stability. The clear commitment by existing institutions and by the new ones that want to join the scheme, such as Safeway and the other supermarkets, will ensure that we shall get new net savings.
      There will not be the simple displacement factor to which the noble Lord Lawson referred when he introduced the scheme. He said, "This is not really about net increases in savings—we do not believe that—but it will increase the habit of investing in equities." That was the policy of the previous Government. Our policy is different: we want to generate genuine new savings. That is why we have no lock-in period and why we have guaranteed tax reliefs for 10 years, with a review after seven.

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      It is unnecessary to go further than that at this stage. No Government have gone as far as that: the previous Government never gave a similar undertaking. All the documents relating to PEPs made it absolutely clear that tax reliefs could change and that people would have to guard against that. If the Opposition are minded to push their ridiculous proposition to a vote in this amendment, we shall have to resist it. In dividing the Committee, the Opposition would be going clearly against the wide acceptance of the stability of the long-term commitment that the Government's proposal represents, which has been so well received by the industry.
      Mr. Hammond: How would the Minister square the projected decline in the savings ratio with the net increase in savings that he is talking about?
      Mr. Robinson: We do not need any lectures from the Opposition about savings ratios or the mis-selling of pensions or savings products. The past masters in both were the Opposition. That is the point they must take on board. For four years in the 1980s, they managed to achieve a negative savings ratio. Billions of pounds—
      Mr. Hammond: Check the figures.
      Mr. Robinson: Absolutely. Check the figures. The hon. Gentleman will find that he is wrong. Indeed, he has been wrong already on one point, but he has not had the grace to admit it. The Opposition managed to achieve a negative savings ratio in the 1980s, and I shall send him the figures to prove it. We need no lectures on any of that from Opposition Members.
      Everything that we have been doing—the Government have been committed to this approach and all our economic policies have been about this since we formed our Administration, including the operational independence of the Bank, the code of fiscal stability and the evening of the playing field on forms of investment—is designed to achieve long-term stability and long-term growth. That is best for savings, best for incomes and best for the country.
      Amendment negatived.
      Clause 75 ordered to stand part of the Bill.

    Clause 147

      STAMP DUTY ON CONVEYANCE OR TRANSFER ON SALE
      Mr. David Heathcoat-Amory: I beg to move amendment No. 10, in page 136, line 32, at end insert—
      '(4A) This section shall not apply to properties which are subject to uniform business rate.'.
      I shall give my reasons for moving the amendment in the context of a wider comment about the Bill, which is that it is a tax-raising measure. That is the general nature of the Bill, and the clause is very much part of that strategy.
      We had a good deal of waffle in the Budget statement about the Budget being for investment and enterprise. However, wherever we look in the Bill we find an
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      increased tax burden, often on the precise sectors of the economy that are asked to produce additional jobs and more investment.
      The Chancellor of the Exchequer said in his statement that stamp duty would rise from 1.5 to 2 per cent.—a 25 per cent. increase for the transfer of properties above £250,000 in value. For properties valued at more than £500,000, there would be a 50 per cent. increase in stamp duty from 2 to 3 per cent.
      I have a commercial interest to declare as I am a director of a property company that is duly registered in the Register of Members' Interests. Perhaps right hon. and hon. Members may be affected in their private lives by having to pay increased stamp duty on house transactions. I do not think that many Members will be affected in that way, however, because the burden of the tax does not fall primarily on the house owner, contrary to what the Chancellor tried to put over in his Budget speech.
      The right hon. Gentleman, having described the tax increase, said that it was
      "a change which leaves 98 per cent. of house transactions unaffected."—[Official Report, 17 March 1998; Vol. 308, c. 1110.]
      He was therefore suggesting that the tax would be felt only by richer householders. The truth is that the burden falls on the commercial sector, not on the private householder. The Chancellor adopted a disingenuous way of describing the increase because three quarters of the tax is paid by commerce.
      The burdens are considerable. In the current year, the extra burden of the tax will be £390 million, rising in the next financial year to £470 million. In the year 2000-01, the yield will be £520 million, so the yield from this tax will be more than half a billion pounds a year. The burden will fall on the sector of the economy that is asked in the welfare-to-work project to produce extra jobs.
      In the Budget statement, we had an appeal for more investment. In the Red Book, which was subsequently published, we find that, although business investment has been rising strongly in recent years—it is recorded as rising at 7.75 per cent. last year—there is a projected stabilisation and then a small decline.
      8.45 pm
      The reason lies in the clauses that are before the Committee this evening. Quite simply—it is not a startling observation—if we tax business and reduce profits, the result is fewer jobs and less investment. More than that, such an approach inhibits mobility, flexibility and inward investment—those are all the things which the Government say that they are seeking to encourage. It is not surprising that the Association of British Insurers said that the measure was
      "a disincentive to productive business investment and efficiency."
      The increased tax will be paid primarily perhaps by those selling commercial property. However, indirectly it will be paid by a much wider spectrum of businesses. Commercial tenants will pay because their landlords will seek to recover the additional cost of stamp duty through increased rents. The increased tax will provide a perverse incentive for those who are investing in property. For example, there will be an advantage in investing in property overseas in those countries that have lower property transfer taxes, especially those outside the European Union.

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      In the time available, I have undertaken a little research in the context of the European Union. There is a confused position because there is not even attempted harmonisation or standardisation in the description of taxes, let alone the rates and incidence of the taxes. Sometimes, they are described as property transfer taxes and at others as conveyancing taxes. Sometimes, the taxes are described, like our own, as stamp duty. Some taxes are collected at municipal level, some at regional level and others at national level.
      Generally, most member states have higher equivalent taxes than we do. It seems that the French conveyancing tax is levied at an ordinary rate between 13.4 and 15.4 per cent. In Belgium, the standard rate for a similar tax is 12.5 per cent. The rate in the Netherlands is lower. It seems that 6 per cent. is normal for property transactions there. Ireland has a conveyancing duty on a sliding scale between 1 and 6 per cent. In Portugal, the tax is collected by the municipalities. The Library produced a figure of 10 per cent., that being normal on transfers of urban buildings or building land. There is a sliding scale for domestic properties. Germany seems to have a lower rate of 2 per cent. which is collected by the Lander government, so the picture on the continent is very mixed.
      I mention that because one of our advantages up to now was that our stamp duty was comparatively low, and that at least contributed to our being an attractive haven for inward business investment, but the Government appear set on eroding that. Indeed, if we go on increasing stamp duty as we are going, we shall lose a very valuable competitive advantage. This could be connected with the fact that, a few months ago, the Government signed up to a code of conduct on business taxes to counter what the European Union is pleased to call harmful tax competition. One of my questions for the Paymaster General is whether the code of conduct on business taxation has implications for stamp duty and whether the Government are seeking to increase stamp duty under the guise of harmonisation, as there is undoubtedly pressure from that part of the European Commission that sees low taxes as unfair.
      Another point worth dwelling on for a moment is which companies will primarily pay the increased stamp duty. It is well known in accountancy circles—I have to confess to being a chartered accountant, so I used to earn a living by doing such things—that large companies can on occasion avoid stamp duty by using various avoidance devices. The simplest concept is that a property to be transferred is owned by a subsidiary company, and it is the company rather than the property that is sold. If that is done offshore, in another tax jurisdiction, stamp duty can sometimes be avoided completely.
      Of course, there are various anti-avoidance devices; nevertheless, it remains true that the sophisticated company which is well advised can often find ways around stamp duty. In a free trading world and a global environment in which many multinational companies have their headquarters in Britain, it is increasingly the case that, where avoidance can be secured, great time and effort go into securing it. It tends to be the smaller or medium-sized company, which is less sophisticated and less well advised, that pays the increased taxes upfront.
      If the Paymaster General is intent on increasing stamp duty, is this not an opportunity to move to a slice rather than a slab system? Putting it as simply as I can, under the slab system if the value of a property moves even
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      £1 above the threshold of, say, £250,000, the higher rate of stamp duty is applied to the entire value rather than just to the extra slice. That can lead to a mysterious grouping of valuations just below the threshold, for obvious reasons, and people can attempt to divide up properties or sell the furniture and fittings separately in order to keep under the relevant value. However, it is inequitable that the extra charge should apply to the entire value of the property. Was this not an opportunity to move to a slice system, whereby the higher rate applied only to the top slice? I put that forward not as an amendment but as a genuine question to the Paymaster General. The higher the rates become, the more inequitable the system of assessment.
      Our best solution is to remove clause 147 altogether and put things back to the way they were before Budget day. If that is not possible, our second-best option is to confine the proposal entirely to householders. If the Government really are anxious to tax people with large and expensive houses, amendment No. 10 does exactly that by exempting properties that are subject to the uniform business rate, so stamp duty would not be a tax on the commercial sector.
      I commend the amendment to the Committee.
      Mr. Hammond: I welcome the opportunity to speak in support of the amendment. I shall declare an interest over and above the interest that all hon. Members have as owners or aspiring owners of houses, in that I have an interest in a small house building company, and the house building sector is certainly more interested than most in the proposals.
      As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, we are opposed to the measure in its totality, and would prefer it to have been excluded from the Bill. Since coming to office less than a year ago, the Government have now had two bites at the cherry of stamp duty. As my right hon. Friend suggested, one must have serious concerns about where this will lead us. I shall say a little more about that in a moment.
      The spin put on the stamp duty announcement during the Chancellor's Budget speech and in most of the press reporting immediately after the Budget was to relate it entirely to houses. Indeed, as my right hon. Friend pointed out, the Chancellor said that the change would leave
      "98 per cent. of house transactions unaffected".—[Official Report, 17 March 1998; Vol. 308, c. 1110.]
      That takes us back to the politics of envy of some 20 years ago—"It's all right, because it will affect only those who have houses worth more than £250,000," the implication being that we should not be too concerned about such people. I draw the Committee's attention to the fact that any arbitrary cut-off level of that nature in relation to house prices already discriminates severely against certain parts of the country.
      In my constituency, for example, someone owning a house worth £250,000 is likely to be the kind of industrious manager in a small business whom the Paymaster General is anxious to encourage in his endeavours. I accept that in other parts of the country, someone owning a £250,000 house might genuinely be considered to be a rich and unusual member of the community, but that is not so in the more affluent parts of the south-east.

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      Since I May 1997, the Government have effectively tripled the stamp duty payable on the transmission of properties worth more than £500,000 and doubled it on properties valued at more than £250,000. If we look further down the house price scale, it is not true to say that the measure will not affect 98 per cent. of houses, because houses have to be built on land. When builders and developers buy land to build even the most modestly priced houses, they will typically buy it in parcels worth more than £500,000. In those circumstances, the Government's action will contribute to house price inflation at the bottom as well as the top end of the scale. Typically, land accounts for a third of the value of a new house, and very much more than that in the south-east. The amendment would specifically exclude business premises from the scope of the stamp duty increase. It is a second-best option if the increase cannot be rescinded altogether. My right hon. Friend the Member for Wells made a persuasive case for, as he put it, the slice system as opposed to the slab system.
      Until last year's Budget, most of us regarded stamp duty at 1 per cent. as more of an irritant than a meaningful consideration in a transaction. Now that it is becoming a meaningful consideration, one of our concerns must be the extraordinarily high marginal rates at the change points of £250,000 and £500,000.
      The Chancellor recognised quite rightly in his Budget speech, when addressing matters of welfare reform, that high marginal rates have a disastrously distorting effect in the marketplace, sending people all the wrong signals and inspiring inappropriate behaviour. He was referring to marginal rates of withdrawal of 80 or 100 per cent. In respect of a property priced at £499,999, we are discussing a marginal rate of tax of 500,000 per cent. if the sale price increased by £1. The Paymaster General will recognise that, in general terms, that would lead inevitably to distortions in the market, discrete steps and a discontinuity in the curve of the marketplace. My right hon. Friend the Member for Wells has made a sensible and valuable proposal which I hope the Government will consider.
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      The measure will have two effects specifically in respect of business property. The first relates to property as a tool or as a piece of working capital in the operation of a business. The Bill will place an additional tax burden on all businesses using property, including factories, shops, offices and warehouses. Estimates show that 75 per cent. of the yield of the increase in stamp duty will come from business—raising £350 million in 1999-2000. That represents a significant additional burden on business. In cash flow terms, the burden will fall on a business purchasing a new property, expanding or building a new factory—just when its cash flow is strained most, as it seeks to expand and to answer the Government's exhortation to invest and create jobs.
      The second effect of the measure will be on property as an investment. Property is already by far the most illiquid of the assets held by investment funds, and the Bill will dramatically decrease the liquidity of property. If a fund owns a building that would be expected to sell for £100 million, it must consider that any buyer will have to pay 3 per cent. tax on that transaction—a not
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      insignificant sum. The measure, if passed, must have an effect on the value of existing property assets held in funds, including pension funds that have already been hit by the Government's change in the treatment of ACT credits last year.
      As my right hon. Friend the Member for Wells suggested, there are a number of ways in which more sophisticated operators can seek to avoid the impact of the increase in stamp duty. They include the use of the single-asset property company as a vehicle for the transmission of a property—or perhaps multiple transmissions—avoiding the payment of significant stamp duty on each occasion. The Paymaster General would probably agree that, in general terms, it is undesirable for the tax tail to wag the investment or business decision dog. We are in danger of a multiplicity of methods being employed to avoid the full impact of the measure on business properties, including an increase in the use of single-asset companies and the development of different funding methods for property development to avoid the transmission of ownership and, therefore, a charge to stamp duty.
      Any measure that fragments the market into different qualities of assets because of different tax status attaching to them must be negative, as it will damage liquidity in the market and create distortions, adding to the distortions that will already be created by the arbitrary cut-off points at £250,000 and £500,000. The cut-off points are particularly important. They are far too low to affect the behaviour of large property investors and sophisticated developers building in the City of London, but they will affect and determine the behaviour of smaller companies building investment properties, and public authorities building starter industrial units up and down the country.
      The Government should not object to the Opposition amendment if their real purpose is to introduce a new regulator into the housing market, as the Chancellor suggested. However, I have my own concerns about the possibility that stamp duty is being ratcheted up from a nominal 1 per cent. to become a significant tax. My concerns lie not so much with the issue of harmonisation of business taxes in Europe, but with the Government's projected preparations for our possible entry into the single currency.
      The United Kingdom has a distinctive housing market which is different from that of many of our European Union partner countries. When my right hon. Friend read out a list of countries in the European Union with high rates of property transfer tax, although he was dealing specifically with business property, it occurred to me that there may be a correlation between the high rates of property transfer tax and the relatively low percentage of home ownership in many countries. We would not wish to discourage home ownership in the United Kingdom.
      As the Government look towards preparing the United Kingdom for possible entry into a single European currency, the Treasury must be concerned about the peculiar nature of our housing market and the absence in a single currency union of any distinctively British regulator of housing market activity. The Government would not control interest rates. They could find themselves facing a housing market boom in the United Kingdom while overall economic conditions in the European Union indicated relatively lax monetary conditions. In those circumstances, the British Government would find it extremely difficult to control

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      the housing market in the United Kingdom and certainly would not be able to use the conventional means that have been employed in the past.
      I wonder whether the Government are looking at stamp duty as the future method to regulate house price inflation. If so, the British people should be told. We should understand now that the Government propose to increase stamp duty, perhaps to 6 or 7 per cent. as applies in other European Union countries, as their preferred method of regulating the housing market as the United Kingdom prepares for entry into the single currency. If that is the case, the British people should be told.
      Mr. St. Aubyn: I share the concern of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) that there is a hidden agenda in the rise in stamp duty imposed by the Government. It is absolutely right that, in considering the amendment, we ask ourselves whether it goes far enough. Should it not also include an exemption for the housing sector?
      At this point, I declare an interest as someone who is affected by both clause 147 and the amendment.
      The problem with stamp duty is that, as a regulator of economic activity, it is for any Government what one might term counter-intuitive. Often when a recession looms, the Government's borrowing requirement goes up and it is intuitive and in their interest to cut interest rates. That is easy. But if in such a situation they consider a cut in stamp duty as part of regulating the economy, there will be howls of anguish from some members of any Cabinet. They will ask, "Why are we giving money back to this relatively affluent sector?" and to be told that it is part of the Government's long-term plan to regulate the housing market will not wash with them.
      Stamp duty is a one-way street for this Government. They will happily raise it in the good times that they inherited from the previous Conservative Government. However, it will go against all their instincts to contemplate reducing it again if and when—I fear that under this Government, it will be when—a recession hits not only manufacturing, as is happening now, but the property and housing sectors.
      The trouble with a tax that is aimed at what we are told is 2 per cent. of residential housing purchases is that it sounds as if it hits only the rich. But in the London economy and, indeed, in the wider economy, there are many businesses and craftsmen who work for those rich clients. A business in which I am much involved often works for clients who own substantial properties. If those properties are hit by a higher rate of stamp duty, not only will their rich owners have less money to spend, but they will be less inclined to move. If they do move, they will probably decide to economise on some of the costs of moving, which would include the more craft-based, refined products that they would otherwise purchase. The Government's policy—their stated policy and their hidden agenda—will hit a specific sector of craftsmen.
      We are considering an amendment which would change only the rate on commercial property. As my hon. Friend the Member for Runnymede and Weybridge said, the liquidity of the property market is almost certainly at risk as a result of the proposal. Over the years, there have been attempts to develop a derivative market in commercial property. The threat of the higher rate of stamp duty may act as a spur to such a market. I hope that the Paymaster
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      General will at least assure us tonight that if such a derivative market in commercial property were to develop, he would regard it not as a tax avoidance device, but rather as a healthy development for efficient investment in this country. If we have taxes that distort investment, we shall have a less efficient economy.
      I know that the Paymaster General's own investments relate more to intellectual than to commercial property. Nevertheless, he should recognise that old-fashioned bricks and mortar have their role to play in the running of businesses.
      Another aspect of the issue is brown-field sites. We have heard much back-treading by the Government on brown-field sites. Initially, they set modest, unsatisfactory targets for the number of brown-field sites to be developed for residential use. They now want to achieve a target of 60 per cent. That is not enough for an area in Surrey such as I represent, but it is a welcome improvement on their earlier target. Have the Government considered how the rise in stamp duty will affect the attractiveness of brown-field site development? Following the logic of the argument of my hon. Friend the Member for Runnymede and Weybridge, for some businesses, it will be a marginal decision whether they give up their inner-city brown-field site for a residential housing proposal and then have to buy a new commercial site in another part of the town. They may be discouraged by higher stamp duty.
      That brings me to the crux of the matter: 3 per cent. stamp duty—an increase of 1 per cent.—may change the positive environment for property investment, although it may be just about bearable. In agreeing the full price, buyers and sellers may agree to suffer the rise between them. If, however, the Government intend to raise stamp duty to continental levels, as my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) mentioned, the quantity of land available for brown-field site development to meet the country's housing needs will certainly be adversely affected.
      Sources suggest that the rate of stamp duty in other countries is much higher. I have heard that in Italy it is 8 per cent., and that in Ireland it reaches up to 9 per cent. Stamp duty at 9 per cent. on brown-field sites in this country would almost certainly be enough to kill any prospect of change in use. That has long-term consequences. It is a good example of how stamp duty can distort the economy.
      9.15 pm
      Part of the hidden agenda is the fact that the Government took one swipe at pension funds and enjoyed it so much that they want to take another. They took that swipe through changes to corporation tax. By not allowing a tax credit, they in effect introduced a pensions tax. It must alarm some in the Treasury that pension funds can redirect investment into commercial property and thereby increase income and get round part of the problem. The Government told us that they did away with the investment tax credit to encourage companies to keep money in the company rather than give it out in dividends. The hidden agenda behind the increase in stamp duty suggests far more. It is just old-fashioned Labour, seeing a pot of gold and trying to find as many different angles as possible from which it can get its greedy mitts on it.

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      Even if there is not a derivative market in commercial property, fees for lawyers' advice and accountancy schemes will be paid. That will result in long-term major pension fund investors avoiding the consequences of stamp duty. If the increase is part of a progressive increase in stamp duty, it is fair to say that the Government will find that the amount of revenue attracted will steadily diminish. A law of diminishing returns will apply rapidly to stamp duty. If there are to be high levels of stamp duty, a pension fund will have to think hard before it can justify switching from one commercial property to another in the course of balancing its portfolio.
      As my hon. Friend the Member for Runnymede and Weybridge mentioned, the final part of the Government's hidden agenda is convergence in Europe—not just in tax rates and regulation of the economy, but in the very nature of the economy. We have a property-owning democracy, not just for the very rich, but for all levels of society. Many people who have started their own businesses have as their pension fund their company's commercial premises. In order to sell their business, they may intend to retain control of the company's main asset in some form or other and to rent it out. That is a classic way in which businesses change hands. Businesses changing hands is all part of the way in which the economy develops, grows and thrives.
      The increase in stamp duty is yet another Labour spanner in the works. It is another way in which attempts to ease the flow of business will be upset by the scale of duty that the Government are imposing—in many ways quite arbitrarily—on those who own commercial property with a value of more than £250,000. It is arbitrary because, in other parts of the Finance Bill, we see a general claim—which we shall examine in more detail later in Committee—that there is an attempt to mitigate the capital taxation of long-term investments. Yet here we have a clear case of the Government imposing a swingeing tax on a long-term capital investment. It shows how far new Labour's actions are divorced from its warm words.
      Mr. Gibb: I support the amendment, which seeks to remove from these draconian provisions properties that are subject to the uniform business rate—commercial properties. One of the points that the Chancellor of the Exchequer skated over when announcing the swingeing increase in the rate of stamp duty on high-value properties was that stamp duty also applies to the transfer of commercial property; not just real property, but all assets in a business that are transferred by document. That greatly affects businesses. The notes on clauses make clear that 75 per cent. of the revenue raised will be from sales of businesses and commercial property.
      Mr. Hammond: Would I be right in thinking that the measure applies also to transfers of intellectual property, which might be of direct interest to the Paymaster General?
      Mr. Gibb: My hon. Friend is right. It applies to all assets of a business, including intellectual property. It can also apply to one's debtors. If a company has any assets transferred by document—cash, even—the stamp duty is applied to the value of those assets
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      As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, a large company that takes legal advice from leading solicitors and accountants can avoid paying duty. If it is made clear in the agreement to sell or buy a business that certain assets—for example, plant and machinery and tools—will be transferred not by document but by delivery, the stamp duty is avoided. That requires a company to take legal advice on the sale of a business, but most small and medium businesses will not have the resources to take advice on stamp duty; they will probably be caught more than large companies. A measure designed to raise revenue for the Government will hit the very businesses they purport to want to encourage.
      The Institute of Directors has made clear that it opposes this draconian measure, saying:
      "We deplore the increases in stamp duty on high-value properties. While very few house purchases will be affected, a higher proportion of purchases of business premises (and of goodwill and patents) will be affected."
      The Institute of Chartered Accountants deplores the measures; the tax faculty has said that the
      "further increases in stamp duty for asset transfers as against share transfers may distort business decisions and inhibit sales of assets as against companies."
      Here, again, we have a measure designed to hurt medium and small businesses, as against large ones. It will not affect businesses that simply sell shares from one owner to another; they will be subject to a different rate of stamp duty—the rate applying to the transfer of shares—but someone trying to sell a small business because of retirement, for example, will have to pay the very high rates of stamp duty on all the assets transferred.
      The IOD makes the valid point that insurance companies, pension funds and property unit trusts will bear the brunt of the direct impact of the increases in stamp duty because most commercial properties are owned by such investors and then leased. Millions of people who invest in insurance, pension funds or unit trusts will suffer.
      Mr. Hammond: Will not the measure cause a further distortion—a bias in favour of renting or leasing smaller business premises rather than purchasing them outright and paying the attendant stamp duty?
      Mr. Gibb: My hon. Friend is absolutely right. It is wrong that Government measures should have such distortionary effects—the Government should carefully consider the effects of taxes on the market. The distortion of usual commercial transactions is distressing, but it will happen in a variety of areas as a result of the Bill.
      The Institute of Directors is concerned that the measure will reduce the value of the investments of millions of innocent investors. That demonstrates a wider point—taxes levied on big business or business generally are always eventually borne by individuals. That has been widely acknowledged, as the Treasury Committee noted. Gavyn Davies said that the brunt of the advance corporation tax credit would be borne by the household sector. Similarly, the brunt of the effects of clause 147 will be borne ultimately by individuals, either as tenants or as purchasers of houses on small estates where the land was bought as a parcel—as my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) rightly pointed out, the 3 per cent. stamp duty would be passed on to the purchaser of the newly built house.

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      Like my hon. Friends, the Institute of Directors is concerned that nothing has been done to remove the distortions caused by the slab scale. The matter was the subject of an amendment to the Finance Bill in the summer; the Government opposed that amendment, too. As they are doing everything possible to remove distortions in areas such as national insurance, it is odd that they are exacerbating distortions in stamp duty by increasing the rates.
      I urge the Government to accept the amendment, which would prevent business from having to face these draconian measures. In his Budget statement, the Chancellor implied that the provisions would apply only to residential property; he made no reference to their effects on commerce and business transactions. For once, let us see legislation living up to the spin and presentation.
      Mr. Geoffrey Robinson: Opposition Members have advanced reasoned arguments on the amendment, but I think that they are really saying that they do not like the clause. It would have been much more simple if we had debated the clause as a whole.
      The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) mentioned draft regulations. We have checked what happened—they were placed in Derby Gate, in the House of Commons Library and in the House of Lords Library. We are not sure why they were not there when he looked for them—
      Mr. Gibb rose—
      Mr. Robinson: I do not doubt that they were not available to him, but I reassure him that we have arranged for additional copies to be deposited—no doubt he will be able to collect them after the Division.
      Mr. Gibb: I am grateful for that reassurance, but why were the draft regulations not referred to in the regulations list, in the book that lists all the documents that the Government have presented to the Library, or in today's Order Paper under the list of documents that were placed in the Library on Friday?
      Mr. Robinson: I have explained to the hon. Gentleman that the draft regulations were deposited in the Library, although we do not know why they were not available to him. I have assured him that we have made additional copies available. I cannot do more, and I ask him to accept what I have said.
      The increased levels of stamp duty will apply to intellectual property, but the amounts will be very small—some tens of millions in the total. I do not think that the matter is significant to our consideration of the amendment—in fact, the amendment would not affect it.
      I am sure that the whole House has considerable respect for the professionalism of the hon. Member for Bognor Regis and Littlehampton, but he must find other reference points than the Institute of Directors and Gavyn Davies, much as we respect the latter and much as our relations with the former are improving. I am sure that he can do better than that, even if he has to make frequent reference to his former boss.
      We heard about the slice system as against the slab system and the cliff edge. My right hon. Friend the Chief Secretary conceded in the debate on 28 July last year,
      110
      when we divided on an amendment, that there were certain deficiencies in the present system, but it is funny that the Conservatives did nothing about it when they were in government.
      I hasten to add that rates were lower then, so the problem was slighter, but Conservative Members have made the point today that there was already a bunching. We are prepared to consider the issue, but only in the context of there being no reduction in revenue, so presumably the rates would be spread over a banded system and the results might not be to everyone's liking.
      9.30 pm
      The Opposition's talk of a hidden agenda is a lot of nonsense. I suppose that they have nothing better to say, but we could have predicted that the right hon. Member for Wells (Mr. Heathcoat-Amory), along with the hon. Members for Guildford (Mr. St. Aubyn) and for Runnymede and Weybridge (Mr. Hammond) and others, would mention the European situation.
      In anticipation, I took the trouble of getting some figures on Europe, which I am sure will interest or even intrigue the right hon. Member for Wells. He was pretty right on Belgium; wrong on France and on Germany; and right on the Netherlands. I have the figures here, and I will make them available to him afterwards. Overall, stamp duty and its equivalents in the Community stand at between 6 and 10 per cent. on average, which still puts us at a considerable advantage.
      I believe that I am correct in saying that there is no intention that the business properties taxation should bring us in line with the code of conduct of business taxation. We have looked at the market—
      Mr. St. Aubyn rose—
      Mr. Robinson: If the hon. Gentleman can contain himself for a moment, I am dealing with a coherent point raised by other Conservative Members in the debate. I agree with the Budget judgment that we have a level of taxation that even he would accept is assimilable in the present market and does not pose a problem.
      Mr. St. Aubyn: In the light of the Paymaster General's assertion that to refer to a hidden agenda is nonsense, and of the comments that he has just made, can he confirm that the Government have no intention of raising stamp duty yet further?
      Mr. Robinson: The question of a hidden agenda was raised in relation to Europe and to some harmonisation proposals concerning a code of conduct for business taxation. I repeat that that is nonsense. There is no hidden agenda in that respect.
      Mr. Hammond: The point was also raised in respect of how the housing market would be regulated under a single currency and of comments made by the Chancellor himself suggesting that a prime motive for the move was a further damping of the housing market.
      Mr. Robinson: The hon. Gentleman says that the Chancellor made that remark, and I look forward to receiving a copy of it, if he can produce it.

      111
      The issue is not whether the United Kingdom's housing market is out of phase with the European Union's, although that could well happen; the issue is whether there is genuine convergence between our economy and the European economies. That is why the policy that we cannot contemplate entry to the single currency until there is established convergence is so right. Convergence means a general harmonisation of the economies in terms of inflation, growth and other factors, one of which, but only one, is the housing market. We cannot pick out housing and try to deal with it as a separate issue; nor would we attempt to do so.
      All the amendments have been odd, as if the Opposition had trouble getting them down or making up their minds what they wanted to do. The odd thing about this amendment is that it would give relief for businesses of over £250,000, but nothing for those under that figure. I do not resent Opposition Members speaking to the amendment. For the most part, their concern seems to have been the effect on the housing market, but the amendment would do nothing about the problems that they consider the increase in stamp duty might pose for that market and we do not accept that it will pose a problem.
      The hon. Members for Runnymede and Weybridge and for Guildford are concerned about the housing market and the possible effects of the tax on house building, house prices and land prices, but surely they must have learnt from the 1980s, the Lawson boom and the mishandling of the economy by the Conservative Government that the one thing the property market does not want is the politics of boom and bust. The politics of envy has nothing to do with it—it is the politics of boom and bust. That is what brought the housing market to its knees and what plunged millions into negative equity from which, as I heard today from someone who works in the Treasury, people are still not escaping, in spite of the improvement in the economy.
      The whole point about everything that the Government are doing, as I explained during the debate on clause 75, is that stability and long-termism have to be the name of the game. There is no point in going back to boom and bust or trying to regulate one aspect to distort another. We have to have a coherent set of policies that keep the economy on a steady course. That is what the Budget is about and the increase in stamp duty is one part of it.
      Mr. St. Aubyn: I am afraid that the hon. Gentleman condemns himself with his own words. On the one hand, he tells us that there is no hidden agenda and that raising stamp duty is not part of regulating the economy, but, on the other, he talks about preventing boom and bust. In the context of house building, surely he realises that it is the transaction costs that are the concern. Increasing transaction costs will deter the development and provision of brown-field sites for residential development.
      Mr. Robinson: The hon. Gentleman may continue to make that point, but we believe that we have taken a balanced view. Indeed, a Conservative Member agreed—I cannot remember whether it was the hon. Member for Bognor Regis and Littlehampton or the hon. Member for Runnymede and Weybridge—that, at the present level, the increase will not markedly affect the market. We agree with that judgment and it is the one which we have taken.
      112
      The point that I was trying to make about stability, which the hon. Member for Guildford seems to be too dense to understand, is that we are trying to achieve it not through one measure alone, but through a set of measures. The one thing that will kill the housing market again is to get away from stability and go for boom and bust. We must not do that. That is why the whole of the Budget fits together as a coherent set of measures to keep the economy on a steady course, with steady growth, to the benefit of all sectors.
      I hope that the right hon. Member for Wells is reassured about the European fund. He also mentioned welfare to work and its having some effect on those companies that we will be looking to to provide considerable effort in that respect. I am pleased to be able to tell him that my right hon. Friend the Chancellor and I met representatives of some big companies in the hotel industry—this is not unrelated to commercial property values—and, while they could give us a tremendous commitment to welfare to work and the developments that they have in hand are extremely encouraging, none of them raised the increases in stamp duty with us. They were committed to welfare to work and very committed to the Government's policy of stability and long-termism.
      We are in the right ball park as far as the increase is concerned. Indeed, that is confirmed in the monthly index of Richard Ellis, which shows that the impact is pretty marginal, if there is any at all, and that we are not greatly affecting the market. It also seems that Richard Ellis reviews its Budget judgment as well.
      Mr. Hammond: I listened carefully to what the Paymaster General said about long-term stability. Can he explain how two separate stamp duty increases in less than 12 months convey an impression of stability? Either we have to assume that there will be a steady progress and further increases, or those are discrete and disruptive movements.
      Mr. Robinson: There has been nothing of significance in the market and no boom such as that which the Conservative party managed to contrive. There is every indication that the economy is on a steady course. We believe that our Budget judgment was right and everything we have done was committed to stability. We shall stick with our policies.
      There is no merit in the amendment, which would do nothing to improve the housing market in a way that would have any effect on commercial property. We believe that our judgment is correct and we will make decisions as and when it is proper to do so in the context of the Budget.
      If a fit of misguided "Oppositionism" leads the Conservatives to force the amendment to a vote, we shall resist it.
      Mr. Heathcoat-Amory: I do not think that the Paymaster General has done justice to the many excellent points raised by my hon. Friends the Members for Bognor Regis and Littlehampton (Mr. Gibb), for Runnymede and Weybridge (Mr. Hammond) and for Guildford (Mr. St. Aubyn), all of whom spoke with considerable theoretical or practical knowledge. The Minister has once or twice completely overlooked their questions.

      113
      The Paymaster General did pass the comment that our amendments were confused and asserted that we had had trouble in getting them down. I do not know what he means by that, or how on earth he can know the circumstances in which our amendments were tabled. In fact, we had no difficulty. Our only problem was to try to restrain ourselves from flooding the amendment paper with necessary amendments and to try to concentrate on those that would be constructive and would improve the Bill.
      The amendment is crystal clear. We tabled it to try to take out commercial property because we thought that the Government intended that.
      Mr. John Swinney: I take it from what the right hon. Gentleman has said that the Opposition amendments will be the pinnacle of their contribution to the debate and that we can expect no better from the other amendments that we will debate over the next two days.
      Mr. Heathcoat-Amory: I do not know whether the hon. Gentleman is trying to be witty or to ask a genuine question. If he sticks around for the next two days, he will hear more of our amendments, which I hope he will support because we have in mind not only the United Kingdom, but improvements to the economy of Scotland, which is dear to the hon. Gentleman's heart.
      The amendment was tabled, at least partly, because we judged, following the Chancellor's Budget statement, that it could well meet his intention. The Chancellor referred only to increasing stamp duty on householders and we know from last year's Finance Bill that the Government—or, at least, those on the Treasury Bench—did not always understand their legislation. The fiasco of the withdrawal of dividend tax credits made it clear that they certainly did not understand their own Bill. Those of my hon. Friends who served on the Standing Committee will remember that Ministers simply did not understand foreign income dividends. Eventually, rather than withdrawing the relevant clause, they said that it was inoperative and that they would return to it later.
      It is possible that, in the rush of preparing a Budget, the Chancellor genuinely thought that stamp duty did not apply to commercial properties. No one had gone into the point in great detail and the Chancellor himself has no commercial background. Perhaps that was a mistake, and we have sought to help him by giving effect to what may have been his intention; otherwise, the Bill will have a very damaging effect on commercial properties. We hope that there will be time for a short debate on clause stand part so that we can make a few more general points about the clause's wider effect on the economy.
      I must complain that the Paymaster General was dismissive of my innocent inquiry about whether this might not be the opportunity to move from what I called a slab system to a slice system. I think it was my hon. Friend the Member for Runnymede and Weybridge who picked that up as an important potential reform. All the Paymaster General said was that we should have done it. My point was that it is not so important to have such reforms when the rates are low, but, when the upper rate of stamp duty is increased by 50 per cent., as is proposed, it becomes important to try to avoid such gross distortions.
      114
      9.45 pm
      There is also the code of conduct for business taxation. Again, the Paymaster General was dismissive and said that, as far as he knew, there was no connection; that is his opinion, but the Government appear to have an agenda to harmonise—upwards, of course—business taxation to fit a European pattern. He challenged my figures on the effective rates of stamp duty in other member states. I defer to his greater knowledge, or at least to his easier access to specialist advice. I had to refer to the Library at short notice and it did a very good job for me, but I may not have got its figures right. However, it is clear, and he confirmed this, that the average rate of property transaction taxes is between 6 and 10 per cent. He confirms my point that we have a comparative advantage. That is one of the reasons why firms transfer to Britain and why we act as a magnet for overseas investment. That is much criticised by members of the European Commission, who regard that as terribly unfair. They are itching to harmonise it all upwards to the higher continental rates. It was not right for the Paymaster General to be so dismissive of my point.
      The Paymaster General ignored my question about which sorts of businesses would be hit by the increased stamp duty. I noted—again, this was echoed by several of my hon. Friends—that large, well-advised companies can and do avoid stamp duty by various means. The Paymaster General did not mention that. He knows a great deal about tax avoidance and how to counter it. The Committee would have expected some reference to how he will ensure that the burden of the higher rate of stamp duty is spread evenly through the commercial world rather than, as often happens, being loaded on to the weaker shoulders of small companies that cannot afford professional advice on the scale necessary.
      The Paymaster General's responses were inadequate. We may seek answers to some wider questions in the debate that will shortly follow on clause stand part, if it is allowed.
      Amendment negatived.
      Question proposed, That the clause stand part of the Bill.
      Mr. Heathcoat-Amory: The transfer of property is not a luxury but a sign of a dynamic and successful economy, so any tax that inhibits it strikes at the root of productive investment and business activity. In an earlier speech, the Paymaster General suggested that the tax was to bring stability—that it would somehow even out the ebbs and flows of the property market and ensure that we do not have a boom followed by a bust. I do not think that it has anything at all to do with that.
      I should believe the hon. Gentleman more if there were some indication that he would lower the rates of stamp duty at another stage in the economic cycle, but, as has been said, it is a ratchet—the direction is ever upward, with no chance whatsoever of the £500 million impost on the commercial sector ever being reversed.
      The truth is that the measure is not about stability, but about extra taxation. That sits oddly with the Government's professed desire for a dynamic economy—presumably one in which both foreign and domestic

      115
      businesses locate, relocate and start up in or transfer to the United Kingdom. The vigour of the property market is a healthy sign, so to tax property transfers is a retrograde step. What is the reason for the clause? Why are the Government increasing taxes on property and, therefore, on commerce at this time?
      Mr. Geraint Davies: Does the right hon. Gentleman accept that, given that the rate of increase in commercial sector property prices is more than twice the rate of inflation, any simple understanding of market systems brings one to the conclusion that there is excess demand in the market and that the rate of increase is far in excess of the marginal increase in tax, which will surely be absorbed in containing the rate of increase in prices? There is no way that the increase will harm the economy—far from it. It will have a stabilising impact.
      Mr. Heathcoat-Amory: There are two responses to that interesting intervention. The first is that the increased prices in the commercial sector mean that, even at existing rates of stamp duty, the yield is extremely buoyant. It will increase precisely because of the higher taxes; therefore, the Chancellor did not need to increase the rate in order to increase the yield. The second point follows on from my remarks a few minutes ago, which is that I would only accept such an argument if there were any evidence that the Government would cut the rate again if the commercial property market turned down.
      That logically follows on from the hon. Gentleman's point. If the hon. Gentleman indicates that that is indeed his policy in the debate we are about to have—however short it may be—I shall regard his interventions with considerable respect in future. Incidentally, I hope that he is on the Standing Committee on this Bill. He was happily on the Committee on last year's Finance Bill and, having finally got the hang of the different between you and they—the first person and the third person—he was an excellent member of that Committee.
      Before that intervention, I was asking the Paymaster General about the reason for the tax. There is no environmental reason; as my hon. Friend the Member for Guildford emphasised, it has nothing to do with the difference between building on green-field or on brown-field sites. There is no apparent reason from a European perspective—the Paymaster General has denied that there is a hidden convergence agenda. Finally, the Government do not need the money, because we are in surplus. A budget surplus was nearly achieved in the financial year just ended and there will be a substantial surplus in the financial year on which we have just embarked. Given that there is already to be a £20 billion tax burden on the commercial sector in the lifetime of this Parliament, why is the Chancellor adding to that unnecessarily by increasing rates of stamp duty that disproportionately hit the business sector?
      I conclude with those few questions and comments, hoping to allow one or two of my hon. Friends to make a contribution in time for an early end to the debate.
      Mr. St. Aubyn: I begin by applauding the Paymaster General's altruism in proposing the clause. We are near neighbours in Surrey, where he is my constituent.
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      Whereas I occupy a humble labourer's cottage, he occupies the mansion of the village—very nice it is, too—and I know that, in this case, the tax rate will hurt him a great deal more than it will hurt me. Nevertheless, one is bound to ask, in what spirit is that altruism being proposed?
      The Paymaster General says that he is anxious to prevent boom and bust. Well, we do have a boom. In the past two years, the stock market has increased by about 50 per cent., as measured by the increase in the FTSE index. To help us understand the Government's long-term policy, will the Paymaster General clarify why his Government are happy to preside over a boom in financial assets as represented by shares, but have an engrained hostility to any increase in the value of bricks and mortar in so far as they, too—especially on the commercial property side—represent a financial asset?
      We need to know the answer to that question, when the Paymaster General has told us that he believes that 3 per cent. is about right, and has pretty well implied tonight that stamp duty should not go higher than that, and yet he stops short of giving the House any reassurance that he and the Government recognise that if they try to push this boat out any further, the harmful effects—which we have identified this evening—on the property market, especially the commercial property market, will become very marked.
      The property-owning democracy is a decent society—there is nothing to be ashamed of in it—but I believe that we have isolated all the possible motives that the Government have for introducing clause 147, and in the end we must conclude that the motivation for the clause comes back to old Labour. It comes back to an old-fashioned attack on property. That is what will drive Labour Members through the Aye Lobby tonight.
      Mr. Geoffrey Robinson: My reply will be brief. In your absence, Mr. Lord, and that of your iron discipline, we had a fairly wide debate on amendment No. 10. A debate on an amendment relating to commercial property was turned into one on the housing market, and Opposition Members expressed much anxiety.
      It remains only for me to say, as we near the end of the first day's debate in Committee of the whole House, that there is no hidden agenda regarding the increase in stamp duty, and that no European convergence idea underlies it. The obsession of the right hon. Member for Wells (Mr. Heathcoat-Amory) with anything that might smack of Europe is well known to the House and he is respected by many for it, but he must not let that obsession overreach itself by imagining things where, obviously, none exist.
      I assure the hon. Member for Guildford (Mr. St. Aubyn) that I am not—sadly or happily—his constituent; that we have no hostility to financial assets; that we are pleased by the sustained confidence shown by the markets in the Labour Government; that we are sure that that will continue; and that we are delighted that property-owning democracy is also continuing, as polls show, to support this Labour Government.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 285, Noes 119.

      Division No. 257]

      [9.58 pm

      AYES

      Abbott, Ms Diane

      Dobbin, Jim

      Adams, Mrs Irene (Paisley N)

      Donohoe, Brian H

      Ainger, Nick

      Doran, Frank

      Ainsworth, Robert (Cov'try NE)

      Dowd, Jim

      Alexander, Douglas

      Drew, David

      Allan, Richard

      Drown, Ms Julia

      Allen, Graham

      Eagle, Angela (Wallasey)

      Anderson, Janet (Rossendale)

      Eagle, Maria (L'pool Garston)

      Armstrong, Ms Hilary

      Edwards, Huw

      Ashton, Joe

      Ellman, Mrs Louise

      Atkins, Charlotte

      Ennis, Jeff

      Ballard, Mrs Jackie

      Etherington, Bill

      Bayley, Hugh

      Ewing, Mrs Margaret

      Begg, Miss Anne

      Fatchett, Derek

      Bell, Stuart (Middlesbrough)

      Fearn, Ronnie

      Benn, Rt Hon Tony

      Fisher, Mark

      Bennett, Andrew F

      Flynn, Paul

      Benton, Joe

      Foster, Rt Hon Derek

      Best, Harold

      Foster, Michael Jabez (Hastings)

      Blackman, Liz

      Foster, Michael J (Worcester)

      Blizzard, Bob

      Foulkes, George

      Borrow, David

      Fyfe, Maria

      Bradley, Peter (The Wrekin)

      Galloway, George

      Bradshaw, Ben

      Gardiner, Barry

      Brinton, Mrs Helen

      George, Bruce (Walsall S)

      Brown, Rt Hon Nick (Newcastle E)

      Gerrard, Neil

      Brown, Russell (Dumfries)

      Gibson, Dr lan

      Bruce, Malcolm (Gordon)

      Godman, Dr Norman A

      Burden, Richard

      Godsiff, Roger

      Burgon, Colin

      Golding, Mrs Llin

      Butler, Mrs Christine

      Gorrie, Donald

      Byers, Stephen

      Griffiths, Jane (Readings E)

      Campbell, Alan (Tynemouth)

      Griffiths, Nigel (Edinburgh S)

      Campbell, Mrs Anne (C'bridge)

      Hall, Mike (Weaver Vale)

      Campbell, Menzies (NE Fife)

      Hall, Patrick (Bedford)

      Campbell, Ronnie (Blyth V)

      Hanson, David

      Campbell—Savours, Dale

      Harris, Dr Evan

      Canavan, Dennis

      Heal, Mrs Sylvia

      Cann, Jamie

      Health, David (Somerton & Frome)

      Casale, Roger

      Henderson, Ivan (Harwich)

      Caton, Martin

      Hepburn, Stephen

      Chapman, Ben (Wirral S)

      Heppell John

      Chisholm, Malcolm

      Hoey, Kate

      Clark, Rt Hon Dr David (S Shields)

      Home Robertson, John

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hood, Jimmy

      Hoon, Geoffrey

      Clark, Paul (Gillingham)

      Hopkins, Kelvin

      Clarke, Charles (Norwich S)

      Howarth, Alan (Newport E)

      Clarke, Eric (Midlothian)

      Howells, Dr Kim

      Clelland, David

      Hoyle, Lindsay

      Clwyd, Ann

      Humble, Mrs Joan

      Cohen, Harry

      Hurst, Alan

      Coleman, lain

      Hutton, John

      Connarty, Michael

      Iddon, Dr Brian

      Cook, Frank (Stockton N)

      Illsley, Eric

      Corbyn, Jeremy

      Jackson, ms Glenda (Hampstead)

      Cotter, Brian

      Jackson, Helen (Hillsborough)

      Cousins, Jim

      Jenkins, Brian

      Crausby, David

      Johnson, Alan (Hull W & Hessle)

      Cryer, Mrs Ann (Keighley)

      Johnson, Miss Melanie (Welwyn Hatfield)

      Cummings, John

      Cunliffe, Lawrence

      Jones, Barry (Alyn & Deeside)

      Cunningham, Jim (Cov'try S)

      Jones, Ieuan Wyn (Ynys Môn)

      Dalyell, Tam

      Jones, Ms Jenny

      Darling, Rt Hon Alistair

      (Wolverh'ton SW)

      Darvill, Keith

      Jones, Jon Owen (Cardiff C)

      Davidson, lan

      Jones, Martyn (Clwyd S)

      Davies, Rt Hon Denzil (Llanelli)

      Kaufman, Rt Hon Gerald

      Davies, Geraint (Croydon C)

      keeble, Ms Sally

      Davis, Terry (B'ham Hodge H)

      keen, Ann (Brentford & Isleworth)

      Dean, Mrs Janet

      Kennedy, Jane (Wavertree)

      Denham, John

      Kidney, David

      Dewar, Rt Hon Donald

      Kilfoyle, Peter

      118

      King, Andy (Rugby & Kenilworth)

      Raynsford, Nick

      Kingham, Ms Tess

      Reed, Andrew (Loughborough)

      Kirkwood, Archy

      Reid, Dr John (Hamilton N)

      Kumar, Dr Ashok

      Rendel, David

      Ladyman, Dr Stephen

      Robertson, Rt Hon George (Hamilton S)

      Lawrence, Ms Jackie

      Laxton, Bob

      Robinson, Geoffrey (Cov'try NW)

      Lepper, David

      Roche, Mrs Barbara

      Leslie, Christopher

      Rogers, Allan

      Levitt, Tom

      Rooker, Jeff

      Livingstone, Ken

      Roy, Frank

      Llwyd, Elfyn

      Ruane, Chris

      Lock, David

      Ruddock, Ms Joan

      Love, Andrew

      Russell, Bob (Colchester)

      McAllion, John

      Sanders, Adrian

      McAvoy, Thomas

      Sarwar, Mohammad

      McCabe, Steve

      Savidge, Malcolm

      McCafferty, Ms Chris

      Sawford, Phil

      McCartney, lan (Makerfield)

      Sedgemore, Brian

      McDonnell, John

      Sheerman, Barry

      McFall, John

      Sheldon, Rt Hon Robert

      McGuire, Mrs Anne

      Simpson, Alan (Nottingham S)

      McIsaac, Shona

      Skinner, Dennis

      McKenna, Mrs Rosemary

      Smith, Rt Hon Andrew (Oxford E)

      Mackinlay, Andrew

      Smith, Angela (Basildon)

      McNamara, Kevin

      Smith, Miss Geraldine

      McWilliam, John

      (Morecarnbe & Lunesdale)

      Mallaber, Judy

      Smith, John (Glamorgan)

      Marsden, Gordon (Blackpool S)

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

      Marshall, David (Shettleston)

      Spellar, John

      Marshall—Andrews, Robert

      Squire, Ms Rachel

      Maxton, John

      Starkey, Dr Phyllis

      Meacher, Rt Hon Michael

      Steinberg, Gerry

      Merron, Gillian

      Stevenson, George

      Michael, Alun

      Stewart, David (Inverness E)

      Michie, Bill (Shef'ld Heeley)

      Stewart, lan (Eccles)

      Michie, Mrs Ray (Argyll & Bute)

      Stinchcombe, Paul

      Milburn, Alan

      Stott, Roger

      Mitchell, Austin

      Strang, Rt Hon Dr Gavin

      Moffatt, Laura

      Straw, Rt Hon Jack

      Moonie, Dr Lewis

      Stringer, Graham

      Moran, Ms Margaret

      Stuart, Ms Gisela

      Morgan, Ms Julie (Cardiff N)

      Stunell, Andrew

      Morgan, Rhodri (Cardiff W)

      Swinney, John

      Morris, Ms Estelle (B'ham Yardley)

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Morris, Rt Hon John (Aberavon)

      Mudie, George

      Taylor, Ms Dari (Stockton S)

      Murphy, Denis (Wansbeck)

      Thomas, Gareth (Clwyd W)

      Murphy, Jim (Eastwood)

      Thomas, Gareth R (Harrow W)

      Murphy, Paul (Torfaen)

      Timms, Stephen

      O'Brien, Bill (Normanton)

      Tipping, Paddy

      O'Brien, Mike (N Warks)

      Touhig, Don

      Olner, Bill

      Trickett, Jon

      O'Neill, Martin

      Truswell, Paul

      Organ, Mrs Diana

      Turner, Dennis (Wolverh'ton SE)

      Osborne, Ms Sandra

      Turner, Dr Desmond (Kemptown)

      Palmer, Dr Nick

      Turner, Dr George (NW Norfolk)

      Pearson, lan

      Twigg, Derek (Halton)

      Perham, Ms Linda

      Tyler, Paul

      Pickthall, Colin

      Vaz, Keith

      Pike, Peter L

      Walley, Ms Joan

      Plaskitt, James

      Welsh, Andrew

      Pope, Greg

      White, Brian

      Pound, Stephen

      Williams, Rt Hon Alan

      Powell, Sir Raymond

      (Swansea W)

      Prentice, Ms Bridget (Lewisham E)

      Williams, Alan W (E Carmarthen)

      Prentice, Gordon (Pendle)

      Williams, Mrs Betty (Conwy)

      Primarolo, Dawn

      Willis, Phil

      Prosser, Gwyn

      Wise, Audrey

      Purchase, Ken

      Wood, Mike

      Quin, Ms Joyce

      Wright, Anthony D (Gt Yarmouth)

      Quinn, Lawrie

      Radice, Giles

      Tellers for the Ayes:

      Rammell, Bill

      Mr. Clive Betts and

      Rapson, Syd

      Mr. David Jamieson.

      119

      NOES

      Ainsworth, Peter (E Surrey)

      Lait, Mrs Jacqui

      Arbuthnot, James

      Lansley, Andrew

      Atkinson, David (Bour'mth E)

      Leigh, Edward

      Atkinson, Peter (Hexham)

      Letwin, Oliver

      Baldry, Tony

      Lidington, David

      Bercow, John

      Lilley, Rt Hon Peter

      Beresford, Sir Paul

      Lloyd, Rt Hon Sir Peter (Fareham)

      Boswell, Tim

      Loughton, Tim

      Brazier, Julian

      Lyell, Rt Hon Sir Nicholas

      Browning, Mrs Angela

      MacGregor, Rt Hon John

      Bruce, lan (S Dorset)

      McIntosh, Miss Anne

      Cash, William

      MacKay, Andrew

      Chapman, Sir Sydney (Chipping Barnet)

      Maclean, Rt Hon David

      McLoughlin, Patrick

      Chope, Christopher

      Madel, Sir David

      Clappison, James

      Malins, Humfrey

      Clark, Rt Hon Alan (Kensington)

      Maples, John

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Maude, Rt Hon Francis

      Mawhinney, Rt Hon Sir Brian

      Clifton—Brown, Geoffrey

      May, Mrs Theresa

      Collins, Tim

      Moss, Malcolm

      Colvin, Michael

      Nicholls, Patrick

      Cormack, Sir Patrick

      Ottaway, Richard

      Gran, James

      Page, Richard

      Curry, Rt Hon David

      Paice, James

      Davies, Quentin (Grantham)

      Paterson, Owen

      Davis, Rt Hon David (Haltemprice)

      Pickles, Eric

      Day, Stephen

      Prior, David

      Dorrell, Rt Hon Stephen

      Randall, John

      Duncan, Alan

      Redwood, Rt Hon John

      Duncan Smith, lain

      Robathan, Andrew

      Emery, Rt Hon Sir Peter

      Robertson, Laurence (Tewk'b'ry)

      Evans, Nigel

      St Aubyn, Nick

      Faber, David

      Sayeed, Jonathan

      Fabricant, Michael

      Shephard, Rt Hon Mrs Gillian

      Fallon, Michael

      Simpson, Keith (Mid—Norfolk)

      Forth, Rt Hon Eric

      Smyth, Rev Martin (Belfast S)

      Fraser, Christopher

      Soames, Nicholas

      Gale, Roger

      Spelman, Mrs Caroline

      Garnier, Edward

      Spring, Richard

      Gibb, Nick

      Steen, Anthony

      Gill, Christopher

      Swayne, Desmond

      Gillan, Mrs Cheryl

      Syms, Robert

      Gorman, Mrs Teresa

      Tapsell, Sir Peter

      Gray, James

      Taylor, lan (Esher & Walton)

      Green, Damian

      Taylor, John M (Solihull)

      Greenway, John

      Taylor, Sir Teddy

      Grieve, Dominic

      Townend, John

      Hamilton, Rt Hon Sir Archie

      Tredinnick, David

      Hammond, Philip

      Viggers, Peter

      Heald, Oliver

      Wardle, Charles

      Heathcoat—Amory, Rt Hon David

      Widdecombe, Rt Hon Miss Ann

      Hogg, Rt Hon Douglas

      Wilkinson, John

      Horam, John

      Wilshire, David

      Hunter, Andrew

      Winterton, Mrs Ann (Congleton)

      Jack, Rt Hon Michael

      Winterton, Nicholas (Macclesfield)

      Jackson, Robert (Wantage)

      Woodward, Shaun

      Johnson Smith,

      Yeo, Tim

      Rt Hon Sir Geoffrey

      Young, Rt Hon Sir George

      Key, Robert

      King, Rt Hon Tom (Bridgwater)

      Tellers for the Noes:

      Kirkbride, Miss Julie

      Mr. John Whittingdale and

      Laing, Mrs Eleanor

      Mr. Nigel Waterson.

      Question accordingly agreed to.
      Clause 147 ordered to stand part of the Bill.
      To report progress and ask leave to sit again.—
      [Mr. McFall.]
      Committee report progress; to sit again tomorrow.

PETITION

  Cannabis (Medical Use)
  10.11 pm
  Dr. Brian Iddon: I wish to present a petition signed by several hundred citizens of the United Kingdom, whose signatures were collected in just a few hours by Your Health magazine. The petition is considered to be representative of the feelings of millions of people across the UK. It calls for the legalisation of cannabis for medical use. The petitioners therefore request that the House of Commons gives serious consideration to that proposal.
  To lie upon the Table.

Venezuela
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McFall.]
10.12 pm
Mr. George Galloway: I am conscious of the long and close relations between the United Kingdom and the Republic of Venezuela. If, in the land of the blind, the one-eyed man is king, in the long, troubled history of Latin American dictatorship, Venezuela' s relative freedom, democratic rights and respect for the rule of law suggest that that country is not some grim prison state or jack boot-ruled banana republic. That makes it all the more disturbing that I must bring before the House this evening the shocking case of two of my constituents, Vanessa Cross and Andrew McLachlan, who suffered a horror at machine gun point at the hands of members of the military of Venezuela that could have been a particularly gruesome scene from an Oliver Stone film or a Graham Greene novel.
On 31 March 1995, my constituents, lured by the glossy Venezuelan holiday brochures, were camping in an organised group at Playa Arapito. The camp was quiet, most of the tourists had gone to bed, and my constituents were asleep in their tent. They were awoken by the barrels of two machine guns pointing through the entrance of their tent. Two crop-haired, camouflage-uniformed Venezuelan soldiers started a nightmare which, for Vanessa and Andrew, continues to this day.
Andrew was beaten and pistol whipped, and held at gun point, while Vanessa was taken outside and raped by both men. When I saw her last Saturday at my surgery, it was clear that the incident had marked and disfigured the life of that young woman in the same way as a hideous scar across her face might have done. She told me that she thinks about it every day and that her relationship with Andrew, her fiancé, has suffered greatly. She lives in fear—fear of travelling, fear of being alone and fear of men. Andrew is severely traumatised, too, not just living with the memory of looking down the barrel of an automatic weapon, but plagued by massive pangs of guilt that he was unable to come to the defence of his fiancée.
This case has been in front of the Foreign Office and the Venezuelan authorities since March 1995—more than three years ago. It was first raised by the noble Lord Watson, formerly the hon. Member for Glasgow, Central and the couple's Member of Parliament at the time. Lord Watson doggedly pursued justice, writing letters, having meetings and all the time seeking to encourage the Venezuelan authorities to bring the criminals before the courts in order to secure some kind of apology and compensation for the couple. He pressed, too, for our man in Caracas to be more proactive in bringing the matter to a proper conclusion. Alas, all his efforts failed—as have all of my own. That is why I am forced to bring the matter to the Floor of the House this evening.
This rape in Arapito was not just a grave crime in itself; it was followed by calamitous incompetence or, worse, wilful negligence on the part of the Venezuelan authorities, which raises important political questions. Immediately after the assault, my constituents alerted their tour leader, who drove them and the rest of the touring party to the municipal police in Puerta La Cruz. Vanessa was advised by the police there to take a shower in a
122
nearby hotel and reassured that any forensic evidence would be present for up to 14 days following the attack. Alas, she now knows that that was not true.
Vanessa spoke to the police, describing the uniforms and the guns of the perpetrators. The police told her that the attackers sounded like military men from a nearby base, but no formal statement was taken. No one returned to the scene of the crime and no one pursued her attackers. One policeman told her tour leader, Alison Beck, a fluent Spanish speaker, that nothing would be done and no investigation would be carried out. He advised her that the best thing she could do would be to try to get the story into the local newspaper, El Tiempo.
Vanessa was seen on the morning of 1 April by the PTJ, the special branch police. She gave three statements to three different people, one of whom also expressed the view that he was certain that the attackers were soldiers from the nearby military base and that he felt that no action would be taken. She was given an appointment card to see a forensic doctor in the afternoon. He refused to see her because his nurse was not present—even though Andrew and the tour leader, Alison, had accompanied her. When she persisted and explained that she was leaving the next day for Caracas, the doctor shouted at her and threw her out of the clinic. Vanessa was shocked and appalled: a guest in Venezuela, her life threatened, brutally raped by two men and then treated like this by a doctor.
Vanessa eventually saw a forensic doctor on 3 April—three days after the attack. Almost unbelievably, while she was being examined by the doctor, he invited a group of medical students to witness the examination. As she said at the time, "Did not these people realise how violated and humiliated I already felt?"
It should not have been difficult—if there had been a willingness to do so—to track down two military men who were outside their base at 1 am armed with machine guns. In fact, no one really tried. All the evidence seems to suggest that no one really tried because of the fear among civilian and even police authorities of the all-powerful military, which menaces democracy and the rule of law in Venezuela.
Vanessa told me on Saturday, "I continue to have terrifying flashbacks of the attack and not a day has gone by without me having to relive the experience. This is something that I have learnt will never go away."
The performance of our embassy in Caracas in this affair has not satisfied either Lord Watson or me, or Andrew McLachlan, a British citizen. For a time, I had the horrible feeling that the apparent lack of concern and urgency on the part of our embassy might be because Vanessa is a New Zealand national. However, Vanessa has British patriality, her grandfather having been British. She lives and works in Britain with a British citizen, Andrew McLachlan. The New Zealand authorities have no embassy in Venezuela, their interests being looked after by the embassy of Great Britain.
I have a letter dated 24 April 1995 written by our consul in Caracas, which pointedly warns Vanessa that she should be aware that
"should she wish to proceed with the case"—
it is an extraordinary proposition that she might not wish to proceed with it—
"she should be aware that she will be required to appear in person, together with Andrew, to recount the evidence."

123
The consul adds,
"I have been advised that Venezuela will not accept a proxy."
Vanessa and Andrew have made it clear to me that the embassy clearly conveyed to them that if they wished to proceed, they would be doing so very much on their own. To stick around in Venezuela indefinitely and expensively—a country where the police and the justice system had already been found to be severely wanting—was an unappealing prospect and the couple returned home.
Mr. Keith Vaz: The House will have been shocked to hear of the events in Venezuela concerning two of my hon. Friend's constituents. He will be aware that two of my constituents, Paul Loseby and James Miles, have been in Venezuela over the past year. They were convicted of a criminal offence without having attended their own trial or knowing when the trial was taking place. Does not my hon. Friend's case show that the system of justice and of investigation of offences in Venezuela is deplorably flawed?
Mr. Galloway: My hon. Friend makes the very fair point that Venezuela is not what it is cracked up to be. It is not as it likes to portray itself and not as the world generally thinks of it. Both these cases raise serious questions.
The couple returned home, hoping against hope that the embassy that we maintain in Caracas would look after their interests. That hope has been dashed. Both Lord Watson and I held meetings in London with his excellency the ambassador of Venezuela, who sincerely told us that herculean efforts were being made in Venezuela to find the culprits. He told us that all manner of special task forces and committees had been drafted in to crack this case. By this time, I have no confidence in those efforts or arrangements.
I ask the Government to press for an apology to Vanessa Cross and Andrew McLachlan, not only for the horror of the experience, but for the appalling police and forensic medical work that followed it. I want the Government to energise our diplomatic staff in Venezuela to harry the authorities there until the culprits are found. I want the British Government to raise with the Venezuelan Government the possibility of compensation for my constituents for the horrifying and on-going nightmare that they have had to endure now for more than three long years.
10.23 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Derek Fatchett): I thank my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) for bringing this matter to the attention of the House. I extend to his constituents all our sympathy for the events that have taken place. I hope that my hon. Friend will allow me to take up a point made by my hon. Friend the Member for Leicester, East (Mr. Vaz). Having done so, I shall return to the case of Vanessa Cross.
My hon. Friend the Member for Leicester, East referred to his constituents, James Miles and Paul Loseby. The House will recall that he raised the matter last year and that he expressed particular concern about the Venezuelan
124
legal system. The Government shared my hon. Friend's concerns, especially that relating to the possibility that people could be tried and sentenced in their absence. As he pointed out on that occasion, there is no agreement on the transfer of prisoners between the United Kingdom and Venezuela, and it might be useful if I take this opportunity to update my hon. Friend on the current situation.
As my hon. Friend knows, we are keen to negotiate an agreement, and we first approached the Venezuelan authorities in 1994. The Prison Service here, which has overall responsibility for prison transfer matters, was unhappy with the draft text proposed by the Venezuelans, and talks on the subject were suspended at that stage.
On 17 February, we asked the Venezuelans for their views on accession to the Council of Europe convention on the transfer of sentenced prisoners. Our embassy in Caracas has been informed that the Venezuelan Minister of Foreign Affairs has sent a recommendation to the Venezuelan Congress to accede to the convention. My hon. Friend will be pleased by that news, as he will also be pleased to know that a member of the Foreign Office's consular division met a Venezuelan Opposition Member of Parliament who has been involved in the case to which my hon. Friend referred. That was an opportunity to discuss the convention. He undertook to do what he could to raise the profile of the convention among parliamentarians. The Under-Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), also raised the subject when the Venezuelan Minister with responsibility for drugs visited the United Kingdom in November last year. From that information, my hon. Friend the Member for Leicester, East will appreciate that we are active on this issue, and we hope that we may well persuade the Venezuelans to accede to the European convention on the transfer of sentenced prisoners.
I deal now with the sad case that my hon. Friend the Member for Kelvin has brought before the House. I am grateful that he has taken the time to bring the matter to our attention and that he has dealt with it in such a sensitive and delicate manner. I emphasise at the outset that the protection of the rights of British nationals overseas is something which the Foreign and Commonwealth Office takes very seriously. More than 10 million Britons live and work around the world. Others travel as tourists, making more than 40 million trips abroad each year. The protection of our citizens overseas is a front-line responsibility of the Foreign and Commonwealth Office, 24 hours a day and world wide. Our job is to do everything in our power to safeguard the interests of all those British citizens.
My hon. Friend set out the case of Vanessa Cross and Mr. McLachlan, and there is no reason for me to repeat the facts that my hon. Friend presented to us as they are without question. He may be interested to know that our embassy in Caracas was first notified of the attack a couple of weeks after it took place. The embassy immediately made every effort to contact Ms Cross and Mr. McLachlan who, by that time, had moved on with the group to Colombia.
Messages were left at the hotel, offering any help that might be needed at that stage. Ms Cross and Mr. McLachlan did not get in touch, and we understand the reasons explained by my hon. Friend. The Foreign

125
Office then contacted the tour operator, directly asking it to pass on our assurances that we were available and ready to offer any assistance that might be needed.
As my hon. Friend said, on returning to the United Kingdom, Ms Cross contacted Lord Watson, who was then the hon. Member for Glasgow, Central. His inquiries about the case in June 1996 were followed up promptly by the Foreign Office's consular division. Let me put on record my thanks for the way in which the noble Lord Watson pursued the case. It was typical of the way in which he carried out his responsibilities as a Member of Parliament and it is a great honour for the other place to have him as a member.
Since then, as my hon. Friend knows, our embassy has sent a number of written notes to the Venezuelan Ministry for Foreign Affairs, requesting information about the progress of the investigation. Last August, we were informed that, although the case had not reached a conclusion, investigations would continue. We made further inquiries in February this year, but, at that stage, they yielded no further information.
My hon. Friend mentioned the relationship between the United Kingdom and New Zealand in respect of the case and the way in which our responsibilities have been carried out. We have worked closely with the New Zealand Government and particularly with New Zealand house in London. There is a close relationship and a joint interest, and we shall continue to pursue the matter jointly. With respect to my hon. Friend, the fact that there is a question whether Vanessa Cross has New Zealand nationality or whether, through patriality, she is a United Kingdom citizen is irrelevant in terms of the way in which the matter has been pursued. We shall continue to keep in touch with New Zealand house and the New Zealand authorities.
126
I hope that, briefly, I have been able to set out what we have done and our aims in respect of the case that my hon. Friend has raised, and I am delighted to tell him that there are substantial signs of progress according to information that we have received only this evening. The embassy in Caracas has been in contact with the newly appointed Executive Secretary of the Human Rights Commission in Venezuela. He has pursued the case actively and we have just been informed that the local police now have suspects. We understand that the next step is for Vanessa Cross to identify them in person. Our embassy in Caracas is following that up with the Venezuelan Foreign Ministry to establish exactly what is required.
I do not need to say much more to my hon. Friend except to make two final points. First, we are all delighted by the news. I cannot flesh it out in any greater detail in terms of whether charges have been laid or the extent of the success of the investigations. Secondly, we shall be making contact with Vanessa Cross. We shall do what we can to assist in the case and, as we have tried to do throughout, we shall handle the case sensitively.
I do not want to reach a premature judgment, but it seems from the information that we have received as late as this evening that dramatic progress has been made. We hope that what we have heard this evening turns out to be a real breakthrough in the case. If it is, it will be good news for my hon. Friend's constituents. I certainly promise to keep in touch with my hon. Friend and both his constituents and, hopefully, we shall bring the matter to a successful conclusion.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes to Eleven o'clock.

CULTURE, MEDIA AND SPORT

  New Opportunities Fund
  Mr. Linton
  To ask the Secretary of State for Culture, Media and Sport if he will give estimates of the cash allocations for each of the New Opportunities Fund's initiatives for England, Scotland, Wales and Northern Ireland, according to the methodologies announced at Second Reading of the National Lottery Bill in the House of Lords; and if he will make a statement. [40120]

  Mr. Chris Smith
  I have today published preliminary drafts of Policy Directions which I intend to give to the New Opportunities Fund. Copies have been placed in the Library. These set out the proportion of money from that fund to be allocated between each of the four

  £ million

  NOF initiative

  England

  Scotland

  Wales

  N. Ireland

  Unallocated

  Total

  Healthy living centres

  232.5

  34.5

  19.5

  13.5

  —

  300

  ICT training and content creation

  199.4

  25.6

  13.6

  11.4

  50

  300

  of which:

  Teacher training

  183.3

  23.2

  12.7

  10.8

  —

  230

  Librarian training

  16.1

  2.4

  0.9

  0.6

  —

  20

  Content creation

  —

  —

  —

  —

  50

  50

  Out of school hours activities

  310

  46

  26

  18

  —

  400

  of which:

  Learning activities

  139.5

  20.7

  11.7

  8.1

  —

  180

  Childcare

  155

  23

  13

  9

  —

  200

  Integrated childcare and learning

  15.5

  2.3

  1.3

  0.9

  —

  20

  Total

  741.9

  106.1

  59.1

  42.9

  50

  1,000

  Mr. Linton
  To ask the Secretary of State for Culture, Media and Sport if he will publish drafts of policy directions which he intends to give to the New Opportunities Fund under Section 26(1) of the National Lottery etc. Act 1993 and Section 43C(1), to be inserted into the 1993 Act by the National Lottery Bill[Lords]. [40121]

  Mr. Chris Smith
  I am publishing today preliminary drafts of the Policy Directions for the New Opportunities Fund, with accompanying explanatory notes. As drafts, these will, of course, be subject to further refinement and consultation with the Board of the New Opportunities Fund when it is established, before they are formally issued.

  The Directions will ensure the New Opportunities Fund will deliver the objectives of the three initiatives set out in the White Paper (health, education and the environment) and overwhelmingly supported in the subsequent consultation exercise; set up a framework for the New Opportunities Fund's operation as an efficient,
  2
  countries of the UK for each of its first initiatives. The National Lottery is proving more successful and raising more money than anyone anticipated. I am determined that this extra money should be spent on projects which bring wider benefits to more people across the whole of the UK.

  I have decided that the money from the New Opportunities Fund should be allocated between each of the four countries of the UK on a basis appropriate to each of the different initiatives it will support. So: the £300 million for healthy living centres will be allocated on the basis of population size, weighted by deprivation factors; the £400 million for out of school hours activities will also be allocated on the basis of population size, weighted by deprivation factors; the £250 million for information and communications technology training for teachers and librarians will be divided by the number of teachers and librarians in each country. Decisions have not yet been taken on the allocation of the £50 million for content creation.

  The Lottery is played by the majority of adults across the UK and I want to ensure that as far as possible every area benefits from the money it raises for good causes.

  Current estimates of what this will mean in cash terms for the next five years are shown in the table.

  accountable, independent public body like the other Lottery distributors; require the New Opportunities Fund, like other distributors, to take account of important government policies and strategies relevant to its work.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Waste Recycling
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions what action he is taking to help local authorities to meet the waste recycling targets of(a) 60 per cent. reduction of wastes going to landfill by 2005, (b) recovery of 40 per cent. of municipal waste by 2005, (c) 25 per cent. household waste recycled by 2000 and (d) 75 per cent. of local authorities actively promoting composting by 2000. [38616]
  3
  Angela Eagle
  Our prime aim is to move waste management up the waste hierarchy—reduction, re-use, recovery (which includes composting, recycling and energy from waste), and finally disposal—having regard to the Best Practicable Environmental Option (BPEO). On the national targets mentioned by the hon. Gentleman, we have taken the actions set out below.

  (a) The target in the previous Government's White Paper "Making Waste Work" is to reduce the proportion of controlled waste going to landfill to 60 per cent. by 2005. The landfill tax is the main tool we have for reducing the amount of waste going to landfill and the increase in the standard rate of tax (for active waste) from £7 to £10 per tonne, which takes effect from April 1999, will build on the reduction that has already taken place since the introduction of the tax. The same proportion£20 per cent.£of additional revenue generated by this increase will be available for distribution to environmental bodies as is the case for funds under the current scheme. The Government will also be considering whether the environmental bodies scheme could be enhanced, and in particular examining how it could be used to encourage more recycling.

  Under the United Kingdom's presidency of the European Union, a Council Common Position has been agreed on the draft landfill directive, which would entail substantial reductions in the landfill of biodegradable municipal waste.

  (b) "Making Waste Work" also set a target of 40 per cent. recovery of municipal waste by 2005. We have accepted all of the recommendations of the cross-sectoral Review Group on the Role of Local Authorities in Recycling, one of which was that Waste Disposal Authorities and Waste Collection Authorities should work together to formulate integrated municipal waste management strategies. Such a strategy would bring into play all the various ways of dealing with waste—composting, recycling, energy from waste and final disposal. With the increasing cost of final disposal to landfill, I would expect waste management options further up the hierarchy to play a more important role in an integrated waste management strategy than they do at present. Composting, recycling and energy from waste all count towards this national recovery target.

  The Department has recently issued guidance to local authorities on revising their recycling plans and strategies. The emphasis in the guidance is very much on authorities working together towards integrated municipal waste strategies, of which we expect waste collection authorities' recycling plans to form an integral part.

  The Packaging Regulations will also have an important role to play in meeting this target. The Producer Responsibility Obligations (Packaging Waste) Regulations 1997 were introduced by the previous Government and reflect a shared approach agreement between business sectors as a means of implementing the EC Directive on Packaging and Packaging Waste. These Regulations are a first step towards changing attitudes in industry and in society more generally towards consumption, disposal and recycling. The targets in the Regulations are staggered in such a way that will allow the UK to meet the Directive targets as required in 2001,
  4
  that is that at least 50 per cent. of packaging waste be recovered each year from 2001 and thereafter, and at least 15 per cent. of each material be recycled.

  The Regulations are currently being reviewed by the Advisory Committee on Packaging. Among the matters under consideration is the scope for strengthening the local authority role. The Committee is to report at the end of May. Consultation on any proposed changes to the Regulations will take place in the summer.

  (c) As far as the target of recycling 25 per cent. of household waste is concerned, we do not now expect it to be met. However, it needs to be recognised that some local authorities are already recycling 25 per cent. of their household waste, although others only manage less than 3 per cent. The important thing is for those authorities with lower recycling rates to benefit from the experience of those achieving higher rates, and to this end the Department is currently undertaking a Good Practice project, which will disseminate to all authorities the good practice of, and lessons learnt by, about forty authorities.

  (d) "Making Waste Work" contains targets on composting, including for 1 million tonnes of organic household waste a year to be composted by 2001. This administration is keen to increase the quality and quantity of municipal waste which is composted. One of the main barriers to centralised composting is the lack of markets for the end product. In November last year we issued guidance to local authorities on designing and marketing their compost to large-scale users, mainly in the horticultural and landscaping industries. At the same time, we issued guidance to a wide range of prospective users in those sectors on the benefits of specifying waste-derived compost.

  We have also set up a Composting Development Group to identify the problems and obstacles of marketing waste-derived composts to the agricultural, land restoration, landscaping and horticultural sectors, and to develop proposals to help overcome them. The Group is due to report in the summer.

  Tenancy Relations Officers
  Dr. Tonge
  To ask the Secretary of State for the Environment, Transport and the Regions how many local authorities employ tenancy relations officers, pursuant to the Protection from Eviction Act 1977. [39335]

  Mr. Raynsford
  A survey commissioned by the Department of the Environment in 1995 to explore how local authorities work with the private rented sector found that about 30 per cent. of local authorities employed tenancy relations officers. However, about 80 per cent. of London Boroughs and over half of the metropolitan authorities employed tenancy relations officers.

  Shorthold Tenancies
  Dr. Tonge
  To ask the Secretary of State for the Environment, Transport and the Regions what plans his Department has to commission research into matters relating to private tenancies, with particular reference to six-month assured shorthold tenancies. [39336]
  5
  Mr. Raynsford
  Information on matters relating to private tenancies, including assured shorthold tenancies, is collected on a continuous basis by the Survey of English Housing, and reports are published annually.

  The Department is currently commissioning research to investigate harassment and illegal eviction in the private rented sector and is planning, later this year, to commission research into private renters' attitudes to, and experiences of, the private rented sector. Both studies will cover private renters with assured shorthold tenancies.

  Cause

  1

  2

  3

  4

  5

  6

  7

  8

  9

  10

  11

  12

  13

  Total1

  Antisocial behaviour

  362

  408

  472

  428

  449

  394

  377

  365

  382

  339

  359

  350

  452

  5,137

  Passenger ill/injured

  38

  42

  50

  54

  54

  29

  48

  54

  65

  53

  48

  41

  34

  610

  Person on track

  23

  22

  28

  45

  20

  28

  31

  17

  22

  33

  26

  34

  24

  353

  Driving technique

  64

  58

  63

  63

  57

  63

  47

  58

  53

  31

  43

  40

  62

  702

  Rolling stock

  1,056

  1,185

  1,101

  1,187

  1,430

  1,049

  1,102

  1,141

  1,084

  927

  1,101

  1,014

  1,166

  14,543

  Possession overrun

  11

  5

  5

  8

  4

  5

  5

  8

  14

  3

  5

  5

  10

  88

  Signals/point

  206

  220

  187

  190

  210

  193

  239

  294

  268

  183

  156

  148

  170

  2,664

  Terminus management

  339

  368

  315

  382

  494

  437

  428

  510

  468

  451

  419

  475

  477

  5,563

  Track

  45

  68

  67

  74

  60

  60

  48

  62

  70

  68

  77

  74

  60

  833

  Unattended luggage

  72

  58

  41

  40

  41

  29

  29

  22

  36

  26

  22

  26

  37

  479

  All other

  92

  96

  104

  107

  124

  112

  105

  113

  99

  80

  131

  95

  126

  1,384

  Total

  2,308

  2,530

  2,433

  2,578

  2,943

  2,399

  2,459

  2,644

  2.561

  2,194

  2,387

  2,302

  2,618

  32,356

  1London Transport calculates statistics on the basis of four week 'periods'. The figures in the table relate to the 13 periods in the financial year 1997–98.

  Our Public/Private Partnership proposals will ensure that London Underground has the resources it needs to replace the worn out equipment that leads to rolling stock, signalling, and control failures.

  We will also be working with London Underground to see how best to tackle the other causes of delays.

  Local Government Pensions
  Mr. Gapes
  To ask the Secretary of State for the Environment, Transport and the Regions how many applications for dispensation(a) have been approved and (b) were not approved in each year since the coming into force of (i) the Local Government Compensation for Redundancy Regulations 1994 (SI 3025) and (ii) the Local Government Pension Scheme (Pensionable Remuneration Amendment) Regulations 1995 (SI 2249). [39683]

  Mr. Raynsford
  This information is not held centrally because the discretion whether to award a one-off compensation payment or to reinstate a reduced pension at its former level under these regulations lay entirely with local authorities. In both cases they had six months to decide whether to exercise it. The time limit for the 1994 regulations expired on 27 June 1995 and for the 1995 regulations on 27 March 1996.

  A27, Glynde
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions what was the cost of the recent works to improve junction safety on the A27 at Ranscombe Lane, Glynde; and what assessment his Department has made of the advantages of installing simultaneously a cycle path between Lewes and Beddingham. [39584]

  London Underground
  Mr. Cohen
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the causes of delays to London Underground passenger journeys in 1997, broken down into specified time periods and indicating for each category the ways in which the proposed new funding arrangements will reduce those delays. [39428]

  Ms Glenda Jackson
  I understand from London Transport that figures for the number of train delays for the year 1997–98 are as follows:

  Ms Glenda Jackson
  [holding answer 24 April 1998]: The current estimate of the cost of the works to improve Ranscombe Lane junction is £155,000. There has been no assessment to establish the merits of combining this scheme with the Highways Agency's future scheme to install a cycle path between Lewes and Beddingham. It would not have been practicable to carry them out simultaneously, Ranscombe Lane junction was a high priority safety project and improvement was essential to reduce the number of accidents there. The proposal for a cycle path between Lewes and Beddingham is still at an early stage of preparation, for possible implementation in this financial year.

  Carbon Dioxide Emissions
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the relationship between growth in gross domestic product and changes in carbon dioxide emissions. [39726]

  Angela Eagle
  There is a complex relationship between changes in gross domestic product and carbon dioxide emissions because the types of fuel used, the structure of the economy, and energy efficiency are all changing over time. We estimate that under present conditions every 1% increase in GDP would increase emissions of carbon dioxide by about 0.5%, other things being equal. But changes in the other factors mentioned mean that the trend in UK emissions of carbon dioxide is falling at present, whilst gross domestic product is increasing.

  Civic Amenity Sites
  Mr. Beith
  To ask the Secretary of State for the Environment, Transport and the Regions if he will give guidance to local authorities on the extent to which civic
  7
  amenity sites are made available in rural areas, and on the maximum travel distance required to convey material to such sites. [39655]

  Angela Eagle
  No. Under the Environment Protection Act 1990, each Waste Disposal Authority has a duty to arrange for
  "places to be provided at which persons resident in its area may deposit their household waste"
  and to ensure that these civic amenity sites are "reasonably accessible". The Act does not stipulate what is reasonable and my Department has no power to intervene. We have no plans to issue guidance. However, as far as recycling facilities are concerned, we do have a national target of ensuring that 80% of households have easily accessible facilities by 2000 and the Environment Agency has been asked to consider the possibility of licensing unmanned civic amenity sites where appropriate with a view to assisting their provision in rural areas.

  New Road Projects
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what has been the total cost of new road projects authorised by him since 1 May 1997. [39861]

  Ms Glenda Jackson
  Since 1 May 1997 new trunk road projects worth £294.5m have been authorised following the Accelerated Roads Review. Of that figure, some £4.2m has been spent to date.

  Neighbour Disputes
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what measures he is considering as part of his review of those powers which are available to local planning authorities, to intervene in neighbour disputes caused by excessively high garden boundaries; and when he expects the review to be complete. [39494]

  Angela Eagle
  There is no general review of the powers available to local planning authorities to control excessively high garden boundaries.

  We are, however, considering whether Government intervention in relation to leylandii and other high hedges is necessary.

  Housing Benefit
  Maria Eagle
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has for curbing the cost of housing benefit by introducing rent controls; and if he will make a statement. [38476]

  Mr. Raynsford
  We are considering rent levels and their interaction with Housing Benefit in the context of our overall housing policy as part of our Comprehensive Spending Review. Conclusions from the Review are due to be announced in the summer.

  Rail Travel (Disabled Access)
  Mr. Oaten
  To ask the Secretary of State for the Environment, Transport and the Regions when the Disability Discrimination Act Rail Vehicle Accessibility Regulations will be published. [39879]
  8
  Ms Glenda Jackson
  We are planning to publish shortly a consultation document which will contain draft Rail Vehicle Accessibility Regulations. The final regulations will be published later this year when they have been approved by Parliament and will apply to all new rail vehicles entering service from 1 January 1999.

  Safety at Work
  Mr. Oaten
  To ask the Secretary of State for the Environment, Transport and the Regions what measures the Government are taking to reduce industrial injuries and promote safety at work. [39878]

  Angela Eagle
  The Health and Safety Commission's Plans of Work set out what the Commission and the Health and Safety Executive are doing to promote health and safety at work and reduce occupational injury. The Plan for 1998–99 is expected to be published at the end of May. This Government take health and safety at work very seriously and have allocated additional funding of £4.5 million for 1998–99. This will enable the Commission to reinforce its field activity and take forward its key priorities, which will include the improvement of occupational health and cutting injury rates, particularly in the agriculture, construction and manufacturing sectors.

  Play Resource Warehouse, Belfast
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland if she will allocate capital funding for the provision of accommodation for the Play Resource Warehouse, Belfast. [39306]

  Mr. Worthington
  An application from the Play Resource Warehouse for funding for a specific capital project is being considered in the light of available resources.

  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what applications the Department of Education, Northern Ireland has received from the Play Resource Warehouse in Belfast for capital funding for new premises. [39305]

  Mr. Worthington
  One application for part funding was received in 1997 under the Special Support Programme for Peace and Reconciliation.

  Businesses
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many businesses employ 10 or more people in Northern Ireland; how many businesses that employ 10 or more people are members of the CBI in Northern Ireland; on what basis she has assessed that the CBI in Northern Ireland is representative of business opinion on Northern Ireland; and if she will make a statement. [39196]

  Mr. Ingram
  At 22 April 1998 there were 6,185 private sector businesses employing 10 or more people in Northern Ireland. Total employment in these firms is some 300,000. I understand the CBI in Northern Ireland has about 300 member firms employing approximately 100,000 people and representing a wide spectrum of
  9
  business activity. I welcome views from the CBI and other business organisations in Northern Ireland on a broad range of economic and commercial topics.

  Ministerial Group on the Family
  Mr. Clappison
  To ask the Secretary of State for the Home Department how many times the Ministerial Group on the Family has met since 1 January; and when it will hold its next meeting. [39383]

  Mr. Michael
  The Ministerial Group on the Family has met once since 1 January. Its next meeting is planned for 11 May 1998.

  Drugs
  Mr. Clappison
  To ask the Secretary of State for the Home Department if he will list the cautioning rates by police force area for(a) the supply of class A drugs, (b) the possession of class A drugs and (c) the supply of class B drugs. [39385]

  Year

  Armed with a replica gun

  Armed with a knife

  Armed with a gun

  Unarmed

  Still under investigation

  1989

  0

  0

  2

  0

  0

  1990

  0

  0

  2

  0

  0

  1991

  1

  0

  1

  0

  0

  1 starting pistol

  —

  —

  —

  —

  1992

  1

  0

  2

  0

  0

  1993

  0

  0

  3

  0

  0

  1994

  1

  0

  1

  0

  0

  1995

  0

  0

  0

  2

  0

  1996

  0

  1

  0

  0

  1

  1997

  0

  0

  0

  0

  0

  The Police Complaints Authority have kept the relevant records only since 1991. They have supervised investigations into 14 fatal shootings between 1991 and 1997. In every case they have issued a certificate under section 89(7) of the Police and Criminal Evidence Act 1984, recording their satisfaction with the way in which the investigation was conducted. They are still investigating one case of a fatal shooting during that period.

  Millennium Compliance
  Mrs. Gillan
  To ask the Secretary of State for the Home Department if all the computer systems used by the emergency services in England will be millennium compliant by 31 December 1998. [39894]

  Mr. Straw
  No. It is the responsibility of each police force and fire authority to ensure that their local information technology (IT) and communications systems are millennium compliant. In prioritising the remedial actions necessary to resolve millennium problems, forces and brigades will take into account the date by which particular systems need to be compliant. Priority will be given to those key systems which will need to be compliant by the start of 1999. For other systems, the end of 1999 will be the target date for compliance.
  10
  Mr. George Howarth
  The information requested is not readily available and could be provided only at disproportionate cost. Some information on cautioning rates in 1996 for all drug offences taken together by police force area has recently been published (see table A2.4 in Statistics of Drug Seizures and Offenders dealt with, United Kingdom, 1996—Area Tables), copies of which are in the Library.

  Police (Fatal Shootings)
  Fiona Mactaggart
  To ask the Secretary of State for the Home Department (1) how many people were shot dead by police officers in 1997; and of those, how many were(a) unarmed, (b) armed with a replica gun and (c) armed with a gun; [38463]

  (2) how many of those people who were shot dead by police officers in each of the years 1989 to 1996 were (a) armed with a replica gun, (b) armed with a knife and (c) armed with a gun; [38464]

  (3) in how many cases of fatal shootings by the police in each year since 1981 the Police Complaints Authority has issued a certificate of satisfaction in connection with its inquiry. [38466]

  Mr. Michael
  The information is given in the table.

  Ambulance Trusts and Acute Trusts providing accident and emergency services, in line with other National Health Service organisations, are making every effort to ensure their computer systems are millennium compliant by 31 December 1998. In particular, ambulance command and control systems have been given a very high priority in determining their compliance status and in undertaking the necessary replacements or upgrades. However, in some cases, it may not be possible to complete the latter until the first quarter of 1999.

  MISC4, the Ministerial Group on the Millennium Date Change, is continuing to give priority to preparing the national infrastructure, including the emergency services, for the new millennium. I refer the hon. Member to the answer my right hon. Friend the Prime Minister gave to my hon. Friend the Member for Swansea, East (Mr. Anderson) on 30 March 1998, Official Report, columns 374–76.

  Handguns
  Mr. Steen
  To ask the Secretary of State for the Home Department when Michael Wellum, of Wrenwell Farm, Denbury, Devon, will receive compensation for the pistols he handed in 1997; and what factors underlie the length of time taken to handle the claim. [39779]
  11
  Mr. Michael
  The claim was received in the Firearms Compensation Section on 28 August 1997. The Option A and B elements of the claim, and of an accompanying ex gratia application under the voluntary surrender scheme for small-calibre pistols, were processed on 23 January 1998 and payment made. The remaining Option C elements, which will require individual consideration of the evidence of value provided, will be dealt with later in the year. As I have said to the House on many occasions, the number and complexity of these compensation claims, and the need for careful examination to counter fraud and ensure payment at the correct rates, are all factors contributing to the processing time.

  Cornish Language
  Mr. Andrew George
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the Government will support the nomination of the Cornish language for inclusion in the European Charter for Regional or Minority Languages. [39700]

  Mr. Tony Lloyd
  I refer the hon. Member to the answer I gave the hon. Member for Ceredigion, (Mr. Dafis) on 9 March 1998,Official Report, column 56.

  Mr. Andrew George
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment the Government have made of the advantages to(a) Britain and (b) Cornwall and Scilly of the proposal to incorporate the Cornish language in the European Charter for Regional or Minority Languages. [39701]

  Mr. Tony Lloyd
  I refer the hon. Member to the answer I gave today to his previous question (39700). The advantages to Cornwall and the Isles of Scilly will form part of the assessment of the relevant Government Departments.

  Refugee Legal Group
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the Refugee Legal Group will receive a reply to their letter of 17 July, concerning entry clearance officers in Columbo. [39484]

  Mr. Fatchett
  My noble Friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs wrote to the hon. Member on 22 April 1998 replying to the points raised in the Refugee Legal Group's letter.

  Consular Offices (South Africa)
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many British citizens have sought advice and assistance from the British High Commission in South Africa in each of the last three years. [39703]

  Mr. Fatchett
  The total number of telephone/postal and personal requests for assistance and advice recorded in our Consular statistics for South Africa are:

  1995: 173,300

  1996: 303,850

  1997: 306,400.

  12
  The number of services provided to British Citizens in the last three years by the Consular Offices in South Africa are as follows:

  Passport Applications:

  1995: 27,000

  1996: 28,000

  1997: 31,800.

  Number of British Citizens provided with financial assistance:

  1995: 242

  1996: 582

  1997: 366.

  Number of protection cases related to accidents, deaths, arrests, prison and hospital visits involving British citizens:

  1995: 242

  1996: 130

  1997: 287.

  Indian Prime Minister
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he plans to meet the Prime Minister of India. [39704]

  Mr. Fatchett
  My right hon. Friend the Foreign Secretary has no plans to meet the Indian Prime Minister in the near future. I hope to visit India and have discussions with the new Government there soon.

  Ambassadors
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the ambassadors he has appointed since 1 May 1997. [39705]

  Mr. Tony Lloyd
  The following Ambassadors have been appointed and announced since 1 May 1997:

  Name

  Country or International Organisation

  Sir A. Allen

  Australia

  Mr. G. Baker

  Barbados

  Mr. J. Wilde

  Botswana

  Mr. J. S. Laing

  Brunei

  Mr. J. Jenkins

  Burma

  Mr. P. Boon

  Cameroon

  Mr. J. Thorp

  Colombia

  Mr. A. Green

  Costa Rica

  Mr. T. Millson

  Gambia

  Sir P. Lever

  Germany

  Mr. A. Caie

  Guatemala

  Mr. M. Pellew

  Holy See

  Mr. M. Williams

  New Zealand

  Mr. J. Yapp

  Seychelles

  Mr. B. Dinwiddy

  Tanzania

  Sir C. Meyer

  United States of America

  Mr. T. Young

  Zambia

  Mr. P. Longworth

  Zimbabwe

  Governors

  Mr. F. Savage

  British Virgin Islands

  International Organisations

  Mr. J. Greenstock

  United Nations

  Mr. I. Soutar

  UK Delegation to the Conference on Disarmament

  13
  It is not possible to give details of appointments which have not yet been formally announced.

  EU Common Foreign and Security Policy
  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 27 March 1998,Official Report, column 311, if he will make it his policy to seek agreement with other member states so that the subjects discussed at the EU Common Foreign and Security Policy working groups can be disclosed. [38918]

  Mr. Doug Henderson
  [holding answer 24 April 1998]: Several Member States have consistently made clear their objection to publication of documents that reveal details of their negotiating position.
  As my answer of 27 March 1998, Official Report, column 311 stated, the Government are committed to ensuring more effective parliamentary scrutiny of CFSP business, and have published proposals to that effect.

  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 27 March 1998,Official Report, column 311, if he will publish in advance the dates on which EU Common Foreign and Security Policy working groups meet. [38919]

  Mr. Doug Henderson
  [holding answer 24 April 1998]: The calendar of Common Foreign and Security Policy working groups for the remainder of the UK Presidency of the European Union is as follows:

  Date

  Working groups

  April 1998

  Wednesday 22

  Security, Asia, Middle East/ Gulf

  Friday 24

  Planners, Global Disarmament

  Wednesday 29

  Central Europe, Conventional Arms Exports

  Thursday 30

  Africa

  May 1998

  Tuesday 5

  Euro-Mediterranean

  Wednesday 6

  Mashraq/Maghreb, Eastern Europe/Central Asia, Terrorism

  Thursday 7

  Western Balkans Region, Asia, Middle East Peace Process

  Friday 8

  Armaments Policy, South East Europe

  Monday 11

  OSCE

  Wednesday 13

  Human Rights

  Thursday 14

  Human Rights

  Tuesday 19

  Latin America, Drugs

  Wednesday 27

  United Nations, Euro-Mediterranean

  Thursday 28

  Euro-Mediterranean

  Thursday 28

  Euro-Mediterranean, Non-Proliferation

  Friday 29

  Communications

  June 1998

  Wednesday 3

  Central Europe, Middle East/Gulf, Africa, Armaments Policy

  Thursday 4

  Western Balkans Region, Middle East Peace Process, Africa, Global Disarmament

  Wednesday 10

  Security

  Thursday 11

  Conventional Arms Exports, Asia, Eastern Europe/Central Asia, Public International Law

  Friday 12

  Law of the Sea

  Wednesday 17

  OSCE

  Thursday 18

  Administrative Affairs

  Wednesday 24

  Consular Affairs

  14
  Austria, the next holder of the EU Presidency, have not yet circulated their calendar of Common Foreign and Security working group meetings. This will be placed in the Libraries when finalised.

  PRIME MINISTER

    Reviews
    Sir Raymond Powell
    To ask the Prime Minister what is the cost to date of the reviews set up by the Government since 1 May 1997; and if he will list each review. [38078]

    The Prime Minister
    Information on the cost of reviews is not held centrally and could be provided only at disproportionate cost. However, in many cases reviews have been carried out as part of normal departmental business. A list of the reviews announced by the Government since 1 May has been placed in the Library.

    List of Reviews announced by the Government since 1 May 1998

    Review of the Crown Prosecution Service

    Review of International Development policy leading to the publication of a White Paper

    Review of civil justice and legal aid

    Review of welfare services to the courts

    Review of enforcement of civil court judgments Study and evaluation of current tax appeals systems

    Review of Lord Chancellor's Department funding for marriage support and research services

    Review of the UK legislation controlling the disposal of animal waste

    Review of the public analyst service in England and Wales

    Review of salmon and freshwater fisheries

    Review of the future funding of regulatory arrangements for pesticides

    Review of the current rules on quarantine of imported pet animals

    Review of the Hill Livestock Compensatory Allowance Scheme Review of the Home Grown Cereals Authority

    Review of the rates and structure of aid to farmers under the Organic Aid Scheme

    Review of arrangements for enforcing the rules on the welfare of animals exported live to the Continent

    Review of the Milk Development Council Review of fishing vessel licensing

    Review of the threshold exempting employers with fewer than 20 employees from the employment provisions of the Disability Discrimination Act 1995

    Review of the Qualifications Appeals Systems

    Review of the Bureaucratic Burden on Teachers

    Review of Pensions

    Review of Welfare

    Review of the Women's National Commission

    Review of the Code of Practice on Access to Government Information

    Review of Quangos

    Review of the Charter Programme

    Review of the existing Drugs Strategy

    Review of the United Kingdom's position under various international human rights instruments

    Review of policy towards the remaining UK Overseas Territories

    Review of the criteria used in considering licence applications for the export of conventional arms

    15

    Strategic Defence Review

    Review of the arrangements for compensating service personnel (or their dependants) and for the payment of Death and Invaliding Benefit

    Review of Information Services: Northern Ireland Office

    Review of Trust Ports in Northern Ireland

    Review of the 1993 Strategy for the Support of the Voluntary Sector and for Development in Northern Ireland

    Review of the District Councils' Community Services Programme

    Review of Training Centres and Further Education Colleges in Northern Ireland

    Fundamental Review of the Economic Development Strategy in Northern Ireland

    Review of the Industrial Development Support Services: Northern Ireland

    Policy review of the Youth Service: Northern Ireland Review of the law relating to surrogacy

    Review of the evidence relating to silicon breast implants

    Review of the breast cancer screening programme in Devon and the implications for the breast cancer screening programme as a whole

    Strategic review of health services in London

    Review of the latest information available on inequalities in health

    Independent review of proposals for the transfer of bulk blood processing and testing from Liverpool to Manchester

    NHS Charter Advisory Group (Review of NHS Charter) Review of the National Curriculum in Wales

    Strategic review of the Welsh Trunk Road Programme

    Review of the role of the Welsh Language Board in Welsh Education

    Review of the number and shape of NHS Trusts in Wales

    Review of economic regeneration Wales

    Welsh Office Review of planning policy for opencast coal mining
    Comprehensive Spending review

    Review of the North Sea Fiscal Regime

    Review of capital gains taxation

    Review of charities' taxation

    Review of leakage and avoidance of direct taxes

    Review of alcohol and tobacco duties

    Review of the Venture Capital Trust Scheme and Enterprise
    Investment Scheme

    Review of tax and benefits Review of landfill tax

    Review on the revenue effect of a reduced rate of VAT for energy efficient materials and alternative options for targeted relief to help those on low incomes to save energy

    Review of Private Finance machinery

    Review of research and development

    Review of the calculation of Vehicle Excise Duty for lorries

    Further review of the capital gains of companies

    Home Office and Northern Ireland Office Review to consider

    Permanent UK-wide counter-terrorism legislation

    Review of the law relating to bribery and corruption

    Strategic review of National Police Training

    Interdepartmental review of police pensions

    Review of arrangements for confiscation of criminal assets

    Review of fire-fighters pension scheme

    Review of community fire safety

    Review of prison nursing services

    16

    Review of long-term future of Prison Service health care

    Review of Prison Service Drug Strategy

    Review of Prisons Investigation Strategy

    Review of the operation of release of prisoners on temporary licence

    Review of Government proposals for youth justice

    Review of measures to deal with anti-social behaviour

    Review of measures to deal with protection of communities from
    known sex offenders who pose a continuing risk

    Review of measures on community safety

    Inter-Departmental review of the treatment of vulnerable and intimidated witnesses

    Review of the future role of local civil protection in England and Wales

    Review of the control of unscrupulous immigration advisers Review of immigration and asylum appeals

    Working Party on Electoral Procedures

    Comprehensive Review of the food-related scientific services in Scotland

    Review into the system of land ownership and management in Scotland

    Review of transport policy in Scotland

    Review of the Scottish roads programme

    Review of Skye Bridge tolls

    Review of countryside access legislation in Scotland

    Review to identify areas of Scotland appropriate for designation as National Parks

    Review of the Scottish water industry

    Review of rural water and sewerage grant scheme

    Review of Gaelic broadcasting

    Scottish Enterprise Strategy review

    Review of the Scottish Awards Agency for Scotland

    Review of Scottish Homes' Support for Owner Occupation

    Review of Scottish Homes' support for rented housing

    Commission on Local Government and Scottish Parliament

    Review of the Post Office

    Audit of the Foresight Programme (a programme to bring together businesses, Government and academia to identify market and technology opportunities for the future)

    Review of new and renewable energy

    Review of clean coal technology

    Review of utilities regulation

    Review of electricity trading arrangements

    Review of energy sources for power regeneration

    Review of company law

    Review of film policy

    Review of arrangements for celebrating the Millennium

    Review of the National Lottery, leading to the publication of a White Paper

    Review of policy on admission charging by national museums. (Now subsumed within the Comprehensive Spending Review)

    Review of the list of nationally important sporting events which must be made available on free-to-air terrestrial TV channels

    Independent review of the future of the Royal Opera House companies and the English National Opera

    Review of rolling stock leasing market

    Review of policy on chemicals in environment

    Review of the National Air Quality Strategy

    Review of the Pilotage Act

    Review of the water charging system and the water abstraction
    licensing system

    17

    Review of UK sustainable development strategy

    Fundamental review of transport policy

    Review of compulsory competitive tendering regulations and guidance

    Financial management and policy review of the Local Government Commission

    Review of political restrictions on local government officers

    Review of the conveyancy process

    Libya
    Mr. Dalyell
    To ask the Prime Minister, pursuant to the oral answer of the Secretary of State for the Home Department of 30 March 1998,Official Report, columns 887–88, if he will discuss with each of the host countries during his forthcoming Middle East visit the extent to which (a) Lockerbie and (b) the case of WPC Yvonne Fletcher underlie United Nations sanctions against Libya. [38213]

    The Prime Minister
    [holding answer 7 April 1998]: Lockerbie is an issue of the greatest importance to this Government. During my visit to the Middle East I stressed the need for progress in implementing the relevant UN Security Council Resolutions. They relate to Lockerbie, not to the murder of WPC Fletcher. That tragic case, with Lockerbie, is a major obstacle in our bilateral relations with Libya.

    Question Time
    Mr. Gummer
    To ask the Prime Minister if he will initiate a review of his decision to change Prime Minister's Question Time to one session a week. [38425]

    The Prime Minister
    As my right hon. Friend the President of the Council made clear when the changes to Prime Minister's Questions were made, the Modernisation Committee will be able to review the new arrangements as time progresses as part of their wide-ranging programme which is looking at many aspects of the machinery of Parliament. That remains the case.

    China
    Mr. Vaz
    To ask the Prime Minister if he will make a statement on his discussions with Premier Zhu Rongji; and if he will review the mechanisms by which UK-China relations are conducted. [38822]

    The Prime Minister
    On 2 April I held constructive discussions with Premier Zhu on a wide range of topics of bilateral and international interest. We value dialogue with China and aim to hold high-level discussions on a regular basis.

    EMU
    Mr. Cash
    To ask the Prime Minister if he will list the criteria for determining the success of economic and monetary union in the context of determining a future United Kingdom application to join; and for how long that union must have been in operation in order so to judge. [39742]

    The Prime Minister
    The economic tests were set out in the statement made by my right hon. Friend the Chancellor of the Exchequer to the House on 27 October 1997,Official Report, column 583.
    18
    Mr. Cash
    To ask the Prime Minister what measures he is taking to ensure that the United Kingdom meets the five economic tests for participation in economic and monetary union. [39753]

    The Prime Minister
    The Government's reforms to the Bank of England and the Code for Fiscal Stability will help to deliver the macroeconomic stability the UK economy needs to demonstrate sustainable and settled convergence.

    In addition, the Government's programme of investing in education and training, helping people from welfare into work and improving the functioning of markets will deliver the flexibility the UK economy needs.

    Crown Office, Scotland
    Mr. John M. Taylor
    To ask the Prime Minister which Government Minister is answerable to the House for the performance of the Crown Office in Scotland. [39582]

    The Prime Minister
    [holding answer 24 April 1998]: The Government Minister answerable for the performance of the Crown Office in Scotland is my noble and learned Friend the Lord Advocate. Questions in this House will be answered on his behalf by the Secretary of State for Scotland.

  PRESIDENT OF THE COUNCIL

    Anti-Drugs Co-ordinator
    Mr. Clappison
    To ask the President of the Council what is her most recent estimate of when the strategy of the United Kingdom Anti-Drugs Co-ordinator will be published; and if she will make a statement. [39375]

    Mrs. Ann Taylor
    1 announced to the House on 23 April 1998,Official Report, column 974 that it would be launched today.

    Mr. Clappison
    To ask the President of the Council what estimates she has made of how much will be spent by the United Kingdom Anti-Drugs Co-ordinator in each of the three years of his term. [39381]

    Mrs. Ann Taylor
    The UK Anti-Drugs Co-ordinator, Keith Hellawell, is a special adviser to the Government, and as such has no budget to spend. He has been tasked with overseeing a Comprehensive Spending Review of existing drug resources, which has informed the Government's new anti-drugs strategy, to be launched today. This shows that the Government currently spend about £1.4 billion a year on anti-drugs activity. An announcement on funding from 1999–2000 will be made later in the year, following the outcome of the Comprehensive Spending Review.

  DEFENCE

    Reserves
    Mr. Key
    To ask the Secretary of State for Defence if he will list the numbers of regular reserve forces in the Royal Navy, Army and Royal Air Force in each year since 1988. [39634]
    19
    Dr. Reid
    The information requested is given in the table.

    UK regular reserve forces at 1 April each year

    Year

    Royal Fleet reserve

    Army reserve

    Royal Air Force reserve

    1988

    12,113

    58,082

    5,553

    1989

    12,717

    62,197

    7,394

    1990

    13,630

    65,751

    10,091

    1991

    13,944

    65,214

    12,607

    1992

    13,369

    63,145

    14,450

    1993

    8,792

    57,423

    15,919

    1994

    8,763

    54,939

    16,329

    1995

    8,603

    53,425

    15,877

    1996

    9,012

    48,521

    16,018

    1997

    9,974

    41,195

    16,349

    Note:

    Definitions of the regular reserve forces are taken from Reserve Forces Act 1996. Figures for 1 April 1998 are not yet available.

    Mr. Key
    To ask the Secretary of State for Defence how many RAF reservist role support squadrons have been established; for which aircraft; and what are their missions. [39623]

    Dr. Reid
    Four role support squadrons have been formed.

    The Helicopter Support Squadron, based at RAF Benson, formed on 1 October 1996. The Squadron provides manpower for augmentation and operational support for the Support Helicopter Force during contingency force, peacekeeping, humanitarian and disaster relief operations.

    The Offensive Support Role Support Squadron formed on 1 January 1998, and is based at RAF Cottesmore. The Squadron provides manpower for augmentation and operational support of the Harrier and Jaguar Force.

    The Strike Attack Support Squadron based at RAF Marham, formed on 1 April 1998. The Squadron provides a pool of manpower for augmentation and operational support of the Tornado GR 1/4 Force.

    The Air Transport and Air-to-Air Refuelling Support Squadron with an HQ based at RAF Brize Norton, and a detachment at RAF Lyneham, formed on 1 April 1998. The Squadron provides manpower to augment and support Air Transport at RAF Lyneham and Brize Norton and Air-to-Air Refuelling at RAF Brize Norton.

    A further Squadron, the Air Defence Support Squadron, is due to be established at RAF Leeming on 1 July 1998. The Squadron will provide manpower to augment and support the Air Defence Force.

    Mr. Key
    To ask the Secretary of State for Defence what were the findings of the 1996 study into the demographic and geographical distribution profile of potential recruits to the reserves which was announced in the Government response to the Twelfth report of the Defence Committee in January 1996 (HC 188). [39636]

    Dr. Reid
    In 1996 my Department employed an independent consultant to conduct a detailed study into recruitment to the Territorial Army (TA). This study suggested that the approach to TA recruitment was insufficiently nationally co-ordinated, and that it was not therefore possible to make a proper assessment of the 20
    demographic and geographical distribution profile of recruits and potential recruits to the Reserves. Following the study's conclusions, my Department is developing a management information system which will allow analysis of geographic and demographic trends, and in turn enable us greater focus in TA marketing and recruitment.

    Mr. Key
    To ask the Secretary of State for Defence what is(a) the establishment and (b) the strength of the Royal Marines Reserve. [39632]

    Dr. Reid
    The total establishment of the Royal Marines Reserve is presently 1,000, of which some 600 billets are for fully trained personnel. As at 1 March their total strength was 871, of which 525 were fully trained.

    Mr. Key
    To ask the Secretary of State for Defence what new roles for RAF reservists have been(a) identified and (b) established since the enactment of the Reserve Forces Act 1996. [39630]

    Dr. Reid
    As the Reserve Forces Act 1996 focused primarily on terms of employment rather than types, no new roles have been identified or established as a direct consequence of the Act. However, since the enactment in April 1997, 3 further Role Support Squadrons have been formed to complement the first, the Helicopter Support Squadron, which formed in October 1996; a fifth squadron is to be formed in July 1998. Their roles reflect a new concept of operations which requires them to supply manpower to augment regular RAF units deployed on contingency force, peacekeeping, and humanitarian and disaster relief operations. Use has already been made of the new categories of reserve service introduced within the Act. All Reservist Aircrew have volunteered to serve as High Readiness Reservists, and some 17 officers and 18 other ranks are currently employed under the new Full Time Reserve Service terms in a range of posts.

    Mr. Key
    To ask the Secretary of State for Defence what is the(a) actual strength and (b) establishment of the Merchant Navy Reserve; what is the recruiting target; and what is the annual bounty payable. [39631]

    Dr. Reid
    At the end of March 1998 the actual strength of the Merchant Navy Reserve was 978 against an establishment of 1,000. There is no specific recruitment target at the present time. Members of the MNR receive an annual taxable bounty of £200.

    Mr. Key
    To ask the Secretary of State for Defence what was the strength in(a) June 1997 and (b) March 1998 of the RAuxAF training and standardisation squadrons at RAF Halton and RAF Shawbury. [39625]

    Dr. Reid
    The strength of the Royal Auxiliary Training and Standardisation Squadrons at RAF Halton and RAF Shawbury in June 1997 and March 1998 were as follows:

    June 1997

    March 1998

    TSS Halton

    2

    14

    TSS Shawbury

    1

    7

    Mr. Key
    To ask the Secretary of State for Defence what was(a) the establishment and (b) the actual strength of the Royal Naval Reserve in (i) 1994, (ii) 1995, (iii) 1996, (iv) 1997 and (v) 1998. [39628]
    21
    Dr. Reid
    The establishment and actual strength of the Royal Naval Reserve for each year since 1994 are shown in the following table:

    Establishment

    Actual strength

    1 April 1994

    3,500

    3,566

    1 April 1995

    3,500

    2,808

    1 April 1996

    3,500

    2,632

    1 April 1997

    3,500

    2,671

    1 April 1998

    3,500

    2,838

    Mr. Key
    To ask the Secretary of State for Defence what was the strength in(a) April 1997 and (b) April 1998 of the RAuxAF Air Transportable Surgical Squadron at RAF Leuchars. [39624]

    Dr. Reid
    The RAuxAF Air Transportable Surgical Squadron which formed on 1 April 1997 had on 1 April 1998 a strength of 39 personnel which includes three regular members of the RAF.

    Mr. Key
    To ask the Secretary of State for Defence if he will make a statement on trials being conducted on the feasibility of recruiting and training volunteer reservist aircrew for Tornado F3 fighter aircraft. [39622]

    Dr. Reid
    The trial into the feasibility of recruiting and training volunteer reservist aircrew for Tornado F3 aircraft is under way, with two pilots and one navigator currently undergoing refresher training.

    Mr. Key
    To ask the Secretary of State for Defence how many Royal Auxiliary Air Force aircrew have been recruited to fly Puma helicopters in each month since February; and if he will make a statement. [39621]

    Dr. Reid
    Since February 1997 no Royal Auxiliary Air Force aircrew have been recruited to fly Puma helicopters, although one pilot who was part of the earlier trial on the Wessex helicopter is currently undergoing Puma simulator training. Three further pilots are to be recruited by September this year, and two further applications are pending.

    Chemical Defence Programme
    Mr. Sedgemore
    To ask the Secretary of State for Defence if the United Kingdom chemical defence programme is in compliance with the terms of the Chemical Weapons Convention; and if he will make a statement. [40119]

    Dr. Reid
    The Chemical Weapons Convention, with which the United Kingdom is fully compliant, permits activities which protect against the use of chemical weapons. The UK chemical defence programme has been constructed to meet that need. In order to re-emphasise our commitment to openness, a copy of the 1997 summary outlining the UK chemical defence programme, which has been forwarded to the Organisation for the Prohibition of Chemical Weapons in the Hague, has been placed in the library of the House.

    Astra Group
    Mr. Browne
    To ask the Secretary of State for Defence if he will make a statement on the quantity and content of files relating to the Astra Group taken by Ministry of Defence Police from RAF Weathersfield and returned to 22
    the Receiver subsequent to the conclusion of the Scott Inquiry; and what assessment the Government have made of the relevance of this material to the conclusions of the Scott Inquiry. [38780]

    Mr. Spellar
    [holding answer 20 April 1998]: MOD Police Fraud Squad Officers seized documentation, between 1990 and 1992, from the Astra group of companies during the course of an investigation into corruption involving those companies. All the seized documentation that belonged to the Astra group of companies was returned to their Receivers in June 1993 and June 1995.

    Documentation held by the Astra Group's Receivers was examined by Sir Richard Scott's Inquiry and is catalogued at Appendix A Part C of the Inquiry Report; which is available in the Library of the House. Sir Richard Scott dealt with the relevance of the documentation to his Inquiry at paragraph D7.59 of his Report.

    Mr. Browne
    To ask the Secretary of State for Defence if he will take steps to ensure that files relating to the Astra Group taken by Ministry of Defence Police from RAF Weathersfield and returned to the Receiver subsequent to the conclusion of the Scott Inquiry are made available for scrutiny by interested parties. [38781]

    Mr. Spellar
    [holding answer 20 April 1998]: MOD Police Fraud Squad Officers seized documentation, between 1990 and 1992, from the Astra group of companies during the course of an investigation into corruption involving those companies. All the seized documentation that belonged to the Astra group of companies was returned to their Receivers in June 1993 and June 1995.

    The availability of that documentation for scrutiny is a matter for the Receiver.

    Gulf War Syndrome
    Mr. Matthew Taylor
    To ask the Secretary of State for Defence when the Chemical and Biological Defence Establishment at Porton Down drew up its strategy and proposed work programme for its research into Gulf War Syndrome; if this document has been approved by his Department; and if he will place a copy of this document in the Library. [38929]

    Dr. Reid
    Outline proposals were drawn up at MOD's request by CBD Porton Down in May—July 1997 for a research programme into the possible health effects of the combination of vaccines and tablets given to troops in the Gulf to protect them against the threat of biological and chemical warfare. The proposals were described in the policy statement "Gulf Veterans Illnesses: A New Beginning" published on 14 July 1997.

    The proposals were subsequently developed into a programme document and detailed protocols which were submitted to an Independent Panel established to oversee the programme, prior to its first meeting on 18 December 1997. Some modifications have been made to the research proposals in the light of advice received from the Panel and further advice is expected in due course on other aspects of the programme. The programme documentation is, therefore, evolving. Our intention is to agree with the

    23
    Panel a document summarising the revised programme and to place a copy in the Library of the House as soon as this has been done.

    C-17 Aircraft
    Mr. Hoyle
    To ask the Secretary of State for Defence if he will make a statement on the cost of the C-17 aircraft; what tendering rules have been drawn up for the C-17; and what assessment he has made of the benefits to British industry of the project. [39565]

    Mr. Spellar
    I refer my hon. Friend to the answers I gave on 5 November 1997,Official Report, column 255 and 19 January 1998, Official Report, column 415. We are still considering with partners how a competition involving other aircraft might be organised. I can assure my hon. Friend that any decision on future airlift will be subject to normal procurement rules and will take account of industrial issues as well as other relevant factors.

    Mr. Stephen Kock
    Mr. Campbell-Savours
    To ask the Secretary of State for Defence what contact Mr. Stephen Kock had with DESO between 1985 and 1991. [38862]

    Mr. Spellar
    [holding answer 20 April 1998]: DESO may have had contact with Mr. Kock during this period in the course of its normal function of providing advice and support for defence exporters. However, DESO is not aware of any record of these contacts.

    Challenger II
    Ann Clwyd
    To ask the Secretary of State for Defence what estimate he has made of the current expected cost to completion of the Challenger II programme and the change which represents in real terms over the original estimated cost of the programme. [39269]

    Mr. Spellar
    The current estimate of the cost of completion of the Challenger II programme is £2,156 million, compared with the original estimated cost of £2,162 million, both at 1996–97 prices. A detailed breakdown of these figures is contained in Appendix 1 of "Major Projects Report 1996", a copy of which is in the Library of the House.

    Territorial Army
    Mr. Blunt
    To ask the Secretary of State for Defence how many TA centres are also used by the cadet forces. [39498]

    Dr. Reid
    As at 1 April 1998, there were 376 TA Centres that are also used by the cadet forces. I have arranged for a detailed list to be placed in the Library of the House.

    Mr. Key
    To ask the Secretary of State for Defence what evidence he has obtained of the effectiveness of the fifth year rate of bounty in improving the rate of turnover in the Territorial Army. [39627]

    Dr. Reid
    The Fifth year bounty for the Territorial Army was introduced in April 1996 and turnover figures since then are available only for the year 1997. It is too early to draw any meaningful conclusions on the impact of this bounty on retention.

    Hercules Squadrons
    Mr. Key
    To ask the Secretary of State for Defence how many Royal Auxiliary Air Force aircrew for Hercules squadrons have been recruited in each month since February 1997; and if he will make a statement. [39620]

    Dr. Reid
    30 reservist aircrew have so far been recruited for the Hercules aircraft since February 1997 as follows:

    Hercules reserve aircrew recruited since February 1997

    Year

    Month

    Number

    1997

    February

    0

    March

    0

    April

    0

    May

    8

    June

    1

    July

    3

    August

    2

    September

    2

    October

    3

    November

    5

    December

    2

    1998

    January

    1

    February

    1

    March

    1

    April

    1

    Air Refuelling Tanker Fleet
    Mr. Hoyle
    To ask the Secretary of State for Defence if he will make a statement on the date for replacement of the air refuelling tanker fleet. [39771]

    Mr. Spellar
    Plans to replace the RAF's air refuelling tanker fleet are at an early stage. Current planning assumptions, however, are that we will start to replace the fleet early next century.

  EDUCATION AND EMPLOYMENT

    Sick Children
    M
    Mr. Burstow: To ask the Secretary of State for Education and Employment what guidance is issued by his Department to local education authorities concerning the management of children with ME/CFS. [39864]

    Ms Estelle Morris
    Guidance on good practice in arranging provision for sick children is contained in DfEE Circular 12/94, "The Education of Sick Children". Circular 14/96, "Supporting Pupils with Medical Needs in School", sets out schools' legal responsibilities for pupils with medical needs. Good practice guidance was also made available in October 1996 to help schools put policies and procedures in place.

    New Deal (Chesham and Amersham)
    Mrs. Gillan
    To ask the Secretary of State for Education and Employment how many people are eligible in Chesham and Amersham for the New Deal. [39893]

    Mr. Andrew Smith
    I have placed in the Library a list of the client planning assumptions for each New Deal unit of delivery which the Employment Service is using to plan provision for young unemployed people aged 18–24.
    25
    The table shows that the planning assumption for the Slough unit of delivery, which includes the Chesham and Amersham constituency, is that 1,042 young people could be eligible to join the New Deal in 1998–99.

    Mrs. Gillan
    To ask the Secretary of State for Education and Employment how many companies in Chesham and Amersham have signed up for the New Deal. [39904]

    Mr. Andrew Smith
    Since the national launch of New Deal for 18–24 year olds on 6 April, three companies in the Chesham and Amersham constituency have signed formal agreements for the employment option. There has been positive interest from other employers in the area who are expected to sign up for New Deal shortly.

    Young unemployed people in the constituency will also have New Deal employment opportunities through local branches of companies which have signed up to New Deal at the national level and also through vacancies notified at the local Jobcentres. Ten employers have currently signed Employers Agreements at Aylesbury Jobcentre and 14 at High Wycombe Jobcentre. Across the Slough unit of delivery, which includes the hon. Member's constituency, 65 firms have signed up.

    Child Care
    Fiona Mactaggart
    To ask the Secretary of State for Education and Employment what plans he has for improved child care for school-aged children during half-term and school holiday breaks. [38492]

    Mr. Alan Howarth
    Our national child care strategy will help parents, especially women, to balance work and family life. The aim is to have a range of good quality, affordable child care provision in every neighbourhood, meeting the year-round needs of children and parents. More than £300 million from public funds and from the New Opportunities Fund will be invested in developing child care over the next five years.

  TRADE AND INDUSTRY

    Offshore Wind Generation
    Mr. Boswell
    To ask the President of the Board of Trade what plans she has to introduce a unified consent system for offshore wind generation installations. [39587]

    Mr. Battle
    Section 36 of the Electricity Act 1989 provides the legislative basis for an existing system for the construction, extension and operation of electricity generating stations exceeding 50 Megawatts of installed capacity. Offshore wind energy stations exceeding 50 Megawatts of installed capacity are embraced by these arrangements and separate arrangements exist under the Coastal Protection, Food and Environmental Protection, and Transport and Works Acts for offshore wind energy generating stations which do not exceed 50 Megawatts. I am currently considering representations I have received from the British Wind Energy Association on these arrangements.
    26

    Parental Leave
    Mr. Cohen
    To ask the President of the Board of Trade what plans she has in respect of increasing the provision of parental leave. [38511]

    Mr. Ian McCartney
    The Government are committed to implementing the EC Parental Leave Directive by December 1999. The Directive will provide employees, both mothers and fathers, with a basic entitlement to three months unpaid leave on grounds of the birth or adoption of a child. It will also provide employees with the right to time off for urgent family reasons. We intend to consult fully on how we implement the Directive, in particular on the matters on which it provides options and flexibilities.

    Electronic Commerce
    Dr. Ladyman
    To ask the President of the Board of Trade how the Government intend to encourage electronic commerce; and if she will make a statement. [40083]

    Mrs. Roche
    The Information Age strategy launched by the Prime Minister on 16 April 1998 demonstrates the Government' s commitment to electronic commerce. Electronic commerce is crucial to the future prosperity of our economy and to the competitive position of our industries, and the UK is well placed to play a leading role. Building on the success of the Programme for Business, the Government are now putting in place the policy and legal framework in which electronic commerce can flourish. From schools to high finance in the City the Government are committed to ensuring everyone benefits from advanced electronic communications.

    It is also important to make electronic commerce more secure. Users cannot afford to let the information they transmit across the Internet (or any other network) be compromised. They must have confidence that both the integrity and confidentiality of their information will be protected. At the same time, users must be able to trust both the technologies which allow such security and the commercial organisations providing it. To that end, I am announcing today proposals for legislation to introduce voluntary licensing arrangements for bodies offering cryptographic services to the public to ensure that minimum standards of quality and service are met. They will apply to both Certification Authorities (providing electronic signature services) and other bodies providing encryption services. The arrangements will set minimum technical and competence standards for bodies that wish to seek licences. The legislation will also enable users to place greater reliance on digital signatures, through a presumption of legal recognition for those signatures generated by licensed Certification Authorities. Fuller details of this policy are set out in a Statement which is being lodged in the Libraries of both Houses.

    It is not, however, in the interests of business or the public for criminals and terrorists to be able to exploit these new technologies to disguise or conceal their activities. To meet these concerns, the Government will also introduce legislation making provision for law enforcement agencies to gain legal access, under a properly authorised warrant and on a case by case basis, to encryption keys or other information protecting the secrecy of stored or transmitted information. The purpose

    27
    of these new powers will be to maintain the effectiveness of the existing legislation designed to protect the public from crime and terrorism.

    Defence Exports
    Ms Drown
    To ask the President of the Board of Trade what amount of export credits for each of the years between 1994 and 1997 was granted for defence-related business with(a) India, (b) Indonesia, (c) Jordan, (d) Kenya, (e) Malaysia, (f) Nigeria, (g) Pakistan, (h) Saudi Arabia, (i) Thailand and (j) Turkey. [39665]

    Mrs. Beckett
    From information readily available, the figures requested are as follows:

    £ million

    1994

    1995

    1996

    1997

    India

    0

    0

    0

    0

    Indonesia

    114

    412

    143

    9

    Jordan

    0

    0

    0

    0

    Kenya

    0

    0

    0

    0

    Malaysia

    0

    0

    0

    0

    Nigeria

    0

    0

    0

    0

    Pakistan

    7

    0

    0

    0

    Saudi Arabia

    225

    225

    225

    225

    Thailand

    22

    0

    0

    25

    Turkey

    90

    265

    2

    36

    These figures include all ECGD-covered business with defence buyers, including the sale of non-lethal equipment.

    Regional Development Funding
    Mrs. Ellman
    To ask the President of the Board of Trade what is the allocation of Objective 1 Funding per head in Merseyside for the current funding period; and what is the average figure for all European Objective 1 areas. [38989]

    Mrs. Beckett
    Structural Funds allocations per head to Merseyside for the period 1994–99 amount to some 615 ecu (in 1998 prices), £410 using current exchange rates. The equivalent figure for all European Objective 1 areas is 1,170 ecu (£780).

    European Business Round Table
    Mr. Mitchell
    To ask the President of the Board of Trade what recent representations she has received from the European Business Round Table. [39327]

    Mrs. Beckett
    None. But the Chairman of the ERT has been invited to a dinner I am hosting in Brussels on 6 May for EU Industry Ministers and representatives of EU Industry to discuss competitiveness. In addition, my noble Friend Lord Simon, the Minister for Trade and Competitiveness in Europe, will be speaking at their colloquium on Innovation and Competitiveness.

    Grey Cloth Imports
    Mr. Mitchell
    To ask the President of the Board of Trade what representations she has received about the duty imposed by the European Commission on grey cloth imports; what steps she will take to enforce this duty; and what consultations she has had with the Commission on this matter. [39320]
    28
    Mrs. Beckett
    I have received a number of representations from the UK textile industry and others about the provisional anti-dumping duty that the Commission, against the wishes of a clear majority of member States, has decided to impose on imports of grey cloth. When consulted by the Commission, we made clear our firm opposition to such a step, which we believe to be against the interests of both the Community textile industry and EU consumers and will cost jobs. Collection of the duty is a matter for HM Customs and Excise.

    Overseas Trade Board
    Mr. Sheerman
    To ask the President of the Board of Trade what contribution her Department made to the budget of the Overseas Trade Board in the last financial year. [38880]

    Mrs. Beckett
    My Department's expenditure on the British Overseas Trade Board during financial year 1997/98 was £229,000. This includes the salary of Sir Martin Laing CBE, Chairman of the BOTB, and the cost of visits both in the UK and overseas by Sir Martin and by the Vice-Chairman, HRH The Duke of Kent.

    National Engineering Laboratory
    Mr. Sheerman
    To ask the President of the Board of Trade what is the present value of her Department's contracts with the National Engineering Laboratory. [38876]

    Mr. Battle
    The Department currently has contracts with the National Engineering Laboratory which, over financial years 1998/99, 1999/2000 and 2000/01, have a total outstanding value of £10.6 million.

    Ex Gratia Payments
    Mr. Wills
    To ask the President of the Board of Trade how many ex gratia payments have been made by her Department to individuals or organisations in each of the last three years. [39425]

    Mr. Ian McCartney
    The number of ex gratia payments made by the Department of Trade and Industry is as follows:

    Financial year

    Individuals

    Organisations

    1994–95

    71

    8

    1995–96

    51

    10

    1996–97

    41

    12

    Details of payments made in financial year 1997–98 will be made available on publication of the Department's Appropriation Accounts in the autumn.

    Uniformed Police
    Mr. Baker
    To ask the President of the Council what is the establishment of uniformed police officers assigned to Parliament; and what was the cost of this for 1997–98. [39728]
    29
    Mrs. Ann Taylor
    It is not the practice to state the numerical strength of the Parliamentary Security Force. However, the security costs for the House of Commons for the year 1997–98 were £12.64 million.

    Opposition Parties (Benefits)
    Mr. Tyler
    To ask the President of the Council if she will list the benefits and the monetary value of benefits granted to each opposition party, including details for both Houses of Parliament and both Short Money funding and other allocations, with special reference to(a) salaries of the Official Opposition Leader and whips, (b) salaries and costs of civil servants attached to the Official Opposition Whips' Office, (c) the provision of a car and driver to the Leader of the Opposition and (d) the supply of newspapers and other services to the Official Opposition Whips' Office for (i) 1996–97, (ii) 1997–98 and (iii) 1998–99. [38950]

    Mrs. Ann Taylor
    [pursuant to the reply, 24 April 1998, c. 725]: The financial assistance to Opposition Parties in the House of Lords are as follows:

    £

    £

    1996–97

    Labour

    50,000

    Liberal Democrats

    15,000

    1997–98

    Conservative

    102,600

    Liberal Democrats

    30,780

    1998–99

    Conservative

    106,191

    Liberal Democrats

    31,857

    Pesticide Residues
    Mr. Ben Chapman
    To ask the Minister of Agriculture, Fisheries and Food if the review of the arrangements for reporting surveys on pesticide residues in food has been completed; and if he will make a statement. [40011]

    Mr. Rooker
    The Government are committed to informing the public about all food safety matters. Following the changes announced last year, and the new arrangements announced for veterinary drug surveys on 6 April 1998, I have now agreed to further improvements in the reporting of surveillance results for pesticide residues surveys. To continue to improve openness and information to consumers, the brand names of products tested in future pesticide residue surveillance exercises will, subject to some minor exceptions, be published on a regular basis.

    The UK has in place a pesticide residues surveillance programme to fulfil its Community obligations to monitor pesticide residues in fruit and vegetables, cereals and products of animal origin. This programme is undertaken each year under the auspices of the Working Party on Pesticide Residues. The results are published in the Working Party's annual report although any results of public interest are published earlier together with any necessary advice to consumers.

    The publication of brand names will require some restructuring of the pesticides surveillance programme to ensure that surveys are representative of particular produce on the market. The new arrangements will, therefore, apply for surveys conducted from 1998 onwards. As with the other programmes there will be
    30
    certain minor exceptions, such as surveys whose sample are pooled, where publicising brand information would be inappropriate.

    Planned surveys for residues of pesticides will continue to be announced in advance, as has been practice for some years. However, the sheer scale of this programme precludes releasing the brands to be sampled in advance.

    We are committed to giving consumers the maximum possible information on the presence of pesticide residues in food and will ensure that this is provided with appropriate advice on the public health significance of any results. Of course, we will make every effort to ensure the fairness of any tests and not seek to select one manufacturer or source over another. I believe the new arrangements will allow consumers to make a more informed choice about the food that they buy.

    Organophosphate Pesticides
    Mr. Tyler
    To ask the Minister of Agriculture, Fisheries and Food if all the proposals relating to the use of organophosphate pesticides, announced by the Minister of Agriculture, Fisheries and Food on 17 February 1997 have been implemented. [39651]

    Mr. Rooker
    Following a review of the Certificate of Competence Scheme for the purchase of organophosphorus (OP) sheep dips in February 1997, the Veterinary Products Committee (VPC) concluded that the marketing of OP sheep dips should continue. A revised guidance leaflet, AS 29 Sheep dipping, produced jointly with the Health and Safety Executive and the environment agencies, emphasises the importance of the Certificate of Competence Scheme for the users of dips. The leaflet has been sent to known sheep farmers.

    The Royal College of Veterinary Surgeons has agreed to ensure that veterinarians are aware that clients hold the necessary certificate and will amend the Guide to Professional Conduct when next reprinting it.

    There is no change in the legal classification of sheep dips, which continue to be available from pharmacists and registered merchants.

    The VPC is currently reviewing the labelling of sheep dips with a view to simplifying labels where possible.

    The Department of the Environment, Transport and the Regions has circulated proposals for new Groundwater Regulations which would require the environment agencies to be notified of sheep dipping activities and would apply new controls on disposal of spent dip.

    Research is underway to look at the nature and mechanisms of the toxicity of OPs. The Health and Safety Executive is conducting work on the measurement of urinary metabolites and on new forms of protective clothing. We are awaiting a report from a working party of the Royal College of Physicians of London and the Royal Colleges of Psychiatrists which will include advice on how clinical studies might be undertaken.

    A review by the VPC of non-OP sheep dips has been completed and the results were published with the Government's response on 29 January 1998. Legislation, which comes into effect on 6 May, will apply the certification Scheme to the purchase of all sheep dips from 31 December 1998.
    31
    Mr. Tyler
    To ask the Minister of Agriculture, Fisheries and Food when he expects to publish the report of the inter-departmental committee on organophosphate pesticides. [39653]

    Mr. Rooker
    The report of the interdepartmental committee of officials on organophosphates (OPs) has been submitted to Ministers in the group chaired by my right hon. Friend. It will be published when Ministers have considered its recommendations and reached their conclusions.

    Beef Sales (Retail Profits)
    Mr. Tyler
    To ask the Minister of Agriculture, Fisheries and Food what representations he has received following the March 1998 inquiry by the BBC Radio 4 programme, "Farming Today", into retail profits on beef sales; and if he will make a statement. [39652]

    Mr. Rooker
    Although we have had representations from beef producers, who consider that the fall in producer prices has not been reflected in retail prices for beef, no one has raised specific concerns about the inquiry by the BBC Radio 4 programme, "Farming Today". We will continue to monitor movements in beef producer prices and in meat prices at retail level.

    Russian Fish Imports
    Mr. Mitchell
    To ask the Minister of Agriculture, Fisheries and Food what representations he has received in respect of Denmark's policy towards imports of Russian fish from unregistered freezer trawlers; and what is his Department's policy towards such imports. [39319]

    Mr. Rooker
    I have received a small number of representations alleging that Denmark has allowed imports of Russian fish from unregistered freezer trawlers in contravention of a European Commission Decision. In view of this substantiated allegation, uncertainty over the operation of the Decision by other Member States, and following discussions with the European Commission, we have recently decided to allow imports of Russian fish from unregistered freezer trawlers. This has been done as an interim measure, with enhanced checks at UK ports, until the European Commission can propose a satisfactory solution.

  WALES

    Beef Exports
    Mr. Barry Jones
    To ask the Secretary of State for Wales when he expects the restriction on the export of Welsh beef to be lifted; and if he will make a statement. [39278]

    Mr. Win Griffiths
    We are doing everything possible to bring about the resumption of our exports from the UK as a whole. On 16 March the Agriculture Council adopted a Decision which would lift the export ban from beef from export certified herds in Northern Ireland.

    The Export Certified Herd Scheme is available only to animals whose history can be traced by computer—so it is only applicable in Northern Ireland initially, until the GB Cattle tracing system is fully functional.
    32
    Proposals for a UK Date Based Export Scheme for the export of animals born after 1 August 1996 (when we believe the feed risk was eliminated from the supply chain) have been considered by the Scientific Steering Committee (SSC), which gave a positive Opinion. The SSC commented on our formal response to their initial Opinion in a further Opinion on 20 February. We await reaction from the Commission to the UK response and to the SSC's further Opinion

    Council House Sales Receipts
    Mr. Barry Jones
    To ask the Secretary of State for Wales what is the extra amount of council house sales receipts made available for the current and the next financial year; and if he will make a statement. [39279]

    Mr. Win Griffiths
    Provision of £33.38 million has been made under the Capital Receipts Initiative this year. Capital expenditure provision in future years is being considered in the Comprehensive Spending Review.

    Bovine TB
    Mr. Barry Jones
    To ask the Secretary of State for Wales (1) how many cases of bovine TB were recorded in Wales in each of the last three years; and if he will make a statement; [39434]

    (2) if he will make a statement on bovine TB in Wales. [39433]

    Mr. Win Griffiths
    The number of confirmed outbreaks of bovine TB in Wales is as follows:

    1995: 102

    1996: 102

    1997: 62.

    The Government are minded to accept Professor Krebs' recommendation. Implementing this report will require the Government, the farming industry and those interested in badger conservation to work together to build a better scientific basis for policy in this area.

    NHS Bureaucracy
    Mr. Barry Jones
    To ask the Secretary of State for Wales what estimate he has made of the savings to date from his policy of reducing bureaucracy in the NHS; and if he will make a statement. [39438]

    Mr. Win Griffiths
    I refer my hon. Friend to the answer I gave him on 17 December 1997,Official Report, column 209. I can confirm that I expect to be able to establish what savings have been made when the audited accounts of health authorities and trusts for 1997–98 are available in August.

    Chernobyl Accident
    Mr. Llew Smith
    To ask the Secretary of State for Wales what estimate he has made of the cost to(a) Welsh farmers and (b) his Department of the radioactive fall-out from the Chernobyl accident; and what are the figures for each year since the accident for the area determined as restricted in Wales as a result of the accident. [39674]

    Mr. Win Griffiths
    The main economic effect of the Chernobyl accident in 1986 has been on the sheep farming industry in North Wales. The direct cost to Welsh farmers,
    33
    measured in terms of disruption to their enterprises and for which compensation has been paid since 1986, is over £8.9 million. Information on the specific costs to the Welsh Office arising from the Chernobyl accident is not available because staff and effort allocated to this work varies according to the circumstances.

    Figures for each year of the area determined as restricted in Wales as a consequence of the accident are as follows:

    Year

    Restricted area (square kilometres)

    1986

    4,100

    October 1986—December 1990

    848

    1991

    839

    1992

    832

    1993

    734

    1994

    677

    1995

    647

    1996

    580

    1997

    580

    1998

    530

    Millennium Compliance
    Mrs. Gillan
    To ask the Secretary of State for Wales if the computer systems used by the emergency services in Wales will be millennium compliant by 31 December 1998. [39895]

    Mr. Win Griffiths
    I refer the hon. Member to the answer given to her today by my right hon. Friend the Home Secretary who has responsibility for some of the emergency services on an England and Wales basis. I will reply on the NHS Ambulance Trust and acute trusts in Wales.

    The Ambulance Trust and acute trusts providing accident and emergency services, in line with other NHS organisations, are making every effort to ensure their computer systems are millennium compliant by 31 December 1998. In particular, ambulance command and control systems have been given a very high priority in determining their compliance status and in undertaking the necessary replacements or upgrades. However, in some cases, it may not be possible to complete the latter until the first quarter of 1999.

    Quarries
    Dr. Marek
    To ask the Secretary of State for Wales what plans he has to reform planning law relating to quarries and quarrying. [39357]

    Mr. Win Griffiths
    My right hon. Friend and I currently have no plans to reform planning law relating to quarries and quarrying in Wales.

  INTERNATIONAL DEVELOPMENT

    Global Environment Conference
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development who will represent her 34
    Department at the Global Environment Conference in New Delhi; what new initiatives will be proposed; and if she will make a statement. [39577]

    Mr. Foulkes
    The first Global Environment Facility (GEF) Assembly took place from 1–3 April in New Delhi. It was preceded by a meeting of the GEF Council which formally concluded the second replenishment of the Facility of US dollars 2.75 billion and endorsed policy recommendations to improve further GEF activities.

    The policy recommendations cover: improved country ownership of GEF financed projects; better mainstreaming of global environmental objectives into the regular policies and programmes of the three Implementing Agencies, UNEP, UNDP and the World Bank; better involvement of the private sector and partnerships with them; enhanced monitoring and evaluation and the development of performance indicators; greater participation by other international and regional organisations, including the Regional Development Banks; further clarification of the application of incremental costs, that is, the costs to achieve global, as opposed to national, environmental benefits which the GEF is designed to meet.

    The UK has committed £85.25 million to the second replenishment, being the UK's full share of the replenishment plus an additional voluntary contribution of £2 million. The UK has offered to provide a further £4.25 million during the replenishment period to help fill the replenishment funding gap of some US$70 million if other donors make additional efforts to meet their shares. The UK is the fifth largest contributor to the Facility.

    DFID was represented at the Assembly by the head of Environment Policy Department (EPD) and other officials from EPD, the UK Mission to the World Bank and DFID's office in India. The British High Commissioner and a DETR official also participated.

    Representatives from 119 of the GEF's 164 countries were represented in the Assembly which was opened by the Indian Prime Minister and concluded with the New Delhi Statement. This reaffirmed the Facility's role as the multilateral funding mechanism dedicated to promoting global environmental protection and actions to improve the Facility's operations. Copies of the New Delhi Statement are being placed in the Libraries of the House.

    Departmental Management
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what operational and management improvements her Department will implement during the current financial year. [39749]

    Mr. Foulkes
    On the operational and aid management side, improvements will include: refocusing bilateral and multilateral strategies on White Paper objectives; further promotion of consistency of policies affecting development; improved aid management arrangements for Asia, Pacific and Caribbean programmes; enhancement of our systems for performance assessments; development of closer partnerships with the private sector and not for profit organisations; improvement of procedures and systems for aid delivery.

    On the personnel management side a range of initiatives will be carried forward, many of which are linked to my Department's commitment to achieve

    35
    Investor in People accreditation. These will include: action to ensure that the Department is properly staffed and trained, at home and overseas, to meet the objectives set out in the White Paper; the introduction of management development programmes for all senior civil service members and other staff groups; comprehensive induction training; improvements to promotion systems; initiatives to enhance communication within the Department; ongoing action to underline and ensure fair and equal opportunities within the Department; the transfer of certain posts to the Department's office in East Kilbride to improve staff opportunities there; action to improve the development of DFID's locally engaged staff overseas; an ongoing programme to ensure value for money, proper structures and best management practice within the Department through management and efficiency reviews.

    Sir Alastair Goodlad
    To ask the Secretary of State for International Development in which departments and development divisions of her Department the Performance Reporting Information Systems for Management will be piloted in 1998–99. [39761]

    Mr. Foulkes
    The Performance Reporting Information Systems for Management system will be piloted in West and North Africa Department in London and in the Department for International Development overseas offices for Southern and Eastern Africa, located in Pretoria and Nairobi respectively.

    Committee on Economic and Social Research Overseas
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development who are the current members of her Department's Advisory Committee on Economic and Social Research Overseas; and when were they first appointed. [39746]

    Mr. Foulkes
    The current members of the Advisory Committee on Economic and Social Research Overseas with the dates they were appointed are:

    Member

    Date of appointment

    Professor Graham Chapman

    1 October 1993

    Professor Tony Killick

    1 February 1994

    Dr. George Kolankiewicz

    15 June 1994

    Professor Pat Caplan

    1 April 1998

    Professor Anne Booth

    1 April 1998

    Professor Jan William Gunning

    1 April 1998

    Ms Caroline Harper

    1 April 1998

    Professor Athar Hussein

    1 April 1998

    Professor Carole Rakodi

    1 April 1998

    Professor David Hulme

    1 April 1998

    Dr. Frank Ellis

    1 April 1998

    Professor Anil Markandya

    1 April 1998

    Publications
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development if she will list the material issued by her Department(a) through its own publications and (b) through The Stationery Office and the parliamentary publishing programme in 1997–98. [39873]
    36
    Mr. Foulkes
    The following material was issued through the Department for International Development's (DFID) own publications programme in the financial year 1997–98:

    White Paper Summary

    Eliminating World Poverty: A Summary—24 pages.

    Versions also available in Bengali, Gujarati, Hindi, Punjabi, Urdu, Chinese.

    Country Strategies

    British aid to Ecuador: Working to improve the quality of life for Ecuadorean people—24 pages.

    Development Partners: Britain and Pakistan—14 pages.

    Support for Transition Countries: A new strategy—16 pages.

    Issues

    Developments: The International Development magazine (issue 1 first quarter 1998)—36 pages.

    UK@earth.People: Poverty and the Environment—64 pages.

    Forests Matter: The DFID approach to forests—5 pages.

    Time for Action: Reducing the dangers of pregnancy in poor societies—18 pages.

    Banking on the Poor: DFID and Microfinance—16 pages.

    Towards 2015 Together: How the UK will use its Presidency of

    the European Union to work for a fairer world—4 pages.

    Water Matters: DFID's role in water for development—5 pages.

    Participatory monitoring and evaluation guidelines: experiences in the field—St. Vincent and the Grenadines.

    Better water services in developing countries: public-private partnership—the way ahead—13 pages.

    Six monthly newsletters on Water, Energy Efficiency,

    Urbanisation, Transport and Earthworks—8 to 12 pages.

    Reports

    Gender and school achievement in the Caribbean (serial no. 21)—126 pages.

    Good practice in developing sustainable information systems—74 pages.

    Integrated Coastal Management: South Asia—95 pages.

    The Know How Fund: Annual Report 1996–97—51 pages.

    British Aid Statistics 1996–97—144 pages.

    School based understanding of human rights in four countries: a commonwealth study (serial no. 22)—62 pages.

    Girls and basic education: a cultural enquiry (serial no. 23)—160 pages.

    Investigating bilingual literacy: evidence from Malawi and Zambia (serial no. 24)—99 pages.

    Activity in environmental management in Chile: donor agencies, non-governmental organisations and research organisations—54 pages (English/Spanish).

    A guide to the regional environmental action plan for the

    Antofagasta region of Chile—56 pages English/Spanish).

    Social development policies, results and learning: experiences from European agencies—34 pages.

    Social development policies, results and learning: a multi agency review—71 pages.

    Human Rights 1998—56 pages. Issued through The Stationery Office and published jointly with the Foreign Office.

    Eliminating World Poverty: a challenge for the 21st Century (White Paper on International Development presented to Parliament by the Secretary of State for International Development by Command of Her Majesty November 1997 Cm 3789).

    DFID Departmental Report 1998–99: the Government's expenditure plans 1998–99—93 pages.

    Projects
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development if she will list those projects funded by her Department which were the subject

    Sector

    Project

    Publication

    Privatisation:

    Assistance to components of the Russian privatisation programme

    Already published

    Population:

    Kenya Population III project

    Already published

    Higher Education:

    Final Synthesis Study

    Already published

    Emergency Aid:

    Final Synthesis Study

    Already published

    Primary Education:

    Primary Education Project in Kenya

    Due for publication in June 1998

    Indonesia Active Learning and Professional Support Project

    Publication date June 1998

    Andhra Pradesh Primary Education Project

    Publication date October 1998

    Final Synthesis Study

    Publication date October 1998

    Small Enterprise Development

    British Assistance to Small Enterprises Programme in Kenya: Enterprise Education in Slovakia; Russian Agency; and Bangladesh Rural Advancement Committee

    All are due for publication around July 1998

    Police Projects

    Assistance programmes to Namibia, Indonesia and Uganda

    All are due for publication around July 1998

    Sir Alastair Goodlad
    To ask the Secretary of State for International Development how many copies of reports by her Department's Evaluating Department on Project Completion were requested by outside bodies in 1997–98. [39758]

    Mr. Foulkes
    The Evaluation Department very seldom receives external requests for individual Department for International Development Project Completion Reports, none of which is publicly available since, unlike ex post evaluation reports, they are not cleared with the recipient governments. But we do make publicly available our periodic synthesis analyses of the broad findings of the most recent batches of Project Completion Reports. In 1997–98 a total of 158 copies of our ex post evaluation reports were sent out in response to external requests.

    Sir Alastair Goodlad
    To ask the Secretary of State for International Development which projects funded by her Department will be subject to full retrospective impact evaluations in 1998–99. [39762]

    Mr. Foulkes
    We are still in the process of identifying individual projects for full retrospective impact evaluation in 1998–99 once residual work on the previous programme is complete. Initially the new work will focus predominantly on two broad themes: sustainable rural livelihoods; and the strengthening of revenue collection systems. Subsequently we shall turn our attention to three additional themes: gender; the public sector and the role of the state; and participatory approaches. Work from the previous programme due for completion and publication in 1998–99 includes the following:
    Natural Resources Research: final Synthesis Study.Small Enterprise Development: final Synthesis Study.Police Projects: final Synthesis Study.Environment: country studies covering a range of projects in India, China, Brazil, Kenya and Tanzania; and final Synthesis Study.Poverty Reduction: country studies covering a range of projects in India, Uganda, Zambia, and Mozambique; and the final Synthesis Study.38
    of full retrospective impact evaluations in 1997–98; and when she will publish the results. [39760]

    Mr. Foulkes
    Projects subject to full retrospective impact evaluations in 1997–98 included the following:

    Gender Discrimination
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development in which countries her Department launched new women's empowerment programmes in 1997–98; and at what cost. [39449]

    Mr. Foulkes
    During 1997–98 we approved 124 projects and programmes which include support to women's empowerment, spread across the broad range of developing countries where we work. New spending commitments to projects and programmes, across all sectors, which take account of women's concerns, added up to £266 million in 1997–98.

    Sir Alastair Goodlad
    To ask the Secretary of State for International Development which initiatives relating to women's empowerment her Department is supporting in the current financial year; and at what cost to public funds. [39447]

    Mr. Foulkes
    We seek to support women's empowerment across the board in our international development assistance programme. The Department for International Development expenditure commitments which include an explicit consideration of gender concerns and which seek to promote gender equality have been steadily rising, a trend which we expect to continue. During 1997–98 new funding commitments across all sectors explicitly taking account of gender concerns add up to about £266 million, representing more than 35% of total bilateral commitments for the year.

    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what mechanisms her Department will employ to evaluate its work in respect of the removal of gender discrimination in developing and transitional countries; and if she will publish such evaluations. [39448]

    Mr. Foulkes
    A major evaluation study of our work in tackling gender discrimination will be undertaken by the Department for International Development's (DFID) Evaluation Department, commencing during the course of the current financial year. A report of the evaluation will be published.
    39
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development when she will publish the study on the gender dimensions to international trade commissioned by her Department. [39451]

    Mr. Foulkes
    The study commissioned by the Department entitled "Global trade expansion and liberalisation: gender issues and impacts" was published in January this year. I will arrange for a copy to be laid in the Library of the House and for a separate copy to be sent to the right hon. Gentleman.

    Afghanistan
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what measures her Department is taking to increase access education for girls in Afghanistan. [39450]

    NGO

    Project

    1996–97

    1997–98

    Support for Afghan Education (SAFE)

    Kandahar Education Project

    £34,808

    —

    Save the Children (SCF)

    Support to Lower Primary Education, Balkh Province

    —

    £245,000 (over 2 years)

    CARE

    Community Organisation for Primary Education

    —

    £316,356 (over 2 years)

    Fresh Water Management
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development who will represent her Department at the UN's Commission on Sustainable Development meeting on freshwater management; and what new policy initiatives her Department will promote. [39453]

    Mr. Foulkes
    The UK delegation to the Commission on Sustainable Development (CSD) will be led by my colleague the Minister for the Environment. He will be accompanied by the Department for International Development's (DFID) Chief Natural Resources Adviser who will provide support in relation to DFID issues.

    A key theme of this year's session of the CSD, which began on 20 April in New York, is freshwater.

    The UK will promote a clear objective of securing access to safe drinking water and adequate sanitation for all, the reduction of water related diseases and greater food security through sustainable management of water contributing to the elimination of poverty.

    We are supporting this objective by increasing our assistance in the water sector and ensuring that this support is used more effectively. To this end, we are continuing to promote the importance of meeting international targets in this area and the need to develop appropriate indicators to monitor progress.

    Official Development Assistance can meet part but not all of the funding requirements. It can be focused on priority areas of meeting basic human needs and building capacity. It can also be used to help developing states to establish appropriate policy frameworks and to mobilise finance from other sources.
    40
    Mr. Foulkes
    We remain seriously concerned about human rights in Afghanistan, especially the rights of women and girls. The UK continues to advocate respect for these rights in the relevant international fora and in direct contacts with the Taliban and other groups inside Afghanistan.

    At the start of our EU Presidency the UK proposed and gained agreement for a new Common Position on Afghanistan. The Common Position commits the EU to work for the protection and promotion of equal rights for men and women in Afghanistan, including access to education and health facilities. In addition the United Nations Strategic Framework for Afghanistan, which has the full support of the UK, includes as one of its four main strategies the protection and advancement of human rights, with particular emphasis on gender issues.

    DFID directly supports a number of UK NGOs who provide education services within Afghanistan. The projects are aimed at both boys and girls but pay particular attention to providing education for female students. The details are:

    We aim to encourage development of a broad range of partnerships, in particular with the private sector, which can better generate and manage the additional funds required. We recognise the importance of recovering all the costs for water systems to be viable and sustainable, but this must be linked to transparent and well targeted subsidies to protect the poorest who cannot pay full costs. This can lead to the mobilisation of resources and greater access to basic water and sanitation services for poor people—essential if we are to meet goals of universal access to these services.

    Commonwealth of Independent States
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what assistance her Department is giving to the International Committee of the Red Cross in the Commonwealth of Independent States to disseminate international humanitarian law through local institutions; and what will be the cost to public funds of such assistance. [39446]

    Mr. Foulkes
    Since April 1996, we have supported the International Committee of the Red Cross (ICRC) in its development of international humanitarian law (IHL) materials appropriate for use in the Commonwealth of Independent States (CIS) and the promotion of IHL courses within public and private higher academic institutions in the Russian Federation and the CIS. The activities are continuing and has involved a commitment to date of £127,000.

    We also provided a contribution of £15 million to the ICRC in February 1998, of which £4 million was provided specifically for the dissemination of humanitarian law within the ICRC's global programmes.

    Children and Armed Conflict
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what financial support her Department will give to the UN Secretary General's Special Representative on Children and Armed Conflict; and in which countries it will work with him. [39452]

    Mr. Foulkes
    We provided £200,000 in January 1998 to enable the UN Secretary General's Special Representative on Children and Armed Conflict to begin his important work of co-ordinating international action to ensure the protection, healing and rehabilitation of war affected children. We will host a ministerial meeting in London on 23 June to give exposure to Mr. Otunnu's work programme and priorities to our European partners and NGOs. We will also explore opportunities for working together in countries which are particularly affected by children serving as soldiers, such as Sierra Leone and Liberia.

    Human Rights
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what discussions she has held with her EC counterparts about regulations to guide the use of development funds for human rights promotion and protection; what will be the status of those regulations; and if she will make a statement. [39455]

    Mr. Foulkes
    Two regulations governing the use of development funds for human rights promotion and protection are currently under discussion at working group level in the Council. Once agreed, the Regulations will provide a legal base and policy framework for projects financed from relevant EC external assistance budget lines. We have been pressing for the inclusion of references to social and economic rights, as well as civil and political ones, in the negotiations.

    Sir John Stanley
    To ask the Secretary of State for International Development which aspects of the Government's human rights policy are her Department's responsibility. [39679]

    Mr. Foulkes
    The Department for International Development's contribution to the UK Government's objective of achieving human rights for all will be to focus on the rights which are essential for eliminating poverty and for achieving sustainable livelihoods and dignity for disadvantages people in poorer countries. This encompasses economic, social, cultural, civil and political rights of poor and disadvantaged peoples in poorer countries.

    Regional Organisations
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what steps her Department is taking to strengthen the conflict-management capacity of regional organisations. [39445]

    Mr. Foulkes
    We are committed to supporting the creation of a stronger peace-building and conflict management capacity for regional organisations and are working within the European Union (EU) and United Nations to achieve this. The EU agreed a Common Position on Conflict Prevention and Resolution in Africa in 1997, and is pursuing practical proposals with the Organisation for African Unity (OAU) and working to 42
    enhance its dialogue with other sub-regional organisations such as the Intergovernmental Authority for Development (IGAD) and the Economic Community of West African States (ECOWAS).

    In 1998 the Department is providing financial support for a sub-regional seminar for Central Africa on practical disarmament, the Mali Government's initiative of a West African moratorium on the import, export and manufacture of light weapons, and a conference in South Africa to develop national, regional and international measures to address illicit trafficking in conventional arms. We will continue to look for ways to provide practical support to regional conflict management initiatives.

    Good Governance Assessment Framework
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development if she will publish the Good Governance Assessment Framework. [39454]

    Mr. Foulkes
    I will place a copy in the Library of the House. Copies will continue to be available through the Department for International Development. The Framework should be regarded as work in progress and is being adapted to the Government's priorities.

    Open Government
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what was the cost to her Department of meeting the 16 requests for information under the Open Government Code of Practice in 1997. [39748]

    Mr. Foulkes
    The cost of meeting the requests received by the Department for International Development in 1997 under the Open Government Code of Practice is estimated at £630. This is made up principally of staff time.

    Departmental Reviews
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what market tests and efficiency reviews she plans for her Department in the current financial year. [39750]

    Mr. Foulkes
    The Department's programme of efficiency reviews for 1998–99 comprises: training services; personnel services; aid management in Asia, the Caribbean and the Pacific. There are no plans for market tests.

    Policy Information Marker System
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what changes to the policy information marker system her Department is putting into effect in the current financial year. [39759]

    Mr. Foulkes
    The Policy Information Marker System (PIMS) has been used since 1993 to track the targeting of bilateral commitments and expenditure on priority policy objectives of the aid programme.

    PIMS was reviewed at the end of 1997 following the publication of the White Paper on International Development. It was agreed that the system needed to be revised to reflect better the Department for International Development's (DFID) new agenda and Statement of

    43
    Purpose. This has been achieved through the introduction of a three-tiered approach whereby projects and programmes are marked against DFID's aim of poverty elimination (Poverty Aim Marker); DFID's three new Objectives (Policy Objective Marker); sub-elements of the Objectives, other policy areas and international reporting requirements (new PIMS markers of which there are now 33).

    The former Direct Assistance to Poor People marker has been replaced by the over-arching Poverty Aim Marker (PAM) to address the aim in DFID's Statement of Purpose, considering both "direct" and "indirect" means of assisting poverty elimination. The PAM has three categories:
    Enabling—actions which are necessary to establish or strengthen the preconditions for poverty reduction and elimination Inclusive—broad based actions which will improve conditions and services generally, and also address issues of equity and barriers to participation of poor people Focused—actions which will bring benefits predominantly to poor people and specifically improve their conditions and remove barriers to their participation.
    The Policy Objective Marker allows commitments and expenditure to be scored against the ONE Objective which they primarily target such that they sum to 100 per cent. of the total.

    The PIMS marker set has been extended to cover all of the White Paper sub-objectives (20 markers), other important and cross-cutting policy areas (8 markers) and the Rio reporting requirements (5 markers).

    The new system came into effect on 1 April 1998.

    Further details and full guidance on using the system are given in the PIMS Pink Book, a copy of which will be sent to the right hon. Gentleman.

    Investment
    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what representations she plans to make to the OECD in connection with its forthcoming review of the OECD Guidelines on Multinational Investment; and if she will make a statement. [39342]

    Mr. Foulkes
    The OECD has asked member countries to put forward initial thoughts on issues that might be addressed in the review of the Guidelines. The Government's initial thoughts were submitted to the OECD in December. Our key areas of interest relate to the core labour standards, environmental protection and application of the Guidelines beyond OECD member countries. In particular, the Department is currently looking at the experience of voluntary codes of conduct. The Government are working on a more detailed contribution, consulting with trade unions, business and NGOs, in readiness for the beginning of the review process in June.

    Sir Alastair Goodlad
    To ask the Secretary of State for International Development what representations she has made to the World Trade Organisation preparatory to a WTO Agreement on Investment; and if she will make a statement. [39355]
    44
    Mr. Foulkes
    The Government are pleased with the progress being made by the WTO Working Group on the relationship between trade and investment, which is looking at important issues surrounding foreign investment and existing international investment instruments and activities. We will work towards the eventual establishment of a WTO agreement on investment, and hope that through the confidence-building nature of the current discussions a consensus can be reached to begin negotiations in due course.

  MINISTER WITHOUT PORTFOLIO

    Millennium Dome
    Mr. Vaz
    To ask the Minister without Portfolio what assessment he has made of the total economic impact of the Millennium Dome on the greater Greenwich area. [37246]

    Mr. Mandelson
    I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Chorley (Mr. Hoyle) on 27 March 1998,Official Report, column 321. In addition the British Tourist Authority (BTA) have estimated £300m-500m will be spent by overseas visitors in Britain in the year 2000 as a result of the New Millennium Experience.

  SCOTLAND

    Rented Housing
    Mr. Webb
    To ask the Secretary of State for Scotland, pursuant to the answer of 27 October 1997, Official Report, column 726, on rented housing, what would be the gross cost to the public sector if all local authority rents in Scotland were to be cut by 10 per cent; and what would be the cost net of savings in housing benefits. [37199]

    Mr. Macdonald
    [holding answer 6 April 1998]: Scottish local authorities determine their rents according to local needs and circumstances. In England, guideline rents are set by the Department of the Environment, Transport and the Regions and, in certain circumstances, rental income is used to offset the cost of rent rebates. Because of these and other differences in the systems of local authority housing finance, it is not possible to give estimates for Scotland which are directly comparable with those for England given on 27 October 1997, Official Report, column 726.

    A 10 per cent. reduction in Scottish local authorities estimated rented income for 1997–98 would, however, have resulted in an estimated reduction in housing benefit in that year of around £79 million. And local authorities' housing expenditure in the same year would have been reduced by £107 million. As a result, authorities would have had this amount less to invest in repairs and maintenance and for other housing related expenditure. That, in turn, could have led to an increase in Housing Support Grant and pressure also to increase Housing Revenue Account allocations, although it is not possible to be precise about the size of such increases. The net effect on overall public expenditure cannot therefore be reliably estimated.

    Cairngorm Funicular Railway
    Mr. Randall
    To ask the Secretary of State for Scotland how much expenditure was incurred by Highlands and Islands Enterprise and Moray, Badenoch, and Strathspey Enterprise to support the Cairngorm Chairlift Company's study by Arthur Andersen and L & R Leisure of development options; and if he will ask them to publish it. [39418]

    Mr. Wilson
    The level of the financial contributions made by Highlands and Island Enterprise and by Moray Bedenoch and Strathspey Enterprise to the costs of the study referred to in the question is an operational matter for Highlands and Islands Enterprise. I will ask the Chairman of that organisation to write to the hon. Member.

    With regard to the publication of the study, I understand that it was commissioned by the Cairngorm Chairlift Company. Decisions on publication are therefore a matter for that company.

    Dental Services
    Mrs. Ballard
    To ask the Secretary of State for Scotland how many applications received for funding under the Investing in Dentistry Scotland scheme have been successful; and what was the amount of each grant. [39694]

    Mr. Galbraith
    Eight applications have been approved under the Scottish Dental Access Initiative. Three grants of £50,000, four of £25,000 and one of £4,000 have been offered.

    Local Government Finance
    Mr. Gorrie
    To ask the Secretary of State for Scotland what were the totals for Scottish councils collectively in 1998–99 and in each of the last 10 years for(a) grant-aided expenditure, (b) aggregate external finance and (c) actual expenditure, or budgeted expenditure where the actual expenditure is not yet known; and what were the totals expressed at constant prices. [38157]

    Mr. Macdonald
    [holding answer 21 April 1998]: The levels of GAE, AEF and actual spending for 1998–99 and each of the previous 10 years, where available, in cash terms are given in the table.

    £ million

    Year

    Total GAE

    Total AEF

    Total capped expenditure

    1988–89

    3,640

    3,689

    3,742

    1989–90

    3,873

    3,716

    4,126

    1990–91

    4,293

    3,937

    4,495

    1991–92

    4,792

    4,651

    4,912

    1992–93

    5,103

    5,123

    5,166

    1993–94

    5,086

    5,165

    5,133

    1994–95

    5,260

    5,272

    5,309

    1995–96

    5,318

    5,306

    5,437

    1996–97

    5,391

    5,369

    5,616

    1997–98

    5,316

    5,345

    5,579

    1998–99

    5,495

    5,366

    5,755

    46
    The same figures at constant (1997–98) prices are as follows:

    £ million

    Year

    Total GAE

    Total AEF

    Total capped expenditure

    1988–89

    5,291

    5,362

    5,439

    1989–90

    5,262

    5,049

    5,606

    1990–91

    5,400

    4,953

    5,655

    1991–92

    5,666

    5,500

    5,808

    1992–93

    5,791

    5,814

    5,863

    1993–94

    5,609

    5,696

    5,661

    1994–95

    5,715

    5,728

    5,768

    1995–96

    5,622

    5,609

    5,747

    1996–97

    5,537

    5,514

    5,768

    1997–98

    5,316

    5,345

    5,579

    1998–99

    5,340

    5,215

    5,593

    Notes:

    1. The above AEF figures are as announced and do not include any subsequent redeterminations. In particular, the 1998–99 figures for GAE and AEF do not include the additional £19 million for education authorities announced in the March Budget.

    2. No adjustments have been made for changes in local authority responsibility over the period in question apart from Note 3 below.

    3. The 1997–98 AEF figure includes £105.6 million which was paid to local authorities as a special grant (outside AEF) in respect of Strathclyde Passenger Transport. £95 million has also been included in the 1998–99 AEF figure for the same purpose.

    4. Grand Aided Expenditure (GAE) does not include expenditure on loan and leasing charges.

    5. Prior to 1991 Grant Aided Expenditure (GAE) was known as Assessments of Relative Expenditure Need.

    6. Prior to 1991–92 Aggregate External Finance (AEF) was known as Aggregate Exchequer Grant.

    7. Aggregate Exchequer Grant consisted of Rate Support Grant and Specific Grants only. The Non-Domestic Rate Income (NDRI) figures have therefore been added to these years for comparison purposes.

    8. The total capped expenditure figures represent total relevant non-housing net current expenditure (excluding loan and leasing charges). For the years 1988–89 to 1997–98 the figures are actual budgeted expenditure figures. For 1998–99 the figure is the maximum capped expenditure permitted under the Secretary of State's capping principles.

    9. The numbers in the second table have all been converted to 1997–98 prices using the latest HM Treasury's GDP deflators dated 13 March 1998.

    Nuclear Waste
    Ms Roseanna Cunningham
    To ask the Secretary of State for Scotland what discussions he has had with the Prime Minister regarding the transfer of radioactive material from Georgia to Dounreay; what is his policy on(a) public consultation and (b) public information with regard to the importing of radioactive material into Dounreay; and if he will make a statement. [39916]

    Mr. Macdonald
    The normal process of consultation by exchanges of minutes among appropriate Cabinet Ministers took place.

    Policy on public consultation and information on the importing of radioactive material into the UK is a matter for my right hon. Friend the President of the Board of Trade. I understand that in the interests of security no prior notice is given about such movements of radioactive material. However once such movements have been completed there is no such restriction. Details of this particular movement were confirmed in the answer given to my hon. Friend the Member for Dartford (Dr. Stoate) on 24 April 1998, Official Report, column 721.
    47
    A summary of all of Dounreay's activities is presented to the local liaison committee which meets twice a year. These meetings are open to the public. All activities at Dounreay are subject to strict independent regulation by the Nuclear Installations Inspectorate and the Scottish Environment Protection Agency.

    Special Advisers
    Dr. Fox
    To ask the Secretary of State for Scotland what is the total annual cost of employing special advisers in his Department. [39882]

    Mr. Dewar
    Aggregate salary costs of Special Advisers in individual Departments are not provided in order to protect the privacy of the individuals concerned.

    Dr. Fox
    To ask the Secretary of State for Scotland what is the annual cost of employing Mr. David Whitton as a special adviser in his Department. [39881]

    Mr. Dewar
    Special Advisers are paid within a range of £24,349 to £73,484. Their salaries are negotiated individually and are confidential within this range. Details are not revealed in order to protect the privacy of the individual concerned.

    Nurses
    Mr. Moore
    To ask the Secretary of State for Scotland how many vacant NHS posts for qualified nurses there were in Scotland by health board as at 31 March. [39657]

    Mr. Galbraith
    The information available centrally is shown in the table.

    Qualified nursing staff vacancies' by health board area and qualification whole time equivalent: at 31 March 1997

    Total

    Registered

    Vacancies Enrolled

    Total

    1,225

    1,108

    117

    Ayrshire & Arran

    31

    29

    3

    Borders

    6

    6

    —

    Argyll & Clyde

    128

    118

    11

    State Hospital

    1

    1

    —

    Fife

    20

    19

    1

    Greater Glasgow

    316

    295

    22

    Highland

    34

    32

    1

    Lanarkshire

    58

    52

    6

    Grampian

    103

    100

    3

    Orkney

    1

    —

    1

    Lothian

    288

    276

    13

    Tayside

    75

    50

    25

    Forth Valley

    134

    103

    31

    Western Isles

    5

    5

    0

    Dumfries & Galloway

    19

    19

    —

    Shetland

    7

    7

    —

    1 The vacancy figures relate to vacant posts at 31 March, irrespective of when the vacancy arose.

    Source:

    ISD(M)36, ISD Scotland

    Scottish Business Forum
    Mr. Moore
    To ask the Secretary of State for Scotland what are the terms of reference for the Government's Scottish Business Forum announced by the Chancellor of the Exchequer on 14 April; and what selection criteria will be used to determine who will be appointed to the Forum.
    [39659]
    48
    Mr. Dewar
    The Scottish Business Forum has been established to enable a regular exchange of views between the Scottish business community and Government. It will provide direct access for its members to Treasury Ministers who will attend meetings of the Forum as a matter of course. I have made appointments to the Forum on a personal basis, in consultation with the Chancellor of the Exchequer. A copy of the press notice which announced the appointment of members has been placed in the House library.

    Hospital Medical Staff
    Mr. Moore
    To ask the Secretary of State for Scotland how many vacant NHS posts for hospital medical staff there were in Scotland by health board as at 31 March. [39656]

    Mr. Galbraith
    Provisional figures were given to the hon. Member in reply to his written question of 16 December 1997,Official Report, columns 100–01. These figures have now been finalised and are provided in the table.

    Hospital medical consultant and staff grade vacancies1; by health board areas: at 30 September 1997

    Area

    Total number

    Consultant

    Staff

    Scotland

    161

    132

    29

    Argyll and Clyde

    19

    14

    5

    Ayrshire and Arran

    15

    14

    5

    Borders

    2

    2

    —

    Dumfries and Galloway

    7

    7

    —

    Fife

    10

    8

    2

    Forth Valley

    5

    5

    —

    Grampian

    21

    15

    6

    Greater Glasgow

    20

    14

    6

    Highland

    6

    6

    —

    Lanarkshire

    27

    22

    5

    Lothian

    14

    10

    4

    Orkney

    —

    —

    —

    Shetland

    4

    4

    —

    Tayside

    7

    7

    —

    Western Isles

    2

    2

    —

    Common Services Agency

    2

    2

    —

    1Information on vacant posts is collected centrally for consultant and staff grades only.

    Source:

    From ISD(M)4, ISD Scotland

    Community Pharmacies
    Mr. Moore
    To ask the Secretary of State for Scotland how many community pharmacies in Scotland have closed since 1 May 1997. [39658]

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

    Since 1 May 1997, 169 pharmacist contractors have been deleted from Health Board lists and 177 have been added.

    These figures do not differentiate between pharmacies opening or closing, and pharmacies changing hands.

    Highlands and Islands Airports
    Mr. Wallace
    To ask the Secretary of State for Scotland when Ministers last met the Chairman of Highlands and Islands Airports Ltd; and what subjects were discussed. [39493]

    Mr. Dewar
    Ministers meet the Chairman of Highlands and Islands Airports Ltd. from time to time to discuss a variety of issues. The last meeting was on 22 September 1997 when operational and financial matters were discussed.

    Mr. Wallace
    To ask the Secretary of State for Scotland if he will list(a) the date of appointment of each member of Highlands and Islands Airports Ltd. and (b) the expiry date of each member's appointment. [39492]

    Mr. Dewar
    The appointment dates of the Board Members of Highlands and Islands Airports Ltd. are as follows:

    Date first appointed

    Date appointed expires

    Peter J. Grant CBE, Chairman (part-time)

    17 March 1993

    28 February 2001

    Robert Macleod, Managing Director (full-time)

    9 June 1997

    8 June 2000

    W. Francis Hamilton, Member (part-time)

    1 June 1995

    31 July 1998

    William K. Semple, Member (part-time)

    17 April 1991

    31 March 1999

  HEALTH

    "Abortion Provision in Britain"
    Mr. Martyn Jones
    To ask the Secretary of State for Health what assessment he has made of the Birth Control Trust publication, "Abortion Provision in Britain"; and if he will make a statement. [38231]

    Ms Jowell
    This publication which has just been received, is being studied with interest. The White Paper "The New NHS" outlines a number of steps which we will be taking to improve the consistency of service provision throughout the National Health Service. We will challenge and address variations not based on health needs and wishes of local people. We will aim for maximum consistency while still allowing appropriate local and individual responsiveness.

    Birth Control Advice
    Mr. Trickett
    To ask the Secretary of State for Health (1) what proportion of teenagers seek birth control advice on matters for which advice is available only from the family general practitioner; [38282]

    (2) what guidance the Government have given on the availability of birth control advice to teenagers. [38322]

    Ms Jowell
    There are no aspects of birth control advice available only from general practitioners.

    In 1996–97, the number of first contacts by females under 16 for family planning services at family planning clinics was 60,390. The number of females under 16 receiving ordinary contraceptive services who are registered with general medical practitioners was 26,521.
    50
    The Department provides funding to Brook Advisory Centres, the major source of advice for young people and also sponsors the Sexwise phoneline which provides confidential advice to enable young people to make informed and responsible decisions about sex and personal relationships. The service is complementary to that provided by Brook.

    Confidentiality is of particular importance to young people. Existing guidance to regions (HC(86)1) is contained in Guidelines for reviewing family planning services issued in January 1992. In addition we are funding a Brook project which will include work on the dissemination of good practice information.

    We are developing a practical programme of action which will lead to the launch of a National Programme on Reducing the Rate of Teenage Conceptions later this year. Part of the programme will involve the further development of information, advice, counselling and contraception services to meet the needs of young people.

    Mr. Trickett
    To ask the Secretary of State for Health what guidance the Government give to district health authorities on the availability of birth control advice; and if it is the Government's policy that such advice should be available from a number of sources in addition to the family GP. [38298]

    Ms Jowell
    The Department's guidance on family planning services is set out in HSG(92)6 "Guidelines for reviewing family planning services: Guidance for Regions", copies of which are in the Library. The guidance states that specialist family planning clinic services should complement those provided by general practitioners and asks health authorities to consider the best way to integrate the two to ensure a comprehensive and effective range of family planning service is provided to local populations.

    Early Pregnancy Units
    Jane Griffiths
    To ask the Secretary of State for Health if he will make a statement on his plans for early pregnancy units. [39201]

    Mr. Boateng
    The establishment of early pregnancy units, which provide treatment and counselling for women with problems early in their pregnancy, is a relatively new initiative and the numbers are increasing. It is the responsibility of health authorities and National Health Service trusts, taking into account the health needs of the local population.

    Antibiotics
    Mr. Levitt
    To ask the Secretary of State for Health what assessment the Government have made of the seriousness of the risk to health posed by increased bacterial resistance to antibiotics; and what measures are being taken to minimise this risk. [38972]

    Ms Jowell
    Antimicrobial resistance is an issue that we take extremely seriously. A number of initiatives have been undertaken or are underway to help tackle the problem. These include enhancing the systems of surveillance and infection control measures, reviewing the clinical use of antimicrobials and the use of antimicrobials in the food chain.

    CR Gas Sprays
    Mr. Livingstone
    To ask the Secretary of State for Health what assessment of the health effects of CR gas sprays has been made by the medical officers of his Department since 1991; how many published and internal papers have been written by his Department's medical officers on this subject since 1991; and what are the current security classifications of the internal reports. [38614]

    Ms Jowell
    No scientific assessments of the health effects of CR gas sprays have been made by medical officers of the Department in the period since 1991. No papers have been published by the Department's medical officers on the subject. However, in the book "Chemical Warfare Agents: Toxicology and Treatments" published by Wiley in 1992 (ISBN 0–471–95994–4), a chapter authored by a medical officer of the Department made reference to the subject.

    Head Lice
    Ms Walley
    To ask the Secretary of State for Health what guidance his Department has issued in respect of organophosphate-based treatments for head lice; and if he will make a statement. [39332]

    Ms Jowell
    Guidance on the safe use of organophosphate containing treatments for head lice is made available for health professionals and patients by the manufacturer through the product information, which is authorised by the licensing authority.

    Ms Walley
    To ask the Secretary of State for Health if he will make a statement on the incidence of head lice amongst children in Staffordshire. [39331]

    Ms Jowell
    Head lice infections are not notifiable and are often managed within the privacy of people's own homes, making accurate counting difficult. A study1 in the south of England suggests that in a year on average 10 per cent. of children catch lice. The health authorities in Staffordshire believe incidence in Staffordshire to be similar to that experienced in other parts of the country. The Public Health Departments and School Health Services in both North and South Staffordshire are active in providing support and advice to health care professionals, schools and parents about managing head lice.

    Source:

    1Public Health Laboratory—Communicable Disease Report: Head Lice 10 October 1997.

    Multiple Sclerosis
    Mr. Gordon Prentice
    To ask the Secretary of State for Health, pursuant to his answer of 19 March 1998,Official Report, columns 701–03, if he will make it his policy to require health authorities to collect information on the number of persons in their areas with relapsing/remitting MS and the number of persons prescribed Beta Interferon. [39906]

    Mr. Boateng
    There are no current plans to make it policy to require health authorities to collect this information. However, the information that health authorities are required to provide is continuously reviewed.

    Secure Units
    Dr. Cable
    To ask the Secretary of State for Health what is the capacity of each local authority secure unit in London and the home counties. [39474]

    Mr. Boateng
    The table gives the location of secure units and the number of approved places as at 24 April 1998, in England.

    Secure accommodation: Current national provision (England)

    Unit

    Local authority

    Approved places

    London:

    1. Stamford House

    Hammersmith & Fulham

    16

    2. Orchard Lodge

    Southwark

    24

    Rest of England:

    1. Clare Lodge

    Peterborough City Council

    16

    2. Barton Moss

    Salford City Council

    20

    3. Watling House

    Staffordshire County Council

    12

    4. Thornbury

    Oxfordshire County Council

    3

    5. Stoke House

    Coventry City Council

    16

    6. Swanwick Lodge

    Hampshire County Council

    16

    7. Atkinson Unit

    New Devon County Council

    16

    8. Eastmoor

    Leeds City Council

    27

    9. Lincolnshire

    Lincolnshire County Council

    8

    10. Leverton Hall

    Essex County Council

    16

    11. Clayfields House

    Nottinghamshire County Council

    18

    12. Aldine House

    Sheffield City Council

    8

    13. Dales House

    Lancashire County Council

    8

    14. Briers Hey

    Lancashire County Council

    8

    15. Redbank SU

    St. Helens Met Borough Council

    26

    16. Redbank (Vardy)

    St. Helens Met Borough Council

    6

    17. St. Catherine's

    St. Helens/Nugent Care Society

    5

    18. Sutton Place

    Hull City Council

    10

    19. Redsands

    Cheshire County Council

    8

    20. Beechfield

    West Sussex County Council

    6

    21. St. John Earlswood

    Birmingham City Council

    8

    22. Dyson Hall

    Liverpool City Council

    8

    23. Vinney Green

    South Gloucestershire County Council

    22

    24. Brunel

    Derbyshire County Council

    8

    25. St. John's Tiffield

    Northamptonshire County Council

    16

    26. Aycliffe

    Durham County Council

    43

    27. Lansdowne

    East Sussex County Council

    5

    28. Kyloe House

    Northumberland County Council

    12

    Total number of places:

    415

    Dr. Cable
    To ask the Secretary of State for Health how many females are currently accommodated in each local authority secure unit in London and the home counties; and if he will provide a breakdown by age. [39475]

    Mr. Boateng
    The table gives the current female occupancy levels in secure accommodation as at
    24 April 1998, in England.
    53

    Females in secure accommodation as at 24 April 1998 (England)

    Age at 24 April

    Unit

    Local authority

    Total females

    Under 12

    12

    13

    14

    15

    16

    17

    18 and over

    London

    Stamford House

    Hammersmith and Fulham

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Orchard Lodge

    Southwark

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Rest of England

    Clare Lodge

    Peterborough City Council

    8

    0

    0

    0

    4

    2

    2

    0

    0

    Barton Moss

    Salford City Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Watling House

    Staffordshire County Council

    1

    0

    0

    0

    1

    0

    0

    0

    0

    Thornbury

    Oxfordshire County Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Stoke House

    Coventry City Council

    5

    0

    0

    0

    1

    3

    0

    1

    0

    Swanwick Lodge

    Hampshire County Council

    2

    0

    0

    0

    2

    0

    0

    0

    0

    Atkinson Unit

    New Devon County Council

    2

    0

    0

    0

    1

    0

    1

    0

    0

    Eastmoor

    Leeds City Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Lincolnshire

    Lincolnshire County Council

    1

    0

    0

    0

    1

    0

    0

    0

    0

    Leverton Hall

    Essex County Council

    4

    0

    0

    0

    2

    2

    0

    0

    0

    Clayfields House

    Nottinghamshire County Council

    3

    0

    0

    0

    1

    1

    1

    0

    0

    Aldine House

    Sheffield City Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Dales House

    Lancashire County Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Briers Hey

    Lancashire County Council

    5

    0

    0

    3

    0

    1

    1

    0

    0

    Redbank SU

    St. Helens Metropolitan Borough Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Redbank (Vardy)

    St. Helens Metropolitan Borough Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    St. Catherine's

    St. Helens/Nugent Care Society

    5

    0

    0

    0

    3

    1

    1

    0

    0

    Sutton Place

    Hull City Council

    1

    0

    0

    1

    0

    0

    0

    0

    0

    Redsands

    Cheshire County Council

    3

    0

    0

    0

    1

    2

    0

    0

    0

    Beechfield

    West Sussex County Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    St. John's Earlswood

    Birmingham City Council

    4

    0

    0

    0

    2

    1

    0

    1

    0

    Dyson Hall

    Liverpool City Council

    0

    0

    0

    0

    0

    0

    0

    0

    0

    Vinney Green

    South Gloucestershire County Council

    2

    0

    0

    0

    0

    0

    2

    0

    0

    Brunel

    Derbyshire County Council

    3

    0

    0

    1

    1

    0

    0

    1

    0

    St. John's Tiffield

    Northamptonshire County Council

    2

    0

    0

    0

    0

    1

    1

    0

    0

    Aycliffe

    Durham County Council

    5

    0

    0

    3

    1

    1

    0

    0

    0

    Lansdowne

    East Sussex County Council

    2

    0

    0

    1

    1

    0

    0

    0

    0

    Kyloe House

    Northumberland County Council

    6

    0

    2

    1

    1

    1

    1

    0

    0

    Myalgic Encephalomyelitis
    Mr. Burstow
    To ask the Secretary of State for Health what research his Department has funded into ME/CFS in the last five years. [39863]

    Ms Jowell
    A number of research projects into myalgic encephalomyelitis/chronic fatigue syndrome (ME/CFS) have been carried out or are currently underway. These are:
    "The role of noradrenaline in the neuropsychological pathogenesis of the chronic fatigue syndrome (ME)", funded by the Medical Research Council (MRC) and costing £37,000, is being undertaken by Dr. R. K. Morriss at the University of Manchester."Rehabilitation in the chronic fatigue syndrome (ME)—a controlled trial of cognitive-behavioural therapy", now completed and funded by the Department of Health for £59,034."Should General Practitioners manage chronic fatigue syndrome (ME)? A controlled trial", an ongoing research project funded by the National Health Service research and development programme for £64,433.The Department has also funded a £65,000 project which considered whether a particular type of psychological treatment was effective in reducing disability in CFS/ME Patients and a £60,000 project which is looking at whether general practitioners are best placed to manage CFS/ME patients.54
    In addition, the NHS Standing Group on Health Technology has recently identified the latest series of priority areas for which it anticipates commissioning primary research or systematic reviews. One of the topics identified is management strategies for chronic fatigue syndrome/ME.

    Mr. Burstow
    To ask the Secretary of State for Health what guidance his Department has issued to health authorities concerning ME/CFS. [39860]

    Ms Jowell
    There is no single effective treatment for chronic fatigue syndrome/myalgic encephalomyelitis (CFS/ME). The condition varies significantly from one patient to another and therefore individual patients benefit from different treatment regimes. Therefore, we consider that it is more appropriate for clinical guidelines to be produced by clinicians themselves or through their representative professional bodies. Furthermore, the Medical Royal Colleges point out that, whilst CFS/ME should be managed by general practitioners, it is inappropriate at present to issue clinical guidelines given the lack of methodologically sound research.

    Special Educational Needs
    Mr. Burstow
    To ask the Secretary of State for Health what consultations his Department has had with the DFEE on their Green Paper on Special Education Needs. [39862]
    55
    Mr. Boateng
    The Department was represented on the group, chaired by my hon. Friend the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Birmingham, Yardley (Ms Morris), which produced the Green Paper "Excellence for all Children—Meeting Special Educational Needs", and continues to contribute to consultations following its publication last October.

    Long-term Care
    Mr. Flight
    To ask the Secretary of State for Health when he expects the Royal Commission to publish its findings on funding long-term care for elderly people; and if he will make a statement. [38482]

    Mr. Boateng
    I refer the hon. Member to the statement made by my right hon. Friend the Secretary of State on 4 December 1997,Official Report, column 489.

    Housing Benefit
    Mr. Gerrard
    To ask the Secretary of State for Social Security what plans she has for reform of the housing benefit system. [38500]

    Mr. Kidney
    To ask the Secretary of State for Social Security if she will make a statement about her plans for the reform of housing benefit. [38504]

    Mr. Keith Bradley
    Tackling benefit fraud and encouraging people of working age to work are two important principles of welfare reform. In the immediate term, we are taking steps to tackle Housing Benefit fraud, and the Working Families Tax credit and other changes announced by my right hon. Friend the Chancellor in the Budget will reduce the work disincentive effects caused by the combination of housing benefit and Family Credit.

    For the longer term, as the Welfare Reform Green paper made clear, we are reviewing Housing Benefit. The review will consider and seek to address the underlying relationship between housing policy and housing benefit. We aim to develop stable and sustainable policies, in line with the overall objectives of welfare reform, striking a better balance between tenants' right and responsibilities.

    Mr. Chope
    To ask the Secretary of State for Social Security if she will make a statement on the future role of local authorities in the payment and administration of housing benefit. [38505]

    Mr. Keith Bradley
    The Welfare Reform Green Paper made clear we are reviewing the underlying relationship between housing policy and housing benefit. We aim to develop stable and sustainable policies, in line with the overall objectives of welfare reform, striking a balance between tenants' rights and responsibilities. We will be aiming to develop a simpler benefit system that will be more easily administered.

    Mr. Hood
    To ask the Secretary of State for Social Security what were the(a) numbers and (b) amounts of rent rebate allowance overpayments and (c) the amount as a percentage of the authority's overall housing benefit
    56
    expenditure for (i) each district and island council in Scotland, in each available year from 1993–94 and (ii) each unitary authority for 1996–97. [37818]

    Mr. Keith Bradley
    The information has been placed in the library.

    Mr. Hood
    To ask the Secretary of State for Social Security if she will provide(a) a breakdown of the number of housing benefits claimants, split into rent rebate and rent allowance categories, with the total amounts paid under each heading, (b) the numbers and amounts of housing benefit backdated payments under Regulation 72 (15), and the amount paid as a percentage of each local authority's housing benefit expenditure and (c) the numbers and amounts of discretionary payments under Regulation 69 (8) and the percentage they form of each local authority's total housing benefit expenditure, in the most recent available year. [37823]

    Mr. Keith Bradley
    The information is not available in the format requested. Such information as is available has been placed in the library.

    Child Support Agency
    Mr. Baldry
    To ask the Secretary of State for Social Security if she will make a statement on the number of staff employed by the Child Support Agency. [38502]

    Mr. Keith Bradley
    The Child Support Agency currently employs 9,109 full time and part time staff. Over 8,000 are permanent with the remainder made up of fixed term contract and casual staff.

    Currently fewer than 1 in 20 of the Agency's field staff have face to face contact with the public. However, the Agency is reorganising itself over the next year to make more staff available for front-line work; to improve telephone contact with customers; and to increase face to face contact.

    Disability Benefits
    24. Mr. Wilkinson
    To ask the Secretary of State for Social Security what recent representations she has received on the level of benefits paid to those with disabilities. [38503]

    Mr. Denham
    We have received many representations on a range of issues relating to people with disabilities. Some of these may have concerned the level of benefits.

    Income-related Benefits
    Mr. Ruffley
    To ask the Secretary of State for Social Security what is her policy towards reducing dependency on income-related benefits; and if she will make a statement. [38506]

    Mr. Field
    Income-related benefits will continue to offer a mechanism for getting resources to the most needy. As our plans for New Deals for people of working age, measures to make work pay, lifelong learning and pension reform take hold, people will have new opportunities to provide for themselves. Over time this will reduce the need for widespread reliance on income-related benefits.

    United Nations Commission on the Status of Women
    Helen Jackson
    To ask the Secretary of State for Social Security when she expects to respond to the report of United Nations Commission on the Status of Women. [38507]

    Ms Ruddock
    I am pleased to announce that in June the Ministers for Women will be publishing a response to the twelve critical areas of concern to women which make up the UN Global Platform for action on women.

    The areas on which progress will be reported include education and training, women's health and violent crime against women. The United Nations Commission on the Status of Women (CSW) holds an annual conference to follow up on commitments to the UN Platform for Action on women.

    At the meeting of the CSW in February 1998 the UK Government, in our role of Presidency of the EU, succeeded in securing agreement to the main points of concern to the EU in the final texts. As soon as the final texts are available to the Government a copy will be placed in the Library.

    Pensioners
    Mr. Barry Jones
    To ask the Secretary of State for Social Security what measures she has implemented to improve the living standards of pensioners. [38508]

    Siobhain McDonagh
    To ask the Secretary of State for Social Security if she will make a statement on the Government's policies towards the poorest pensioners during the last 12 months. [38480]

    Mr. Denham
    I refer my hon. Friends to the answer given by my right hon. Friend the Secretary of State earlier today to my hon. Friend the Member for Conwy (Mrs. Williams).

    Mr. Etherington
    To ask the Secretary of State for Social Security what steps she is taking to ensure that pensioners in Sunderland are in receipt of the benefits to which they are entitled; and if she will make a statement. [37972]

    Mr. Denham
    The local office of the Benefits Agency in Sunderland has a number of initiatives in place to assist pensioners in claiming Income Support. These include the issue of form IS1 (an initial claim form for income support) to pensioners on being awarded Retirement Pension, and monthly meetings with Age Concern where appointments are arranged to deal with individual pensioners' inquiries. They also attend a twice yearly forum run by Social Services, who are targeting pensioners.

    On a national scale, the Government are committed to examining the means of delivering more automatic help to the poorest pensioners, around one million of whom do not take up their Income Support entitlement. We have commissioned independent research into the barriers to pensioners claiming their entitlement. We have also started pilot projects in nine areas of Great Britain (Glasgow, East Renfrewshire, York, Preston, Stroud, Torbay, South Staffordshire, Torfaen and Lambeth) to test the most effective methods of identifying potential pensioner recipients and of encouraging them to claim.
    58
    We should have the results of both the research and the pilots early next year when we will consider the best way to proceed nationally.

    Mr. Webb
    To ask the Secretary of State for Social Security what would be the effect on public expenditure of raising the state pension age to 67 years for both men and women. [38200]

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

    Benefit effects of raising State pension age to 67 in 1998–99

    £billion

    Benefits

    Cost/saving

    Retirement pension (RP) savings

    5

    Income related benefits (IRB) offset to RP savings

    —1

    Other benefit offsets

    —2

    Notes:

    1. Estimates assume an immediate change in State pension age in 1998–99 with no transitional protection and Audit Dependancy Increases (ADIs) extended in line with current policy.

    2. Estimates are rounded to the nearest £ billion (-) represents a cost, (+) represents a saving.

    3. RP effects include moves onto Widows Benefits (WB) and the extension of ADIs.

    4. IRB offsets are provided for the RP and WB costs only. Information on the IRB effects of moves onto other benefits is not available.

    5. "Other benefits" cover Incapacity Benefit, Jobseeker' s Allowance (Contributory), Severe Disablement Allowance and Invalid Care Allowance.

    6. No behavioural effects have been assumed, apart from moves onto other contributory benefits.

    7. Contributory benefit effects have been provided by the Government Actuary's Department.

    Lone Parents
    Miss McIntosh
    To ask the Secretary of State for Social Security what plans she has to introduce elements of compulsion into the New Deal for lone parents. [38509]

    Mr. Keith Bradley
    I refer the hon. Member to the reply I gave the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) on 25 November 1997,Official Report column 540.

    Pensions
    Mr. Viggers
    To ask the Secretary of State for Social Security what plans she has to reform the system of occupational pensions. [38510]

    Mr. Denham
    The pensions review is looking at ways to meet the Government's commitment to strengthen and support occupational pensions because we recognise the importance of occupational pensions in providing income for retirement.

    There are three strands to this work. First, we are taking steps to get the regulation of pensions right. Secondly, we want to find ways of acknowledging the best in occupational pension provision and of encouraging others to meet the standards of the best. Thirdly, we are seeking to raise the level of pensions education and awareness so that people can take informed choices about their own provision.
    59
    The Government have signalled their willingness to look at the weight and appropriateness of the current regulatory system. We have also raised a series of issues on which we want to encourage a wider debate. Over the next few months we will be consulting widely on proposals for making the provisions of the Pensions Act easier to operate by simplifying a number of requirements.

    Sir Teddy Taylor
    To ask the Secretary of State for Social Security how many representations she has had from members of the public about her proposals for retirement pensions. [38512]

    Mr. Denham
    A key objective of our review of pensions 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.

    We received over 2,000 responses to the pensions review from pensions providers, employers, employees, consumers, pensions experts and pensioners themselves. We are considering the responses and we will be publishing a Green Paper later this year.

    34. Mr. Lansley
    To ask the Secretary of State for Social Security when she proposes to publish her proposals for stakeholder pensions. [38514]

    Mr. Denham
    Details of the proposed framework for Stakeholder Pension schemes will be included in the Green Paper on pensions which we will publish later this year.

    Child Care
    Mr. Burgon
    To ask the Secretary of State for Social Security if she will make a statement on Government initiatives to help parents pay for child care during the last year. [38513]

    Ms Ruddock
    Child care is a priority for the Ministers for Women and we have worked with colleagues across government in the last year on initiatives to help parents, particularly women, with paying for childcare.

    The Government announced in March that a new Child care Tax Credit will be introduced from October 1999, as part of Working Families Tax Credit. This will cover 70 per cent. of all weekly childcare costs up to an overall limit of £100 for families with a single child and £150 for multi-child families. The tax credit will replace the child care disregard in Family Credit and other income-related benefits.

    In addition, the Chancellor announced a major boost to child care in the Pre-Budget statement in November. £300 million is being made available to set up 30,000 out of school projects, which will provide places for up to one million children. Out of school clubs for children before and after school, and in the holidays. This is a tenfold

    Number of tribunals attended and unattended by the appellant and/or a representative

    Appeals heard

    All attendances

    Not attended

    Quarter ending

    (Total number)

    (Total number)

    (Per cent.)

    (Total number)

    (Per cent.)

    31 December

    28,048

    17,470

    62.29

    10,578

    37.71

    31 March

    25,586

    15,907

    62.17

    9,679

    37.83

    30 June 1997

    31,507

    17,092

    54.25

    14,415

    45.75

    30 September

    36,053

    15,962

    44.27

    20,091

    55.73

    60
    increase on existing provision, and will mean that every child in Britain will have access to out of school child care in their community.

    In the meantime, from June 1998, the Family Credit child care disregard will be enhanced by increasing the maximum child care costs allowed to £100 for families who incur child care costs for two or more children of qualifying age and extending the age limit by one year to the September following the child's 12th birthday.

    Since July 1997, lone parents participating in the New Deal for Lone Parents programme have also been eligible for help with childcare costs of up to £60 per week (or £100 per week for two or more children from June 1998) while undertaking various activities helping them secure a job, for example attending job interviews; attending an interview with the Personal Adviser and attending certain kinds of training courses or programmes.

    Part-time Employed
    Mr. Sheerman
    To ask the Secretary of State for Social Security what new steps she is taking to protect the benefit payments to the part-time employed. [38501]

    Mr. Keith Bradley
    The changes we are making to National Insurance from April next year will reduce the amount all employees' pay, but will not affect their benefit entitlements. Our longer term aim is to align the starting point at which employees pay National Insurance with the single person's income tax allowance. When we do so we will ensure that benefit rights are protected. We shall be considering how best to provide this protection and will bring forward proposals in due course.

    National Insurance
    Mr. Hoyle
    To ask the Secretary of State for Social Security what representations she has received from lawyers on proposals to remove actors from Class 1 national insurance contributions. [38932]

    Mr. Denham
    We have had no such representations from lawyers. We have announced that we are reviewing, with the Department for Culture, Media and Sport, the position of performers for National Insurance purposes. No decision has yet been taken. An announcement will be made in due course.

    Appeals
    Mr. Levitt
    To ask the Secretary of State for Social Security what proportion of social security appeals tribunals were(a) attended by the appellant and/or a representative and (b) unattended; and what was the success rate for (i) attended and (ii) unattended appeals in each of the last four quarters. [38973]

    Mr. Keith Bradley
    The information is set out in the tables.
    61

    Success rate of attended and unattended tribunals

    All attendances In appellant's favour

    Not attended In appellant's favour

    Quarter ending

    (Total number)

    (Number)

    (Per cent.)

    (Total number)

    (Number)

    (Per cent.)

    31 December 1996

    17,470

    9,561

    54.73

    10,578

    1,249

    11.81

    31 March 1997

    15,907

    8,766

    55.11

    9,679

    1,192

    12.32

    30 June 1997

    17,092

    9,535

    55.79

    14,415

    1,820

    12.63

    30 September 1997

    15,962

    8,813

    55.21

    20,091

    2,523

    12.56

    Source:

    The quarterly Social Security Appeal Tribunal statistics published by DSS Analytical Services Division.

    Mr. Gibb
    To ask the Secretary of State for Social Security how many paper appeals made against decisions following an all-work-test were processed in the last four quarters for which figures are available; and what proportion of these were decided in the appellant's favour. [39775]

    Mr. Keith Bradley
    The information is not available.

    Lung Function Test
    Mr. Clapham
    To ask the Secretary of State for Social Security (1) if she will commission a comparison between her Department's predicted values in the lung function test and the European Community for Steel and Coal study undertaken in 1993; [39921]

    (2) when the survey of the general population, which is the basis of the predicted performance used in the lung function test was undertaken; how many males were included in the survey; what proportion of those taking part smoked; and when it was last updated; [39920]

    (3) what is the basis of the predicted performance used in the lung function test; how it is calculated; and when it was first devised; [39918]

    (4) if the Industrial Injuries Advisory Council has re-evaluated J. E. Cotes' Lung Function Assessment in Medicine used by her Department, since the European Respiratory Society recommended the use of ECSC values; and what was the outcome. [39919]

    Mr. Denham
    The Industrial Injuries Advisory Council provides Ministers with expert independent advice on matters relating to the Industrial Injuries Benefit Scheme. The Council re-evaluated the use of the Cotes equation for the lung function test in their review of the prescription of chronic bronchitis and emphysema. That re-evaluation included consideration of the European Community for Coal and Steel study published in 1993. The Council concluded that the Cotes equation remained as appropriate as any other available equations, including that published in the latter study. A copy of the Council's report of their review entitled "Chronic Bronchitis and Emphysema" (Cm 3240) which was published in May 1996 is in the Library. Particulars of the Cotes equation and the reference populations used in Cotes are set out in detail in "Lung Function: Assessment and Application in Medicine" by J. E. Cotes (ISBN 0–632–00033–3).

    Benefit Integrity Project
    Mr. Oaten
    To ask the Secretary of State for Social Security what plans her Department has to set target times for processing appeals under the Benefit Integrity Project. [39912]

    Mr. Denham
    We are committed to looking at various ways of improving the way in which the Benefit Integrity Project operates. For example, from 1 May all review requests will be subject to new faster processes. The aim is to reduce the time taken to process review requests from 10 to 11 weeks to 4 to 5 weeks in the majority of cases. We are also examining ways of speeding up the processing of appeals against decisions made under the Project and discussions have begun with the Independent Tribunal Service.

    Industrial Injuries Disablement Benefit
    Mr. Oaten
    To ask the Secretary of State for Social Security how many claims of industrial injuries disablement benefit were made in 1996–97; and how many he estimates will be made in 1997–98. [39899]

    Mr. Denham
    There were 70,640 claims to Industrial Injuries Disablement Benefit in 1996–97. No estimates are made of the number of claims expected in future years. However, in the 9 months from April 1997 to December 1997 73,820 claims were made.

    Note:

    The data are based on a 10 per cent. sample of claims made.

    Disability Living Allowance
    Mr. Oaten
    To ask the Secretary of State for Social Security how many people whose main disabling condition is deafness were awarded disability living allowance(a) between June 1996 and May 1997 and (b) since June 1997 (i) on their initial application, (ii) at review and (iii) at appeal. [39897]

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

    People whose main disabling condition is deafness awarded disability living allowance.

    Type of award

    1 June 1996 to 31 May 1997

    1 June 1997 to 28 February 1998

    All types of award

    3,000

    3,580

    on initial application

    1,720

    1,880

    on review

    680

    940

    on appeal

    600

    760

    Source:

    Analytical Services Division: 5 per cent. data.

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

Community Hospital Closures: Public Consultation
Lord Hurd of Westwellasked Her Majesty's Government:
How they propose to consult the public before closing NHS community hospitals.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, the Government recognise that community hospitals often play a very valuable part in local health services. As I am sure the noble Lord is aware, changes to those services are primarily the responsibility of individual local health authorities. The Government become involved only if a community health council is unsatisfied with a local consultation process and refers a decision to Ministers. The community health councils regulations require local authorities to consult CHCs on any proposals which a health authority has under consideration for any substantial changes in its district. We also expect health authorities to take other steps, such as holding public meetings, to involve the public more generally.
Lord Hurd of Westwell: My Lords, I thank the noble Baroness for that reply. Will she go further and accept that many local community hospitals have over the years attracted extraordinary affection and support from those who depend on them? At a time when the Government say—and it is the Government who are telling us, as all previous governments have done—that so much extra
2
money is going to the NHS, is it not strange and sad that in my county, Oxfordshire, a consultation paper is being circulated on cuts and closures for community hospitals, and that both the options listed involve the closure of the much loved hospital at Burford? Will the noble Baroness further accept that that kind of consultation is in effect a pretence; and that, were closures to follow, whether of this hospital or similar ones in Oxfordshire, Cornwall and other counties, they would be regarded as closures by the Government, and would be received with great anger and sorrow?
Baroness Jay of Paddington: My Lords, I am entirely happy to confirm, and underline, the noble Lord's general point about the value of local community hospitals and the great affection in which they are often held by local communities. Our general policy is indeed to promote the better and greater use of those kinds of local facilities. As the noble Lord rightly said, it is part of our general policy of encouraging local services to be more accessible to local communities, and to use that type of facility as much as we can. I am afraid that I cannot comment on the individual situation in Oxfordshire, precisely for the reasons that I mentioned in my original Answer: if those decisions to which the noble Lord refers were finally to be referred to my right honourable friend the Secretary of State, it would be stupid at this point to prejudice his decision.
Lord Walton of Detchant: My Lords, in the light of her comments, will the Minister accept that community hospitals play an invaluable role not only in providing day care for disabled and elderly people but also in accepting for admission patients who would otherwise occupy beds for rehabilitation purposes for much longer periods in the acute hospitals? Given the Government's recommendations in their NHS White Paper towards a primary care led NHS based in part upon community hospitals, is it not short-sighted to recommend the closure of community hospitals, with the inevitable

3
effect of reducing the ability of acute hospitals to reduce their waiting lists, which is one of the Government's highest priorities?
Baroness Jay of Paddington: My Lords, I entirely accept the noble Lord's remark about the importance of some of the local community hospitals. I hope I made that point in my replies to the noble Lord, Lord Hurd. Of course it is true that community services which are local and accessible to people are extremely important. The noble Lord refers to a primary care led NHS. That slogan was used by the previous administration. The new NHS White Paper envisages a service in which swift advice and treatment are available as close to where people live as possible. Community hospitals will clearly be a part of that policy in some places.
The Lord Bishop of Oxford: My Lords, is the Minister aware that not only are these hospitals held in great affection but they receive significant financial support? Burford, for example, receives more than £40,000 a year raised by the local community. In 1987 I opened a new out-patient department there, for which some £140,000 had been raised. Would it not be a great pity if that money were lost to the National Health Service?
Baroness Jay of Paddington: My Lords, I am well aware of the extraordinarily important part that voluntary organisations play in supporting some of those bodies. Indeed, as the former chairman of the National Association of League of Hospital Friends, I have played a role in it myself. It is also important to emphasise that a great deal of public money has gone towards local community services in the Anglia and Oxford region. For example, I understand that recently £554,000 went to community rehabilitation services from the special moneys that were allocated for the winter. Overall, £2·1 million was allocated to community schemes in that area.
Lord Jenkins of Putney: My Lords, can my noble friend say whether the policy being followed is the Government's own policy or an inherited policy?
Baroness Jay of Paddington: My Lords, it is our own policy to give locally accessible services to local communities. I hope that I emphasised that point in my previous replies. Of course, there is no national blueprint for the most satisfactory way of delivering community services. It may be through a local community hospital; it may be, for example, through our new initiative of NHS Direct, in which nurse-led telephone services provide good local advice to people. There is no national template. As I said in answer to the noble Lord, Lord Hurd, it is for local communities to decide what is most appropriate.
Lord Geraint: My Lords, before we start the consultations, will the noble Baroness give an assurance to the people of Wales that community hospitals will not be closed before we set up our parliament in Wales?
Baroness Jay of Paddington: My Lords, were it within my power to give that assurance, I should be
4
delighted to do so. However, as I am sure the noble Lord realises, it is a topic which, for the moment, is for the Welsh Office.
Baroness Cumberlege: My Lords, does the noble Baroness agree that many small hospitals are in rural areas, serving rural communities? I understand that the White Paper which is likely to come out shortly will insist that it is for her right honourable friend the Secretary of State for Education to make any decision about closing rural schools. Will the noble Baroness suggest to her ministerial colleagues that it is a line that the Department of Health might wish to pursue?
Baroness Jay of Paddington: My Lords, the noble Baroness confirms what I said in reply to the noble Lord, Lord Hurd. If decisions at a local level are not agreed, then the decision to which he and other noble Lords referred will automatically be referred to the Secretary of State for Health, if the community health council does not accept the local decision.
Lord Dean of Beswick: My Lords, did not the Government a short time ago announce the biggest hospital building programme within memory? Is it not a fact that where large centres of excellence are produced, some other hospitals have to go out of existence? It may be a choice between an archaic hospital and the most up-to-date hospital. On that basis, are we not on the right track? Even though we must consider local services and what the people want, at the end of the day are not the big hospitals with modern, up-to-date facilities the right choice?
Baroness Jay of Paddington: My Lords, I am glad my noble friend recognises the large amount of investment which has been put into new acute hospitals. However, no part of health provision stands alone. It is an interconnected system and primary community and acute services must be delivered effectively. As I said in previous answers, the way in which that is best achieved is primarily best decided at local level.
Lord Hamilton of Dalzell: My Lords, on 26th February I asked the noble Baroness the following:
"What was the impact on hospital waiting lists of beds occupied by medically fit people awaiting discharge who cannot leave because there is no one to look after them?".
In her kind reply, the Minister explained what the Government were doing about elderly people in order to find them beds. She said:
"However, it is not possible to quantify the impact of this on hospital waiting lists".—[Official Report, 26/2/98; col. WA.115.]
I tabled the Question for Written Answer because the charity for which I am responsible is threatened with closure of a holiday home in Essex which gives respite to patients from national health hospitals during the winter. Does the Minister think she ought to have statistics on the subject? What sum is involved in terms of private contributions to help relieve the National Health Service of those who want to be given relief and respite?
Baroness Jay of Paddington: My Lords, I feel that the noble Lord's question is wide of the Question on

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the Order Paper. However, I agree with him about the importance of community rehabilitation services and that is precisely why in my reply to one of the noble Lords who raised the issue in relation to Oxfordshire I mentioned the sums which had been given for community rehabilitation to try to reduce the acute stress on some hospitals. However, if the noble Lord would care to write to me again with the specific issue he wishes to raise about Essex, I shall try to help him.

Asylum
2.46 p.m.
Lord Campbell of Croyasked Her Majesty's Government:
Whether they have plans to improve the system of screening applications for asylum, in consultation with other governments, and plans to consider expeditiously the cases of applicants who have been waiting in the United Kingdom for decisions.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, we are committed to delivering a faster, fairer and firmer asylum process than the one we inherited. Reducing delays and backlogs within the asylum system will play an important role in discharging that commitment. Consultation with other governments on asylum issues is a continuing feature of intergovernmental co-operation both within the European Union and more generally.
Lord Campbell of Croy: My Lords, I am grateful to the noble Lord for his reply. I would welcome progress in discussions with the Belgian and French authorities. Are the press reports correct that sea ferries in future will receive government help on the same scale as Eurotunnel now does since the ferry companies cannot refuse to carry passengers whose documents are in order? Bogus asylum seekers often destroy their documents during the journey before they land.
Lord Williams of Mostyn: My Lords, any company is entitled to carry or not carry people, as it chooses. As I said in answer to a question a few weeks ago, it is essentially a commercial decision. I take the noble Lord's point that, unfortunately, a device often used by bogus entrants is to destroy documents wilfully because that makes it difficult then to return such people to the appropriate country of origin.
Lord Janner of Braunstone: My Lords, will the Minister tell the House how many people are at the moment awaiting the hearing of their asylum cases and how many were waiting a year ago? Is there the same proportion waiting now in London as there was? Most of the support organisations for those people are in London. I have been told that many cases are being shifted outside London, thereby causing grave hardship.
Lord Williams of Mostyn: My Lords, there is a backlog of around 50,000 people altogether waiting. As I said on an earlier occasion, 10,000 of those cases,
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lamentably, pre-date 1993. I simply cannot say whether the proportion of those in London has gone down. I shall research the figures and write to the noble Lord. It is true that some asylum seekers and immigrants have been placed outside the London area, but the placing authority retains the financial obligation of their upkeep.
Lord Avebury: My Lords, in relation to those who have been waiting for a long time, can the Minister say whether the asylum directorate instruction is still in force? That provides that where a person has been waiting for more than seven years from the date of his or her initial application, exceptional leave to remain may be granted. Is it the practice invariably to give exceptional leave to remain where people have been here for seven years? In order to reduce the backlog, will the Government consider as an interim measure reducing the period to six years? Six years is long enough for anybody to wait for a first decision.
Lord Williams of Mostyn: My Lords, the policy to which the noble Lord refers is still in being; that is, after seven years exceptional leave to remain will be granted. It will be possible to have an arbitrary reduction of that period from seven years to six. However, it is premature to come to a conclusion on that, bearing in mind the overall wide-ranging review of these topics which is being conducted and considered.
Lord Renton: My Lords, can the Minister say what proportion of the cases that have been dealt with within the past 12 months have been found to be bogus asylum seekers? Is he aware that any strengthening of the policy which the Government introduce will receive wide support in this country?
Lord Williams of Mostyn: My Lords, a significant majority were found to be ineligible. I welcome the noble Lord's support, which he has propounded on earlier occasions. There are a number of deficiencies in the system. One is delay, which means unjustified expense and uncertainty and also—the critical point—the fact that bogus asylum seekers are doing a serious disservice to those who are genuine claimants.
Viscount Waverley: My Lords, can the Government not introduce a system whereby there is no appeals process when there has been a unanimous initial consideration?
Lord Williams of Mostyn: My Lords, I would always be reluctant to contemplate any regime where there is no appeal in any circumstance. I have never met any judicial or even quasi-judicial body which is free of all possibility of error. However, that is one aspect of the review that is presently being considered.
The Countess of Mar: My Lords, I must declare an interest in that I am a lay member of the Immigration Appeal Tribunal. The Minister has already said that a large number of applications are found to be bogus. Is

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it correct that only a tiny proportion of those bogus applicants are removed from this country when their cases have gone right through the appeals system?
Lord Williams of Mostyn: My Lords, it is not true that only a tiny proportion are removed. My recollection is that 7,000 were removed last year. That is a significant number.
Baroness Blatch: My Lords, I welcome the use of the word "bogus" by the noble Lord; it is a word that was used vociferously by his colleagues on these Benches when they were in opposition. It is true that a large proportion of applicants are bogus asylum seekers, and I welcome the fact that the noble Lord now accepts that. The Minister does not possess specific figures. But will he make available to the House information as to whether there is any increase or decrease in the backlog? How many of the cases that preceded 1993 have been dealt with during the course of this year?
Lord Williams of Mostyn: My Lords, the last questions are legitimate questions and I shall research the figures, transmit them to the noble Baroness and place them in the Library. It is a matter of genuine public interest. However, I do not believe that I was ever guilty of complaining about the use of the word "bogus". It is a well-known English term with which I am familiar.
Lord Dean of Beswick: My Lords, the Minister said that 7,000 people who were unlucky in their appeals were returned to their country of origin. Have any of those attempted to re-enter this country on another bogus excuse?
Lord Williams of Mostyn: My Lords, that is not a question I am capable of answering. If people are removed, they may well attempt to come back with bogus documents.

Lomé Convention: Negotiations
2.55 p.m.
Lord Juddasked Her Majesty's Government:
In relation to their commitment to give priority to the defeat of world poverty in their overseas development programmes, what progress has been made in the preparations for the renewal of the Lomé Agreement.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, a draft negotiating mandate setting out the EU's position on the successor to the Lomé Convention will be discussed at the EU Development Council on 18th May. As presidency, we hope that this mandate will be agreed in the EU General Affairs Council in June. Poverty eradication will be at the heart of the EU's position.
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Formal negotiations between the EU and the African, Caribbean and Pacific countries party to the Lomé Convention are due to begin in September.
Lord Judd: My Lords, I thank my noble friend for that helpful reply. However, are the Government satisfied with the Commission's current trade proposals or do they have any anxiety lest they contradict the poverty eradication targets? Is it realistic to expect, as currently proposed, SADC, covering southern Africa, and Caricom, covering the Caribbean, to enter into free trade agreements with the European Union within six years? They will be competing with much stronger economies. By contrast, what progress is being made with the Department for International Development's proposals for an improved generalised scheme of preferences?
Baroness Symons of Vernham Dean: My Lords, as the House knows and as was made clear in the Government's White Paper, for which the Department for International Development was responsible, the eradication of poverty lies at the heart of the negotiations which the Government, along with the rest of the EU governments, will be addressing. The key target remains to halve absolute poverty by the year 2015. That is achievable; it is affordable; and the Government believe it to be morally right. However, our position will be affected in the negotiations by the review taking place on 18th May. We hope that we can adopt the negotiating position of the EU in the General Affairs Council on 8th June and that thereafter, in September, we will be able to begin negotiations with the 71 African, Caribbean and Pacific countries involved.
Lord Redesdale: My Lords, can the Minister say whether, in the formulation of this policy, the needs of business and private investment were looked at, considering that they form such an important part of poverty eradication?
Baroness Symons of Vernham Dean: My Lords, the Government clearly acknowledge in the White Paper, published by my right honourable friend the Secretary of State for International Development at the end of last year, the need and indeed the vital part that business and the private sector can play in poverty eradication. Those proposals were put forward and will be borne in mind in our negotiations.
Viscount Waverley: My Lords, are the Government sufficiently advocating the concerns of traditional friends? For example, is the Minister aware that the Caribbean statistically has a relatively high level of per capita income, yet significant pockets of poverty exist with governments unable to allocate sufficient resources as a safety net?
Baroness Symons of Vernham Dean: My Lords, as I said, poverty eradication lies at the heart of what we are doing. Having said that, the Government are particularly sensitive to the needs of our "traditional

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friends", as the noble Viscount described them. Indeed, my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs clearly made that point in the Caribbean forum held in Nassau in the second week of February this year. He made it clear to our friends from the Caribbean that their interests will be very much at the heart of our negotiations.
Lord Judd: My Lords, will my noble friend accept that, while we all applaud and endorse the Government's commitment to fight the battle for the eradication of poverty, it is not just a matter of programmes and development assistance? It is also a matter of relevant trade policies. There is real anxiety that some of the proposals put forward, not by our own Government but by the Commission, may be counter-productive in this context, not least for the Caribbean and southern Africa. Can the Minister assure us that that will be rigorously looked at?
Baroness Symons of Vernham Dean: My Lords, the Lomé Convention covers aid, trade and political relations. All those will have to be looked at. At the moment we are in the middle of negotiations with our European colleagues. Thereafter we will be in negotiation with the ACP countries. I do not believe that in any negotiation, having stated the Government's policy, it is sensible or wise to try to negotiate through a loudhailer. Our best position is to stick to the principles that I outlined to the House and do our best to pursue those with our colleagues in the European Union and thereafter with the ACP countries.

Medway Secure Training Centre: Costs
2.59 p.m.
The Earl of Longfordasked Her Majesty's Government:
How the cost per head of trainees at the new Medway Secure Training Centre for young people aged 12–14 compares with the average cost in local authority secure units.
Lord Williams of Mostyn: My Lords, it is difficult to make a direct comparison between the cost for the Medway Secure Training Centre and the average charge for local authority secure units because local authority charges for secure units reflect only the operating costs and not the build costs, which are met directly from central government capital grants. In addition, there is a wide range of charges across different local authority units. There is no one standard regime. Some units charge extra for specialist facilities. However, if we exclude capital costs, the average cost of a place at Medway would be £2,400 compared with the average in local authority secure accommodation of £2,570.
The Earl of Longford: My Lords, while expressing complete scepticism about that Answer, which is one of the phoniest I can recall in 52 years in the House, everyone being perfectly well aware that these places are enormously expensive and the Answer says the
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opposite, may I put these questions to the noble Lord? Will he allow me to pay a tribute to the staff of this place under the inspiration of its director? I think I am one of the few noble Lords who has had the chance to visit it. The House may be aware that there are 100 people on the paid staff and two inmates. However, I want to pay my tribute to the evident inspiration of the staff and director. Does the noble Lord realise that there is tremendous disquiet about this place if only because it treats young people as criminals, as everyone knows who reads the press, where they are described as children's gaols? Does he understand the disquiet at the idea of treating children aged 12 to 14 as criminals so that for the rest of their lives they will bear a criminal taint?
Lord Williams of Mostyn: My Lords. I know that your Lordships do not like asperity of language and therefore I would not want to say anything about the particular comment that the noble Earl made. I was aware, surprisingly, of his visit to Medway on 20th April, as I was helpfully provided with a note about that visit. The noble Earl paid tribute, which I believe to be justified, to people who are carrying out extremely difficult work. What is the work that they carry out? It is attempted rehabilitation of young children who have, unfortunately, fallen into criminal ways. They are there essentially to be given the best possible opportunity—I accept at considerable public cost—to make their lives decent and fruitful when they come out.
Baroness Blatch: My Lords, I welcome the Government's establishment of this centre. It is another successful policy of the previous government which was opposed tooth and nail by the noble Lord himself and by his colleagues on these Benches when they were in opposition. Will the noble Lord clear up one point for me? The original intention was that such centres should ostensibly be for young very persistent offenders. It was set down in law how persistently they had to offend in order to qualify for a place. There was to be a programme of intensive education and training and rehabilitative programmes which included counselling and developing very close links, if that were possible, with the family and/or mentors in the community. I understand that these establishments are to be an improvement on what the previous government had originally intended. Will the noble Lord explain what is different from the programme that was originally intended for these establishments?
Lord Williams of Mostyn: My Lords, it is true, as the noble Baroness says, that the Home Secretary announced in July 1997 that he would continue with the preparations for the centre to avoid the waste of public money that would be involved in withdrawing from the previous commitment. I believe that to be a perfectly justifiable approach. If all the places are taken up, there will be 100 staff providing 24-hour cover for 40 trainees—education, care, security and support services. We believe—I am not sure that there is an enormous difference between us in our objective—that

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this will give a decent opportunity for rehabilitation for young children whose circumstances and background have been very unfortunate.
Lord Allen of Abbeydale: My Lords, as the catchment area for the centre seems to be the whole of England and Wales, does the estimate of expenditure include the cost of assisting parents from, say, Northumberland or North Wales to travel to Kent to visit their offspring at the centre?
Lord Williams of Mostyn: My Lords, the intention is that there should be assistance, where appropriate, for family visits to be made easy, or at least relatively easy, for those who simply cannot afford to travel to see their children.
Lord Acton: My Lords, as the number of girls at Medway is likely to be tiny, and as they are to be kept in separate accommodation from the boys, does my noble friend agree that the cost per girl is likely to be very much higher than £2,400; and am I right in thinking that that is £2,400 per week?
Lord Williams of Mostyn: My Lords, it is £2,400 a week. I do not accept the proposition put by the noble Lord that that necessarily means that a girl will be more expensive in terms of charges than a boy. I should have thought that the same proposition would obtain if he made it about local authority secure accommodation, where girls and boys are accommodated. I repeat, for the benefit of those who wish enlightenment, that the cost in local authority secure accommodation is £2,570. That is more than the Medway cost on a like-for-like basis.
Lord Acton: My Lords, am I right in thinking that at Medway there are to be five trainees in each of eight sub-units? If there are only two girls in a sub-unit, and if there are no boys in a sub-unit, are not the girls going to cost considerably more than the boys?
Lord Williams of Mostyn: My Lords, many years ago my father warned me, "If you ever go to the House of Lords, avoid two things: loose women and hypothetical questions."

Public Interest Disclosure Bill
Brought from the Commons; read a first time, and to be printed.
Registered Establishments (Scotland) Bill
Brought from the Commons; read a first time, and to be printed.
Road Traffic Reduction (National Targets) Bill
Brought from the Commons; read a first time, and to be printed.

European Communities (Amendment) Bill
3.7 p.m.
Lord Whitty: 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 Whiny.)
On Question, Motion agreed to.
House in Committee accordingly.
[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES in the Chair.]
Resumed debate on Clause 1: Amendment No. 10.
Lord Bruce of Donington: The Committee will recall that Amendment No. 10 deals specifically with the items set out in the new Title VI on page 29 of the Amsterdam Treaty, to which, with the Committee's permission, I should like to refer. There can be no question that this section of the treaty puts unemployment on the agenda. But to be on the agenda is quite insufficient to deal with the situation that currently confronts us. At the moment there are 19 million unemployed people in the European Union and the figure is rising, if account is taken of the United Kingdom statistics which, presumably, are to be corrected. The figure will rise to probably 20 million.
On previous occasions—and I do not propose to do so this afternoon—I have drawn your Lordships' attention to the undesirable economic and social effects of large-scale unemployment developing in Europe. Those of us who have memories that go back before the last war will know perfectly well that the rise of fascism in Europe, and Nazism in particular, were powerfully assisted by large-scale unemployment at that time. That produced considerable unrest and resulted in the formation and strengthening of the Nazi movement in Germany with consequences of which we are all well aware.
So it is only right and proper that, with unemployment developing in Europe on the existing scale and showing no signs of diminution—in fact, rather the reverse—those who participated in the deliberations leading up to the adoption of the Treaty of Amsterdam were bound to have that consideration in mind.
Members of the Committee will see from new Title VI that adequate testimony is paid to this subject. For example, Article 1090 refers to,
"Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article 109n",
which is the previous article. That states,
"Member States and the Community shall … work towards developing a coordinated strategy for employment".
Article 109o, paragraph 2, continues:
"Member States shall have regard [to] promoting employment as a matter of common concern".
Article 109p states:
"The Community shall contribute to a high level of employment by encouraging cooperation between Member States".

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Perhaps more importantly, paragraph 2 of the same article states:
"The objective of a high level of employment shall be taken into consideration".
Article 109q says:
"The European Council … shall each year draw up guidelines which the Member States shall take into account"—
I put the words "shall take into account" in parenthesis for the purposes of my present argument—
"in their employment policies. These guidelines shall be consistent with the broad guidelines adopted pursuant to Article 103(2)".
So no one can say that adequate consideration was not given to the matter.
The trouble is that at best consideration of the problem of unemployment,
"shall be taken into consideration",
whereas the situation in Europe requires that it should be a principal priority at this time, affecting as it does the lives and fortunes of thousands of people in each of the member states, including our own. Politicians are prone to announce very good intentions. I speak in terms which I trust represent broadly consensus politics across the Chamber because consensus politics are very much in vogue these days. No one can query the sentiment which, for political purposes, is given wide circulation in the press and the broadcasting media. But the question is: what is to be done about it? It is not simply a question of having regard to the situation.
Members of the Committee may suffer a variety of emotions from time to time. We all know what "taking into account" means as distinct from forming a firm conviction leading to a springboard to action. I can sympathise, and I trust that your Lordships will also sympathise, with members of the Government and the Opposition—I believe in consensus politics for this purpose—who may have had the utmost good intentions.
The difficulties are the factors which diminish the prospects of employment. They are not merely matters to which some regard has to be paid. They appear in the Maastricht and Amsterdam treaties. Those treaties lay down economic formulae against which there is no argument. We have abdicated that responsibility; it has gone to the Bank of England. There is no argument as to what has to be done. All these matters are laid down.
We must have regard to the mathematical formulae set out in the Maastricht Treaty; we have to look to deficit financing as well. We have also to consider the recent deal as regards economic and mathematical formulae enshrined in the stability pact. In other words, our hands are already tied by treaties to which we have put our signature and which, in accordance with the procedures normally adopted in the Community as a whole, are now enshrined in our own law.
Members of the Committee will be well aware of the numerous fudges which have taken place over the past few weeks in forcing member states, sometimes successfully and sometimes otherwise, to adopt the deflationary policies which are quite explicit in the Maastricht Treaty and in the stability pact. These are
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the actualities of the situation rather than the aspirations which we might legitimately have, bearing in mind the humanities and social policy generally.
So we are in some difficulty. I trust that neither my own Government nor those who have a consensus with them on the other side of the House will seek to cast these matters aside or try to prove that, after all, Maastricht meant nothing and that the deflationary policies originally set out in the Delors Report and in the European Agenda 2000 can be lightly cast aside. They are part of our daily lives. Due to other factors which are not relevant for the purpose of this amendment, but which many of us hope to discuss later, they are not subject to democratic control either.
We are caught completely outside the variations that could be made to policy as a result of democratic considerations of these matters. We are, literally, in the hands of the machine—and it is a machine which is being administered effectively on matters on which I hope to be able to enlarge later which ensure that the will is enforced. We are in the midst of deflationary policies which will be pursued with the utmost ruthlessness and which make any consideration—sympathetic or otherwise—of the solutions of the unemployment problem a mere exercise in academics, which I am sure will please those academics who may be present this afternoon.
Lord Moynihan: Before turning to some of the important issues which the noble Lord has raised, we on these Benches would like to wish the noble Lord, Lord Shore, a speedy recovery from his illness. Having heard the noble Lord speak earlier at Committee stage, it strikes me that he must be well below par to be absent from our proceedings today. It would have been his deep desire to participate. All of us—those who echo his words as well as those who oppose them—recognise the significant contribution that he has made to date to our Committee proceedings. I know that all noble Lords wish him well.
After a brief introduction to the important issues which we shall be debating in these amendments, I intend to focus on the employment chapter in order to enable other noble Lords to reflect on that chapter. Then, with the permission of the Committee, within the same group of amendments, I should like to consider the social chapter in detail. The reason for that is that the Amsterdam Treaty marks the point at which this Government became full signatories to the European social model, composed of the social chapter and the new employment chapter. In our view, that provides for a centralised European employment programme. This is an area where the Opposition accept that the Government were not negligent in their negotiations at Amsterdam but rather deeply misguided. On this issue, we are in genuine disagreement and that is why I have tabled an amendment and new clauses to oppose both measures.
On these Benches, we believe that there is an inherent contradiction between the social chapter and the employment chapter, on the one hand, and the needs of a competitive, flexible economy, on the other, but apparently the Government do not think so. Perhaps the

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Government do not recognise that contradiction because, collectively, they share the opinion of the Minister of State in another place, who has confessed, perhaps in another example of truth spoken in jest of which this Government are so fond, that he does not believe statistics. He said:
"I had the misfortune to study economics for four years. That experience taught me never to believe statistics".—[Official Report, Commons, 12/11/97; col. 998.]
That presumably helps to suppress the inconvenient facts that we have signed up to the European Social Model exactly at a time when unemployment is falling in the UK and rising in the rest of Europe; that one-third of all investment into the EU flows into the UK; and that Britain has created more jobs in the past four years under the previous government than all the major countries of Europe put together.
Since 1992, the UK has enjoyed the longest and strongest recovery of any major European country. I should point out that unemployment in the UK is significantly lower than the EU average and is lower than in Germany, France, Italy, Spain, Belgium, Greece, Ireland and Sweden. The UK has a higher proportion of its working age population in work than any other major EU country. The UK has the lowest labour overheads in the EU. For every £100 paid in wages, employers must add non-wage costs, such as employer's social security contributions and health insurance, of £32 in Germany; £34 in Spain; £41 in Italy; but only £18 in the UK.
The strike rate in the UK has been lower than the EU average for each of the last nine years. Over the last international economic cycle (1982–93) fixed investment growth in the UK was more than in any other major European economy. The burden of tax, public spending and public debt in the UK is lower than in any other major European economy. Over the past 20 years, that story has been underpinned by the fact that the United States has created 36 million new jobs, of which 31 million were in the private sector. Over the same period, only 8 million jobs were created in the EU, with no increase in private sector employment.
Taken individually, any one of those points would make a compelling case. Taken together, they conclusively prove that unless Europe cuts its social costs and frees up its labour markets, it will be outpriced and outperformed by the rest of the world, ensuring that the unacceptable levels of employment and unemployment persist. Red tape and regulation are a regime that Europe can no longer afford to keep in place.
Does the Minister disagree with that scenario? Does he feel that we should apply a strong socialist employment policy on top of that success story? Does he believe that marginal differences in price, quality and delivery can make all the difference between winning orders and losing them; between creating jobs and destroying them; and between building prosperity and undermining it in the global economy; or does the Minister agree with the Minister of State in another
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place who apparently discerns no link between competitiveness and the social chapter, for he said:
"Competitiveness is a different issue [from the social chapter], about securing products, new designs, new production systems and breaking into new markets"?—[Official Report, Commons, 4/12/97: cols. 566–7.]
Many of us on this side of the Committee are greatly cheered by the Government's seemingly wholehearted conversion to the principles of labour market flexibility, competitiveness and open markets and fewer burdens on business. But we only hear those comments; we do not see them echoed in policy when it comes to the adoption of the employment and social chapters by this Government. I fear that once the rhetoric of the social chapter is stripped away, the best result for the Government would be an empty page.
Agreement in principle with our European partners on the need for job creation will be very different from agreement in detail on how to achieve that goal. That will not come easily, and although it is most commendable, the practical conversion of some of our European colleagues to the new orthodoxy of the past four years may require a road to Damascus to achieve it, particularly bearing in mind that the Prime Minister of France, Lionel Josping was elected on a platform of cutting the working week.
From these Benches, it will come as no surprise to hear that we agree without reservation that creating the right climate for jobs for Europe's 18 million unemployed people should be one of Europe's highest priorities. Unemployment is Europe's worst disease. Job creation should be a priority for Britain's presidency.
I should like the Minister to give the Committee one concrete example of how he expects measures under the employment and social chapters to increase labour market flexibility and competitiveness and to create jobs. I doubt whether he can guarantee that no jobs will be lost as a result of those measures. However, I shall listen carefully to what he has to say on that because I should like to consider the implications of the measures introduced by the employment chapter. The treaty may,
"for the first time recognise that employment and growth result from the flexibility that comes with skills, not the inflexibility that comes with over-regulation".
But how many jobs will that create? How many jobs were created in Europe as a result of the Prime Minister's so-called employment summit last November?
Treaties, summits and governments do not create jobs. It is businesses, entrepreneurs and risk takers free from the burden of bureaucracy who create jobs. Creating the right conditions for employment is primarily a national responsibility. No one should pretend that jobs can be willed into being simply by legislating for them in a treaty. The key to creating new employment in Europe is to improve competitiveness and productivity and strip away unnecessary regulation. It is on this stage that the UK should have a leading role to play in Europe. The implementation of British ideas and strategies for success should be at the top of the European jobs agenda.

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I have some specific questions on those articles of the treaty that deal with the employment chapter and make member states' employment policies a matter for common concern. Article 109p, paragraph 2, establishes the objective of a high level of employment as a consideration in formulating and implementing Community policies. Can the Minister tell the Committee what common figures member states have agreed upon to define a high level of employment? Could this have future implications for the single currency, given that the Maastricht criteria do not take into account unemployment figures? New Article 109r in the employment chapter allows the adoption of incentive measures designed to encourage co-operation between member states on the basis of Article 189b; that is, the co-decision procedure involving the European Parliament and qualified majority voting. Can the Minister tell us of what these incentive measures might consist? Furthermore, can he give a tight definition of areas where EU money may be spent to reassure us that this is not simply old-style interventionism disguised under the rhetoric of laissez-faire?
Can the Minister also give some examples of the co-operation between member states which is to be encouraged? Can he also give an assurance that British businesses and workers will not be used as guinea pigs for unproductive, potentially costly and ultimately futile pilot projects and that we shall not be put in a position of having to pay for unnecessary and unproductive employment programmes?
The European Council will consider the employment situation each year and adopt conclusions. Article 109q, paragraph 2, provides for the Council on the basis of those conclusions to draw up guidelines for member states to take into account in their employment policies. Can the Minister give an indication of what those guidelines will consist? Can the Minister guarantee that such guidelines in such a chapter, which require member states to make employment policies a matter of common concern and to co-ordinate their actions in that respect within the Council, cannot be used to impose on this country an employment policy to which we are opposed?
Furthermore, each member state is required to provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy in the light of those guidelines. Given that the Council acting by qualified majority on a recommendation from the Commission on the basis of those reports can make recommendations to a member state, what assurances can the Minister give that a future British Government will not have to support and implement inappropriate, unrealistic and even job-destroying policies? In what circumstances does the Minister envisage such recommendations being made? These are detailed questions about an employment policy which goes to the very heart of our market which over the past 10 to 15 years has attempted to strip away the bureaucracy that inevitably jeopardises job creation, productivity and the growth that is essential to the success of a modern and productive economy. To impose yet further employment and social chapter measures and intervention into the market place is counterproductive to growth and successful competition in an increasingly
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competitive global market for the marginal investment dollar. The figures that I have provided both about the United Kingdom's policies and their impact over the past 15 years, the American situation, and the stark comparison with the inherent problems of the socialist model in Europe in these areas, provide proof of the need to do exactly the opposite of what the employment chapter and the social chapter that we are considering now will achieve.
Does the Minister believe that on the principles that I have set out, the annual report to implement an employment policy in the light of Article 109 will be beneficial? What good will it do to increase employment? Given that the Council, acting by qualified majority on the recommendations that are made as a result of that report, can have a far-reaching and deep impact on UK job creation, how do the Government intend to counter many of those policies that have so clearly not worked within Europe and which, through the Commission, can now be imposed on UK businesses as a result of signing up to the employment chapter?
In what circumstances does the Minister envisage such recommendations being made? Would it be when a member state had breached an agreed treaty objective, in which case Council recommendations would presumably carry considerable authority? Could this result in the British Government being hauled before the European Court of Justice, which could then interpret the employment chapter's provisions as placing a duty on the British Government to pursue employment policies dictated by other EU states which could well be against Britain's national interests?
In the light of all that I have set out, who now will have final responsibility for Britain's employment policy? Will it be the British Government accountable to British workers who are the very people to be affected by any changes in policy? I can only conclude that the answer is presumably this: not if our employment policies are to be "a matter for common concern" for all member states.
As I said at the beginning of my intervention, I intend to turn to the social chapter at a later stage of the consideration of the clauses which are now being considered by the Committee.
3.30 p.m.
Baroness Williams of Crosby: I echo strongly the words of the noble Lord, Lord Moynihan, with regard to the regret felt by all noble Lords about the illness of the noble Lord, Lord Shore of Stepney. The noble Lord, Lord Shore of Stepney, is a splendid contender on these issues. He is a man who has bravely expressed his views on many occasions out of a deep sense of loyalty and patriotism to his country. I know that I speak for many when I say that we all hope that the noble Lord will soon be back in his accustomed place contributing to these debates in his unique and remarkable way. Having said that, that is probably the point at which any further agreement with the noble Lord ceases.
I begin by saying a few words about employment policy. I shall then deal with the amendments to social policy. First, I believe it is absolutely clear that Title VI as set out in the Treaty of Amsterdam is specifically an

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intergovernmental policy. Article 109r specifically states that no attempt is being made to harmonise the laws or practices of member states. The other sections of Title VI refer over and over again to an attempt to establish co-ordinated action on employment policy, to exchange information and to try to indicate best practice—in other words, to attempt to deal with this difficult problem by calling upon the experience of each member state. Speaking as someone who for many years has been engaged in OECD employment policies, I can see remarkably little difference between Title VI and that which the OECD constantly adjures upon its many member states: the importance of co-ordination of information and best practice.
I find it difficult to conjure up the kind of ghosts and wraiths that are being conjured up in this debate. I do not believe that there is any serious substance in them. However there is a strong case for co-ordination and the exchange of best practice in this field of all fields, because none of us has the obvious answers. In many instances the best practice in one country can become the initial stages of an imitation, a copying, in another country, which can bring benefits to all.
There is another consideration. The business world is increasingly dominated by multinational companies which will try to achieve the same practices in the fields of training, employment, promotion and skill in all their subsidiaries throughout many different European countries. It is therefore important that governments as well as multinationals and other large companies can co-ordinate their policies and practices in a way most beneficial to the citizens of Europe. For example, Article 109 refers to the exchange of information and best practice. In that context I must declare an interest as the chairman of the Regional Jobs Competition for the EU, where we are constantly engaged in trying to bring the best practice from one area to other countries, very often bringing the best practice in the UK—Scotland, the north east and the south west—to the attention of countries such as Spain or the Netherlands where a similar problem of a declining industrial base has to be dealt with. I can see no possible damage in that and every possible good, including a great deal of good for those who are most innovative and entrepreneurial in our own country.
Secondly, increasingly, under earlier provisions of the treaty, there is a greater mobility of skilled and qualified people, so what can possibly be the objection to trying to co-ordinate and to bring together training for skill? Surely we want to see a similar exchange of young people, a similar widening of opportunities for those whose training and education lie essentially in the vocational and skill areas to that which most noble Lords have broadly accepted for the exchange of university students under the Erasmus scheme.
That brings me to the first question that I want to ask the Minister. Will he tell us something about the attempts to widen the opportunities for young people who are training in advanced skills, to exchange their experience and work in other countries, so that we have a situation similar to that which now exists under the Erasmus scheme for university students?
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Secondly, it is appropriate that there should be an annual report to the Council and to the Commission, but here I have some sympathy with those who have tabled Amendment No. 28. On these Benches, we believe that it would be wise to make that same report available to the European Parliament and to national parliaments. There seems no reason why it should not be made available. In that context I wish to commend Her Majesty's Government for having already made clear their own employment policies and for making them available to members of the public before the Cardiff summit looks at the comparative achievements of all the different countries in the Community.
With great respect, I found the arguments of the noble Lord, Lord Moynihan, which depended apparently on the argument that in Britain everything is as it should be, that we were the most competitive, most brilliant in performance, and most sharp-edged in pricing, a little strange in view of the fact that we are still contending with serious balance of payment problems at a time when countries which he criticises strongly, such as Germany, bound from one month to the next from one balance of payments surplus to the next. No one in this Chamber can pretend that Germany does not have serious problems. So she does. No one can be true to the facts if they do not recognise also that Germany, despite the social model—some of us would say partly because of it—has a remarkable record of economic achievement.
Finally, I shall address a few remarks to social policy so that I do not have to detain your Lordships again. The Social Charter and the social protocol have been exaggerated out of all possible proportion in the debates that have taken place over the past few years. The total number of directives under the social protocol amounts at present to one directive on consultation with work forces; one directive on maternity leave; and one on parental leave.
It is no good talking about the importance of family life, about the need to improve the upbringing of young people, and then to take no steps to try to create a world of work in which such things are possible. Parental leave is right because men and women alike should take responsibility for their children; it is right that there should be consultation between management and workforces. I find it incredible that one should still have to argue that that is in some way a deeply counter-productive and reactionary policy. It is right that the treatment of part-time workers in terms of working conditions and opportunities should be similar to those of full-time workers.
Surely we want a society where there is a competitive, entrepreneurial, imaginative and innovative industry, but one that exists within the tenets of a compassionate, responsible and decent society. That compassionate, responsible and decent society means that we have to give priority to high employment and to a compassionate social policy. Alongside our undoubted achievements in areas of competition, innovation and entrepreneurship, it is tragically true that Britain has the highest proportion of children in poverty, the highest proportion of families in poverty, and one of the most rapidly growing unequal structures of income

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distribution to be found anywhere in Europe. That is not something of which to be proud. We need British entrepreneurial attitudes within a social model that will enable all people in society to recognise the responsibility that each has to the others.
3.45 p.m.
Lord Monson: From these Benches I, too, wish the noble Lord, Lord Shore of Stepney, whom we all admire, a speedy recovery. Although I am not remotely capable of matching his eloquence, I should like to pick up two or three of the points made by the noble Lord, Lord Moynihan, in his most interesting speech. I should like to have been a fly on the wall when Articles 125 and 130, dealing with employment, were being hammered out.
Which EU governments can seriously believe that EU unemployment can be reduced by "co-ordinated strategies" or "the issuing of guidelines"? We all know why unemployment is so high in the highly regulated continental economies with their burdensome social costs and, more often than not, their high minimum wages. It does not require the creation of costly quangoes, such as the treaty envisages, to discover that. Naturally any national government and parliament will respond to the wishes of their own electorates and do their best to maximise employment for their own people, first and foremost.
Under those circumstances—assuming that they are determined to keep their high social costs and their high minimum wages—there is only one way in which high continental unemployment can be reduced in the short-term, although certainly not in the longer term; that is, by the introduction of protectionism. Overt protectionism is of course forbidden by the GATT, but there is plenty of scope for covert, indirect protectionism. We have only to think about the way in which the French channelled Japanese and other Asian electronics imports to a small customs post in the inland town of Poitiers, thereby delaying them by several months, to realise that.
That protectionism is what the French have always wanted to keep out goods from Asia, the Americas, Australasia, and so forth. The French even managed to infect the late Jimmy Goldsmith with that virus. Now it appears that even the Germans seem to be moving to some extent in the French direction in so far as they seem anxious and, indeed, ready to keep out eastern European manufactured goods and agricultural products. Is that, one wonders, the direction in which those who have formulated the employment articles hope the so-called co-ordinated strategy will lead?
Lord Renton: We are discussing an important issue. Surely, in every modern democracy the three principal aims of economic policy must be, first, the creation of employment; secondly, the improvement of social services; and, thirdly, the raising of the standard of living. But the creation of employment must come first because without it we cannot achieve the other two. Economic policy involves many aims, but they are merely a means to an end. Monetary policy, interest
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rates, the balance of payments and increasing production, for instance, merely support the aims, but the creation of employment must come first.
In that respect, I was pleased that the noble Baroness, Lady Williams, praised the speech of my noble friend Lord Moynihan. He gave a powerful analysis of the need to put the creation of employment first. I am pleased to say that the Conservative Party, which I have supported for many years, performed extremely well, especially in its last five years in government. Great achievements were also made in the early years of the Thatcher governments. It is a pity that during the general election campaign, almost a year ago, the people did not appreciate what had been achieved.
It is right that during our debate on the part to be played in Europe we should concentrate first and foremost upon the creation of employment and how our membership of the European Union, under a new treaty and further strategies, can lead to that principal aim. I hope that the government spokesman will give a full and careful answer to the points made by my noble friend Lord Moynihan.
Lord Grenfell: I, too, am sorry that my noble friend Lord Shore is indisposed. He adds enormous wisdom to our debates, even when we do not agree with the points he is making. Today, I have a difference of view with the noble Lord, Lord Moynihan. It is curious that those who have attacked the provisions in the new title are pessimistic about the possibility of best practice in this country being transferred to other members of the Community. They attack the title as though it were designed to create unemployment. One has only to read the title to see that it is replete with objectives, all aimed at putting employment at the top of the list and creating maximum employment possibilities.
Secondly, the title deals with developing a co-ordinated strategy. When a community of nations suffers from the problem of perhaps one country being successful in its employment and others not, it is not unreasonable that there should be a transfer of ideas. People should come together to discuss what in the practice of one country brings about a better record of employment which could be adopted by another country. That is all that the title proposes. It tries to find the best and most practical means of discovering what is best practice and encouraging its adoption by those countries which do not possess it.
The flexibility of the labour market is a typical example. Of course other countries have a great deal to learn, but I cannot understand the attitude of those people who assume that we should have nothing to do with this title, as if we have nothing to say to our Community partners. That is not the case. What on earth is wrong with drawing up guidelines for member states to take into account employment policies? Does not this country have the confidence to impart its best practice to others? Is it afraid to discuss with other members of the European Union how we have arrived at a successful employment policy with less than 5 per cent. unemployed? That is what Title VI is all about. It shares

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the experience that we have accumulated in order to ensure that the European Union as a whole can improve its employment record and learn something from us.
I wish that those who attack Title VI on the ground that it is an intervention and interference would look at it from the other side and see that it is not an intervention and interference in our business, but an invitation to us to pass on our best practices to those who need them most.
4 p.m.
Lord Tebbit: I believe that the noble Lord, Lord Grenfell, misunderstands the way in which the transfer of best practice operates. The British motor industry, which had fallen into the worst practice in the world, did not manage to regain its competitiveness by going to governments and asking, "Please, can you tell us what the Germans and the Japanese are doing which is right?", and then waiting for governments to meet under the cover of a great treaty, with enormous numbers of people going backwards and forwards to huge offices erected in Brussels. It did not happen like that. It happened as a matter of commerce; as a matter of business. Sadly, in the end, because we were slow at picking these things up, Japanese companies arrived in Britain and demonstrated to us just what best practice meant.
I must assure the noble Lord that I was in the Department of Trade and Industry when the Nissan Motor Company came to Great Britain. It was not universally welcomed by Members on all sides of the House, but it came. It did not have to bring best practice from Japan via the government in Tokyo, coming across to me in the Department of Trade and Industry and asking me to go out and tell people in the industry what it should be doing to make motor cars. This is an absolute mare's nest. The only best practice we would receive from this method would be the best practice of bureaucrats in creating jobs for themselves and destroying jobs for other people.
I took an interest in what was said by the noble Baroness, Lady Williams. She said that this is no more than occurs all the time in the OECD. That is fine. But why do we need this provision? We could throw away part of this treaty and achieve the result by going through the OECD. If the provision does no more than the OECD does, why do we have to re-invent the OECD and put it into the Treaty of Rome in order to achieve the aim? It is a most extraordinary argument. Of course I know why it is, as I am sure do most noble Lords if they think about it. If we include in the Treaty of Rome words in particular of the kind which the noble Baroness, Lady Thatcher, used to believe were guff, they acquire a life of their own. Matters of common concern move on and become matters of common policy. Sooner or later they become matters of single policy. That is a progress and that is why we cannot leave the matter with the OECD. It is why we cannot leave it to businessmen, through the normal flow of practice and competitive pressures, to take best practice from one country to another.
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In particular, I noticed the comfort which the noble Baroness gave. At the bottom of page 30 of the treaty are those words from which the noble Baroness told us we should take great comfort. The treaty states:
"Those measures shall not include harmonisation of the laws and regulations of the Member States".
But that applies to paragraph 109r. It does not apply to paragraphs 109p or 109q or any of the other paragraphs. It applies only to the part which matters least and it does not apply to the parts which matter most.
I am not a stranger to all this kind of thing. When I was Secretary of State for Employment, we were making some of the changes which, I believe, before the election the then Leader of the Opposition, now Prime Minister, used to refer to as "best practice" in industrial relations law. I might add that that is best practice against which he voted on every possible occasion when those changes were being introduced. But let us set that on one side. We should welcome sinners when they come to repentance.
However, when I was introducing those measures, which now stand out clearly as best practice in Europe, I was being badgered constantly by my colleagues in the Council of Ministers with ideas of precisely the sort that we are now seeing introduced through the social chapter. "Why don't we do this?" they asked. As we all know, the power of initiation does not rest with Ministers but with commissioners and, at that time, they had the powerful backing of a most distinguished commissioner. Since he is not on the Government Front Bench at the moment, I shall not mention his name. But he kept bringing forward those ideas and bringing them forward in the Council. At that time, we needed unanimity and so I merely made it plain that there was not the slightest prospect of unanimity and those ideas were taken away again.
Always I said to my colleagues, "Look, if you sincerely believe that those measures will assist your economies, will help to reduce unemployment, will give new energy to your commerce and industry, why don't you introduce them? I wouldn't stop you. I wish you good fortune". "Oh no", they would say, "We couldn't do that because unless you were required to introduce them as well, you would have a competitive advantage". That seemed to me a most extraordinary argument.
Of course, it has been refined now. The French call it le social dumping. The French believe that it is better to be an unemployed French worker than an employed British worker because the British worker is the victim of le social dumping. On the whole, I believe that it is better to be employed in Britain than unemployed in France.
Of course, we would see the pressures to harmonise our laws. After all, it is absolutely disgraceful, is it not, that we see a company like P&O Ferries prospering, carrying goods back and forth across the Channel, while the French opposition is in considerable trouble? Naturally, the view of the French unions is the view which would have been the view of a British union 20 years ago; that is, "We'll go on strike. There is nothing like a good strike for improving the competitiveness of one's business". But of course, at

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present, before they can stop their customers going to P&O, they have to blockade the ports. That causes disorder and social tensions—quite disgraceful affairs. British and German lorry drivers can avoid the disruption of their businesses by using P&O ferries. That causes grave concern for France.
What is the answer? To a Frenchman, it is perfectly obvious: you bring the British into line; you give us the benefit of your employment laws. That is the purpose of this provision.
The noble Lord, Lord Bruce, speaking this afternoon, said what I am sure the noble Lord, Lord Shore, had he been here, would have said too. I must say that I shall miss hearing the vivid imagery of the noble Lord, Lord Shore, on this matter. It was said that we should have a common purpose of creating employment. That is quite right. But here is the rub. At the moment, we seem to have found that happy trick of increasing employment and reducing unemployment in this country. We are doing it quite well.
What is it that is stopping our competitors on the Continent from following our best practice in that regard? Why do they not adopt the British system? Are they waiting for a treaty which would compel all of them to agree that our system is better and that they should adopt it, or are they waiting for an opportunity to make sure that we fall into line with them so that we are not competitive?
If the European Union were the world perhaps that trick might work for a while, but it is not. I talked recently to the managers of one of our largest, most successful manufacturing companies. They have made the decision that, for the first time, they will establish a manufacturing plant outside the United Kingdom. They are a shrewd bunch, very successful. Are they rushing to Germany, Spain, Greece or Finland? Not on your life. Nor are they going to the Far East to enjoy the fruits of purposeful capitalism àla Will Hutton in Malaysia. No, they are going to the United States. They are going there because not only is land cheaper, not only is the cost of the construction of a factory cheaper, not only are the planning procedures simpler, not only is the bureaucracy less but the wage overhead ratio is better too. There is less interference from union officials more concerned with making a living for themselves than making a living for their members.
If we were to have a treaty under which we were to bind ourselves to exchanging information on best practice, and perhaps even one day to bind ourselves to accept the practices of others, we might do better to have a treaty with the United States than with France or Germany.
I am afraid that, in this treaty, we have got it all wrong. I now come to some common ground with the noble Lord, Lord Bruce. Paragraph 2 of Article 109p states:
"The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Community policies and activities".
Could there be a more important part of a government's policy in that regard than the management of the currency? Who, in this brave new world of the European
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Community, will be in charge of the management of the currency? It will not be this place, not the Bundestag and not the National Assembly; it will be a quango of bankers. The treaty specifically provides that they should not take any notice whatever of outsiders such as, for example, parliaments—even the European Parliament if it should call for policies designed to achieve higher employment.
I am one of those who think that, on the whole, the bankers are more likely to get it right than the politicians, but it seems to me to be a fundamentally undemocratic practice and one which makes an absolute nonsense of Article 109p. I think that we would be better off if the whole of this section were torn out of the treaty now before it does any more harm.
Lord Beloff: The word "statistics" was mentioned earlier in the debate on this amendment. What I believe people thought about at the time were economic statistics. However, as the eminent economists who normally grace the Labour Benches are none of them present today, I shall not embark upon something which would leave them disadvantaged in their absence.
I shall, therefore, talk about another kind of statistics which are much more immediately relevant; namely, the statistics of voting in yesterday's election in Saxony-Anhalt. It is important to notice that in a state in Germany—which still seems to have the untrammelled devotion of the noble Baroness, Lady Williams—over 12 per cent. voted for a Neo-Nazi party, while something like 40 per cent. voted for an ex-Communist party advocating the same policies as when the GDR was a Communist country. Commentators on those results have pointed out that the division there is one of age—the older people still hanker after the quasi-security of their former Communist regime but the younger people find that a little pathetic and go for Neo-Nazism. At whose expense have those votes been garnered? It is at the expense of the two governing parties in the coalition of the Federal Republic—Chancellor Kohl's Christian Democrats and their Free-Democratic partners, who did not even make the 5 per cent. necessary to be represented in the Land Parliament.
That has happened at a time when the German Government seem intent on bludgeoning Europe into a single currency. The fact is that in Germany a single currency, among other things, has not led to improvements in employment but to a kind of mass unemployment. That is the ultimate explanation of the electoral figures, as it was, in retrospect, probably the ultimate explanation of the rise of Hitlerism in the first place. It seems curious that this phenomenon is taken so little account of when we are considering a treaty which intends, in one way or another, to bind us more closely to an economy (and an outlook) that is proving to be such a massive failure. Even in prosperous western Germany the unemployment figures are still very high.
The point I wish to make is a simple one and one which I have already made in reference to this Bill and to the Maastricht Treaty before it. Europe consists of a

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number of countries of a highly individualistic kind, each of them with their own preferences, their own convictions and their own ways of doing things. Any attempt to put them into a single system is bound, in the end, to run up against that simple fact. Attention has already been called by, I believe, the noble Lord, Lord Monson, to the French preference for protectionism as a way of securing employment. As it goes back for some 300 years, it is not surprising that they are attached to it. For reasons which I believe could be explained if we had the time, the Germans have the feeling that you somehow or other create employment by limiting the freedom of employers and exalting the influence of trade unions.
In each of those countries there is something different. As my noble friend Lord Moynihan pointed out, we have a different approach. I do not expect for a moment that it is ignorance of that approach which prevents the Germans, the French, the Spaniards or indeed the Italians from adopting the British model; it is just not relevant to their situation as they see it. Surely it is important for a British Government to retain under their own control the basic instruments of economic policy. To do less than that is to betray the electorate to whom, at least in this country, government are responsible.
4.15 p.m.
Lord Stoddart of Swindon: I should like, first, to thank all those noble Lords who have sent their good wishes to my noble friend Lord Shore of Stepney. It is absolutely true that we are missing him very much today. We shall continue to do so tomorrow, but perhaps not on Report. I spoke to my noble friend's wife last night and it appears that he is quite ill in hospital. Nevertheless, he has taken a great deal of interest in what is going on. His wife hopes that he will be out of hospital on Wednesday, but it will be some little while before he can take part in our proceedings. I shall ensure that the good wishes of noble Lords are passed on to my noble friend.
My noble friend Lord Grenfell and the noble Baroness, Lady Williams, asked what this was all about. They said that it is only a bit of talk, the employment chapter is intergovernmental in its operation and, therefore, why not give them our ideas and why not listen to theirs? That is a seductive argument. However, the problem for me is that I have heard it all before and, after a little while, it becomes part of the ratchet effect towards a federal Europe.
We heard that foreign and security policy would be intergovernmental and that we were only going to have chats about such issues. Indeed, we were only going to discuss foreign policies. However, in this Amsterdam Treaty, the matter has been taken very much further than we thought it would be when we discussed Maastricht. It bears no relationship to the assurances that we were given about foreign and security policy during the debates on that matter.
The same is true as regards police and judicial co-operation which, again, is an intergovernmental pillar. Once again in the Amsterdam Treaty the question
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is being taken further. More powers are being given to the institutions of Europe than we were led to believe would be the case when we discussed the Maastricht Treaty. That is what worries me about this employment chapter. Of course I do not mind discussing matters with our European competitors. I do not mind discussing them with anyone else in the world because full employment is a good objective. The Labour Party, which I joined 50 years ago, has always had that objective. Indeed even the Conservative Party came to accept it eventually. Of course full employment is a great aim and something which we should all support. However, I fear very much that the way in which the European Community works will not necessarily bring that about.
I do not know how many noble Lords watched the programme on BBC2 on the way that EMU and a single currency were obtained. It was an interesting programme. It showed just how undemocratic the decision making process is and that ordinary people were never involved. When we talk about the people's Europe we are not talking about ordinary people; we are talking about the "top people" in Europe. It is the "top people's" Europe that appears to concern some people, not the real people's Europe.
Those who watched that programme would have seen exactly how two men stitched up EMU and a single currency over tea, like any potentate of bygone ages. It was not done through a democratic process. They had not even discussed the matter with their parliaments or assemblies. It was decided over a cup of tea. They made great decisions which affect people's lives, their employment or unemployment, without any reference to the people at all. That is why I am worried that although this new title may be intergovernmental, in the final analysis one or two people will make the decisions without reference to any democratic process. I am worried about the whole issue of EMU and a single currency because those people were not concerned about the economic aspects except in so far as they concerned France and its high unemployment rate. They were concerned about the political aspects. One could see how Germany and France between them were prepared to sideline and to "do down" this country.
If some of us are suspicious when matters such as Title VIa are drafted into a new treaty, please excuse us because we have been through all this before and it is a continuing process. Those are the reasons I believe we should be careful about this title and why I shall support, with alacrity, the amendment in the name of my noble friend Lord Shore whom we all wish a speedy and good recovery.
Lord Moynihan: I mentioned earlier that I thought it was critical to address the questions posed by the social chapter. I do so now with renewed vigour. I am always cautious when I listen to the noble Baroness, Lady Williams, because I think it is fair to say that we agree on many aspects of foreign affairs, but on this subject we disagree most vehemently. We take a polarised position in that disagreement, save possibly as regards the importance of compassion in politics. I hope she will accept that I believe equally in the importance

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of compassion in politics and see it being achieved best by satisfying the primary concern expressed by the noble Lord, Lord Renton, of creating employment and providing individuals with jobs. The statistics I mentioned when we focused on the employment measures were endorsed by those of us who are involved in politics and in business who also recognise the importance of compassion in terms of creating jobs and creating a healthy economy.
I believe that true compassion is effectively expressed in phrases such as that used by Hans Olaf Henkel, President of the Federation of German Industries, when he pointed out that,
"Great Britain has become the most attractive location for investment in Europe".
For it is governments who create the right legal, regulatory and fiscal framework to ensure maximum efficiency, creation of jobs and competitiveness. That is an important part of compassion. From these Benches our position has been unequivocal and constant. We were simply not prepared to accept the social chapter proposed at Maastricht because it opens the door to unwanted regulation which threatens to damage our competitiveness and destroy jobs.
The Government have given many reasons why they signed up to the social chapter. We have been told repeatedly that our opt-out was damaging and that it insulted British workers. The Foreign Secretary said,
"We have ended the insult to the British people that they are fit only for the worst rights at work in the whole of Europe".—[Official Report, Commons, 12/11/97; col. 912.]
How can he possibly claim that to be accurate when set against the relative success of our economy and the compassion in creating so many jobs through our productivity over the years? In my view those words of the Foreign Secretary are hollow indeed. We were told that it was essential that we signed up to the social chapter if British workers were to have the same rights as those in Europe.
I understand the point made by the noble Lord, Lord Grenfell, that the Minister in another place sought to embrace the same rights as those in other countries in Europe already have. I am in complete agreement with him on the importance of dialogue, but I do not believe for one moment that it could not take place in a constructive manner without signing up to the social chapter. We were also informed that our opt-out reduced our influence in Europe and that we needed a seat at the negotiating table. Of all the issues that we shall debate in Committee this is possibly the most important one. I recognise that this is a subject that appeared in the Government's manifesto. It is not my intention to seek to divide the Chamber on this issue at any stage because I recognise that this Chamber has accepted that we do not challenge manifesto commitments, particularly one that was expressed so strongly by the then Labour opposition.
However, during all the "door knocking" and canvassing that occurred during the previous general election, I did not come across a single voter who decided not to vote for the Conservative Party because of the Government's intent with regard to the social
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chapter. I may be unique in that and other Members of the Committee may have had a different experience. I should like to know in what way our opt-out from the social chapter was damaging. What are the benefits that our opt-out from the social chapter has denied us? What is the injury, the damage, the detriment that the opt-in agreed at Amsterdam is supposed to rectify? Did our opt-out mean that jobs were lost? No, on the contrary. Did it threaten our economic success? No, on the contrary again. Were we ever at risk of unwanted and possibly job-destroying legislation imposed on us by qualified majority voting? The answer is clearly not; on the contrary.
It is disingenuous for the Government to say, as the Minister said in Committee in another place, that the social chapter is,
"not only about what can be agreed at a European level; it is also about recognising that some things are better dealt with at a nation state level. When the Government judge that that is the case … we are determined to make it the case that those matters are determined at a national level".—[Official Report, Commons, 3/12/97; cols. 436–437.]
But that is patently untrue. The Director-General of the CBI put it best when he said:
"If you sign up to the social chapter you can't actually be sure that you'll have your way because some directives will he covered by qualified majority voting. There is, however, a way to pick and choose, and that is available to the Labour party if it wants to have it as its policy. The way to pick and choose is actually not to sign up to the social chapter".
The directives covered by QMV mean that the Government would be powerless to prevent some measures being imposed on the United Kingdom against its will. This threat has already become a reality before the social chapter has even been put in position; it does not become active until the Treaty of Amsterdam is signed.
Yet the reality has been shown, because Commissioner Flynn has proposals to extend the works council directive to companies with 50 workers and above which, if successful, would be introduced under the QMV sections of the social chapter, with no chance of a national veto.
The Government oppose these proposals to extend compulsory works councils. Yet, as the CBI business update says:
"the Government has stated that it shares our reservations, but it can be overruled since this is one aspect of Social Chapter legislation which can be covered by QMV".
How will the Foreign Secretary guarantee to ensure, as he has promised, that the Commission's proposal for all such legislation with which the Government disagree is amended? Will he give the same answer as the President of the Board of Trade, who told the BBC's "On the Record" programme that she did not support Commissioner Flynn's proposals for national works councils; but, when asked what action the Government would take to prevent the proposals for national works councils becoming law, she could only manage to stumble:
"Well, er, we shall see how things go".
How will the Government pick and choose between those social chapter policies which suit them and those which do not if they, and indeed many policies, can be

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introduced under QMV? When summing up, can the Minister guarantee that such a measure to introduce national works councils, if the Government proved powerless to prevent it, would not be damaging to the interests of the 3·7 million small British businesses and the entrepreneurs who run them who risk their all to make their businesses a success and who do not have the resources to pay for the personnel departments and the compliance officers?
The noble Baroness, Lady Williams, was right to underpin the importance of social legislation, and I echo those sentiments. But we have a Parliament in which we can consider each possible measure that we deem necessary in this country to protect workers. I have a list, with which the Library have generously provided me, with hundreds of measures appropriately considered by Parliament and passed for this very purpose, and on which I have full agreement with the noble Baroness. But, under the social chapter, legislation in any of these areas—working conditions, the information and consultation of workers, equality between men and women in relation to both employment opportunities and treatment at work, the integration of people excluded from the labour market and health and safety at work—can be introduced under QMV and the Government would have no power to stop such legislation.
There will be noble Lords on both sides of the House who will say that these seem reasonable areas for proposals. But let us look at them. Proposals under working conditions, the first I cited, which could not be vetoed if they are adopted, include the requirement for firms to provide equal rights for permanent and temporary workers, which is already a European Community proposal; no more flexibility in employing temps or casual workers; the requirement for firms to provide full employment rights for all workers—no more probationary periods and full redundancy costs; and the requirement for firms to provide full pay for every day of sickness, as in Germany, which could lead to an increase in sickness absenteeism. All these are measures which have been considered in both Houses of Parliament and all are measures which we do not wish to see imposed upon us, even if they are right for other members of the European Community.
My second area relates to proposals under information and consultation of workers, which could not be vetoed if they are adopted. I mentioned works councils for all firms with more than 50 employees. There is the obligation to consult elected representatives—in other words, trade union officials—over every management decision—recruitment, redeployment, redundancy; the requirement for co-decision between a company's management and works councils, as in Austria—firms will have to gain the agreement of the works council before every dismissal decision; the requirement for all firms to reserve up to half the seats on their boards of directors for duly elected representatives of the workers; the requirement for firms to apply to the government for permission before making any dismissal or redundancy, as in the Netherlands.
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These are not pie-in-the-sky ideas; I am quoting specific examples which occur elsewhere in Europe and which, no doubt, those countries would like to see universally applied throughout Europe. They deemed the measure satisfactory for them; why should they not propose it within the social chapter to be satisfactory for the whole of the community and push, through QMV, for it to be adopted?
We may say in this House that we do not feel it is right for the United Kingdom. We had the opportunity when we had the opt-out to consider the social legislation appropriate for this country. But that will not be the case in future on proposals as regards the equality of men and women in relation both to work opportunities and treatment at work, which could not be vetoed if they are adopted. On sex discrimination, the European Community proposal would require employers to prove their innocence instead of being innocent until proved guilty, overturning what we consider to be a basic principle of justice; there is requirement for positive discrimination in favour of women in the workplace, with quotas for both female directors and management; and, for example, the requirement for firms to provide all workers four weeks' holiday a year from 1999; the requirement to provide all workers six weeks' holiday a year, as in Spain, which is what Spain believes to be in its national interest and, if it persuades the majority in the Community, the measure could be extended throughout; the forbidding of any worker to work more than eight hours a night on a nightshift, as per the working time directive; and the forbidding of any worker from working more than 40 hours a week, as in France and Belgium, adding further costs and inflexibility to business limitations on overtime.
It is Jacques Santer's opinion that there should be more QMV in the social chapter. He wrote to the effect that he believes that it is essential to extend qualified majority voting to certain provisions of the social chapter which currently require a unanimous vote; namely, to the protection of workers whose employment contracts have been terminated, the social security and social protection of workers and the representation and collective defence of the interests of workers and employers.
The Government say that we are scaremongering. As has been pointed out this afternoon by the noble Baroness, Lady Williams, the two directives introduced under the social chapter to date—the European works council directive and the parental leave directive—have been modest, sensible and reasonable. But that fails to take into account the fact that the danger is not what has already been introduced under the social chapter, but the potential for more increasingly far-reaching social legislation. I have given many national examples in support of my argument on this vital issue. The fact that we had an opt-out acted as a brake on the development of the social chapter. How can the noble Lord, Lord Whiny, guarantee his words, echoed in another place, will remain true in the future? He said that,
"None of the provisions in the social chapter, likely or actual, impose serious costs on British business".—[Official Report, 28/7/97; col. 68.]

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How can the Government guarantee that the social chapter today will not add to the costs of social security tomorrow?
Furthermore, surely our past experience suggests that European Union institutions, including the European Commission and the European Court of Justice, will seek to apply the widest possible interpretations in order to maximise the scope for adopting measures by qualified majority. Hence, the European Union's working time directive was imposed on Britain on the grounds that working time concerns health and safety rather than employment. The Department of Trade and Industry calculated that the working time directive could cost British employers £2 billion.
The noble Lord, Lord Beloff, focused on what is surely the most important issue. After all, what is wrong with a domestic agenda for social legislation? If the Government deem it essential that British workers have the same rights as their counterparts in Europe, why do the Government not introduce employment and social policy measures which they believe will boost employment in Britain through domestic legislation and avoid the risk of the imposition of unwanted and damaging legislation under the social chapter? From those—
Lord Tebbit: I am surprised that my noble friend seems not to know the answer to that question. It is that such domestic legislation could be repealed following a change of mind by the British electorate. Any measure introduced as European legislation under the provisions of this treaty could not be so repealed. My noble friend made the point that we in this place would never vote down a matter that was in the election manifesto of an elected government. Unfortunately, our masters in Brussels do not have such qualms.
Lord Moynihan: My noble friend intervened as I begged the question and before I came to give an answer. I had intended to give two answers. My noble friend has given what would have been my second answer far more eloquently than I could ever have done.
My first answer to the question that I posed is that social legislation must, and should, be tailored to fit the interests of this country as decided by this Parliament for the people of this country. It is just not possible for any student of Europe, particularly given the examples that I have mentioned, to believe that the ill-fitting, one-size-for-all measures on social policy for general use from Finland to France can possibly be in the best interests of this nation.
Thirdly, the argument was put to us that the "empty chair at the negotiating table" philosophy has been used to argue that, despite our opt-out—which meant that we played no part in shaping social chapter policies and had no influence over them—Britain was still affected by legislation under the social chapter and companies were frequently forced to apply it. Even in this House, the Lord Privy Seal himself has told us that there is no halfway house between opting in and staying out, and that we must be at the table arguing our case or we shall be outvoted on measures with which we disagree. That is a critically important point.
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Will the Minister explain why the same logic does not apply to our other opt-outs—to the title on asylum, immigration and visa policy and to our sovereignty over our border controls, to the provisions for flexibility, and even to our opt-out from economic and monetary union? Will the Minister explain where the difference lies and how, elsewhere in the Union, we shall be able to maintain a halfway house between opting in to those measures which may suit us while exercising our right not to opt in to other potentially damaging measures, if that is not possible in the case of measures enacted under the social chapter?
It is therefore relevant for us to consider whether there is a third way, or whether it is merely a damaging dead end. The truth is that, despite the Prime Minister's much vaunted "third way", despite his apparent conversion to flexible job markets and his praise for entrepreneurship—even though it is clear that the Foreign Secretary does not share his enthusiasm—his early action in signing up to the social chapter and agreeing to the employment chapter sends quite a different message: that we are returning to the old, discredited agenda that social legislation is somehow the way to provide more security in employment for people in the modern world.
From these Benches we support the Government if their objective is indeed ending the old ways of state intervention, corporatism and over-burdensome regulation. But it is hard to see how that fits with signing the social chapter, compulsory union recognition, adopting the employment chapter and introducing the minimum wage, many of which are more likely to destroy jobs than create them.
It is particularly ironic that this should happen just as we were winning the argument for the enterprise model of Britain—just as the years of Conservative government were delivering Britain an economic performance that has made it the envy of Europe; just as our partners in Europe were waking up to the fact that the only route to job security and wealth creation is through the success of enterprise, and the success of building an open, outward-looking, customer-driven economy throughout Europe.
4.45 p.m.
Baroness Williams of Crosby: I thank the noble Lord for giving way. Does he not find some inconsistency between his extolling of American records in achieving high employment and his remark about the minimum wage, to which the United States has been attached for many years?
Lord Moynihan: I find none at all. For that reason I assure the noble Baroness, who focused very carefully on the words that I chose, that I should be more than happy to enter into a debate about the effect of a minimum wage. I should, however, be in danger of straying outside the remit of this particular clause. I genuinely believe that the minimum wage, particularly set at the wrong level, can be deeply damaging to the flexibility of the labour market. It is an argument on which I should happily deliver in greater detail.

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The point I was making when the noble Baroness intervened was that the European social model—I quoted four or five specific aspects of that model, many of which would now be employed as a result of the social chapter—has done much to destroy jobs in Europe. When we see that absence in the United States, when we see the climate that we have built in this country, I find it worrying and disturbing, and wholly wrong politically, that we should be going down the path of establishing a stronger social model, which will now be imposed on the United Kingdom as a result of the absence of our opt-out, rather than working in quite the opposite direction to make the economy more competitive, less burdened by bureaucracy and particularly by the social measures that I indicated would possibly have to be adopted—that is the importance of the point made by the noble Lord, Lord Tebbit—by this country whether we liked them or not. I believe that anybody looking at our economy recognises that millions of Europeans also accept that. Perhaps I may quote again to the noble Baroness the many examples cited by strong pro-Europeans, with whom she would have a great deal of sympathy. Jacques Delors forecast after Maastricht that our opt-out from the social chapter would make Britain, "a paradise for Japanese investment".
I have already quoted Hans Olaf Henkel who, I believe, is very wise in this context and highlighted his recognition of the benefits of the right economic framework in the United Kingdom as opposed to the damage that can be done by a European social model, the likes of which we are witnessing in so many European countries and which has brought so much unemployment to those countries. Maybe the Government give greater weight to the opinions of their European partners than those I have just quoted.
However, I add in this context a couple of newspaper reports to support the point I hope to make, although I doubt whether I shall convince the noble Baroness, Lady Williams, on this occasion. Perhaps I may quote the German newspaper Handelsblatt which reported:
"With greater labour flexibility, trade union power was reduced, meaning that Britain has suffered far fewer strikes than during the 1960s. According to OECD economists, Britain is setting the pace in micro-economic reforms".
It went on to say:
"One might even say that Britain was a model".
If the Germans do not convince, then perhaps the French might. Le Monde asked:
"How does one interpret the incredible change in unemployment in Great Britain? If unemployment is dropping in Britain it is because they have done everything to deserve it. For several years, considerable efforts have been made to improve the workings of the labour market, thereby boosting job and new company creations".
Perhaps the last word might go to the Dutch. Jan Timmer, president of Philips, said:
"The most competitive country in Europe today is the United Kingdom. It has a great sense of realism, a great sense of competitive spirit—the factories we have in the UK are the most changed factories in the world. For manufacturing, Britain [for Philips] is the most competitive country in Europe today".
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I have made those arguments in detail because we on this side of the House feel passionately that the proposal to adopt the social chapter, to face the effects of QMV in the way that I have outlined, will be deeply damaging to our economic prospects at exactly the time when we should not be staying where we are but going in the opposite direction for further liberalisation. The policies of the previous government were focused intently on this approach. They gave British business a critical competitive advantage for British business to win orders, create jobs and build prosperity.
The cumulative effect of the present Government's policy, the signing up to the social chapter and the new employment chapter represents a slow but definite erosion in the opposite direction—the salami slicing of that critical margin of competitiveness, starting with small and medium sized firms across the country. To sign the social chapter is to lower our legal defences and to invite into our law, into our market place and into our culture, rules and regulations that are strangers to our spirit of free trade. To sign the social chapter and to agree to the employment chapter is to sign away British competitiveness and to stifle and smother our entrepreneurial shoots of success.
Some confusion exists over the Government's assessment of the importance of the social and employment chapters to British workers and businesses. Can the Minister confirm once and for all whether the social chapter and the employment chapter are vital measures for British workers which will create jobs and lead to better working conditions or whether they are modest measures which are more symbol than substance? It seems to me that both would lead to disaster, although by different roads; the former, by hitting prosperity through burdensome regulations, the latter by fuelling unrealistic, potentially damaging expectations. That is why I have tabled Amendments Nos. 18 and 19 opposing those measures. That is why I tabled the new clause—it appears as Amendment No. 43—calling for a report to Parliament on the legislation and employment implications arising from the social chapter. I hope that the Government will adopt the proposals.
Lord Whitty: This has been a lengthy debate in two halves. For those who can remember, the first half was late on the night of 26th March when we had some broad sweep of history discussions about the whole nature of the European Union. Today has been more concerned, I admit, with the clauses on the table. However, the past hour or so, with its concentration on the social chapter, has once again been a bit of a pre-election time warp. I was hoping that we had got over some of the arguments. The social chapter and the employment chapter are neither the bogies that are suggested by the noble Lord, Lord Moynihan. Nor are they the solution to all our ills. We never claimed that they were.
As regards the broad sweep of history argument, we must be careful. I shall not respond in detail because we have heard much of the argument previously. This is still the Committee stage of the Bill and we should concentrate on the amendments and what is changed by

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the Bill and the treaty which it facilitates. So it will not be the intention of myself or my noble friends to engage repeatedly in debate about the fundamental principles of the Treaty of Rome and UK membership of the European Union. That was the tendency on the night of 26th March; it has occasionally been so today.
The basic framework under which we are operating, including the notion of qualified majority voting, is the same as it was in the Single European Act which was signed when the noble Lord, Lord Tebbit, was a member of the Cabinet and when the Maastricht Treaty was signed at which time the noble Lord, Lord Moynihan—although regrettably not a member of the Cabinet—was a member of the Government.
I therefore cannot accept, as the noble Lord, Lord Tebbit, said in his first intervention, an attack on our adherence to the social chapter on the grounds that it is impossible for us to reverse it. His government were responsible for signing a very large package or range of issues on which QMV would apply, which put us in exactly the same position under the Single European Act—quite rightly, in my view.
The social chapter, as the debate has indicated, is an area where there is a genuine difference of opinion between this side of the House and the other side, although one or two Members behind me seem to share the concern. But that is on grounds of principle and not on grounds of the content of the social chapter.
The difference between us is that we believe that the single market, to which I had thought all the mainstream parties were committed in this country, should have a social dimension. The Conservative Party apparently does not believe that it should have a social dimension. That is a genuine political difference, but not a major constitutional issue.
I had thought, with some relief, at the beginning of his speech, that the noble Lord, Lord Moynihan, recognised that this issue was explicitly settled by the general election. I understand that. In a few areas of the Labour Party manifesto, I understand, people are claiming ambiguity of meaning. But there can be no ambiguity of meaning whatever in,
"Britain to sign the Social Chapter".
The noble Lord may regret losing the general election. He may feel that the British electorate were mistaken in making the decision that they did. But we have never supported the opt-out on the social chapter; the British electorate has never supported the opt-out on the social chapter; and we take pride in reversing the opt-out on the social chapter. It was a squalid little episode in our European history. The British government were behaving like a banana republic, going around assuring potential investors, who were not impressed, that British trade unions and British workers had fewer rights than anyone on the Continent. That is now over, and the British public in general support the change.
There was a slightly different attack on the social chapter in the first intervention of my noble friend Lord Stoddart. He produced an argument I have not heard for some time. It is, of course, true that at one point the British trade union movement and the British Labour Party were against any legal intervention in
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the area of workers' rights and collective bargaining. But that era came to an end, partly as a result of the experience of the 1970s. It is not the position of the Labour Party and has not been the position of the Labour Party for at least two decades. We now recognise on all sides that a clear legal framework for the way in which workers are treated is needed for prosperity as well as for security of workers.
As to whether we should be pursuing those social provisions at national or European level, clearly the vast majority of social policy issues will continue to be determined at national level. The social chapter is a much more limited part of the social provisions than has been claimed today. We have not taken on a whole mountain of prescriptive EU regulations intruding into every aspect of our working lives. We have not shackled ourselves to pointless restrictions which will strangle British competitiveness. As the noble Lord acknowledged, there are so far few provisions, and those which are in the pipeline or which may emerge will be subject to input not only from Britain but also from those countries which he rightly points out picked up the positive aspects of the experience of the British and American economies over recent years, as well as the much longer run of benefits of their own job creation programmes which took place in an earlier period, some of which still benefit them today.
The noble Lord points to the alleged ambitions of the Commission, and of Commissioner Flynn in particular, and a whole range of new regulations. That is scaremongering. Even if Mr. Flynn wished to pursue a whole range of new regulations, he does not act in a vacuum. The member states are increasingly influenced by an approach to labour market flexibility. I hesitate to use the term "the third way", but it is neither the corporatist demon that the noble Lord seeks to conjure up before us today, nor the utter free market concept of cutting workers' standards and wages, of which the previous government were very much in favour in both their domestic and European policies.
5 p.m.
Lord Tebbit: The noble Lord must have clear in his mind examples of where, under the previous government's policies, workers' wages were cut. Will he tell us about those wage cuts?
Lord Whitty: I intended to come to this in terms of the employment chapter, but the biggest wage cut of all occurred with the destruction of a large number of jobs in the manufacturing sector of British industry in the early 1980s.
Lord Tebbit: That will not do. I asked the noble Lord to give me examples of cuts in wages; that is, reductions in the amount of money men received from their employers.
Lord Whitty: I was first making the point that the biggest cut in the aggregate wages of British workers occurred because of the deliberate creation of unemployment by the previous government. They remarked on more than one occasion that unemployment was a price worth paying. However, if the noble Lord

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wishes for more specific examples, for which his department was partially responsible—I believe he was Secretary of State for Employment at the time—we had the abolition of the wages councils. In many of our service sectors, and subsequently in agriculture, that definitely in real terms cut the wages of several hundred thousand British workers. That was the objective. The noble Lord now denies the objective. But otherwise what was the point?
We do not believe that the labour market should be overregulated, nor do we believe that it should be unregulated. We believe that there are decent minimum standards, as do our European partners. We require more flexibility than some of our European partners recently demonstrated. But we believe also that to have a properly flexible labour force we need not only greater skills, mobility, flexibility, adaptability and employability, but also some degree of security and motivation among the workers. Simply cutting their protection and standards does not provide the background to make the substantial changes which the European economies will have to face in order to compete with increasingly globalised world markets.
Our balanced view on this matter—I regret that it is not shared by the Front Bench opposite—is that this combination of flexibility and basic minimum standards is necessary and that the commitment to co-operation at the job summit in Luxembourg last November and in the employment treaty provisions at Amsterdam will lead to a sharing of expertise; to some new European initiatives; and also to the creation of a skilled and adaptable workforce and labour markets which are responsive to economic change. Those are the British Government's words; they are not words which were there before the present Government took over and they are words which recognise the reality of the labour market situation rather than the mythology.
As to whether we will be overruled by QMV on these issues, our constructive approach to Europe gives us a real voice in the future development of EU policy in all these areas. Some noble Lords seem to approach QMV on the defeatist assumption that we will always be in a minority of one. Far from it. We can influence others and bring about our own majority. Indeed, the noble Lord, Lord Moynihan, referred to the empty chair allegation that we made—rightly—on the absence of British influence on the development of the social chapter during the period from Maastricht until the British general election. He mentioned in particular, in a different context, the new proposition coming through the social chapter pipeline on information and consultation for firms with under 50 employees.
It is true that the present British Government, like the past one, is not keen on that proposition. But it is true also that, had we started in the negotiations on that proposition at an earlier stage—in other words, if we had not had the social chapter opt-out—we would have been able to influence it in a somewhat different way. Of course, those negotiations are still open to us; they are not yet complete. The British Government's belated presence will improve the directive and make it more acceptable to us. We will continue to oppose it in its
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present form. But one of the reasons it is in its present form is that no British influence was brought to bear at an earlier stage. As has proved to be the case with the European Works Council, British firms will be indirectly affected by it, whether or not we are a party to the social chapter.
We believe that we have done the right thing in signing the social chapter. The provisions of the social chapter ought now to be accepted by a wide consensus of British industry and British society, and in reality we believe that they are. The debate on the social chapter is politically over as a result of the general election; it ought intellectually to be over in this House once and for all. I hope therefore that amendments which seek to delete our signing up to the social chapter will not appear at any later stage in the Bill. I hope that the noble Lord, in recognition of the convention in these matters, accepts my position—as he outlined—on the Salisbury Convention, not only by not pressing the vote himself but also by not voting for anybody else who may, by some chance, happen to press the Motion themselves.
I was slightly surprised at the vehemence of the Opposition in this debate towards the employment chapter, particularly those arguments we heard this afternoon. The comments we heard in the earlier stages of the debate, on 26th March, were even-handed and perhaps slightly confused. On the one hand, my noble friends Lord Bruce of Donington and Lord Shore—whose absence we greatly miss—made the point that these employment measures were not sufficient to make any real difference to economic policy. In reality, these employment measures will make some difference to the way in which the Council of Ministers approaches employment matters at the European level. They are not specific measures in themselves but they provide a way in which European Ministers can look at each other's employment policies and consider whether they should be generalised across Europe. However, the responsibility for the adoption of those policies rests with national governments.
I find the official Conservative position on the employment chapter quite extraordinary. On the one hand they say—the noble Lord, Lord Renton, echoed the earlier contribution of the noble Lord, Lord Moynihan—that the creation of employment is central to their concerns, but they reject the idea that part of any strategy on employment should be co-operation with our closest trading partners. My noble friend Lord Grenfell made that point clear. We all agreed that greater emphasis on employment was needed. All partners in Europe were convinced of this, although the degree to which we needed new employment measures was subject to some negotiation, and therefore not everyone got exactly what they wanted out of the new employment chapter, as is always the case in these inter-governmental conferences. But the provisions are not a centralised, Stalinist, European employment policy; they are a matter for common concern. Common concern means co-operation; it means learning from each other; and it means that some things are done better at European level than at national level.

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Our position, which has been adopted by Europe, is that we ought to be adopting the kind of guidelines that were agreed at the Luxembourg jobs summit last November. The employment chapter sets out a sensible procedure for member states to work together to identify how best to tackle unemployment. The value of EU-level co-operation is that it enables us to pool our expertise and to identify best practice. I am not clear why the Conservative Front Bench has departed from the position adopted by its predecessor. The previous administration accepted at the Essen summit that there was great benefit in agreeing procedures and guidelines on co-operation on European employment policy, on assessing each other's performance, on identifying areas where European co-operation could take place and on setting objectives for employment policy. In effect, the substantive part of the employment chapter puts into treaty form the agreement with which the previous government, with relatively little dissent on their Back Benches as compared with one or two other European issues during that period, were quite prepared to go along and indeed regarded as a major achievement.
I was asked some specific questions on the articles comprising the employment chapter. The noble Lord, Lord Moynihan, referred to Article 109p and asked whether there would be specific targets in this area. The answer is no, there will not be specific targets in this area in the sense that there are targets under the Maastricht criteria for the single currency, if that is what he meant. But there will nevertheless be some concerted effort to try to co-ordinate activities under that title.
He also asked what incentive measures may be. They are relatively tightly defined under Article 109r, which indicates that initiatives aimed at the exchange of information will be included as well as analysis promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects. For example, we are now working on a project to improve training opportunities for young entrepreneurs. Given that the chapter will not be in force until the ratification of the treaty, specific examples are slightly difficult to define. Nevertheless, they will fall in those kinds of areas. Declarations 23 and 24 attached to the treaty make it clear that any such incentive measures must be limited in time, must have limited financing and must have an objective need.
The noble Baroness, Lady Williams, asked whether they could include incentive measures in order to finance a project for exchange students or young people. They could indeed include such funding, although the funding under this chapter is limited. It is clear that all European-level funding of these activities, as distinct from national-level funding, is within existing budgets. The agreement at Luxembourg, with which Members of the Committee may not be entirely familiar, provides that some of the first measures under this chapter should be an agreement to a significant increase in EIB venture capital which would be lent to small and medium-sized enterprises in order to create employment. But that is not European budget money. It comes from the bank's reserves, not from member states or from the Community budget. The summit also agreed to redeploy 150 million ecus a year from the Community budget to
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provide for venture capital for small and medium-sized enterprises in order to fund projects. But this spending will be offset elsewhere in the budget, so there will be no overall increase.
I hope that, in a slightly rushed way, I have shown that the intentions of the employment chapter are nowhere near as Stalinist and centralising as the noble Lord attempted to conjure up and that they are directed at specific and practical ways in which we can learn from each other and provide some communal expertise and a limited degree of communal resources. They will not lead to vast, new regulations. The noble Lord, Lord Tebbit, asked why the limitation on harmonisation applies to only one article. The answer is that that is the only article in the employment chapter which is a legal basis for the Council to adopt detailed measures. So it would not be relevant to make that qualification to areas other than the article which provides for incentive measures.
The employment chapter will not create jobs overnight and will not bring down the number of unemployed—18 million—in a short time. But it will help to focus member states on the need to tackle unemployment by investing in people, by being competitive and by providing decent prospects for improving skills and mobility. It should also help all EU governments to identify which policies are most successful in doing that.
The debate has perhaps exaggerated the importance of both the social chapter provisions and the employment chapter provisions—not so much the debate in this House but the debate outside. However, it is a real distinction between us. We believe that social measures are an important part of the future of Europe and we believe that the European institutions can help in creating jobs. Apparently, the Opposition do not. We are prepared to rest on that defence but not to create a major constitutional issue out of it. I hope, therefore, that other colleagues in the Committee will not create a major constitutional issue out of it and I trust that, at this stage at least, the amendments can be withdrawn and that consideration can be taken at a later stage.
5.15 p.m.
Lord Bruce of Donington: Before the noble Lord sits down, will he be kind enough to deal with the argument which I presented at the initial stage of the debate, bearing in mind that I am fully in accord with his observations on the social chapter, and more particularly with those of my noble friend the Lord Privy Seal, who pointed out that its effects in any case are insignificant within the general flow of political and economic events? Will he deal with the point I ventured to make that, although the existing employment provisions incorporated in the Amsterdam Treaty are good enough in themselves and put unemployment firmly on the agenda, with marginal good effects where applied, nevertheless, other provisions of the Maastricht Treaty, and indeed of the Amsterdam Treaty, providing for economic conditions, monetary conditions and even fiscal policies to be determined centrally, have had an adverse effect on unemployment and have not contributed to unemployment going down?
Lord Whitty: The reason why I did not deal in detail with that point is because I believe that much the same point was made in the debate that we had on the EMU provisions on, I believe, the second day of the Committee stage. If we are to have a debate on particular amendments which extend to the whole area of economic management, we are going to be here a very long time. I accept that there are some aspects of economic policy in the European Union which have a negative effect on employment. That is the exact and main reason why I believe we should institute an employment chapter which begins to reverse that tendency. Therefore, such a chapter should be seen by the noble Lord, among others, as a benign move in that direction, even if it is a limited one.
Baroness Carnegy of Lour: Before the noble Lord finally sits down, may I say that I have listened with enormous interest to the debate. I have a question which the noble Lord may regard as a matter of detail. If he cannot answer it immediately, perhaps the noble Lord will write to me. He will know that the matters under discussion, such as social affairs and employment, will devolve to the Scots parliament. Under the Scotland Bill not only is there devolvement, but there is no certainty that a Minister from that parliament will be present when United Kingdom Ministers discuss these matters in Europe. Are the Government considering altering the Scotland Bill to make sure that a Minister from the Scottish parliament will be present when these matters are discussed? If not, there are serious questions when there is policy divergence between England and Scotland. Will the Scottish parliament be kept in touch with Europe? I shall be grateful if the noble Lord can answer that question or write to me about it.
Lord Whitty: I believe that the noble Baroness would like me to write to her so that I get the formulation right. However, I do not believe that changes are required to the Scotland Bill to fulfil what we are committed to. I may not have got the formulation quite right, but as regards those areas which are devolved to the Scottish parliament, where European legislation is relevant steps will be taken to ensure that the views of the Scottish parliament on behalf of the United Kingdom are taken into account in the deliberations at European level.
Lord Pearson of Rannoch: Before the noble Lord finally sits down, may I press him on a position taken with some force by the noble Baroness, Lady Williams, and the noble Lord, Lord Grenfell? It seemed to me that they made much play of the suggestion that the United Kingdom should be happy to share with our European competitors the secrets of our social, employment and industrial success compared with some of theirs. In other words, our competitors in the European Union would be wise to accept our experience and advice and follow it.
The point I wish to put to the Minister and on which I would welcome his view is that the evidence to date is that that is not the way matters flow between us. I had intended asking the noble Baroness and the noble
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Lord the same question; perhaps they might like to intervene since we are in Committee. Can the Minister give examples of where the Commission and others have accepted our advice? It seems to me that the bulk of the flow is the other way. I refer to the working time directive—the 48-hour week, as it is known—parental leave, young people at work and other directives mentioned by my noble friend Lord Moynihan. It seems to me that they all prove the way the river flows in this debate. It does not flow from us to them. Can the Minister tell the Committee why he believes that it is going to change direction?
Lord Whitty: All the examples the noble Lord cites show our partners being slightly resistant to ideas coming from the United Kingdom for understandable reasons. There was the hostility of the United Kingdom government of that period to anything European. Therefore, it is not surprising that there was then a certain intellectual as well as political resistance. I believe that in the past few months there has been a major change in that flow. Indeed, the conclusions of the Luxembourg Summit are clearly reflective of the views put a few weeks earlier by the Chancellor of the Exchequer in his proposal as to what a European-level approach to employment policy should be. That proposal is reflected virtually word for word in the Luxembourg communiqué and it is being pursued in the national action plans of every member state. It will have to be reported on by the time of the Cardiff Summit. These are early days. I accept that.
I believe that we have seen a reversal in the flow of ideas—not always ideas which, at their most extreme, have been expressed from time to time by people who are defensive about the position of the previous government but ideas we can share with our fellow members. However, we should not be so arrogant as to assume that there are not still a few ideas of theirs which we can learn from as well.
Lord Hamilton of Dalzell: Before the noble Lord sits down, I have detected in the debate—acknowledging that the party opposite is now in power and whatever it says goes—an ideological difference between us. That was borne out in the contribution made by my noble friend Lord Tebbit. He believes that free market ideologies are the secret to what we have achieved. What has to be borne in mind—and this was very much derided in the speech of the noble Lord opposite—is the extremely painful period this country went through when we shook out what one might call "rust-belt" industries. Europe needs to do that very badly. What advice will the Government give in that respect if they are going to give advice to Europe? Without it, nothing much will happen. Alternatively, will the Minister give the kind of advice which he gave when his party was last in power which led to our having the highest tax, the lowest output, and the lowest level of benefits in the whole of the OECD?
Lord Whitty: We have all been through painful periods of economic adjustment. We went through a much belated one, in the view of some people, in the

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1980s. But we did so in a way which did not take account of the need to ensure that not only were we moving away from inefficient work practices and areas of industry but also that we were equipping our workforce to take on the skills and move into areas in which we would be able to compete in the longer term.
We still have one of the least skilled workforces in Europe. The Germans, and almost any other European country, still have better skill levels. If we can combine the adaptation of the structure of British industry which we have gone through over the past couple of decades with the continued upgrading of the skills of our workforce and of our innovation and expertise, that is the kind of message that we would wish the whole of Europe to receive. At no stage do we intend to go back to what may have been prescribed by some Members of this House in the 1970s. Nor do we intend to go back to achieving change solely at the expense of the workers which, by and large, was the experience of large sections of our community during the 1980s. There is a better way forward not only for Britain but for the rest of Europe.
Lord Hamilton of Dalzell: I am sorry to intrude again. I believe I detected the noble Lord saying that the Germans have reached that situation already. I am always interested in the contributions of my noble friend Lord Beloff. He made the point that the Germans are not very happy in spite of that.
Lord Whitty: I did not say that the Germans had it already; I said that the Germans have a more highly trained and flexible workforce in many areas requiring higher skills than we have been able to achieve. That does not mean that they have resolved all their problems.
I get slightly fed up when people in this House and elsewhere point to Germany as an economic disaster. I note that the noble Lord, Lord Beloff, is no longer in his place, and I accept that some of the judgments of the electorate in Eastern Germany are worrying, but, for heaven's sake, let us accept that one of the major reasons for the Germans' relative failure in the past six or eight years has been the enormous task that they have taken on in absorbing the whole of the defunct and decaying economy of 17 million people in Eastern Germany. I cannot even bring myself to imagine what would have happened to the British economy in 1990, in the last years of the Thatcher regime, if we had had to absorb similar costs. Germany's record over the past 50 years in terms of its creation, prosperity and democratic traditions has been a lesson to us all. The fact that Germany has stumbled on the economic front in the past eight years or so has very little to do with some of the issues raised this afternoon, and quite a lot to do with its absorption of Eastern Germany.
I believe that this amendment stands in the name of the noble Lord, Lord Shore, but perhaps I may ask my noble friend Lord Stoddart to withdraw it.
5.30 p.m.
Lord Stoddart of Swindon: If my noble friend Lord Shore of Stepney were here, I am sure that he
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would want to reply at reasonable length to our very long and detailed debate, which has ranged widely over economic policy, employment policy, the social chapter, economic and monetary union and the single currency. Having to reply to such a debate is a tall order, and I am not tempted to do so otherwise we would he here for a long while yet.
I am sure that we were all pleased to hear my noble friend Lord Whitty say that this is not a Stalinist measure. Some of us agree that it is not a Stalinist measure at the moment, but we are frightened that it may become such in the future. Let us hope that my noble friend is right and that it will not progress in that way.
On the social chapter and collective bargaining, I advise my noble friend that I was in the trade union movement a long time and I believe that trade unions are still in favour of collective bargaining. Indeed that is their whole raison ďêtre and if they cease to believe in collective bargaining, they cease to exist. What is necessary is a broad framework in which they can embark on collective bargaining. I am afraid that the social chapter goes further than I would wish in those circumstances.
I must also advise my noble friend that it may well have been necessary under the previous government to have the social chapter because their attitude to trade unions was perhaps a little different from our own, but now that we have a Labour Government we do not need to be constrained by any social chapter because we now have the power to put into operation whatever social chapter measures we want. That is the essence of the British democratic system—and I do not want it interfered with. When there is a Conservative government in power with a mandate from the people, they must put forward their policies unconstrained, but when a Labour government are in power I expect them, having the same sort of mandate but on different policies, to be entitled to do exactly the same. That is the essence of the British democratic system and that is why I am opposed to the social chapter. I believe that it undermines our system.
As I said earlier, we have had a long and useful debate. It seems that we are agreed on some measures. We believe that the free market is good—that is, at least the two Front Benches agree that it is good and that it should continue for all time because it will bring us all great benefits. Having said again that this has been a good debate, I beg leave to withdraw Amendment No. 10.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 and 12 not moved.]
Lord Pearson of Rannochmoved Amendment No. 13:
Page 1, line 13, after ("2") insert (", other than paragraph 7 (provisions of the Treaty establishing the European Community relating to combatting discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation),").
The noble Lord said: Amendment No. 13, and Amendment No. 50 which is grouped with it, stand also in the names of the noble Lords, Lord Stoddart of

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Swindon, Lord Shore of Stepney and Lord Monson. I am moving the amendment in the absence of the noble Lord, Lord Shore. This gives me the opportunity to echo the sentiments which have been expressed by other noble Lords about the noble Lord's very regrettable absence from this Committee. All those who have attended our debates so far will appreciate that he is a tremendous strength and addition to the more Euro-realist side of our arguments. I join others in hoping that the noble Lord will have a speedy recovery and that he will be able to join us at Report.
Amendment No. 13 would exclude a new article, an article which by coincidence and not, presumably, by diabolic intervention, is also numbered new Article 13 in the proposed Amsterdam amendments to the treaty establishing the European Community. New Article 13 extends the competence of the EU to allow the Council, acting unanimously to,
"take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation".
Amendment No. 50 would subject the old Article 6, now Article 12 of the Treaty establishing the European Community, to a report from the Government setting out its implications for the United Kingdom, such a report to be approved by both Houses of Parliament. New Article 12 prohibits discrimination on grounds of nationality.
To take Amendment No. 13 first, which refers to new Article 13 of the treaty, one has to acknowledge with as much gratitude as one can muster—that may not be much—that the extension of the EU's powers to allow it to join forces in this country with those armies of political correctitude of the sex, race and class brigade, is at least subject to unanimity in the Council—in other words, we could veto any action which the rest of the Council might wish to take but which we do not, although our veto would be subject to all the usual horse-trading which goes on in Europe.
Nevertheless, it is yet another glaring example of the way in which the EU machine advances step by step into areas which were before subject only to our national jurisdiction, and which should remain so. It is yet another example of the working of the "salami slicer" of my noble friend Lord Tebbit. Incidentally, I am still waiting from our earlier debates in Committee for the Government to give us any examples of where power has been returned to national parliaments in contradiction of the doctrine of the acquis communautaire. No doubt we shall come back to that question when we reach our old friend subsidiarity in the group of amendments which begins with Amendment No. 26 on the Marshalled List, but perhaps I may mention it again in this context. Perhaps the answer is that that is just not how salami slicers or the EU work, which may be why the analogy chosen by my noble friend Lord Tebbit is so accurate. Once another juicy slice of national sovereignty has been severed, they are not capable of putting it back again, even if they wanted to do so which, of course, they do not.
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I trust that your Lordships will forgive me if this all seems very obvious. It would be nice to hear just a few examples from the Government, compared to all the thousands which go the other way, which might go to show that the sovereignty of the United Kingdom is not on a salami slicer after all. If they cannot do that—I am pretty sure that they cannot—perhaps they would at least admit it. Then we shall know where we stand and openly acknowledge the true nature of the Treaty of Rome.
This is not a particular criticism of the present Government. The problem was exactly the same with the Single European Act and the Treaty of Maastricht. Indeed, in 1993 some of us posed exactly the same question to the previous government in our debate on the Treaty of Maastricht, without the vestige of a satisfactory answer. Instead, we were told that subsidiarity would be our shield of defence against the further erosion of national sovereignty which of course it has not been, nor could it be.
I come to the detail of new Article 13, from which I have quoted. I should like to ask the Government a few questions. First, why have they felt it necessary to allow the European Community to extend its competence into these areas? For instance, what is wrong with our own Race Relations Act or similar legislation? Is it in any way inadequate? If so, could it not be easily amended in this Parliament? For instance, is it felt that we do not do enough about ageism? For those noble Lords who may not be familiar with that expression from the vocabulary of the politically correct, it means that we should not be discriminated against just because we are getting on a bit. I am sure that a number of noble Lords, myself included, would support something along those lines, but do we need Europe to do it for us?
What does this article actually mean? What did the Government believe that it meant when they signed up to it? Can the Minister be so good as to tell the Committee exactly in what kind of "appropriate action" the Government foresaw themselves joining forces with other members of the Community to combat all of these evils? What would be an "appropriate action", and why could not each of us take it on our own if we wanted to? Can the Minister explain to the Committee exactly what is the difference between a religion and a belief? Have the Government thought through some of the possible ramifications of this dilemma? For instance, if one is a well-known Christian evangelical will one be able to sue the national council of atheistic marxists if it refuses to give one a job as membership secretary? Who will decide whether the Moonies or other less desirable sects deserve Europe-wide protection under this clause? What about witchcraft? Can the Minister tell the Committee what are the bounds of decency, and therefore presumably of protection under this provision, of sexual orientation?
I hope that the noble Minister will forgive me but I am trying to understand what this clause may come to mean. I do so against the background of one of the good things that the present Government seek to do in the field of education. One of those good things appears to be an appreciation of how much damage the

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over-promotion of issues concerning gender, race and class has done in our schools. The present Secretary of State is to be congratulated on his firm comments in this regard. Yet here we are extending Community competence into those very areas that have brought our state system of education so low, or at least have helped to do so. The people in our schools who over-promoted these issues were the same people who, for instance, refused to use the phonic method to teach children to read. I congratulate the Government on standing up against these people. I do not understand therefore why they are kicking them out of the front door only to risk letting them in through the back door under this treaty. Another brief example is the growing demand for single-sex schools in this country, for very good educational reasons. Have the Government considered whether such schools will eventually become a violation of EU legislation?
I understand that part of the inspiration for new Article 13 may be a response by the Community to the so-called Kilanker case in Germany which overthrew an attempt to put into law positive discrimination in favour of women; in other words, we may be looking at an attempt by the EU to start to enshrine positive discrimination in favour of certain groups taking precedence eventually over the existing national legal order. Can the Minister assure the Committee that this is not part of the intention behind the article?
When the Minister comes to consider his answer will he remember that, although the new article is protected by unanimous voting, already Directive No. 7605/97 aims to combat gender discrimination in the workplace? Such directives can already be passed by qualified majority voting under the social chapter, which I fear the Government may one day regret having signed. Directive No. 7605/97 (if I am not mistaken) enshrines the principle, contrary to British law and natural justice, that the burden of proof is to be divided between plaintiff and defendant. It also introduces into our law the rather woolly concept of indirect discrimination. My noble friend Lord Moynihan alluded to that kind of legislation in his speech on the previous group of amendments.
That is the kind of legislation, is it not, that gives rise to the recent case in this country of a pregnant woman who applied for a job which she knew that she could not do because it required her to lift heavy loads? The employer was as a result forced to pay compensation for not giving her the job. The Minister may recall that that case has been raised in Written Questions by my noble friend Lord Vinson, from which it appears clear cut and apparently true. Does the Minister agree that that is the kind of case which must make us very worried about new Article 13 and that therefore Amendment No. 13 is reasonable in seeking to exclude it from the treaty?
I turn to Amendment No. 50. This deals with the previous article in the treaty, Article 12, by making it subject to a resolution of both Houses of Parliament. The article simply prohibits any discrimination on grounds of nationality:
"The Council, acting in accordance with the procedure referred to in Article 251, may adopt rules designed to prohibit such discrimination".
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Article 251 is also without prejudice to other special provisions in the treaty.
The first matter that we must look at is the procedure to be followed under new Article 251. That article turns out to be our old friend Article 189b in the Treaty of Maastricht which sets out what is known as the co-decision procedure, except that the procedure has been slightly speeded up in the Amsterdam amendments. The co-decision procedure is not the innocent creature that many people suppose it to be. In effect, it allows the Council acting by qualified majority vote to pass into nationally binding law any Act with which the European Parliament agrees. It is only if the European Parliament does not agree with a law or Act supported by qualified majority vote in the Council that the so-called common position procedure is then adopted.
The common position procedure is just about the silliest way of taking a decision or not (as the case may be) that has yet been devised by mankind, as far as I can see. But I need not weary the Committee with it now. The danger to the United Kingdom in Article 251 lies in the stark fact that we can be out-voted in the Council, as we often are, and then our only protection is the possibility that the European Parliament may agree with us against the majority of the Council who have voted against us. I would have thought that that eventuality was so unlikely as to provide very little protection. Therefore, for practical purposes I fear that we must accept that Article 251, which governs Article 12 of the treaty, subjects us to a qualified majority vote in Council; in other words, no veto.
One then must look pretty carefully at what Article 12 may really come to mean. What it says is fairly stark:
"Within the scope of [this] Treaty, and without prejudice to any special provisions contained therein",
the Council shall prohibit any discrimination on grounds of nationality. To boil it right down, the Council must prohibit all discrimination on grounds of nationality, unless there is something in the treaty which says that it need not do so. What does this mean? Of course, we must look to the Minister to enlighten us. I appreciate that this was largely the version of the Treaty of Rome which predated the amendments agreed at Amsterdam, although that does not give comfort to many of us.
I give the noble Lord an example of what it may mean as far as I can see. Might it mean that in future there is to be no difference between Spanish, Dutch or English fishermen under the common fisheries policy? If it does not mean that, can I ask the noble Lord why it could not do so? If it does mean that there will be no such difference, it would of course be very serious and would make the CFP even more of a free-for-all for those who cheat, and a shambles, than it is at the moment.
In asking that question, I refer to a Written Answer that I received from the noble Lord, Lord Donoughue, on 24th April. He said that the legal basis for the CFP was to be found in Article 3 of the EC treaty, which merely states:
"The activities of the Community shall include a common policy in the sphere of agriculture and fisheries".

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I imagine that something may have gone adrift in the translation there, or Article 3 is not being followed, because, of course, we have one common policy in the sphere of agriculture and another common policy in the sphere of fisheries; in other words, two common policies.
I would of course be grateful if the Minister would care to comment on that point. But whatever the answer is—it may have great significance for the legality of the CFP—that is not strictly the subject of the amendment. The noble Lord, Lord Donoughue, then said that the rest of the legal basis for the CFP is to be found in Articles 39 to 47 of the EC treaty. Members of the Committee will understand that I am looking through these articles, trying to find some special provision in the treaty which will exclude the extinction of nationality under the CFP.
I have read through the articles and can see no mention of nationality. Indeed, the words "fish" or "fisheries" do not seem to appear in them at all. Even in Article 38, which the Minister did not mention in his Answer as forming part of the legal basis for the CFP, the word "fisheries" occurs somewhat obliquely as part of the meaning of the expression "agricultural products". In fact, one is left wondering whether the CFP does indeed have a legal basis in the Treaty of Rome.
The question for the Minister when replying to this amendment, however, is whether Article 12, potentially, or indeed actually, removes the distinction of European nationality under the CFP, or has the capacity to do so. I am aware that the CFP is labouring under a derogation at the moment, but surely that cannot for long override the clarity and authority of Article 12. If the Minister can assure us that I am wrong about the specific example of the CFP, that would of course be good news, but, if so, can he assure the Committee that this article will not come to have other similar disadvantages for our national identity and for our national independence in the future?
In other words, is it possible that Article 12 may pave the way for the virtual disappearance of European nationalities in the Treaty of Rome? Until we hear the Minister's answer, I have to hope that the Committee will support the amendment. I beg to move.
Baroness Williams of Crosby: I do not wish to pursue the complex arguments advanced by the noble Lord, Lord Pearson of Rannoch, on the subject of Article 12, but I should like to congratulate the Government most warmly on having been among the supporters of Article 6a. Had the previous government still been in office it is unlikely that Article 6a would ever be part of the Treaty of Amsterdam. I want to say just one or two words about why I believe it to be an important article, and one which may have been insufficiently discussed and deliberated upon.
I say first—it is in response partly to something that the noble Lord, Lord Pearson of Rannoch, said—that that is in part because of the UK's example in areas such as equal opportunities legislation, the Race Relations
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Board, and race relations legislation. There has been a great deal of interest in the British experience in all those areas throughout the EU member states. I took part in no fewer than six meetings of NGOs in six member states of the EU. In virtually every one members of non-governmental bodies, some of them working at the grass roots—not the élite—spoke of the need for anti-discrimination legislation to be embodied within the Treaty of Amsterdam. That request came from immigrant groups, civil liberties groups, women's groups, and people working with children. In all cases they begged that there should be within the Treaty of Amsterdam reference to the need for action against discrimination on racial, religious, sexual and other grounds. I congratulate the Government on having heard that and on having responded to it.
Secondly, when we are looking forward to the enlargement of the EU to take in a group of countries whose history with respect to discrimination is at best patchy, and which needs to be greatly strengthened by the requirements of the acquis communautaire, to oppose the idea that Article 6a should be a part of the treaties governing the EU would be to misunderstand the extreme importance of shoring up civil liberties and human rights.
We are aware that Slovakia has been put in the second wave, just because of the degree of discrimination against Romanies and people of Hungarian and other descent. One of the reasons why many people are concerned about the possibility of Romanian and Turkish membership relates to human rights issues. Surely, regardless of politics, we must welcome an attempt to deal with those issues and to enshrine at the very basis of the EU the concept that racial and religious tolerance are a required principle of that Union.
We are not the only country that has a substantial religious minority (the Moslems) or substantial racial minorities. The same is true of France, Germany, and many other member states. This was a necessary article. I see no objection to it. It is based upon unanimity. It is something in which British practice is well in advance of that of many other countries in the EU and what the Committee is asking for—that our best example should be followed—is indeed being followed in this very article of the treaty.
At the heart of Amsterdam—it is an important new aspect—is a concern for human rights that did not exist before. Article F and Article O are all about human rights being at the heart of what the EU should be all about. Anyone who looks back at the finest moments of British history will recognise that that is indeed part of the British tradition, and one which I am delighted to see the EU is now embodying. Far from being critical of this article, we should be applauding it, and the amendment should be withdrawn with the full support of all Members of the Committee.
Lord Desai: I am somewhat surprised that the noble Lord, Lord Pearson, introduced the amendment. Surely he is not for discrimination. As the noble Baroness, Lady Williams, pointed out, in these matters UK law has been in advance of European law. Let us consider the single market, of which we are all in favour, and a

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British person who wants to work abroad. Why should that person not have the same rights wherever he or she works in Europe as he or she has at home?
How would the noble Lord feel if a French person came here and enjoyed better rights of non-discrimination than a British person working in France? He would be the first to protest that that was outrageous. Once we have a single market we cannot have the idea that laws are relevant only in the territory in which one lives, that there is no commerce and that no one will travel, work abroad, or earn money abroad, and that local laws are all right for local citizens. With the single market comes the free movement of capital as well as labour. Once one has the free movement of labour people must have a basic set of rights. Surely, the noble Lord will agree that the good rights enjoyed by British citizens should be portable across Europe. The purpose of the provision that he wishes to remove is precisely to make the rights portable—
6 p.m.
Lord Pearson of Rannoch: I do not wish to detain the noble Lord, hut, for me, the price of that portability is too high. The noble Lord is right in saying that I am not in the least in favour of discrimination. In fact, I asked the Committee what is wrong with the Race Relations Act in this country. One knows what the anti-discrimination laws are in the countries where one goes to work or to live—so when in Rome, do as the Romans do.
Lord Desai: I cannot resist repeating what an Indian politician once said: "When in Rome behave like the Romanians"! That is often the case.
The noble Lord's answer is not good enough. Many people are posted abroad. They should not have to say, "I cannot be posted to such a country because being a woman, black, or homosexual I shall be discriminated against". In that case, one would be less qualified to take up a job in Britain because one's mobility would be restricted. Do Members of the Committee really want British citizens to be restricted in taking jobs abroad because other countries do not enjoy the same good rights as ours? Surely not, but if the Committee adopts this strategy it will be disadvantaging British citizens from taking jobs abroad.
I am not a great expert on the Maastricht or Amsterdam treaties, but I know that as regards fisheries there is a conflict between the single market and national quotas. As the noble Lord knows, one of the problems with Spanish fishermen is that some of the quotas held by British citizens became saleable. That was part of the single market. Therefore, it is probable that Spanish fishermen are holding British quotas because British fishermen sold them. We are all in favour of a single market—I am very much in favour of a single market—but in a single market national logic will not work if it is declared that British fishermen will not be able to sell quotas while the fishermen at every other country can do so. Surely that is absurd. As
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regards the idea that we should have a common policy for agriculture and fisheries, the mind boggles. How would we have set-aside?
Lord Monson: In response to the noble Lord, Lord Desai, not every state in the United States has identical labour and anti-discrimination laws. They may be fairly identical, but not wholly so.
Lord Desai: That is not the case. The interstate commerce clause in the constitution ensures that discrimination is not allowed. As the noble Lord is aware, the entire civil rights legislation of the early 1960s was carried through on the interstate commerce clause. Once one has mobility of labour one cannot have different discriminatory laws in different parts of the country. That is not allowed. Similarly, one should not have different laws in different parts of the European Union.
Lord Monson: The noble Lord may he right about the United States in theory but not in practice. I believe that the laws are enforced with more vigour in some states than in others.
I support the amendment moved so well by the noble Lord, Lord Pearson of Rannoch. One could take the view, as he appears to do, that the proposed Article 13 is an airy-fairy, motherhood and apple pie declaration unlikely to have any practical effect since it requires unanimity. The Mediterranean countries alone are not noted for their enthusiasm for Californian style political correctness. That lack of enthusiasm does not stop at the Mediterranean. At the heart of the Community, the European Commission practises blatant age discrimination, telling candidates for certain jobs that no one over the age of 35 need apply.
The article would outlaw religious discrimination, for example, re-opening many of the problems that we have and are still experiencing in respect of the Human Rights Bill. Religious bodies for good reason wish to employ their co-religionists, but may be forced to employ those whose beliefs may not only be different from but positively hostile to their own. It would also be illegal to take people's beliefs into consideration, even the most fanatical or outlandish political or religious beliefs. Therefore, a Jewish employer, for example, would be forced to employ someone who sincerely believes in the authenticity of the protocols of the elders of Zion.
The noble Lords, Lord Moynihan and Lord Pearson, referred to the disgraceful directive on so-called gender discrimination in the work place which is wholly counter to our Anglo-Saxon tradition of someone being innocent until proved guilty. That is leading to positive discrimination by the backdoor and no doubt to more disgraceful examples of injustice; for instance, that suffered by the prospective—not the actual—employer who had to pay an enormous sum of money, which practically bankrupted him, for declining to engage a heavily pregnant woman to carry out a physically demanding job.

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What about the idea that discrimination on the ground of sexual orientation should be outlawed? Surely, that would open a can of worms. Schools, juvenile prisons and other institutions dealing with young people would be forced to employ paedophiles; presumably undertakers would have to employ necrophiliacs; and so on and so forth. We shall be told, as the noble Baroness, Lady Williams, told us, that this is simply a question of rights. The trouble is that one group of people gain rights at the expense of the rights of others. I commend to the Committee an excellent article on this topic written by Barbara Amiel in the Daily Telegraph on 23rd April. It is absorbing and well worth reading.
Lord Tebbit: On many grounds, I have a good deal of sympathy with those who oppose discrimination. Two questions arise in relation to this clause and this amendment. As was said by the noble Baroness, Lady Williams, the present Government were enthusiastic advocates of the inclusion of this clause into the Treaty of Amsterdam. Therefore, we should hear from the Minister what measures they propose to bring forward under it. Surely, it is not to be left as a piece of decoration. As it stands, it has no effect because there are no measures under it. Exactly what do the Government propose to bring forward?
Inherent in my objection is the fact that here is another example of the common market which we joined showing its ambition to become a state. Surely it is the business of a state, not a market, to legislate in these areas. We have legislated in the state of the United Kingdom in a way which we regarded as appropriate. Others in the European Community have done the same. If one argues that the legislation should be at the level of the European Community one is inherently arguing that it is not an economic community but a state. I believe that that is where it is heading.
Furthermore, there are problems with these grand and sweeping comments. We are all against discrimination based on sex. However, I must confess that some 40-odd years ago I chose a woman to marry and should the occasion ever arise again I shall do the same. I hope that that is not offensive to other members of my sex.
We are all against discrimination based on racial or ethnic origin, religion or belief, disability and all that. Although I am not against discrimination based on sexual orientation, I am of the view that one should be allowed to discriminate against homosexuals if one is looking for scoutmasters. I do not know whether that is a widely held view any more, but if I were looking to recruit a scoutmaster I should not be haunting Hampstead Heath to do so these days, I must confess. It is right that persons of that orientation should be excluded from such activities.
But of course the European Union is becoming involved in those matters, as we know. It is not that long ago that we were compelled, whatever this Parliament thought, to enact legislation to amend the sex discrimination legislation of 1976 in relation to the provisions regarding the Armed Forces. We had no choice in that matter. Therefore, this game is already on in many ways. Let us be in no doubt about that.
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It is bound to lead us into many troubles. Apart from anything else, as the noble Baroness, Lady Williams, observed, in this country we now have a substantial minority of Moslems. Just how do we legislate in that area? After all, if we are to respect the religious beliefs of Moslems, we may find ourselves with some problem as regards some of their views on sexual discrimination. Which of those injunctions are we to obey? Are we not to discriminate on grounds of sex or not to discriminate on grounds of religion? I do not have an easy solution to that, although my preference would be to say of a religion like the Moslem religion that such an established religion, which is held so deeply by so many people throughout so much of the world, must be allowed to take its own view on the position of women.
That may be offensive to some people. But if we are to envisage the day when Turkey is admitted into the European Union, we had better make up our minds whether in this country, our Government wish to become involved in controversies within Turkey which have been fundamental to the social fabric of that country and to its religion for many years. Those are the sort of issues which Kemal Atattirk took on in his day and had apparently resolved but which are now returning to the surface as the Moslem religion in Turkey becomes again more dominant in terms of politics and social life.
I believe that we would be utterly and completely mad to become involved with those issues. But I cannot imagine that the Greeks, for a start, would be able to resist treading in that dirty water if it embarrassed their neighbours in Turkey. We would be better without this on the grounds of impracticability; the fact that this is another extension of the power of the European state over the nation states: and above all, that we have no idea at all where this will lead us. It would be better out of the treaty than in.
6.15 p.m.
Lord Moynihan: I am pleased to say that I find myself in broad agreement with the thrust of what the noble Baroness, Lady Williams, said about the important issues which we need to address in relation to discrimination. Indeed, I echo many of the points which the noble Lord, Lord Desai, made on that subject. I was slightly surprised that in earlier debates this afternoon he did not speak on the economy. However, on this occasion at least, we agree with the general thrust of the points and principles espoused by the noble Lord, Lord Desai, the noble Baroness, Lady Williams, and other noble Lords.
As ever, we feel that it is our duty to look in detail at exactly what is proposed by the clause. The example of portability was interesting. If, as was rightly pointed out, the basic body of legislation which we have in this country is something worth following in other countries—and we take a lead in this area—it takes only one other country in the European Union to disagree

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with the lead that we have taken, for whatever reason, for it to go by the board, because this is to be applied by unanimity.
Lord Desai: Does the noble Lord support QMV in that regard?
Lord Moynihan: I would have a great deal of sympathy with the point which the noble Lord made when it comes to other countries in the European Union adopting many of the measures that we have taken in that context. However, there is something far better than QMV; that is, to persuade other countries on a bilateral basis—outside this treaty—as to the merits of the body of law which we have and to encourage them individually to adopt that body of law. It is not necessary for that to be done within the context of the Treaty of Amsterdam. Therefore, while gingerly and cleverly drawn into the subject of whether I agree with QMV in that context, I say that there is a far better route to follow; that is, completely outside this treaty, to persuade other countries of the important steps which we have taken and the principles which have been espoused.
Therefore, it is important for me to look at the detail of this matter. With the permission of the Committee, I shall ask the Government to respond to the points I raised. This is an area which has taken up a great deal of time in Committee in another place and there are many issues to which I simply do not know the answer and I am sure the Government do. It would be helpful for the Committee to clarify the position as it stands. I shall ask specific questions and give specific answers and follow the warning given by the Government earlier this afternoon to avoid hypothetical questions and loose women. Therefore, the questions which I ask will be very specific. Some were looked at in another place and never answered, and some are new points.
I should be happy to be corrected if I am wrong but, as I understand it, the treaty introduces a new clause which the Government see as providing a legal basis for Community measures to combat discrimination based on sex, racial or ethnic origin, disability, age or sexual orientation. Indeed, that chimes with the Government's commitment to fight unfair discrimination and promote equality in the domestic context. With the important proviso of unanimity in decision-making, European Union-wide measures will be adopted only, as I understand it, when action at European level would bring an added value to action by member states. The clause is couched as a legal basis for future action rather than as a free-standing and unrestricted principle which might allow direct interference in UK laws in the realm of anti-discrimination. I shall examine that important distinction between a legal basis in that context and a free-standing, unrestricted principle.
It is important for the Committee to be aware that that is accompanied also by a declaration calling on Community institutions to take the needs of the disabled into account when framing single market legislation. In addition, there are strengthened provisions on equality between men and women. Amendments to Articles 2 and 3 make the promotion of equality a specific aim of
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the Community applicable to all its activities. Incorporation of the social agreement provides the legal basis for action to promote equal opportunities and equal treatment of men and women in employment matters.
Article 6a gives the European Community new powers to act in specified areas. Article 6 (new Article 12) already allows the European Union to act against discrimination on the grounds of nationality. There was already a provision to prevent discrimination on grounds of sex, but that is made more explicit in that article, and other areas are newly introduced. The new article provides a legal basis for Community measures to combat discrimination based on sex, racial or ethnic origin, religion and belief, disability or age.
I turn now to the first important point. The new article entitles the Council, after consulting the European Parliament, to take "appropriate action" against discrimination based on sex, racial or ethnic origin, religion and belief, disability or age. However, the article fails to make clear what it means by "appropriate action". I am sure that the Committee will allow me to question the Government as to what they consider "appropriate action" to mean in that context because it opens up new areas in which the Community can act.
A memorandum on the Amsterdam Treaty from the Minister of State at the Foreign Office said:
"The clause is couched as a legal basis for future action, rather than as a free-standing and unrestricted principle which might allow direct interference in the UK laws in the realm of anti-discrimination".
As UK law already provides against discrimination on the grounds of sex, race, ethnic origin and disability, this is a very important issue to pursue and consider carefully. The British Government supported the new article at Amsterdam. In addition, they tabled the declaration attached to Article 95, which was adopted, calling on Community institutions to take the needs of the disabled into account when framing internal market legislation.
In doing so, I should say that I know the Government were specifically keen to promote this idea—this important principle—and it is one that should be welcomed. It was an important initiative to take and I was only sorry that it had to be carried unanimously throughout Europe and that that required us to push it. But that, at least, is commendable from the British Government's perspective.
In another place it was interesting to note that particularly, and at significant length, Bill Cash MP and Sir Teddy Taylor MP were robust in exploring what they saw as the flaws in this article. They were concerned about the uncertainty that that may cause to Church schools, as many Anglican and Catholic schools currently insist on being run by a practising member of their Church. It is not clear that this could remain a condition of employment after the introduction of such measures.
On Second Reading in another place, Sir Teddy Taylor quoted a letter to Christian Action, Research and Education dated 7th July 1997 from the Foreign Office, which said that although it would not expect litigation to arise one could not rule it out.

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The other place was also concerned about the ambiguous definition of sexual orientation in reference to discrimination on those grounds. For example, does it question the future status of marriage by opening the door for homosexual relationships to be treated in law as if they were heterosexual marriages? The question was asked as to whether sexual acts between homosexuals would have to be equated with marriage and childbearing, and whether the age of consent for marriage would have to be equated with that for homosexual sex. Indeed, could a Church refuse to marry a homosexual couple? Would the case of a same sex couple applying to adopt a child be given the same weight as an application from a married man and woman? Would discrimination by an employer, including the Armed Services, on the grounds that an active homosexual is inappropriate in that particular workplace, be illegal? Those were legitimate questions which led to a very lively debate in Committee in another place. It is important to clarify how the Government see the answers to those questions as they were not available in the other place.
I should say—I do not believe that I need to emphasise it because it is well known in this Chamber—no one should be in any doubt about the attitude of my party to discrimination. Like everyone in this House, we are firmly, resolutely and utterly opposed to it in any shape or form. In government we did not hesitate to take action to fight discrimination and to stamp it out. We are proud of our national record on questions of discrimination and we are also convinced of the adequacy of the legal framework already in place. For example, although our race relations may not be perfect, they are nevertheless recognised as being very important in many countries of the world. Among the legislative measures that we took in government, the Public Order Act 1986 stands out. I give way to my noble friend.
Lord Tebbit: I am most grateful. My noble friend set out in broad terms the position of the Conservative Party and its opposition to discrimination. However, just before that he raised some enormously interesting questions and asked where the Government would stand on some of them, such as those relating to Church schools, and so on. However, I am no longer quite sure where the Conservative Party stands on those issues.
Lord Moynihan: I am sure that the Conservative Party stands very firmly and clearly on those issues and would find considerable if not total agreement with my noble friend in the answers to many of the questions that I put forward. However, perhaps I could make a clear and telling point in that context. In my view—and I know my noble friend will agree with me—it is a matter for the Houses of Parliament to consider the answer to that important question and for a decision to be made in this Parliament. My worry is about the implications, especially the legal implications, of another body determining the answers to those questions without recourse to the views expressed in this place.
I mentioned the Public Order Act 1986 as an exemplary measure. It is right also to recognise the Criminal Justice and Public Order Act 1994 which, for
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example, made the publication of racially inflammatory material an arrestable offence and created the new offence of intentional harassment. Now, in opposition, we remain ready and willing to support any sensible and effective measures that the Government may take to combat discrimination. We believe that problems of discrimination, especially on such sensitive questions as race and religion, are best dealt with through national legislation. Legislative provisions to deal with discrimination need to be carefully tailored to the particular circumstances and traditions of each member state. The exact nature of problems of discrimination depends on the country in which those problems occur. This is an extraordinarily sensitive area and requires very sensitive handling.
I believe that our domestic legislation has always sought to reflect our particular circumstances. The great disadvantage of the provisions in Article 6a (new Article 13) is that they do not meet that essential requirement. It is yet another example of an ill-fitting "one size for all" measure, tacked approximately into place for general use from Italy to Ireland. Therefore, we do not believe that the European Union is the right context for a general clause prohibiting discrimination on the grounds of gender, sexual orientation, race, religion, age or disability in that way.
Why do I say that? Perhaps it would be better if I were to pose that in the form of a question to the Minister. It is critical that we look to the legal basis. I would be grateful if the Minister could confirm that this article enables the European Court of Justice to intervene, go beyond specific legislation and act on the basis of the treaty language that we find here. For example, could the European Court of Justice give direct application to the article? Could a complaint be brought before the ECJ on the basis of Article 13 and the general principles laid down under it? Can the Minister help me by giving a specific and categoric assurance that that court will not be able to intervene on the basis of this article unless and until there are specific legislative provisions under it? I hope that that is the case, but it would be most helpful if the Government could clarify the position for the purposes and the benefit of the Committee.
We on this side of the Committee wanted to see co-operation on racial and other discrimination issues achieved. We wanted to reach agreement on those issues under the third pillar. However, it seems that the introduction of the article into the treaty would give the European Court of Justice jurisdiction and that it is a treaty article which could be taken into account by the ECJ in reaching decisions on complaints brought before it. I would welcome the Minister's response to that issue.
I am aware that we were discussing an enabling measure which is not, at this stage, a directive or binding in law and which, as I understand it, will not change any Act of Parliament or any measure covered by such an Act. I am also aware that decisions taken, based on the provisions of the measure, must, as I mentioned earlier, be adopted by unanimity. Yet its general catch-all provisions and ambiguous definitions nevertheless open up a minefield of social and ethical

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dilemmas which could have far-reaching implications for the traditions and beliefs of this country. For example, does the Minister believe that the magistracy should be opened up to adults under the age of 27, as could happen under the age provisions of this article? Should doctors be able to refuse fertility treatment to women over 40? Should the institution of marriage—as I mentioned earlier—be restricted to heterosexual couples? As regards religious groups in the United Kingdom, all at present can technically refuse to admit individuals to membership on the basis of their religious belief. Mosques, for example, are allowed to employ only practising Moslems. The Roman Catholic Church is allowed to ordain only men into the priesthood. I do not seek to debate these detailed points but to ask the Minister's views on the application of the article to them.
Can the Minister give examples of the kind of appropriate action (which I mentioned at the outset) that this article will entitle the Council—after consulting the European Parliament which has a veto in this area—to take with regard to the relevant areas of discrimination? Of course, such an article has merits and drawbacks. Its merits are its good intentions. However, those good intentions should be reflected in the individual legal frameworks of member states. All states should be encouraged to ensure that their frameworks are adequate. I firmly believe that national domestic legislation should be introduced to cover key questions—I have mentioned many—not least the need for members of racial minorities to travel freely throughout the Union without suffering discrimination. But if countries which do not have such legislation prove reluctant to introduce it, the unanimity requirement in this article—which is rightly part of the provision—would prevent those countries being obliged to do so by any action under the treaty. If such an objective was the raison d'être for this article's inclusion in the treaty, in that situation it is effectively rendered useless.
The drawbacks and the unknown aspects of this blanket provision have caused widespread apprehension and genuine concern, particularly given the sensitivities of the issues involved which far outweigh the arguments in favour of the inclusion of this article in the treaty. I hope that the Government will inform the Committee of the position they are taking on these points. In terms of the broad principles I am at one with colleagues on all sides of the Chamber as regards the importance of tackling these measures. However, I believe that the focal point for tackling them should be the national parliaments, and that there are real dangers—I hope that I have mentioned many of them—as regards uncertainty and the language that is employed. I hope that the Minister will be able to answer my questions.
6.30 p.m.
Baroness Symons of Vernham Dean: My noble friend Lord Whitty expressed his regret earlier this afternoon at the absence of our noble friend Lord Shore of Stepney. I am sure I speak for the whole of the Government Front Bench in wishing the noble Lord, Lord Shore, a speedy recovery from what I understand
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is an extremely painful condition. I hope that he will return shortly to give us the benefit of his wisdom on this matter as on so many other issues.
We have had a wide-ranging and interesting debate on Amendments Nos. 13 and 50. First, I shall concentrate on Article 6a and Amendment No. 13 which pertains to it. The new clause provides a legal base for Community measures to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age, or sexual orientation. As such it represents a new power to adopt by unanimity legislation in fields where the Community already acts, such as employment and social policy. This is welcome to the Government. It is also welcome to the noble Baroness, Lady Williams of Crosby, and to my noble friend Lord Desai. I had thought that it was also welcome to the noble Lord, Lord Moynihan, but towards the end of his peroration I was in some doubt of that.
The Government have always supported the fight against unfair discrimination in the United Kingdom and across the European Union. While this country already has relatively advanced anti-discrimination legislation such as the Race Relations Act, the Disability Discrimination Act and the Equal Pay Act, the same cannot necessarily be said of other member states. We should not claim that our domestic legislation is perfect in every respect, but we are in the vanguard on much anti-discrimination legislation. We are confident that the experience of our domestic laws will help to shape EU legislation in a way that brings positive effects in Europe.
It has been suggested in this Chamber this afternoon that issues of such sensitivity should be handled only at national level. Some Members of the Committee have argued that only national governments can take proper account of national sensitivities. While it is true that incidents of discrimination differ between member states, many are common problems. To take one example, racism is a blight across Europe. In discussion of this provision in another place a number of speakers referred to the discrimination suffered by their black and Asian constituents when they travelled in Europe. Most notably the honourable Member for Leeds, North gave an example of two of his constituents, one of whom had been born in St. Kitts and another of whom had been born in Karachi, who had experienced difficulties when travelling in Europe.
Before I joined your Lordships' House I was the general secretary of a Civil Service trade union. I am proud of that record. Unlike some Members of the Committee I do not regard trades unions as the inevitable and awful instigators of all that is wrong with industrial relations in this country. When I was general secretary of the FDA, incidents were brought to my attention of fairly middle ranking or senior civil servants who had experienced racial discrimination in different parts of Europe. When noble Lords ask what is the point of trying to do anything about this in Europe, I must point out that at the moment some British nationals suffer racial discrimination when they travel in Europe. If European legislation can help to prevent that, we should be prepared to support it. This Government are prepared to support it. Of course we shall need to

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consider individual proposals when they are presented, but we believe there is an important role here for co-ordinated action at European level.
It has also been suggested that Article 6a will have direct effect and could be interpreted widely by the courts. However, that is not the case. As the noble Lord, Lord Moynihan, said, the article is clearly couched as an enabling provision for future action and is not couched as a freestanding and unrestricted principle. In itself it does not outlaw discrimination on any of the grounds that have been listed in the Chamber this afternoon. The examples given by the noble Lord, Lord Monson, were not only preposterous but also groundless. I refer to the view supported by other member states and by Justice, which is chaired by the noble Lord, Lord Alexander. I had thought that that proposition was also accepted by the noble Lord, Lord Tebbit, until he also allowed himself to be tempted into giving possible examples which would automatically be put in place by this provision. As the recent report of Justice on the Amsterdam Treaty states—
Lord Tebbit: If the noble Baroness will forgive me for saying so, I did not suggest that any of the matters which I mentioned could be brought automatically into effect by this provision. I am as capable of reading the treaty as the noble Baroness, if I may say so. It is quite clear to me that nothing will be brought into effect without propositions from member states and legislation flowing from that. My concern, apart from ones of principle, is to know what the Government want to bring forward under this provision.
Baroness Symons of Vernham Dean: The noble Lord must forgive my misinterpretation of his remarks about scoutmasters and Hampstead Heath. However, shortly we shall discuss what the Government would like to introduce. As Justice's recent report on the Amsterdam Treaty states:
"This means that individuals will not be able to rely on [Article 6a] in actions before national courts; instead additional EU implementing measures are required to bring it into force".
I hope that those noble Lords—not the noble Lord, Lord Tebbit—who thought that there was some degree of automaticity here are comforted, if not by what I say, at least by what is said by the noble Lord, Lord Alexander, as the chair of Justice.
Lord Renton: I wonder whether the noble Baroness the Minister will give her opinion on the following matter; I think that she will have no difficulty in doing so. The European Court of Justice could not rely merely upon the provisions mentioned here. Those provisions would have to be followed up within the European Union, carrying them into some effect within the Union.
Baroness Symons of Vernham Dean: The noble Lord is right. It was a point also raised by the noble Lord, Lord Moynihan. The provisions do not of themselves give the European Court of Justice any right on any particular issue. Extra action would be required
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for that. There are two main safeguards in that respect. The clause makes clear that any action taken under Article 6a must be what is called "appropriate" to the objective. Several noble Lords have raised the question as to what is appropriate action. At one end of the scale, it could be a directive harmonising the legislation of member states; at the other, it could be a recommendation addressed to member states on how their legislation should be framed. It will clearly depend on the precise objective which the Council is seeking to pursue.
The word "appropriate" also caters for many of the individual points that the noble Lord, Lord Moynihan, put towards the end of his speech. Action might support one person's extreme definition of non-discrimination, but that would not be appropriate. I have in mind here such points as those made about Church schools and homosexual marriages. But, of course, the ultimate safeguard is not the word "appropriate", interesting and important as that is. The ultimate safeguard is the point on unanimity. If we felt that the legislation was going too far, that it was not appropriate or that it failed adequately to reflect UK approaches, we would not agree to it.
Baroness Williams of Crosby: On the more positive rather than the negative aspect, would Her Majesty's Government view the article, which expresses a will and a desire on the part of the European Union, as the basis upon which Her Majesty's Government might push an argument for looking again at, for example, recruitment to the official levels of the European Union's employment, where few faces are other than white?
Baroness Symons of Vernham Dean: I am grateful to the noble Baroness for redirecting our attention to the positive aspects of Article 6a. I regret that of necessity in answering the debate I have unfortunately had to concentrate much of my remarks on the more negative aspects.
Let me take the noble Baroness's point, together with the point made by the noble Lord, Lord Tebbit, who asked what action we might want to take. Commissioner Flynn has an initiative under way to look at an action plan on racism, for example. It would be an important contribution to keeping up the momentum in Europe generated by last year's European Year Against Racism. Her Majesty's Government plan to make our own contributions to this through a seminar on racism which we shall host in June this year. We look forward to studying in detail Commissioner Flynn's action plan and to working with the Commission and our European partners to take forward the fight against racism in Europe. I hope that that gives the noble Lord, Lord Tebbit, a concrete example, while also giving the noble Baroness the more positive angle on this part of the treaty.
6.45 p.m.
Lord Hamilton of Dalzell: I feel extremely uneasy whenever we start talking about discrimination. When we discussed the Disability Discrimination Bill, I spoke to the effect that Bills against discrimination achieved

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nothing. That is partly because of a misuse of the English language. What we are all talking about is not discrimination but prejudice. Of course, there are suspicions. When the noble Baroness talks about objectives of various people in using discrimination law to effect various matters, one immediately sees the system being manipulated. If it were simply a case of someone proving prejudice, it would be a matter for the courts to decide whether or not something was a matter of prejudice. If we could sweep away "discrimination" and put in "prejudice", everyone's mind would be clearer.
Baroness Symons of Vernham Dean: I do not want to be drawn into a semantic argument about the difference between prejudice and discrimination. What we are talking about is unfair discrimination. The noble Lord says that he does not believe that that subject can be legislated about. I wonder whether the thousands of women in this country, and the millions of people in this country who are not white Anglo-Saxons, who have benefited from the legislation of the mid-1970s would agree with the noble Lord. I rather think not. I believe that the anti-discriminatory legislation of the mid-1970s has stood women and people from ethnic minorities in this country in very good stead; and I am proud that it was a Labour government that enacted that legislation.
I should like to thank the noble Lord, Lord Moynihan, for his acknowledgment of the role that the Government played in relation to the disability aspects of the treaty. It was at the Government's insistence that a declaration was included in the treaty calling on Community institutions to take disabled people's needs into account when framing the single-market legislation. We believe that this will give the Commission a clear signal, when drafting legislation, not to overlook disabled people's interests. I believe that the thousands of disabled people in this country will consider that a not inconsiderable part of the treaty. I believe that they will think it an important and much needed part.
We should not fool ourselves that the situation in this country is perfect regarding the state of our anti-discrimination legislation; but neither do we need to be blind to the advances that we have made. We should like to see these advances against unfair discrimination reflected elsewhere in Europe. We believe that this article is a sensible provision which will help in that respect.
I should like to turn now to Amendment No. 50, about which the noble Lord, Lord Pearson of Rannoch, spoke. The amendment made in the Amsterdam Treaty to this article makes EC rules to prohibit discrimination on the grounds of nationality subject to co-decision. This means that the agreement of the European Parliament, as well as that of the Council, is needed for EC legislation in this area. The article has been little used, but it was used, for example, for a 1993 directive on the rights of residence of students.
We support co-decision because we believe that the European Parliament has an important oversight role in the EC legislative process, especially in areas like this which are subject to majority voting in the Council. Extending co-decision is a limited but sensible
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enhancement of that role. It does not enable the European Parliament to propose an Act or to insist on a proposal opposed by the Council.
We recognise that the co-decision procedures need to be streamlined. That is why we agreed in the IGC to changes to the procedures to simplify them. We must ensure the right balance between the proper legislative oversight role of the European Parliament and the requirement for efficient EU decision-making.
We do not see enhancing the European Parliament's oversight role as an alternative to strengthening the role of national parliaments. On the contrary, we believe that the two are complementary. So we strongly support the new protocol on national parliaments. This creates a new legally binding minimum period for national parliaments to scrutinise the new legislative process.
I said that discrimination on grounds of nationality has always been banned. It is a basic principle, and nothing in Article 12 changes that. The way in which the principle applies to the common fisheries policy, the point exercising the noble Lord, Lord Pearson, is through the requirement of non-discrimination in the provision of freedom of movement and freedom of establishment. I hope that that gives the noble Lord some handle on the matter.
The common fisheries policy allows national fishing quotas; however, the quotas cannot under EC laws be applied in a way which discriminates between one nationality and another. That is why the previous government's efforts to introduce provisions through the Merchant Shipping Act were struck down by the ECJ. We shall be able to discuss this area, which I know particularly interests the noble Lord, in rather greater detail when we debate the amendments on quota-hopping.
If my replies to these matters have not been to the satisfaction of noble Lords, then at least I hope that I have covered the points raised in the debate. I hope that the noble Lord will now be willing to withdraw the amendment.
Lord Stoddart of Swindon: I deliberately did not speak until I had heard what my noble friend had to say. We always hang on her words very closely. I was pleased to hear her confirm that decisions can be taken under this article only by unanimity. That is true; and they can be discussed only on the initiative of the Commission, and not of any single country.
I have to say that I am not quite as reassured as I should like to be. If a decision was made under this article, by unanimity, it could come into operation in this country without the consent of this Parliament, although under other provisions Parliament is given the opportunity of examining the provisions over a period of six weeks. Let us make no mistake about it. Once the decision has been taken, by unanimity or whatever else in the future, that becomes law and does not need the British Parliament, or any other parliament for that matter, to bring it into domestic law. I feel sure that I am right on that point. Therefore, we have to be extremely careful about what we are doing. That was the reason for tabling this amendment. It was not tabled

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because some people are more racist or less racist than others. It was tabled so that we could have a full and proper discussion. That discussion has taken place, and will perhaps continue to take place.
An examination of Article 13 indicates that there can be absolutely no problem about discrimination on grounds of sex, racial or ethnic origin, disability or age. I do not think anybody would worry at all about those items. In this country we have built up a great body of law and practice which is good and is admired in many parts of the world. Certainly, nobody would want to go back on that. If other countries wish to adopt our ways, we should be very pleased.
But the matter goes further than that; and this is what worries many people. We are now entering the realms of religion and belief and sexual orientation. Those subjects are fraught with enormous difficulty. In relation to religion there could be enormous problems. There are all sorts of different religions throughout the European Community. It is understandable that church leaders, in this country and other countries, will be worried about this proposition being included in an article of this sort. We must therefore take account of those worries and try to deal with them, not merely set them aside.
Baroness Nicholson of Winterbourne: Perhaps the noble Lord will give way. I am grateful to him. I did not intend to interrupt his peroration. However, he made some specious claims on behalf of disability legislation in this country and contrasted our legislation and practice very favourably with that in other European Union member states. Perhaps I might bring him up on the point about the provision of hearing equipment for those with significant deafness such as myself and tell him that Germany, which he criticised heavily some two weeks ago, has far more advanced legislation and practice on the treatment and provision of hearing aids and equipment for the deaf than does the United Kingdom, which lags very far behind. Will he please therefore withdraw his comments on disability legislation? It is just one example; I can give him many more.
Lord Stoddart of Swindon: I do not think that I am prepared to withdraw my remarks. I did not specifically refer to this country being better than every other country in all matters. I have no doubt that there are other countries of the Community that do things better than we do, and that we do things better in this country than many other countries of the Community. I am sure that the noble Baroness is right. If the Germans have better disability legislation than we do, then the sooner we follow them the better. However, I do not believe that we need Article 13 to enable us to do so. We can do that through our own Parliament and our own decisions. I hope that that answers the noble Baroness and that it brings us somewhat together.
There are, as I said, very real difficulties. I do not know how "belief" is defined, and what appropriate action could be taken in relation to somebody's belief. We run into all kinds of difficulties when we try to deal
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with these matters by laying down legislation of this sort. And what is discrimination against sexual orientation?
The noble Lord, Lord Tebbit, raised the matter of whether we wish to employ homosexuals in the scout movement? As a matter of fact the movement does employ homosexuals. It was recently decided that it is perfectly all right to do so. That is a matter for the scout movement, and of course the parents.
Lord Tebbit: The noble Lord may not be aware that there is a separate scout movement which is gaining many adherents because it undertakes that it will not employ homosexuals as scoutmasters. Clearly, we are in the happy position at present that each of those movements can take the view that it likes and parents can decide to which movement they prefer their children to belong.
Lord Stoddart of Swindon: I did not know that. We learn something every day. In that case the matter becomes even more worrying. This article might very well mean that the new scout movement which guarantees not to employ people of a homosexual bent may very well be declared illegal. That is one of the problems that may arise when entering into legislation of this sort.
Another matter comes to mind. If people wish to be homosexual, bisexual, trans-sexual, or whatever else, I have no problem with that. It is entirely a matter for their own choice. However, those who employ people of that orientation also have to have a choice. I fear that that choice may be taken away from them. For example, if you have children and want them looked after, you may well wish them to be cared for by a heterosexual. It would be completely wrong if the state came along and said: "You may not make that choice". That is why I believe that to bring such matters of personal choice, personal habit and personal belief into a clause of this kind is wrong. I hope that the Government will think carefully when dealing with the matter in future discussions within the European Community.
I also ask for an assurance—I am sure it will not be given—that we shall never agree to QMV on this article.
7 p.m.
Baroness Symons of Vernham Dean: I wish to make a couple of points in relation to what the noble Lord said and of which it might be helpful to remind the Committee. First, the provisions are subject to scrutiny. Any legislation would have to be agreed by an elected government of this country on the basis of unanimity in Europe. I believe that there are safeguards—if that is the appropriate word—in trying to deal with some of the perhaps more extreme difficulties that some Members of the Committee have raised this afternoon in relation to the provision.
The noble Lord asked finally about the extension of QMV. I am in no position whatever to give open-ended commitments on the extension of QMV. All I can say is that it is a recently negotiated treaty. The Government negotiated on unanimity because that is what they

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believed to be appropriate. So the unanimity is something that the Government wanted. I am sure the noble Lord, Lord Tebbit, would be angry with me if I said that it stood for all time, as would others. It is for future governments to decide what they wish to do in that respect. I cannot make decisions that would be binding in that way, as I think the noble Lord knows.
Lord Tebbit: The noble Baroness has just said something which we should think about deeply. She said that she could not bind future parliaments. Quite so. It is one of the great traditions of British constitutional law that parliaments cannot bind their successors. Here comes the double-edged sword of unanimity in decisions which might be made under this article. If a parliament accepts that its government, which is formed from its ranks, should agree to a proposal which was put forward under this or any other provision of the treaty and it is enacted by unanimity, exactly how does a subsequent parliament escape from that law? It has in effect been bound.
So we now find that parliaments can and do bind their successors under European law. We would be bound, unless we were able to persuade every other member of the Community to agree with us to repeal the legislation which had been enacted.
Baroness Symons of Vernham Dean: The noble Lord is most kind to give way. I was responding to a specific point raised by the noble Lord, Lord Stoddart, in relation to QMV and future voting on Article 6a, which is currently on the basis of unanimity. I said it was on that basis because that is what the Government felt was appropriate. The noble Lord asked me about the future.
Treaties change, governments change. A future government might take a different view. The noble Lord should read no more than that into it. We have had this discussion with him in relation to every single one of the groupings we have taken so far, and I am sure that we shall continue the discussion in relation to every one of the groupings we still have to deal with. I believe that at one time there was an amendment on the Marshalled List which dealt specifically with the point. It is not clear why it was withdrawn, but if there is something the noble Lord wishes to pursue, perhaps it would have been the most appropriate vehicle.
However, this is no more nor less than what we have said on the point. We stand in grave danger of rehearsing the argument over and over again. I am sure it would not meet the noble Lord's point, but my noble friend Lord Whitty dealt with it successfully when winding up on the previous group of amendments.
Lord Tebbit: That is quite right, but it underlines once again that the noble Baroness should no longer, ever, use the expression that one parliament cannot bind its successors. That is precisely the position we are in now; parliaments can bind their successors. By putting the provision into the treaty, in effect the Government have bound their successors.
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There was one other point which I thought worth raising with the noble Baroness. We know the way in which the European Court works and leaps from point to point in a treaty and finds new ways to extend its influence. I suppose that one would broadly say that these provisions relate to what are generally referred to as human rights. I guess that most of us would take that view.
But then one looks back to page 10 of the Treaty of Amsterdam and finds Article E which tells us that Article F should he amended and should be replaced by the following:
"The Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms".
It then goes on, under Article F.1, to make the point that if a government are found to be in breach of any of those principles, certain of their rights can be suspended, including voting rights.
I give a warning. No one on the Europhile side of the Committee will take it at all seriously, but here we are again. We have extended it. There is the opening, the wedge in the door to combine this section, Article 13, with Article F.1 and Article E. Just wait. Just watch.
Lord Stoddart of Swindon: Before the Minister answers, to save her getting up and down like a jack-in-the-box, perhaps I may intervene. The amendment to which she referred concerning one parliament not being able to bind its successor was taken off the Marshalled List because it was to be debated late at night or early in the morning. I can assure the noble Baroness that it will be brought back under the first business at Report stage.
I also wish to ask whether she was confirming that any decisions under this article, once made by unanimity, will not need any further legislation in this Parliament. That was what I asked. I believe I was right in saying that no further legislation would be necessary, but perhaps the Minister could confirm it.
Baroness Symons of Vernham Dean: It would depend on what the decisions were. They might be decisions which needed legislation. It would depend on the nature of the decision reached by the Council. I thank the noble Lord for his warning about the reappearance of the amendment. I had thought—wildly—that perhaps the noble Lord had thought better of it. However, I thank him for giving us adequate warning on the matter.
In relation to the point raised by the noble Lord, Lord Tebbit, he will not have to wait long for a discussion. We will either reach it later this evening or at some point in our debate tomorrow.
Lord Pearson of Rannoch: I am grateful to all Members of the Committee who have spoken, especially those who supported these two amendments. Most of the debate took place on Amendment No. 13, which refers to the new Article 13 in the treaty.
Amendment No. 50 deals with Article 12 and its co-decision procedure. I am grateful for what the Minister said in that regard. It confirms the question of

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discrimination on grounds of nationality, whatever that may come to mean in the future. It will depend on a qualified majority vote in the Council supported only by the agreement of the European Parliament.
I was trying to look a little further into the future as to how the article might be used in view of the well-known action of the famous salami slicer of my noble friend Lord Tebbit, to which he has just referred again. I was grateful for the Minister's answer, in so far as it went, concerning the application of that principle to the common fisheries policy. I was trying to get at whether the article might not lead to the eventual disappearance of European nationalities under the Treaty of Rome. We did not quite conclude that, but I am happy to leave the fisheries aspect to quota hopping and related matters.
As to Amendment No. 13, I take the point made by the noble Lord, Lord Desai, and others that it would be nice if we could go anywhere in Europe and the world and find anti-discrimination legislation, arising from prejudice as my noble friend Lord Hamilton so rightly said, as good as it is here. Of course we cannot. There is the rest of the planet to consider. I accept that many Members of the Committee may feel that this is a first step in that direction. However, for me and perhaps many other noble Lords, that somewhat dizzy prospect is not outweighed by the fact that this is the European Union making another step forward—as my noble friend Lord Tebbit and others pointed out—into national sovereignty and that these anti-discrimination clauses are more properly the attribute of a state than a market.
Some of the questions asked concerned the difficulties of our obvious and proper tolerance, for instance, of the Moslem religion. But what do we do when we come up against some of its less acceptable attitudes towards women? The whole question of national sensitivities was not properly concluded in this debate. Also, the noble Lord, Lord Stoddart, is absolutely right when he says that the issues of race, religion, disability or age are comparatively easy to deal with as set out in new Article 13, but other issues such as sexual orientation are much more difficult.
I asked what is the difference between religion and belief. I am sorry that the right reverend Prelate is no longer in his place; I thought that he might be able to help on that matter. What about belief? That is not an easy question. The noble Lord, Lord Stoddart, made the point that people should be free to do what they want in matters of sexual activity and so forth, but so should their employers be free to employ them or otherwise.
There is no question of dividing the Committee on the amendment this evening. I am grateful to all those who have spoken and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.15 p.m.
Lord Stoddart of Swindonmoved Amendment No. 14:
Page 1, line 13, after ("2") insert (", other than paragraph 15 (Title IIIa of the Treaty establishing the European Community (visas, asylum, immigration and other policies related to the free movement of persons)),").
The noble Lord said: In moving Amendment No. 14, it may be convenient also for me to discuss Amendments Nos. 15 to 18, 45 and 51. This group of amendments deals with the freedom of movement of persons, border controls and the implications for Gibraltar. It covers immigration controls, asylum and other matters. It also incorporates the Schengen Agreement between certain countries in the European Community and is therefore subject to the acquis communautaire.
As the protocol states in its opening paragraph, the new Schengen acquis agreements are aimed at enhancing European integration. It means that the powers now given to the European Union cannot be reversed because the intergovernmental nature of the agreements no longer applies and all new applicants for membership will have to agree to the Schengen acquis before they will be allowed to join. Thus the control of borders, except for the United Kingdom, Ireland and Denmark, will come under the control of the institutions of the European Union, constituting yet another step towards the eventual creation of a single European state stretching from the Atlantic Ocean to the Russian border—yet another big step towards the creation of a country called Europe under the suzerainty of Germany. I am sorry to mention Germany again.
If anybody believes that my last statement is rather extreme, I recommend that they read the article by Graham Turner in the Daily Telegraph of Saturday, 28th March 1998. I shall not read it or quote it to the Committee because it is too long; I shall just read the title. It says, "Tomorrow belongs to Germany" by Graham Turner:
"Chancellor Kohl and his allies have managed to create by the ruthless exercise of political will the empire that Hitler failed to fashion by military conquest".
That is not the Euro-realist Stoddart saying that; it is Graham Turner, a distinguished journalist of long standing.
What is more, life will be made more difficult for travellers and workers from eastern Europe. The Schengen acquis will simply be a further step towards the building of a fortress Europe. Those are basic reasons for not wishing to see the Schengen acquis incorporated into the European Community even though the United Kingdom, Eire and Denmark will not be part of it, at least in the early stages. As I said, Britain has an opt-out and will retain control of her borders. She will continue to have the right to refuse entry to any citizen of a third country and, presumably, of the European Union and European Economic Area citizens, though I am not sure how refusal of entry to the two latter categories will work. Perhaps my noble friend will explain that to me when replying to the debate.

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Britain and the other opted-out countries will have the right, at some future stage, to apply to join the Schengen acquis, though I hope I can be assured that the present Government will never make such an application. But any such application will have to have the unanimous consent of existing members—a condition smuggled in by Spain, no doubt with some ulterior motive concerning the future of Gibraltar. As we all know, the Spanish authorities make endless difficulties for Gibraltarians and others wishing to go to and from the Rock. They do so with a blatant disregard for the principle of free movement of people enshrined in the treaty of the European Union to which Spain is a party. The noble Lord, Lord Moynihan, will no doubt wish to elaborate on the position of Gibraltar when he speaks to Amendment No. 45, so I shall not say anything further about that aspect.
The claim is made for the Schengen aquis that it will make it easier to catch criminals, but I have to say that the reverse would seem to be the case. Surely the fewer the border checks, the easier it will be for criminals to extend their criminal activities and the more difficult it will be to catch them. That is the conclusion I would come to, but apparently some people believe the reverse. I should like to know the reason for that. The Italian Mafia have already made a killing out of fraud in the European Union and they must be licking their lips at the prospect of a Europe-wide bonanza for themselves and other criminals out of this arrangement and when the border controls are loosened further.
There are many questions arising from the Schengen aquis which need to be answered. For example, what will be the position regarding asylum? Will the United Kingdom be able to reject mass applications for asylum when people travel through the European Union from such places as Slovakia or Kurdistan, or anywhere else for that matter? Will this country be able to exercise its full authority to reject applicants for asylum under such circumstances without making special agreements with the various countries of the European Union, as has previously happened in relation to Albanians who came here through Italy? We had to make a special arrangement and agreement with Italy before we could return them to that country. Perhaps my noble friend would be kind enough to deal with that point when he speaks.
I come back to the issue of European Union citizens wishing to enter the United Kingdom. Will British immigration officials be able to examine the official identity documents of any entrant—his passport or any other document he may have such as an identity card? Will immigration officers be able to search his person? Will immigration officers be able to examine his belongings or detain him temporarily for further inquiries? Will they be able to detain him for longer periods if that is thought appropriate? I am talking here about citizens of the European Union.
This is undoubtedly an important issue. Although the United Kingdom will not be part of the aquis in its early stages, there are implications for this country, especially in the long-term and even more especially if we foolishly decided at some future date to accede to the Schengen aquis. On that point, I should like to ask my
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noble friend a final question. What would be the position of Parliament if the Government decided to opt into the Schengen aquis? Would such a decision require parliamentary approval through primary, or even secondary, legislation, or does Parliament's ratification of the Amsterdam Treaty through this Bill give the Government full authority without further reference to or decision by Parliament? Would the Government be able to accede to the Schengen aquis provided all the other member states agreed to such accession, which of course is implicit in the Bill?
Those are very basic questions and I hope that my noble friend will be able to answer them this evening. If not, I should like him to study the matter and perhaps write to me as and when he can. I beg to move.
Lord Chesham: I should like to speak specifically to Amendment No. 45 on the position of Gibraltar. For nearly a decade the status of Gibraltar has been an obstacle to agreement among the member states on a convention to control third country immigration into the EC/EU. A common visa format and a policy for crossing the EC/EU's external frontiers has not been possible to agree.
In 1993 the Spanish Government refused to ratify a draft external borders convention because of its application to Gibraltar and insisted that the southernmost external frontier of the Union should be at La Linea, on the southern tip of Spain. Recognition of Gibraltar as an EU frontier would give Gibraltar a status unacceptable to the Spanish Government because of the Spanish objection. The draft convention has not come into force and has to a certain extent been superseded by Schengen and other EU developments.
In his evidence to the Foreign Affairs Committee in November 1997 the Chief Minister of Gibraltar, Mr. Peter Caruana, identified incorporation of the Schengen agreement into the Community pillar in the Amsterdam Treaty as one of the main areas of concern. Schengen was in fact an earlier agreement than the external frontier draft. It was agreed in 1985 by France, Germany, Belgium, the Netherlands and Luxembourg. When it came into force in 1995, those countries had been joined by Spain and Portugal. By mid-1997 there were 13 full Schengen members—all the EU member states except the UK and Ireland, with associated status for Norway and Iceland as members of the European Economic Area. Should the British Government decide to join the Schengen aquis in the future, the unanimity requirement in the Amsterdam Treaty could mean that entry by Britain, and by extension Gibraltar, would be blocked by the Spanish Government unless Britain agreed to exclude Gibraltar, which could result in further obstacles to free movement to and from the Rock.
The Conservative Government did not intend to join Schengen because it was considered incompatible with the UK's policy on the need to retain border controls. The Labour Government have expressed similar views and have said that they have no intention of joining. The Gibraltar Government, on the other hand, are for economic reasons extremely keen to join Schengen and be free of both official and unofficial border controls.

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The Schengen aquis and provisions to build on it were included in the Amsterdam Treaty as a protocol integrating the Schengen aquis into the framework of the European Union. The UK will not be a party to the Schengen aquis, as provided by Article 4 of the protocol, but,
"may at any time request to take part in some or all of the provisions of this aquis".
Shortly after the Amsterdam summit the Minister with responsibility for Europe was asked what arrangements had been made for Gibraltar to enter the Schengen area if it decided that it was in its interests to do so. The answer given was that it was up to the United Kingdom to decide and that since Gibraltar is part of the UK for most EU purposes there could be no question of unilateral decision-making in this area by the Gibraltar Government. That could have interesting ramifications when we come to the Committee stage of the European Parliamentary Elections Bill.
In evidence to the Foreign Affairs Committee in another place, the Foreign Secretary, Mr. Robin Cook, discussed the treaty protocols and declarations in relation to the possibility of future British membership of Schengen and insisted that there was nothing in the treaty that altered the status between Gibraltar and Spain or gave Spain power to impose border controls on Gibraltar. There were reports of a misunderstanding at the time of finalising the Amsterdam provisions on Schengen which have added some confusion to the nature of the opt-in arrangements. Apparently, Spain did propose an amendment to have the effect of bringing in unanimity for UK participation in the Schengen acquis. There was an agreement that this should be submitted in writing by Spain, which was not done. The subsequent change to the treaty, we are advised, was a bilateral agreement between Spain and the Dutch presidency.
The position of Schengen in the Amsterdam Treaty remains somewhat confusing. According to Mr. Cooke, Spain had not deposited its proposal in writing with the presidency to be agreed by all member states, and yet it was written into the treaty allegedly as a result of a bilateral agreement between the Spanish Government and the presidency. I believe that Amendment No. 45 would clarify the position as far as the United Kingdom and Gibraltar are concerned. I support it.
Lord Monson: My Lords, I put my name to Amendment No. 18 and I meant to put it to Amendment No. 45 but because of some oversight I failed to do so. So the noble Lord, Lord McIntosh, will understand that I, too, am very concerned about Gibraltar. As the noble Lord, Lord Stoddart, reminded us, Spain has caused endless trouble for both Gibraltarians, British visitors and British residents at the frontier, totally contrary to the Treaty of Rome, which has nothing to do with the Schengen agreement and ante-dates it by decades. As the noble Baroness, Lady Symons, said when speaking to Amendment No. 13 a half hour or so ago, discrimination on the grounds of nationality has always been banned.
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I complained at Question Time some weeks ago about one serious incident involving very senior British personnel. The noble Baroness, Lady Symons, was good enough to write to me. May I take this opportunity to say how impressed I am by the way in which Ministers of this Government always do write to one when they say that they will do so. They write at length and promptly. That is most commendable. She wrote to me at some length explaining that the British Ambassador had complained to the Spanish authorities, who had apologised and promised not to do it again. As we know, that sort of thing still does happen, but perhaps the incidents are not quite so serious. I hope that, whatever happens, pressure will continue to be brought to bear on Spain to behave in a civilised manner, as the Treaty of Rome should compel it to do.
The other aspect of this article which concerns me is that there is a danger that, by abolishing all the internal borders of the Community and strengthening the external borders, it will make the probable introduction of a Europe-wide identity card more likely, which for anyone with libertarian tendencies is worrying. Another aspect is that it will make life for our Commonwealth friends who fought for us in World War II even more difficult. It is already humiliating for ex-servicemen and others to have to queue for hours at immigration to enter, although those from Guadaloupe, Macao and elsewhere apparently get in without any problems. All this is a matter of worry. For that reason I support the amendment.
Lord Hoyle: I beg to move that consideration of Amendment No. 14 be now adjourned and that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
Lord Hoyle: My Lords, I suggest that the Committee stage begin again not before 8.35 p.m.

Pesticides Bill
7.34 p.m.
Lord Stone of Blackheath: My Lords, I beg to move that this Bill be now read a second time. In doing so I should declare an interest. For 32 years I have worked in a company which has been involved with improving safety standards in foods for the consumer, for those involved in the food production chain and for the community at large.
Pesticides carry many important public health and economic benefits. For example, in agriculture they are used both to protect crops from pests and diseases and to increase yields. However, being designed to control or destroy living organisms they must, therefore, be regarded as potentially hazardous material. A comprehensive regulatory system has been put in place to ensure that only those pesticides which may be used without undue risk are placed on the market and are available for use.

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The basis of the regulatory system is that before all new pesticides are given approval they are subject to a comprehensive scientific assessment, considering in particular the potential effects on human health and on the environment. The day-to-day work is carried out by the Pesticides Safety Directorate, which is part of the Ministry of Agriculture, Fisheries and Food, and the Health and Safety Executive. Where major decisions are to be taken, their work is overseen by the independent Advisory Committee on Pesticides. This committee in turn makes recommendations to Ministers in a number of departments and only when these Ministers are content, is approval granted to place the pesticide on the market. I shall not seek to detail these arrangements further at this stage because they work well and the Bill before your Lordships does not seek to change them. What the Bill does seek to do is make some improvements to associated features of the pesticides regime.
The Bill deals mainly with public access to information on pesticides. Because pesticides are hazardous products, it must be right that the public should have ready access to information about the pesticides to which they may be exposed. The powers to enable information to be provided are already in the legislation. However, the powers to provide detailed scientific information about individual pesticides can only be applied to pesticides approved since 1986 when the statutory system came into force. This means, in effect, that the comprehensive arrangements to provide information to the public cover less than half of the pesticides currently on the market. This Pesticides Bill would remove the 1986 cut-off date and would thus allow information on all the older pesticides (which are often of greatest concern to the public) to be made available.
The other main issue dealt with in the Pesticides Bill is the enforcement of pesticides legislation. Existing legislation set up a comprehensive system to ensure the orderly marketing and proper use of pesticides once they have been approved. Enforcement powers are shared between the agriculture departments, the Health and Safety Executive and local authorities. The powers given to these bodies to enforce the legislation are wide-ranging, but several minor areas for improvement have been identified and are included in the Pesticides Bill.
First, there is currently a restriction on the powers given to local authorities. Local authorities acquired enforcement powers when the original legislation was amended in 1989. However, the 1989 Act did not allow local authorities to be provided with the power to seize or dispose of pesticides. The Pesticides Bill would enable this power to be given to local authorities by way of legislation.
Secondly, the Pesticides Bill would introduce flexibility to the existing power for enforcement officers to serve enforcement notices. Enforcement notices are issued to those believed to be in breach of the regulations and indicate the action which should be taken. Clearly, it is possible that circumstances may change or that the enforcement officer may not have
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been in possession of all facts when first issuing the notice. The Bill, therefore, allows notices to be withdrawn and re-issued in these circumstances.
Thirdly, the Bill introduces a power to enable potential witnesses to be questioned. The power is designed to maximise the information which can be gathered but includes a safeguard that the evidence so collected cannot be used to prosecute the interviewee, unless they have perjured themselves. I understand that the usual powers under the Police and Criminal Evidence Act would be used to interview suspects.
Fourthly, the Pesticides Bill would extend the present power which authorises enforcement officers to photograph written records. The Bill would enable photographs to be taken of anything which might prove helpful to the investigations.
The Pesticides Bill also makes a technical amendment to the arrangements for making secondary legislation in Northern Ireland. This would allow secondary legislation on pesticide residues to be set out in a single instrument where at present two are required.
The United Kingdom already has a strong system of regulatory control for pesticides. This Pesticides Bill would improve the operation of these arrangements. In particular, the change to allow the public to be given comprehensive information on all pesticides rather than simply those authorised or reviewed since 1986 is a valuable amendment to the legislation. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Stone of Blackheath.)
7.39 p.m.
Lord Kimball: My Lords, I am certain that everyone would want me to congratulate the noble Lord, Lord Stone of Blackheath, on starting to carry through his first Private Member's Bill. However, I think that he will find that it is not quite the same experience as was making his excellent maiden speech. I am confident that the House will extend to him the same courtesies, but I am not quite certain whether we shall be able to extend to him the same tolerance towards the errors and omissions of this legislation. The noble Lord reminded the House of something of which we are well aware. I refer to his connection with one of the principal food retailers in this country, whose name is associated with value for money and quality.
Food safety concerns us all. We have lived through the BSE crisis, e-coli outbreaks and the farce of beef on the bone. We seem to have endless scare stories in the press on the subject which have the effect of eroding public confidence in this area.
In this Bill the noble Lord is attempting to extend into the public domain further information about the pesticides used in food production. However, I think that the Bill should be considered against the background of two other initiatives which are in the early stages of enhancing food safety in this country. I refer first to the Food Standards Agency, which is about to start its work

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according to nine guiding principles to protect pubic health in relation to food and
"to work in an open and consultative way".
How does the noble Lord feel that his Bill fits in with the provisions of the Bill that we are shortly to consider on food safety regulations?
I am sorry that when introducing the Bill the noble Lord did not mention something that is regarded highly, certainly throughout the arable counties. I refer to the assured combinable crop scheme. It is an industry-backed voluntary initiative in support of this Bill. This summer the first quality-assured crops will be harvested. Crop merchants are already putting out contracts under the scheme and I sincerely hope that some are being put out for purchase by the organisation for which the noble Lord works.
Is the noble Lord aware that that scheme requires an 80-strong team of farm verifiers, who are commencing their visits this month to assess standards in relation to crop protection, sprays, spray records and pesticide label recommendations? The scheme needs finance. In fact, that is being met by a levy on all those competing with the scheme. I simply do not understand how it is said that the noble Lord's Bill does not require finance. As I read it, there are to be enforcement powers and powers to direct other persons to take remedial action. There are powers to extend the Bill to Northern Ireland. Surely the Bill should have been subject to a financial resolution in the other place.
However, I do not see why the noble Lord should be penalised for what is becoming a very disturbing habit. I do not believe in Private Members' Bills being government-sponsored or government-hand-outs. There should be no such thing, although we should admit that there is such a thing. What normally happens is that a private Member who is selected in the ballot will feel strongly enough about an issue to want to do something about it. It is wrong that we should continue to allow private Members in another place to introduce measures which incur financial liability without a proper financial resolution being placed. I hope that the noble Lord can give us some guarantee that the expenditure problems which this Bill creates will be dealt with.
I do not want to delay the matter further, but I must advise the noble Lord that we shall certainly seek minor amendments in Committee. First, we all know that the position of Secretary of State is recognised in law, but the Bill does not specify which Secretary of State. That vagueness in the Bill reflects a problem that we all know exists between the Secretaries of State responsible for agriculture and for the environment. We shall want to be more specific in Committee and to have the matter sorted out. Secondly, the definition of "information" is too broad and, thirdly, the provisions seek to empower certain officers to a greater extent than is desirable.
Subject to those three small amendments, which I am confident that the noble Lord will be able to accept because they will not in any way delay the progress of the Bill—they will improve it—I thank the noble Lord for introducing the Bill and wish it well.
7.45 p.m.
The Countess of Mar: My Lords, I begin by expressing my gratitude to the noble Lord, Lord Stone of Blackheath, for his introduction of this Bill to your Lordships' House. It is a short Bill, described as "a dormouse" in another place, but none the less an important one in our progress towards greater freedom of information in this field. I have very little doubt that any noble Lord who has been in this House during the past six years will understand my interest.
I accept that the majority of users of pesticides are responsible individuals and that they make every effort to comply with existing legislation which, as Section 16 of the Food and Environment Protection Act 1985 indicates, is designed to protect the health of human beings, creatures and plants, to safeguard the environment and to secure safe, efficient and humane methods of controlling pests. There are, as I have found, some people who behave in a cavalier manner, with a total disregard for safety, perhaps because they are unaware of the implications, careless or take short cuts simply to save time and money.
Clause 1(1) of the Bill extends ministerial powers to seize and dispose of pesticides and treated materials to local authorities. If I understand it correctly, it should bring the law enforcers closer to the illegal activity in both the time and location and should reduce the delays which so often render any attempt to enforce legislation ineffective.
I particularly welcome Clause 1(2). Any move to make information on what is known, and perhaps what is not known, about the actions of a pesticide can only be helpful. May I ask the noble Lord the Minister to make clear one or two points? I have read the proceedings on this Bill in another place with great care and have been unable to ascertain whether the information to be made available concerns only the active ingredients of the pesticide formulation or whether it includes what are known as the inert ingredients. I ask this because research by the Northwest Coalition for Alternatives to Pesticides in the USA recently identified 25 per cent. of some of the 2,500 substances added to pesticides but not named on product labels as hazardous. Some 400 of these so-called "inerts" are in fact active ingredients in other pesticides; for example, coal tar, a known carcinogen, and naphthalene, considered to be of "unknown toxicity" but on the other hand known to destroy red blood cells.
May I ask the Minister whether the Government intend that full disclosure of the formulation is intended? I can see that there may be some difficulty here. This could justify a refusal on the grounds that commercial confidentiality would be breached. I am sure the Minister will appreciate how important full disclosure is to an individual who believes that his or her health has been damaged by exposure to a pesticide; a medical practitioner treating such a person; a veterinary surgeon treating an animal; or any person investigating an environmental incident to establish exactly what chemicals may be implicated. Is there any means whereby the information could be divulged to an individual inquirer but not to a competitor?

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I note that Section 16(4) of the Food and Environment Protection Act 1985 states that:
"Pesticides may be identified in any way for the purposes of this … Act".
Despite the recent tightening of the controls for the purchase, use and disposal of sheep dips, which are veterninary medicines, there is still evidence that the law is not always observed. Can the Minister inform the House whether sheep dips will come within this legislation?
In another place there was discussion about the feasibility of putting information on the Internet. I commend this practice to the Minister. I have made considerable use of the service provided in the USA and would be delighted if it could be extended to the United Kingdom. The Minister in another place made much of the facilities provided by the reading room at the Pesticides Safety Directorate in York. While I accept that this facility is excellent, it is not much help to a person who lives some distance from York, is ill and is unlikely to be able to afford the rail fare, no matter how good the rail services.
I also welcome Clause 1(4)(b) which extends the provision of information on pesticides to those in use prior to 1986. I ask the Minister how many pesticides in current use fall into this category.
The power to question embodied in Clause 2, new paragraph 2A is a very necessary addition. All too often I have been made aware that an individual who has been concerned with an incident where a pesticide has been purchased, stored, used or disposed of illegally has been afraid to speak out for fear of jeopardising his or her employment. This is especially applicable to certain areas of the country where unemployment is high and employers are still, dare I say it, feudal. This was highlighted when I heard of a joint HSE/Pesticides Trust research project in Lincolnshire which was hampered by just such a situation. While I am pleased that every effort is now to be made by investigating officers to obtain such information, I have no doubt that a determined employer, who may later be the subject of a prosecution, will at least attempt to prevent an employee from divulging information of an incriminating nature. I ask the Minister what protection will be available to an employee or other person against loss of employment or any action which may affect their current position.
Clause 2, new subparagraph (3) permits an investigating officer to photograph anything which he believes is relevant to the exercise of his functions under paragraph 4 of Schedule 2 to the 1985 Act. Frequently, an infringement of the law takes place when no investigating officer is present. I think particularly of field-spraying operations when a member of the public may be present with a camera. I am not sure whether such evidence is currently accepted. If it is not, would the Minister consider extending this provision to admit photographs produced as evidence by a person other than the investigating officer?
I look forward to the progress of the Bill, I hope unhampered, through your Lordships' House.
7.53 p.m.
The Earl of Clanwilliam: My Lords. I too congratulate the noble Lord, Lord Stone of Blackheath, for introducing this Bill. I apologise to him that I missed the first minute of his opening speech. Any Bill that serves to regulate pesticides in the marketplace and their indiscriminate use is to be recommended and supported. Where farming has been changed from being an occupation to an industrial enterprise by the concentration of market forces and the drive for intensive production there will inevitably be a small proportion of the intensive farming community who will take the easy route to soil management by throwing pesticides at any problem, often on the advice of the pesticide salesman. Control is important on several fronts.
Soil management is a vital part of the sustainable environment, and the reckless use of chemicals seriously damages our inheritance. Is the Minister aware that Wessex Water offers a premium of £12 an acre to any farmer who can be persuaded to convert to UKROF standards of organic farming in an attempt to reduce the leaching of agricultural chemicals into the water supply? Does this not impress the Minister as proof of the need drastically to reduce the use of pesticides on all fronts? In this context the power to seize and dispose of chemicals, and in particular what is euphemistically called treated materials, is very useful to local authorities. In Clause 2 "enforcement notices" has the ugly ring of the thought police, but this is a vital matter and recalcitrant farmers must be held to pay special regard to the safety of the food that they grow for public consumption, of which the noble Lord, Lord Stone, is well aware and is a great exponent.
The recent help offered by the Ministry to organic farmers is most welcome. While it is not directly relevant to the Bill, I hope I shall be allowed to make that point. Perhaps I may ask whether other water companies will be encouraged by the Minister to take a leaf out of the book of Wessex Water. The residual effect of all pesticides on the crop which will pass through the food chain is well known to dieticians. I should be glad to hear from the Minister whether the department is taking on board the serious effect of organophosphates on society and small children in particular. This is especially so when it is used as a pesticide in horticulture. It is all very well to be told that there is no danger when the department itself has recently tightened up the regulations about its use in horticulture. If there is no danger, why is there any need to restrict its use? The Bill states that pesticides are permitted to be marketed or used only if they are safe to people and the environment. If one is altering the structure of a product that is allowed to be used there must be danger in it.
Is it not worth pointing out for the umpteenth time that this particular pesticide is derived from a nerve gas that directly affects the central nervous system and for which there is no known cure? Not only that, but its effects are cumulative and fatal. I say this in deference to the noble Countess, Lady Mar, whose strictures on the subject are well known to noble Lords. We have the examples of Dieldrin and Aldrin, not to mention DDT,

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which in our wisdom and in the light of revealed knowledge have been banned. When will we come, as inevitably one day we will, to the conclusion that OPs should join that insalubrious list? I hope that the Bill will have fair passage through your Lordships' House.
7.56 p.m.
Lord Beaumont of Whitley: My Lords, this Bill is about freedom of information and public safety in a field that causes increasing concern, not least in your Lordships' House where the noble Countess, Lady Mar, has rightly pestered the Government to come clean on the matter of OPs. It may be that she is partly responsible for the fact that this Bill reached the shelf of the Ministry of Agriculture from which it was rescued by the noble Lord and his colleague in the other place.
There is a growing body of opinion that there is a fundamental connection between many of these chemicals and the incidence of cancer. Only last week my noble friend Lord McNair hosted a meeting in this House at which Mr. Teddy Goldsmith delivered a lecture in memory of his brother in which that point was strongly made. In another place on Third Reading of this Bill that admirable Member of Parliament, Sir Richard Body, raised the same point.
It is not that we do not need science and technology to help us. We have thankfully left an era in which Pliny the Elder could state as a fact that naked menstruating women walking round grain fields could cause caterpillars and beetles to fall dead. We need to have the knowledge to control pests properly but to control them in such a way that we do not poison ourselves or, for that matter, the useful insects, the bird population or the fish in our streams.
The problem under the current law is that the public have access to information on only about 40 per cent. of approved pesticides, which do not include a large number of the older and more popular ones which this Bill will bring within the system. We on these Benches believe it is important that maximum information on these dangerous substances should be available to the public. It may be that this Bill does not go far enough. Clause 1(3) gives Ministers power to consider making information available to the public. This surely is inadequate. Information must be provided and freely available, not just on the Minister's whim.
The Minister in another place gave an undertaking that all information requested would be made available. I accept that that will be so for the foreseeable future. But we come across the problem that your Lordships always encounter at this point in a Bill. The Minister cannot bind his successors. If that is what is intended why is it not on the face of the Bill? We all know that we are in an area where if people are harmed important commercial interests come into play. There could be very powerful reasons for some people in some circumstances not wanting full information to be made available. There have been such cases in the past. It would be wildly optimistic to think that there will not be some in the future.
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It is now more than ever possible to make such information easily available. It was suggested in another place, and has also been suggested here this evening, that the information should be put on the Internet. The Minister took that suggestion on board and said that he would take advice on the matter (Hansard of Sub-Committee C, 4/3/98; col. 6.) I should be interested to know if the Minister can let us know what advice the Minister has taken since he gave that undertaking, and what the ministry intends to do.
One of the elements in the Bill of which we on these Benches approve in principle is the bringing down of the responsibility in these matters to local level. In principle, we of course agree with that, but will the local authorities have the resources adequately to carry out their duties? Here I join the comments of the noble Lord, Lord Kimball, about the pretence that the Bill does not carry costs with it, although I challenge the noble Lord, who must know from his experience in another place, that just as another place does not exist so far as concerns this House, so there is only one Secretary of State. Having sat in another place there may have seemed to him to have been several Secretaries of State, but technically speaking there is only one. So in legislation it is not considered right to particularise which part of the one Secretary of State is responsible.
I look forward to hearing the matters that we shall discuss in Committee, but, in the meantime, I have great pleasure on behalf of these Benches in giving full support to the Bill.
8.1 p.m.
Baroness Anelay of St Johns: My Lords, I, too, add my congratulations to the noble Lord, Lord Stone of Blackheath, on the manner in which he introduced the Bill and the clear explanation that he gave. Like him, I declare an interest—it is not as professional as his—as someone who occasionally uses pesticides, like the vast majority of the population of this country, in the garden and the home. I note that the Bill affects not just farmers and producers but home owners, as entry into private homes is covered in the Bill.
My noble friend Lord Kimball referred to the practice of government hand-out of Bills. When I read Hansard of another place, I noticed with interest that the Minister of State admitted freely that this is a hand-out Bill left over from the previous government, not an invention of the present Government, and that it fills a gap identified some while ago. So it is hardly surprising that I, too, agree with the Bill's objectives, but I still have some questions to ask and issues to explore. There are two reasons for that.
First, I seek, whenever possible, to apply to legislation what I call the "Judge Bassingthwaighte" principle introduced to us in the Social Security Bill; that is, that a Bill which enjoys bipartisan support paradoxically needs to be challenged more strenuously in order to test its effect. The second reason why I should like to examine the Bill in some detail is that this House possesses expertise uniquely available within the Palace of Westminster, which means that we can examine effectively aspects of the Bill which might not

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receive such attention in another place. That is a fact recognised by my honourable friend Mr. Paice who is recorded in Hansard of another place as saying that there were legal technicalities in the Bill which might well require the judgment of Members of this House who may have more expertise in such matters. I am sure that we shall try not to let his confidence in this House flag.
I shall ask the Minister a number of questions. If they can be addressed by the noble Lord, Lord Stone, I shall be grateful. However, I do not wish to make the noble Lord's life difficult at this or any stage of the Bill. I recognise that it may be more appropriate for the Minister to answer them, either now or in Committee.
The Bill makes several improvements to the provision of information with regard to pesticide control and enforcement, which I welcome. I was pleased to note that the noble Lord, Lord Stone, recognised that the UK already has the most rigorous controls on pesticide registration in the EU.
Clause 1(3) deals with the release of information on older products that have not yet been reviewed by the Pesticide Safety Directorate. My noble friend Lord Kimball referred to costs. My first question relates to the costs to be incurred in complying with the new provisions of the Bill. It was an issue raised by my honourable friend Mr. Paice in another place. Like him, I am anxious to ensure that the industry is not burdened with unnecessary costs in providing information which the public may not demand to see. Will the Minister tell the House what costs are to be incurred in providing information? How will the calculation be made and what will constitute a reasonable charge which will not then deter research?
I note that in another place the Minister of State claimed that the wording in the Bill:
"the cost reasonably attributable to the supply of the information",
was chosen to replace the old phrase a "reasonable fee" because its construction is tighter. Do the Government intend that the cost of supply should be limited to photocopying? How will they calculate that? Will they take into account matters such as the full cost of labour, maintenance of machinery and depreciation?
The question of how information may be transmitted to interested parties was raised by the noble Countess and the noble Lord, Lord Beaumont. Like them, I shall he interested to learn what advice the Minister received with regard to the use of the Internet, and what decision the Government have made with regard to using the Internet for posting information? I should like to take the opportunity to congratulate MAFF on its website. It has an excellent home page. Its signposting is the best within Whitehall. It gives a lesson to some other government departments. One department which I hope might learn from MAFF would be the DETR. I have torn out some hair trying to find my way around its website. That could never be said of MAFF's.
Clause 1 raises also civil liberties issues which we may need to examine in some detail in Committee. It extends to the local authority the power to enter premises as prescribed in the 1985 Act. Those premises include private homes. Have the Government considered
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fully the implications of extending to the local authority the power to enter private homes to take photographs and videos of evidence?
Clause 2 deals with improving the operation of investigations where allegations have been made, bringing it into line with the normal procedures of the Health and Safety Directorate. It is an attempt to make enforcement effective against the holding of illegal pesticides. It is a move that we on these Benches welcome.
I seek confirmation from the Minister that I have correctly understood the provisions of Clause 2(2) with regard to two points. Those two points relate to perjury and the sanctions for non-compliance. First, with regard to perjury, currently an inspector is allowed only to ask a person to volunteer information. The amendment to Schedule 2 of the 1985 Act introduced by this Bill gives the inspector the power to question the individual and obtain a signed statement. New Section 2A(4) provides that a person is not to be excused from giving information on the ground that it might incriminate him or that person's spouse, but:
"a statement or admission made in complying is not admissible in evidence against either of them in proceedings for any offence other than perjury".
When the subsection was discussed in the other place there seemed to be confusion about its implications—at least, I was certainly confused when I read the debates on the matter. Therefore, I wish to seek guidance on whether I have correctly understood the clause. I hope that your Lordships will forgive me if I pose a practical explanation of how the Bill might operate.
Let us say, first, that an officer questions me and I give a statement that I am storing illegal pesticides for Mrs. Bloggs. Some time later, I find myself in court. At this stage, there are three possible scenarios. First, I am the defendant charged with storing the pesticides and I state in court that I have not stored them. I understand that the Bill prevents the prosecution from adducing my original statement as evidence against me in those proceedings. But if it wishes subsequently to prosecute me in separate proceedings for perjury it can use the first statement as evidence.
The second scenario would be that I am a prosecution witness in the trial of Mrs. Bloggs. Again, I lie and say that I have not stored the pesticides. My first statement can be brought into that case only if the prosecution wishes to apply to treat me as a hostile witness by demonstrating that I had made a previous statement which was inconsistent with my oral evidence. It would then be used as to my unreliability as a witness but not against me because it would not be in proceedings against me. However, the prosecution could subsequently bring a charge of perjury against me and, as in the previous scenario, use the first statement as evidence against me in those proceedings.
The third scenario is that I am a witness for the defence in the prosecution against Mrs. Bloggs. Again, I lie in court. I promise your Lordships that I would never do such a thing, especially having until recently been a magistrate. Again, I lie in court and say that I did not store the illegal pesticides. The first statement

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can be used as evidence, but only to demonstrate the unreliability of my oral evidence. It cannot be used against me because the proceedings are not against me. However, the prosecution could subsequently bring a case of perjury against me.
I hope that those three scenarios have given the House an example of the issues about which the other place got into such a tangle. I hope that the Minister can reassure me that my legal interpretation is correct with regard to the three scenarios. If so, I would not have too much trouble with the wording of the Bill, but it may be that those who must operate the Bill will have some difficulty.
The other issue is the sanction for non-compliance. I wish to query the sanction which can be imposed on a person who is asked by an officer to give information, but simply refuses to do so. Debates in another place refer to the sanction as lying within the provision of the Food and Environment Protection Act 1985. Does that Act require further amendment to ensure that the sanctions are extended to cover the amendments introduced by the Bill? If not, can the Minister direct me to the relevant provision?
I, too, wish the Bill well. I am sure that noble Lords will bring their expertise to bear in discussions in Committee. We on these Benches support the underlying objectives of the Bill.
8.13 p.m.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, the Bill before us is designed to improve the effectiveness of the United Kingdom pesticides legislation and the provision of information about pesticides to the public. The Government fully support the Bill and I wish to congratulate my noble friend Lord Stone for sponsoring it before your Lordships. He did it so well that he runs the risk of carrying similar burdens in the future.
I wish to set the Bill in a general context, but, first, I shall touch on some of the questions that have been asked. I noted 18 questions. As we have a time constraint I shall not be able to answer them all. However, I wish to deal with some of them in order to ensure that they are dealt with at the beginning and not lost in the rush at the end. I can assure the noble Baroness that I can speak for 20 minutes without answering any questions.
The noble Lord, Lord Kimball, asked about the relationship with the Food Safety Agency. We see no reason why the Bill should not sit alongside the aims of the agency. It is important for us to take the opportunity offered by my noble friend to tighten up relevant existing legislation.
The noble Countess, Lady Mar, asked about active and inert ingredients. Some details are bound to be confidential, but all formulants are assessed and the evaluation published covers the safety of the whole product, not just the active substance. She asked whether the legislation will be extended to sheep dips. I do not need to point out that separate legislation already applies
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to sheep dips, which are considered veterinary medicines. It applies similar standards of safety and efficacy to those set out in pesticides legislation.
The noble Countess asked about the balance of pesticides since 1986. Information is available only in respect of about 40 per cent. of pesticides. That will increase to 100 per cent. once the Bill is passed. She asked what protection is available to employees who give a statement. A copy of the statement is given to the person who made it, if he wants it, but a copy is not given to the employer.
I am grateful to the noble Earl, Lord Clanwilliam, for raising the assistance offered by a water company in the conversion to organic fanning. We are sympathetic towards organic farming and applaud the initiative taken by the company and encourage others to follow its good example.
The noble Lord, Lord Beaumont, asked about the information available. Regulations to provide access to all information that is not strictly commercially confidential will be laid as soon as possible. An increasing amount of information on pesticides is being placed on the Internet. There is a risk that placing detailed information on the Internet would increase the risk of misuse by rival companies. But there is likely to be scope to go further and this is being pursued.
The noble Baroness, Lady Anelay, asked an impressive number of questions, most of which I wrote down. We do not believe that the Bill will require the industry to provide any additional information. The costs charged will cover the administrative costs, including an element for labour. The maximum price charged for any document is set at £25 and there is no intention to increase that by more than the rate of inflation.
I shall certainly write to noble Lords about the points that they have raised. I shall also try to come to grips with the three scenarios which the noble Baroness presented.
Perhaps I may set the Bill in context and outline briefly the current arrangements and indicate how those would be developed by the provisions of the Bill. In the UK there is a rigorous and detailed system for regulating pesticides. To gain approval for their products, pesticide manufacturers must provide detailed scientific information about health and environmental effects. That is evaluated within government and important decisions referred to the independent Advisory Committee on Pesticides which makes recommendations to Ministers in five government departments. Only if all agree will approval be granted.
A considerable volume of information about pesticides is already available. This includes evaluations carried out by the advisory committee which provide a great deal of high quality scientific information and assessment. In addition, the data submitted by companies underlying these documents are available for inspection.

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The Bill before the House today has three features. The first is the extension of powers for providing information. At present, those extend only to about 40 per cent. of pesticide compounds; that is, those evaluated or reviewed since 1986. The Bill would allow Ministers to bring all pesticides within the arrangements.
Some questions were raised in another place as to the costs of extending these arrangements. As I said, it is not intended that any existing charges should increase should the Pesticides Bill enter into law.
The Bill makes several minor improvements to current enforcement arrangements. Current powers allow enforcement officers to serve enforcement notices but do not allow a notice to be re-issued or withdrawn. The Bill would allow this flexibility. The Bill would provide a new power so that a person being questioned would be obliged to answer the questions put to him. However, the information thus obtained could not be used in a prosecution other than for perjury and safeguards are included to prevent the powers being used to intimidate. The Bill would allow an enforcement officer to photograph anything reasonably believed to be relevant to an investigation. Current powers extend only to documents, books and records.
The Bill provides that Ministers may make regulations so as to give local authorities powers to seize or dispose of pesticides following a breach of any legislation.
The final provision of the Bill is a technical amendment to streamline the making of secondary legislation in Northern Ireland.
I pay tribute to the vigilance of the major food retailers in ensuring the safety and quality of the food they sell. The work they carry out in respect of the residue testing is a valuable complement to the Government's own programme. There is already a great deal of contact between companies and government officials in this area and that is an approach we should like to encourage and see developed further.
I conclude by saying that the Government welcome the Pesticides Bill, in particular the extension of public access to information. I commend the Bill to the House.
8.24 p.m.
Lord Stone of Blackheath: My Lords, I take the opportunity to commend the Bill to noble Lords. Its provisions are sensible and in the area of public access to information on pesticides they represent a significant improvement on current powers.
I am grateful for the comments made by your Lordships and for the general support for the Bill. I thank the Minister for answering many of the questions raised this evening. I do not wish to go over those questions again but look forward to discussing any of the points not answered fully in Committee.
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I am grateful to the noble Countess for bringing her expertise to this Second Reading debate. I am grateful also for the support of the noble Lord, Lord Beaumont, and the noble Baroness. I am not sure that the unscrupulous Mrs. Bloggs would share my gratitude.
I commend the noble Earl on his passion for organic produce which one must surely applaud. Finally, I thank the noble Lord, Lord Kimball, and I look forward to discussing his proposals in Committee.
I shall not expand on the present pesticides approval system and its enforcement powers since the noble Lord, Lord Donoughue, summed up the relevant details. I would, however, like to speak for a few moments about the Bill itself and emphasise the main areas of improvement it makes possible.
First, on access to information, I agree with the noble Countess, Lady Mar, that the public should have a right to be able to find out as much as possible about pesticides about which they may have concerns. As already pointed out, current legislation only allows the public to access information on pesticides approved or reviewed since the introduction of regulatory controls over pesticides in 1986. However, this represents a minority of those pesticides on the market today—about 140 out of 340. The Bill will open up access to information on pesticides which were authorised under previous arrangements. As a result, the public will be able to access information on all pesticides.
Secondly, on enforcement powers, investigation officers, who ensure that all aspects of pesticides marketing and use are fully complied with, face difficulties in the execution of their work. These difficulties lie mainly in the fact that officers do not have powers equivalent to those available under other legislation, including the Health and Safety at Work etc. Act 1974. That has sometimes made it more difficult to enforce pesticides legislation. Again, the Bill would improve the ability of officers to enforce pesticides legislation.
Thirdly, on secondary legislation for Northern Ireland, although the Bill only provides a minor technical amendment to allow the Northern Ireland authorities to make secondary legislation on pesticides, this is nevertheless important. At the moment Northern Ireland authorities face delays and increased work as a result of having to make regulations under two primary Acts. This delay, which I should point out affects pesticides legislation only, also disadvantages the agrochemical industry and farmers are not able to make use of newer technology. This Bill addresses that point.
I believe the Bill makes valuable improvements to pesticides legislation and in particular offers scope to improve, by regulations, the public's access to information on pesticides. I ask your Lordships to give the Bill a Second Reading. In doing so I wish to say how grateful I am for the support I have been given today. As the noble Lord, Lord Kimball, pointed out, this is my first Bill. I have been helped enormously

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by officials who have taught me more about pesticides than I ever wish to know although, yes, my work has made me familiar with all aspects of food safety, including the Food Safety Agency on which we have offered advice. Your Lordships' advice and helpful contributions at this late hour have been encouraging. I thank noble Lords and commend the Bill to the House.
On Question, Bill read a second time and committed to a Committee of the Whole House.
Lord Hoyle: My Lords, I beg to move that the House be now adjourned during pleasure until 8.35 p.m.
[The Sitting was suspended from 8.30 to 8.35 p.m.]

European Communities (Amendment) Bill
House again in Committee on Clause 1, Amendment No. 14.
Baroness Park of Monmouth: I strongly support Amendment No. 45. I am concerned about the anomalous situation in Gibraltar, for which the UK is responsible, and the lack of transparency throughout the many negotiations with the EU which have concerned that territory. Thanks to British advice, Gibraltar long ago stayed out of the Customs Union. She is equally disadvantaged, thanks to Spanish pressure, in matters of air liberalisation and on a number of other issues. But, worst of all, we allowed ourselves to be out-manoeuvred by Spain at Amsterdam on the Schengen issue. That has already been outlined by my noble friend and I shall not, therefore, rehearse it again.
However, Gibraltar has had constantly to find out for itself what clauses in the Amsterdam and the EU treaties may render that territory yet more vulnerable to Spanish harassment, and to warn Her Majesty's Government rather than the other way round. It appears that they cannot or will not secure for Gibraltar even some of the special funding and support which the French overseas departments—and, indeed, some British overseas territories—enjoy from the EU. Gibraltar has no voice in the UK either and seems to have none of the advantages and all of the drawbacks of a dependent territory.
Under Article 227(4) of the Treaty of Rome, Gibraltar is an integral part of the EU. That article applies to European territories for which a "Member State is responsible", yet Gibraltar was not invited to comment on the IGC or to have its views considered. There seems to have been a lamentable failure to consult in time to keep Gibraltar informed and, most of all, to act effectively to protect her interests. I therefore strongly support the amendment and I urge that Gibraltar should be given some way to vote for its own future, if not in the EU then in the United Kingdom.
Other Members of the Committee will have received today, as I did, a note from the Self-Determination for Gibraltar Group which makes two relevant points. First,
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why have Her Majesty's Government not yet rejected the Spanish proposal for a period of joint Spanish/British sovereignty, leading to full Spanish sovereignty? Secondly, what are the Government's reservations on recognising the right of Gibraltarians to self-determination? What possible argument could be advanced in the EU or, for that matter, in the UN, for handing over a territory to the very power which has consistently harassed it and which is an alien power? All this is very relevant to the related issue of the veto and QMV.
Surely this is a case where we should be free to exert the Luxembourg compromise if the worst comes to the worst and Spain continues to attack the human rights and the economic survival of Gibraltar. I shall be wholly unimpressed by anything the Government may say about human rights or transparency if the Gibraltar issue is not properly and honourably resolved and Spain's disgraceful behaviour exposed.
Lord Molyneaux of Killead: I should like to express my support for the noble Baroness. The exclusion of Gibraltar from the right to vote in Europe in elections seems to most people, on this side of the water and where I live in Northern Ireland, to be indefensible. Admittedly we in Northern Ireland are accustomed to having all manner of exotic devices imposed upon us. I imagine that at election time we shall have another tranche of them. But this measure really is the limit. I understand that 30,000 people in Gibraltar regard themselves as British. I refer also to other European Union nationals of other countries who happen to have the misfortune—in the eyes of the bureaucrats—to live in Gibraltar. All of them are denied the right to vote in European elections.
Whatever rather bogus arguments may have been proposed in 1978, the situation of Gibraltar has altered significantly. The European Parliament has acquired a much more extensive role in legislation which applies to Gibraltar, even to the extent of compelling the authorities in Gibraltar to embody certain directives and new laws in their arrangements. Yet in the electoral sense they will not have a say. It is even more staggering to note that French and Spanish territories on the continent of Africa are given full voting rights in European elections. To my simple mind it is difficult to extend the European Union across the Mediterranean to another continent. That seems not only illogical but indefensible. At this end of the Building we debate matters calmly. I hope that we can arrive calmly at some measure of agreement and put to right something which is quite indefensible.
8.45 p.m.
Baroness Williams of Crosby: In a few moments I shall refer to the remarks made by the noble Baroness, Lady Park, and the noble Lord, Lord Molyneaux, in their interesting speeches on Gibraltar. I shall for a moment or two address the wider issues. I find it hard to believe that the Schengen opt-out is of any great permanency. It was a convenient way of dealing with a difficult problem at the time. Denmark and the Republic

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of Ireland opted out of the Schengen agreement. I believe that Denmark wanted to do so but that the Republic of Ireland did not.
The logic of the Schengen agreement is bound almost inevitably to "suck in" the countries that have presently opted out. I refer to having separate sets of policies with regard to third country residence. That raises difficult questions as regards the mobility of senior managers. To have separate visa requirements poses difficult questions. The issue of how to deal with refugee and asylum cases will produce the most horrendous problems for Her Majesty's Government, as those countries that are within the Schengen agreement will be inclined to export some of their problems to those countries that are outside the agreement. I do not say that with any prejudice because I think it is almost inevitable that a country which opts out of an arrangement which then becomes mutual is likely to be the one that loses most in terms of the advantages of such an arrangement.
The poor Minister is always being asked many questions. I shall try to keep mine as brief as possible and as relevant as possible. As regards those countries which are within the Schengen agreement—most of the treaty, including Articles 73J, 73K and 73M, concerns the situation within the Schengen agreement—why is there such a clear reference in the treaty to a three-month period of travel? It seems to me that this is profoundly restrictive. I do not understand why the period of three months is reiterated in the treaty, especially given the importance of trying to encourage people to study, to work, and to work as managers in other countries within the European Union. First, can the Minister throw any light on the reiteration of the three-month period, as if it were, in a sense, central to the granting of visas? Are we right in thinking that it is? Will there be a quite different procedure for people who arrive for more than three months than for those who arrive for less than three months if they are third party nationals? If so, on what basis do we justify this bureaucratic limit?
My second question concerns visas. Will Her Majesty's Government work with the other countries of the European Union on an informal or a co-operative basis with regard to those third country nationals who are neither members of the European Union—who would clearly be within the agreement—or who are members of the Commonwealth? Do the Government envisage any continuing special relationship for those Commonwealth countries which already have substantial numbers of their fellow citizens in this country as regards giving them some degree of preference over other third country nationals?
My third and most serious question concerns asylum and refugee policy. I shall not mince my words. A proper asylum and refugee policy has to be balanced between the need to prevent the swamping of a country by huge numbers of people coming in largely for economic reasons—clearly in our present deeply unequal world two-thirds of the world would like to move into one-third of the world as they would gain far better opportunities than they will enjoy at home—and the absolutely essential requirement that those who have
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the courage to be political refugees in situations where there are major issues of principle at stake should be offered asylum. I take the example of courageous men and women in Nigeria who risk their lives and their safety for the sake of democracy. Are we to take the view that there are no political refugees at all and therefore we do not need to make provision for them?
Within the treaty there is a reference to that profoundly forgotten document; namely, the Dublin convention on asylum and refugees. There are some other references to the minimum conditions—I use the phrase from the treaty—applied to asylum status, refugee status, the reception of such people, their treatment and the way in which their claims are dealt with. I have recently read the report on Campsfield. Anyone who has read that report cannot for one moment pretend that this country has anything to teach our European neighbours, or they anything to teach us, in this regard. The record of Europe has moved from being excellent to being frankly disgraceful. Germany and Scandinavia and for a long time Great Britain had excellent records of offering asylum to genuine refugees. There are such people. Today all three countries are running away as fast as they can from the inheritance of the past.
I recognise fully that this matter presents us with most acute difficulties. The next decade will be a decade when people seek asylum by any means they can. The position will become more and more difficult. In no way do I hold Her Majesty's Government responsible for the endlessly lengthening queues. But we must have a sensible, reasonable and agreed policy for dealing with political refugees who are genuine cases. We must be humane in dealing with the cases that we do not accept as valid cases of asylum. We must recognise—here the treaty's words are correct—that there has to be a balance of responsibility between the member states of the European Union, or otherwise we shall simply find that we export the problem from one to the other in a kind of lurid form of pass-the-parcel in which human beings constitute the parcel and European states the players. I should be grateful for comments from the Minister on what I believe is one of the most difficult issues that we shall discuss tonight and one to which neither Schengen nor opting out of Schengen offers any satisfactory answer.
Baroness Park of Monmouth: I hope I may ask a further question which arises from what the noble Baroness has said. So long as we are not members of Schengen, are we obliged to abide by the EU negative visa list to which the noble Baroness has referred, which contains an extraordinary anomaly that it includes countries such as India, Pakistan, Zambia, and many countries of the Commonwealth with whom we are on the closest and most longstanding terms, but, according to the EU's rules, we are required to ask them for visas? Are we required to do that or not? It is pretty odd that Latin American countries, whose nationals might be

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supposed to be bringing drugs into Europe, are not on the list. I hope that the Minister will give me a clear answer. Do we have to recognise that list or not?
Baroness Williams of Crosby: If the noble Baroness will forgive me, I had not completely finished what I had to say. I apologise, because I looked as if I was about to finish, but then I remembered that I had promised to say something about Gibraltar.
Let me make two comments about Gibraltar. First, I strongly agree with the noble Lord, Lord Molyneaux, about the illogic of excluding Gibraltar from having some voice in European elections. As long as Gibraltar is regarded in the European Union treaties as being associated with and in effect part of the United Kingdom, I believe that there must be some means of representation. If that means of representation is to make Gibraltar part of some other European Union constituency, so be it. What is crucial is that the voice of Gibraltarians should be represented in the European Parliament.
My second point on Gibraltar is perhaps more contentious. On this I completely agree with the noble Lord, Lord Molyneaux. With regard to the point made by the noble Baroness, Lady Parks, I simply want to say—contentiously, if you like—that I believe that in the long run a solution may be found along the lines of that which is emerging in the Belfast agreement, where there would be some broad discussion with Spain but a recognition that self-determination must be the final criterion, but where Spain is brought in to discuss the logistics and transport issues that arise from Gibraltar's geographical placement. I regard the Belfast agreement as possibly a model for far beyond Northern Ireland. I am delighted to see that the noble Lord is nodding in agreement.
Lord Moynihan: It is important that in the context of this Committee stage we bear in mind the important comment made by the noble Baroness, Lady Williams of Crosby, who referred to the logic, as far as Schengen is concerned, of being sucked in, whether or not we particularly want to be. The implications there are very clear. When we consider the impact of Schengen, it is important for us to concentrate on the contribution that she has made.
Throughout the Committee proceedings I have sought from a variety of Ministers one of what are almost three Opposition pillars, the first being clarification, the second being an analysis of policy differences, and the third views on areas where we in Opposition believe that the Government have been incompetent in handling the negotiations. I regret in many ways that it falls to the Minister who will be at the Dispatch Box in a moment to answer charges of incompetence, but they are important and they will be analysed in some detail, not least because they have been referred to by my noble friend and definitely affect Gibraltar.
Before I come to the conflicting views and statements from the Government regarding Gibraltar, I should say that I have tabled new Clause 45 which seeks to correct this most grievous example of the sheer incompetence
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of the Government's negotiations at Amsterdam. As I said in the Second Reading debate, the early hours of the morning appear to be a particularly low point for the Government's ability to negotiate, as is amply demonstrated by the negligent negotiation of the Schengen acquis. This agreement will move those countries who have chosen to participate in it towards a European Union without common border controls.
The Opposition welcomed the Government's seamless transition of policy in retaining sovereignty over Britain's border controls through the legal binding protocol to the treaty, although I hope that the Government recognise that our support on this is not surprising in the light of the agreement reached in March when a complete British opt-out on border controls was first agreed in principle before the general election. The Government are absolutely right to proclaim that this is a major achievement. That is exactly what it was: a Major achievement with a capital "M".
To put this point firmly on the record, let me refer to an article in the Financial Times in February 1997 which supports this claim:
"After a decade of battling against pressure to open up the frontiers as part of the EU's single market, the UK now seems certain to be offered an "opt-out" from a new treaty agreement which is expected to set 2001 as the target for banishing customs and police checks at national ports. Mr. Michael Patijn, the Minister for European affairs in the Netherlands, said it was now an accepted political fact that the UK's borders would not be given up in the interests of European Union integration".
I am also pleased that the Government have overcome their opposition to opt out:
"We reject permanent opt-outs or 'variable geometry'".
Time prevents me from indulging in a semantic argument over what I understand I must call the Government's right to opt in to any part of the proposals to establish a new area of freedom, security and justice.
This change to the third pillar of justice and home affairs represents the biggest change in the treaty, a point which has been recognised and echoed on many sides of the Chamber. It also represents the single largest transfer of the powers of member states to the Community contained in the treaty. Policy on asylum, immigration and visas will no longer be agreed intergovernmentally; instead we shall be "communitarised" within the European Union first pillar, into which the Schengen frontier zone will also be gradually integrated. This will allow the Commission to initiate proposals, and the institutions of the community will also participate. The European Parliament will be given a full role in these affairs, and the European Court will have legal review powers.
The creation of an area of freedom, security and justice was a main priority for other states to allow freedom of movement for people to become as much a reality as freedom of movement for goods and services. This has major constitutional importance, for, after five years, qualified majority voting will be introduced on these decisions if two-thirds of member states agree to this. This introduction of QMV after five years is critical.

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I refer Members of the Committee to the fact that, to guarantee that an area of freedom, security and justice is established gradually in the Community, that five-year period from the entry into force of the treaty during which the Council will continue to take decisions by unanimous vote came against an interesting background. At the end of five years, Community decision-making procedures may be introduced if at least two-thirds of member states agree. In fact, it was pressure from Germany's 16 Länder, which share responsibility for immigration with the federal government, which caused Bonn to reverse its position on integrating justice and home affairs. On its insistence, such decisions will remain subject to such unanimous approval for the time being, as I have outlined. Some Länder, such as Bavaria, fear that co-ordinated European immigration policies could grant third-country residents living in one European Union country the same rights of movement as European Union citizens. They have insisted that Germany retains a veto on all issues of immigration policy. The treaty aims to remove obstacles to free movement and to strengthen the means available for maintenance of security. All frontier checks and internal border controls will be abolished, with one heavily policed external border ringing participant countries.
The Prime Minister told us:
"what we have secured, which is important and a better way of going about things, is what I call an opt-in. We have the power within the Treaty to go into any of these areas if we want to. If we do not want to, we need not, but if we do, no other country can block us"—[Official Report, Commons; 18/6/97; col. 319.]
I do not believe that that statement is correct. Subsequently the Foreign Secretary indicated that the Prime Minister's statement referred only to new Title IIIa on asylum, immigration and visas. That is indeed correct, but this seems a little strange since the Prime Minister's next sentence used the example of the Schengen acquis to illustrate his point. If the Minister tells me that the Prime Minister's statement applies only to Title IIIa on asylum, immigration and visas, can he explain to the Committee the distinction between the asylum, immigration and visa provisions under Title IIIa and the provisions of the Schengen acquis, the relationship between that title and the Schengen agreement, and, further, how the Schengen agreement will be incorporated into the treaties?
I seek clarification from the Minister on the issue of Article 4 of the protocol integrating the Schengen acquis into the framework of the European Union. I beg the indulgence and patience of the Committee while I dissect this extremely sorry saga in some detail, not least because of its importance to the people of Gibraltar.
It is my understanding that, as a result of negligence on the part of the Foreign Secretary, a late amendment by the Spanish Prime Minister, José María Aznar, was accepted into the treaty by default in the early hours of the morning of 18th June, meaning that any member state, including Spain, would have a veto over future opt-ins to the Schengen acquis which will be decided by unanimity rather than by qualified majority voting.
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That potentially hands the Spanish a powerful bargaining chip with which to exact concessions over Gibraltar. I repeat the question of the noble Lord's colleague, the Labour Member for Wrexham, to the Foreign Secretary, when he wanted to know whether this had happened simply because
"Her Majesty's Government do not care about Gibraltar and give it a low priority, or was it just a government cock-up?"—[Official Report, Commons, 25/11/97; col. 754.]
The Government have compounded that negligence and blunder by their utter failure to produce a clear, consistent and coherent explanation of what actually happened. Let us hope that we shall receive one tonight. But to date we have heard a catalogue of confused and contradictory explanations. It is important that the Committee is aware of those, because the Foreign Secretary's first explanation for the blunder was that it had been a "misunderstanding", and that the Dutch presidency's note-keeping was, "not as much as we would have wished it to be". That gave the impression that the Foreign Secretary had failed to challenge the Spanish Prime Minister's late amendment, perhaps, I venture, as a result of the lateness of the hour.
But three weeks later, the Foreign Secretary gave another explanation. He had indeed challenged the amendment, and it was withdrawn by the Spanish, only to reappear mysteriously in the text of the treaty when the Foreign Secretary received it "a week later". He explained that mysterious re-emergence as the result of a deal done between the Spanish Government and the Dutch presidency which was kept secret from the other member states and incorporated into the treaty after the negotiations had finished. He explained that,
"there was no cock-up in the Amsterdam Treaty negotiations".
I rather think that the government and people of Gibraltar think otherwise.
I sincerely hope that such hole-in-the-corner deals between member states following the conclusion of intergovernmental summits are not common. Certainly they do not inspire confidence in the European decision-making process.
But then, the Minister of State gave a third explanation, which contradicted that of his own Foreign Secretary. The Minister explained that the deal was not in fact done after the negotiations, but during the summit on the night of 16th/17th December before the negotiations had finished, but that it was still kept a secret from the other member states and incorporated into the treaty without their knowledge, although the United Kingdom found out about it a day after the summit concluded, when it received a copy of the revised treaty text on 19th June and not "after a week", as the Foreign Secretary had alleged.
On closer examination in another place, the Minister of State gave a fourth explanation: that it was in fact both—a deal done between the Dutch presidency and the Spanish Government in the margins of the summit and discussed afterwards, "when it was discovered there was a difference of historic interpretation".—[Official Report, Commons, 4/12/97; col. 568.]

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Worse still, in alleging that the text of the treaty was changed, to the detriment of the United Kingdom, as the result of a private deal between two member states which was not communicated to the rest of the Council, the Government have managed to portray themselves as cuckolded by the Dutch presidency and the Spanish Government.
The Foreign Secretary has also effectively accused the Dutch Government of lying about whether a challenge to the amendment was made. He has effectively accused the same member state of inefficiency by criticising its note-keeping, although subsequently the Minister of State claimed that there were in fact no provisions for minutes to be taken or for a record.
I should like clarification on this matter. Is it the case that there was absolutely no provision for a record of the meeting in question? Is it not the case that the negotiations were recorded by the Dutch presidency? Would it be possible for the Government to clarify all of this by releasing those tapes in order to clear up the matter? What representations did the Foreign Secretary make to the presidency of the European Union about the bilateral agreement between Spain and the Dutch presidency? Was that matter raised as a priority at the Luxembourg Summit last December as it should have been for the people of Gibraltar?
The Dutch Government have, unsurprisingly, clearly been concerned by these extraordinary allegations in relation to the behaviour of two member states. They wrote to the British Government as long ago as 16th July. Given the Government's commitment to open government and transparency, not to mention their dislike of fraud, will they give the Committee an assurance this evening that that letter will be published?
It may be argued by some that the question of an opt-out is a technical point. That is neither our view nor that of the Foreign Office. When I say it is not the view of the Foreign Office, let me quote from the Foreign Office's memorandum to the Foreign Affairs Select Committee, which states:
"There may, however, be aspects of the Schengen acquis unrelated to the removal of frontier controls in which the United Kingdom will want to take part when the Schengen arrangements are brought within the EU Treaties … there may be areas of co-operation, notably on the fight against crime and drugs, where we will want to participate",
far further than potentially being sucked in at some stage in the future. That is a direct and clear view expressed by the Foreign Office about the current benefits in areas where the Government may wish to participate in the Schengen acquis. I give way to the noble Baroness.
Baroness Williams of Crosby: I am grateful to the noble Lord. I simply wish to clarify that when I use the phrase "sucked in" I mean sucked in essentially by the circumstances of organised crime and the movement of immigrants and refugees, not by some conspiracy.
Lord Moynihan: I had hoped that we had moved on from a clear explanation of the hole-in-the-corner affair to look at areas of the Schengen acquis where the noble
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Baroness's point is well made. I refer not only to the potential for being sucked in in the future. Already, in Foreign Office memoranda, there are clearly stated areas where today it might be in the interests of the Government to pursue closer involvement with Schengen, not least, as the areas that the noble Baroness mentioned, in the fight against crime and drugs.
It may well be that the Foreign Secretary has secured the declaration of the whole Council which sets out that admission to the Schengen acquis would be on the basis of an opinion of the Commission. I wish to know from the Minister whether the declaration is legally binding in the same way as an amendment to the treaty.
I say that it is not the view of the Foreign Office that the opt-in is a technical point. It clearly is not. Nor is it the view of the Labour MP for Thurrock who has said that future UK governments may wish to opt in, that Article 4 substantially disadvantages Gibraltar for the future and that it puts a powerful tool at the disposal of the Spanish foreign ministry. He too wanted an explanation and he, too, as another Labour Member of Parliament, agreed that the episode illustrated how not to conduct negotiations.
But even if this lapse does not have serious consequences—and we on these Benches very much hope that it does not—it does not lessen the fact that the Foreign Secretary's negotiation being negligent the matter should be brought before this Committee and answers sought from Ministers. Without clarification one is left with lingering doubts about the Government's competence in negotiation, their ability to protect and enhance British interests in all future negotiations, and, frankly, a suspicion of gross dereliction of duty.
Was this what the Foreign Secretary had in mind when he spoke of Britain's "transformed" relations with our European partners? I sincerely hope that the episode is not an example of Britain being respected as a constructive partner with which the other countries of Europe can do business; that it is not an example of the Government getting a better deal for Britain as a result of their new co-operative approach. I hope it is not an example of how the Government intend to make Britain's voice heard in Europe. Rather, it makes a mockery of the Government's claims that their approach to negotiating in Europe is successful.
I have gone into the incident in some detail. I do so not just to highlight incompetence in negotiation. I do so first and foremost because every member of Gibraltar's government, everyone within Gibraltar, and many people in both Houses are very concerned about the implications of this late-night slip-up, whichever of the four different interpretations one may care to believe. Maybe we shall have a fifth tonight; I hope not. I hope we shall have clarification of exactly what happened. The people of Gibraltar should know. That is why I believe that it is important that the Committee has the opportunity to consider Amendment No. 45.
Lord McIntosh of Haringey: It may be helpful if, first, we are clear in our minds which amendments we are talking about. The amendment moved was Amendment No. 14 which would exempt the whole of

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Title IIIa, new Title IV, from the treaty. We follow with Amendment No. 15, which is concerned with Article 73j on border checks and visas; Amendment No. 16, concerned with Article 73k on asylum, refugees and immigration policy; Amendment No. 17, concerned with Article 73m on judicial co-operation in civil matters having cross-border implications; and Amendment No. 18, concerned with Article 73o, which, in turn, is concerned with the decision-making process and the review, which is referred to in the treaty, of the unanimity requirement.
Amendment No. 51 deals with Protocols 2 and 4 which in turn deal with the integration of the Schengen acquis and the UK and Ireland position in Protocol 4. Finally, Amendment No. 45, which has understandably taken up a good deal of time, is particularly concerned with Gibraltar.
Let me acknowledge right from the beginning that the free movement, Title IIIa, and the relationship which the United Kingdom and Ireland will have with the title is probably the most complicated part of the treaty. I say that with due deference to my noble friend Lord Whitty who understands complications which I do not even start to comprehend.
It was a basic negotiating objective for the United Kingdom that a way be found at Amsterdam to give the United Kingdom an explicit assurance of its right to keep internal frontier controls and to retain national control of the sensitive area of immigration and asylum. Equally, however, a way had to be found to accommodate the majority who wanted to use the EU treaties to create an area of passport-free travel within the EU in which policies on immigration, asylum and other related matters would be closely harmonised. The result was an elaborate system of overlapping text, including the various articles under Title IIIa, the two protocols to which I referred and declarations (in particular Declaration 45 which is concerned with Gibraltar), plus a range of opt-in and flexibility provisions. On top of that, we have the text of the Schengen acquis itself and the various decisions which have been taken subsequent to the adoption of the Schengen acquis.
Let me set out briefly what the implications of this package will be to this country. Under the treaty our legal right to maintain frontier controls is explicitly enshrined in EC law. It is important to say that because this is the first time it has happened. That alone is a substantial achievement for the United Kingdom and, judging from the speeches which have been made, one which is welcome in this Chamber. A protocol to the treaty integrates the Schengen agreements and existing Schengen measures—the subsequent documents to which I referred—into the framework of the European Union and sets out procedures for future UK and Irish participation in Schengen measures to the extent that our two countries wish to be involved.
In relation to the free movement, Title IIIa, we will not be bound by any measure adopted under it except where we so choose. However, arrangements are set out in Protocol 4 by which the United Kingdom and Ireland can participate in measures adopted under this title. That
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means that we will be able to decide whether we want to take part in individual measures adopted under the title. That is quite different from the situation before, where we only had the choice of being wholly in or wholly out of these arrangements. Our main consideration will be whether participation would make us better able to implement UK immigration and asylum policies and safeguard harmonious race relations. Where civil judicial co-operation is concerned, we will similarly want to take a pragmatic decision on participation which will depend on the nature of the measure.
I return to the incorporation into the EU framework of the measures agreed among themselves by the Schengen member states. The arrangements I described are rather different where a measure forms part of the Schengen acquis; in other words, where a measure is part of that package of measures agreed unanimously among the Schengen states in the context of the Schengen agreement—a treaty aimed at the removal of frontier controls between its party states and to which we are not a party and (I emphasise this) have no intention of becoming a party.
Even in that area we have the right, under Amsterdam, to participate in individual measures should we wish to do so and should the others agree. Where the UK and Ireland wanted to take part in a Schengen measure, the Commission would be asked to deliver an opinion. In practice, we have no intention of signing up to the Schengen acquis in full. That would be inconsistent with our determination to maintain frontier controls. Many of the existing Schengen measures are aimed at creating a system able to dispense with internal frontier controls and are therefore unlikely to be of operational value to the United Kingdom. I need only to point to the well-known differences of geography—the absence of land frontiers.
However, we may want to take part in some of those measures; for example, in so far as they relate to drugs or crime. We know that our partners are keen for the United Kingdom to play a full role in helping to keep Europe safe for our citizens. They have all signed up to a declaration making clear that they will use their best efforts to enable us to do so where we wish. That is Declaration 45, to which I have already referred. Where a new measure is being developed which builds on the Schengen acquis, the United Kingdom and Ireland may participate as of right, whether the measure is being developed under the new free movement Title IIIa or the revised third pillar. The agreement of the others is not required in that regard.
Clearly, I shall come on in some detail to the issue of Gibraltar, to which the noble Lord, Lord Moynihan, referred. However, before I set out the Government's position on that, perhaps I might deal with the individual points made by Members of the Committee in the debate.
My noble friend Lord Stoddart asked how European Union citizens could be kept out of the United Kingdom. As he is well aware, it is not just European Union citizens; it is the citizens of the European free trade area, an organisation to which I know he attaches credit.

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European Union and EFTA citizens already have a right to enter the United Kingdom; that is fundamental to the principle of free movement. We have a right to ensure that someone who claims to be an EU citizen possesses documentation that proves that to be the case. In direct answer to my noble friend, therefore, if there is any doubt about a person's citizenship, officials can examine documentation and exercise powers to search belongings and so forth. I can assure my noble friend that that situation is not changed by anything in the Amsterdam Treaty.
My noble friend went on to ask whether legislation would be needed if the United Kingdom wanted to join the Schengen acquis. If we wanted to joint the Schengen acquis in total and we wanted to participate solely in the zone of free movement by changing the EC treaty—I have already made it clear that that is not our intention—for example, by removing the United Kingdom borders opt-out, Parliament would need to be consulted because a Bill would be required. Therefore, there would be full parliamentary scrutiny. If we wanted to opt in only to a limited part of the Schengen acquis—for example, matters relating to police co-operation—the normal parliamentary arrangements for European Union measures would apply. In other words, it would be available, after sifting, for scrutiny by our own European Communities Committee and there would be opportunities for debate, which I and my noble friends on the Front Bench have already explained to the Committee. The Home Secretary has given an assurance to a committee in the other place that if the United Kingdom wants to participate in aspects of the Schengen acquis, that will be subject to parliamentary scrutiny. However, the need for legislation would depend on whether existing United Kingdom law required amendment in order to implement the measures in question.
The noble Baroness, Lady Williams, asked me about the three-month period which is referred to on a number of occasions in Title IIIa. The three-month period is the period for the short-term visa for which there is to be, and is and will be, a uniform Schengen visa. Longer visits or settlement—this would include visits to this country for lengthy periods of study—are not covered by Schengen. Visas for such purposes are a matter for individual states and will remain a matter for individual states. The fact that we are opting out of Schengen in any case means that we do not have to operate the Schengen short-term visa unless we choose to do so.
The noble Baronesses, Lady Williams and Lady Park, asked whether we will work with our partners to give preference to Commonwealth citizens. We will need to consider how far we want to co-operate with our partners in visa arrangements. As the noble Baroness, Lady Williams, will know, visa co-operation, even under Maastricht, is a matter for qualified majority voting. We already have agreement with our partners on the European Union common visa list, which sets out certain countries for which all European Union member states must have a visa regime. That seems sensible. Clearly, under QMV it will be difficult to guarantee special arrangements relating to Commonwealth
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citizens. Although we are part of the EU common visa list, what Amsterdam provides is a choice as to whether we take part in any future arrangements. We are not bound by the Schengen visa list, which is more extensive than the EU common visa list.
I turn now to the issue of asylum, which was referred to particularly by my noble friend Lord Stoddart and the noble Baroness, Lady Williams of Crosby. The UK does and will retain its right to deal with asylum applications under the 1951 Geneva UN Convention on Refugees. Even the most recent asylum and immigration legislation of the previous Conservative Government started off with a declaration that anything that was done would be in accordance with the 1951 convention. The noble Baroness asked me about the Dublin convention, which relates to the member state in which an asylum application should be made. As she will know, the Dublin convention only came into force with the last signatories in December of last year. The arrangements under the Dublin convention will remain in force under the Amsterdam Treaty. If the Schengen members decide, once Amsterdam is in force, to agree further measures dealing with asylum, the UK will have the option of joining in, or not, as it chooses, but if we do not opt in we will not be bound by any such measures and our existing rights of asylum will not be changed.
In taking asylum generally, we co-operate with our partners on some aspects of asylum policy, but always in the context of our obligations under the 1951 convention. It is that convention which is the foundation of our national asylum policy. The fact that there have been difficulties with people coming over in the past few months is evidenced by the fact that the Dublin convention came into force only in December of last year and, clearly, it still needs time to settle down. But I am confident that it will be possible to do that.
Baroness Williams of Crosby: Perhaps I may ask the noble Lord one brief, technical question. Under the Dublin convention will the last friendly country be assumed to be a nation state or the Schengen agreement countries as a whole?
Lord McIntosh of Haringey: I believe that it is the first country of entry into the European Union rather than the last friendly country which is covered by the Dublin convention. My understanding is that the Dublin convention applies to Schengen and non-Schengen countries alike. So it is where entry takes place into the European Union rather than the last friendly country which is the consideration.
Before I return to the subject of Gibraltar, which is clearly of concern, I say to the noble Lord, Lord Moynihan, that I do not agree with his claim that the move after five years to qualified majority voting will take place if two-thirds of the member states agree. The treaty states quite clearly in Article 73o that the Council has to act unanimously in order to make a decision as to whether to move to qualified majority voting or to stay with unanimity.
I now turn to the issue of Gibraltar. I recognise that this is a highly sensitive and difficult issue. I refer Members of the Committee not only to the text of the treaty itself, but to Protocol IV and Declaration 45.

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We shall continue to defend vigorously the position of Gibraltar in the European Union and the Community law rights of Gibraltarians, in particular existing rights of free movement in the EU. There is nothing in the provisions of the Amsterdam Treaty which erodes these rights, nor which gives Spain any additional rights over its border with Gibraltar.
Where a measure that the UK would like to opt into is potentially relevant to Gibraltar, our approach will give due weight to the interests of the UK and to the interests of Gibraltar, as with any other EU measure. Where the UK opts in it will negotiate robustly and in good faith, taking fully into account the interests of Gibraltar.
Nevertheless, a number of criticisms have been levelled at the Government, both here and in another place, on their negotiation of the provisions for UK participation in existing Schengen measures. I would therefore like to take this opportunity, as I was invited to do by the noble Lord, Lord Moynihan, to set the record straight about what happened at Amsterdam.
During the course of the debate at the European Council, Spain proposed an amendment to the Schengen Protocol to bring in unanimity for UK and Irish participation in the existing Schengen acquis. I am talking about the Schengen acquis, the core text, rather than to any subsequent agreements. At the insistence of the Foreign Secretary, there was agreement that any such amendment should be submitted in writing by Spain. No such amendment was submitted.
When the revised treaty text was circulated after the Summit, we subsequently learnt that the unanimity requirement had been introduced into the text. We took that up with the Dutch presidency and a number of member states. It emerged that there was a misunderstanding about what had been agreed at Amsterdam. As a result of that intervention we obtained Declaration 45 that provides protection for the UK's interests in this area.
The declaration invites the Council to seek the opinion of the Commission before it decides on a request by the United Kingdom to participate in any measure in the existing acquis. Moreover, member states undertake to use their best efforts to enable the UK to participate.
9.30 p.m.
Lord Moynihan: I am most grateful to the Minister for clarifying the position. He said that these matters were taken up with the Dutch Government and I asked whether it would be possible—it would certainly assist the Committee—to see a copy of the letter which the Dutch Government wrote back to our Government. I should be grateful if the Minister could confirm that that letter will be published.
Lord McIntosh of Haringey: No, it is not normal practice for intergovernmental correspondence of that kind to be published. Perhaps I may anticipate the noble Lord's next question. Members of his party in another place have asked several questions about the availability
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of the tapes of the debates in the Council. The answer which has been given consistently, and which I now give, is that the tapes are not available to member states.
The important thing is not the process of what happened on a particular night, however late, in June, but the result. Declaration 45, which has been attached to the final Act of the treaty, makes the provision, to which I have referred, for the Council to seek the opinion of the Commission before it decides on such a request from the UK or Ireland. Other member states undertake to make their best efforts available to allow the UK or Ireland to participate. Moreover, the UK cannot be blocked from opting into proposals and initiatives which build upon the Schengen acquis. That is a declaration of the intergovernmental conference. It is politically binding on all member states and any decision to allow the UK or Ireland to participate in the existing Schengen measures will be a political decision.
Noble Lords have referred to the issue of Gibraltarians taking part in European parliamentary elections. We understand the strong feelings in Gibraltar about the lack of representation in the European Parliament. As has been said, it is true that Gibraltar is bound by a number of directives from the Commission and the Parliament. We have reviewed the situation, but we have had to conclude that the practical and legal difficulties of any change would be formidable. The main obstacle is the requirement to amend the 1976 European Communities Act on direct elections, which has treaty status. An amendment would require the agreement of all member states and subsequent ratification by all member states. The prospect of securing that is uncertain, to say the least. Therefore, we are not attracted to pursuing that possibility now when the chances of such an agreement remain so uncertain. We have other priorities to pursue on Gibraltar's behalf.
I hope that that has set out the position on the negotiations that took place and how they affected Gibraltar in the context of Title IIIa of the protocols, and now of the declaration which has been appended to the treaty.
The free movement title is enormously important and valuable. It is clearly right that those who wish to open their frontiers internally should be able to do so, but at the same time that the position of the UK, which sees, or may well in the future see, advantage in particular aspects of the title but which is determined not to have an open frontier policy, should be protected. Our negotiations at Amsterdam provided both the freedom for the Schengen countries to go ahead as they wish and a clarification and assurance that our opt-out from the Schengen agreement is accepted and included in the treaty, and that we have the ability and the power to adopt those parts of the title that are consistent with our own national interests. That has been our concern throughout, and that has been the result of our negotiations at Amsterdam.
Lord Moynihan: Before the Minister concludes his remarks—I thank him for going into these points in detail—I must press him once more on this matter. For a Government who are totally committed to transparency and openness, I believe that on an issue of

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such critical importance to the people of Gibraltar, and where it is well known that this exchange of correspondence has taken place, it would be of considerable help to make this information available. I do not understand why the Government are not happy to do that. Since the Minister has rightly come clean on every aspect, I do not understand why he cannot give a commitment to publish the letter.
Ironically, he anticipated my second question, which I had not asked. Part of the reason for not asking it was that I took as read the claim by the Minister of State in another place that there were no provisions for minutes to be taken or that there were no tapes. Given that there were Amsterdam tapes, surely it would be helpful if the relevant extracts could be made public along with the letter to clear up these matters. In the interests of open government, surely there is every benefit in making available this information on a matter of critical importance to the people of Gibraltar.
Lord McIntosh of Haringey: I do not believe that the noble Lord need be in any doubt about our adherence to open government. It would be a quite remarkable state of affairs if, in conflict with all of the principles of diplomatic negotiation between nation states, we unilaterally published confidential correspondence between one nation state and another. The noble Lord's government did not do it. I believe that I see the noble Baroness, Lady Park, nodding in agreement. I think I am right in understanding that she also cannot imagine how it would be done. I do not think that on this occasion we can make such a major change.
Lord Molyneaux of Killead: Before the noble Lord sits down, some noble Lords will be greatly encouraged by his words in regard to voting rights for Gibraltarians for the time being. I hope that I do not misquote him. Will Her Majesty's Government give some thought to the helpful suggestion that has been made by the noble Baroness, Lady Williams of Crosby, in regard to the Belfast treaty? That is not as far fetched as it may seem. That treaty now provides a consultative mechanism for overseas British territories such as all three Channel Islands separately plus the Isle of Man. That is not too great a stretch of the imagination.
Baroness Williams of Crosby: Before the Minister replies, perhaps I might add to what the noble Lord, Lord Molyneaux, has said. There are always ways of easing situations in which the law stands in the way. Another suggestion I make so that the Minister can turn it over in his mind is the possibility perhaps on one occasion a year of allowing a representative of Gibraltar, possibly the Prime Minister, to meet the British delegation to the European Parliament so that he can at least be assured that the concerns of Gibraltar are heard by those who are legitimately Members of that Parliament.
Lord McIntosh of Haringey: I am sure that both suggestions will be treated with the seriousness that they
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deserve by Ministers in the Foreign and Commonwealth Office. I would not wish to give the noble Lord, Lord Molyneaux, the wrong impression. In my reply I believe that I described the formidable obstacles to be overcome if a change were to be made to the European Communities Act 1976 in order to give Gibraltarians a vote in the European Parliament. Not least it would require the unanimous agreement of all member states and unanimous ratification afterwards. Those are formidable obstacles.
Lord Stoddart of Swindon: I thank all noble Lords who have taken part in this very interesting and wide-ranging debate. I also thank my noble friend for his detailed response to the many questions raised by noble Lords. I am relieved that he has given as absolute an undertaking as he can that we shall not join the full acquis system and that ratification of the treaty by Parliament in no way gives the Government carte blanche to accede to the acquis without proper parliamentary debate and consent. However, I am not quite as reassured by his statement that we could enter parts of it without primary or secondary legislation, although parliamentary scrutiny of European legislation would take place. I am most obliged to my noble friend for all the replies that he has given me. Naturally I want to study them, and, if necessary, bring back matters on Report.
I am also happy with my noble friend's assertion that so far as concerns asylum, it is the first friendly country and not the last that is responsible for giving asylum to asylum seekers. Presumably the Belgians and Italians know and understand that and will ensure that people who land in their countries seeking asylum will not be trained on to London or any other railway station in this country. I hope that I have that assurance and that I understand it completely. If I do not have it right, perhaps my noble friend will intervene and say that I have not.
Lord McIntosh of Haringey: Pepper v. Hart says that what Ministers say on legislation can be taken into account in the courts. It does not say that what other people say in debate has to be taken into account or that the failure or unwillingness of Ministers to reply to statements with which they do not agree has to be taken into account in the courts. If I have misled the Committee or my noble friend in any way, I shall of course write to him.
Lord Stoddart of Swindon: That is satisfactory, and I thank my noble friend. We rightly had a number of speeches on Gibraltar. The Gibraltarians are concerned about their position and want it rectified. Representation is probably a matter not for this Bill but for the European Parliamentary Elections Bill, which could perhaps be amended to accommodate Gibraltar, although, as my noble friend said, it would be difficult to achieve. If I can help in any way, of course I shall do so, although I do not know when we shall be considering it.
I am worried about what happened about the Spanish amendment in the Council. I spoke earlier about the hole-in-the-corner way that things are done in the EU.

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That seems to confirm my view of it. Here we have what appeared to be an agreed text being amended by the presidency in consort with a member state without the member state which was going to be most affected being aware or informed of it. That is absurd, outrageous and completely unacceptable. I do not know whether the British Government noticed that before or after the treaty was signed. If they noticed it before the treaty was signed, why on earth did they sign a treaty to which they had not agreed? My noble friend might check on that and drop me a line about it.
Lord McIntosh of Haringey: I can spare my noble friend the pain of receiving correspondence from me. The answer to his question is that we saw to it that Declaration 45 was added to the treaty.
Lord Stoddart of Swindon: I hope that that is satisfactory. We shall see in due course. Again, I find it almost inconceivable that parties to a discussion which is tape recorded do not have access to those tapes when there is a dispute. I would have thought that since it was a Council discussion the tapes belong to the Council and that, if there was a dispute, all its members had the right to say, "Let us listen to the tapes." After all, even we in this House, if there is a dispute as to what we say, may listen to the parliamentary tapes. Why on earth in matters of great moment—greater moment than we discuss here—cannot governments or their representatives be allowed to listen to the tapes? I do not expect an answer from my noble friend, but I confess that I am completely amazed by the whole business. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 to 20 not moved.]
9.45 p.m.
Lord Bruce of Doningtonmoved Amendment No. 21:
Page 1, line 13, after ("2") insert ("(except paragraph 40)").
The noble Lord said: The treaty with which we are dealing today contains a large number of amendments to the Union treaty. It is possible to trace most of the reasons for their inclusion. One may not always agree with the amendments to the treaty set out in the Treaty of Amsterdam, but one can at least understand the reasons and importance attached to them.
The amendments we are now considering deal with paragraphs 40 and 41 of the Treaty of Amsterdam, set out on page 38. They can be found within the original setting at pages 75 and 76 of that invaluable document, The Treaty of Amsterdam in Perspective. I cannot imagine how those two measures found their way for consideration at the conference held on the treaty.
Paragraph 40 relates to the appointment of the president and members of the Commission. Paragraph 41 relates to extra powers to be given to the president of the Commission. I cannot for the life of me understand who put the proposal forward or the reasons for it. It may conceivably be part of a greater deal
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reached between the parties in the course of the negotiations. In precise terms, it provides:
"The governments of the Member States shall nominate by common accord the person they intend to appoint as President of the Commission; the nomination shall be approved by the European Parliament".
That is a new adjunct to the appointment. I suppose that it can be expected; there is no particular reason why the appointment should not be approved by the European Parliament.
Lord Renton: The word "shall" in that context could have a double meaning. It could mean that the parliament has no option but to be a rubber stamp; it has to approve. Alternatively, it could mean also that the appointment could not be effective unless approved by the European Parliament. If I am right that there is a genuine ambiguity, I should be most grateful if the noble Lord will give us his opinion as to which interpretation may be right.
Lord Bruce of Donington: Read in terms of the actual text, it appears to follow automatically. The paragraph states:
"The governments of the Member States shall nominate by common accord the person they intend to appoint as President of the Commission; the nomination shall be approved by the European Parliament".
I do not know whether that is a command to the European Parliament to approve automatically or whether the European Parliament has a discretion in the matter. I am quite content to accept the interpretation that the European Parliament definitely has some choice, if sufficient of its members are present in plenary at the time to be qualified to record a vote at all.
It then goes on to state:
"The governments of the Member States shall, by common accord with the nominee for President, nominate the other persons whom they intend to appoint as Members of the Commission".
Since when has the nominee for president of the European Commission been given the power of veto over who the member states may decide to nominate as members of the Commission? That is extraordinary.
It would be bad enough if the provision referred to "The member states, by common accord, with the president of the Commission"—but no, they are supposed to arrive at an accord on the persons to be appointed members of the Commission, with a person whose status is not even that of president yet but merely a nominee. That seems to be quite extraordinary.
I pass no particular observation other than to say that it is quite true that the president of the Commission over the years—and to my own personal knowledge I speak of the time since 1975 when I first became a member of the European Parliament—has steadily acquired more influence. That has matched the growing influence of the Commission itself which has become the powerhouse, in effect, of developments within the European Union. That is quite natural because that is its function. It does not have to govern member states; it has no departmental responsibilities to anybody; it has no territory to administer and no armed forces, yet, at

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its disposal. Its entire function is to carry forward the impetus towards its own objectives, which it puts most forcefully.
Therefore, one can understand that some further formal recognition of importance as an individual member state is sought. I do not speak of Luxembourg, which has the population of Bristol, but of Germany and the larger member states. We are arrogating to the nominee for the post of president of the Commission a power of veto.
I should have thought that the Commission has power enough. Of its own accord, it appoints ambassadors throughout the world without any objection from the Council. In fact, under the treaties, the Council cannot object in any event. It administers whole areas of finance, quite out of control of the Council. It makes apportionments of budgeted funds in relation to various projects without the slightest need to have the consent of the Council. Therefore, it is extremely powerful.
Some people in the United Kingdom might wear that; but I do not intend to do so. I do not approve of, and will not agree to—and I am now a European citizen, too, although I did not elect to become one—the president of the Commission, let alone a nominee president, having that power of veto. There are, of course, circumstances in which that might be possible, but that in itself would be in breach of the treaty. Because it is the only logical supposition, are we to suppose that member states of the European Parliament, before they nominate a president of the Commission, will make unofficial inquiries to him as to who in advance he is prepared to approve as a member? Surely that is rather a degrading position for a member state to find itself in.
I do not necessarily stand on ceremony, and other countries can take whatever consciousness of their national identity as they wish. However, as a Briton, I object to it. No doubt the Government can tell us who raised the proposition. Who put it forward in the negotiations over Amsterdam? Surely it could not have been the British Government putting forward such a proposal. If so, what kind of package deal was involved in giving way to the wishes of the president? Surely these questions require answers. They do not even involve party politics.
I turn now to the second item which is to be found in paragraph 41 of the treaty and which reads:
"The Commission shall work under the political guidance of the President".
Tut, tut: what political guidance? Members of the Commission are supposed to be quite objective in their work and they are not supposed to pay attention to representations from outside. They are supposed to be—and I have no doubt that they are—persons of the utmost personal integrity. But now, suddenly, out of the blue and without any discussion, we see that the president of the Commission shall give "political guidance". But what kind of political guidance will that be?
Perhaps we shall be given some idea as to what was in the minds of the representatives of Her Majesty's Government who apparently agreed to this clause. Will the president of the Commission be able to define what
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the attitude of individual members of the Commission is, for example, towards the budget? Alternatively, will he be in a position to satisfy himself as to whether the existing control of European affairs at Commission level is adequate? In the event of arguments between one or another member state, will he be able to decide which side to take? All these matters fall due to be considered. There should be answers to them.
For my own part, as regards any endeavour by the president of the Commission to give any kind of political guidance whether party, ideological or even technical—as long as it comes within the term "political"— I do not think that he should be entitled to do this. I am at a complete loss to understand why these amendments should ever have been included within the treaty itself. I cannot find any reason for them at all unless they mark the relentless advance of the president of the Commission and the members of the Commission towards the progressive achievement of their goal of the ultimate government of a federal Europe. That is the only thing that makes sense and is fully in accordance, incidentally, with an instance that I reported to this Chamber many years ago—this is not new—when the then spokesman, Mr. de Vries, talking on behalf of the socialist group in the European Parliament, said that there should be no misunderstanding. He said that his party believed in the Commission becoming the government and Parliament exercising its normal parliamentary functions over them.
This is my suspicion. I sincerely hope that my noble friend will be able to dispel it and say that the insertion of these absurd clauses in the Treaty of Amsterdam was something that happened while people were taking a post-prandial nap, or that they were smuggled into the presidential summary without anyone's knowledge. That has often been the case. Certainly there must be some logical explanation for a ridiculous action such as this. I beg to move.
10 p.m.
Viscount Montgomery of Alamein: Before the noble Lord sits down, if the president of the Commission whose authority he is questioning happened to be British, would he express the same opposition?
Lord Bruce of Donington: The answer is yes.
Baroness Ludford: The noble Lord, Lord Bruce of Donington, wondered why these proposals had been put forward. I confess that I do not know who put them forward. I hope it may have been the British Government; I would be proud if that were the case as I submit that these proposals, which do not please the noble Lord, seek to improve the quality and the accountability of the Commission.
We are dealing with three issues. The first concerns the greater involvement of the European Parliament in approving commissioners. The second concerns giving the president in waiting a say in the appointment of his or her colleagues. The third concerns encouraging the president to be a real team leader. As regards the involvement of the European Parliament, the

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Amsterdam Treaty simply builds on the influence granted to the European Parliament by the Maastricht Treaty. Maastricht gave the European Parliament the right of approval of the whole Commission before appointment by governments. The Parliament used this power in 1995 to hold a series of hearings before approving the Santer Commission as a whole. Therefore the practice of questioning individual commissioners—the president and others—has already been established.
It is but a small further step for the president on his or her own to be subject to approval by the European Parliament. Surely accountability can only help to ensure that the president is of the highest possible standard. Will the Minister confirm that the word "shall" in relation to the European Parliament's approval process means that the European Parliament is obliged to institute an approval process—that is, it means more than "may"—and indeed that the European Parliament can approve or reject?
By the same logic of what I have said about the president, we on these Benches would like in the future to see the European Parliament acquire the right to approve individual commissioners via a series of confirmation hearings analogous to the way in which the US Senate approves executive appointments. That is not on offer now, but I flag it up for the future.
The second issue challenged in these amendments is that the putative president should have a say in the appointment of other commissioners. This is only formalising the previous behind-the-scenes soundings. I do not believe that we would think much of any nominee who did not have sufficient leadership aspirations to want to influence his team.
Lord Pearson of Rannoch: Will the noble Baroness give way? On my reading of the treaty, it is not that the president elect will have "some say" in the nomination of the other members of the Commission; it is that he will have a veto. It says:
"The governments of the member states shall"
and the new words in the Amsterdam Treaty are,
"by common accord with the nominee for President, nominate the other persons whom they intend to appoint as Members of the Commission".
To me, that means that if that common accord is not there, nobody can be appointed. It means that the president elect of the Commission can go on blackballing anyone he likes until eventually the member states come up with a Commission that suits him. That gives the man a veto.
Baroness Ludford: I stand corrected. It is indeed the approval of the president in waiting that is required. I stand corrected on my loose use of the term "a say". That leads on to the question I was about to ask the Minister. Can he confirm that the term "nominee" means after approval by the European Parliament, so that this nominee is truly the president in waiting and does not have that rather irresponsible power to horse-trade which I believe the noble Lord was suggesting? I believe that, once the nominee is the
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president in waiting, having been approved by the European Parliament, we can have good confidence in the responsibility of that person.
Lord Pearson of Rannoch: I am sorry to interrupt the noble Baroness again, but I do not agree. The fact that the president elect, or the president in waiting, has become the president and as such has the power of veto to which I referred earlier does not make any difference. It merely makes him more presidential and less acceptable to those of us who support these amendments.
Baroness Ludford: The noble Lord and I will not agree. I believe that it is a good idea for the president of the Commission to have responsibility for his or her team, and the noble Lord perhaps does not. Therefore I fear that we shall not see eye to eye. What I want to achieve—and I therefore applaud these provisions in the Amsterdam Treaty—is a position where the president of the Commission cannot evade responsibility for the performance of a weak colleague, as can happen at present, by pointing out that he or she has to put up with the choice of governments; that the president simply has to take what they decide and therefore "the buck does not stop here", as it were. We on these Benches want the Commission president to be a true team leader. We do not expect team leaders in other circumstances—a sports team captain or a business chief executive, for example—to have no ability to approve the selection of the team.
Finally, on political guidance, perhaps that term should not be interpreted in the way the noble Lord, Lord Bruce of Donington, interprets it. I do not believe that it means that a socialist president—if socialists exist any more—should ensure that all his team are socialists. I believe it means political with a small "p" and that the president will be responsible for keeping the team in line and working well. We believe that giving the president this kind of influence will make him or her accountable for the effective working of the Commission as a whole and improve the chances of the Commission being cohesive and efficient. It will help to meet the aim of the declaration at Amsterdam by the heads of government supporting the rationalisation and reorganisation of the Commission to improve its effectiveness.
This provision is not about the president forcing unwanted appointments down the throats of governments. We therefore believe that the provisions challenged by these amendments are designed to improve the quality and accountability of the Commission and are laudable. It is surely not in the interests of our citizens or our governments to block improvements in the working of the Commission. These amendments cannot be supported from these Benches.
Lord Monson: Before the noble Baroness sits down, perhaps I might put one question to her. She said that her party looks for leadership qualities in any president of the European Commission. Since when has a civil

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servant been required to have leadership qualities? Such qualities are required in a politician, such as the Prime Minister of a nation state, not in a civil servant.
Baroness Ludford: I should have thought that anyone in a position of public responsibility, or indeed in the private sector, would be expected to have leadership qualities—the Permanent Secretary of a Whitehall department, the chief executive of a company or the captain of a sports team. Surely we are looking for qualities across the spectrum of leadership and ability to inspire loyalty, hard work and effectiveness. I am afraid I am at a loss otherwise to answer the noble Lord's point.
Baroness Park of Monmouth: Surely it is inherent in the notion of any effective servant of an organisation—which this person, as president, would be—that he or she is expected to be a good manager and to have loyalty and all the other qualities. But they are not expected to give a political lead. We cannot get round the word "political". It suggests directions, guidelines, acting as if the Union were one political body. That is what concerns us.
Lord Renton: Constitutional democracies vary a great deal, but they all have four factors in common. They have a head of state who may be, like our Queen, the sovereign head of the state, or, like the President of the United States, may also be a politician, providing leadership to the nation. All democracies have their political bodies—in our case a Cabinet and other Ministers. They all have a Civil Service; and they all have a Parliament.
With those factors in mind, it is interesting to consider the points made by the noble Lord, Lord Bruce, with great clarity and force in moving this amendment so that we can see and understand clearly what it is to be like in the European Union (I avoid the word "Commission" for the moment). There will not be anything analogous at all with a head of state—either political, as in America, or an hereditary head of state, as in this country, or with an elected head of state who keeps himself above party politics. There will be none of that, so far as we can tell.
We know that there is to be a gathering of democratically elected politicians serving on the Council of Ministers. That is analogous with the Cabinet in our country. We know that there is a Parliament. In our country, our Parliament, coupled with the Queen, is given sovereignty. The Civil Service does not have to share sovereignty at all. It is separate from it and subordinate to it. None of us would imagine giving the head of the Civil Service—and calling him a president—the kind of power that is now envisaged under the Treaty of Amsterdam.
The Government must do their best—they may find it very difficult—to explain two matters in particular. They must first explain how it is that the president of the Commission is to have this tremendous power, which Parliament, it would seem, in making his appointment,
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has to endorse whether it likes it or not. Or it may—we should be glad to be told—have a discretion not to endorse it.
The other matter I find strange is that the president of the Commission shall give political guidance to other members of the Commission. Whoever heard of the head of the Civil Service in any democracy in the world having a power and an obligation to give political guidance to his subordinates? If anyone is to give political guidance, it is the Ministers at the head of each department, but not the head of the Civil Service. The Prime Minister can give political guidance to the whole of the Government if he has the support of the Cabinet. Those are important questions to which constitutionally we must have an answer.
10.15 p.m.
Lord Pearson of Rannoch: Before my noble friend sits down, I might have misunderstood him, but I do not think I heard him recognise the fact that the Commission to which he referred, under the Treaty of Rome, has the monopoly of proposing legislation to the Council and the institutions of the Community for acceptance. So we are looking at a budding presidential system, with a president or president-elect who has the power to blackball every other member of the Commission and to give them political guidance for an institution of the Community which has the monopoly of proposing legislation. I submit that it takes my worries a little further than those expressed by my noble friend Lord Renton.
Lord Stoddart of Swindon: I am surprised that another place should have let this go through without much discussion. We see the power seeping away gradually from the British Parliament, and the House of Commons in particular. They seem not to realise what is happening. My noble friend and others have exposed what is happening, but the House of Commons does not appear to understand that every time it gives the power to an institution of the European Community, it takes perhaps just a little bit—but it is a little bit or a big bit—of power away from Parliament.
Let us take the appointment of the president of the Commission. Up to now, or up to the time when the Amsterdam Treaty goes through, he will have been appointed by the elected representatives from their parliament, in other words the individual governments. So our Prime Minister will have something to do with the appointment of the president of the Commission, untrammelled by anything else.
Now the European Parliament comes into it, so that in itself weakens the vote of the British Prime Minister and every other Prime Minster. Thus another little bit of power has seeped away from Parliament, in particular the House of Commons. Of course, the House of Commons is the real representative body of the people of Britain. When it gives the power to the president to refuse the nomination of a representative of its Parliament—the Prime Minister—again it loses a little bit of its power. The House of Commons has ceded it to someone else; indeed, in this case not even to an elected body but to an appointed person. So the House

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of Commons has now ceded its power to an official, for that is what he is. Because they will weaken the political presidency and have given a share in political guidance to an official, they will have weakened themselves and a bit more power seeps away from the House of Commons to the institution of Europe.
That is why I am surprised that the House of Commons did not block this. It was its duty to block it. It is the true representative of the British people. It is to the House of Commons that the people have given power and the people do not give power for it to be ceded to somebody else. I am sorry therefore that it did not do what I consider to be its duty.
However, as my noble friend Lord Bruce said, it is part of the plot. We know well that the federalists or the unitarists wish to see the Commission as the government of Europe. That is no secret. The European Parliament passed a resolution in that regard. That is the game plan—that eventually the Commission will become the government of Europe and the parliament will become the parliament of Europe. But they want to speak for the peoples of Europe; not Westminster, but Strasbourg and Brussels. They are the people who will speak for the British people. Anybody who doubts that needs only to look at the issue we are discussing. It is a move forward to that position.
I asked a question as to why, in discussions, reference was made to "President Santer" rather than to the "President of the European Commission", but reference was made to the "President of the Council" rather than to "President Blair". I thought that the real president of Europe was the president of the Council for the time being. That is Mr. Blair, for the time being. The answer came back that the president of the Commission was always referred to as "the president". So, by nomenclature, he is already the "president of Europe" and poor Mr. Blair is relegated to being the "President of the European Council".
One can see where we are going. We are going away from an elected system to an appointed system. That is not democratic. I thought we were all democrats here. In fact, it is anti-democratic and should not go further. Indeed, the reason these amendments are tabled is to try to prevent it going further. We believe it is dangerous.
In relation to political protection, we must know from my noble friend what that means—whether it means that the president of the Commission will give a political lead or whether he will become the political leader rather than the troika which is at present the leader under the presidency of the European Council for the time being. We also want to know whether the president is the president with a writ firmly to impose his views and his discipline, or whether he is primus interpares. That is an important distinction and we are entitled to know exactly what the president will be. If we are not careful, we could be on our way to a nasty little dictatorship. The question is asked, "Why do people like Stoddart, Bruce and Tebbit become so worked up about this whole thing?" The answer is that we believe in democracy. We see steps like this as taking us away from a proper democratic system in which the people and not the officials rule.
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I hope that my noble friend will be able to give us some answers tonight that will put our very real fears at rest. I am not at all sure that he will be able to.
Lord Moynihan: The amendments that I have tabled on Article 2.40 and 2.41 relate to another area addressed in the treaty which has been debated by noble Lords on both sides of the Committee. The debate has focused on the reforms to the appointment of the president of the Commission and new commissioners from member states. It seems yet again that the Government may simply not have been present at the time of negotiation on these points for nowhere in the treaty is the Government's negotiating failure more clear. Nowhere in the treaty is the Government's giveaway more apparent and nowhere in the treaty have the Government sacrificed national interests so greatly for the sake of the Brussels bandwagon with so little apparent thought. Of all the changes agreed by the Government in Amsterdam, these reforms are potentially of the most long-term significance for the people of Britain. That is why the intervention of the noble Lord, Lord Stoddart, focusing on why the other House had not addressed this subject in greater detail, was extremely important. I hope that in due course this House will provide the other place with another opportunity to discuss the matter.
In this treaty the Government have given away important national powers. As we have heard, in future the European Parliament will have to approve the new president of the Commission. The freedom of member states to appoint commissioners of their choice is diminished, as the president of the Commission has been given new powers to veto the appointment of new commissioners and can therefore effectively pick the other 19 commissioners. What is more, those new commissioners will be required for the first time to work under the political guidance of the president. I shall come to the interpretation from the Liberal Democrat Benches of the word "political" in this context, which frankly I find astonishing.
My amendment, to remove Article 2.40, would correct the situation where, first, the European Parliament has been given a veto over the agreed nominee of the president of the Commission. This means that even a candidate on whom all member states had unanimously agreed could be blocked by the European Parliament. Secondly, my amendment seeks to remove the proposal that the president of the Commission should have a veto over the nominee for commissioner of each member state. This means that if the United Kingdom, France, Germany or another member state wanted a particular person as its commissioner, the president of the Commission could say no. I should like to know whether the Minister agreed with the attempts of the Euro socialists to block the appointment of the European Commission in January 1995 under the leadership of Pauline Green, MEP for London, North. For this is the parliament which in future will have the right to veto the appointment of the president of the Commission.

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Under the existing arrangements the president is appointed by common accord by member states after consulting the European Parliament, so the power to appoint the president lies quite properly with member states. Under Maastricht, the nomination must be unanimously agreed by the member states, which is an important and necessary power. Previously, the European Parliament was consulted about the presidency but had to approve or reject the Commission as a whole. That is no longer the case.
It is true to say that the treaty does not provide for the right of nomination for the European Parliament, either originally or in the place of a rejected candidate, so the nomination of the president still lies with member states. But given the Government's approach to protecting our national interest in this area, it is wholly legitimate to wonder how long that will be the case.
Furthermore, Article 2 paragraph 40 of the treaty provides that,
"governments of the Member States shall, by common accord with the nominee for President, nominate other persons whom they intend to appoint as Members of the Commission".
That gives the president of the Commission the completely new right to veto the appointment of any other member of the Commission thus substantially diminishing the unfettered right of member states, under the Maastricht Treaty, to nominate their own representatives to the Commission.
Under the Maastricht Treaty there was a duty for member states to consult the president of the Commission when putting forward their choices for the commissioner. That was simply and rightly consultation. Member states were free to ignore the views of the president if they so wished and to appoint a person of their choice. That has been the position since the Treaty of Rome. The previous government successfully defended that arrangement every time the European treaties were negotiated. Why did this Government fail at their first attempt?
I move on briefly to my second amendment which addresses Article 2 paragraph 41. That paragraph states,
"The Commission shall work under the political guidance of its president".
As Members of the Committee have pointed out this evening, it is a short sentence but far from being an innocuous one. In the context of this new sentence Article 160, left unaltered by the Amsterdam Treaty, is worthy of some reflection. It provides that,
"If any Member of the Commission no longer fulfils the conditions required for the performance of his duties … the Court of Justice may … compulsorily retire him".
Article 2 paragraph 41 of the Treaty of Amsterdam imposes a new condition on each commissioner to work under the political guidance of the president. That is not under the managerial effectiveness or leadership of the president, about working well or helping to keep in line and doing the job, but under the clear political guidance of the president. Is it not the case, then, that if a commissioner, in the president's opinion, fails to toe the president's political line, shows too much independence of thought, or questions the president's political
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direction or even disagrees with it, the Commission can simply apply to the European Court of Justice to remove him or her.
If the commissioner is found to have failed to follow the president's political guidance the court would then have little option under the treaty but to remove him or her. I accept that in practice it is unlikely that such a case would reach the court, and I sincerely hope so, since the president would use his powers to force the resignation of the commissioner in question. But I give it as an example to illustrate the potential danger of these new powers concentrated in the hands of, as has so rightly been pointed out, an unelected official, the president of the Commission.
What may be the Government's justification for allowing these changes from the debates that we have had in another place? Does the Minister agree that these changes take power away from democratically elected governments who are accountable to the people of their countries and place it in the hands of an unelected official? The noble Lord, Lord Bruce, searched for this: what is the justification for such a change? Why did the Government agree that the president of the Commission should have the power to veto commissioners chosen by member states? On what criteria will selection by the president be based? What assurances are there in the treaty that the commissioners who take office in the year 2000 will not all be drawn from one political party or from one point of view? What assurances did the Minister seek on these issues? If he sought none, why not?
The Government have said that amended Article 2 paragraph 40, which amends Article 158, represents an enhanced role for the Commission president in the appointment of commission members. I do not understand the justification for this enhancement. The Minister of State in another place has said that the changes are very much in Britain's interests. Does the Minister think that it is in our national interest that no President of the European Commission can be appointed unless the European Parliament agrees?
The Minister of State said that he,
"cannot foresee a situation in which the European Parliament would reject someone as President if the Council is agreed on who he or she should be".
He would not be the first Minister to fall into the guessing-game trap of what might or might not be a realistic scenario in Europe. Does the Minister really think that it is in our national interest that we in the UK can no longer be guaranteed the right to choose our own Commissioner? Does he really think that it is in our national interest that the Commission must in future work under the political guidance of its President and that the President now has the power to hire and fire? Does the Minister really think that it is in our national interest that the balance of power in Europe has shifted away from nation states and from intergovernmental control towards a political Commission led by a political President with the word "political" spelled out in the papers before us?
What possibly can be the justification for that fundamental shift in the nature of the Commission where the President can use his veto again and again to

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ensure the right result for himself or for the Commission but possibly the wrong result for Britain? Once the President is appointed, all the Commissioners must work under his political guidance. Why has the independence of the Commissioners been removed? What defects are these proposals designed to correct? What flaws have the Government identified in the existing arrangements? I looked long and hard to find criticisms from the then Opposition on these points. I could find none that warranted and pushed for the changes that are now being sought.
The Minister of State justified the powers to the European Parliament saying that,
"as Members of the European Parliament come form the same countries and political parties as Council Members, I do not think their views will he very much out of line with the majority Council view. The fear is therefore unrealistic".
That was a direct quotation from the Minister of State. Is that faith in MEPs why the Government have undemocratically and repeatedly tried to gag their own MPs when it came to hearing them express a socialist agenda? Was that faith in MEPs justified by the Euro-Socialist group's efforts to block the appointment of the Santer Commission in 1995?
If the Minister cannot,
"foresee a situation in which the European Parliament would reject someone as President if the Council had agreed on who he or she should be",
what was the reason for enshrining in treaty form a provision to allow the European Parliament to set aside the unanimous view of its member states? The Minister of State justified the shift to a political Commission because,
"some Commissioners do not always take the Commission … view and grind their own axe. Some Commissioners have a view of their own and go off on their own track"—[Official Report, Commons, 15/1/98; col. 544.]
That is what he said. Is it now government policy that their appointees—indeed, their Members—should not have a view of their own'? If that is the case, even when that view being expressed or that axe being ground happens to be in their view in the British national interest, I would greatly appreciate it if the Minister could justify that fundamental and inexplicable shift in power to the President of the Commission and the European Parliament with no apparent gain whatsoever to the British people.
Ultimately, it is still for member states to decide by unanimity the big issues. Nevertheless, it cannot be denied that the Commission clearly plays a role in driving the EU forward and in setting the agenda. These are major changes with major implications yet they were not even mentioned by the Prime Minister in his Statement in another place on his return from Amsterdam. They represent a significant step towards an overtly political Commission in which unprecedented powers are concentrated in one individual's hands. Taken together with the extension in QMV and the substantial additional powers for the European Parliament, which we have yet to debate, the treaty represents a significant shift from the nation state to the central institutions of the European Union. It is no mild amendment to the current position in Europe. It is a
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fundamental shift. It is therefore vital that today we hear from the Government why these proposals were agreed by them, their implications for Britain and why they consider them to be in the national interest.
Baroness Williams of Crosby: I make a brief intervention. I am extremely puzzled by part of the argument advanced by the noble Lord, Stoddart of Swindon, and the noble Lord who speaks for the Official Opposition. Time and again the noble Lord, Lord Stoddart, in a very eloquent speech referred to loss of democracy. On a number of occasions he said that he deeply disapproved of these sections of the Treaty of Amsterdam because they represented a loss of democracy. I do not understand the English language in that sense. I believe that the proposals in the treaty represent a democratic gain. In the past proposals for nominating the president of the Commission have been conducted secretly by governments. Governments have reached precisely the back-door deals of which the noble Lord has expressed such powerful disapproval. They have never consulted Parliament or the people but simply reached understandings with other member states about the name of the person to be advanced as president of the Commission. I am sure that the Committee would not wish me to detain it by going through the history of previous presidents from the very beginning. But if noble Lords care to consider the matter they will find that time and again the president of the Commission has been appointed following agreement between two or three powerful member states.
The shocking crime of Her Majesty's Government is to have agreed to a change in the Treaty of Amerstdam which for the first time subjects the president of the Commission to some kind of democratic procedure. I can understand the argument advanced by the noble Lord, Lord Stoddart, and the noble Lord, Lord Moynihan, who leads for the Official Opposition—I acquit the latter to a certain extent in this matter—only on the basis that democracy is defined to exist only in national parliaments and in no way at the level of the directly elected European Parliament. We may not like the directly elected European Parliament, but the truth of the matter is that the people of Britain, France, Germany and Italy have elected freely the people they wish to represent them by a recognised democratic procedure. That parliament will now be able to approve, or I assume refuse to approve, the name of the person put forward as president of the Commission. By any simple standard that must represent an extension, not a diminution, of accountability of a democratic kind.
Similarly, in relation to the second part of the paragraph which the amendments address, the Committee has heard over and over again about the "veto exercised by the president of the Commission". The truth of the matter is that the provision precisely states that nomination will lie in the hands of member governments and that member governments must reach a common accord with the president of the Commission. In ordinary English, it means that they must continue to consult until such point as they can agree upon a name. It resembles the strange process by which in this country we manage wisely to appoint bishops. There is an almost endless process,

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which I do not fully understand, of consultation between the Church and the Prime Minister of the day by which we end up with bishops apparently approved by both sides.
I believe that this debate has entered a rather strange self-contradictory phase. In my view, and I believe the view of any fair-minded person who reads the treaty, there is an improvement in democratic accountability. There is a requirement on both member state governments and the Commission president to agree the names of commissioners. I believe that that is very much in the interests of good government within the European Union.
10.45 p.m.
Baroness Park of Monmouth: We were discussing earlier what the word "political" meant. Perhaps I might draw the Committee's attention to Article J.1 where the member states are required to support the Union's external and security policy actively and unreservedly, and work together, and refrain from any action which is contrary to the interests of the Union or likely to impair its effectiveness as a cohesive force in international relations.
We pass then to Article J.8 where we are told:
"The Presidency shall represent the Union in matters coming within the common foreign and security policy".
That is a definition of a pretty wide mandate for political action.
Lord Tebbit: I had not intended to intervene in the debate. It is worth mentioning that the noble Baroness, Lady Williams, has once again clarified issues for us. If the EU is to be a state, then what she has said had some force; if, on the other hand, the EU is to remain an organisation comprised of sovereign national states, then what she has said is absolute nonsense. That is where we divide: between those who, like the noble Baroness, want to create the state of Europe and those of us who do not.
Lord Whitty: Like the noble Lord, Lord Tebbit, I am grateful to the noble Baroness, Lady Williams of Crosby, because until then I thought that I was becoming slightly unhinged. I should be used by now to recognising that all European debates in this place give rise to a degree of paranoia and demonology about the Commission. But I had not expected to have the fantastic constructions put on the relatively minor provisions that we have heard in the past hour.
I am even more surprised that the Official Opposition should go along with those interpretations, because these proposals are, as the noble Baroness, Lady Ludford, said, about the quality and efficiency of the governance of the EU, and what is important, they are about the European dimension of the accountability and democracy of the EU. They are not about creating a superstate; they are not about creating a president of the European Commission who is the equivalent of a President of the USA. That may be a complete misunderstanding and an attempt to apply British structures and British definitions to what are evolving new apolitical institutions within Europe.
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Indeed, the debate in another place which my noble friend Lord Stoddart had clearly read was at the more superficial level of why we called Jacques Santer president in the first place. I suppose that I would expect this place to be more respectful of title, but it must be recognised that the title "president" does not imply that one is running a superstate. Some Conservative Members in the other place were making an issue of us changing to President Santer, as respect requires, the previous government's convention of referring to Mr. Santer simply as Mr. Santer. They saw it as a major shift of politics and sovereignty away from this place towards Brussels and Strasbourg. Those are fantasies.
Lord Stoddart of Swindon: They are not fantasies.
Lord Whitty: Let us look instead at what is proposed.
Lord Stoddart of Swindon: I thank my noble friend for giving way. It is not fantasy when the president of the Commission is called Mr. President and the president of the Council is called the President of the Council. That is the point that I was making: the official is called Mr. President and the president of the Council is called the President of the Council. That is not fantasy; that is fact.
Lord Whitty: I was not directly referring to that contribution of my noble friend but to expressions in another place that our designation of the president of the Commission by his proper title somehow shifted sovereignty and power from here to Brussels. Admittedly, the debate here has been a little more sophisticated, but let us return to the proposal.
The first part increases democracy within the European Union. The European Parliament is now part of our democracy. Those who resent it are rejecting the past 30 years, whereby we in this country—Parliament by Parliament and Government by Government—have agreed that some of our powers should be pooled within a pool sovereignty within Europe; that there should be a European Parliament to look after the democratic interests of the British people and the rest of the peoples of Europe; and that we should provide for accountability in the exercise of those powers.
The Amsterdam Treaty changes the relationship between the Parliament and the appointment of the Commission in one important way. I clarify the interpretation understood by everyone until tonight, when the noble Lord, Lord Renton, raised the issue that the Parliament is not obliged to give its approval, that it does have a choice. Admittedly, it is unlikely that that choice would ever be exercised in contradistinction to the decision of the Commission to appoint a president. However, it is important that we have made this change so that we have a separate power to appoint the president and the Commission.
The UK has always supported an elected European Parliament having a stronger role in appointments to the Commission. The European Parliament will not have the right to nominate the European Commission's president; only member states will have that right. The European

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Parliament's right will simply be to agree or disagree with the Council's candidate. We believe that that is an improvement in democracy which retains the essential right of the member states in this respect and also makes their choice subject ultimately to the European Parliament's agreement.
The second issue is that of concord over the appointment of member states' nominees to the Commission. The current position is that the nominee president of the Commission is only consulted about nominees to that Commission rather than having a separate voice. But it is already a common accord. We are moving from a common accord of 15 member states to a common accord of 15 member states plus the president. The president will already have been agreed by all the member states, including this one, and by the European Parliament in order to become a president in waiting.
Surely, it is sensible that the Commission president should play a part in ensuring that the Commission is made up of people with the right ability, the right spread of representation and the right spread of competence. But that common accord for appointing all the members of the Commission is not new. We are extending the right of participation to the presidency, and that already existed for all 15 member states to approve each other's nominees.
Lord Pearson of Rannoch: It is not that the president is playing a part; he has a veto. That is a tremendous difference.
Lord Renton: Before the Minister replies to my noble friend's question, will he say whether common accord means unanimity or a majority vote?
Lord Whitty: It means unanimity and it has always meant unanimity. It meant unanimity over the appointment of the president and it means unanimity over the approval of the nominees of the member states which, I repeat, are the only ones that can nominate the members of the Commission. Therefore, the initiative clearly rests with the member states, but, surely, the president will be in a better position to help ensure that the Commissioners are the right calibre for the job and can meet all its varied political requirements.
Lord Pearson of Rannoch: Will the Minister confirm absolutely clearly whether the president elect has a veto or does not have a veto over the appointment of the other members of the Commission? I used the word "veto".
Lord Whitty: And I used the words "common accord". That is a common accord between 16 entities—15 member states and the president. I do not believe that I can be clearer than that.
Lord Tebbit: What word would the Minister use if the Secretary of the Cabinet were to be given a veto over the appointment of the permanent secretaries of the departments of state?
Lord Whitty: The Secretary of the Cabinet is not the appropriate equivalent in this situation. That takes us on to the misunderstanding as regards the role of the president of the Commission in the first place.
Lord Tebbit: Of course, that is quite correct, because the Secretary of the Cabinet is a civil servant who works
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to the instructions of Ministers who are working on the instructions from this sovereign Parliament. That is the difference.
Baroness Williams of Crosby: Will the noble Lord accept that those of us on these Benches find it extremely shocking that in that situation Luxembourg clearly has a veto?
Lord Whitty: And always has. I find it surprising that in all issues noble Lords are insisting on unanimity and yet on this particular issue they find unanimity unacceptable. However, the point raised by the noble Lord, Lord Tebbit, goes to the heart of the matter. Perhaps there is a major ideological or perceptual problem in this regard. The president of the Commission is more than the Secretary of the Cabinet. He is more than a civil servant. He is a political figure who gives political direction. At present, in practice, he gives political guidance to the other commissioners. That is the reality of the matter and has always been so since the Treaty of Rome onwards. The practice of the European Commission, which has been complained about many times in this Chamber, will bear me out.
Lord Tebbit: I recollect most clearly the words of the then Prime Minister, Sir Edward Heath, on this matter when he returned from his discussions with President Pompidou. He made it plain that the members of the Commission are civil servants and no more than civil servants who took their instructions from Ministers and had no rights of policy initiation. The doctrine which the Minister is now expounding is very different from that.
Lord Whitty: No, the position has always been, from the Treaty of Rome onwards, that in pillar 1 areas at least the Commission has sole initiative for policy proposals. The issue as to whether it is accountable to the Council is an entirely separate matter. It has a political role but its political accountability is to the Council of Ministers and, in certain circumstances, to the European Parliament. Therefore, members of the Commission are political rather than purely civil servants but they do not have the ultimate political responsibility. That rests, not with an appointed figure like the president, but with the Council which is, and will continue to be, the main decision-making body of the Union to varying degrees, subject to the agreement of the European Parliament.
Perhaps this debate indicates the chasm of misunderstanding which exists. It certainly shows that the role of the Commission is both misunderstood and denigrated within this Chamber. A Commission which acts coherently within the structure of the European institutions acts effectively also in the interests of the citizens of the United Kingdom. It has an absolutely key role to play in the functions of the Union. Its roles on proposing legislation, on implementing the decisions of the Council, as the guardian of the treaties and as an independent institution of the treaties are all vitally important political roles. But at the end of the day, as regards the carrying out of those decisions, it is subject

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to the Council of Ministers which is responsible to national parliaments and, to some degree, it is responsible to the European Parliament. The idea that it is an unelected dictator model for a super-European state, as we have heard suggested over the past hour, should be dismissed from our minds.
As the noble Baroness, Lady Ludford, said right at the beginning of this debate, these are relatively minor amendments and we should recognise them as such. However, they are important and they will improve the functioning of both democracy and efficiency within the Commission.
11 p.m.
Lord Bruce of Donington: After listening to the very interesting debate that has taken place, I stand astounded at my own moderation. I am normally known as someone who goes into debate in fair combative style—and that is still not a sin within a parliament; indeed, that is what the conflict of ideas is all about—but I approached this matter on a very modest scale. My noble friend, who effectively excluded me from the debate in his reply, may find on reflection that what I said is strictly in accordance with the facts as they have been presented not only by him but also in the treaty. I could have gone a long way further.
It will be within the recollection of this Chamber that I have objected publicly to the cavalier attitudes shown by successive presidents of the Commission, excluding the noble Lord, Lord Jenkins, who was always polite and correct in such matters. They have sometimes intervened rudely in the political debates which have taken place between the heads of member states and even between Prime Ministers and the opposition within their own countries. I heard President Delors, who came across to this country to attend a conference organised by the Financial Times, refer derisively and dismissively to the then British Prime Minister, Mrs. Margaret Thatcher. I objected publicly to anyone in his position—that is, in a collegiate position, a civil servant position or its equivalent—presuming to criticise a British Prime Minister personally, regardless of the fact that she did not happen to be a member of my party and that politically I was firmly opposed to her. I got up and objected publicly to that and received a reply from Delors, who said: "Well, it's a free country, isn't it?". This was in public in the United Kingdom.
I have heard successive presidents of the Commission take it upon themselves to enter unilaterally into political disputations between the heads of member states; they are quite permissible and, indeed, normal, and should be so. They have intervened personally in debates that have taken place in this country; indeed, it is not only the president of the Commission who has been guilty of this but so also have several of the Commissioners who have presumed to lecture us as to how we should conduct affairs in our own country. It would be far better if they conducted their own affairs.
I listened to my noble friend the Minister, for whom I have the utmost respect—indeed, he knows that—cataloguing the successes and the brilliance of the
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European Commission. However, I have news for him. I have watched those concerned for years and have witnessed their activities. I am thoroughly familiar with the way that they work. If any Member of this Committee wishes to get up and praise the Commission for its control, for example, over financial affairs (for which it is responsible), all he or she has to do is to read the last report of the Court of Auditors and the latest document produced by our own Audit Office here to find out the depth of gross inefficiency, negligence and, in some sections of the staff, actual fraud at Commission level. I am under no illusion about that. I shall be proved to be correct with the passage of time even though I may perhaps be derided now on the grounds that this is old hat, or possibly because of my advancing years. I tell the Committee that I shall be proved to be right, and so will my colleagues.
Having delivered that friendly homily to my friends on both sides of the Chamber, believing as I do in consensus politics, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 22 and 23 not moved.]
Lord Moynihanmoved Amendment No. 23A:
Page 1, line 13, after ("2") insert ("(except paragraph 13)").
The noble Lord said: In moving Amendment No. 23A I wish to speak also to the amendments grouped with it. I hope that the Minister appreciates that the points being made from all sides of the Chamber reflect our concern and consideration for what is in the treaty. As the hour grows late, I am concerned that there is a tendency to dismiss amendments lightly as minor drafting amendments which should not agitate the Committee, let alone lead to serious questioning. If that were the case it would be a pity because the points being made in different ways from all sides of the Chamber reflect genuine, legitimate concerns about principle, drafting and negotiation. We intend to examine the Bill in detail and the spirit in which we do so inevitably requires a full consideration from the Government Ministers who respond.
The amendments on QMV may well be the final series of amendments we consider this evening in Committee. Therefore I shall speak briefly. I may return to some of the points I want to make about the importance of the fight against fraud and the significant and new powers for the European Parliament, not to mention the location of the European Parliament. Those are three important issues which are covered in the amendments. They will be mentioned at a later stage and I do not intend to cover them in detail this evening.
I fear or expect that at an early stage of my comments concerning QMV, the Government will probably say that we did not have a blanket ideological opposition to QMV when we were in government. That is certainly the case as we agreed to a considerable extension of QMV at the time of the Single European Act in 1986 and subsequently at Maastricht. As a result majority voting now already applies to a wide range of issues such as the single market. However, there was always a clear tangible benefit to the extension presided over by

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the previous government which was worth the price of sacrificing our veto. In 1986 it ensured the progress and the development of the single market. This evening I question the Government's claim that the extension of QMV we are discussing gives a similar benefit. The previous government accepted QMV in limited areas for a specific purpose. I do not believe they ever did so without getting a real tangible benefit in return.
The amendments we are discussing tonight deal with three specific areas: the extension of qualified majority voting; the reduction in the use of the national veto agreed at Amsterdam; and the extension of the powers of the European Parliament, and particularly its co-decision powers on the location of the European Parliament. I question the Minister as to whether we gain tangible benefits in return for a significant extension of the use of QMV and the co-decision procedure in the European Parliament which, on the face of it, represents a significant transfer of influence from this Parliament to the institutions of the European Union. There will be those who will argue that these concessions, given away at Amsterdam, were wholly unnecessary. No one is claiming that they constitute in themselves the end of the United Kingdom as a sovereign national state; but, the more I look at them, the more I feel that they represent a significant reduction in the influence of this Parliament and of the British Government. It is a further step away from our vision of an enlarged, competitive, decentralised, flexible Europe, a partnership of nation states which deepens instead of widens the Union.
I should like to start with the extension of QMV. The weighted voting system, or QMV, works against the background of the political agreement known to all Members of the Committee as the Luxembourg Compromise, whereby in the last resort a member state may insist that, where it has a very important national interest at stake in a particular decision, discussions should continue until its fundamental problem has been resolved. It was agreed at the informal Foreign Affairs Council in Ioannina in March 1994 to discuss the arrangements for majority voting and the scope of QMV at the intergovernmental conference.
However, the result has been that the Amsterdam Treaty extends QMV to 15 new areas—four existing areas and 11 new ones. This is a significant increase in the power of the EU institutions. To increase this power, it must be transferred from elsewhere, and it has been. It has been transferred from Parliament to Brussels. Together with Britain's competitive advantage, jettisoned by joining the social chapter, which we covered earlier, Britain's veto and position of negotiating strength have also been discarded, with the result that we are now powerless to resist many more potentially burdensome legislative proposals in a wide variety of areas.
Let me spell out the sheer scale of what was agreed to at Amsterdam in this context. The four areas currently decided by unanimity consist of co-ordination of provisions laid down by law, regulation or administrative action for special treatment for foreign nationals; the adoption of the research framework
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programme; adapting or supplementing the research framework programme; and the setting up of joint undertakings in R&T development.
The 11 new treaty provisions which will also be subject to QMV consist of employment guidelines; incentive measures; social exclusion; equality of opportunity and treatment of men and women; public health; transparency; countering fraud; statistics; protection of individuals with regard to the processing and free movement of persons' data; outermost regions and customs co-operation.
Under the social chapter, legislation in any one of the following areas can be adopted by QMV: working conditions; the information and consultation of workers; equality between men and women in relation to both work opportunities and treatment at work; the integration of people excluded from the labour market; and health and safety at work. Not only that, but there are provisions for QMV under the employment chapter and within the flexibility provisions.
On the reduction in the use of the national veto and the extension of QMV, I wonder if the Minister can give the Committee one concrete example of how giving up our veto in the four areas previously decided by unanimity—that is, the right of establishment for foreign nationals; adoption of the research framework programme; adapting or supplementing the research framework programme; and the setting up of joint undertakings in R&T development—will benefit this House or the British people? Is it not the case that under the European Union framework programmes for research Britain has done well, winning money for our research programmes under various schemes—for example, the European Strategic Programme in Information Technology, ESPRIT? If QMV is used to decide these programmes, the UK could do less well, and, at the very least, we shall no longer be able to use our veto as a persuasive tool in arguing our case.
Secondly, can the Minister guarantee that the extension of QMV to cover 15 new areas would not result in the introduction of policies harmful to our national interest which this House and another place would be powerless to prevent? Is it not the case that any new proposals should be not only open to all but agreed by all?
Let me take one example, Article 129, to which QMV applies. The article seeks to ensure,
"A high level of human health protection … in the definition and implementation of all Community policies and activities",
and that,
"Community action, which shall complement national policies, shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health. Such action shall cover the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education".
It is possible that decisions by QMV on the public health provisions contained within Article 129 could lead to considerable interference by Brussels which we should not welcome, given how liberally a court, or indeed this House, could interpret, first, what constitutes public health and, secondly, what amounts to "preventative" measures. For example, preventative measures could

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refer to anything from a good diet, housing and shelter, to school meals or the provision of milk to children. Is it up to Brussels to determine those preventative measures, or is it something that the Government believe should be done at national level?
Thirdly, can the Minister explain how the proposals for social legislation in the pipeline will be subject to QMV and, under the social chapter, benefit the national interest? I have already spoken at some length on these issues, particularly about the directive to extend the remit of works councils to all companies with 50 or more employees, a proposal which the Government themselves oppose but which they could be powerless to resist.
Likewise, the proposed directive to change the burden of proof in sex discrimination cases, so that employers would be assumed guilty of discrimination unless they can prove otherwise, will also be subject to QMV. Is it not the case that qualified majority voting could succeed in this case in overturning the basic principle of British justice and lead to a flood of speculative cases?
Were we to debate this matter at length, we should come up with an endless list of such examples—full rights, terms and conditions for employees for those on part-time, temporary and fixed-term employment contracts; the incentive measures to be adopted by QMV under the employment chapter, which could prove to be a source of employment programmes for which the UK would have no need but would be expected to pay. And is it not the case that such an instrument to devise incentives, possibly financial ones, could be used to encourage member states to act in a certain way?
As I have already demonstrated, the Amsterdam Treaty provides for more majority voting in the operation of the CFSP decision-making process. Article J.13 provides for subsequent decisions on the implementation of overall strategies—that is, on the adoption of joint actions and common positions—and on any other decisions made on the basis of the new CFSP instrument, the "common strategy", to be taken by QMV in the Council of Ministers.
The treaty continues the distinction on decision-making on principle, which is still unanimous, and implementation of decisions, which is now generally to be by QMV. But is the line between principle and action so black and white? In the Minister's opinion, is one trade sanction the same as another? Is the trade sanction a principle, or is it an action? That represents an important question and a potentially dangerous move from a true common foreign policy agreed by all to a foreign policy supported by most. Likewise, the flexibility provisions are also subject to QMV.
I do not intend to go into further detail on these points. I hope the Committee will forgive me for not doing so at this late hour. There are critical issues associated with the Ford argument which I hope noble Lords will take up during this Committee stage.
Finally, perhaps I may touch upon the gridlock enlargement argument in this context. The Government have used the gridlock argument to justify the extension
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of QMV on the grounds that an enlarged European Union will be paralysed unless more decisions are taken by QMV. The QMV already applies in those areas where regular decisions are needed to enable the Community to conduct its day-to-day business such as the single market, agriculture and external trade. It is inappropriate, in my view, for fundamental decisions such as foreign policy and defence, which must remain intergovernmental in their nature. Are the Government seriously arguing that, in those remaining areas, indecisions on research or industrial policy, retention of unanimity would render the Union unmanageable after enlargement? I am sure that the Minister will be the first to agree that there are greater obstacles to the process of enlargement which the Treaty of Amsterdam singularly fails to address.
Perhaps if the Government believe that the only way forward for Europe is instinctive integration from west to east and north to south, then the argument I have just made does not carry sufficient weight. But there is a different way forward which does not require every member state to sign up to absolutely every aspect of the treaty of which the Government are already taking advantage in terms of borders and the single currency. If that way is taken, then it is not necessary to have more QMV to enlarge.
On these Benches, we do not believe that unanimity in those areas to which it currently applies would be incompatible with effective decision-making, even in an enlarged Union. The European Union has been able to reach decisions on highly contentious issues such as the Maastricht Treaty itself and the 1992 financing package, despite the unanimity requirement. Unanimity ensures that decisions on even the most sensitive issues take proper account of vital national interests, as indeed they should—a fact which the Government appear, sadly, with the Amsterdam Treaty before us this evening, largely to have forgotten. I beg to move.
Baroness Williams of Crosby: I begin by saying a few complimentary words to the noble Lord, Lord Moynihan. Throughout the debate he has addressed the subject with great detail, thoroughness and care, and, although quite frequently on these Benches we do not find ourselves in agreement with him, we always listen carefully to the arguments he makes. They are rational and well argued.
On this group of amendments, I wish to distinguish between three elements. The first concerns qualified majority voting. Here, perhaps to the surprise of the noble Lord, Lord Moynihan, we have sympathy with the view that qualified majority voting should not just be randomly extended as a simple way out of the problems of trying to get agreement on difficult issues. Clearly a substantial area falls within the responsibility of the Community and will continue to do so. That area becomes more complex, as Members of the Committee have indicated, in such areas as how one deals with organised crime, the drug trade, and so on. None of us can seriously think of trying to repatriate the national governments' responsibility in a large part of the field. As has been said before in this debate, the noble Baroness, Lady Thatcher, as Prime Minister, fully

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recognised that, in agreeing to qualified majority voting, as regards the Single Act which established the Common Market. That should not be forgotten.
At that point, we were doing a certain amount of cherry-picking. We liked the single market. We were prepared to accept qualified majority voting for the single market; and then we drew the line at almost every other area of qualified majority voting because we did not want it, we just wanted the single market. Nevertheless, it is obviously right that national parliaments and this Parliament in particular should scrutinise carefully the argument made for extending qualified majority voting.
With regard to the long list of amendments to that effect that were put down by the noble Lord and his colleagues in the Opposition, I thought that both Customs co-operation and fraud were odd subjects to choose. I should have thought that they were good examples of where qualified majority voting might be appropriate. One needs only one naughty government to be able to veto effective measures to deal with the issues. They seem to be prime examples of where QMV is appropriate.
On these Benches, we do not argue that QMV should be extended loosely to more and more areas. It is essential, if the European Union is to work, that member states have an area which they regard rightly as their own, where the principle of subsidiarity is fully recognised, and where member states also work with one another within those areas on the basis of co-operation and not of qualified majority voting.
Having said that, I found it puzzling that on Amendment No. 25 the Opposition took exception to the co-decision-making procedure. Until the Amsterdam Treaty, the methods of making decisions within the European structures, the Community structures, were ludicrously complex, obscure, lengthy, and difficult; it was hard to understand what was going on. I cannot see any objection to simplifying those democratic procedures down to the three that now effectively exist: consultation, assent and co-decision. Co-decision makes it quite plain that the European Parliament's agreement—by way of conciliation procedures and all the rest of it—is a necessary component of passing major European legislation. That has to be right. In this area, which falls to the Community—I use the word advisedly because the Community is only part of the Union—it is surely vital that the European Parliament must be carried by the Council and the Commission before law becomes law. Therefore, on Amendment No. 25, from these Benches we cannot offer the sympathy we offer for the earlier amendments in at least the sense that they should be taken seriously, because we believe that the co-decision procedure is a substantial improvement on what has gone before.
In that context let me add one further word of sympathy for amendments we will later approach; that is, that central to this Bench's argument—it may sound paradoxical to some noble Lords—is the strengthening of the scrutiny by our own Parliament of European legislation and proposals. That is crucial to maintaining democratic control, and nothing we say from these
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Benches about the importance of including the European Parliament in decision-making procedures in any way reduces our total commitment to having the strongest possible scrutiny, advice and consultation by national parliaments.
I should like to say a few words about Amendment No. 26B. This amendment is well taken. It makes no sense for the European Parliament to he a perpetual mobile theatre, where secretaries, files, computers and heavy material are dragged around Europe by large lorries at great expense to the taxpayer, making the Parliament less efficient than it ought to be. I fully understand the desire of the Government of France to maintain Strasbourg as a significant city. I would have thought that it was not beyond the bounds of the imagination of Commissioners and the Council of Ministers to find some excellent European agency that could be settled in Strasbourg, in those attractive surroundings, which would then save the expense of shuffling Parliament to and fro. Those of us who care about parliamentary democracy recognise that that is no way to build up respect for the European Parliament, and it would be much better all round if the European Parliament, like the wandering dervish, were to be allowed to finally settle in one place.
Lord Grenfell: Perhaps I might briefly intervene. Like the noble Baroness, Lady Williams, I listened with great attention to what the noble Lord, Lord Moynihan, said. It is always to the point and interesting, though we do not always agree with him. However, with all due respect to the noble Lord, he tends to speak with a mind-set which is indicative of a party which when in government always found itself in a minority of one in Brussels. In those circumstances, of course, the veto is extremely attractive.
I wish that noble Lords opposite who take objection to the extension of QMV would think a little about that. All that the extension is designed to do is to try to make the conduct of affairs in the European Union a little easier. There is seemingly a great lack of confidence on the Opposition Benches in the possibility of being able to assemble a blocking minority in the Commission and the Council. It is possible to do that. But with this reluctance to give up the veto, it suggests that there is a mind-set which reflects the fact that the idea of assembling a blocking minority is almost an impossibility; it is not. This Government are perfectly capable of putting together a blocking minority when they feel it is necessary to do so. We should therefore not be afraid of an extension of qualified majority voting in areas where we believe that that would be suitable.
My final point—I hope it will not be taken as being too jocular at this late hour—relates to what the noble Baroness, Lady Williams, said when she referred to the movement of the European Parliament from Brussels to Strasbourg and back again. As a member of the Council of Europe I have suffered somewhat in the past from arriving in Strasbourg having been blocked on the way by trailer trucks carrying documents backwards and forwards. I simply suggest that we might be able to make a deal if we were prepared to allow M. Trichet

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to have the presidency of the European Central Bank in exchange for France agreeing to give up Strasbourg as a centre for the European Parliament.
11.30 p.m.
Lord Pearson of Rannoch: No one has yet spoken in support of Amendment No. 25, which deals with the co-decision procedure and its extension under the Amsterdam Treaty. It gives me great pleasure to agree with what the noble Baroness, Lady Williams, said about the European Parliament and the jamboree, which I understand costs fully £10 million a year, of moving the files from one building to the other and back, and also with what she had to say about the scrutiny procedure, which I understand becomes strengthened under the treaty. However, when we come to Amendment No. 25, we have to face the fact that the co-decision procedure is being extended by the treaty into 21 new areas, some of which overlap with other areas, or are the same areas but different parts of them, covered by the extension of qualified majority voting.
Co-decision may sound an innocent enough procedure but in fact it boils down to qualified majority voting with which the European Parliament agrees. If the European Parliament does not agree, then we go into the common position procedure, which, I agree with the noble Baroness, Lady Williams, is complicated. So, extremely briefly for the record, I ought to mention the areas which the Amsterdam Treaty does subject to the co-decision procedure—in other words, qualified majority voting plus the agreement of the Parliament if it is available.
They are: discrimination on grounds of nationality; freedom of movement and residence of citizens of the Union; social security measures for migrant workers; special treatment for foreign nationals; provisions relating to self-employment and professional qualifications; common transport policy—that could be a big one; incentive measures for employment; customs co-operation; equality provisions; the European Social Fund; vocational training policy; public health; trans-European networks—another big one; the European regional development fund; multi-annual framework programmes for research; some elements of environmental protection; multi-annual framework programmes for development co-operation; transparency; anti-fraud measures; statistics; and the independent advisory body on data protection.
All those are further erosions of our national sovereignty, however else one likes to look at it. I do not propose to say any more about those matters now, but I have no doubt that we shall be coming to them at the next stage.
Lord Stoddart of Swindon: At the risk of again being described as paranoid, I want to support what has just been said about co-decision and qualified majority voting. Before I do so, I am pleased to be able to support the noble Baroness, Lady Williams, in her plea for the European Parliament to be allowed to sit in one place. Brussels. It is completely ludicrous and a waste of taxpayers' money that the Parliament should be moving
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around. It is inefficient for the operation of the Parliament itself, it is costly and it is very upsetting for the Members of the European Parliament. After all, we have just spent around £670 million on providing a new parliament building in Brussels which is unoccupied for part of the year. That is quite absurd. Therefore, I find myself in total agreement with that.
I am of course—my noble friend would expect me to be—against further qualified majority voting and co-decision. I have already said that I object to further erosion of British parliamentary sovereignty. I believe that the British Parliament represents the British people. That has been our constitution over a very long period of time. I object to it being undermined. Every time we agree to some measure of new qualified voting or co-decision we undermine another piece of sovereignty, because once qualified majority voting has applied and the co-decision procedure ended, that is the end of the matter. Apart from giving its opinion, the British Parliament then has no further say. That is my objection.
The noble Baroness, Lady Williams, criticised me in our previous debate. She said that we are extending democracy, but I do not believe that we are. I shall tell her why. As far as I am concerned, democracy lies in the House of Commons. There they are elected to appoint a government to govern the country; to hold that government to account; to check on what they are doing and to raise supply. That is our parliamentary democracy. All the people there are elected by the British people. But when one goes across to the European Parliament that is not so, because out of 626 members we in this country elect only 87. Therefore, on every occasion we can be outvoted by people who have not been elected by the British people. That is my objection. I hope that the noble Baroness will agree that it is a reasonable one and a reasonable point of view to take. She takes a different point of view and I understand that. But that is where I am coming from and I hope that I have been able to explain to her the difference that we bring to European democracy.
With those words, I ask my noble friend to believe that when we discuss these matters in detail we are not being paranoid but we are being good parliamentarians because the essence of real parliamentary democracy for parliamentarians, whether they are in another place or here, is to understand what is being put before them; to object, if necessary, and to make those objections heard, however bizarre they may seem to the government, and to have those objections considered seriously and, if necessary, at length. I hope that my noble friend will understand that and take those objections into account when he replies.
Lord Monson: Before the noble Lord sits down, will he agree that people the world over will accept laws that they dislike, albeit grudgingly, made by their fellow countrymen, but that they will not accept laws that they dislike made by strangers?
Lord Pearson of Rannoch: Before the noble Lord, Lord Stoddart, answers that, and in amplification of what he was saying about the lack of democratic legitimacy of the European Parliament, it is interesting

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to note that the public perception of that parliament appears to have decreased over the years with the greater powers that have been given to it. For instance, in 1979 when direct elections were first held to the European Parliament, 63 per cent. of the population voted. In 1984, that decreased to 61 per cent. In 1989, it further decreased to 58.5 per cent. In 1994, it fell to 56 per cent. or just over half of the available population, and all this despite the fact that in a number of member states voting is compulsory and despite the arrival of new members in the European Community whom one might have expected to have been enthusiastic about the wretched thing. Clearly, they are not and that is why I, among others, do not take the great democratic legitimacy of the European Parliament very seriously. If it were abolished, life would be much easier for all of us.
Lord Stoddart of Swindon: I concur with those two points. It is right that, as the noble Lord, Lord Monson, said, people are prepared to take a lot from their own countrymen; they are not always prepared to take the same from people who live abroad. I hesitate to call them "foreigners", or I shall be criticized—
Noble Lords: Hear, hear!
Lord Stoddart of Swindon: There you are, straightaway!
The noble Lord, Lord Pearson, is right that support for the European Parliament has continued to decline. I cannot tell the reasons for that. It may very well be that MEPs are ineffective or that the public do not notice them because they do not do the sort of jobs done by local councillors or MPs. At the last European elections, turnout was 36 per cent. in this country and in the last European by-election, in Liverpool it was down to 11 per cent. It is true that the European Parliament is not held in great regard or is perhaps not properly understood by people in this country and, increasingly, in other countries.
Lord Whitty: I am gratified that this is, I hope, the last debate of the evening and that it has been a measured one in which noble Lords have expressed expected but nevertheless important views. When I perhaps provoked my noble friend Lord Stoddart to say that I should not accuse him of paranoia for raising these issues, I must point out that I was not doing that. I have great respect for my noble friend's views and for all other views expressed this evening. It is just that on some issues a construction is built which does not bear a reading of the text and, on other points, important issues of principle clearly arise. There have been differences over both QMV and the role of the European Parliament. On QMV, it has been unfortunate that at the back end of the previous administration it became such a totemic issue. It was not during the earlier stages of the Conservative regime. Under the Single European Act and the Maastricht treaty, successive Conservative Prime Ministers rightly judged the issue on whether it would be in Britain's interests to go along or whether the only way of getting something, even if they were
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not particularly keen on it, was to use the QMV process. That gave us the single market, and the Maastricht treaty gave us 30 new articles subject to QMV.
This treaty is far more minor with regard to the extension of QMV, as was clear from the list that the noble Lord, Lord Moynihan, rightly read out. We are not unhappy about that extension of QMV. Indeed, we would even have been prepared in certain circumstances to have gone slightly further. Nevertheless, that seemed sensible progress at this point in the development of the EU.
We have a view of QMV which is not informed, as my noble friend Lord Grenfell said, by the expectation what we will always be in a minority, that we will never be able to build a blocking minority or that we will always be in a minority of one. At Amsterdam, we argued strongly that some extension of QMV was necessary to allow the Council to push through effective measures in important areas. Those areas included fraud. If we allow measures against fraud to continue to be subject to unanimity, we can expect a veto from one country or another. Fraud is rightly an issue of serious concern which we shall be debating at some unearthly hour tomorrow, but if we are serious about expecting to do something about fraud in the Community—it is a serious problem—we must accept that decisions will have to be made through QMV. We argued also for QMV on transparency, so that some member states which are less keen on openness in government would not be able to block those measures.
The noble Lord raised queries in relation to research and development. It is true that the British Government, the British economy, British industry and British universities have had a good deal out of the R&D framework programmes over the years. But that depends in future on other member governments not vetoing the excellent criteria on which we gain those resources. If unanimity were required we would face that prospect. Earlier this year there was an excellent example of it. Spain threatened to block the R&D framework until she got satisfaction over her future receipts under the structural and cohesion funds. In the event we were able to agree the framework, but had we not been able to do so after long and difficult negotiation we would have faced a veto which would not have been in the interests of this country, yet a European framework for R&D is for the benefit of Europe and Britain has differentially benefited from it.
On the other hand, at Amsterdam we rightly insisted that many major areas should remain subject to unanimity, as we said in our manifesto. We retain the veto in key national interest areas such as taxation, the budget, foreign policy—subject to discussions that we have had in previous debate—defence, immigration and border controls. We are not a government that is in the business of extending QMV left, right and centre 'for dogmatic, ideological, federalist reasons—any more than we are in the business of resisting it for equally static reasons. There are some areas where QMV is simply inappropriate, but those areas to which the Treaty of Amsterdam extends QMV will greatly benefit

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this country and the decision-making process of the European Union both immediately and in anticipation of enlargement.
I turn to co-decision and the role of the European Parliament. The noble Lord, Lord Pearson of Rannoch, cited the list of areas to which co-decision would henceforth apply. I did not quite understand the argument put forward by the noble Lord and others that somehow it represented a loss of sovereignty. Those areas are already subject to decision by the Council of Ministers. In most cases such decisions are subject to qualified majority voting and can lead to legislation at European level. The issue here is not the balance of sovereignty between Britain and Brussels or Strasbourg but the balance between the powers of the executive and a degree of democratic accountability. I am aware that the noble Lord, Lord Pearson, and others almost deny that the European Parliament has, or should have, democratic credentials. I am also aware that the legitimacy and importance of the European Parliament in this respect has suffered over recent years, particularly here but in other member states, by some denigration and failure on its part to put its own house in order and to ensure that the citizens of Europe understand what the European Parliament is about.
The Committee is aware that co-decision means that the agreement of the European Parliament and Council is required for Community legislation. It does not enable the European Parliament to propose an Act or to insist upon a proposal or a provision that is in any sense opposed by the Council, but it makes the Council's decisions subject to the agreement of the European Parliament. The European Parliament is therefore able directly to exercise democracy within the European institutions, which we welcome. Co-decision was introduced under the Treaty of Maastricht signed by the previous government. Therefore, there can be no objection in principle to co-decision by the Opposition Front Benches. I assume that they, like us, supported co-decision because they believed that, despite its difficulties and set-backs, the European Parliament had an important oversight role to play in the European Union's legislative process, particularly in areas subject to majority vote in the Council. It is an important democratic check which needs to be further developed. We also realised before Amsterdam that the co-decision procedure laid down in Maastricht needed to be streamlined. That has also been done under the Amsterdam procedure.
The anxiety expressed here, that giving the European Parliament greater oversight of European legislation somehow takes away the role of national parliaments, is misplaced. We believe, as the principles laid out in the new treaty indicate, that there are complementary roles for national parliaments and the European Parliament. We strongly welcome the new national parliaments protocol. It gives a new and legally binding minimum period for national parliaments to scrutinise new legislative proposals.
Co-decision is not appropriate in all cases. It is appropriate in those limited cases to which it has been extended by the Amsterdam Treaty. If there is to be an
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extension of co-decision in future that needs to be accompanied by an extension of scrutiny by national parliaments. We shall be returning to that issue early in tomorrow's debate when we consider the protocol on national parliaments.
I should emphasise that there is no contradiction in wishing to extend the role of the European Parliament on European legislation and extending the role of national parliaments in scrutinising and controlling the European decisions of their national governments. We wish to see improved scrutiny at both ends of that process.
Finally, I suppose that I have to respond to an issue with which I have considerable sympathy—that relating to the dual location of the European Parliament, which has proved irksome to me as it has to other Members of this place and MEPs and which is an unnecessary cost for the European taxpayer.
Although we did not seek in any sense to include this provision in the treaty, it is consistent with the existing agreement on dual sites which had been reached in Edinburgh in 1992. In October 1997 the ECJ ruled that the European Parliament is legally obliged to hold 12 plenary sessions a year in Strasbourg. That ruling was based on the existing legal provision after the protocol agreed at Edinburgh, signed by the previous government, and not on any new agreement.
There are enormous problems with that, but the status quo pre-dates even UK accession. It can be changed only by unanimity, irrespective of whether it is in the Edinburgh decision or the treaty. There is no greater prospect now of unanimous agreement to a single European site than there was in 1992. Unfortunately there is no prospect in sight in the future. We therefore agreed with some reluctance to that provision which merely carried over into the new treaty the Edinburgh provision. I hope that with those remarks the noble Lord can withdraw the amendment.
Lord Moynihan: I thank the Minister for his response. I was slightly concerned about the comments of the noble Lord, Lord Grenfell. He believed, to a certain degree at least, that my mindset was that of a blocking minority. There are two arguments which militate against that observation. The first is that, no doubt greatly to my disadvantage, my observations throughout the Committee's proceedings came from a politician who spent the past five years in industry outside Parliament, regretting deeply the polarity which existed in the Conservative Parliamentary Party and which I believe proved so electorally damaging.
Secondly, all my comments have been considered and drafted in my offices south of the river and revised late at night. For the past six weeks my three children, all of whom are under four years-old, had chicken pox and accordingly kept me awake most nights and allowed me to do some of that work. For those reasons my contributions may not have matched the excellence of Conservative Party briefings. I sincerely hope that from our Benches they provide a constructive approach to our

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role in Europe and Europe's relationship with us, and were not in any sense made in the mindset of a blocking minority.
Lord Grenfell: I thank the noble Lord for giving way. I was not intending to say that he was acting as a blocking minority. I was saying that there is a certain mindset on his side of the Committee which reflects his party having been in a minority of one so often in Brussels and that has made it much attached to the idea of the veto.
Lord Moynihan: I am grateful to the noble Lord for clarifying that position. Perhaps I may make one or two swift observations. First, we will return to fraud at a late hour tomorrow, so I will hold back on my comments until then.
Secondly, I welcome the comments of the noble Baroness, Lady Williams, in highlighting the fact that there are strong arguments, not least financial ones, for all the parliamentary sessions, the committees and the secretariat to be based if not under the same roof at least in the same city and, in my view, surely in the same country. I believe that by tabling the amendment tonight it has been useful to place on record our concerns about the location of the European Parliament.
Thirdly, I was concerned by the echoing "Hear, hear" to the view that at the end of the previous government a blanket ideological opposition appeared to creep in with regard to QMV. That is not the case. It may have been brilliantly exposed as such by the electoral machinations of those seeking to beat us at the last election, and if that was the case I offer congratulations to colleagues opposite. However, at all stages, the issue of QMV should seriously be considered in the context
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of cases in which QMV in limited areas can, for specific purposes, produce a tangible benefit in return. That is how we should be looking at the extension of QMV, and it is the point I underlined at the outset of my comments. It certainly underpins the position of my Benches.
Finally, I believe that at this late hour we have not given sufficient consideration to the whole question of co-decision in the treaty. For the record, there are massive new powers for the European Parliament, and this was confirmed in a briefing note produced by the European Community in July last year. It stated:
"The European Parliament made two major gains at the Conference to become a genuine co-legislator and a full arm of the European legislature alongside the Council … Firstly the co-decision procedure has been considerably extended essentially along the lines of the principle suggested by the Commission in its report of July 1996, whereby any instrument of a legislative nature should be adopted under the co-decision procedure between the European Parliament and the Council".
The co-decision procedure is nothing short of a veto over decisions of the Council of Ministers handed to the European Parliament, and the Government have agreed that veto in 23 new areas. It was right and appropriate, even at this late hour, that attention should be focused on those provisions in this set of amendments.
I indicated that I intend to return to some of the key points that have arisen during the debates, but at this point in the Committee stage tonight, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 23B to 23K not moved.]
House resumed.
House adjourned at two minutes before midnight.

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