Sitting of 28 April 1998

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

    Health Authority Allocations
    Mrs. Louise Ellman: When he will announce the additional individual health authority allocations as outlined in the Budget. [38671]
    The Secretary of State for Health (Mr. Frank Dobson): I have announced today each health authority's share of the first £288 million of the extra funds that we have provided to reduce hospital waiting lists this year. Liverpool will get an extra £3,193,000. There is more to come.
    Mrs. Ellman: I very much welcome my right hon. Friend's statement about additional funding for Liverpool. Will he confirm that that is in addition to the £11.4 million extra already announced for Liverpool health authority? What steps does he intend to take to ensure that the money provided by the Government is used for the purpose for which it is intended—reducing waiting lists?
    Mr. Dobson: I can confirm my hon. and numerate Friend's arithmetic. I am taking steps to ensure that every penny that is earmarked for reducing waiting lists will be spent on that alone.
    Mrs. Virginia Bottomley: Every health authority will welcome any additional money, particularly as the Secretary of State has signally failed to use the Red Book figure as the basis for negotiation to deliver an adequate return for the health service. Why does he not support NHS research and development? Why has he reduced the percentage of NHS money going to research and
    development—reversing the Culyer commitment—when he is proclaiming the importance of evidence-based medicine?
    Mr. Dobson: The right hon. Lady will know from the figures that we have published today that my initiative, using the money provided by the Chancellor in the Budget, will give her health authority an extra
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    £3.4 million to reduce waiting lists in her constituency. Our principal target for the moment is to reduce waiting lists. The waiting lists that we inherited were too high.
    Mr. Owen Paterson: They are higher now.
    Mr. Dobson: They are higher still now, but they will come down. The reduction will be greater than any seen in the history of the national health service, because the money will be spent on what it is intended for.
    Mr. Bob Blizzard: I greatly welcome the additional £3.5 million being allocated to Suffolk health authority, from which my constituents will benefit. I also welcome the announcement that the money will be used to cut waiting lists. How does my right hon. Friend expect the health authority to distribute the money? Will it take into account the length of waiting lists in different parts of the area?
    Mr. Dobson: Provided that they reduce waiting lists, I want to leave matters as much as possible to the initiative of those responsible locally. Their targets will be spelled out to them and made public in due course.
    Mr. John Maples: Will the new allocation to Lambeth, Southwark and Lewisham health authority remedy the situation of an elderly diabetic and cardiac patient who has contacted me? Last September he was given an appointment to see a diabetes consultant in April. That appointment has been cancelled, and he has been given a new appointment for June. In January he was given an appointment with a cardiac consultant for June—a five-month wait. That has been cancelled and he has been given a new appointment for October. Why should he have any confidence in the Secretary of State's stewardship of the NHS?
    Mr. Dobson: If the hon. Gentleman wants to raise individual cases with me, I am prepared to take them up and pursue them. If he is asking what Lambeth, Southwark and Lewisham is getting of the new money allocated to reduce waiting lists, I can tell him that it is £5.6 million. I think that that is a substantial sum. If the hon. Gentleman is going for specific cases, I can tell him that his health authority, Warwickshire, will be getting £2.8 million from the new allocation.
    Dr. George Turner: I know that the more than £2.2 million allocated to my constituency will be particularly welcome. Given that my right hon. Friend has said that we will be told the targets, and given that he has, I believe, said that money that is being held back will in due course be distributed, will he say on what grounds extra funding will be provided? I would certainly like to get on to my health authority to ensure that it meets the targets.
    Mr. Dobson: The initial share is simply intended directly to increase the number of operations. Some of the remaining money—more than £100 million—will be held back so that it can be used to make improvements in primary care, mental health or community services that would indirectly lead to a reduction in waiting lists.

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    Various health authorities and trusts will be invited to say how much of that money they would like and how they intend to spend it.

    Homeopathy
    Mr. Desmond Swayne: If he will make a statement about the licensing of homoeopathic medicines. [38672]
    The Minister for Public Health (Ms Tessa Jowell): Homoeopathic medicines marketed in the United Kingdom must either have a registration certificate under the homoeopathic registration scheme or a marketing authorisation issued by the licensing authority.
    Mr. Swayne: What will the hon. Lady do to ensure that the licensing system does not become an enormous economy of scale which will be used by large drug companies to exclude smaller firms which currently serve the market very well?
    Ms Jowell: As the hon. Gentleman will be aware, the homeopathic medicine industry is regulated by European directive. There are some quite disturbing inconsistencies in the marketing requirements for products, depending on when they were licensed. Our concern is to ensure that no homeopathic product is marketed in such a way that unproven medicinal claims are inadvertently made about its effectiveness that would be misleading to the public.
    Mr. Alan Simpson: I am grateful for the Minister's supplementary answer. Does she accept that it is absurd that, if I buy arnica for my football bruising from a company that has the original product licence of right from the 1960s, the packaging tells me that the product is for bruising, whereas the packaging of arnica produced by a newer company cannot tell me that? Is it possible for the United Kingdom to seek a dispensation simply to allow companies to be able to offer the same information about homeopathic products?
    Ms Jowell: My hon. Friend makes an important point. The European directive provides for member states to take action in relation to efficacy of products. Only France has so far drawn up guidelines, but, given the growing public interest in homeopathic medicine and complementary medicine more generally, I shall certainly want to study the issue closely.

    Primary Care (Leicestershire)
    Mr. Andrew Robathan: If he will make a statement on primary care in Leicestershire. [38673]
    The Minister of State, Department of Health: In December, we published our White Paper "The New NHS", which sets out our proposals to develop a modern health service. In February, Leicestershire health authority issued a discussion document setting out the primary care locality arrangements in the county and suggested proposals for how those arrangements may evolve towards primary care groups.
    Mr. Robathan: The Minister must be aware that the Government are underfunding the NHS in
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    Leicestershire—as compared with other areas—this year by about 3 per cent., or £13.4 million. In primary care, that is leading to disputes among general practitioners over scarce resources. As a direct result of the capitation-based approach to resource allocation, GP services in south Leicestershire will deteriorate. What would the Minister say to my constituents in Countesthorpe and elsewhere, where hospital waiting lists are higher this year than they were last, and where GP services are worsening owing to his Government's policies?
    Mr. Milburn: Frankly, I am surprised that the hon. Gentleman has raised that issue. This morning, I inquired about the position with the health authority, and I can tell him that GPs in his area are set to gain from the changes, just as the health authority has gained today following my right hon. Friend's announcement of an extra £4.8 million to tackle waiting lists.
    Mr. Barry Sheerman: Is not Leicestershire—like so many other parts of the country—doing extremely well under the new Government? Is it not important that Leicestershire and other health authorities should use the 50th anniversary year of the NHS not only to look back to their achievements but to look forward to what a dynamic and innovative health service can do for the citizens of Leicestershire—and do it better than ever before?
    Mr. Milburn: My hon. Friend is absolutely right. We have a heaven-sent opportunity in this, the 50th anniversary year, to look to the future and to produce a modern and dependable health service which is properly resourced and engages all family doctors, community nurses and all staff in providing an excellent service day in, day out. That is a sentiment we ought to hear from Opposition as well as Labour Members.
    Mr. Edward Gamier: May I cautiously invite the Minister not to spend too much time or Government money on celebrating the anniversary of the NHS, but to make sure that there is sufficient provision within it to assist those who need it? As we are talking about Leicestershire, will he assure me that the new dispensation under his glorious Government will provide sufficient funds for physiotherapy services for my constituency? We are satisfied with our GP provision—we have a number of excellent practices—but, in Harborough, we are short of physiotherapists. Will the Minister assure me on that matter?
    Mr. Milburn: I am not sure whether the hon. and learned Gentleman has seen the light or not, but I will take his remark as a compliment. Physiotherapists, and therapists generally, provide an important service to the NHS. It is important to acknowledge that, in some parts of the country, there are problems in recruiting physiotherapists and occupational therapists. Unlike the previous Government. we will not sweep the problems under the carpet. We are doing what we can to tackle them—particularly by providing more training facilities and grants for those who want to take up that profession inside the NHS.

    Walk-in GP Clinics
    Mr. Paul Truswell: What plans he has to ensure the proper regulation of walk-in private GP clinics. [38674]
    The Minister for Public Health (Ms Tessa Jowell): General practitioners involved in private clinics are subject to scrutiny by the General Medical Council in the same way as all other doctors.
    Mr. Truswell: Did not the recent survey in Health Which? paint a particularly depressing picture of people paying between £36 and £250 to see a GP who did not know them from Adam; who had no access to their medical records; who was not trained to the exacting standards of the NHS; who was not subject to a proper complaints procedure; and who was not registered with the local health authority? Quite apart from those concerns, is this not one more chilling indictment of the previous Government's mentality, which gave rise to this form of taxi-rank medicine?
    Ms Jowell: My hon. Friend is absolutely right. The account in Health Which? of prescribing by a number of independent walk-in health centres made disturbing reading. It is not in patients' interests—which are the single most important thing—to go to a GP who does not know them, or their medical history, or what they are being prescribed. That is why our efforts are going into building a modern and dependable health service which is led by quality, combining technical excellence with the responsive and flexible meeting of patients' needs. In pursuit of that, my hon. Friend will join me today in welcoming the allocation of £4.2 million to drive down waiting lists for his constituents, honouring a promise made by the Government at the time of the election a year ago.
    Mrs. Marion Roe: Will private GPs be able to make secondary recommendations? What is the Minister's view of the relationship between private GPs and the NHS?
    Ms Jowell: With great respect, I think that I have made the situation absolutely clear. Our concern is with the interests of patients. It is not in their interests to shop around and to go to several different GPs. They will receive the best care by going to a GP who knows them and whose services and care are supported by state-of-the-art medicine, delivering health care to patients where they need it.
    Dr. Peter Brand: I am very disappointed that the Minister is ducking the question. Does she not agree that our experience with slimming clinics, some cosmetic surgery clinics, and now private walk-in clinics, is such that we need a regulatory mechanism that is more beefed up than that existing at present?
    Ms Jowell: We do Keep any such development under close review, but the medical conduct of GPs who operate in those or other private clinic is a matter for the General Medical Council.

    Specialist Services
    Ms Sally Keeble: When he intends to issue consultation proposals to the NHS on commissioning specialist services. [38675]
    The Parliamentary Under-Secretary of State for Health: The consultation proposals on commissioning specialist services were published on 8 April and issued to the national health service and to relevant professional and voluntary organisations. Copies are available in the Library. The document may also be viewed on the internet, on the NHS web page. Responses are requested by 1 June.
    Ms Keeble: I welcome the statement. I am sure that the consultation can lead to substantial improvements in the quality of life in care for people with difficult conditions. Will the consultation also cover services that are needed by people with multiple sclerosis and motor neurone disease, who have very complex care needs, ranging from community to specialist, over a period? In my constituency, those needs are extremely well met at Favell house, which provides that seamless care from community to specialist medical treatment.
    Mr. Boateng: The consultation is designed to cover precisely that sort of complex condition. MS is one of those conditions that is well served by the voluntary and charitable sector, which will no doubt respond to the consultation. We look forward to hearing what it has to say.
    Mr. Owen Paterson: Royal Shrewsbury hospital provides world-renowned specialist services. There is a proposal for its amalgamation with the nearby Princess Royal hospital in Telford. Will the Minister guarantee that he will consult locally to ensure that those specialist services stay in Shrewsbury?
    Mr. Boateng: The hon. Gentleman has been in the House long enough to know that consultation is very much a part of any proposal. Consultation will no doubt take place in the usual way, and, if it comes to Ministers, he will have an opportunity to make his views known.
    Rev. Martin Smyth: Bearing in mind the fact that there is growing emphasis on devolution throughout the nation and that, at the same time, more specialist skills are needed for technical work in the health service, will the Minister give an undertaking that specialist services that serve the whole nation will be available?
    Mr. Boateng: We work closely with colleagues in the Northern Ireland Office, and the hon. Gentleman can be sure that what we propose in this instance will apply throughout the nation. Of course that will include Northern Ireland.

    New Deal
    Mr. Jonathan Shaw: What proposals he has for extending the new deal to the NHS. [38676]
    The Minister of State, Department of Health: I wrote to health authority and NHS trust chairmen on 11 March, in a joint letter with my right hon. Friend the Minister for Employment, Welfare to Work and Disability Rights, about the benefits of the new deal, encouraging them to support the Government's welfare-to-work programmes. The NHS executive will shortly issue further guidance to NHS employers.
    Mr. Shaw: Given that the NHS is the largest employer in the UK, is it not sensible that it plays a part in the Government's new deal initiative? Furthermore, does my hon. Friend agree that the new deal provides a golden opportunity, given the concern about the shortage of nurses, for NHS trusts to attract back nurses who perhaps have been prevented by family commitments from going back to work in hospitals?
    Mr. Milburn: My hon. Friend is absolutely right. The NHS is in a position both to contribute to and to gain from the new deal. I am pleased to tell him that, when I visited Newcastle yesterday, I learned that the NHS in Tyne and Wear is already considering making available 100 health care jobs through the new deal. I expect that to be followed in other areas.

    National Survey
    Mr. Derek Twigg: When the first national survey of patients and user experience will be carried out in the NHS. [38677]
    Mr. Dennis Turner: When the first national survey of patients and user experience will be carried out in the NHS. [38685]
    The Secretary of State for Health: The first national survey of the experience of NHS patients, users and carers will be carried out later this year.
    Mr. Twigg: Is not the best way of getting patients and staff more involved in an organisation to give them a voice in it? Is it not especially important, given the massive injection of resources that the Government have put into the health service recently, to give people that say and ensure that the money is spent correctly? North Cheshire has already been allocated £6 million for 1998–99, with an extra £1.9 million to reduce waiting lists, which was described by the chief executive of North Cheshire health authority as
    "a huge sum of money".
    Mr. Dobson: I certainly welcome any such statements. We certainly need to listen to the people who work in the national health service, which is why I made it my business recently to write to every single person working in the service to ask for comments on the service generally and on local matters.
    We are also determined to carry out straightforward surveys of the experience of patients, users and carers; that has never been done before, and it will be the first example of a Government listening to what the people who use the service have to say. Up to now, any assessment has depended on odd random surveys or
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    anecdotal evidence; some of that may be perfectly valid, but we want to find out systematically what people think about the services that they are getting.
    Mr. Turner: Is this not an excellent and fitting way in which to celebrate the 50th anniversary of our national health service, created by a Labour Government? Will not a new, dependable, modernised health service be created by this new Labour Government to take us into the next 50 years?
    Mr. Dobson: I endorse everything that my hon. Friend has said. It is always worth repeating for the record that the Tory party voted against the establishment of the national health service. People need reminding of that from time to time.
    A genuine survey of patient opinion will confirm what polls conducted by the commercial pollsters show: if asked what they think about the national health service generally, people say that it is pretty good; but if asked about the service that they and their family got, they think that it is brilliant. It is necessary to emphasise the extent to which people who use the national health service are satisfied with the treatment that they receive.
    Mr. Simon Hughes: After the rough ride that the Secretary of State got at the Royal College of Nursing congress last week—
    Mr. Milburn: Were you there?
    Mr. Hughes: No, but I was there the next day.
    Does the Secretary of State agree that we do not need a national survey of user and patient experience to confirm that, a year on from Labour's general election victory, community hospitals are closing or threatened with closure; a quarter of trusts and authorities project deficits; there are more than 10,000 vacancies in the NHS; and waiting lists are up 100,000 instead of down 100,000? Is the right hon. Gentleman telling us that that is saving the NHS? Is not the truth that, a year on, the NHS is far from safe in the Labour Government's hands?
    Mr. Dobson: All I can say in response to the hon. Gentleman's usual whingeing, moaning contribution is that the figures announced today show that the health authorities serving seats represented by Liberal Democrat Members are getting an extra £73 million to help to deal with waiting lists. People—I refer not to constituents but to the whingeing, moaning Liberal Members of Parliament who purport to represent them—should show some gratitude.
    Dr. Julian Lewis: Will the survey of user experience include women raped on mixed wards in acute psychiatric units? Will the Minister explain why new units with mixed wards are still being built in London, despite the opposition of a range of mental health charities? Is it not disgraceful that last Friday the Government again blocked the Mental Health (Amendment) (No. 2) Bill, which would prevent users unfortunate enough to go into an acute psychiatric unit from having such horrifying experiences?
    Mr. Dobson: It is news to me if new mixed wards are being opened. If they are, I will put a stop to it.
    Audrey Wise: I welcome my right hon. Friend's last remarks, and the national survey. Does he

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    none the less agree that, although such national surveys are extremely useful and welcome, they cannot replace certain pilot schemes that enable deeper evaluation to be made of some treatments? Does he accept that a number of such schemes have been conducted in maternity services? Will he make sure that, having received good evaluation, including favourable responses from users, health authorities and trusts will listen to the results of those evaluations?
    Mr. Dobson: What we propose is intended to supplement the current evaluations and pilot schemes. The object of the exercise—pilot schemes and evaluations as well as the national survey of opinion—is simply to identify the things that are right and ought to be encouraged and the things that are wrong and should be discouraged, and in that way to improve the performance of the health service. That is what everyone in the country wants, and all the 1 million people working in the health service want.

    GP Prescription Budgets
    Miss Anne McIntosh: If he will make a statement on the financial provision for GP prescription budgets. [38678]
    The Minister of State, Department of Health: Nearly £4.4 billion has been allocated to health authorities in England to cover the cost of drugs and medicines prescribed by general practitioners this year.
    Miss McIntosh: Does the Minister agree with some practitioners that setting cash limits on prescription budgets will detract from their freedom to act in the best interests of their patients and in accordance with their best clinical judgment? Does he agree that it could lead to a loss of morale, especially in the GP profession; might harm recruitment; and might prevent the best relations between doctor and patient from being established? Does he accept that it should be for the GPs to prescribe what is best for their patients?
    Mr. Milburn: The answers to the hon. Lady's questions are no, no, and yes. Yes, of course it is for the family doctor to decide what is in the best interests of the individual patient, but I did not hear any howls of protest from Conservative Members when the previous Government cash-limited drug spending for 50 per cent. of GPs by introducing the GP fundholding scheme. There were no protests then, so why the protests now?
    Mr. Barry Jones: Has my hon. Friend guaranteed the clinical judgment of general practitioners?
    Mr. Milburn: Yes. As my hon. Friend is aware, we have put family doctors and community nurses in the driving seat. We have removed the artificial barriers between prescribing budgets and referral budgets which, in the past, have got in the way of allowing the family doctor to make the right decision for the patient. We have done no more and no less than increase GP freedom.
    Mr. John Maples: It was good to hear the Secretary of State say that survey after survey
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    showed how happy people were with the NHS. He was clearly referring to the British social attitudes survey. There has not been one since the election, so presumably he was referring to people's happiness with the health service when it was being run by us.
    I should like to bring the Minister back to the question of GPs' budgets. Under fundholding there was a trade-off for fundholders between prescribing and referrals to secondary care. GPs were limited in a much wider budget and in a great many cases they overran it and the money was made available to them by their health authorities. Under the new primary care groups, that will not be the case, will it? Suddenly, the vast majority of GPs believe that there will be a separate cash-limited prescribing budget within the group's overall budget. That is one of the reasons why so many of them are showing, in survey after survey, their misgivings about the new proposals.
    Mr. Milburn: On his first point, I remind the hon. Gentleman of what he said in Birmingham recently about the previous Government's record on the national health service. He said that they had failed and that the British people had given their judgment on that. Let us be clear about the facts.
    Secondly, the hon. Gentleman referred to GPs' prescribing budgets. I say to him, to the House and to GPs throughout the country that no GP will run out of cash, that patients will be guaranteed the drugs and the treatment that they need, and that, if a primary care group overspends, the overspend will be catered for within the health authority's general allocation.
    Miss Melanie Johnson: Can my hon. Friend confirm the excellent comments made by my right hon. Friend the Secretary of State for Health at an Association of the British Pharmaceutical Industry event last Thursday evening? He made a well-received speech, in which he rightly said that we would ensure that money spent on pharmaceuticals and on drugs was used most effectively. His concern was not about budgets, but about effective treatment for patients.
    Mr. Milburn: My hon. Friend is absolutely right. The new system that we shall introduce will allow the individual family doctor to decide what is best for the individual patient, without there being any artificial barriers in the way. That may mean that there will be an increase in drugs spending in some GP practices; elsewhere, it may mean an increase in referral patterns to hospital. The key fact is that, in future, decisions will be taken in the best interest of the patient.

    Dentistry (South-West)
    Mr. David Heath: How many applications from the south-west of England have been approved under the investing in dentistry initiative. [38681]
    The Minister of State, Department of Health: Since the investing in dentistry initiative was announced last September, my right hon. Friend the Secretary of State has approved 46 funding requests from the area covered by the south and west regional office of the national health service executive.
    Mr. Heath: I thank the Minister for that reply and warmly welcome the initiative, if it provides wider access

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    to NHS dentistry. Will he continually audit the evenness of the spread of availability across the country, and ring-fence any moneys that are unspent from the allocation, and ensure that they are available for dentistry? Will he also ensure that my constituents, some of whom have rung me in desperation about finding a dentist within reasonable travelling distance who will provide NHS treatment, are satisfied that there is such provision in their area?
    Mr. Milburn: We have received two investing in dentistry applications from the hon. Gentleman's constituency. Both have been approved. We have allocated an extra £50,000 as a consequence, and an extra 4,000 patients in his area will have access to NHS dental care as a result. We want the NHS dental service to be available across the country as part and parcel of a modern and dependable health service, not an add-on or an afterthought. That is why we are tackling access problems through investing in dentistry and through other initiatives. They are working well to date, and we shall continue to monitor to ensure that they work well in the future.
    Mr. Peter L. Pike: Is it not a fact that, in the south-west and in the north-west, the Tory party—
    Madam Speaker: Order. We are not concerned about the north-west. I was waiting for someone to widen the question, which is about applications from the south-west of England.
    Mr. Pike: Is not it a fact that people in the south-west cannot get NHS dental treatment, and cannot move anywhere else in the country to get it, because the Tory party destroyed the dental service in the south-west and throughout the country?
    Mr. Milburn: Throughout the south-west and in other parts of the country, we are taking action to tackle the availability problems that are a legacy of the previous Government's rundown of NHS dentistry. Through investing in dentistry, we are making NHS dental services available to an extra 250,000 people across the country who otherwise would not have access to them. That is a good start, but we want it to continue.

    Waiting Lists
    Dr. Vincent Cable: When he expects waiting lists will be reduced by 100,000 from the 1 May 1997 levels. [38682]
    The Secretary of State for Health: As I made clear on 18 March, we are committed to reducing waiting lists to 100,000 below the record levels we inherited by the end of this Parliament.
    Dr. Cable: I thank the Secretary of State for his reply. Can he give an assurance that, following the welcome additional money now being used to reduce waiting lists, there will be no further cases of the sort reported to us as constituency Members of Parliament, wherein clinicians have been leaned on by administrators to distort their medical priorities in order to treat politically more embarrassing 18-month waiting list cases?
    Mr. Dobson: I would not have thought that any clinician worth his or her salt would allow themselves to
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    be leaned on. If they allowed their judgment to be clouded in that way, that was their fault and they must answer to their conscience, their profession and their patients.
    Mr. Andrew Mackinlay: As part of the strategy to bring down hospital waiting lists, will the Secretary of State consider approaching the South Essex health authority and Basildon and Thurrock General Hospitals NHS trust to find out whether the spare capacity in wards at Orsett hospital can be used not only for my own area of Basildon and Thurrock, but for the wider regional need to reduce hospital waiting lists?
    Mr. Dobson: I do not pretend to be an expert on every hospital in the country, and I am sure that those in charge in that area, having had it made clear to them by me that they are to get their waiting lists down, will take every sensible step to get them down. In this case, they will be assisted by the £3.8 million that is going into my hon. Friend's area, which takes the total extra money that we have put in to £18.5 million over and above what the Tories intended.
    Mr. Patrick Nicholls: Does the right hon. Gentleman recall that, in its document "Labour's Early Pledges" and, indeed, in the general election manifesto, the Labour party promised immediate action to reduce waiting lists by 100,000? Is it not a fact that, 12 months on, waiting lists have actually increased by 100,000? Although no one doubts the sincerity of the right hon. Gentleman's commitment to the national health service, is not the truth of the matter that, in the general election campaign, the Labour party made promises about waiting lists that it knew it could not possibly keep, because it did not want political honesty to get in the way of a successful electoral outcome?
    Would not the people of this country be better served if, instead of casual ad hoc sums being offered up as a fig leaf to spare the Secretary of State's embarrassment, the right hon. Gentleman came to the House today and pledged that the Government would ensure that their annual increases were at least as great as those of the previous Conservative Government? That would be an announcement worth hearing.
    Mr. Dobson: Talking about casual promises, we could reasonably interpret the hon. Gentleman's remarks as a rejection by their elected representative of the £6 million extra that is going to the two health authorities serving his constituents. The casual ad hoc sums to which he refers are apparently of no consequence to the hon. Gentleman, but I am sure that many of my hon. Friends would welcome them being spent in their area. We are serious about getting waiting lists down. The people of this country are sick to death of waiting lists, year in, year out. It is not the fault of the people working in the health service, but the fault of successive Governments. We have to bring waiting lists down and we are going to bring them down.
    Mr. Dennis Skinner: Instead of wasting too much time listening to hypocritical claptrap from the Tories—they had their chance and they blew it—will my right hon. Friend bear in mind that he probably has the biggest nut to crack in getting down waiting lists, and that £500 million was set aside for contingencies in the Budget

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    a few weeks ago? Will he consistently remind the Chancellor of the Exchequer that we need to keep the promise to get waiting lists down, and that it will need a lot of money? A lot rests on it, so let us make sure that we get our hands on all the cash available to do it.
    Mr. Dobson: My hon. Friend knows that both he and I set a great deal of store by propriety. He knows that I have discussions with the Chancellor and the Prime Minister, and that it would be wrong for me to disclose their contents, but we have been successful in obtaining an extra £500 million to be spent on reducing waiting lists this year, and I expect that sufficient sums will be forthcoming to reduce them by 100,000 or more before the end of this Parliament.
    I remind those Conservative Members who seem to think that their stewardship of the national health service was popular of the statement made by the hon. Member for Stratford-on-Avon (Mr. Maples), now the principal Tory spokesman on the health service, who, as recently as 22 September 1997, said:
    "We had a very clear policy on the health service up until May 1. It was rejected by the electorate."

    Primary Care Groups
    Mr. Andrew Lansley: When he next expects to meet the Royal College of General Practitioners to discuss the structure of primary care groups; and if he will make a statement. [38684]
    The Minister of State, Department of Health: We have regular meetings with general practitioners and other primary health care representative bodies, including the Royal College of General Practitioners. The development of primary care groups is just one among a number of issues that we have discussed. These professional bodies are supportive of the Government's plans to develop a modern and dependable national health service.
    Mr. Lansley: Will the Minister confirm that it has emerged from meetings with those professional representative bodies that the problems of recruitment and retention of general practitioners are severe and growing? To meet those needs, will he therefore extend to general practitioners the commitment that the Secretary of State gave to the nursing profession—that the Government do not propose to stage future pay awards?
    Mr. Milburn: As the hon. Gentleman is aware, there are problems with the recruitment and retention of GPs in some parts of the country. As he is also aware, the Doctors and Dentists Review Body recommended to the Government—and we have accepted the recommendation—that an extra £60 million be found to tackle some of those problems in the course of the next year or so. We shall discuss those recommendations with the professional organisations, including the British Medical Association, and no doubt target those resources to tackle the hard core of recruitment and retention problems that are encountered in some parts of the country.
    Mr. Kevin Barron: When the Minister consults the Royal College of General Practitioners,
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    will he remind its members that the formation of primary health care groups that include people who work in and for the national service and those who are contracted to it will not only improve health care, but prevent ill health? Everyone who is concerned about ill health in this country should join in welcoming that.
    Mr. Milburn: My hon. Friend is absolutely right. Throughout the country, family doctors and community nurses are enthusiastically embracing the idea of primary care groups, for two good reasons. First, it puts them in the driving seat in shaping hospital services and other local health services, and gives them far more leverage, influence and power than they have ever had. Secondly, the primary care groups go with the grain of the more recent developments in the NHS, where family doctors are coming together and overcoming the divisions of the past—especially the sole legacy of the previous Government to the national health service. The previous Government left the GP community split down the middle between fundholders and non-fundholders, but that is being brought to an end, because we want those in the NHS, including those in primary care, to work together as one.

    NHS Accountability
    Mr. Bob Russell: What plans he has to increase public accountability in the NHS. [38686]
    The Secretary of State for Health: Since we took over, we have opened trust board meetings to the public, and removed the gagging clauses on staff. We have appointed people more representative of the communities that they serve. For example, more than half the appointments are of women, and we have doubled the proportion of black and Asian representatives.
    Mr. Russell: Does the Minister agree that a strong body of opinion in the Labour party would like some democracy to be introduced to the people's national health service? May I suggest that we should do away with quangos? I invite the Minister to consider the three trusts in my constituency, plus the area health authority, in which all four chairmen are Conservatives, two of whom have been rejected by the electorate. Is it not the case that the present Government are just providing retirement jobs for defeated Conservatives?
    Mr. Dobson: On the hon. Gentleman's last point, I do not think that that has been the main burden of the Conservative attack on the people whom I have appointed. I thought the point was—I may have missed it slightly, but I do not think so—that I was heaving out too many Tory deadheads. However, I may be wrong. The hon. Gentleman appears to think that he is an expert on the internal affairs of the Labour party.
    Mr. Dennis Skinner: He is a retread.
    Mr. Dobson: I understand that the hon. Gentleman was once a member of the Labour party, and he remains an expert on it. However, I assure him that there is no substantial body of opinion within the Labour party seeking a wholesale change to the national health service. Labour Members want to see that service working.

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    When it comes to elected representatives, I do not think that there is a council in this country comprising 50 per cent. women members or 9 per cent. black and Asian members. Those percentages certainly apply to my appointments to the national health service.
    Mr. Paul Flynn: What can members of the public do when they suspect that their relatives are being over-prescribed neuroleptic drugs in residential homes? There is a wealth of evidence to suggest that anti-psychotic drugs are being administered to make the homes easier to run rather than to benefit the patients. Will the Secretary of State aim to reduce costs and damage to patients in the health service by avoiding the over-prescription of not only neuroleptic drugs, but antibiotics?
    Mr. Dobson: We must aim to ensure that the right people are prescribed the right drugs in the right amounts at the right times so that there is no over or under-prescribing, or people getting no prescriptions at all. That is our target. As to people in one institution or another being treated badly, the fact that we have opened trust board meetings to the public and removed the gagging clauses on staff should provide substantial new protections.
    Mr. John Wilkinson: Does the Secretary of State believe that he increased public accountability by announcing yesterday to a private NHS meeting his plans to create a single health authority for London, which will take over the role of the North Thames and South Thames NHS executives? How did that increase public accountability? Should not the Secretary of State have done us the courtesy of making that announcement to the House of Commons? Ought he not to have borne in mind the implications that the announcement would have for NHS trust hospitals, such as Mount Vernon in my constituency, which straddles the Greater London boundary? Furthermore, what is the future of the home county areas that are currently administered by those two executives?
    Mr. Dobson: If my announcement yesterday to a private meeting was a secret, it was one of the worst-kept secrets in the national health service. Sir Leslie Turnberg proposed a London-wide health region in his review, which we published. It was endorsed in the Government's written response to that review, which we also published and which I introduced with a statement in the House. I went no further than saying that we should get on with it a bit more quickly than we intended originally.
    There will obviously be certain problems with the boundaries, and we shall look at them carefully. From the point of view of the health care of Londoners, having a London-wide health region that will take London-wide strategic decisions is better than having two bodies that serve the south and the north of the Thames—and which are notoriously very bad at liaising with each other—taking those decisions.
    Mr. Ken Purchase: Does the Secretary of State accept that accountability goes further than appointing people to positions in the NHS? It includes NHS systems that people understand readily. Will the Secretary of State encourage health authorities
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    and trusts to adopt the standards of the King's Fund and the equivalent of International Standard Organisation 9000—which, incidentally, the authority in my constituency has just been awarded? Will the Secretary of State take on board my comments, and congratulate my authority on taking that action?
    Mr. Dobson: I am happy to congratulate the Wolverhampton authority. Like many others in the west midlands, it is innovatory and dedicated to looking after local people better. The previous Government changed the arrangements in the NHS for consultation and for complaints. For good or ill, those procedures should stay in place for a while for us to see how well they work, rather than our deciding to rip them up without examining the evidence. We want far more genuine consultation in future.
    Of all the changes that we are making to the NHS, the most far-reaching is perhaps the proposal that each health authority should in future be required to draw up a health improvement programme for its area, identifying what is wrong and presenting proposals to put it right, and that that should be done in consultation with local authorities, voluntary organisations, staff, professional bodies and local businesses. When all have signed up to it, they should buckle down and put those programmes into action.
    Mr. Julian Brazier: In light of the fact that community health councils are publicly accountable in a way that district health authorities are not, will the Secretary of State take particular note of the views of Canterbury and Thanet community health council if, as appears likely, it refers to him East Kent health authority's dreadful proposals to close the Kent and Canterbury hospital? Following his answer to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), will the Secretary of State confirm that there is no danger of East Kent suddenly moving regions, in the middle of an already fraught consultation?
    Mr. Dobson: East Kent is fairly likely to stay where it is. I know about the history of the Goodwin lands becoming the Goodwin sands, but Kent is probably fairly safe for the immediate future.
    If the community health council objects to the proposals affecting the hon. Gentleman's constituency, that decision will come to me, as he well knows. It will be my responsibility to decide what happens. The hon. Gentleman is not a churlish Member, generally speaking, so I would have hoped that he would welcome the £3.6 million extra that we provided for his area to reduce the waiting lists, whatever the hospitals.

    NHS Staff (Consultation)
    Mr. Vernon Coaker: What action he proposes to improve consultation with staff within the NHS. [38687]
    The Parliamentary Under-Secretary of State for Health: We have made clear our commitment to involve national health service staff in decisions about how the NHS is run. We have set up a task force to identify and explore new approaches to staff involvement, and my right hon. Friend the Secretary of

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    State has written to every individual working in the NHS, seeking his or hser views on examples of what has or has not been shown to work in practice.
    Mr. Coaker: Does my hon. Friend agree that consultation with staff in the NHS is vital if we are to rebuild the NHS and get the NHS that we want? With reference to the task force that the Government have set up to consult staff, is it not significant that it includes not only senior managers and doctors, but porters, so that the forgotten army of the NHS is represented and can express an opinion on the future development of the NHS?
    Mr. Boateng: We have made clear our intention that the 13-strong panel that has been set up as the task force should include porters, nurses, doctors, managers, a national union officer and representatives from outside the industry, all of whom are making a valuable contribution to the work of the task force. It is a matter of recognising the skills that exist in the NHS and using them.
    Mr. Edward Leigh: When the Minister next consults NHS staff, what estimate will he give of the size of waiting lists this time next year?
    Mr. Boateng: We need no lessons from Conservative Members about consulting NHS staff. As they know, we see NHS staff as our greatest asset—one that they wasted when they had the opportunity to use it.
    Ms Diane Abbott: Will the Minister ensure that in consulting NHS staff, some attention is paid to finding out their views and opinions on issues affecting black and ethnic minorities? After the second world war, women of Afro-Caribbean descent played an important role in building up the NHS. In my view, their contribution has never been sufficiently recognised.
    Mr. Boateng: My hon. Friend has shown considerable commitment to ensuring that the contribution of Afro-Caribbean and Asian men and women to the NHS is recognised, and we shall celebrate it in the course of this 50th anniversary year. I was pleased to have the opportunity of visiting, with my hon. Friend, a hospital in her constituency, showing that the Government consult all
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    staff and recognise the manifold contribution of all those who, over the years, have built the NHS into something we should be proud of and something that Labour Members are determined to protect.

    NHS Bureaucracy
    15. Mr. John Bercow: If he will make a statement on his plans for releasing £s1 billion from NHS bureaucracy; and when he expects this target to be met. [38688]
    The Minister of State, Department of Health: The Government have already taken action to reduce bureaucracy in the national health service. By the end of this year, £240 million that would otherwise have been spent on bureaucracy will be released for patient care. Building on that, the White Paper "The New NHS" sets out a programme of action to release £1 billion from bureaucracy by the end of this Parliament.
    Mr. Bercow: I am grateful to the Minister for that reply. How does he square his rhetoric about cutting bureaucracy in the health service with the intention in the White Paper to create a national institute of clinical excellence, a commission for health improvement, a primary care group, an advisory committee on resource allocation and a capital prioritisation advisory group? What is his estimate of the likely annual cost to the national health service of the flotilla of pen pushers that he proposes to create?
    Mr. Milburn: I know that the hon. Gentleman has a reputation as a zealot for all things Conservative, but I would have thought that even he would have drawn the line at protecting and defending bureaucracy at the expense of patients. We want to establish a national institute for clinical excellence and a commission for health improvement to improve the quality of services to patients. I hoped that that would command support not only from Labour Members, but across the House. I can tell the hon. Gentleman that we intend to release £1 billion by cutting the number of commissioning bodies from around 4,000 to as few as 500, and by ending extra-contractual referrals, the annual contracting round and the absurd system of individual invoicing introduced by the Conservative Government.

Points of Order
3.32 pm
Mr. Andrew Robathan: On a point of order, Madam Speaker. I know that the Minister of State, the hon. Member for Darlington (Mr. Milburn), would not wish to be misunderstood or in any way to mislead the House. I respect that, but he said in response to my question that general practitioners in my area were happy with the settlement that they had received. I should like to assure him and you, Madam Speaker, that they are very unhappy.
Madam Speaker: That is not a point of order, but an abuse of a point of order. The hon. Gentleman should not be making that point to me as Speaker. I have no control over such matters.
Ann Clwyd: On a point of order, Madam Speaker. You will be as disturbed as the rest of us by the pictures on television of dead and dying children in the Sudan. Because of the considerable concern of our constituents, may we expect a ministerial statement on the matter in the next few days so that we can find out in detail what action the United Kingdom Government are taking to alleviate those terrible problems?
Madam Speaker: I have not been informed that the Government are seeking to make a statement. I have noticed what appears on television, and the hon. Lady has made her point. I believe that I am right in saying that tomorrow we have questions to the Department for International Development. I have not yet looked at the questions, but they may provide some opportunity for Ministers to be questioned on the matter.
Mr. Nick Gibb: On a point of order, Madam Speaker. During yesterday's debate on amendment No. 2 to clause 30 of the Finance (No. 2) Bill, I was informed—
Madam Speaker: Order. I am sorry, but the situation arose in Committee when I was not in the Chair; therefore, it was not my responsibility. If the hon. Gentleman approaches the Chair when the House is in Committee, he may be able to seek some help.

Town and Country Planning (Amendment)
3.34 pm
Mr. Elfyn Llwyd: I beg to move,
That leave be given to bring in a Bill to amend the law with respect to town and country planning.
It is vital that planning legislation is reviewed periodically to reflect the various changes in society, which may be socio-economic, cultural or demographic in nature. Some aspects of the law relating to town and country planning are in dire and urgent need of reform, and that is why I seek leave to present the Bill.
One aspect which needs to be addressed is the situation whereby planning permissions granted 25 or 30 years ago remain valid despite nothing but the merest effort to develop being made by the holder of the planning permission. Under the Town and Country Planning Act 1990, a development must usually be begun within five years of the granting of permission or within two years of the final approval of any reserved matter.
The moot point, and that which concerns me, is when a development is said to have begun. Sweet and Maxwell's "Encyclopaedia of Planning" refers to that and says that a developer can comply by doing
"any work of construction in the course of erection of a building"—
that is a wide latitude—or even
"any operation in the course of laying out or constructing a road or part of a road, for example, marking out the line … with pegs."
Therefore, a developer can simply mark out the line of an estate road, which may or may not be developed in the future, with a few wooden pegs, and that constitutes development within the Act, keeping the planning permission extant.
Planning authorities are not using existing powers to place time limits on developments; that causes considerable damage to many communities and brings the system into disrepute. Take, for example, the village of Aberdyfi in my constituency, an old, small seaside village steeped in maritime history.
In the late 1960s, a developer was granted planning permission for more than 200 houses on Copper hill above the village. There was no local need for them then and there is no local need for them now. The fact that those permissions have been in existence for more than 30 years without a single plot having been built on persuades me that there never was a local need for them. The developer is in effect treating them as his pension policy bonanza, and the mere fact of a peg having been hammered into the ground here and there keeps his speculative investment alive.
Quite apart from the fact that many people question whether such speculation is consistent with land policy and forward planning, some fundamental and far-reaching problems are being visited on Aberdyfi and, I am sure, many other constituencies.
When those plots are developed, they will kill off Aberdyfi as a village, a village that we all know and love. Its charm and immense character will dissipate overnight. Such a situation is a block to the sensitive and sustainable development that planning law and procedure should nurture. I say that because, in my experience, whenever

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an application by a small-scale developer in south Meirionnydd is turned down, one of the reasons which always crops up is that there are already X number of planning permissions for building plots in the locality. The vast bulk of those would, of course, be the permissions on Copper Hill street in Aberdyfi. That is a classic catch-22 situation. We have heard a lot of Joseph Heller recently, and this exemplifies that. One can argue that such a development not only is harmful per se, but is hampering the proper and sensitive development of an area.
Furthermore, it is settled law that a planning permission, once commenced, cannot be abandoned by a non-user. My Bill seeks to deal with that matter. There would, as at present, be an initial five-year term in which to undertake a development, but if the developer has done nothing, or has simply complied with section 56 of the 1990 Act, they would have to reapply after five years to the planning authority, which will examine the application on its merits, question the delay in fully developing, and then issue a fresh permission strictly limited in time. If the development is not fully completed within that time scale, the permission should expire. That would ensure that there is better control of local authority planning policy and it should prevent a recurrence of the Aberdyfi example.
I further pray in aid a speech reported in Hansard on 4 April 1968, when the then Minister of State said:
"there is no bar to renewal of the permission. I accept that cases will arise when, for perfectly good reasons outside his control, the owner will not have been able to start his development within the expected time. It may be due to a falling off of demand in the area … it may be due to difficulties over capital, although if that is so, it does not necessarily follow that he should get an extension, for it may be that he ought to convey the land to somebody who is able to develop it—if it is land which ought, according to proper planning needs, to be brought forward earlier for development"— [Official Report, Standing Committee G, 4 April 1968; c. 956.]
That could almost be part of today's script. Unfortunately, that declaration of intent was not followed in practice.
The Campaign for the Protection of Rural Wales fully supports the Bill. The second main change which I seek would assist many communities throughout Wales, Scotland, Ireland and England, which are in difficulty because villages are dying. They have lost local amenities and basic services such as the local school, the post office, the village shop and the garage. That problem was recognised by the House recently when we legislated to allow rate relief for rural retailers. That is a welcome move, but further steps must be taken.
A factor which undoubtedly exacerbates the problems is the preponderance of second homes and holiday dwellings. They are socially divisive and are empty for most of the year: hence they are of no benefit to the community. They do not assist the viability of village retailers, because their occupants are there for only a few weeks or months of the year.
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Such properties also bring certain social problems: the usual scenario is that they are purchased by those who can, by definition, afford a second home, which often means that they are earning many more times the average salary of those in the local community. They are able to pay the asking price without quibble, and locals are left in the wake wondering when, if ever, they will be able to enter the property market and buy a house in the community in which, often, they were born and brought up.
There are villages in Kent, Somerset, Cumbria and all over the UK where that problem is evident, but in Wales it has an added dimension because it directly dilutes the indigenous culture and language, which is a great source of concern to all who hold them dear.
My answer would be a register of second homes in every rural community, and a limit on such homes of 10 per cent. of the available housing stock. That would be possible through an amendment to the use classes order, so that, when a full-time residential property is intended to become a second or seasonal dwelling, it shall require planning permission.
As I recall, the problem and that solution were canvassed by the Select Committee on Welsh Affairs in its report on rural housing three and a half years ago. I repeat the call for that solution, which is a straightforward, honest and open approach. A prospective purchaser would know whether a community had reached 10 per cent. of its quota because he or she would obtain information from the local authority, and that would be that. Villages can thrive and sustain themselves only if part-occupancy is limited. It is tragic to see villages where only half a dozen local families live year round.
Finally, in true Welsh Methodist minister mode, I come to the third head of my sermon. I consider that a neighbour whose strong views are given to a planning authority should have a third-party right of appeal in the planning process where there is a prima facie case for that. The wheat can be separated from the chaff by making it necessary to have leave to apply in each case. I know that that works perfectly well in many other jurisdictions—for example, in Ireland. I hope that it can be introduced within the United Kingdom jurisdiction.
Those three matters have concerned me for some time and I have viewed them both as a lawyer in the field and as a Member of the House. I therefore commend the Bill to the House and trust that it will receive the support that it deserves.
Question put and agreed to.
Bill ordered to be brought in by Mr. Elfyn Llwyd, Mr. Dafydd Wigley, Mr. Ieuan Wyn Jones and Mr. Cynog Dafis.

Town and Country Planning (Amendment)
  TOWN AND COUNTRY PLANNING (AMENDMENT)
  Mr. Elfyn Llwyd accordingly presented a Bill to amend the law with respect to town and country planning: And the same was read the First time; and ordered to be read a Second time on Friday 3 July, and to be printed [Bill 180].
Orders of the Day

  Finance (No. 2) Bill
  (Clauses 1, 7, 10, 11, 25, 27, 30, 75, 119, and 147)
  Considered in Committee [Progress, 27 April].
  [MR. MICHAEL J. MARTIN in the Chair]

  Finance (No. 2) Bill
    Clause 1

      RATE OF DUTY ON BEER
      Question proposed, That the clause stand part of the Bill.
      3.44 pm
      Mr. Nick Gibb: On a point of order, Mr. Martin. During yesterday's debate on clause 30 and discussion on amendment No. 2, a Labour Member said that the statutory instruments relating to clause 30 were available and asked whether I had seen a copy. I had not, and I raised the matter as a point of order at the end of the debate on clause 30 because no copies of those statutory instruments had been deposited in the Library yesterday; nor were they available in the Vote Office.
      The Paymaster General responded later by saying:
      "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".
      The Paymaster General went on:
      "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."—[Official Report, 27 April 1998; Vol. 311, c. 109.]
      I was not able to collect the draft regulations after the Division, and I was not able to collect them this morning. I have just been to the Library and they are still not there, and they have not been deposited in the Vote Office.
      This is contempt not only of this Committee and the House, but of the wider public who are waiting to see the contents of the regulations before they are debated. The documents should have been available before yesterday's debate, and they are not even available now.
      The First Deputy Chairman of Ways and Means: That point of order relates not to the business before us, but to past business. However, the Minister will have heard the hon. Gentleman's remarks and will no doubt find ways to rectify the matter.
      The Financial Secretary to the Treasury (Dawn Primarolo): May I deal with the point of order first? The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) raised a point of order yesterday, and it was explained to the Committee that copies of the draft regulations were placed in Derby Gate, which is where they are, and in the House of Lords Library—they are there also. Four copies were deposited in the House of Commons Library at 3.30 pm on Friday.
      I cannot explain why all the copies went missing from the House of Commons Library, but they were deposited, and the Government are not treating the House with contempt. Extra copies have been placed in the Library. I apologise to the hon. Gentleman for the difficulties that
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      he is experiencing with the Library in respect of these draft regulations. I shall ensure that we find out exactly why this has happened, as the hon. Gentleman should be given an explanation.
      Draft regulations are slightly different in that they have no reference number and hon. Members must ask correctly for the specific item. However, the draft regulations are there for scrutiny. If the hon. Gentleman was so desperate, he could have gone to Derby Gate, as the documents are certainly there as well—[Interruption.]
      The First Deputy Chairman: Order. Hon. Members should not intervene. An explanation has been given, so we must now get on with the business before us.
      Dawn Primarolo: Clause 1 will increase the rate of duty on beer in line with inflation from 1 January 1999. The rate will increase from £11.14 to £11.50 per hectolitre per cent. of alcohol in the beer. The change does not represent a increase in real terms, but is needed to maintain revenue. Between January 1994 and January 1998, beer duty fell by 6 per cent. in real terms, and it is now at its lowest level in real terms for 15 years. The increase will prevent a further erosion of revenue in real terms.
      Several hon. Members are keen to speak in the debate. I shall listen carefully, and reply to any specific points.
      Mr. David Heathcoat-Amory: Today's debates will generally be about items that make life a little bit more enjoyable—not just beer, but tobacco and gambling. However, the Government seem to regard those items less as a source of pleasure than as a source of revenue. In a savagely tax-raising Budget and Finance Bill, the Chancellor could not resist raising almost all such indirect taxes by the maximum amount that he thought he could get away with.
      I must declare an interest in beer, as I am a member of the parliamentary beer club, which has a distinguished patron—Madam Speaker. Perhaps you, too, are a member, Mr. Martin? I am delighted that you are. It is the biggest, or best attended, of all parliamentary clubs, so there is a great deal of expertise about beer—and, perhaps, considerable alarm about the increase in duty. We accept that it is not a real-terms increase, but it will nevertheless be damaging, for reasons that I shall outline.
      The background to this nominal increase is a worsening of smuggling and excise fraud, persistent problems that I do not claim have arisen over the past year or two. The origins of smuggling lie far back in time, when, for various reasons, the United Kingdom had a structure of excise duties that were comparatively high against those of our continental neighbours, which relied on raising equivalent revenues by other means.
      Whatever the reason, there is a substantial gap between the rate of tax on beer, and most other alcoholic duties in this country, and the rates prevailing on the continent, particularly in France and Belgium. That encourages people to go over to those countries to do their shopping—quite legitimately. There is some entirely legitimate cross-border shopping, and an increasing problem of smuggling and excise fraud. The two are linked, but distinct, phenomena.

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      The previous Government moved to ameliorate the problem. The substance of our charge is that the present Government, through not just this year's but last year's Budget, are making it worse. That is why we have tabled amendments intended to delete the increase.
      The single European market creates, in effect, an open border. The legitimate trade, in Calais typically, but also in other continental shopping centres where people buy large quantities of drink—and tobacco, which we shall debate later—has created a huge retailing business in France. We are not just talking about retailing, however. Shoppers going abroad often buy drinks—beer, in this instance—that are not manufactured in this country. Those people are responding to a market signal. The Labour party, which now believes in market economics, cannot be terribly surprised when people respond to cheaper prices and lower duty rates on the continent. The United Kingdom beer tax is 32p in the pound whereas in France the equivalent rate is 5p, and that difference drives the huge and increasing habit of cross-border shopping.
      There are two solutions. We can restrict the amount that people can bring into this country, which is not possible under the rules of the single market, which we support, or we can reduce the high rate of duty. That cannot be done quickly or easily and it does not need to be done completely. No one suggests that duty rates should be standardised, but somehow the clear incentives must be tackled.
      Mr. Ross Cranston: If the amendment is carried, how will the revenue gap be filled? The real value of beer duty is lower than for 15 years, partly as a result of the single market.
      Mr. Heathcoat-Amory: In debates on the Finance Bill last year, the hon. Gentleman gained the reputation of making helpful interventions, and that one is no exception. I shall explain exactly why the Government can afford not to increase duty this year, contrary to the situation that we faced in government.
      The hon. Gentleman will recall that, in the previous Parliament, the Conservative Government faced a persistently high —in some ways, alarmingly high—budget deficit. Nevertheless, we managed to freeze alcohol duty, and in our last two years in government we cut the duty on spirits. This Government face a different situation. The rates of duty are to come into effect on 1 January 1999, and in the financial year on which we have embarked the Government envisage a large budget surplus.
      The comment by the hon. Member for Dudley, North (Mr. Cranston) about the low proportion of duty ignores the fact that there is still a gap between continental and United Kingdom duties, and that that is driving the phenomenon of massive cross-border shopping and the smuggling and other illegalities on which I shall shortly enlarge. There is a problem, and it is no defence to say that the proportion of duty on a pint of beer is lower than it was before. If the hon. Gentleman thinks that there is not a problem, he should talk to publicans and owners of off-licences in his constituency, who I think will tell a different story.
      We attempted to tackle the problem. We froze the duty and, over time, that would have led to erosion of the differential. The Government have increased duty in
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      nominal terms, not just in the Bill but in last year's Budget. They are making a bad situation worse. There is a gulf which, if anything, is widening. Matters have got worse not just because of the Government's failure to pursue our policy of freezing duties but because of the strength of the pound, which is a potent element in the equation. A strong pound makes it even cheaper to buy drink in Calais and elsewhere. I could speak at length about the Government's responsibility for that, but perhaps that it is a topic for another debate. That problem, plus the duty differential, is creating a crisis.
      I have spoken about cross-border shopping. The second major element is illegality, which hits legitimate trade in all our constituencies and means that often alcohol is sold in an uncontrolled way, perhaps to those under the legal drinking age. It has also contributed to the demise of the British pub. I do not want to over-emphasise that. I have been in politics too long to accept all lobbying comments at face value. Beer drinking is experiencing a secular decline, which cannot be attributed solely to the habit of buying drink abroad or from illegal sources. Marginal pubs, which are nevertheless socially important, are shutting. One reason is that they are undermined by illegal trade.
      4 pm
      An estimated 1.4 million pints of beer are brought across the channel every day. That amount is thought to be increasing. I cannot be certain about that, because the Government have not produced recent figures, despite promising to conduct a study.
      That leads me to another Labour broken promise. This is quite a startling one, because it comes from the top—from the Prime Minister. He wrote in The Licensee, the main trade magazine, on 1 May 1997—a significant date—that the Government should
      "initiate an urgent independent and comprehensive study, analysing the extent and effects of both smuggling and illegal cross channel shopping".
      He also said:
      "We are not going back on a single promise, not a single promise."
      Well, he broke that one. He has not set up an urgent, independent and comprehensive study. Instead, a Customs and Excise study was announced in the pre-Budget report last November. That report is not available to the Committee.
      I asked the Financial Secretary to publish the report. I received a written reply on 25 March that did not answer the question. She simply said:
      "The Government will be taking action to clamp down on smuggling and fraud and … will announce their Proposals for doing this as part of the outcome of the Comprehensive Spending Review."—[Official Report, 25 March 1998: Vol. 309, c. 202.]
      She said that nothing would be published before then. She did not say whether the study by Customs and Excise would be published and, if not, why not.
      The Government have published a slightly hilarious document called "Your Right to Know". It was produced by the Chancellor of the Duchy of Lancaster and prefaced by the Prime Minister, setting out all sorts of wonderful ways in which the public—and presumably the House of Commons—would be better informed. In his introduction, the Chancellor of the Duchy of Lancaster says:

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      "Openness is fundamental to the political health of a modern state."
      He also says:
      "It is a new balance with the scales now weighted decisively in favour of openness."
      The Prime Minister talks disparagingly about the traditional culture of secrecy and how all that will be broken down by giving people the legal right to know. Of course, that was all just waffle.
      Mr. Cranston rose—
      Mr. Heathcoat-Amory: I am sure that the hon. Gentleman wants to be helpful again.
      Mr. Cranston: I thank the right hon. Gentleman for giving way yet again. I should like to be helpful. Will he support the freedom of information legislation?
      The First Deputy Chairman: Order. We shall not go as far as to debate any freedom of information legislation that might be brought before the House. We shall stick to the clause.
      Mr. Heathcoat-Amory: I shall obey you, Mr. Martin. I should love to give the hon. Member for Dudley, North his answer. When we see the Bill, I shall tell him whether we will support it.
      The Government have published an expensive glossy saying that we all have a right to know. It is obvious that we have a right to know only what the Government think that we ought to know. Although the smuggling and illegality in the smoking and drinks trade are important matters that concern the Committee, we clearly have no right to know the conclusions of the Customs and Excise review.
      That would not matter if the Prime Minister had kept his promise and initiated that
      "urgent, independent and comprehensive study",
      which would not be conducted by Customs and Excise because, although it is a splendid department, it is part of the Government. This is a particularly stark example of a promise being broken by the Prime Minister that is very much to the detriment of the House. It will impoverish our debate on this important subject.
      I return to the amendment before us. The point which I wish to leave with the Committee is that, although we recognised in government that there was no quick fix in this respect, we nevertheless recognised, in freezing duty on beer, that the gap between duties had eventually to be closed. As an interim measure, when I was doing this job in the Treasury, I committed additional resources to tackling smuggling and illegality on the ground. That was never going to be a substitute for tackling the causes of crimes.
      When in opposition, the Prime Minister used to talk about tackling not just crime but the causes of crime. As the great economist Adam Smith first pointed out, smuggling is largely a crime induced by the Government. If they establish through the taxation system a clear incentive to smuggle, they can hardly be surprised that people take advantage of it. The only solution is gradually
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      to move in the direction of continental rates of duty. As a very large budget surplus looms, this Finance Bill is a very good opportunity to make such a move.
      I know that one or two of my hon. Friends wish to contribute to the debate, so I simply urge the Committee to support the amendment.
      The First Deputy Chairman: Order. Perhaps the right hon. Gentleman is mistaken; there is no amendment before the Committee. He was speaking to clause stand part.
      Mr. Heathcoat-Amory: I apologise, Mr. Martin, although the effect will be the same if we vote against clause stand part.
      Miss Anne McIntosh: I hope that my comments will be helpful to the Government but will support the remarks of my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory).
      I am concerned about the problems of bootlegging—otherwise known more politely as smuggling—which are not addressed in clause 1. The differentials between duty paid in this country and in other European Union member states invite people to smuggle on an increasingly large scale. The worry for the Financial Secretary to the Treasury must be that the loss of revenue to the Treasury is as high as it is. From the figures that I have, I believe that revenue to the Treasury would increase if rates of duty went down and volume of sales in this country correspondingly went up. In addition, the costs of the increased number of Customs and Excise agents used to apprehend suspected smugglers would be saved. I know that we are still waiting for proposals.
      Dawn Primarolo: So that I do not misunderstand the hon. Lady's point, will she say whether the economic model to which she is referring is the Oxford model commissioned by the Brewers and Licensed Retailers Association? Knowing that will help me in my response.
      Miss McIntosh: I might need to do some more research, but from work which I did earlier, I understand that the loss of revenue to the Treasury is £978 million—regardless of the cost of the agents whom the Government are minded to introduce to apprehend smugglers.
      I am also concerned that, at this quite late stage of the British presidency of the Council of Ministers, the Government are so far not using their office to act to remove the distortion of trade and competition caused by divergence between rates of excise duty in different member states. I understand that the Financial Secretary or her colleagues could instruct the Commission to prepare a report that the Council could discuss. Without that instruction, the Council is open to a charge of neglect of duty, because it is obliged to report every two years on the distortions to competition and trade caused by the differentials in duty.
      The rates of duty paid in the UK distort the market in drinks—particularly wines, beers and spirits—between the UK and other European Union countries. I understand that Customs and Excise admits that, if it is lucky, it catches only 5 per cent. of suspected smugglers. There is a huge loss to the Revenue in terms of excise duty, but

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      there is also a large cost to the Treasury of employing existing Customs and Excise agents and any future agents yet to be appointed.
      It seems odd that the approach of the Government discriminates against home-produced wines, beers and spirits. I regret the fact that clause 1 refers only to the problem of wines. I wish to give an example from this year's statistics on Scotch whisky. The excise duty on a 70 cl bottle of Scotch whisky—which costs £10.70—is £5.48. The VAT is £1.59, making a total tax of £7.07—66 per cent. of the cost of the bottle. That means that Scotch whisky is taxed more heavily than any other alcoholic drink—particularly with regard to alcoholic volume.
      The First Deputy Chairman: Order. Perhaps I may remind the hon. Lady that we are dealing with beer duties. Perhaps she could talk about them, because there are problems there as well.
      Miss McIntosh: I am most grateful for your guidance, Mr. Martin, but the point which I am trying to make is that clause 1 should address excise duty charged on the alcohol content of each alcoholic drink. I am against clause 1 because it fails to do so. The duty charged on beer, wines and spirits is higher in the UK than the duty charged on any other European Union-produced products in their own country. The Government are directly discriminating against our own products in their home market, so I cannot support clause 1.
      Mr. Edward Davey: All of us would want to claim some expertise in this area. As a new Member of Parliament, find the temptation to list all the wonderful pubs and publicans in my constituency almost too great to resist. However, I am sure that you would intervene, Mr. Martin, and call me to order should I do so.
      I want to address the main point of principle. The issue for any Government setting excise duties for beer—and other alcohol or tobacco products—is to try to strike a balance between the need to raise revenue, the need to ensure that health and social issues are properly dealt with, the need to support the strength and well-being of the industry, and the need to prevent too great incentives for smuggling.
      The Government have got it right in the Bill. There is a very modest increase nominally—which is not an increase at all in real terms—and a very small amount of revenue is being raised. On balance, the Government have got the different factors right.
      There are concerns on the health and social side which can be tackled in a number of ways, one of which is price. If we saw a significant reduction in alcohol duties—which seemed to be the implication of the proposals from the right hon. Member for Wells (Mr. Heathcoat-Amory)— there would be worrying side effects in terms of alcohol consumption, particularly by young people. We need to bear that in mind. However, there are other ways in which to pursue those health and social objectives. I hope that the Government will examine them.
      In my short time as Member of Parliament for Kingston and Surbiton, I have noticed some problems in the licensing laws. This matter does relate to the clause, Mr. Martin, because it is one alternative to seeking higher increases in duty. In Surbiton, a rash of new pubs has
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      opened. The local authority, magistrates and local police have opposed the granting of the licences. The Government inspector, sitting in Bristol, far away from Surbiton high street—[Interruption.] The Financial Secretary to the Treasury seems to be concerned. This is not an anti-Bristol, but an anti-licensing regime, point.
      As the Government inspector was in Bristol, clearly he had no idea of the impact on the local community of that significant increase in a short period in the number of pubs in Surbiton' s high street. Elected representatives in Surbiton were well aware of that impact and, working with police and magistrates, wanted to reduce the significant increase in licensed premises because of its bad social side effects.
      4.15 pm
      The Government do have other powers open to them, should they wish to use them. I urge them to examine the licensing regime, to give local representatives and local magistrates working with the local police more powers to intervene, and to ensure that those powers cannot be overridden by a faraway, unaccountable Government inspector, who does not know the local position and cannot react quickly to it.
      Smuggling is the other issue that the Government have to balance in deciding what the duty should be. We have heard much about that, and I am sure that we will hear more from right hon. and hon. Members who are yet to speak, but the question that we have to debate is whether the current duty level has caused the alleged increase in smuggling, whether there are other causes and, most important, whether a significant reduction in alcohol and tobacco excise duties would lead to an increase in revenue.
      That has been the contention of some hon. Members, particularly those who spoke on Second Reading. They would need to show two factors before they could defend their case: first, that there was mass evasion, to the effect that revenues were seriously undermined, and therefore that a reduction in duties would make good those revenues; and, secondly, that attempts to persuade European Union partners to level up duties had been completely exhausted. Indeed, there is a third factor: they would need to show that there were no alternative measures that Her Majesty's Treasury could implement to tackle smuggling, such as reorganisation of Customs and Excise.
      For this debate, I have considered the evidence produced in parliamentary answers from the Financial Secretary and in other papers available to hon. Members. It is clear that the estimate of the amount of revenue that has been evaded by cross-border shopping and lost because of smuggling is very small. Indeed, the estimate seems to be much smaller than that of the losses from evasion of other taxes. Government estimates for 1997 show that, in total, £165 million was evaded and that £120 million was lost. Those figures were reached by using new estimating procedures, which are run jointly with the industries in Great Britain, so the figures are not disputed by them.
      Mrs. Jacqui Lait: I am interested in those figures, which are the lowest that have been produced for a long time. Where did the Treasury get them?
      Mr. Davey: The House of Commons Library took them directly from estimates published by Customs and Excise,

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      based on surveys and estimates made jointly with the industry. If the hon. Lady disputes the figures, I am more than happy to hear what she has to say.
      Beer duties represent about 3 per cent. of the total revenues from excise duties, which is a very low figure. Those who want to slash the duties must provide more convincing figures, which I do not believe are available.
      For the benefit of France and other European Union member states, the Government should try to persuade them to level up their duties. That would also have an effect.
      Mr. Heathcoat-Amory: Dream on.
      Mr. Davey: The right hon. Gentleman may be sceptical, but I still think that that avenue is worth pursuing. Perhaps, with the much warmer relations that the Government claim to have with our European partners, they will have more success than their predecessors.
      Mr. Nicholas Soames: Where does the hon. Gentleman propose raising the revenue shortfall that would accrue from the transaction?
      Mr. Davey: I do not believe that there would be a revenue shortfall from what I am proposing. My proposal was that France should raise the duties on beer.
      Mr. Soames: It will not.
      Mr. Davey: The hon. Gentleman may say that it will not, but it is for this Government to see whether they can be more successful than the Conservative Government. We have yet to find out.
      I read with interest the Alcohol Concern report "Who Creates the Bootleggers' Profits?". Before the industry can lobby effectively for significant reductions in alcohol duties, it will have to answer some of the points that are well set out in that research paper. Alcohol Concern research conducted this March comparing the different prices charged in supermarkets and off-licences in Dover and Calais showed that there was a 21p price difference on a unit of alcohol for beer, of which 9p could be put down to differences in duty, but of which 12p apparently related to differences between the industries in France and in Britain.
      The difference is partly explained by the way in which beer is sold in Calais, where there is a "pile it high, sell it cheap to the day trippers" mentality. It would be possible for enterprising people in this country to pile it high and sell it cheap in a warehouse in Dover. They would not have the 9p price incentive to add to the 12p differential that is caused by our industry's inefficiencies, but there is still a margin that they could arbitrage away. The industry still has a case to prove.
      That does not mean that the Liberal Democrats do not take smuggling seriously. It is illegal and has bad effects, because unscrupulous individuals who break one law are likely to break others by selling alcohol to minors and engaging in other dangerous activities.
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      Rather than merely cutting duty, which is a simplistic approach and may not be effective, the Government should consider changes in Customs and Excise. In a press release in September last year, the Economic Secretary talked about some of the extra resources that she had allocated to Customs in Dover. That was welcome, as there are clearly problems in Dover, including a lack of space to expand the facilities, which is a logistical problem which I hope Customs and Excise management can address. I hope that, when the results of the comprehensive spending review come out, we can go much further.
      I am not an expert in the managerial structure and operational routines of Customs and Excise, but from first principles, one imagines that Customs and Excise has a tradition in history of operating purely out of the ports—coastal ports and airports—and that its organisational structure has been biased towards tackling smuggling at the ports. That is probably a different culture from that which exists on the continent. Our partners on the continent have long land borders and they are much more used to exercising anti-smuggling measures inland. I suggest to the Financial Secretary that there may well be some benefit in seeing whether Customs and Excise can redirect some of its efforts to tackling smuggling inland. I hope that it does that in any case, but the extra marginal investment in its services may be best directed to internal controls.
      For all the reasons outlined, I feel that what is before us in clause 1 is a modest increase. The problems that need to be tackled in setting alcohol duties—health and social problems, and smuggling—can be tackled in other ways. Therefore, Liberal Members will support the Government if the Committee divides.
      Mr. Archie Norman: I, too, want to talk about beer duty but, before doing so, I remind members of the Committee that I have an interest in the matter as chairman of a supermarket group responsible for a large proportion of the legitimate beer sales in this country. The issue at hand is not the interests of large supermarkets or, for that matter, large brewers. It is very much a question of the little guy, the small independent retailer, the small pub and the small brewer. It is a question of the British pint—part of the British way of life—and the price of that pint to ordinary working people.
      We are looking not only at an excessive tax on the daily fare of ordinary working people but at a broken promise. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) quoted the Prime Minister. I have another quote from the Prime Minister. In May 1997, he wrote:
      "Labour accepts that there is a problem and that the Government should act urgently to strengthen Customs and Excise, tackle the illicit sale of contraband, stand up for UK consumers, jobs and businesses when rates of duty are considered by the European Council and initiate an urgent independent and comprehensive study".
      As my right hon. Friend said, the study may have been initiated, but we have not seen much by way of the outcome. I hope that the Financial Secretary will tell us exactly when she expects the study to be published. Perhaps she would be kind enough to give us some insight into its content. There is widespread suspicion in the industry that the content is unhelpful to the Government's case, and that that is why it has not been disclosed.

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      The fact is that it is a bad tax. The motivation for the tax is entirely driven by revenue income. That, in and of itself, is not a sufficient reason for taxing a specific good or product. The tax is exploitative, selective and there for the wrong reasons.
      The Financial Secretary has already made a minor announcement about strengthening the fines and the actions that can be taken against offenders in instances of smuggling. That announcement is welcome, but it tackles only the tip of the iceberg. The fact is that the sheer profitability of smuggling has increased enormously in the past year as a consequence of the increase in beer duty and the increase in the value of the pound. It has become a large-scale industry for organised crime, and is also profitable for the little guy and the small-time smuggler.
      The impact has now gone beyond a level that is sustainable. That is the issue. The question is not whether there should be duty but what is a sustainable long-term level of duty. The hon. Member for Kingston and Surbiton (Mr. Davey) has already mentioned the estimates for loss of revenue. My estimates, published by the Government, are rather different from his, and I know that some of my hon. Friends have different estimates again. However, as I recall, including duty-paid imports, the Treasury is losing half a billion pounds of duty and VAT revenue every year, according to its own figures. I believe that the figures from HM Customs and Excise show a visible loss of £300 million. I shall be corrected by my colleagues if that is not right.
      Mr. Edward Davey: Are those the total figures for alcohol and tobacco? The figures that I quoted related to beer, with which the clause deals.
      Mr. Norman: The hon. Gentleman may correct me, but I understand that the total figure for alcohol and tobacco—£960 million—is greater. We are talking about rough estimates; it is not possible to estimate the true loss as a result of contraband sales, because the only reasonable way to do so is to estimate the amount of smuggling. I am advised by my friends in the brewing industry that the best way to do that, is to count the white Transit vans coming off the channel ferries, which would be an inexact science.
      Dawn Primarolo: If that is the most effective way to assess the amount of smuggling, why did not the previous Government do that, and why did they not agree with the trade's figures?
      4.30 pm
      Mr. Norman: The Financial Secretary makes the important point that the profitability of smuggling has increased enormously in the past year. The actions of the Government in respect of macro-economic policy, the level of the pound and the increase of duty have greatly worsened the impact on the industry. She is a member of the Government, and it is up to her to explain to hon. Members how to count and measure the loss to the Revenue before assuming that it is not great.
      Mr. Derek Twigg: Can the hon. Gentleman tell us how the previous Tory Government helped the situation by cutting severely the number of customs officers?
      Mr. Norman: The hon. Gentleman knows that the previous Government intended to freeze duty on beer and reduced duty on spirits—there was an attempt to tackle the problem. No one is saying that it could be resolved
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      easily because it is complex, but it has gone beyond a sustainable level and a judgment must be made about what level is sustainable.
      Various economic models, such as the Oxford one, have been mentioned. The Financial Secretary, if we might have her attention for a second, has explained that, in her judgment, that model does not prove that there would be material short-term loss of revenue as a result of the increase in duty, but this is not a short-term problem—it is a long-term problem that is growing rapidly.
      As so often in Government dealings with business, the long-term effects are widely misunderstood. They are: decline in investment in the United Kingdom brewing industry, especially among small brewers; decline in the number of pubs and therefore in the capacity to sell British beer at full-paid duty; reduced availability of full-paid duty beer in this country; and changed drinking habits, because the switch in price and value means that it is cheaper to import foreign beer. A lot of contraband beer is foreign, which is tipping the scales against the British industry.
      Mr. Cranston: Can the hon. Gentleman explain why the previous Government increased the rate on beer in 1995 after they lost the VAT on fuel decision? Does the logic of his argument favour a uniform European Union duty on beer?
      Mr. Norman: The best response to the hon. Gentleman's latter point is to acknowledge that, as long ago as 1992, the members of the EU agreed that alcohol taxation across the EU should move towards the reference rate of 8p a pint. Labour Members keep referring to the previous Government, but the problem has been exacerbated greatly in the past 24 months by the increase in the value of the pound and by the increase in beer duty—it has gone beyond a sustainable level.
      Mr. Christopher Leslie: To clarify that point, will the hon. Gentleman cite, with chapter and verse, the source of his information on developments over the past few months?
      Mr. Norman: My information comes from real life: I have talked to brewers and pub owners; I have listened to what the Government and the hon. Member for Dudley, North (Mr. Cranston) have said, and quoted it back to them. I have also looked at the Oxford economic model and other economic models—something that I strongly commend to the hon. Member for Shipley (Mr. Leslie), because, if he read them, he would become better informed on the subject.
      The subject is easy enough to discuss in the ivory tower of the House of Commons, but in the pubs and off-licences and on the streets of Britain, it is affecting ordinary working people and their way of life. I recommend that Labour Members leave their economic models and get to grips with the people outside who are attempting to buy the ordinary British pint for an honest price. [Interruption.]
      Mr. Andrew Robathan: Is it not strange that Labour Members laugh when they hear that my hon. Friend gets information from real life, instead of from the smoke-filled rooms of Labour party politics?
      Mr. Norman: It is not strange at all, because the facts of real life are often inconvenient to those in government, as the Labour party is now discovering.

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      The other salient fact to bear in mind is that ours is the only European Union country that suffers on such a substantial scale from the problem of smuggling and contraband. The reasons for that are: the disparity in duty is great; enforcement has been ineffective in the past; and the logistics of bringing product across the channel are far easier to handle than they would be in, say, Ireland, where the levels of duty are also extremely high.
      Mr. Derek Twigg: Can the hon. Gentleman quote figures on smuggling in other European nations, given that they are so different from UK figures?
      Mr. Norman: The hon. Gentleman will know that we discussed earlier the fact that reliable published statistics are not readily available; however, that there is a problem is well known. The hon. Gentleman may wish to discuss the issue with representatives from the Irish brewing industry.
      Any brewer in the country will say that the industry is under attack because of the growing volume of imports resulting from the escalation in the value of the pound and the effect of increased smuggling and contraband. That is not a small effect, even though Labour Members think it trivial and the hon. Member for Kingston and Surbiton tries to explain that it does not cost the Treasury much. It is estimated that 15 per cent. of all the beer sold in the off-licence trade in Kent is contraband, and that that volume is growing at approximately 15 per cent. a year; compounded, that figure will double in five years.
      When looking at economic models, what we have to worry about is not what happens today, but what will happen if the trend continues. In her response, the Financial Secretary might like to tell us not only whether the Government are prepared to reconsider the most recent increase in duty, but what their intentions are in respect of further increases in duty in years to come.
      Mr. Barry Gardiner: Given that, at 30 per cent., the percentage of the price of a pint of beer that is taken in tax is now lower than at any time in the past 30 years, does the hon. Gentleman agree that the explanation for the rise in smuggling—which is a major problem that we all recognise—must therefore be attributed to some other cause than the duty on beer?
      Mr. Norman: No, I do not agree with that. As a shopkeeper, I must advise the hon. Gentleman that he cannot bank percentages; what he can bank is pound notes. It does not matter what the percentage is: if the pound note profit is higher per Transit van-load of contraband, the exercise is more profitable. The costs have not risen greatly, but the benefits have increased considerably. As I said, it is estimated that the benefits are to the tune of £600 per white Transit van coming off a cross-channel ferry.
      The profits have risen considerably over the past year, as they have done over the past five years. The problem is now out of hand and is having a long-term corrosive effect on a British industry that is worth protecting because it is part of the British way of life. In a sense, smuggling has also become part of the British way of life: it has become what is popularly called yellow-line crime and is widely participated in.
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      The number of people employed and engaged in crime as a result of the duty is great, and smuggling has become semi-legitimised in some communities and certain sections of British culture. It is contributing, on a widespread basis, to the growth in under-age drinking, because, inevitably, small retailers who knowingly sell these goods are also prepared to sell to those who are under age. Labour Members have confirmed that they are worried about that issue.
      Contraband goods are now so widespread on the street—I assure the Committee that it is the case in any retail community, especially around Christmas—that small shopkeepers, to be price-competitive on beer sales, often feel that they must handle contraband. Many of those small businesses—in the north, in Scotland, in Liverpool, in the Manchester conurbation or in Yorkshire—are already under pressure to survive, and to keep themselves going and keep themselves price-competitive they must handle contraband. The level of duty is effectively pushing people into a form of yellow-line crime.
      Mr. Cranston: Is the hon. Gentleman making the accusation that many small shopkeepers in this country are handling contraband?
      Mr. Norman: The hon. Gentleman makes a very good point for me; welcome to the problem. Anyone who has been out on the street buying alcohol in the run-up to Christmas, dealing with small shopkeepers, talking to people in the industry about where the product comes from, knows that that is the case. Shopkeepers are obliged to take that route to stay in business. Because up to 15 per cent. of alcohol sold in the Christmas period comes in through contraband sources, if those shopkeepers did not do so, they would no longer be price-competitive. It is a very seriou's problem on the street but, if the hon. Gentleman recognises it, perhaps we are at last starting to get to grips with it.
      Smuggling is becoming large-scale crime. It is acknowledged by Customs and Excise that the organisation of smuggling is now a large-scale business, which is contributing revenue and profits to the coffers of people who otherwise handle drugs and other more serious products. The profitability of large-scale crime is being fuelled by very high duty and a failure to enforce the Customs and Excise provisions.
      Mr. Edward Davey: I am delighted to hear the hon. Gentleman say that. I am glad that we are getting to grips with the issue. Will he tell us his proposals and by how much he wants to slash duty?
      Mr. Norman: I thank the hon. Gentleman for his question, but I am coming to that point shortly and I shall address it in a moment.
      I do not want to leave this point without telling the Committee that I know, having worked in the industry and spoken to people who handle the product, that this is a widespread, well-known situation throughout the wholesale and retail industries. Moreover, figures for the growth—or lack of growth—in sales of British product show that supply is being eroded by competition from foreign imports, which cannot be sufficiently accounted for by legitimate imports.

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      It is well known, and I know from our experience, that, in the run-up to Christmas, it is possible to buy, at very low prices, not white Transit van-loads but lorry-loads of contraband—spirits as well as beer. Whisky may be bought for £5 a bottle. It is an extremely serious problem, not to be taken lightly, and has a widespread effect on the structure of the industry and the nature of price competition.
      Among the side effects of the problem are that competition in the beer industry is geared to price, and that people are investing less money in the quality and diversity of British beer. It has a corrosive effect, not just on society and on pubs and off-licence outlets, but on the nature of the products that the industry invests in.
      It is also well known that a large proportion of contraband never leaves the country. That can happen only when the crime is widespread and highly organised. The estimated figures on white Transit vans take into account only what is known to come back into the country. What never goes out does not come back in and cannot be counted, and there are no reliable estimates, but wholesalers and retailers throughout the country know that the scale of the problem is now so great that it is obvious to anyone with their feet on the ground who deals with the industry that a significant proportion of the product now never leaves the country. We are dealing with widespread fraud, which requires a far firmer response than greater fines for white Transit vans and proposals to confiscate vehicles, because vehicles that never left the country and never came back in cannot be confiscated.
      This is not an issue of whether duty should be levied. It is an issue of the level of duty that is sustainable, not in the short term—not just for the Oxford economic model—but in the long term. It is a question of whether we should support the industry. Should we support the British pub, especially the little guy—the independent? Should we support the small brewer? Should we support the small retailer? The big retailers can handle anything; we can compete despite the problem. It is the little guy who is penalised by excessive Government interference, regulation and taxation, and the little guy is being penalised by this increase in duty.
      It is not just a question of fighting fire with fire—of fighting excessive duty with excessive regulation and excessive penalties. It is a question of recognising when the tax has gone far enough. Enough is enough. This is a bad tax. It has gone too far. It is not working, and the increase should be reversed.
      4.45 pm
      Mr. Soames: I shall be brief. I congratulate my hon. Friend the Member for Tunbridge Wells (Mr. Norman) on his excellent speech. I was shocked by the incontinent and wanton levity that some Labour Members showed toward what is not only a serious commercial problem but becoming, as my hon. Friend rightly said, a moral hazard.
      It ill becomes the House of Commons, which has always been a gathering from every part of the land, from every interest and from every position of life, if its Committee does not listen carefully to someone who has run, with tremendous success, one of the biggest retailers in the country and who has a great and profound understanding, not only of the consumer's requirements and wishes, but of the difficulties that arise in putting
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      together a pattern of legislation that enables us to have a fair system. I whole-heartedly congratulate my hon. Friend on his admirable presentation.
      The interests of the much smaller brewers are often trampled, especially in the House and by the Labour party. I speak from experience of my part of the south of England, which my hon. Friend the Member for Tunbridge Wells knows well and which the Financial Secretary also knows very well, because she is the distinguished alumnette of an excellent school in my former constituency and well knows the two breweries in the south of England, King and Barnes in Horsham and Harvey's of Lewes. Both breweries have seriously suffered as a result of the increase in smuggling.
      We definitely support any steps that the Financial Secretary is taking to be tougher on this issue. I acknowledge the fact that she is building on the achievements of my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), the former Paymaster General, who was responsible for those matters, who, in a letter to my hon. Friend the Member for Vale of York (Miss McIntosh) last year, wrote of the steps that customs has taken
      "to further imp rove the rate of detection"
      at ports.
      "These include a programme of enhanced training, improvements to intelligence systems, increased staffing levels … together with redeployment elsewhere to reflect more accurately the degree of risk in each area."
      Without a shadow of doubt, the implementation of clause 1 will increase the amount of contraband smuggled into the country. The Financial Secretary knows that that is the case. It is pointless for Labour Back Benchers to talk about what the Conservatives did when we were in power; disappointingly, we are no longer in power. No doubt, when we were in power, we made many mistakes, but a Labour Government are now in power, and it is for them to resolve this tricky problem.
      I shall make two or three respectful suggestions to the hon. Lady. First, the proper policing of the problem depends upon an increase in the amount of intelligence presented to Customs and Excise. My constituency used to comprise Gatwick Airport, and I know the work of Customs and Excise extremely well. I have immense respect for it: it is a remarkable uniform service whose officers do a very good job. Much customs work is based on intelligence, which is assessed and used wisely.
      In this country, we have some of the best intelligence services in the world, and it might be worth while attempting to make available to Customs and Excise more intelligence facilities that will enable it to penetrate some of the large rings that are smuggling beer into Britain. My hon. Friend the Member for Tunbridge Wells was absolutely right: not just private individuals in white Transit vans, but gangs and vast organisations are involved in bringing in contraband, to the great disadvantage of companies such as the two brewers in the south of England that I mentioned.
      That should be a matter of grave concern to the Government. We must not allow smuggling to become a way of life that is accepted as custom and practice. People should not think that smuggling the odd load in a Transit van is fair game. It is not; it is breaking the law, and it must be dealt with using the full rigour of the law. The Government cannot be allowed to say, "It is all very

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      difficult because we do not have enough customs people or the facilities to do it, and only the smaller retailers are damaged, so we don't have to worry about it."
      I hope that the hon. Lady will pass on to Customs and Excise my admiration for the number of detections that it has made in the course of the year. However, much more illegal contraband is getting through than Customs and Excise can detect. We must do more. I suggest that more intelligence work should be done to penetrate those gangs. I know that Customs and Excise does a great deal of work in that area, but I should like to see more.
      Secondly, I should like to see more customs officers deployed at Dover. It is not good enough for the Government to defend their deployment policies by claiming that they must maintain a balance between the various threats and risks to this country and to our integrity. The fact is that Dover is clearly under-resourced as far as Customs and Excise is concerned—even though I know that more people have been employed in that area.
      As I said at the beginning of my speech, I welcome any measures—this is not a party political matter—that the Government may take to pursue this crime. However, they should not believe that they can brush the matter aside lightly. My right hon. Friend the Member for Wells was correct to suggest that duty should be frozen, because that would hold the duty imbalance at a lower level. Parliament should deplore and vigorously oppose anything that encourages the wanton increase of smuggling into this country. If it is not deplored by the House of Commons, where else will it be so deplored?
      I whole-heartedly support the views expressed by my right hon. and hon. Friends. I hope that the Financial Secretary will consider extremely seriously the knowledgeable and expert speech by my hon. Friend the Member for Tunbridge Wells.
      Mrs. Lait: Like my hon. Friend the Member for Mid-Sussex (Mr. Soames), I congratulate my hon. Friend the Member for Tunbridge Wells (Mr. Norman) on an excellent speech, which rehearsed all the issues in great detail and to great effect. He spoke with enormous authority. I also endorse the stand taken by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in opposing clause stand part.
      I am known for supporting a reduction in duty as the only sensible solution to this problem. It was with shock that I noted the levity on the Government Benches when my hon. Friend the Member for Tunbridge Wells outlined some practical solutions to the problem. During debate last week on the Finance Bill, suggestions that the problem could be solved by reducing duty were also treated with levity.
      I hate to remind the Financial Secretary of her words—which I fear will return to haunt her—in the debate on the Finance Bill on 23 January 1995, but she said:
      "Beer smuggling is an enormous threat to the industry. It is a relatively new trade, if I may call it that, and we cannot estimate the extent to which the gradual build-up in the past 18 months has led to the undermining of the industry. The problems that are visible now are a fraction of the problems that will confront us in a few years' time if action is not taken."—[Official Report, 23 January 1995; Vol. 253. c. 64.]
      I venture to suggest that that time is up, and that the Treasury is facing a problem that will not be solved by introducing further prevention measures.
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      I share the admiration expressed by my hon. Friend the Member for Mid-Sussex for the job that is done by Customs and Excise and by the police. Using the tightest of resources, they are doing a first-class job and, as far as they are able, prosecuting the larger cases. However, we must recognise that, when a person is apprehended and charged, customs and police become involved in the paper chase associated with prosecution. That immediately prevents those officers from doing other proactive work. The more criminals the customs and police prosecute, the fewer new smugglers they will be able to catch, because they are already tied up in the court process.
      My right hon. Friend the Member for Wells argued that a reduction in duty is the only solution to the problem. While there is a big duty difference, putting more officers on the front line will halt only temporarily the increase in bootlegging and smuggling. As long as there is profit in it, people will smuggle and bootleg. The Government must reduce or remove that profit through a national strategy.
      Dawn Primarolo: Will the hon. Lady explain to the Committee how much further she would take the logic of her argument? If people persistently flaunt the law, rather than enforcing the criminal justice system, does she advocate legalising their actions?
      Mrs. Lait: I have no wish to legalise their actions. I contend that the Treasury has created a problem because of the duty differentials. We should reduce duty levels until smuggling and bootlegging stops.
      That brings me to the most interesting point to which the hon. Member for Kingston and Surbiton (Mr. Davey) referred. The hon. Gentleman cited revised figures for the amounts of duty evaded, to which he claimed that customs and the industries have agreed. On 23 April, I received a document from the Tobacco Alliance—I may return to it when we discuss tobacco— confirming figures that I had already seen. It stated that Customs and Excise has estimated that £950 million in duty is evaded. If I understood the hon. Member for Kingston and Surbiton correctly, he reduced that figure—I am afraid that I did not catch the details, as my jaw dropped because I was so aghast—to £124 million. I got the impression from the hon. Lady's body language that she agreed with that figure.
      If duty evasion is so low, why are so many people involved in smuggling? As my hon. Friend the Member for Mid-Sussex said, gangs are controlling smuggling operations—it is not just the mules in the white vans. The police suspect that some terrorist gangs are involved in the trade as well. The Treasury seems to condone that level of involvement in the trade. The Financial Secretary clearly disagrees with me; I suggest that she speaks to the Home Office, the Metropolitan police and the police specifically tasked with the job.
      Dawn Primarolo: Will the hon. Lady explain to the House whether the £900 million figure that she quotes relates only to beer, to beer and all alcohol, or to all alcohol and all tobacco products?
      Mrs. Lait: As I understand it, the figure represents the Customs and Excise estimate of all tobacco and alcohol products brought in through British sea ports. That leaves large holes. If one speaks to customs officers, as I have

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      done, they will say officially that it is a major underestimate. If one speaks to them unofficially, they will multiply it by a considerable factor.
      Mr. Soames: Does my hon. Friend agree that, in exchanging estimates of the size of the problem, we are dancing on the head of a pin? I am sure that the Financial Secretary will give us the correct figure and disabuse us of our misapprehensions. Whatever the figure, we know that there is a huge gap. A huge sum is going out by way of lost duty and smuggling. It matters less what the figure is than what the Government intend to do to prevent an increase in such smuggling, in the light of the clause, which will merely lead to more smuggling.
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      Mrs. Lait: I entirely agree. According to the Customs and Excise official figures, the loss equates to almost ½p on income tax or 0.5 per cent. on VAT. It is reprehensible for any Government to condone that level of tax loss.
      I should therefore expect the rate of duty to come down in successive years, until the profit is taken out of smuggling. The people involved should no longer be considered to be acting illegally. Customs should be allowed to get on with the much more important job of stopping drug smuggling. There was some levity when I suggested last week that drug smuggling was more important than tobacco and alcohol smuggling, on the ground that tobacco and alcohol are also drugs. That might lead to an interesting debate, but we should be ruled out of order.
      Mr. James Plaskitt: Does the hon. Lady not see the dangerous logic in her argument? She is in effect arguing that law breakers should be allowed to dictate the Government's fiscal policy.
      Mrs. Lait: That is one of the problems that I have encountered since I first took up the issue, with my own Government and to an even greater extent with the current Government. Smuggling should not be a crime. It is a crime induced by the Government. The Government are responsible for solving the problem. It is not just a revenue issue. It is an issue of health policy and of the rule of law and its place in a civilised society.
      While people are encouraged by our own Government to break the law, do hon. Members expect the police and customs to be respected by the rest of society? It is a mark of civilised society that the rule of law is respected. The rule of law clearly is not respected in this instance because of the sheer level of bootlegging and smuggling.
      Mr. Cranston: I do not follow the logic of the hon. Lady's argument. The logic seems to be that the French Government are creating the problem, by imposing a lower duty. There will always be people who break the law. That does not necessarily lead to the conclusion that we should do away with the law. Would the hon. Lady suggest that we should legalise heroin, because some people break the law in that respect?
      Mrs. Lait: It may have escaped the hon. Gentleman's notice that there is no duty on heroin.
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      For years our Government have had a high-tax policy on alcohol and tobacco. In a single market, that encourages smuggling. We have seen it in the past, in the 18th and 19th centuries. The only thing that reduced smuggling and bootlegging to sustainable proportions in the 18th and 19th centuries was the cutting of duty.
      I am suggesting that we cut the duty year on year gradually, until the profit comes out. That will end the encouragement of under-age drinking. There is ample evidence of French lager being drunk throughout the country—it is not a south-east problem. The role of Customs and Excise and the police will be respected once again.
      It remains a great sadness to me that Labour Members consider this a matter for hilarity.
      Mr. Gardiner: The hon. Member for Beckenham (Mrs. Lait) said that the only solution to the problem was for duty to be cut year on year, and that that was the only effective way to stop smuggling. Forgive me, Mr. Martin, for drawing the Committee back to the amendment tabled by the Opposition. Far from suggesting that duty should be cut year on year to stop smuggling, it suggests that the Treasury should continue with the rate as set, but only one month after a report has been presented to Parliament to tackle cross-border smuggling. A great lacuna seems to be developing between the hon. Lady's argument and the clause that she purports to support.
      Mr. Heathcoat-Amory: To spare the hon. Gentleman embarrassment, may I point out that that is not our amendment. If he glances at the amendment paper, he will see that the amendment is in the name of the Liberal Democrats.
      Mr. Gardiner: I apologise to the hon. Lady. However, the force of her argument does not address the real issue. I shall focus on that. I agree with her and other Conservative Members who emphasised the problem that the smuggling of beer and other alcohol poses for retailers in the United Kingdom.
      I know that my hon. Friend the Minister has recently given interviews to magazines such as Asian Trader, in which she discussed that problem and outlined the way in which the Government believe it should be tackled. Asian Trader is the magazine for small retailers throughout the country, exactly the sort of retailers referred to by the hon. Member for Tunbridge Wells (Mr. Norman) and the hon. Member for—I was not sure whether it was Mid-Sussex or mid pink socks, when his feet appeared over the parapet.
      Mr. Soames: There is nothing mid about my socks—they are full length.
      Mr. Gardiner: Mid pink stockings, in that case.
      There is a real problem for the small retailer—the street corner shopkeeper throughout the country. The thrust of the Opposition argument is that the duty equates with a rise in smuggling. That is clearly a fallacy. In real terms, the excise on beer is lower than it has been for 15 years. Between January 1994 and January 1998, it fell by

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      6 per cent. Therefore, one cannot simply equate the increase in duty with the rise in smuggling. That was the force of my intervention earlier in the debate.
      Mr. David Ruffley: Did the hon. Gentleman support the decision by the previous Chancellor to freeze beer duty in the November 1996 Budget?
      Mr. Gardiner: I was not in the House at the time. In my capacity as a beer drinker I would have supported that measure, but not in respect of the needs of the Treasury and fiscal policy. If the Opposition oppose the increase in duty by the equivalent of 1p on a pint, they must explain where they would raise the revenue, which amounts to £20 million in the fiscal year 1999–2000. It is not good enough simply to oppose the extra penny in duty and to equate it with the huge increase in smuggling.
      We all agree that there should be measures to control smuggling into Britain, but for the hon. Member for Beckenham to say that it should not be a crime absolutely beggars belief. That is exactly why we must have barricades and customs officials at the borders—not only to regulate illegal trade, but to ensure that the proper tax take reaches the Treasury coffers.
      Mr. Robathan: I shall not detain the Committee long, and I apologise for the discourtesy of not having been in the Chamber at the start of the debate. However it would have been discourteous to someone else had I rushed in.
      I had not intended to speak, but I was astonished by the levity with which Labour Members were treating the issue. At least the hon. Member for Brent, North (Mr. Gardiner) acknowledged its seriousness. It involves gangs of criminal thugs who are extremely violent. Of course we wish to apprehend them, but their criminality is partly caused by the duty that is imposed on alcohol.
      I welcome the Government's announcement of extra measures to catch the thugs and confiscate their vehicles, but that is not sufficient to stop the terrible trade that is inducing moral dangers within our society. Gangs of criminal thugs are causing great problems, not just in Dover but throughout the country.
      Of course, the problem has resulted from the single market. I would propose that we revisit the issue and looked again at the previous regulations, but that might be contrary to European law. We might not be allowed to reintroduce small limits on what can be brought into Britain.
      My hon. Friends who have spoken so far all represent constituencies on the south coast. My hon. Friend the Member for Beckenham (Mrs. Lait) previously represented the south coast. However, the problem is not confined to the south. I represent a constituency in the heart of the country. Small pubs and retailers in my constituency of Blaby are suffering just as much as those on the south coast. There are several small family breweries in the midlands. I receive letters every month from Everards, reiterating the problems experienced by small family breweries, their public houses and their sales of beer.
      Mr. Soames: My hon. Friend is right to mention small family breweries. I mentioned two small breweries in the
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      south of England—King and Barnes of Horsham and Harvey's of Lewes. Does my hon. Friend agree that, if the problem continues, the ultimate penalty will be a serious loss of employment for people working in those breweries?
      Mr. Robathan: I agree entirely, and I am grateful to my hon. Friend. We are talking about the livelihood of individuals in all our constituencies that may be affected. They may indeed become unemployed. The problem affects not only big breweries, but small family breweries, publicans and retailers. It also encourages criminality.
      Perhaps we should institute one of the new Government's famous reviews into the issue. Certainly, I condemn all criminality. Smuggling is carried out by criminals. It is far from the romantic notion of the 18th century, when smugglers collected kegs of brandy off the coast. Smugglers are criminals who should be punished. The Government have a responsibility to fulfil, and if they do not institute an overriding review of the matter, they should at least freeze duty with a view to reducing it in future to lessen the temptation to which people are currently responding.
      5.15 pm
      Mr. Nick St. Aubyn: May I also apologise to the Committee for having left the Chamber during such an important debate? When I returned, the discussion raging between the two sides of the Committee was reminiscent of past debates about high levels of income tax.
      One could well imagine the debates in which Labour Members proposed a rate of income tax of 90 per cent.— I think that at one point it was above 100 per cent.—and argued that those who were not prepared to pay that level of income tax were positively anti-social. Over a number of years, we have persuaded the country—eventually the penny dropped even among Labour Members—that a lower rate of tax can generate more revenue and create a more productive society. The arguments about duty—albeit in a different context—are exactly the same. We are discussing the most efficient level of duty which will raise the maximum revenue for the Exchequer.
      The evidence that we have heard this afternoon and that many of us have garnered before shows that the level to which the Government are now pushing beer and other duty is becoming inefficient. Perhaps it is because of the difference between the Inland Revenue and Customs and Excise. It is well known that the customs service is regarded as the rough end of the trade. The contrast between the work of an Inland Revenue officer and a customs officer often resembles that between "The Knock" and "Dixon of Dock Green". However, despite the difference of approach, we want customs officers to do their job extremely well and to concentrate their resources where they are really needed.
      If the resources of Customs and Excise are devoted to trying to maintain what may prove to be unrealistically high levels of duty, on drinks such as beer, it may thereby be precluded from devoting sufficient resources to attacking the real menaces in society—including drugs—where its efforts are sorely needed. That is why the ramifications of the Government's approach of ratcheting

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      up duties without thought for the real economic consequences may well be to the detriment of our entire society.
      Dawn Primarolo: We have had an interesting debate covering an important subject, and we have identified two main problems, neither of which the Government take lightly. The first is smuggling—the scale of the problem, the criminal activity, the loss of revenue and the health and social consequences. The second is duty and whether there is a causal relationship between the rate of duty and the increase in smuggling. I shall do my best to deal with all the points that have been raised.
      Each year, Customs and Excise conducts a survey, and the resulting figures are agreed with the trade and published in September. Everyone will agree that, by the nature of the issue, estimates are exactly that. However, the Government have not picked figures out of the air with which the trade disagrees. The figures are the result of a survey.
      Conservative Members do not do justice to the serious problem of smuggling by inflating their arguments about the likely effect of a 1p increase in duty on a pint of beer. They seem to have a problem distinguishing between the loss of revenue resulting from legitimate cross-border shopping and the loss of revenue resulting from smuggling.
      The amount of revenue lost as a result of legitimate cross-border shopping was estimated at £235 million in 1996, compared with £230 million in 1995. I acknowledge that that is £5 million more, but the catastrophic picture that some Opposition Members painted of a Government who completely ignored the consequences of the illegal trade does a disservice to them and the Committee. It is not true. Those figures are made up of all excise duties.
      The amount of revenue evaded illegitimately was £900 million in 1996 and £950 million in 1997. Again, I acknowledge that the second figure is larger than the first, but the catastrophic picture that Conservative Members painted is not true, and nor are their claims that the Government are immune to the important arguments against smuggling.
      Mrs. Lait: The Financial Secretary has probably cleared up the confusion about the amount lost as a result of cross-border shopping, but no Conservative Member has questioned such losses. Our concern relates to the duty evaded as a result of smuggling and bootlegging, and that is the much larger sum of £950 million. If we agree on that, will the hon. Lady also confirm that that is equivalent to a reduction of about ½p on income tax and 0.5 per cent. on VAT each year?
      Dawn Primarolo: The largest amount comes in the tobacco category, particularly hand-rolled tobacco, which we shall debate later, so perhaps I can deal with the matter then.
      In defence of small business, the hon. Member for Tunbridge Wells (Mr. Norman) went on at some length about prices in Asda, that well-known corner shop. The hon. Gentleman, like several other Conservative Members, sought to advance the case that the only influence on price is duty.
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      The right hon. Member for Wells (Mr. HeathcoatAmory), in committing himself to freezing beer duty, did not mention that, in March 1992, March 1993 and January 1995, the Conservative Government substantially increased beer duties. Why has the Conservative party changed its view now?
      The RPI figures show that, when this Government increased duty on a pint of beer by 1p, the increase to the consumer was 7p. For four cans of lager—we are told that canned drinks pose a particular problem for the corner shop—the real price increase was 12p. There does not seem to be a direct correlation between duty and price. Price will clearly have an impact on cross-border shopping.
      Mr. Norman: Has the Minister, in her estimates of the duty lost, taken into account the extent of fraud? Will she comment on the official import and export figures, which highlighted the problem? I understand that, in 1994, 322,000 hectolitres of beer were exported to France, but the French reported receiving only 148,000 hectolitres, the implication being that the difference is accounted for by fraud.
      Dawn Primarolo: I was about to come to the hon. Gentleman's point about diversion fraud. That relates to how much the Exchequer loses, not the producers who are selling the goods and whether they leave the country. I am not suggesting that producers collaborate in diversion fraud; we discussed diversion fraud with them during the review. The hon. Gentleman will know that a high-level EU group is considering the matter, because it does not affect only Britain.
      Mr. Edward Davey: I want to comment on who is responsible for the price increase. Has the hon. Lady had a chance to read an article in yesterday's issue of The Licensee and Morning Advertiser which, on page 1, under the headline "Price-rise blow for duty campaigners", deals with the issue and with some of the cant and hypocrisy that we have heard from Conservative Members?
      The First Deputy Chairman: Order. The hon. Gentleman is reading from an article, but interventions must be brief.
      Dawn Primarolo: I get the general drift of the hon. Gentleman's point. I avidly read many publications, but I cannot recall reading that particular one yesterday. However, I am delighted that it acknowledges, as I think the industry would, that price is the result of a number of complex issues, not just duty.
      Mr. Norman: The hon. Lady confirmed the considerable problem of duty fraud. Does she agree that one of the difficulties of duty fraud and contraband is that they distort the marketplace in that it is much easier for the big brewers to participate in the export market and therefore receive the benefits of reimportation or—inadvertently and without intention, of course—the benefits of the fraud trade, whereas the small brewer, who is not packaging and selling into the export trade, is disadvantaged?
      Dawn Primarolo: I wanted to deal with the question of smaller brewers in reply to the comments made by the hon. Member for Mid-Sussex (Mr. Soames), so I shall come back to that important point.

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      Hon. Members went on to suggest that the change in the drinking habits of the drinking public and the demise of the British pub were the Government's fault. The hon. Member for Beckenham (Mrs. Lait) suggested that the Government were actively encouraging criminal activity, which is not the case. I will explain later what action the Government are taking on smuggling.
      Mr. Robathan: I assure the Financial Secretary that I, for one, am not pointing the finger of blame at this Government, and that I and other Conservative Members lobbied the previous Government on the problem of smuggling. My point is that the problem is growing and needs action. Far from helping to solve the problem, which has many facets, increasing duty will make it worse. We are not accusing the Government of encouraging criminality; we are accusing them of not taking action.
      5.30 pm
      Dawn Primarolo: With respect, the hon. Member for Beckenham did accuse the Government of actively encouraging criminal activity. I am trying to be fair to those hon. Members who, I know, take seriously smuggling and criminal activity, and who wholeheartedly support the Government's actions.
      The hon. Member for Vale of York (Miss McIntosh) mentioned the Oxford economic model. The brewers' suggestion in the model is that, if we cut duty, we shall boost consumption and shall not, therefore, lose money in the long term. That suggests that the short-term impact of a tax cut might be to boost demand, and that lower taxes are likely to increase personal disposable income and temporarily boost GDP. Almost any tax cut would have a similar effect. We dispute—as, I am sure, does every hon. Memberx2014;the brewers' suggestion of a free lunch and the implication that, by continually cutting indirect taxes, we would indefinitely raise output and reduce inflation. That would clearly not be the case.
      The hon. Member for Kingston and Surbiton (Mr. Davey) made a helpful contribution about health and tax issues. He made several points about young people and alcohol consumption, which must be part of the wider policy debate conducted by the Government. He will be aware that, yesterday, my right hon. Friend the Leader of the House announced in a statement that a cross-departmental ministerial committee will consider the growth in alcohol consumption by young people, as well as that in smoking, to which I will return.
      The hon. Member for Kingston and Surbiton went on to make points about the licensing regime. I know that people think that the Treasury is omnipresent, but as yet, licensing regimes are not within its remit. I therefore note his points, but cannot deal with them.
      Miss McIntosh: I accept that there is no such thing as a free lunch, but the Financial Secretary has not replied to my questions about the fact that the Government are committed by the treaty of Rome not to a uniform rate, on which Labour Members have insisted, but to equalising the rates of duty and VAT. That is an important difference. Does she accept that the British presidency has failed in its duty to undertake that exercise and to commission a Commission study on that matter?
      Dawn Primarolo: No, I do not accept that. The hon. Lady is aware that harmonisation of indirect taxes is not
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      a requirement of the treaty of Rome, and that all member states believe, as we do, that it is important to continue to have the right to set the rates.
      I have covered the points about price made by the hon. Member for Tunbridge Wells. I have tried to reassure him that we take smuggling seriously. He repeatedly asserted that smuggling has worsened in the past 24 months, but whatever he thinks is happening on the streets, his assertion is not supported by the information available to the Government. The significance of an increase in duty of 1 p on a pint has been tremendously inflated.
      Mr. Norman: Will the Minister please confirm that her colleagues in the Home Office are not complaining that smuggling is a worsening problem, and that they are satisfied that it is contained and is static?
      Dawn Primarolo: The Government do not refute the importance of smuggling and how we deal with the threats that it poses to revenue, and health and social policy: hence the setting up of the—
      Mr. Normanrose—
      Dawn Primarolo: May I finish the answer? The hon. Gentleman must surely expect an answer to his question before he intervenes again.
      The Government have made a commitment to set up the alcohol, tobacco and fraud review, and to work with the industry to start to grapple with the difficult problems of smuggling and diversion fraud. That is the first time that such action has been taken. The Opposition seem simply to be arguing that the Government are not moving fast enough, rather than disagreeing with the general direction of our policy.
      Mr. Norman: I thank the Minister for attempting to reply to my question. Will she confirm her assertion that smuggling and fraud have not worsened at all in the past 24 months? That is in direct contradiction to claims made by other members of the Government.
      The Temporary Chairman: Order. Interventions are getting longer, and it would be helpful if hon. Members remembered that they should be brief.
      Dawn Primarolo: I gave the Committee figures for the change in loss of revenue, which has increased from 1995 to 1996, and is therefore clearly getting worse. We need to be mindful of the scale of the deterioration and consider what would be the most effective response from the Government.
      I want to ensure that Opposition Members do not use the debate on a 1 p increase on a pint of beer to imply, and state outside the Chamber, that the Government are complacent about the corrosive effects of smuggling and diversion fraud—we certainly are not.
      I am grateful to the hon. Member for Mid-Sussex for his generous comments about Customs and Excise—particularly the operation at Gatwick airport—and its continuing success in dealing with smuggling. He made some suggestions about how customs activity could be expanded to increase our ability to deal with the problem.

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      The hon. Gentleman also made a special plea for small brewers. He quoted two from his area, but there are several throughout the country. We have recently received proposals from the Society of Independent Brewers for a sliding duty scale for small brewers. The Government are examining those proposals, because we wish to ensure that we respond fairly to the entire industry and to the special pleadings of small brewers.
      Ministers have studied the review report. We greatly value the input from the trade, which has been exceptional and very helpful. However, as I have told hon. Members before, in view of the possible public spending implications, the Government will announce their proposals as part of the outcome of the comprehensive spending reviews and when they can be evaluated, as hon. Members have required us to do in this afternoon's debate, against all the Government's priorities. They will be published at that stage. I have always told hon. Members and the trade that that would be need to be subject to questions of commercial confidentiality.
      The Opposition sought to characterise the Government as the hate figure of the trade. I shall give one example of how the trade has responded positively to the Government's actions on smuggling. On 27 April, the Wine and Spirit Association of Great Britain and Northern Ireland wrote to me:
      "I am writing to say 'thank you' to you and the Department's team for the action you are taking to reduce cross border smuggling and the pernicious effects that it has on the legitimate trade."
      The trade recognises that the Government's strategy is correct. However, with the exception of the hon. Member for Kingston and Surbiton, Opposition Members cannot bring themselves to acknowledge that the Government are achieving what the Conservatives failed to achieve in 18 years of government. The clause is a reasonable measure to defend Government revenue. The Government have a strategy and a proportionate response to deal with smuggling and to start tackling diversion fraud.
      Mr. Heathcoat-Amory: We have heard some exceptional speeches by my hon. Friends. In such debates, hon. Members often revert to type—the only Liberal Democrat solution that we heard from the hon. Member for Kingston and Surbiton (Mr. Davey) was to try to persuade other EU member states to increase their rates of duty in line with ours. As usual, the Liberal Democrats go for the high-tax, harmonised solution, which is simply a pipe dream. We should try, even slowly, to reduce our duty rates in the direction of those on the continent if we are to remove the cause of the illegality and smuggling.
      A number of my hon. Friends spoke in this debate. My hon. Friend the Member for Vale of York (Miss McIntosh) has pursued this matter in the European Parliament as well, and my hon. Friend the Member for Tunbridge Wells (Mr. Norman) brought to bear an unrivalled knowledge of the retail trade. In a Chamber that is not over-burdened with practical business experience, his speech was particularly telling and valuable.
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      My hon. Friend the Member for Beckenham (Mrs. Lait) has pursued this matter over several Parliaments. Her comments were largely ignored in the Minister's wind-up speech. The chief point stressed by my hon. Friends the Members for Mid-Sussex (Mr. Soames), for Blaby (Mr. Robathan) and for Guildford (Mr. St. Aubyn), all in different ways, was the seriousness of what is happening. That contrasted starkly with the attitude of Labour Members, who seemed almost to deny that a problem was being experienced either as a result of massive cross-border shopping—a huge new industry has been set up in France selling drink back to us and therefore denying us business, profit, jobs and duty to the Treasury—or as a result of large-scale smuggling and duty fraud.
      Labour Members' comments show how quickly, in government, they have become out of touch with their constituents. They have only to go into their local off-licences or pubs to discover what people are saying.
      The problem is serious and getting worse. The Financial Secretary gave some figures that show that the problem is escalating and that the loss of duty is increasing. That is happening even before the increase in duty as a result of last year's Budget and the increase when the clause comes into effect. When those duty increases work through, in contrast to the freeze in duty in the last two years of the Conservative Government, the situation really will get worse. Moreover, the strong pound makes cross-border shopping all the more attractive.
      The Minister did not answer the point about the broken promise on the review. The Prime Minister promised, in the main trade journal, that there would be an urgent, independent, comprehensive study of the problem. He has broken that promise. There has certainly been no urgent study, because even the one carried out by Customs and Excise has not yet come out. In any case, it is not independent, because it has been carried out by a Government Department. It is not comprehensive because the trade report said that Customs and Excise has, on the instruction of Ministers, ruled out examination of the two main measures that could control the problem—either the reinstatement of border controls or the approximation of duty rates.
      5.45 pm
      All we have is a secret study, which has not been published, despite Government words about openness, accountability and the public's right to know, but has been carried out within the Government. We await that study—even if it could not be published on time at the end of last year, it would inform our debates at later stages. As my hon. Friend the Member for Tunbridge Wells said, if we do not have it, we shall strongly suspect that its conclusions are embarrassing to the Government and critical, of their policy.
      They might well be critical, because, in our last two years in office, we froze duty rates. Despite a large budget deficit, we moved, albeit slowly, to narrow the gap between rates of duty and thus provide a disincentive to the illegal trade and cross-border shopping. That contrasts with the actions of this Government who, despite their looming budget surplus, have again increased those rates of duty. I shall invite my hon. Friends to vote against the clause.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 293, Noes 123.

      Division No. 258]

      [5.46 pm

      AYES

      Abbott, Ms Diane

      Cox, Tom

      Adams, Mrs Irene (Paisley N)

      Cranston, Ross

      Ainger, Nick

      Crausby, David

      Ainsworth, Robert(Cov'try NE)

      Cummings, John

      Alexander, Douglas

      Cunliffe, Lawrence

      Allan, Richard

      Cunningham, Rt Hon Dr John

      Allen, Graham

      (Copeland)

      Anderson, Donald(Swansea E)

      Cunningham, Jim (Cov'try S)

      Anderson, Janet (Rossendale)

      Cunningham, Ms Roseanna

      Armstrong, Ms Hilary

      (Perth)

      Ashton, Joe

      Dafis, Cynog

      Atherton, Ms Candy

      Dalyell, Tam

      Atkins, Charlotte

      Davey, Edward (Kingston)

      Baker, Norman

      Davidson, Ian

      Ballard, Mrs Jackie

      Davies, Rt Hon Denzil (Llanelli)

      Banks, Tony

      Davies, Geraint (Croydon C)

      Bayley, Hugh

      Dawson, Hilton

      Beckett, Rt Hon Mrs Margaret

      Denham, John

      Beggs, Roy

      Dewar, Rt Hon Donald

      Bell, Stuart(Middlesbrough)

      Dobbin, Jim

      Benn, Rt Hon Tony

      Dobson, Rt Hon Frank

      Bennett, Andrew F

      Donohoe, Brian H

      Benton, Joe

      Dowd, Jim

      Best, Horald

      Drew, David

      Betts, Clive

      Drown, Ms Julia

      Blackman, Liz

      Eagle, Angela (Wallasey)

      Blizzard, Bob

      Eagle, Maria (L'pool Garston)

      Borrow, David

      Ellman, Mrs Louise

      Bradley, Peter (The Wrekin)

      Ewing, Mrs Margaret

      Bradshaw, Ben

      Fatchett, Derek

      Brand, Dr Peter

      Fearn, Ronnie

      Breed, Colin

      Fisher, Mark

      Brinton, Mrs Helen

      Flynn, paul

      Brown, Rt Hon Gordon

      Follett, Barbara

      (Dunfermline E)

      Foster, Rt Hon Derek

      Brown, Rt Hon Nick (Newcastle E)

      Foster, Michael Jabez (Hastings)

      Brown, Russell (Dumfries)

      Foster, Michael J (Worcester)

      Browne, Desmond

      Foulkes, George

      Burden, Richard

      Fyfe, Maria

      Burgon, Colin

      Galloway, George

      Butler, Mrs Christine

      Gardiner, Barry

      Byers, Stephen

      George, Andrew (St Ives)

      Cable, Dr Vicent

      George, Bruce (Walsall S)

      Campbell, Alan (Tynemouth)

      Gerrard, Neil

      Campbell, Mrs Anne (C'bridge)

      Gibson, Dr Ian

      Campbell, Menzies (NE Fife)

      Godman, Dr Norman A

      Campbell, Ronnie (Blyth V)

      Godsiff, Roger

      Campbell-Savours, Dale

      Golding, Mrs Llin

      Canavan, Dennis

      Gorrie, Donald

      Cann, Jamie

      Grant, Bernie

      Caplin, Ivor

      Griffiths, Jane (Reading E)

      Casale, Roger

      Grocott, Bruce

      Caton, Martin

      Gunnell, John

      Chaytor, David

      Hain, Peter

      Chisholm, Malcolm

      Hall, Mike (Weaver Vale)

      Clark, Dr Lynda

      Hall, Patrick (Bedford)

      (Edinburgh Pentlands)

      Hanson, David

      Clark, Paul (Gillingham)

      Heal, Mrs Sylvia

      Clarke, Charles (Nowich S)

      Heath, David (Somerton & Frome)

      Clarke, Eric (Midlothian)

      Henderson, Ivan (Harwich)

      Clarke, Rt Hon Tom (Coatbridge)

      Hepburn, Stephen

      Clwyd, Ann

      Heppell, John

      Coaker, Vernon

      Hesford, Stephen

      Coleman, Iain

      Hinchliffe, David

      Cook, Frank (Stockton N)

      Hoey, Kate

      Corbyn, Jeremy

      Home Robertson, John

      Cotter, Brian

      Hood, Jimmy

      Cousins, Jim

      Hoon, Geoffrey

      178

      Hopkins, Kelvin

      Mullin, Chris

      Howarth, George (Knowsley N)

      Murphy, Denis (Wansbeck)

      Howells, Dr Kim

      Murphy, Jim (Eastwood)

      Hoyle, Linsay

      Oaten, Mark

      Humble, Mrs Joan

      O'Brien, Bill (Normanton)

      Hurst, Alan

      O'Brien, Mike (N Warks)

      Hutton, John

      O'Neill, Martin

      Iddon, Dr Brian

      Organ, Mrs Diana

      Illsley, Eric

      Osborne, Ms Sandra

      Jackson, Ms Glenda (Hempstead)

      Palmer, Dr Nick

      Jackson, Helen (Hillsborough)

      Pearson, Ian

      Jamieson, David

      Perham, Ms Linda

      Jenkins, Brian

      Pickthall, Colin

      Johnson, Alan (Hull W & Hessle)

      Pike, Peter L

      Johnson, Miss Melanie

      Plaskitt, James

      (Welwyn Hatfield)

      Pond, Chris

      Jones, Barry (Alyn & Deeside)

      Pound, Stephen

      Jones, Helen (Warrington N)

      Powell, Sir Raymond

      Jones, Ms Jenny

      Prentice, Ms Bridget (Lewisham E)

      (Wolverh'ton SW)

      Prentice, Gordon (Pendle)

      Jones, Jon Owen (Cariff C)

      Primarolo, Dawn

      Jones, Martyn (Clwyd S)

      Purchase, Ken

      Kaufman, Rt Hon Gerald

      Quin, Ms Joyce

      Keeble, Ms Sally

      Quinn, Lawrie

      Keen, Ann (Brentford & Isleworth)

      Radice, Giles

      Kennedy, Charles (Ross Skye)

      Rammell, Bill

      Kennedy, Jane (Wavertree)

      Rapson, Syd

      Kilfoyle, Peter

      Reed, Andrew (Loughborough)

      King, Andy (Rugby & Kenilworth

      Reid, Dr John (Hamilton N)

      Kingham, Ms Tess

      Roche, Mrs Barbara

      Kirkwood, Archy

      Rogers, Allan

      Kumar, Dr Ashok

      Rooker, Jeff

      Lawrence, Ms Jackie

      Roy, Frank

      Laxton, Bob

      Ruddock, Ms Joan

      Lepper, David

      Russell, Bob (Colchester)

      Leslie, Christopher

      Sanders, Adrian

      Levitt, Tom

      Sarwar, Mohammad

      Lewis, Ivan (Bury S)

      Savidge, Malcolm

      Liddell, Mrs Helen

      Shaw, Jonathan

      Livingstone, Ken

      Sheerman, Barry

      Livsey, Richard

      Sheldon, Rt Hon Robert

      Lloyd, Tony (Manchester C)

      Skinner, Dennis

      Llwyd, Elfyn

      Smith, Angela (Basildon)

      Lock, David

      Smith, Rt Hon Chris (Islington S)

      Love, Andrew

      Smith, Miss Geraldine

      McAllion, John

      (Morecambe & Lunesdale)

      McAvoy, Thomas

      Smith, Jacqui(Redditch)

      McCabe, Steve

      Smith, John(Glamorgan)

      McCafferty, Ms Chris

      Smith, Llew (Blaenau Gwent)

      McDonnell, John

      Spellar, John

      McFall, John

      Steinberg, Gerry

      McGuire, Mrs Anne

      Stevenson, George

      McIssac, Shona

      Stewart, David (Inverness E)

      McKenna, Mrs Rosemary

      Stinchcombe, Paul

      Mackinlay, Andrew

      Stoate, Dr Howard

      McNamara, Kevin

      Stott, Roger

      McNulty, Tony

      Strang, Rt Hon Dr Gavin

      Mactaggart, Fiona

      Stringer, Graham

      Mallaber, Judy

      Swinney, John

      Mandelson, Peter

      Taylor, Rt Hon Mrs Ann

      Marsden, Gordon (Blackpool S)

      (Dewsbury)

      Marshall, David (Shettleston)

      Taylor, Matthew (Truro)

      Marshall, Jim (Leicester S)

      Temple—Morris, Peter

      Maxton, John

      Thomas, Gareth(Clwyd W)

      Michael, Alun

      Thomas, Gareth R (Harrow W)

      Michie, Bill (Shef'ld Heeley)

      Tipping, Paddy

      Michie, Mrs Ray (Argyll & Bute)

      Tonge, Dr Jenny

      Milburn, Alan

      Touhig, Don

      Mitchell, Austin

      Trickett, Jon

      Moffatt, Laura

      Truswell, Paul

      Moonie, Dr Lewis

      Turner, Dennis (Wolverh'ton SE)

      Moore, Michael

      Turner, Dr Desmond (Kemptown)

      Morgan, Ms Julie (Cardiff N)

      Turner, Dr George (NW Norfolk)

      Morley, Elliot

      Twigg, Derek (Halton)

      Morris, Rt Hon John (Aberavon)

      Tyler, Paul

      Mudie, George

      Wallace, James

      179

      Walley, Ms Joan

      Wills, Michael

      Watts, David

      Winnick, David

      Welsh, Andrew

      Wise, Audrey

      Wicks, Malcolm

      Wood, Mike

      Wigley, Rt Hon Dafydd

      Wray, James

      Williams, Rt Hon Alan

      (Swansea W)

      Teller for the Ayes:

      Williams, Alan W (E Carmarthen)

      Mr, Greg Pope and

      Willis, Phil

      Mr. David Clelland.

      NOES

      Ainsworth, Peter (E Surrey)

      Lansley, Andrew

      Ancram, Rt Hon Michael

      Leigh, Edward

      Arbuthnot, James

      Letwin, Oliver

      Atkinson David (Bour'mth E)

      Lewis, Dr Julian (New Forest E)

      Baldry, Tony

      Lidington, David

      Bercow, John

      Lilley, Rt Hon Peter

      Blunt, Crispin

      Lloyd, Rt Hon Sir Peter (Fareham)

      Bottomley, Peter (Worthing W)

      Loughton, Tim

      Brady, Graham

      Luff, Peter

      Brazier, Julian

      Lyell, Rt Hon Sir Nicholas

      Brooke, Rt Hon Peter

      MacGregor, Rt Hon John

      Browning, Mrs Angela

      McIntosh, Miss Anne

      Burns, Simon

      MacKay, Andrew

      Cash, William

      Maclean, Rt Hon David

      Chapman, Sir Sydney

      McLoughlin, Patrick

      (Chipping Barnet)

      Madel, Sir David

      Chope, Christopher

      Malins, Humfrey

      Clappison, James

      Mates, Micheal

      Clark, Rt Hon Alan (Kensington)

      Maude, Rt Hon Francis

      Clark, Dr Michael (Rayleigh)

      Mawhinney, Rt Hon Sir Brain

      Clarke, Rt Hon Kenneth

      Moss, Malcolm

      (Rushcliffe)

      Nicholls, Patrick

      Clifton—Brown, Geoffrey

      Norman, Archie

      Collins, Tim

      Ottaway, Richard

      Colvin, Michael

      Paterson, Owen

      Cormack, Sir Patrick

      Prior, David

      Cran, James

      Randall, John

      Curry, Rt Hon David

      Redwood, Rt Hon John

      Davies, Quentin (Grantham)

      Robathan, Andrew

      Davis, Rt Hon David (Haltemprice)

      Robertson, Laurence (Tewk'b'ry)

      Day, Stephen

      Roe, Mrs Marion (Broxbourne)

      Dorrell, Rt Hon Stephen

      Rowe, Andrew (Faversham)

      Duncan Smith, Iain

      Ruffley, David

      Evans, Nigel

      St Aubyn, Nick

      Fabricant, Michael

      Sayeed, Jonathan

      Fallon, Michael

      Shepherd, Richard

      Forth, Rt Hon Eric

      Simpson, Keith (Mid—Norfolk)

      Fowler, Rt Hon Sir Norman

      Soames, Nicholas

      Fox, Dr Liam

      Spelman, Mrs Caroline

      Fraser, Christopher

      Spicer, Sir Michael

      Garnier, Edward

      Spring, Richard

      Gibb, Nick

      Stanley, Rt Hon Sir John

      Gorman, Mrs Teresa

      Steen, Anthony

      Green, Damian

      Streeter, Gary

      Greenway, John

      Swayne, Desmond

      Grieve, Dominic

      Syms, Robert

      Hague, Rt Hon William

      Tapsell, Sir Peter

      Hamilton, Rt Hon Sir Archie

      Taylor, Sir Teddy

      Hammond, Philip

      Tredinnick, David

      Harvey, Nick

      Trend, Michael

      Hayes, John

      Tyrie, Andrew

      Heald, Oliver

      Viggers, Peter

      Heathcoat—Amory, Rt Hon David

      Wardle, Charles

      Horam, John

      Waterson, Nigel

      Howarth, Gerald (Aldershot)

      Whitney, Sir Raymond

      Hunter, Andrew

      Widdecombe, Rt Hon Miss Ann

      Jack, Rt Hon Michael

      Willetts, David

      Jackson, Robert (Wantage)

      Wilshire, David

      Johnson Smith,

      Winterton, Mrs Ann (Congleton)

      Rt Hon Sir Geoffrey

      Woodward, Shaun

      Key, Robert

      Young, Rt Hon Sir George

      King, Rt Hon Tom (Bridgwater)

      Kirkbride, Miss Julie

      Tellers for the Noes:

      Laing, Mrs Eleanor

      Mr. John M. Taylor and

      Lait, Mrs Jacqui

      Mr. John Whittingdale.

      Question accordingly agreed to.
      Clause I ordered to stand part of the Bill.

    Clause 7

      Rates of Duties And REBATES
      Mr. Heathcoat-Amory: I beg to move amendment No. 12, in page 3, line 39, leave out '£0.4926', and insert '£0.48'.
      Even in the context of a tax-raising Budget, the impost on road fuels was particularly savage. The amendment seeks to moderate the increase to bring it back into line with the so-called escalator that we left behind when we lost office. The private motorist and commercial road users face steep increases, and, as ever, the Library has been helpful in working out the implications of the new transport fuels policy that was announced in the Budget.
      The increase in the escalator from 5 to 6 per cent. in real terms, the fact that the Government have brought forward the implementation date, and an extra increase in the duty on diesel and super unleaded petrol, add up to an additional tax burden of £9 billion over this Parliament. By any standard, that is a huge additional burden, and it is an inefficient way to reduce car use, if that was the intention. Of course it has an effect on the private motorist and a most unfortunate effect on those in rural areas where many people must have cars—there is no realistic alternative to the car for getting to work or for use in the course of daily routine. Against the huge, almost staggering, increase in the overall tax burden, the £50 million that is to be allocated to rural bus services over three years is gesture politics at its worst. It is an insult to people who live in those areas.
      Mr. Dafydd Wigley (Caernarfon): Does the right hon. Gentleman agree that the burden will hit rural areas at a particularly inopportune time, in view of the severe decline in farm incomes? A reduction of 89 per cent. has been reported in a study in Wales in the past year. This is the worst time for such additional impositions to be placed on rural areas.
      Mr. Heathcoat-Amory: I entirely agree. The right hon. Gentleman and I have rural constituencies. I represent the second main dairy county in Britain, and the hon. Gentleman's area has a marked concentration of agricultural and allied industries, both of which are suffering grievously from reduced prices and subsidies and the strength of the pound. The increase in fuel duty on top of those factors is a burden that people find hard to understand from a Government who talk much about their inclusiveness and their aim to help what they call rural communities.
      Mr. Cranston: I should like to draw the Committee's attention to what the right hon. Member for Wells (Mr. Heathcoat-Amory) said in January 1995 when this issue was being addressed:
      "I accept that some things are more expensive in rural areas. Some things are more expensive in urban areas. That is the interplay of a market and the inheritance of the past."—[Official Report, 23 January 1995; Vol. 253, c. 104.]

      181
      Would the right hon. Gentleman like to comment on that?
      Mr. Heathcoat-Amory: That was an entirely different debate. I conceded at that time—and I have always recognised—that those who live in rural areas rely more on cars. That is the issue that we are debating. It is undoubtedly true that some services are more expensive in rural areas, and nothing that the Government can do could alter that. What I said at that time is right, and I withdraw nothing whatever from it. It does not contradict my point that the increase in petrol and other fuels, which affect everyone, are especially burdensome for people in rural areas who are already damaged, as the right hon. Member for Caernarfon (Mr. Wigley) said, by the poor state of farming.
      Mr. John Bercow: The hon. Member for Dudley, North (Mr. Cranston) mentioned the debate of 23 January 1995. Is my right hon. Friend aware that, on that day, the Financial Secretary, who was then in opposition, said of an increase in fuel duty:
      "People living in rural areas will be badly affected."—[Official Report, 23 January 1995; Vol. 253, c. 99.]
      She also said that to portray such a measure as environmental was cynical. Was she wrong then, is she wrong now, or does not she know which?
      Mr. Heathcoat-Amory: The difference is that, in 1995, the hon. Lady was not in a position to do anything on this matter. Now that she is in office, she is able to deliver. During the debate, we shall see whether her words were hollow or whether she intends to deliver on her intentions at that time.
      We are debating the effects on rural areas of the increased duty, but the increase will also affect industrial costs, which are also incurred in rural areas, and the United Kingdom's entire distribution chain. All raw materials have to be moved and all goods distributed; the fuel that propels most of that movement is diesel, the fuel of industry.
      The Budget signals a duty increase on diesel higher than that on petrol. Furthermore, the Red Book signals that future Budgets will widen the gap and that diesel duty will go on increasing at a higher rate than the duty on petrol in spite of the fact that diesel duty in the United Kingdom is already the highest in the European Union. The Freight Transport Association reports that it is 70 per cent. above the average of EU member states, so there is a competition point.
      Industry and exporters in particular are suffering because of the high pound, and the Government are burdening them with a tax increase that goes to the heart of the productive economy. It is not hard to see what will happen. Not only will competitiveness, investment and the capacity to create new jobs be hit; there will be every incentive to hauliers conducting international business to fill their tanks abroad. That is not a trivial problem. If all the lorries that go to the continent leave with empty tanks and return with full ones, there will be a significant drain on the Revenue. When working out the yield from the increase in diesel duty, the Financial Secretary must have estimated the effects of what will be lost through hauliers
      182
      and others filling their tanks overseas. There will be a significant loss of revenue if big articulated lorries with empty tanks fill up in France rather than in this country.
      Mr. Leslie: While we are talking about loss of revenue, perhaps the right hon. Gentleman will tell us the cost to the Exchequer of his amendment. I understand that it might be in the region of £400 million. Will he confirm that? How does he plan to raise that extra money?
      Mr. Heathcoat-Amory: I shall come to the amendment in due course. To put the hon. Gentleman out of his misery, I assure him that we are merely returning the escalator to what we left behind in our Red Book. The Labour party has taken over all our expenditure commitments. Why cannot it take over our taxation estimates as well? If the hon. Gentleman supports that, he will support an amendment that would reduce the extra burden of taxation and return to the estimates that we left behind. There would be no loss of revenue, but a continuation of the revenue that we wrote into our last Budget. I am grateful to the hon. Gentleman for his intervention.
      The effect of the annual increase in fuel duties is estimated as equivalent to 1 p on the basic rate of income tax every year. Those increases affect not just industry and distribution, but public services. Labour Members sometimes overlook the fact that ambulances and police cars run on the more expensive fuel. Without compensation, the increases in duty represent a real-terms cut in expenditure on those public services.
      The Government's excuse for the increase in diesel duty is to encourage the use of low-sulphur diesel. We all know that the compounds produced when sulphur combines with oxygen are part of the pollution problem, particularly in cities, but instead of creating an incentive by reducing the cost of low-sulphur diesel, the Government have increased the duty on that fuel by more than the increase on petrol. It has gone up by 9.4 per cent. That is the second increase in less than a year. The only incentive is that the duty on ordinary diesel has gone up by even more—by 11.7 per cent. That is also the second increase in eight months. They are using a stick rather than a carrot.
      The policy is particularly stupid given the Government's professed concern about global warming. My information from the industry is that taking a tonne of sulphur out of diesel releases 20 tonnes of carbon dioxide into the atmosphere because the procedure is very energy-intensive. There is then also the problem of disposing of the sulphur.
      Diesel is a more efficient fuel than petrol for carbon dioxide emissions. A vehicle can go further on a gallon of diesel than on a gallon of petrol, and the combustion of the fuel produces less carbon dioxide. If the Government are concerned about global warming, why are they encouraging an industrial process that releases more carbon dioxide? Why are they encouraging the use of petrol rather than diesel?
      Mr. Geoffrey Clifton-Brown: Does my right hon. Friend agree that, in balancing petrol against diesel, the Government have also forgotten about the cancerous effects of the benzine and benzine-related compounds in petrol, which are absent from diesel?
      6.15 pm
      Mr. Heathcoat-Amory: My hon. Friend is probably right, but we do not know what the Government have forgotten, because they will not tell us. We could have had the answers to my hon. Friend's question if the Government had fulfilled their promise to accompany their Budget with a green book setting out the environmental implications of Government policy. As the Treasury Committee has recently observed, no green book was forthcoming, despite a promise by the Financial Secretary that one would be published. Perhaps she will fulfil that promise when she answers the debate. Even if she cannot produce the book this afternoon, she can at least tell us when it will be published, in line with her earlier assurance. The Government are in a muddle. They are setting up contradictory incentives. Their environmental goals are not clear.
      The amendment would return the duty increase to the 5 per cent. escalator that we set in motion, and would restrict its implementation to once a year. The arithmetic in the amendment may not be exact—it is for the Government to improve on it if they can—but our intention is clear. We have taken approximately two thirds of the 5 per cent. increase that we left behind in recognition of the fact that this is the second increase in eight months. We are reducing the escalator, because we should get back to annual increases rather than trying to squeeze them in every eight months. That would lift the burden of the £9 billion extra hit on the private motorist and the productive sector of the economy caused by the Government's new policy on the taxation of fuel. If the amendment is accepted, as it should be, we shall strike a blow for industry, public services and the private motorist.
      Mr. St. Aubyn: I support the amendment. The Government are in danger of devaluing an important principle. The previous Government fully endorsed the principle of using economic levers up to a point to change behaviour. We encouraged people to switch to unleaded petrol by changing the rates of duty between unleaded and leaded. A measured increase in petrol duties was part of a programme of persuading people to use their cars less and to use public transport more.
      The Government must explain why increasing the scale on which the duties are raised from 5 per cent. to at least 6 per cent. will make any difference. I do not believe that it will. A measured rise in duty is helpful as part of an overall programme to encourage people to switch from using their cars to using public transport, but on its own it is not an answer. With their excessive rise in petrol duty, the Government are putting too much faith in one policy. That will not work. The huge increases in traffic through my constituency despite increases in duty in recent years show that the use of the private car will not be influenced by the price of petrol alone. A huge convenience factor must be addressed before we can hope to stem the increase in traffic.
      On Friday, we debated the Road Traffic Reduction (National Targets) Bill. It is evident that there is support on both sides of the House for measures that discourage motor traffic, but they must be carefully considered. The Government's proposal is an attempt merely to cap the previous Government's policy by taking it that step further, but without thinking through the consequences. I am sure that we shall hear from hon. Members who represent rural areas, such as Cornwall, where I used to
      184
      live, which will be very hard hit by the scale of the increase that the Government have proposed for all road users without thinking through what other measures are needed.
      The extra burden on the car driver will not make any difference to the increasing traffic in lanes around Guildford. It will not save us from problems on Halfpenny lane in Chilworth or through villages such as Compton and Puttenham, where the massive increase in traffic is causing tremendous disquiet. If the Government's only response is to raise petrol duty, it is simply not good enough. That will not solve the problem.
      Mr. Bercow: Does my hon. Friend agree that, if the Government think that an increase in duty will reduce the use of the private motor car, they owe it to the House and to the public to publish an estimate of what they believe that reduction will be? If they fail to do so, we can assume that they do not expect a reduction in usage, and that the proposal is just a smash-and-grab raid on taxpayers.
      Mr. St. Aubyn: I thank my hon. Friend for pointing out that what really lies behind the Government's proposal is greed. They simply want to grab as much money as they can from the taxpayer. It is old-fashioned socialist greed. The implication is that those with the largest cars will pay the most. The calculation is spinning through the brains of Labour Members as we debate the issue. I would go further than my hon. Friend: the Government should not only publish estimates of how much the additional levy will reduce road traffic but tell us how they will spend the additional revenue to encourage alternative uses.
      I should like to draw the Committee's attention to some very interesting alternative means of transport in my constituency that are at the forefront of thinking on the issue. They demonstrate the inadequacy of the Government's response in clause 7. The concept of an ultra-light railway system has been promoted by a firm based in Guildford that gave a presentation in the House only a few weeks ago. The system could have a significant impact in town centres such as Guildford by encouraging people not to use their cars. The concept relies not only on increases in duty but on new technology. More to the point, it is a purely market-driven solution, which requires no public subsidy.
      The Temporary Chairman: Order. We are discussing rates of duty; I am sure that the hon. Gentleman knows that.
      Mr. St. Aubyn: I am just contemplating how the additional revenue that the Government are planning to raise through the excessive increase in duty might be put towards a constructive policy of discouraging the use of the private motor car. If the Government cannot come up with such a policy, the idea that the motorist should be arbitrarily penalised clearly becomes highly debatable.
      The Temporary Chairman: Order. This is all very interesting, but I am afraid that we are debating a rather narrow amendment. I am sure that the hon. Gentleman would like to return to it.
      Mr. St. Aubyn: I am grateful for your excellent guidance, Mrs. Dunwoody.

      185
      We should emphasise that the Government are proposing a very narrow-minded policy that does not go nearly far enough towards solving the problems that face this country. Behind the example of the ultra-light railway is the fact that we shall solve the problems of excessive traffic through market solutions.
      Mr. Clifton-Brown: Will my hon. Friend call on the Government to publish the specific environmental benefits of not raising the escalator, as we propose in amendment No. 12? No figures have been published either in the notes on clauses or in the Red Book to indicate specific environmental gains in terms of carbon dioxide emissions.
      Mr. St. Aubyn: My hon. Friend makes a very valid point. I hope that the Financial Secretary is making careful notes because recent interventions show just how far short the Government have fallen of what they should be achieving. If they want any support in the Lobby tonight, they must show that there is a purpose behind imposing additional levies on the motorist. The purpose must surely be traffic reduction.
      We must come forward with market-driven solutions. As a result of the policy instituted by the previous Government, there is evidence that although an increase in petrol duty may form part of a comprehensive strategy, it cannot be the whole strategy. If it cannot be the whole strategy, it is simply not fair, particularly on less well-off people in rural areas who depend on cars, to penalise the motorist by proposing such taxes.
      Mr. John Swinney: I support the amendment because some moderation of the Government's proposed increase is better than nothing. I calculate that the percentage increase recommended by the Conservatives was of the order of 6 per cent., against the 9 per cent. that the Government propose. It is important that we do something to moderate the proposed severe increase in petrol duty.
      There has been much double-talk in this debate from Conservative spokesmen who have denounced measures that they were quite happy to introduce when they were on the Government Benches. I shall spare the Committee any further points on the hypocrisy of both main parties on this issue.
      Mr. Heathcoat-Amory: The hon. Gentleman has just said that he wants to return the duty increase to the level that applied under the previous Government, which is exactly what the amendment proposes. Why, therefore, is it hypocritical for us to get together on the same issue?
      Mr. Swinney: Although I am grateful for that intervention, it is a curious way to welcome friends into the body of the kirk, as we would say in Scotland. I would have much preferred the amendment tabled by my hon. Friends and myself—or, possibly, that tabled by the Liberal Democrats. Unfortunately, those amendments were not selected.
      Mr. Bercow: It is sour grapes.
      Mr. Swinney: It is not sour grapes. It is just a recognition that the Conservatives, as usual, are offering us a second-best solution to the problem, which I am happy to support.
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      If the clause is passed without amendment, we will have witnessed two inflation-busting increases in 12 months, totalling three in 18 months. As a Member of Parliament who represents a very large part of Scotland and a diverse rural constituency, I know that the increases are very damaging to the health of the rural economy.
      I have listened carefully to, and comprehend, the Government's arguments at different stages in the Bill's passage on why it is necessary to go down such a route to reduce vehicle use and traffic congestion, protect the environment, reduce emissions, and all the rest of it.
      On Second Reading, I questioned the Chief Secretary on that very point. I asked him what information the Government had at their disposal to suggest that increasing duty on petrol reduced car use. I thought that was a straightforward question. The Chief Secretary replied:
      "The matter has been looked into. If fuel duties are increased, there is a reduction in car use and lower carbon dioxide emissions."—[Official Report, 21 April 1998; Vol. 310, c. 609.]
      That sounded clear, but, to make sure, I thought that I would ask a written question to get the information out into the public domain. I asked the Chancellor
      "what data he has evaluated indicating that increasing the duty on fuel results in lower car use; and if he will make the studies available in the Library."
      The Financial Secretary kindly responded:
      "I shall let the hon. Member have a reply as soon as possible."
      That did not suggest to me that there was compelling evidence in the Treasury to suggest that increasing the cost of petrol resulted in less car use. I am sure that the full answer is in the post.
      I question the central thrust of the Government's strategy in the clause, which is that increases in the cost of petrol will result in lower fuel use. The arguments are much more closely related to a balanced debate on road pricing, increasing parking charges in city centres such as London, and differential levels of vehicle excise duty in different parts of the country. I do not believe that the Government's approach of increasing duty disproportionately beyond the rate of inflation will work.
      Mr. Cranston: Did the hon. Gentleman also ask the Financial Secretary about the benefits that his constituency will receive from the £50 million a year for bus services for the next three years?
      6.30 pm
      Mr. Swinney: I would not need the Financial Secretary's advice to get my calculator out to start working my way through that £50 million over three years for a number of large and diverse rural constituencies. I got into some trouble in a recent radio debate involving the hon. Member for Gordon (Mr. Bruce), when I suggested that there were no public transport services in my constituency. That was careless, because the next day I received a letter from the Stagecoach bus company telling me how many buses went through my constituency.
      Mr. David Heath: The hon. Gentleman's constituency has some similarities to mine in terms of its rurality. Many households need more than one car to go about normal life, because public transport

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      does not exist for them. Does the hon. Gentleman agree that one way of making the imposition fairer on rural areas would be a drastic reduction in vehicle excise duty, with that package being presented to the rural motorist as environmental, but fair?
      Mr. Swinney: Such a solution would take account of the differences between areas. Petrol prices in London are substantially lower than in parts of my constituency, such as Blairgowrie, Pitlochry and Forfar.
      The essential nature of cars in rural communities was outlined by the Scottish Office in 1987, which said:
      "a car in a remote area may be both highly unreliable and barely affordable but nevertheless essential to survival and any households without a car in remote areas must be at a severe disadvantage."
      Statistical evidence shows that, on average, 57 per cent. of households in Scotland have one car. In the highlands, the figure is 68.5 per cent.; in Grampian it is 68.3 per cent.; and in the northern isles it is 70 per cent. By my calculations, when above-inflation increases are taken into account, the increase proposed in the Bill means that an average rural car user will have paid about £60 extra a year since 1993. That is about £400 over that period for rural car users—an enormous burden for people who survive on fairly modest incomes, particularly in the current financial climate.
      Earlier, the hon. Member for Shipley (Mr. Leslie) intervened on the right hon. Member for Wells (Mr. Heathcoat-Amory) and referred to a quotation from 1995. One of the points that I would use to shore up the argument that the right hon. Gentleman made is that, when petrol increases are introduced, the effect on small shops and the price of commodities—which is already higher in rural areas than in urban areas—is severe. That must be appreciated when decisions of this nature are made.
      I have looked at the information on travel-to-work patterns in rural areas of Scotland provided by Highlands and Islands Enterprise. In the UK, about 9.85 per cent. of people travel to work by bus; in the highlands and islands, the proportion is 6.6 per cent.—showing a further differential in the availability of public transport and the essential nature of the car.
      The Government have embarked on a route that—as has been drawn to their attention in the Budget debates, at Second Reading and again today—is damaging the rural economy at a time when it is at one of the most fragile stages of its development. I urge the Government to think again and to give greater consolation than the £50 million over three years. [HON. MEMBERS: " fifty million a year."] I stand corrected. If that amount is broken down into individual constituencies—and the type of work required to build effective public transport services in fragile rural areas is considered—it will not take us very far on the bus.
      Mr. Malcolm Bruce: Is the hon. Gentleman aware that the city of Aberdeen is discussing a possible cross-city commuter railway service, using the existing railway line? It is estimated that that would cost £30 million to £50 million. One project in one city could use the entire amount—and that is a project to bring rural people to work.
      Mr. Swinney: The hon. Gentleman makes a valid point, which touches on the impact on cities such as
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      Aberdeen of the growing commuter belts outwith the major cities. The same problem exists in Perth and Dundee.
      I conclude with some information on comparative petrol prices, which was kindly provided—I could not quite believe the source—by BBC Ceefax in April 1998. This country has the fourth largest average price for unleaded petrol in the EU, and many other countries operate with lower petrol prices. The Government, by pursuing the measures in the clause, are entrenching a problem which is felt by many people—particularly, and most severely, people in rural areas.
      Mr. Burney: It would be in the interests of hon. Members to remember that this is yet another tax increase, a tax increase that the Prime Minister said before the last election he would not be making. House of Commons figures—which Opposition Members have not denied—show that an average household will be more than £1,000 a year worse off as a result of mortgage rate and tax increases.
      No one in the Chamber, Mr. Haselhurst, has even attempted to deny the independence and judgment of those figures. [HON. MEMBERS: "Sir Alan."] You have always been a knight in my eyes, Sir Alan. A large component of that burden on average families comes through increases in duty, including petrol duty.
      The increase is in three parts. The escalator is going up from 5 to 6 per cent. Then there are the two timing changes that the Government have introduced in respect of the previous financial year: the timing was moved from November to July and there is the more long-term change of moving the point of operation of the tax increase from November to March. Those constitute three separate increases.
      That is not more or less what the previous Government did. It is defying the laws of arithmetic to suggest that the increases in the Bill are more or less what the previous Conservative Chancellor was engaged in. It is complete nonsense. If Labour Members bother to read the Red Book, they will discover why. It shows that the estimate for the amount of revenue to be raised between 1997–98 and 2002 is over and above the estimate under the Tory 5 per cent. escalator: it is £9 billion more than under the Conservative escalator. A colossal amount of revenue is being raised by the increases that the Bill would put into effect. For that reason, we suggest that the increase be pegged to 5 per cent.
      With that extra £9 billion over those financial years, a burden will be placed on the countryside. There is no other way in which to interpret £9 billion extra in revenue. Liberal Democrat Members have drawn attention to the experience of their constituencies. [HON. MEMBERS: "Nationalist Members."] I am sure that the hon. Member for Somerton and Frome (Mr. Heath) will make that point; he has already made it in an intervention.
      The increases fall on families for whom a car is a necessity, not a luxury. Many Opposition Members who do represent rural constituencies—not perhaps as rural as Dudley—have a considerable number of rural

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      constituents. They represent the counties of Oxfordshire, Buckinghamshire and Gloucestershire, and actually know and understand—
      Mr. David Hanson: Scotland and Wales.
      Mr. Ruffley: I refer to the hon. Members who are here in their places and not to those who are not.
      Mr. Hanson: There are no Conservative Members in Scotland.
      Mr. Ruffley: Labour Members representing Scotland and Wales are not in their places at the moment; the hon. Gentleman should listen to what I say.
      The fact remains that many lower-income families have smaller, perhaps quite old cars and are not very wealthy by any means, but they need a car to travel large distances. For example, outlying villages in my constituency—those in the Norfolk-Suffolk borders such Hinderclay and Redgrave—are miles away from any nodal transport. That has always been the case. In that part of high Suffolk, for 50 years public transport has not been as good as perhaps it should have been. I do not imagine that it will be any different under this Government, but that is a hard fact of life. The inhabitants there know that they need cars, sometimes more than one car. It is beyond belief that a Government who believe in governing supposedly for the many and not the few can ignore large swathes of the rural populations in Scotland and Wales.
      Mr. Clifton-Brown: Will my hon. Friend consider the fact that, if the Government really want to represent rural areas, they should in some way balance the amount of money that they give to rural community bus services with the amount of duty that they raise on petrol?
      Mr. Ruffley: My hon. Friend makes an interesting point.
      Mr. Bercow: My hon. Friend's charm and courtesy in giving way are well established throughout the House. Does he agree that, if Labour Members representing rural constituencies are to prove that they are independent spirits and not craven lickspittles of the party leadership, they should be prepared to get up and denounce this vicious attack on country dwellers?
      Mr. Ruffley: My hon. Friend makes a typically robust and eloquent point. Perhaps the Financial Secretary to the Treasury, once she has finished shuffling through her brief, will be able to take note of his excellent point and reply to it in her winding-up speech. What on earth do the Government think they are doing by raising the escalator in this fashion? What do they think that will do to rural communities and to poorer people who rely on cars as a necessity, not a luxury?
      That brings me to the point that my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) raised in relation to public transport subsidies. The £50 million was a gross insult to rural communities. I know that Labour Members may not have many regional newspapers to which they bother sending Walworth road and Mandy
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      towers press releases, but many of us do take a great interest in what media and newspapers in the shire counties say. They laughed the proposal for £50 million out of court. These are newspapers with no political bias of any description. [Interruption.] If hon. Members think that the East Anglian Daily Times is a party political newspaper, they are more incompetent when it comes to analysing political runes than I thought.
      These are independent shire newspapers that take a dim view of the rhetoric of governing for the many, not the few, and of the Government's actions in hammering people who are least able to take on board tax increases of the sort that are outlined in the clause.
      Mr. Cranston: Will the hon. Gentleman give way?
      Mr. Ruffley: I happily, but reluctantly, give way to the hon. Gentleman.
      Mr. Cranston: I thank the hon. Gentleman, perhaps reluctantly, but he took the name of my constituency in vain earlier. Before he draws his remarks to an end, will he say something about the environmental impact? He has gone on for almost 10 minutes and has not mentioned the environment once. Does he agree that transport is the fastest growing contributor to carbon dioxide emissions? Is this measure not one step—one step admittedly—in trying to reduce those emissions?
      6.45 pm
      Mr. Ruffley: As far as I am aware, the Rio targets in relation to carbon dioxide emissions were set under the previous Administration and were well on their way to being hit; indeed, I think that they were hit. Although there is always scope for environmentally friendly taxation, I am not convinced that the case has been made at all for increasing the escalator to 6 per cent. It certainly does not begin to answer the questions that those in shire counties ask about the impact on people who rely on their cars.
      Many companies in rural and shire communities have fleets of vehicles. They are concerned about the impact that this unjustified tax hike to 6 per cent. and the increase in diesel will have on their businesses. The hon. Member for North Tayside (Mr. Swinney) made a good point about the impact on village shops and village retail. There is no doubt that this pernicious tax hike will affect people in rural areas. I wish that, in the spirit of openness, the Labour party would—if it is going to play with an even deck on this—admit that this petrol tax hike does cause a problem in rural areas, instead of just ignoring it, pretending that things are all right and using warm words.
      The Government certainly have ambitions for a new Britain. They have ambitions to increase the 6 per cent. even more. Many of the business men I know believe that this is only the start of a smash-and-grab raid in future years. It is 6 per cent. this year. What about future years? Conservative Members know that the best way in which to cap and to stop what could be a remorseless attack, particularly on rural areas, through these tax hikes, is to support the amendment.
      Mr. Dale Campbell-Savours: I oppose the amendment, because I believe that 5 per cent. is insufficient. I support the Government's position that the figure should be higher.
      Mr. Bercow: Six per cent.
      Mr. Campbell-Savours: Yes, that is higher than 5 per cent. The hon. Gentleman can count. I congratulate him. I should have gone even higher.
      I want to comment on leaded petrol and the distorting effect on petrol prices arising from the profile of taxation. I drove down the Embankment the other day and stopped at the first filling station. It seems to me that a lot of misrepresentation is going on about fuels and fuel prices nationally. That may arise in part because the previous Government provided in legislation for a commitment to a 5 per cent. increase. Fortunately, we have now removed that commitment.
      Leaded four-star petrol at that filling station was 73.5p a litre, while super unleaded was 79.5p. As far as the general public are concerned, the reference to unleaded petrol, although it is marked as super, implies that it complies with what we would regard as unleaded criteria. There is a distortion in the way in which such products are being marketed: the public are led to believe that they are buying an unleaded fuel when they are effectively buying a leaded fuel.
      Mr. Edward Davey: Most garages selling super unleaded also sell unleaded, which is more commonly bought by consumers and costs less than four-star.
      Mr. Campbell-Savours: I understand that, but my point is that super unleaded petrol is regarded by the general public as an unleaded fuel, but it costs 6p more than four-star petrol. Many hon. Members, including myself, will have gone into a petrol station and purchased super unleaded in error, paying 6p more than for four-star leaded, in the belief that we were protecting the environment. The reality is that purchasing the leaded fuel would have done more to protect the environment, because that fuel, as I understand it, is less damaging.
      A total misrepresentation is going on at fuel pumps throughout the United Kingdom as to what super unleaded petrol is. My appeal tonight is for people to stop buying it; they are being overcharged and it is probably more damaging to the environment than the leaded four-star petrol, which is a substitute petrol.
      Mr. Bercow: I am sorry to learn that the hon. Gentleman incurred that additional cost. Is it not wrong to assume that, simply because he has such poor judgment in those matters, the same can be said of his constituents, who are probably altogether more discerning?
      Mr. Campbell-Savours: If only that were the case. My constituents fall into the same consumer trap. Perhaps they are not blessed with the hon. Gentleman's intelligence.
      The question of the ceiling and how it is working relates also to diesel. Last week, I spoke about ultra-low-sulphur diesel, which, I am informed, diesel drivers should now use, but which is almost entirely unavailable in the United Kingdom. There are only a few places where it can be bought. I am in favour of as many outlets as possible acquiring the right to distribute it, and selling it at a lower price, but the problem is that they do not have access to it.
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      I have rung garages in my constituency and further afield in Cumbria, and they tell me that it is almost totally unavailable. My plea to the Government is: please get on to the manufacturers and tell them that the public want it, that taxpayers' interests are served by their buying it, and that the interests of the environment are served by their using it. It should be made available as soon as is humanly or physically possible. We know that the pumping facilities exist on the forecourts, and there is no reason at all why companies should not begin the process of switching pumps from diesel to the new low-sulphur diesel.
      When I allude to one other little reform, I hope that you will not rule me out of order, Sir Alan. I know that I am getting right to the margin of your forbearance.
      We shall raise additional revenue from the tax increase that is being introduced, and that is welcome for environmental reasons, but there is another way of protecting the environment. We must make sure that people pay: that they get their MOT certificates, pay their road fund duties and insure their vehicles. Why do we not simply have one disc, in three parts, with three different inserts, dealing with vehicle excise duty, MOT and insurance? If we did that, and the date of expiry was marked on each part of the disc, a great number of vehicles, many of which are responsible in the greater part for the pollution that we so deprecate, would immediately be removed from the road.
      Many vehicles are on the road that should not be. Let us not only raise taxes but enforce measures that already exist, because my view is that we could thereby be more environmentally friendly.
      The Chairman of Ways and Means (Sir Alan Haselhurst): My view is that the hon. Gentleman just about got away with that.
      Mr. Edward Davey: I am glad to hear you say that, Sir Alan, because I want to support what the hon. Member for Workington (Mr. Campbell-Savours) said: there are ways in which we can force some of the polluting cars off the road.
      I understand that the fines for not having a car properly insured are fairly minimal and that, in some cases, especially for youngsters, whose insurance costs would be significant, they are almost the same as the costs of a decent motor insurance policy. That seems ludicrous, as it offers no incentive to be insured. Increasing the fines might have a similar effect to the proposal of the hon. Member for Workington.
      I want to cast the Committee's mind back to the incisive and robust speech of the hon. Member for Bury St. Edmunds (Mr. Ruffley). He focused our minds on a key aspect of the debate: the cumulative effect of the increases in fuel duties. We should think of the increases that have already happened in the past 12 months, because, if we add them to the new increases, as he said, the increase in taxation, over and above what was planned by the previous Government, is up to £9 billion. That significant increase was not foreshadowed in the Labour manifesto.
      Cumulatively, the duty on leaded petrol has gone up by 8.9p and on unleaded petrol by 8.4p. For leaded petrol, that is a 21.4 per cent. increase in less than 12 months. As I understand it, the Government's inflation forecast is

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      about 2.5 to 3.5 per cent. When they increase duty by more than 20 per cent. and claim that the increase is 6 per cent. above inflation on an escalator basis, they seem to be more pessimistic about the prospects for inflation than we have seen in their macro-economic forecasts. The cumulative effect of the two Budgets and two Finance Bills amounts to a swingeing increase.
      Unfortunately, the conclusion of the hon. Member for Bury St. Edmunds was weak. He maintained that the amendment went far enough towards rebalancing the injustice of the increase. While Liberal Democrats will be supporting the amendment because it is the only show in town, it does not go anywhere near compensating people who will be affected by the large increase.
      The Government are making the mistake of their predecessors. They are being narrow-minded in their approach to environmental taxation. It is important that we build popularity for environmental taxation and build consensus among the population. We shall do that only if people see benefits from the environmental taxes imposed on them. If we are to encourage people to change their behaviour and support those measures that will change their behaviour, we must give them some incentive and some benefit.
      7 pm
      When the Liberal Democrats impose an environmental levy such as this one, we always propose offsetting measures to protect those on low incomes who have no alternative but to pay the extra tax. We ensure that the environmental measures are revenue neutral and neutral in their effect on the economy as a whole. We have done that rigorously over the years. The hon. Member for Cotswold (Mr. Clifton-Brown) was right when he intervened in the speech of the hon. Member for Bury St. Edmunds. It is important that there are offsetting measures.
      The Government have proposed two offsetting measures. One is being implemented quickly. They are making available £50 million a year for rural public transport. As other hon. Members have said, £50 million goes nowhere near compensating rural motorists who will be affected by the increase of more than 20 per cent. in 12 months in fuel duty. The money being raised by the Government is in billions of pounds. Seeing that side by side with £50 million shows that the Government do not accept the principle of offsetting measures. That is a great shame.
      The Government have said that they will consult on a second measure. It is not in the Finance Bill, and that is a great shame. They have said that they are minded to consult on introducing vehicle excise duty at a starting rate of £100 for the least polluting cars. I presume that that consultation will happen later this year. It is a shame that it is being delayed, because compensation delayed is not really compensation for people paying higher fuel duties now. The Red Book merely states that the Government are interested in introducing a reduced starting rate of £100. 1 hope that they will go much further.
      The Liberal Democrats have argued for some time that vehicle excise duty should be graduated far more than by the suggestions on which the Government propose to
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      consult. We should like vehicle excise duty for the smaller-engined, more fuel-efficient cars to be reduced to just £10 in order to offset the impact of higher fuel duties, especially on rural motorists who need to use their cars and have no alternative.
      The Government should be taking offsetting measures first before imposing these swingeing increases. The timing is of great significance. The right hon. Member for Wells (Mr. Heathcoat-Amory) mentioned the plight of agriculture and the rural economy as a result of the level of the pound and the problems caused by the decline in the beef industry as a result of the BSE crisis. I accept that the BSE crisis is not the Government's fault. I am happy to agree that the Conservative Government failed to tackle that problem sufficiently, but it has left the rural economy in dire straits. So to impose increases in fuel duty on the rural economy when they will be most directly felt and will have the most swingeing impact—increases of more than 20 per cent. in less than 12 months—is clearly a wrong-headed policy. Liberal Democrats will support amendment No. 12 and vote against clause 7 stand part.
      In spite of what some Conservative Members have said, the Government have published an environmental assessment of the measures on fuel duty and have given some details of the effect of the increases on the environment. I refer right hon. and hon. Members to page 78 of the Red Book. There is a column on the environmental impact on the reductions in nitrous oxide and various other pollutants. I cannot quite describe it from what is written because it is in scientific shorthand that I do not understand, but the bit that I do understand is where the Red Book states that the fuel duty increases will result in a
      "Reduction of around 3 billion car kilometres".
      However, there is a note saying:
      "These estimates are subject to significant margins of uncertainty."
      I am sure they are. [Laughter.] The Financial Secretary laughs, and she is right to do so.
      The more serious point is that that is all that we have—one page; a little line on those massive increases in duty. I am afraid that that does not go anywhere near meeting the promise that the Financial Secretary made recently. Of the promise of a green book setting out the Budget's environmental consequences, she said:
      "We have every intention of keeping that promise from the first full Budget."—[Official Report, 10 July 1997; Vol. 297, c. 1062.]
      In Labour's 1994 pre-election environmental policy paper "In Trust for Tomorrow", it made a commitment to a green book. We have not had it in this Budget. That is a great shame.
      We are not able in this Committee to make a proper analysis of the environmental effects of the Government's measures unless the Government start meeting their pledges. So the Liberal Democrats will vote against the Government on amendment No. 12 and clause 7 stand part because the clause will have a damaging impact on the rural economy, and one that has not been offset by alternative measures. The Government have failed to put before the Committee any serious analysis of environmental impact.
      Mr. Shaun Woodward: I am in favour of the amendment because I represent a rural constituency.

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      There is no question but that clause 7 is punitive and cynical and shows that the Government do not understand one bit the needs of rural constituencies. That is the reason for the amendment. The Government do not understand that 75 per cent. of people in rural areas depend on their cars to go to work. They do not understand that rural people have to travel 50 per cent. further than people who live in towns, and that they depend on their cars. Cars for those people are a necessity, not a luxury.
      The Government made much of the process of public consultation before the Chancellor's statement. Yet again, that reveals that they are a cynical Government with a cynical practice of public consultation. Had the Chancellor come to my constituency and taken the opportunity to consult businesses in the rural area, he would have seen a survey that we conducted of 300 small businesses. Of those 300 businesses, 97 per cent. told us that they disapproved of the increases last July. The Chancellor would also have discovered that, when asked whether they thought that a 5 or 6 per cent. increase was right, only 1 per cent. of those businesses agreed.
      Mr. Leslie: Will the hon. Gentleman give way?
      Mr. Woodward: I shall give way in a moment.
      When they were asked whether they thought that the increases would be bad, neutral or good, 94 per cent. said that they would be bad.
      Mr. Leslie: Will the hon. Gentleman give way on that point?
      Mr. Woodward: The hon. Gentleman will have an opportunity in a moment.
      Why have the Government imposed that increase, which will hit the elderly, poor and sick in my constituency?
      Mr. Leslie: Will the hon. Gentleman give way?
      Mr. Woodward: In a moment. I wish to make some progress.
      My constituency contains three community hospitals—Burford, Chipping Norton and Witney. The Government, who promise great things on the health service, are to close Burford hospital. The people who use it will have to travel 11 miles to Witney hospital, and those who live in rural areas will have to pay extra money to get there. The Government propose to close 25 per cent. of Witney hospital's beds, so people will have to go on to Oxford. That is a tax that will hit the sick, the vulnerable and those who live in rural areas.
      Mr. Leslie: I am grateful to the hon. Gentleman, who is so generous in giving way. He mentioned a survey, which I am sure was statistically and methodologically correct, about the opinions of rural businesses about a 6 per cent. increase in road fuel duty. Did they give an opinion about the 10 per cent. increase in road fuel duty in 1993 which was introduced by Norman Lamont, the former Chancellor?
      Mr. Woodward: I am grateful to the hon. Gentleman for his question, because we made it clear that the road fuel escalator was a constructive tax, so long as the market could plan for it. The difference between the previous
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      Government and this one is that this Government are cynical tax-grabbers who have introduced two increases through the road fuel escalator in 12 months and who are interested only in grabbing money from people's back pockets, front doors and back doors, and now from their car doors.
      Mr. St. Aubyn: Does my hon. Friend recall that the previous Government increased petrol duty against a background of significantly falling oil prices? The Government are introducing larger increases when oil prices have bottomed out.
      Mr. Woodward: My hon. Friend is exactly right, and it is interesting that the hon. Member for Shipley (Mr. Leslie) has not sought to intervene again. Perhaps he has learnt the lesson that he needs to learn.
      Mr. Leslie: I listened carefully to the hon. Gentleman's point and should like an answer. Norman Lamont, the former Chancellor, increased road fuel duty by 10 per cent. in 1993. Was it useful in achieving the hon. Gentleman's objective of helping rural areas?
      Mr. Woodward: I am grateful to the hon. Gentleman for asking his question again, because he clearly did not hear what my hon. Friend the Member for Guildford (Mr. St. Aubyn) said. When hon. Members intervene to make what they perceive to be clever comments, they must consider them in context. As my hon. Friend the Member for Guildford said, if Labour Members examined the overall fall in the price of oil and pump prices at petrol stations, they would realise that the Chancellor is hitting the poor, the sick and people in the countryside. The Government do not care about them.
      Dawn Primarolo: The hon. Gentleman mentioned the price of oil. Will he comment on BP's reduction of its pump price, which acknowledges the falling price of oil? That did not happen in 1993.
      Mr. Woodward: The Financial Secretary makes a valid observation—BP responded to a request from the Chancellor. At a time when petrol prices have been cut in rural communities, it is kind of him to shove petrol prices up left, right and centre.
      The Institute of Fiscal Studies has studied a sample of households to discover what the effect of the tax would be. The Government claim to protect the poor, but the IFS has shown that the wealthy will not suffer, because there will be only a 1 per cent. cut in their average living standards. The income of the poorest 10 per cent. will be cut by 2.25 per cent. by this increase alone—so much for a Government whose rhetoric claims that they care about the poor.
      The measure is taxation by a Government who promised throughout the election campaign not to raise taxes. They have taken another opportunity to hit the British public in rural communities as hard as they can, which shows that they have no understanding of the needs of the rural economy and people who live in rural areas.
      Mr. Geraint Davies: What a load of toffee we have heard from Opposition Members. I draw their attention to an authoritative study published on 3

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      March, which compared the cost of travel by different modes of transport between 1974 and the present day. The cost of travelling by train has gone up by 68 per cent. and the cost of travelling by bus has gone up by 57 per cent., but the cost of travelling by car has gone down by 7 per cent. The Opposition spin the line that the marginal increase in petrol cost for cars will spiral the economy down into recession and hurt the rural poor. It is complete rubbish.
      Mr. Swinney rose—
      Mr. Woodward rose—
      7.15 pm
      Mr. Davies: I shall give way in a moment, but only after I have provoked three hon. Members at once.
      The Government are setting off on a path of environmental sustainability with an holistic view of economic competitiveness in the global economy. Within that wider context, and given that a transport White Paper is forthcoming, the changes should not be interpreted by Conservative Members in such a farcical way.
      Mr. Swinney: I am grateful to the hon. Gentleman, who knows that I represent a large rural constituency. I tell him the truth—petrol prices are higher there than in urban areas. He quotes average figures showing that the cost of motoring has come down by 7 per cent., but he must understand that it has come down by more for some people, primarily those in urban areas, and by much less for people in rural areas, who have no alternative to public transport. Will he reflect on the toffee that he is talking?
      Mr. Davies: The hon. Gentleman is obviously not a statistician. There is a difference between regional differentials and average rates moving down. At all times there has been a higher price in the countryside, but for virtually everyone there has been a reduction of 7 per cent. in the cost of car use which is geared into the technology of new cars and the depreciating costs of old cars as well as the average cost of fuel.
      The Government took a balanced approach in the Budget, which refocuses the burden of taxation on usage rather than on ownership, in the interests of maintaining jobs. A more sophisticated incentive scheme towards sustainability will emerge as the strategy develops. Graduated excise duty will achieve preferential treatment for clean fuels and for clean vehicles, and I hope that there will be more incentives for gas-powered vehicles as part of a wider strategy. Conservative Members shake their heads, but there are 1 million gas-powered cars in Italy and only 4,000 in this country because the previous Government failed to lead the market by setting up a system of incentives in a context within which the economy could adjust to be competitive and environmentally sustainable.
      We do not have all the information, because we await the launch of the transport White Paper by my right hon. Friend the Deputy Prime Minister, who will put the issues in the wider context discussed at Kyoto. I support the Government's position. The amendment is myopic and pedestrian, and should be rejected.
      Mr. Clifton-Brown: I support the amendment. The increase through the escalator is a real increase, over and
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      above inflation. The Government's helpful notes on clauses say that this measure alone will increase inflation by 0.28 per cent. Over 10 years, the pure compounding of the inflator will result in an increase of 3.3p per litre; and the actual increase in hydrocarbon duties of 4.4 per cent. a year gives a 44p per litre increase. Adding to that the increase in VAT take—VAT goes on top of the increase in hydrocarbon duties—means that the tax regime that the Government have established for petrol will amount to a staggering 50p a litre over 10 years.
      The measure will have a disproportionately injurious effect on certain classes of the community—I am thinking particularly of the low-paid, Mr. Deputy Speaker. It is all very well for us and other groups in the public sector and elsewhere who are able every year to get pay increases that nearly match the rate of inflation; but for those who are low-paid or pensioners, whose incomes do not increase with inflation, it is an especially savage measure. In my rural constituency, Mr. Deputy Speaker, that inflator—
      The Chairman: Order. The hon. Gentleman should remember that we are in Committee and that I should not be addressed as Mr. Deputy Speaker.
      Mr. Clifton-Brown: I apologise, Sir Alan. I should know better.
      The increase of the inflator will have a disproportionate effect on those groups in society who are unable to make up their income to an indexed level. My hon. Friend and neighbour, the Member for Witney (Mr. Woodward), made the point especially well that, to those in rural areas—particularly pensioners and those who are low paid or disabled—the car is not a convenience but a necessity. The Government should think carefully about the regime that they have put in place.
      I wish to make one or two points about the environmental effects, Mr. Deputy Speaker, as the Financial Secretary is bound to crow about that aspect when she answers the debate. Some of the claimed environmental effects are dubious, as are the figures on page 75 of the Red Book. I shall ask Sir John Bourn, the Comptroller and Auditor General at the National Audit Office, to use his new powers and new methodology to examine the figures and determine whether or not they are accurate. I suspect, Mr. Deputy Speaker, that those figures are mainly based on the fact of improved technology. Major reductions in carbon dioxide and nitrogen dioxide emissions have come about in the past few years through improved technology such as lean-burn engines and catalytic converters; the reductions have little or nothing to do with fiscal instruments introduced by the Government.
      The hour is late, so I shall make only one more point, which is the competitive effect of the inflationary increases on heavy goods vehicles. In coastal areas, we shall find hauliers who have come from the continent with large spare tanks that were filled up on the continent; inland, they will have an unfair advantage over domestic hauliers because of the duties and increases that the Government have wrongly introduced in the Budget. That is why I shall support the amendment.
      The Chairman: Order. I hope that, with the assistance of the editors of the Official Report, the hon. Gentleman

      199
      will be able to delete all references to Mr. Deputy Speaker, which he continued to make throughout his speech.
      Dawn Primarolo: This has been a long debate and, with your guidance, Sir Alan, I should like to deal with both the amendment and the substantive clause in one go, if that would be in order.
      The hon. Member for Cotswold (Mr. Clifton-Brown) referred to what he thought would be the likely impact on the retail prices index. I refer him to the answer given in Treasury questions last week, which gave the figures from 1990 on the impact of the escalator and fuel price rises, including the figures relating to the 10 per cent. increase imposed by Norman Lamont, to which my hon. Friend the Member for Shipley (Mr. Leslie) referred. Those figures do not bear out the hon. Gentleman's calculations.
      Mr. Clifton-Brown: Will the Financial Secretary give way?
      Dawn Primarolo: I should like to make some progress. This has been a long debate and hon. Members are keen to discuss other clauses.
      Mr. Clifton-Brown: On a point of order, Sir Alan. I quoted the inflationary rise from the Government's own notes on clauses. Paragraph 12 of the notes on clause 7 states that the impact of the increase on inflation is 0.28 per cent.—
      The Chairman: Order. The hon. Gentleman knows that that is not a point of order for me.
      Dawn Primarolo: Perhaps the moral of this story is, give way and so avoid a spurious point of order.
      The whole point of the Budget, including the increases under clause 4, was that it would be good for Britain. An overwhelming 53 per cent. of the population agreed; they accepted the principles that are now enshrined in the clause. My right hon. Friend the Chancellor is the most popular Chancellor ever after a Budget—Conservative Members obviously lament their failure to achieve such a record in government.
      By far the largest number of submissions to the Government in response to the pre-Budget report were in connection with the environment. Those submissions encouraged the Government to make progress on environmental protection, and especially on achieving our targets on carbon dioxide emissions. Opposition Members clearly did not want to refer to the fact that the Kyoto agreement will be legally binding on us. It is an international agreement whereby we have to achieve a reduction in carbon dioxide emissions, and the clause is part of our strategy to do that.
      Mr. Malcolm Bruce: Will the Financial Secretary give way?
      Dawn Primarolo: The hon. Gentleman chose not to speak in the debate; I shall give way to him later if there is time, but, in fairness to hon. Members who did participate in the debate, I should address their points.
      My hon. Friend the Member for Workington (Mr. Campbell-Savours) spoke about market definition in respect of super unleaded, but he appears to have been
      200
      misled by the name of that product. He is right to say that there is a higher duty level on super unleaded, but that is because of the damage caused by the much higher benzine emissions. Super unleaded is used by a very small section of the community and is being phased out, as is leaded petrol.
      My hon. Friend went on to refer to the availability of ultra low-sulphur diesel—
      Mr. Clifton-Brown: Will the Financial Secretary give way? She is wrong again.
      Dawn Primarolo: I give way.
      Mr. Clifton-Brown: The Financial Secretary might not have understood her brief. The higher the lead levels in petrol, the lower the benzine levels, so super unleaded has a lower level of benzine than ordinary petrol.
      Dawn Primarolo: I am clear on the fact that super unleaded contains more carcinogenic compounds. If the hon. Gentleman would care to debate the point with me in the Tea Room tomorrow morning, after I have been to the Select Committee on the Environment, I should be happy to oblige.
      My hon. Friend the Member for Workington went on to refer to the availability of ultra-low-sulphur diesel. He is right to say that the Government's strategy of increasing the differential is designed to encourage wider availability of ultra-low-sulphur diesel. However, there has already been improvement: the Sainsbury supermarket chain, which started making ultra-low-sulphur diesel available in response to the previous Government's introduction of the mechanism, now provides it at more than 200 petrol stations and plans to extend that. Obviously, the Government are keen to ensure the availability of that product.
      Elsewhere in the Bill, the Government have tightened the definition of ultra-low-sulphur diesel to ensure that the Bill delivers on the environmental objectives that we set out.
      The general tenor of the debate seems to be, on the one hand, to complain that the Government have increased the fuel escalator and, on the other, to complain that we have not, and that we are not doing enough, quickly enough, to deal with CO2, emissions and to deliver on the environmental commitments that the Government have and were elected on. For every argument that the escalator is too high at 6 per cent., others are advanced by the environment lobby, to the effect that it is not high enough and that more rapid progress is needed. The Government have sought to strike a balance, so that we deliver on our commitments on CO2, reductions and study the fuels and their emissions to make progress on urban air quality as well as on CO2, emissions.
      7.30 pm
      Several hon. Members said that there should be a reduced vehicle excise duty rate for rural areas alone, to recognise dependence on cars in rural areas because of the lack of public transport. A specific reduction for rural motorists would be incredibly expensive and cumbersome to administer within the system, but wide open to abuse, because other people could register in rural areas. The Government took the view—confirmed in today's

      201
      announcements by my right hon. Friend the Minister of Transport—that we should invest in a transport fund for rural areas.
      Hon. Members may complain that that is not enough, but it is a huge increase on the money made available specifically for rural transport projects under the previous Government. The previous Government made available only £1 million. For all their concerns and worries about rural communities, and despite the fact that they had a 5 per cent. escalator—as opposed to our 6 per cent.—they made available only £1 million for rural initiatives, and now they have the cheek to say that we are not doing enough. As many hon. Members said, car owners buy approximately the same amount of fuel regardless of where they live. We have sought to ensure that all car users are making a contribution to the attainment of our environmental objectives.
      The United Kingdom is taking a lead internationally in promoting action to reduce greenhouse gases, and duty must be a vital element in that strategy. We have put forward, in the Budget and in the Bill, a duty rate regime that recognises the damage that leaded petrol does, and increases pressure against its use. It recognises the damage that diesel does to the environment, and the need to encourage ultra-low-sulphur diesel, and therefore to adjust the duty rates for those two fuels.
      We have ensured that gas oil and heavy fuel oils have increased by the same percentage as petrol and diesel. Duty for fuel gases is frozen again. We are considering commitments to introduce a vehicle excise duty regime that encourages people to have smaller vehicles which are more efficient, less polluting and better for the environment. That consultation is proceeding, but it takes time.
      When there was criticism of the escalator, the previous Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), said:
      "Any critic of the Government's tax plans who claims also to support the international agreement to curb carbon dioxide emissions will be sailing dangerously near to hypocrisy."—[Official Report, 30 November 1993; Vol. 233, c. 939.]
      Post Kyoto, to deliver on our commitments, we need to increase the escalator to deliver the cuts in carbon dioxide. We were asked whether it would have an effect. Institute of Petroleum figures show that, in the first nine months of 1997, inland demand for petrol fell. It did so only slightly, but it fell, and the escalator is feeding through into results.
      The Government have ensured that the increase in the escalator is part of our environmental objective, and that we have a twin strategy to tackle the problems of transport in rural areas. Amendment No. 12 does not live up to the Conservatives' professed commitment to the environment. They have not told us how they would achieve the necessary reduction in CO2 emissions if the amendment were accepted. Simply, they must decide whether they want to be committed to the environment and the difficult decisions that must be taken to deliver on that commitment, or whether they want to continue to make cheap political points across the Chamber. I had hoped that, given Conservative Members' commitments to the environment when they were in government, they might recognise the importance of this measure in the Government's strategy.
      202
      I ask the Committee to reject the amendment, not only because the revenue lost to the Government would be crucial, but because—most important—it would undermine our commitment to reach our CO2 emission target, a Kyoto target which is steep, and, under the Government's commitment to the 20 per cent. reduction in particulates, very demanding. The strategy must start now, and clause 7 makes that start. I urge my hon. Friends to reject the amendment and to support the clause.
      Mr. Malcolm Bruce: As the Financial Secretary was not willing to give way to me, I thought that I would speak briefly on the issues.
      The Government appear to be making a strong case for increasing the tax in order to deliver what they regard as environmental benefits. It has been powerfully argued that many people in rural areas have no alternative to using the car, so they are obliged to pay more and continue to create the same amount of emissions. The Financial Secretary well knows that transport initiatives between towns and in cities are needed to reduce those emissions, and that, if the extra revenue were diverted to such initiatives, it would make a much more substantial contribution than it will if it is pocketed by the Treasury.
      In the unamended version of the Red Book, it was projected that, by the year 2002-03, the escalator effect of the petrol increase would take the Government's receipts as a percentage of gross domestic product to more than 40 per cent.—the highest, apart from one year, that we would ever have achieved.
      Two questions hang in the air. First, if the Government are so keen on the environmental benefits, why are they not using the money for the necessary transport? Secondly, if they are arguing that they need the revenue, how come they are finishing the year in which the forecast public sector borrowing requirement of the previous, Conservative, Chancellor was £19 billion in the red, and the out-turn is just under £1 billion? The Financial Secretary tells us that the Government are desperate for the revenue. Obviously, the position is improving, and the Government are simply taking more taxes from the taxpayer, neither offsetting them with tax cuts elsewhere nor delivering measures that would provide real help for people, many of whom have no alternative to the car.
      We support amendment No. 12, because the Government must balance their claim that fuel duty is a green tax with real green measures, which will bring about the desired changes; and, potentially, they must offset a reduction in taxes elsewhere for the very substantial extra revenue that they are enjoying.
      Mr. Heathcoat-Amory: It is obvious from the Financial Secretary's response to the debate that this tax-raising measure has little to do with protecting the environment and everything to do with increasing the Treasury's tax revenues.
      The Financial Secretary has failed to answer our questions about the environmental consequences of the tax increases and the perverse incentives that are being introduced that could, in some cases, damage the environment. She has broken her promise to bring forward an environmental Green Book with the Budget statement. It is up to the Opposition to protect the British people and British industry from a wholly unnecessary and damaging £9 billion tax increase during this Parliament from the

      203
      increase in road fuel duties alone. The measure will raise taxes, damage competitiveness and hit all of those who rely on transport. I urge my right hon. and hon. Friend and others to support the amendment.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 139, Noes 271.

      Division No. 259]

      [7.40 pm

      AYES

      Allan, Richard

      Jones, Ieuan Wyn (Ynys Môn)

      Ancram, Rt Hon Michael

      Kennedy, Charles (Ross Skye)

      Arbuthnot, James

      Key, Robert

      Ashdown, Rt Hon Paddy

      King, Rt Tom (Bridgwater)

      Atkinson, David (Bour'mth E)

      Kirkbride, Miss Julie

      Ballard, Mrs Jackie

      Kirkwood, Archy

      Beggs, Roy

      Laing, Mrs Eleanor

      Beith, Rt Hon A J

      Lait, Mrs Jacqui

      Bercow, John

      Lansley, Andrew

      Blunt, Crispin

      Leigh, Edward

      Brazier, Julian

      Letwin, Oliver

      Breed, Colin

      Lewis, Dr Julian (New Forest)

      Browning, Mrs Angela

      Lidington, David

      Bruce, Malcolm (Gordon)

      Lilley, Rt Hon Peter

      Burns, Simon

      Livsey, Richard

      Campbell, Menzies (NE Fife)

      Lloyd, Rt Hon Sir Peter (Fareham)

      Cash, William

      Llwyd, Elfyn

      Chapman, Sir Sydney

      Luff, Peter

      (Chipping Barnet)

      MacGregor, Rt Hon John

      Chope, Christopher

      McIntosh, Miss Anne

      Clappison, James

      Mackay, Andrew

      Clark, Dr Michael (Rayleigh)

      Maclean, Rt Hon David

      Clarke, Rt Hon Kenneth

      Mc Loughlin, Patrick

      (Rushcliffe)

      Madel, Sir David

      Clifton—Brown, Geoffrey

      Malins, Humfrey

      Collins, Tim

      Mates, Michael

      Colvin, Michael

      Maude, Rt Hon Francis

      Cormack, Sir Patrick

      Mawhinney, Rt Hon Sir Brian

      Cotter, Brian

      Michie, Mrs Ray (Argyll & Bute)

      Cunningham, Ms Roseanna

      Moore, Michael

      (Perth)

      Morgan, Alasdair (Galloway)

      Curry, Rt Hon David

      Moss, Malcolm

      Dafis, Cynog

      Nicholls, Patrick

      Davey, Edward (Kingston)

      Norman, Archie

      Davies, Quentin (Grantham)

      Oaten, Mark

      Davis, Rt Hon David (Haltemprice)

      Prior, David

      Day, Stephen

      Randall, John

      Dorrell, Rt Hon Stephen

      Robathan, Andrew

      Evans, Nigel

      Robertson, Laurence(Tewk'b'ry)

      Ewing, Mrs Margaret

      Roe, Mrs Marion (Broxbourne)

      Fabricant, Michael

      Rowe, Andrew (Faversham)

      Fallon, Michael

      Russell, Bob (Colchester)

      Fearn, Ronnie

      St Aubyn, Nick

      Fox, Dr Liam

      Salmond, Alex

      Fraser, Christopher

      Sanders, Adrian

      Garnier, Edward

      Sayeed, Jonathan

      George, Andrew(St Ives)

      Simpson, Keith (Mid—Norfolk)

      Gibb, Nick

      Spelman, Mrs Caroline

      Gillan, Mrs Cheryl

      Spicer, Sir Michael

      Greenway, John

      Spring, Richard

      Grieve, Dominic

      Stanley, Rt Hon Sir John

      Hague, Rt Hon William

      Steen, Anthony

      Hamilton, Rt Hon Sir Archie

      Streeter, Gary

      Hammond, Philip

      Swayne, Desmond

      Hancock, Mike

      Swinney, John

      Heald, Oliver

      Syms, Robert

      Heath, David (Somerton & Frome)

      Tapsell, Sir Peter

      Heathcoat—Amory, Rt Hon David

      Taylor, John M (Solihull)

      Hogg, Rt Hon Douglas

      Taylor, Matthew (Truro)

      Horam, John

      Taylor, Sir Teddy

      Hunter, Andrew

      Tredinnick, David

      Jack, Rt Hon Michael

      Trend, Michael

      Johnson Smith,

      Tyrie, Andrew

      Rt Hon Sir Geoffrey

      Viggers, Peter

      204

      Wallace, James

      Willis, Phil

      Wardle, Charles

      Wilshire, David

      Waterson, Nigel

      Winterton, Mrs Ann (Congleton)

      Webb, Steve

      Woodward, Shaun

      Welsh, Andrew

      Yeo, Tim

      Whitney, Sir Raymond

      Young, Rt Hon Sir George

      Widdecombe, Rt Hon Miss Ann

      Tellers for the Ayes:

      Wigley, Rt Hon Dafydd

      Mr. John Whittingdale and

      Willetts, David

      Mr. James Cran.

      NOES

      Abbott, Ms Diane

      Cryer, Mrs Ann (Keighley)

      Adams, Mrs Irene (Paisley N)

      Cummings, John

      Ainger, Nick

      Cunliffe, Lawrence

      Ainsworth, Robert (Cov'try NE)

      Cunningham, Rt Hon Dr John

      Alexander, Douglas

      (Copeland)

      Allen, Graham

      Cunningham, Jim (Cov'try)

      Anderson, Donald (Swansea E)

      Dalyell, Tam

      Anderson, Janet (Rossendale)

      Darling, Rt Hon Alistair

      Armstrong, Ms Hilary

      Davidson, Ian

      Ashton, Joe

      Davies, Rt Hon Denzil (Llanelli)

      Atherton, Ms Candy

      Davies, Geraint (Croydon C)

      Atkins, Charlotte

      Dawson, Hilton

      Banks, Tony

      Dean, Mrs Janet

      Barnes, Harry

      Denham, John

      Bayley, Hugh

      Dewar, Rt Hon Donald

      Beckett, Rt Hon Mrs Margaret

      Dobbin, Jim

      Bell, Stuart (Middlesbrough)

      Dobson, Rt Hon Frank

      Benn, Rt Hon Tony

      Donohoe, Brian H

      Bennett, Andrew F

      Dowd, Jim

      Benton, Joe

      Drew, David

      Bermingham, Gerald

      Drown, Ms Julie

      Best, Harold

      Eagle, Angela (Wallasey)

      Betts, Clive

      Eagle, Maria (L'Pool Garston)

      Blackman, Liz

      Edwards, Huw

      Blizzard, Bob

      Ellman, Mrs Louise

      Boateng, Paul

      Flynn, Paul

      Borrow, David

      Follett, Barbara

      Bradley, Peter (The Wrekin)

      Foster, Rt Hon Derek

      Bradshaw, Ben

      Foster, Michael Jabez (Hastings)

      Brinton, Mrs Helen

      Foster, Michael J (Worcester)

      Brown, Rt Hon Gordon

      Foulkes, George

      (Dunfermline E)

      Fyfe, Maria

      Brown, Rt Hon Nick (Newcastle E)

      Gapes, Mike

      Brown, Russell (Dumfries)

      Gardiner, Barry

      Browne, Desmond

      George, Bruce (Walsall S)

      Burden, Richard

      Gerrard, Neil

      Burgon, Colin

      Gibson, Dr Ian

      Butler, Mrs Christine

      Godman, Dr Norman A

      Byers, Stephen

      Godsiff, Roger

      Caborn, Richard

      Goggins, Paul

      Campbell, Alan (Tynemouth)

      Golding, Mrs Llin

      Campbell, Mrs Anne (C'bridge)

      Griffiths, Jane (Reading E)

      Campbell, Ronnie (Blyth V)

      Griffiths, Nigel (Edinburgh S)

      Campbell—Savours, Dale

      Griffiths, Win (Bridgend)

      Canavan, Dennis

      Gunnell, John

      Cann, Jamie

      Hain, Peter

      Casale, Roger

      Hall, Mike (Weaver Vale)

      Caton, Martin

      Hall, Patrick (Bedford)

      Chapman, Ben (Wirral S)

      Hanson, David

      Chaytor, David

      Heal, Mrs Sylvia

      Chisholm, Malcolm

      Henderson, Ivan (Harwich)

      Clark, Dr Lynda

      Hepburn, Stephen

      (Edinburgh Pentlands)

      Heppell, John

      Clark, Paul (Gillingham)

      Hesford, Stephen

      Clarke, Charles (Norwich S)

      Hinchliffe, David

      Clarke, Eric (Midlothian)

      Hoey, Kate

      Clarke, Rt Hon Tom (Coatbridge)

      Home Robertson, John

      Clwyd, Ann

      Hood, Jimmy

      Coaker, Vernon

      Hoon, Geoffrey

      Coleman, Iain

      Hopkins, Kelvin

      Cook, Frank (Stockton N)

      Howarth, Alan (Newport E)

      Cousins, Jim

      Howarth, George (Knowsley N)

      Cox, Tom

      Howells, Dr Kim

      Cranston, Ross

      Hoyle, Lindsay

      205

      Humble, Mrs Joan

      Perham, Ms Linda

      Hurst, Alan

      Pickthall, Colin

      Hutton, John

      Pike, Peter L

      Iddon, Dr Brian

      Plaskitt, James

      Jackson, Helen (Hillsborough)

      Pound, Stephen

      Jamieson, David

      Powell, Sir Raymond

      Jenkins, Brian

      Prentice, Ms Bridget (Lewisham E)

      Johnson, Alan (Hull W & Hessle)

      Prentice, Gordon (Pendle)

      Johnson, Miss Melanie

      Primarolo, Dawn

      (Welwyn Hatfield)

      Prosser, Gwyn

      Jones, Barry (Alyn & Deeside)

      Purchase, Ken

      Jones, Helen (Warrington N)

      Quin, Ms Joyce

      Jones, Ms Jenny

      Quinn, Lawrie

      (Wolverh'ton SW)

      Radice, Giles

      Jones, Jon Owen (Cardiff C)

      Rammell, Bill

      Jones, Martyn (Clwyd S)

      Rapson, Syd

      Keeble, Ms Sally

      Reed, Andrew (Loughborough)

      Keen, Ann (Brentford & Isleworth)

      Reid, Dr John (Hamilton N)

      Kennedy, Jane(Wavertree)

      Robinson, Geoffrey (Cov'try NW)

      Kidney, David

      Rogers, Allan

      Kilfoyle, Peter

      Rooker, Jeff

      King, Andy (Rugby & Kenilworth)

      Ross, Ernie (Dundee W)

      Kingham, Ms Tess

      Roy, Frank

      Kumar, Dr Ashok

      Ruane, Chris

      Lawrence, Ms Jackie

      Ruddock, Ms Joan

      Laxton, Bob

      Savidge, Malcolm

      Lepper, David

      Sawford, Phil

      Leslie, Christopher

      Shaw, Jonathan

      Levitt, Tom

      Sheerman, Barry

      Lewis, Ivan (Bury S)

      Sheldon, Rt Hon Robert

      Liddell, Mrs Helen

      Singh, Marsha

      Lloyd, Tony (Manchester C)

      Skinner, Dennis

      Lock, David

      Smith, Angela (Basildon)

      Love, Andrew

      Smith, Rt Hon Chris (Islington S)

      McAllion, John

      Smith, Miss Geraldine

      McAvoy, Thomas

      (Morecambe & Lunesdale)

      McCabe, Steve

      Smith, Jacqui (Redditch)

      McCafferty, Ms Chris

      Smith, John (Glamorgan)

      McDonnell, John

      Smith, Llew (Blaenau Gwent)

      McFall, John

      Spellar, John

      McGuire, Mrs Anne

      Squire, Ms Rachel

      McIsaac, Shona

      Steinberg, Gerry

      McKenna, Mrs Rosemary

      Stevenson, George

      Mackinlay, Andrew

      Stewart, David (Inverness E)

      McNamara, Kevin

      Stinchcombe, Paul

      McNulty, Tony

      Stoate, Dr Howard

      Mactaggart, Fiona

      Stott, Roger

      McWalter, Tony

      Strang, Rt Hon Dr Gavin

      Mallaber, Judy

      Stringer, Graham

      Mandelson, Peter

      Taylor, Rt Hon Mrs Ann

      Marsden, Gordon (Blackpool S)

      (Dewsbury)

      Marshall, David (Shettleston)

      Taylor, Ms Dari (Stockton S)

      Marshall, Jim (Leicester S)

      Temple—Morris, Peter

      Marshall—Andrews, Robert

      Thomas, Gareth (Clwyd W)

      Maxton, John

      Thomas, Gareth R (Harrow W)

      Michael, Alun

      Tipping, Paddy

      Michie, Bill (Shef'ld Heeley)

      Touhig, Don

      Milburn, Alan

      Trickett, Jon

      Mitchell, Austin

      Truswell, Paul

      Moffatt, Laura

      Turner, Dennis (Wolverh'ton SE)

      Moonie, Dr Lewis

      Turner, Dr Desmond (Kemptown)

      Moran, Ms Margaret

      Turner, Dr George (NW Norfolk)

      Morgan, Ms Julie (Cardiff N)

      Twigg, Derek (Halton)

      Morgan, Rhodri (Cardiff W)

      Walley, Ms Joan

      Morley, Elliot

      Watts, David

      Morris, Rt Hon John (Aberavon)

      Wicks, Malcolm

      Mudie, George

      Williams, Rt Hon Alan

      Mullin, Chris

      (Swansea W)

      Murphy, Denis (Wansbeck)

      Williams, Alan W (E Carmarthen)

      Murphy, Jim (Eastwood)

      Wills, Michael

      O'Brien, Bill (Normanton)

      Winnick, David

      O'Brien, Mike (N Warks)

      Wise, Audrey

      O'Neill, Martin

      Wood, Mike

      Organ, Mrs Diana

      Worthington, Tony

      Osborne, Ms Sandra

      Wray, James

      Pearson, Ian

      206

      Tellers for the Noes:

      Mr. Greg Pope and

      Mr. David Clelland.

      Question accordingly negatived.
      Clause 7 ordered to stand part of the Bill.

    Clause 10

      RATES OF TOBACCO PRODUCTS DUTY
      Mr. Heathcoat-Amory: I beg to move amendment No. 13, in page 5, leave out lines 24 to 30 and insert—

      '1. Cigarettes

      An amount equal to 22 per cent. of the retail price plus £75.46 per thousand cigarettes.

      2. Cigars

      £112.62 per kilogram

      3. Hand Rolling tobacco

      £87.74 per kilogram

      4. Other tobacco products

      £49.52 per kilogram.'.

      Tobacco is subject to wholly unnecessary extra taxation in this massive tax-raising Finance Bill. Many of the arguments that I might deploy are similar to those that we used in the earlier debate on beer duty, so I shall not go into them in detail, but I shall allude to them.
      The same phenomenon of cross-border shopping, combined with escalating illegality, occurs in the smuggling of both alcohol and tobacco. Again, there is evidence of increasing illegality, which is of great concern to the trade in general and smaller tobacconists in particular. All hon. Members who are in touch with trading interests in their constituencies will have been approached in recent weeks by representatives of the legitimate trade. Traders feel threatened and their businesses are undermined by an escalating tide of illegally supplied tobacco goods.
      Estimates are inevitably somewhat speculative. The trade quotes a Customs and Excise figure of £690 million having been lost last year to tobacco smugglers. That figure comes from a written reply in Hansard on 17 February 1998 at column 528, so it has certainly been quoted by Ministers. The trade points out that the true figure could be a great deal higher, but, by definition, what is illegal is difficult to measure.
      Evidence comes not only from cigarette sales, but from the prevalence on our streets of brands of hand-rolling tobacco that are not legally on sale in this country. There is a brand called Drum, as I recollect from my time in the Treasury, which, as far as I know, is not retailed under that name in this country. Of course, it is possible that smokers legally and legitimately buy it overseas and bring it back, but I am afraid that the bulk of it comes in illegally, as it is easy to compress, hide and smuggle, and it is then resold as contraband.
      Another feature of the tobacco tax is that it is not just a matter of known smuggling at ports and airports. There is also a worrying persistence of large-scale duty frauds. That does not involve people stuffing a few packets of cigarettes or hand-rolling tobacco pouches down their trousers and walking through customs; it involves sophisticated gangs who are manipulating a product, the cost of which, when it is legitimately sold, is more than three quarters duty. When the majority of the retail price is made up of duty, that is an invitation to people to take advantage of the situation fraudulently.

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      That can take the form of cigarettes or tobacco designated for export, on which duty is therefore not paid, finding their way back on to the home market. Recently The Times reported a haul of 18 million cigarettes, which was intercepted by Customs and Excise investigators at Heathrow. According to the report:
      "The cigarettes were originally bought for export without duty being paid. Instead the smugglers planned to use the European Union's liberal freight transit controls and a paperwork fraud to divert them on to the domestic market… The result would have been a loss of more than £2.5 million in taxes…
      Customs intelligence officers say that gangs have abandoned smuggling drugs such as cannabis and started cigarette operations, because the penalties if they are caught are far lower and the profits are still good."
      The trade is therefore characterised by two features: smuggling by individuals and small gangs in vans, and large-scale fraudulent operations by sophisticated gangs. Together, they cost the Revenue large sums and undermine the legitimate trade. The position is getting worse. Not only are the Government putting up duty, but, as noted in our previous debates today, the strong pound has made it that much cheaper to buy abroad.
      The trade not only affects the legitimate business, particularly small, high street traders, but has a damaging effect on children. When the cigarettes and tobacco are sold in an uncontrolled market, there is, by definition, no control over who buys them.
      Sir Michael Spicer: Before my right hon. Friend leaves the subject of smuggling, is he aware of what is happening in other countries? In Sweden, smuggling has become so bad that, having tried massive indirect taxation on tobacco, the Government have now reduced taxation by 27 per cent. as a direct response to smuggling. I understand that Denmark is thinking of following suit. I hope that my hon. Friend will ask why the Government are not contemplating that, instead of the minor action that they are taking to stop smuggling.
      8 pm
      Mr. Heathcoat-Amory: My hon. Friend is right. He may have seen the report in the Financial Times on 15 April that Sweden has cut its excise duty on tobacco products by 27 per cent., precisely because it is threatened by cheap imports from its neighbours. We cannot realistically expect other European countries to increase their tobacco duties and close the gap between their rates and ours, as they are threatened by even cheaper supplies, typically from eastern Europe or the Mediterranean countries.
      British Ministers sometimes ask countries with lower tobacco duties, such as Germany, to raise them for health reasons and as a useful source of revenue if, for instance, they are trying to comply with the requirements of the Maastricht treaty on the single European currency. They get the response, "We would like to, but we can't, as it would create in our country exactly the same problems that you face from smuggling and cross-border shopping."
      There are severe constraints on member states and other countries caused by cross-border shopping and the prevalence of smuggling across what are increasingly open borders. Those who understand market economics realise—and even welcome—the discipline imposed by those constraints. The penalty that is borne by high-tax countries is much more effective than enforced
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      harmonisation by the European Commission or anyone else. If we step out of line, we pay a penalty through loss of revenue caused by cross-border shopping and increased illegality through smuggling. That is what is happening in Britain. The Government are making a bad situation worse by ratcheting up the duties in pursuit of revenue, despite the evidence of the damage that is being caused.
      Before the Government took office, they were apparently aware of that. In an earlier debate, I referred to the Prime Minister's pledge, as Leader of the Opposition, to conduct an urgent, independent and comprehensive study of the issue. However, the Government have not honoured that pledge. Customs and Excise has conducted a review, which the Government are keeping secret, on tobacco and alcohol smuggling, but it has not been published; so it is not the urgent, independent and comprehensive study that was promised; it is a serious broken promise by the Prime Minister.
      Will the Financial Secretary make available the report by Customs and Excise? If she is unwilling to do so, will she say why, as it flies in the face of all the assurances from the Government on taking office that they wished to be open and give the public a right to know, that they had nothing to hide and wished to generate a well informed public debate? If they are sincere about that, the very least that they can do if they are not prepared to keep their pre-election promise of an independent review is to publish the one that has already been conducted by part of the Minister's Department.
      Who will pay for the extra taxation on tobacco? An interesting ' study has been carried out by London Economics, a group of economists who have taken evidence, assembled information and published a review on the incidence of tobacco duty. It reveals a marked regressivity about the tax.
      The report comments on the fact that increasing tax has a deterrent effect on smokers. I always knew that, but I had not realised the extent of it. That is intuitively rather obvious. It points out:
      "It is mainly the better off (the top thirty per cent of householders by income) who have given up tobacco"—
      presumably for other social reasons and pressures. The less well-off have not done so. The report comments that the tax is "extremely regressive" and
      "becomes more so with each increase in duty."
      The report includes research based on the family expenditure surveys for 1995–96 and 1996–97, and reveals that, in the latter of those two financial years,
      "the poorest ten per cent of United Kingdom households spent almost 14 per cent. of their income on tobacco taxes whilst the richest 10 per cent. spent less than half per cent."
      The survey includes non-smokers. If one concentrates entirely on those who smoke, the figures are rather startling. The data suggest that
      "the poorest ten per cent of smoking households spend as much as a quarter of their income on tobacco compared to a little more than one per cent for the richest."

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      The report estimates that
      "savings to consumers from the one-off reduction in VAT on fuel, from eight per cent to five per cent"—
      we hear about that constantly from Labour Members—
      "may have been cancelled out by the first of the planned five per cent real annual increases in tobacco duty."
      Not only are the Government taking back what they have given, but they will do so every year, while the reduction in VAT on fuel was a one-off measure. Perversely, they are encouraging smuggling in a way that does the most damage to the poorest people we represent.
      Presumably that worried the Financial Secretary in opposition when she said on 23 January 1995:
      "We have made clear our views on the health aspects on curtailing smoking and encouraging people not to smoke, but taxation is not the way to do that."—[Official Report, 23 January 1995; Vol. 253, c. 106.]
      At that time, she did not feel that ratcheting up taxation on tobacco was a good way of achieving a health objective.
      Mr. Leslie: During that debate on 23 January 1995, the right hon. Member for Wells (Mr. Heathcoat-Amory) said:
      "Price rises are an effective way in which to reduce consumption"—[Official Report, 23 January 1995; Vol. 253, c. 113.]
      Mr. Heathcoat-Amory: That is exactly what I said a few moments ago. Had the hon. Gentleman been listening, he would have heard me quote from a report that reached exactly that conclusion, although it pointed out that price rises had a much greater effect in deterring smoking in better-off households than in poorer households. I am willing to repeat what I said when the hon. Gentleman was nodding off: it is obvious that, if one increases the price of something, people will buy less of it. That is not a particularly remarkable observation. However, the increase does the most damage to poorer households. I am sure that the hon. Gentleman must have constituents on very low incomes who are hit in precisely the way that I described.
      The measure is flying in the teeth of a serious law and order issue, whereby smuggled tobacco is resulting in uncontrolled sales to minors, in pubs and clubs and on street corners, and illegally to small tobacconists who sometimes cannot resist the opportunity to buy cheap supplies. All that must worry the Government, who, at least nominally, are committed to law and order.
      Our amendment reduces the increases back to 3 per cent. in real terms. I am fully aware that the difference between 3 and 5 per cent. will not cause the difficulties that I have outlined to evaporate, but we are approaching breaking point, and that is why a review is important and why it is disappointing that the Prime Minister's promised review has not taken place. Meanwhile, I urge that the Committee revert to the previous escalator, which will at least avoid the more damaging implications of the Government's present policy.
      Mr. Leslie: Listening to the right hon. Member for Wells (Mr. Heathcoat- Amory), one might forget that smoking kills people and that the rate of death and disease from smoking is far too high and needs to come down.
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      It is essential that people, particularly young people, are deterred from smoking, and we must try to find ways of ensuring that tobacco consumption is reduced.
      The new Government's commitment to the 5 per cent. escalator annually is extremely welcome. In 1993, the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke) said that the tobacco duty escalator
      "is the most effective way to reduce smoking."—[Official Report, 30 November 1993; Vol. 233, c. 939.]
      The higher tobacco duty escalator is widely accepted, certainly in my constituency—I have had no representations opposed to the 5 per cent. escalator—as necessary in the wider public interest for health and public protection.
      If we can stop people smoking, we can consider redirecting resources currently used within the NHS for treating tobacco-related illnesses to other health care priorities. This fiscal measure is central to the Government's approach to public health and protection. In 1994, the then Minister of State, Department of Health, the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney), pointed out:
      "every 10 per cent. increase in price—
      of tobacco—
      "produces about a 3 per cent. to 6 per cent. decrease in consumption."—[Official Report, 11 February 1994; Vol. 237, c. 617.]
      That is an important example of cause and effect. One cannot compare VAT on fuel with tobacco duty, because heating is good for people and tobacco consumption is bad. The right hon. Member for Wells was wrong in that regard.
      The annual escalator is a serious and strong deterrent. It is not an astronomical amount. It is a fair but firm amount, and it strikes the right balance in preventing the smuggling of excessive amounts of tobacco. There are more effective ways of dealing with that issue. In particular, the Government can reinforce the work of Customs and Excise and its officers while discouraging people from this harmful habit.
      Conspicuous by its absence from the contribution of the right hon. Member for Wells was the cost to the Exchequer of the Opposition's amendment. The House of Commons Library tells me that £180 million would have to be found from public finances if the amendment were accepted. We hear nothing about where that money will come from. Would the Opposition cut public services, or raise taxes in another way?
      Mr. Heathcoat-Amory: I am a little disappointed that the hon. Gentleman is raising this matter again, because I answered him earlier. The amendment simply marginally reduces the impending surplus, which is beyond what even the Government expected in the current financial year. Therefore, there is no need to find expenditure from elsewhere in the Government's programme.
      Mr. Leslie: The right hon. Gentleman is effectively saying that he would borrow more money.
      Mr. Heathcoat-Amory: No, it will come from the surplus.
      Mr. Leslie: If we get into surplus we can consider that, but effectively the Opposition are looking at putting that amount on the PSBR.

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      We have heard nothing from the Opposition about how they will make up that lost revenue. The amendment is poorly thought out and, moreover, it is not in the interests of public health and the wider need to protect people's health throughout Britain.
      Mr. Edward Davey: The hon. Member for Shipley (Mr. Leslie) makes a telling point. Conservatives call for reductions in taxes on tobacco and beer. When they produce a costed set of accounts to put before the country, we shall be interested to see whether they include these policies—and to know the British people's reactions to those priorities.
      The Liberal Democrats were highly critical of the Government during the previous debate, but the Government have got clause 10 about right. The right hon. Member for Wells (Mr. Heathcoat-Amory) talked about smuggling, and we heard about that in an earlier debate. It is clear from the figures for revenue lost and revenue evaded that one of the major problems is the smuggling of hand-rolling tobacco.
      8.15 pm
      The right hon. Member for Wells did not discuss the Government's proposals in that regard, but the Government have, rightly, frozen duties on hand-rolling tobacco, and that is pertinent to our earlier debate when the hon. Member for Beckenham (Mrs. Lait) questioned the source of my figures. I can give the detailed reference for them. They were from a press notice issued by HM Customs and Excise on 26 September 1997 entitled "Smuggling of alcohol and tobacco".
      The breakdown of those figures makes it clear where the real problem lies for Customs and Excise. The £950 million that has been referred to today is made up primarily of losses on smuggled hand-rolling tobacco. In 1997, £540 million of revenue was evaded and £540 million lost. Of £950 million, more than half is accounted for by the smuggling of hand-rolling tobacco. Contrary to what we have heard from Conservative Members, the Government are freezing duty and cutting in real terms the excise duties on the products that are the focus of smuggling activity. I applaud the Government, therefore, because they have got the measure about right.
      In comparison, the loss resulting from the smuggling of cigarettes and other tobacco products is £145 million. That is a significant amount; it is a worry and Customs and Excise needs to be more effective in tackling that loss. If one compares that loss of £145 million, however, with the loss of £540 million from hand-rolling tobacco, it is clear that the Government have analysed the problem and put forward a sensible solution. Therefore, the Liberal Democrats will support clause 10 and oppose the amendment. However, we hope that the Government will rigorously analyse the workings of Customs and Excise. I shall not detain the Committee by repeating my earlier argument, but it is probably even more important with regard to tobacco than to alcohol products.
      The hon. Member for Shipley referred to the link between tobacco duties, and health. If anything, we would have supported the Government in further increasing tobacco duties with the one caveat that the resources thereby raised should be earmarked to go directly into the health service. That might have breached the spending limits inherited from the previous Government, but my
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      constituents, and the constituents of many Labour Members, would not have worried about that. They would have welcomed extra cash for the health service, because it would have brought down waiting lists.
      Every week, I receive letters from constituents, many of them elderly, who are being told by Kingston hospital that they will have to wait a little longer for their operation. The staff at Kingston hospital are working their hardest to reduce those waiting lists—and I congratulate them on their hard work—but, despite their best efforts, the lack of cash and the cuts, inherited from the previous Government but nevertheless severe, are affecting the standard of living of my constituents who are having to wait many months for operations for conditions that are causing them great pain.
      If the Government had proposed to increase tobacco duty even more than they have done, and had put the money straight into the health service to tackle waiting lists, they would have had even more support than we are prepared to give them. Their overall strategy is right, but if they want to find other measures to solve public spending problems—although, with the massive war chest that they are amassing, there cannot be too many such problems, and they could have found resources elsewhere—they could use that route to try to sort out the mess in which the Conservatives left the national health service.
      Mrs. Lait: I am somewhat uneasy in this debate on tobacco because I am not a smoker—I loathe smoking—and I believe that the most effective policy is a high tax policy. The problem is that the level of smuggling and bootlegging means that we do not have a high tax policy. Trying to get organisations such as Action on Smoking and Health, and the Government, to recognise that we do not have such a policy is a bit like beating one's head against a brick wall, but I will continue to do so in the hope that eventually the penny will drop.
      I am concerned that the Treasury does not grasp the scale of the problem. The Financial Secretary is aware, because she answered them, that I have tabled a series of questions on tobacco and alcohol smuggling and bootlegging. I was chilled by the apparent lack of interest in grasping the problem.
      I have asked questions about what action the Government are taking in their EU presidency to try to end the subsidy to tobacco farmers and what progress they are hoping to make in ECOFIN. I have also asked Departments to estimate the number of people whose benefits have been withdrawn because they were found to be smuggling and bootlegging. I have asked the Driver and Vehicle Licensing Agency what has happened to licences, and cars and vans involved in smuggling and bootlegging. I have asked how many licences have been withdrawn from licensed premises because they were retailing smuggled and bootlegged goods.
      I accept that not all those issues are the responsibility of the Financial Secretary, but answers have come there none, so it is difficult for the Treasury, let alone the poor Back Bencher, officially and graphically to describe the effects of smuggling.
      I found in the Red Book an interesting point, which I followed up with a question to the Financial Secretary, about the forecast excise receipts. They showed that, for both alcohol and tobacco duties, the Treasury was

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      expecting a reduction in income of £100 million in each case. I sent the Financial Secretary a note asking whether she could explain that, and answer has come there none, so perhaps the Treasury does not understand what is happening.
      Other organisations—for example, customs, which is on the front line—know exactly what is happening and are trying hard to cope. An incident in Dover in October was reported in the Sunday Mirror, which said that Customs made a raid in which
      "the bootleggers fled as £70,000 of illegal booze and cigarettes were seized. But after a heavy drinking session at a nearby pub, the gang returned … and tried to get their haul back. 'We were cataloguing everything we had seized, when the smugglers stormed the place,' said one Customs official."
      The history of smuggling and bootlegging immediately brought to mind a parallel situation in 1747, when smugglers tried to regain bootlegged goods in the Poole customs house. We are reverting to what happened 200 years ago, and there are strong parallels to show what should be the proper response.
      The police have conducted an analysis of people involved in smuggling and bootlegging whom they have caught. They are not members of big gangs, but poor mules. The analysis shows that 90 per cent. of those involved are unemployed and drawing benefit, so the Department of Social Security should be able to answer my questions. Seventy per cent. of those involved have a criminal record; 40 per cent. are from outside Dover; 25 per cent. of crimes such as burglary and car theft in the Dover area—
      The Chairman: Order. The amendment does not relate specifically to smuggling. The hon. Lady must relate her remarks specifically to the proposals in the amendment relating to the duty on tobacco.
      Mrs. Lait: Indeed, Sir Alan, I will. I accept your guidance, but I am trying to build up a case to show why the amendment will help to reduce smuggling.
      The Chairman: Perhaps the hon. Lady should accelerate the build-up.
      Mrs. Lait: I will, with pleasure.
      The police have analysed the problem, and it cannot be beyond the wit of the Treasury to do so.
      Another point of which the Government have made great play and with which I have great sympathy is the effect on health of increased smoking. High levels of duty mean that, when youngsters can get hold of cheap tobacco, they are likely to do so. I asked the Library for information about the worrying increase in the number of young smokers. We must remember that the single market started on 1 January 1993. The number of young smokers peaked in 1984 and dropped until 1988. Between 1988 and 1993, the figure was stable. In 1996, the level of smoking among youngsters was as high as it had been in 1984. I suggest that, although there are complex reasons why youngsters smoke, there is a clear correlation between the opening of the single market and the subsequent availability of cheap tobacco, and the number of youngsters who smoke.
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      All those factors show the need to deal with the problem caused by the high levels of taxation of tobacco. As my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) said, the problem is worsening. There has been a noticeable increase in the smuggling and bootlegging not only of hand-rolling tobacco, which the hon. Member for Kingston and Surbiton (Mr. Davey) mentioned, but of cigarettes.
      Dave West, who runs the Smoking Warehouse in Adinkerke in Belgium, said that before last December's rise in cigarette prices, he was selling a negligible number of cigarettes. He is now describing what happened on 1 December as a gold rush, and he is looking forward to his second gold rush this December.
      Mr. Cranston: Can the hon. Lady explain the results of a 1996 MORI survey, which showed that the preferred cigarette brand among young people was Benson and Hedges—the most expensive—and that consumption by young people was attributable more to advertising than to smuggling, which was not even considered in the survey?
      Mrs. Lait: The hon. Gentleman may care to know that the cost of UK cigarette brands from Dave West is £1.80. Compared with the cost in the UK, that has a much more significant effect on people's consumption of cigarettes than advertising. As I have already been called to order on the issue of smuggling, I dare not go down the route of the advertising debate.
      I shall draw my remarks to a close in the hope that some of the information that I have provided to the Financial Secretary will bring home to her the scale of the problem of tobacco smuggling and bootlegging. We need a clear policy on reducing the profit from smuggling and bootlegging tobacco. The policy that affects duty on tobacco in this country comes from Belgium, not from the British Government, and we need to take that fact into account when thinking about how to deal with the problem of the nation's health.
      I shall sum up by quoting Adam Smith, who was a customs commissioner. He said:
      "The high duties which have been imposed upon the importation of many different sorts of foreign goods, in order to discourage their consumption in Great Britain, have in many cases served only to encourage smuggling; and in all cases have reduced the revenue of the Customs below what more moderate duties would have afforded."
      I hope that the Financial Secretary will put in train some of the inquiries surrounding the broader issue of the health of the nation, which have been brought about by high tobacco duties, and look favourably on our amendment.
      8.30 pm
      Dawn Primarolo: The right hon. Member for Wells (Mr. Heathcoat-Amory) ignores all the health arguments and proposes that, to help the poor, the escalator on cigarettes should be reduced from 5 per cent. to 3 per cent.
      As my hon. Friend the Member for Shipley (Mr. Leslie) said, the health consequences of smoking are at the heart—if hon. Members will excuse the pun—of our strategy. It is worth reminding the right hon. Member for Wells—who clearly needs reminding—of them. Some 80 per cent. of the 40,000 deaths from lung cancer each year are attributed to smoking, and 20 per cent. of the

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      180,000 deaths from heart disease each year and 80 per cent. of the 30,000 deaths from bronchitis, chronic obstructive airway diseases and other types of illness are attributed to smoking. There is a 20 per cent. higher risk of death to babies born to mothers who smoke. Women who smoke run a ten times higher risk of heart attack, stroke or cardio-vascular disease, and smoking may affect fertility.
      We know that babies born to mothers who smoke are lighter, and that paternal smoking also makes babies lighter through passive smoking once the baby is born. Smokers lose, on average, more than one day of their life each year. About half of all regular smokers in developed countries are eventually killed by cigarette smoking. The growth in smoking among teenagers and young adults has a dramatic impact on their life expectancy. The risk of dying from lung cancer is associated with the length of time a person smokes, as well as with the amount that he or she smokes. Even when a person has given up smoking, the consequences to his or her health remain higher than for those who have never smoked. That is the context in which the Government set their policy of raising the escalator on cigarettes and tobacco products excluding hand-rolling tobacco.
      Opposition Members referred to smuggling. I take your guidance, Sir Alan—this is not the subject of the clause—and I do not intend to speak at length on it. The Government recently announced their intention to deal with persistent offenders, to ensure that more people face disqualification from driving and that the criminals who smuggle pay compensation for the revenue evaded through smuggling. Publicans and off-licence and restaurant owners could, after prosecution, find their liquor licences revoked.
      I cannot give the hon. Member for Beckenham (Mrs. Lait) answers about the consequences of those actions, because the Conservative Government did not pursue such policies. I feel a little frustrated by today's debate because Conservative Members cannot, or perhaps will not, understand that this Government have a strategy that their Government failed to put in place. We should be clear about the scale of the problem. The right hon. Member for Wells pointed out that the Government of which he was a member were committed to using taxation as part of their health policy. The then Secretary of State for Health repeatedly referred to the importance of taxation in deterring people from smoking. I agree that it is important, but it should not be done in isolation. We need health education and strategies to ensure that not only tax but other methods are used to encourage people not to start smoking or, if they already smoke, to stop.
      The hon. Member for Beckenham referred to reducing smoking among young people. We absolutely agree with her about the importance of that. The Government's strategy moves in parallel with our tax strategy to reduce smoking among young people. It is set out in detail in the tobacco control White Paper, which will be published later this year. Opposition Members complain that we have not done enough in 12 months, not that we are moving in the wrong direction. I presume that tonight's discussion is to fill up time on the Floor of the House rather than to make genuine suggestions about an alternative strategy.
      I shall not be tempted to discuss whether Opposition Members care about the poor. It is an insult to poor people that, having been in power for 18 years, Conservative
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      Members have only just noticed that they exist and that taxation policies have an impact on them. The right hon. Member for Wells was a Minister in both the Foreign Office and the Treasury. His sudden discovery that policies might impact on the poor is breathtaking. Where has he been, not to have noticed after all this time the impact that the Conservative Government's policies had on the poor?
      The hon. Member for Kingston and Surbiton (Mr. Davey) spoke about the importance of freezing duty on hand-rolling tobacco. We are continuing to pursue our policy with regard to cigarettes, but recognise that, as part of the strategy that we are developing to tackle smuggling, there are special problems with hand-rolling tobacco.
      May I say to the hon. Member for Beckenham that the idea that those engaged in smuggling are poor mules, feckless people or Jack the lads is ridiculous. People who buy goods from smugglers put money in the back pockets of criminals and deny revenue to the Treasury, which means that it cannot be spent on public services. Instead of advocating that the Treasury should cut moneys available to public services by cutting duty rates, the hon. Lady should join us in decrying the criminal activity of smuggling and encourage and support the Government's action.
      Mrs. Lait: May I ask the Minister to add to her reading list some books about smuggling in the 18th and 19th centuries? That would indicate to her the solution to the problem. "The Albion Tree", one of the best, is available in the House of Commons Library.
      Dawn Primarolo: If the hon. Lady is seriously telling me that smuggling has been around for a very long time, I must say that I agree with her. If she is saying that we need complex strategies to tackle it, I also have to agree with that. However, I would encourage her to find a solution in this century rather than seeking refuge in the past. She might pay a little more attention to the strategies that the Government are deploying rather than lamenting the fact that we are not behaving as if we were in the 17th century: I leave that to her hon. Friends.
      Several points were made about the Swedish Government's announcement on 14 April that they intend to reduce duty on cigarettes by 27 per cent. in 1999. They will achieve that by reducing specific rates. I was asked why we do not take similar action in the United Kingdom. First, we would lose £2.4 billion in a full year, which is the equivalent of l½p on the basic rate of income tax. We are not prepared to countenance the loss of that revenue.
      Secondly, I do not know the hon. Lady's position on Europe, but she seemed to imply that we should allow other member states to determine our duty rates. She prayed in aid the Swedes' activities in reducing their rates, as did the right hon. Member for Wells. That is a solution to their problem, but information from Customs and Excise and the tobacco industry suggests that the problem of smuggling in Sweden is much greater than the problem here, much as we regret our own. Customs and the Tobacco Manufacturers Association are discussing reliable methods of trying to estimate the overall scale of cigarette smuggling—a problem that, as the hon. Lady and others have said, is beginning to emerge.
      In the light of our earlier debate on beer duty, it frankly beggars belief that the hon. Lady and others say that we have no enthusiasm for tackling smuggling and the

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      problems that it causes. Imported cigarettes and smuggling are a problem not only for the UK and other European Union member states with high-duty regimes; they are also a problem for those with low-duty regimes. The hon. Lady's causal connection between duty and smuggling is not a fair representation of the complexity of the problem.
      The Government have made it clear that, on health grounds, our policy is correct. We have given more money to the health service than we would have done by linking the escalator to money moved across to the health service, as the hon. Member for Kingston and Surbiton suggested we should. I remind him that the Government have already given an extra £2 billion to the national health service. Our commitment to funding health and education is clear, in terms of priorities.
      I ask the Committee to reject the amendment, which would reduce duty to 3 per cent., and to support the duty of 5 per cent. and our phrasing on hand-rolled tobacco, as they are the best ways to deliver the Government's health policy. That would recognise that we are dealing vigorously with the problems of smuggling and will not allow that criminal activity to continue to undermine public expenditure and public revenue.
      8.45 pm
      Mr. Heathcoat-Amory: We have heard the Financial Secretary at her worst. She either could not or would not answer our questions. I remind her that she said in the House in 1995—I gave the quotation earlier—that increasing taxation is not the way to reduce consumption of tobacco or to deal with the health effects.
      I asked the hon. Lady what had caused her to change to her mind. Switching from Opposition to Government has clearly had an extraordinary effect on her attitudes. Apparently she now thinks that there is no way of dealing with this problem other than by increasing prices and taxation.
      It has occurred to my hon. Friends and me that the Government have changed their mind on another way of tackling tobacco consumption—through advertising. The Committee will remember that the Labour party won the election on a clear pledge to stop advertising on formula one racing cars. The Prime Minister changed his mind, and broke that pledge. It was later discovered that Bernie Ecclestone, who persuaded him to do so, had given £1 million to the Labour party. Lucky old Bernie got his bung back on that occasion, but we are left with a broken promise and the fact that the much heralded ban on tobacco advertising has not come into effect. Perhaps that is why the Government are relying more on increasing duty on tobacco.
      My knowledgeable hon. Friend the Member for Beckenham (Mrs. Lait) has drawn attention to the seriousness of the smuggling or bootlegging problem and the culture of illegality to which it has led. The Financial Secretary said that she was concerned about that, but she clearly is not grappling with the problems. The proposed increases widen the gap between continental rates of duty and our own, which will make the situation worse.
      The Financial Secretary said that there was a problem of young people taking up smoking, and, during our debate, other hon. Members have recognised the
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      seriousness of that problem. If tobacco products are smuggled in, they are made available outside Government controls on the sale of tobacco to minors. It is an unruly and anarchic market, and it leads to young people taking up smoking. For that pure health reason alone, the Government ought to think twice before increasing the escalator to 5 per cent.
      Opposition Members have shown how savagely regressive this policy is. The Financial Secretary appeared entirely ignorant of that. If she did recognise it, she seemed entirely uninfluenced by it. We conclude that the Government's concern about the poor and those on low incomes is entirely synthetic. The figures 1 quoted earlier showed that smoking households in the bottom decile spend up to a quarter of their income on tobacco products. That ought to worry members of a party that, until fairly recently, had at least a published concern for the needy and the disadvantaged.
      My final point, which the Financial Secretary continues to avoid, is that the Prime Minister recognised, before the election, that there was a problem. He said so when he was looking for votes in the tobacco industry and related industries. He promised an independent, urgent and comprehensive study. He has broken that promise. When will the hon. Lady publish the substitute study, by Customs and Excise, to inform our debates, and the public, about the real facts behind the Government's taxation policy, which is driven entirely by revenue considerations? The health issue is purely a smokescreen; it is revenue that the Government are after. If they disagree, let them publish a report on the matter.
      Mr. Patrick Hall: Will the right hon. Gentleman give way?
      Mr. Heathcoat-Amory: The hon. Gentleman has not contributed to the debate, and I do not propose to give way to him. In any case, it is not from the hon. Gentleman that I shall get an answer to the following question, because he is not in a position to give one. When do the Government intend to fulfil their pre-election promise, on which the hon. Gentleman and others stood, to undertake an investigation of this issue and publish the results? Until that happens, we shall conclude that the clause is revenue-driven. I urge the Committee to accept our amendment.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 106, Noes 303.

      Division No. 260]

      [8.50 pm

      AYES

      Ancram, Rt Hon Michael

      Clarke, Rt Hon Kenneth

      Arbuthnot, James

      (Rushcliffe)

      Atkinson, David (Bour'mth E)

      Clifton—Brown, Geoffrey

      Beggs, Roy

      Collins, Tim

      Bercow, John

      Colvin, Michael

      Blunt, Crispin

      Cormack, Sir Patrick

      Brazier, Julian

      Cran, James

      Browning, Mrs Angela

      Curry, Rt Hon David

      Burns, Simon

      Davies, Quentin (Grantham)

      Cash, William

      Davis, Rt Hon David (Haltemprice)

      Chapman, Sir Sydney

      Dorrell, Rt Hon Stephen

      (Chipping Barnet)

      Duncan Smith, Iain

      Chope, Christopher

      Evans, Nigel

      Clappison, James

      Fabricant, Michael

      Clark, Rt Hon Alan (Kensington)

      Fallon, Michael

      Clark, Dr Michael (Rayleigh)

      Fox, Dr Liam

      219

      Fraser, Christopher

      Moss, Malcolm

      Garnier, Edward

      Norman, Archie

      Gibb, Nick

      Paice, James

      Greenway, John

      Prior, David

      Grieve, Dominic

      Randall, John

      Hamilton, Rt Hon Sir Archie

      Robathan, Andrew

      Hammond, Philip

      Robertson, Laurence (Tewk'b'ry)

      Heald, Oliver

      Roe, Mrs Marion (Broxbourne)

      Heathcoat—Amory, Rt Hon David

      Rowe, Andrew (Faversharn)

      Hogg, Rt Hon Douglas

      Ruffley, David

      Horam, John

      St Aubyn, Nick

      Hunter, Andrew

      Sayeed, Jonathan

      Jackson, Robert (Wantage)

      Simpson, Keith (Mid—Norfolk)

      Jenkin, Bernard

      Spelman, Mrs Caroline

      Johnson Smith,

      Spicer, Sir Michael

      Rt Hon Sir Geoffrey

      Spring, Richard

      Key, Robert

      Stanley, Rt Hon Sir John

      King, Rt Hon Tom (Bridgwater)

      Steen, Anthony

      Kirkbride, Miss Julie

      Streeter, Gary

      Laing, Mrs Eleanor

      Swayne, Desmond

      Lait, Mrs Jacqui

      Syms, Robert

      Lansley, Andrew

      Taylor, John M (Solihull)

      Leigh, Edward

      Taylor, Sir Teddy

      Letwin, Oliver

      Tredinnick, David

      Lewis, Dr Julian (New Forest E)

      Trend, Michael

      Lidington, David

      Tyrie, Andrew

      Lilley, Rt Hon Peter

      Viggers, Peter

      Lloyd, Rt Hon Sir Peter (Fareham)

      Wardle, Charles

      Luff, Peter

      Waterson, Nigel

      Lyell, Rt Hon Sir Nicholas

      Whitney, Sir Raymond

      MacGregor, Rt Hon John

      Widdecombe, Rt Hon Miss Ann

      McIntosh, Miss Anne

      Willetts, David

      MacKay, Andrew

      Wilshire, David

      Maclean, Rt Hon David

      Winterton, Mrs Ann (Congleton)

      McLoughlin, Patrick

      Woodward, Shaun

      Madel, Sir David

      Yeo, Tim

      Malins, Humfrey

      Young, Rt Hon Sir George

      Mates, Michael

      Tellers for the Ayes:

      Maude, Rt Hon Francis

      Mr. John Whittingdale and

      Mawhinney, Rt Hon Sir Brian

      Mr. Stephen Day.

      NOES

      Abbott, Ms Diane

      Breed, Colin

      Adams, Mrs Irene (Paisley N)

      Brinton, Mrs Helen

      Ainger, Nick

      Brown, Rt Hon Nick (Newcastle E)

      Ainsworth, Robert (Cov'try NE)

      Brown, Russell (Dumfries)

      Alexander, Douglas

      Browne, Desmond

      Allan, Richard

      Bruce, Malcolm (Gordon)

      Allen, Graham

      Burden, Richard

      Anderson, Donald (Swansea E)

      Burgon, Colin

      Anderson, Janet (Rossendale)

      Burstow, Paul

      Armstrong, Ms Hilary

      Butler, Mrs Christine

      Ashdown, Rt Hon Paddy

      Byers, Stephen

      Ashton, Joe

      Cable, Dr Vincent

      Atherton, Ms Candy

      Caborn, Richard

      Atkins, Charlotte

      Campbell, Alan (Tynemouth)

      Ballard, Mrs Jackie

      Campbell, Mrs Anne (C'bridge)

      Banks, Tony

      Campbell, Menzies (NE Fife)

      Barnes, Harry

      Campbell, Ronnie (Blyth V)

      Bayley, Hugh

      Campbell—Savours, Dale

      Beckett, Rt Hon Mrs Margaret

      Canavan, Dennis

      Begg, Miss Anne

      Cann, Jamie

      Beith, Rt Hon A J

      Casale, Roger

      Bell, Stuart (Middlesbrough)

      Caton, Martin

      Benn, Rt Hon Tony

      Chapman, Ben (Wirral S)

      Bennett, Andrew F

      Chaytor, David

      Benton, Joe

      Chidgey, David

      Bermingham, Gerald

      Chisholm, Malcolm

      Best, Harold

      Clark, Dr Lynda

      Blackman, Liz

      (Edinburgh Pentlands)

      Blizzard, Bob

      Clark, Paul (Gillingham)

      Boateng, Paul

      Clarke, Charles (Norwich S)

      Borrow, David

      Clarke, Eric (Midlothian)

      Bradley, Peter (The Wrekin)

      Clarke, Rt Hon Tom (Coatbridge)

      Bradshaw, Ben

      Clelland, David

      220

      Clwyd, Ann

      Hopkins, Kelvin

      Coaker, Vernon

      Howarth, George (Knowsley N)

      Coleman, Iain

      Howells, Dr Kim

      Cook, Frank (Stockton N)

      Hoyle, Lindsay

      Cotter, Brian

      Humble, Mrs Joan

      Cousins, Jim

      Hurst, Alan

      Cox, Torn

      Hutton, John

      Cranston, Ross

      Iddon, Dr Brian

      Cryer, Mrs Ann (Keighley)

      Jackson, Helen (Hillsborough)

      Cummings, John

      Jamieson, David

      Cunliffe, Lawrence

      Jenkins, Brian

      Cunningham, Rt Hon Dr John

      Johnson, Alan (Hull W & Hessle)

      (Copeland)

      Johnson, Miss Melanie

      Cunningham, Jim (Cov'try S)

      (Welwyn Hatfield)

      Cunningham, Ms Roseanna

      Jones, Barry (Alyn & Deeside)

      (Perth)

      Jones, Helen (Warrington N)

      Dafis, Cynog

      Jones, leuan Wyn (Ynys MÖ)

      Dalyell, Tam

      Jones, Ms Jenny

      Darling, Rt Hon Alistair

      (Wolverh'ton SW)

      Davey, Edward (Kingston)

      Jones, Jon Owen (Cardiff C)

      Davidson, Ian

      Jones, Martyn (Clwyd S)

      Davies, Rt Hon Denzil (Llanelli)

      Keeble, Ms Sally

      Davies, Geraint (Croydon C)

      Keen, Ann (Brentford & Isleworth)

      Dawson, Hilton

      Kennedy, Charles (Ross Skye)

      Dean, Mrs Janet

      Kennedy, Jane (Wavertree)

      Denham, John

      Kidney, David

      Dewar, Rt Hon Donald

      Kilfoyle, Peter

      Dobbin, Jim

      King, Andy (Rugby & Kenilworth)

      Dobson, Rt Hon Frank

      Kingham, Ms Tess

      Donohoe, Brian H

      Kirkwood, Archy

      Dowd, Jim

      Kumar, Dr Ashok

      Drew, David

      Lawrence, Ms Jackie

      Drown, Ms Julia

      Laxton, Bob

      Eagle, Angela (Wallasey)

      Lepper, David

      Eagle, Maria (L'pool Garston)

      Leslie, Christopher

      Edwards, Huw

      Levitt, Tom

      Ellman, Mrs Louise

      Lewis, Ivan (Bury S)

      Ewing, Mrs Margaret

      Liddell, Mrs Helen

      Fearn, Ronnie

      Livsey, Richard

      Flynn, Paul

      Lloyd, Tony (Manchester C)

      Follett, Barbara

      Llwyd, Elfyn

      Foster, Rt Hon Derek

      Lock, David

      Foster, Michael Jabez (Hastings)

      Love, Andrew

      Foster, Michael J (Worcester)

      McAllion, John

      Foulkes, George

      McAvoy, Thomas

      Fyfe, Maria

      McCabe, Steve

      Gardiner, Barry

      McCafferty, Ms Chris

      George, Andrew (St Ives)

      McDonnell, John

      George, Bruce (Walsall S)

      McGuire, Mrs Anne

      Gerrard, Neil

      McIsaac, Shona

      Gibson, Dr Ian

      McKenna, Mrs Rosemary

      Godman, Dr Norman A

      Mackinlay, Andrew

      Godsiff, Roger

      McNamara, Kevin

      Goggins, Paul

      McNulty, Tony

      Golding, Mrs Llin

      McWalter, Tony

      Griffiths, Jane (Reading E)

      Mallaber, Judy

      Griffiths, Nigel (Edinburgh S)

      Mandelson, Peter

      Griffiths, Win (Bridgend)

      Marsden, Gordon (Blackpool S)

      Gunnell, John

      Marshall, David (Shettleston)

      Hain, Peter

      Marshall, Jim (Leicester S)

      Hall, Mike (Weaver Vale)

      Marshall—Andrews, Robert

      Hall, Patrick (Bedford)

      Maxton, John

      Hancock, Mike

      Michael, Alun

      Hanson, David

      Michie, Bill (Shef'ld Heeley)

      Harvey, Nick

      Milburn, Alan

      Heal, Mrs Sylvia

      Moffatt, Laura

      Heath, David (Somerton & Frome)

      Moonie, Dr Lewis

      Henderson, Ivan (Harwich)

      Moore, Michael

      Hepburn, Stephen

      Moran, Ms Margaret

      Heppell, John

      Morgan, Alasdair (Galloway)

      Hesford, Stephen

      Morgan, Ms Julie (Cardiff N)

      Hinchliffe, David

      Morgan, Rhodri (Cardiff W)

      Hoey, Kate

      Morley, Elliot

      Home Robertson, John

      Morris, Rt Hon John (Aberavon)

      Hood, Jimmy

      Mudie, George

      Hoon, Geoffrey

      Mullin, Chris

      221

      Murphy, Denis (Wansbeck)

      Smith, John (Glamorgan)

      Murphy, Jim (Eastwood)

      Smith, Llew (Blaenau Gwent)

      Oaten, Mark

      Spellar, John

      O'Brien, Bill (Normanton)

      Squire, Ms Rachel

      O'Brien, Mike (N Warks)

      Steinberg, Gerry

      O'Neill, Martin

      Stevenson, George

      Organ, Mrs Diana

      Stewart, David (Inverness E)

      Osborne, Ms Sandra

      Stinchcombe, Paul

      Palmer, Dr Nick

      Stoate, Dr Howard

      Pearson, Ian

      Stott, Roger

      Perham, Ms Linda

      Strang, Rt Hon Dr Gavin

      Pickthall, Colin

      Stringer, Graham

      Pike, Peter L

      Swinney, John

      Plaskitt, James

      Taylor, Rt Hon Mrs Ann

      Pope, Greg

      (Dewsbury)

      Pound, Stephen

      Taylor, Ms Dari (Stockton S)

      Powell, Sir Raymond

      Taylor, Matthew (Truro)

      Prentice, Ms Bridget (Lewisharn E)

      Temple—Morris, Peter

      Prentice, Gordon (Pendle)

      Thomas, Gareth (Clwyd W)

      Primarolo, Dawn

      Thomas, Gareth R (Harrow W)

      Prosser, Gwyn

      Tipping, Paddy

      Purchase, Ken

      Touhig, Don

      Quin, Ms Joyce

      Trickett, Jon

      Quinn, Lawrie

      Truswell, Paul

      Radice, Giles

      Turner, Dennis (Wolverh'ton SE)

      Rammell, Bill

      Turner, Dr Desmond (Kemptown)

      Rapson, Syd

      Turner, Dr George (NW Norfolk)

      Reed, Andrew (Loughborough)

      Twigg, Derek (Halton)

      Reid, Dr John (Hamilton N)

      Tyler, Paul

      Robinson, Geoffrey (Cov'try NW)

      Wallace, James

      Rogers, Allan

      Walley, Ms Joan

      Rooker, Jeff

      Watts, David

      Ross, Ernie (Dundee W)

      Webb, Steve

      Roy, Frank

      Welsh, Andrew

      Ruane, Chris

      Wicks, Malcolm

      Ruddock, Ms Joan

      Williams, Rt Hon Alan

      Russell, Bob (Colchester)

      (Swansea W)

      Sanders, Adrian

      Williams, Alan W (E Carmarthen)

      Savidge, Malcolm

      Willis, Phil

      Sawford, Phil

      Wills, Michael

      Shaw, Jonathan

      Winnick, David

      Sheerman, Barry

      Wise, Audrey

      Sheldon, Rt Hon Robert

      Wood, Mike

      Singh, Marsha

      Worthington, Tony

      Skinner, Dennis

      Wray, Jarnes

      Smith, Angela (Basildon)

      Tellers for the Noes:

      Smith, Miss Geraldine

      Mr. Clive Betts and

      (Morecambe & Lunesdale)

      Mr. John McFall.

      Question accordingly negatived.
      Clause 10 ordered to stand part of the Bill.

    Clause 11

      RATES OF GAMING DUTY
      Mr. Michael Fallon: I beg to move amendment No. 14, in page 5, line 33, leave out subsection (1) and insert—
      '(1) In the Table in section 11(2) of the Finance Act 1997 (rates of gaming duty) the figures in the left-hand column under the heading "Part of gross gaming yield" shall be increased on 1 April each year in line with the increase in the retail index of prices over the previous twelve months.'.
      The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this, it will be convenient to discuss amendment No. 15, in page 5, line 39, leave out '£1,500,000' and insert '£3,500,000'.
      Mr. Fallon: We now turn to gaming. Perhaps it is appropriate, as the night draws on, that we turn to the
      222
      tables. I would not suggest for a moment that you are an habitué of any other table than that at which you are presiding, Mr. Lord. However, you may not be aware, as the rest of the Committee may not be aware, that gaming is a big industry in Britain. There are 115 casinos in this country, 21 of which are in London. The industry employs 12,000 people, one third of whom are employed in London.
      Gaming is not just a big industry, but a successful one that attracts overseas visitors and earnings to Britain. Gross overseas receipts last year were £879 million. The industry contributed £141 million to the public revenues in tax in 1996-97.
      When we were in office, we recognised the success of the industry. In the latter part of our time in government, we did not propose the increases in duty contained in the clause to which our amendment is addressed. On the contrary, we proposed a programme of sensible deregulation. I declare an interest as an unpaid member of the Government's deregulation task force, which, from 1995, sought to make it easier for casinos to open in new areas and to modernise the industry, allowing advertising and making it easier for people to be members of casinos. Above all, we treated the industry with respect.
      This Government have changed that. Without warning, they have slapped a £25 million increase on gaming duty. The industry calculates that the figure may be nearer to £30 million. I see the Paymaster General nodding. I am glad to see him confirm that the Government's figures may be wrong on that. By nodding, he has proved my point. The increase has been slapped on the industry arbitrarily.
      For £3 million casinos, the increase in duty is 12 per cent. For £5 million to £12 million casinos, the increase is about 50 per cent. For £20 million casinos, the increase is 30 per cent. The top rate of duty has been upped by 40 per cent. There is no logic behind the progressive increases in duty. This is a dawn raid with a vengeance.
      Mr. Gardiner: I stand to be corrected by the record, but I believe that the hon. Gentleman said that the duty was being upped by 40 per cent. I trust that he meant upped to 40 per cent. from the old rate of 33.33 per cent.
      Mr. Fallon: Subsection (2) increases the top rate of duty to 40 per cent. I am talking about the various bands in subsection (1). The increases are varied and arbitrary, depending on the size of yield. The increase could be 12 per cent., 50 per cent., 30 per cent. or 40 per cent. In the middle bands, the increase is around 50 per cent. An arbitrary, illogical, irrational increase has been foisted on the industry.
      The industry was not consulted. It was not informed or warned, and there was no discussion of the issue. I am doubly grateful that the Paymaster General is here this evening. When we were discussing corporation tax yesterday, he lectured us on the importance of consultation. He said:
      "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

      223
      which we should be afraid or ashamed. We recommend that the Opposition learn from that."—[Ofcial Report, 27 April 1998; Vol. 311, c. 66.]
      Mr. Robert Ainsworth (Lord Commissioner to the Treasury): Hear, hear.
      Mr. Fallon: The Whip says, "Hear, hear," but there was no consultation, no warning and no proper discussion with the industry on gaming duty before the tax was suddenly imposed. Indeed, it is suggested not only that the industry was not informed but that the Home Office, the industry's sponsoring Department, was not aware of the proposed increases until the Budget was announced. All that from a Government who claim to be pro-business. We read in our copies of the Evening Standard on Friday that there might be further tax cuts for business, but tonight we are debating a clause that imposes a tax increase on business. Casinos across the country were pole-axed on Budget day.
      Just in case the Paymaster General or the Financial Secretary does not quite realise what he or she is doing, I shall lay out for them the effect on the two biggest operators in London. There are 21 casinos in London, and 10 of those are controlled by only two groups: London Clubs International and the Capital Corporation. Within days of the Budget announcement, 30 per cent. of the value of their share prices was wiped out. That was the effect of this arbitrary, irrational, cack-handed attempt to grab more revenue from the casino industry.
      I do not want to hear any excuse from Government Front Benchers in response to our amendments, or any suggestion that duties may be higher elsewhere in Europe—they may be higher. Other casinos in Europe—perhaps the Paymaster General knows some of them—have fewer invigilators, and pay their staff in tips rather than salaries.
      On amendment No. 14, I do not want to hear the Financial Secretary say—if I can have her attention—that we did not index gaming duty. We did not have to. We understood the industry; indeed, we were proposing a programme of deregulation to help it. We were not in the business of suddenly slamming on a 40 per cent. increase in gaming duty.
      The amendments offer the Financial Secretary a way out. Amendment No. 15 would reverse one of the most damaging increases. Amendment No. 14 would index duties for ever. At least then the industry would know where it stood. It would be protected from dawn raids in future; it would not suddenly face an arbitrary increase. [Interruption.] I am surprised that Ministers find the matter funny when 12,000 jobs are at stake. Amendment No. 14 would index increases so that there could be no temptation for Ministers suddenly to impose quite savage, arbitrary and ill-thought-out increases in duty.
      Apart from those two suggestions out, there are plenty of other ways out of the impasse. I understand that various talks are going on between the industry and officials, who now accept the ill-thought-out nature of the Financial Secretary's proposals. The other ways out include phasing the various increases—if she really insists on them—over three years. It is not often that an industry that is suddenly taxed by a so-called business-friendly Government sees 30 per cent. of its value wiped out on the stock exchange. There is a case for phasing the increases over three years.
      224
      Perhaps the Financial Secretary will admit that the various banding increases have not been worked through properly. She might be prepared at least to look at the way in which the increases impact.
      In the end, it is up to the Financial Secretary. She must decide how to justify inflicting such increases on one of our most successful British businesses. If she does not, the industry will know that similar increases may be levied each consecutive year. The industry attracts a considerable amount of overseas earnings, which could quite easily pass over to Amsterdam, Frankfurt or any of the European capitals with which the Paymaster General is so familiar. If the Financial Secretary does not listen, it will be clear that she is not prepared to defend this industry, and that she regards it as some kind of milch cow for future tax revenue.
      Amendment No. 14 gives some protection and puts the industry beyond the grasp of the Financial Secretary. It will ensure that future duty increases are only ever linked to the annual rate of inflation. That kind of safeguard was not necessary during our term of office, but it is certainly necessary now.
      9.15 pm
      Sir Teddy Taylor: We have just discussed a series of measures to give the Government more cash from taxing alcohol, hydrocarbon oil, tobacco and other items. The Government will receive a great deal of extra cash, which I hope they spend wisely. I hope, in this case, that the Financial Secretary will agree to have a second look. I want to persuade her that the proposal is irrational and unfair, and will seriously affect jobs.
      In my constituency, leisure and recreation are major employers. The Financial Secretary will know that we have quite high unemployment—about 9 per cent. When we try to encourage the sea-front to do better and to invest some money, it makes a big difference. We have received investment recently which we hope will help but, in general, the problems with employment in seaside towns are serious.
      I have two casinos in my constituency, located at the Westcliff sporting club. I should like the Financial Secretary to think about some figures which have been sent to the Chancellor of the Exchequer. The club's duty for last year was £563,000. The club has calculated what it would pay under the new proposals; it says the figure would be £876,000, an increase of 56 per cent. These figures are either right or wrong, but on the basis of my discussions with people at the club, I think they will be right.
      Mr. Fallon: It sounds as if the casino in my hon. Friend's constituency is a middle-ranking casino in terms of income, and he is describing an increase of more than 50 per cent.—the information provided to the House of Commons. I can assure him that that sounds right. Middle-ranking casinos in the capital or the provinces are facing increases of more than 50 per cent.
      Sir Teddy Taylor: My hon. Friend is absolutely right. The way in which the tax will apply will not impose a straight increase of a certain amount, but one which varies from place to place. In Southend, we have one of those middle casinos. I have never had the opportunity of

      225
      playing in it, but I have seen around it. Those in charge appear to be good employers who appear to run a good business.
      In a seaside town—where things can be tough and where unemployment tends to be high—it seems irrational to impose the increase. In London clubs—where exciting people come from overseas countries, and where they appear to be wealthy—one might see that there is an opportunity to get more tax. It seems rather unfair on an organisation that has spent an enormous amount on investment and is a major employer in our area.
      The second point that I hope the Financial Secretary will bear in mind is that, in taxing alcohol and cigarettes, the increase can be passed on to the customers. There is simply no way in which casinos can do that. It might be possible in the long term for the club to put up the amount one pays to become a member, but even that amount will be limited.
      Thirdly, the Financial Secretary should be aware that the company is a substantial employer. The Westcliff sporting club provides an academy which trains 150 persons a year. It has had little co-operation from the authorities in providing what it regards as a major public service. It also pays a substantial amount in value added tax; as you know, Mr. Lord, casinos have to pay VAT even on bad debts, which are not recorded.
      I appreciate that there have always been some doubts in the House of Commons about the validity of casinos. Some people think that, like smoking, casinos are a bad thing which should be banned. Of course, they have a perfectly good case. Others think that casinos should be encouraged. However, as we have these activities, it seems desperately unfair to impose massive sudden tax increases and to apply them in such a way that particular casinos in particular areas are hit particularly hard. Such a massive increase is unfair on Southend-on-Sea.
      We are already very restrictive in the case of casinos. For example, unlike other industries, we do not allow them to advertise. As the Financial Secretary is also aware, this tax is not on profits, but on gain before costs.
      I appreciate that Governments who want to get a lot of money sometimes look around for obvious targets—the sort of thing about which people might not complain—but the basic question is: is the Financial Secretary confident that this extra money can be secured without jobs being destroyed, without some casinos having to close and without some reduction in the industry?
      If the industry is simply a sitting duck with lots and lots of money everywhere, one can appreciate that the Government may have a case, but I have a feeling that they have gone too strong on this one and that they have introduced it in such a way that it is particularly unfair to particular places. Of course, I feel very upset that Southend seems to be hit harder than other areas. I hope that the Financial Secretary will examine that.
      What can the Financial Secretary do? I appreciate that, in such debates, it is unusual for Ministers to say that they are going to overturn their decisions and change the Budget. However, I hope that she will say that she will examine the impact of the tax as it applies to particular areas, or at least that she has open mind on how the measure might be applied. Changes can be made if things are unfair.
      226
      I appreciate that, like all Governments—goodness knows, I had plenty of arguments with the previous one—the Government do some bad and some good things, and sometimes make mistakes because they are under a lot of pressure. I feel that, in this case, a mistake has been made. Unfairness has been introduced and I therefore hope that the Financial Secretary will say that she will reconsider the matter and at least keep an open mind on what is a serious issue for the people of Southend-on-Sea.
      Mr. Edward Davey: Until earlier today, my personal knowledge of the casino industry was, to say the least, limited. I am not someone who is taken with gambling. I may be the only hon. Member who has yet to buy a national lottery ticket. That is not, I hasten to add, because I have something against gambling; I do not wish gambling to be banned. It is more because, as a modern economic man, I take my decisions on a rational basis, and it is clearly irrational to gamble. It is only justified as a consumption good. Some people like the experience of gambling and want to spend money on it. That is fine for them, but I choose not to.
      There are concerns when gambling becomes an addiction; that is why this and past Governments have sought to regulate the gambling industry. However, in this measure, the Government are not showing particular social concerns. People who use casinos, particularly London casinos, are international gamblers who cross the globe to gamble. I do not think that the Government's aim is to help those people with their gambling problem. It is clear that the Government want to raise revenue; that is the main point of the measure. However, they are going about it in the wrong way.
      As other hon. Members have said, this is a large increase in a very short time. That is a bad way in which to introduce any new tax and, for the casino industry, it is particularly bad. It will affect a small number of businesses very severely immediately. As the hon. Member for Rochford and Southend, East (Sir T. Taylor) has said, it will result in people losing their jobs. That will happen not just in constituencies such as his and those of my right hon. and hon. Friends who have coastal constituencies where there are casinos for tourists, but in London. I have constituents who work in the casinos in central London, and they are concerned that the tax may lead to their losing their jobs.
      As the hon. Member for Rochford and Southend, East said, it is difficult for the tax to be passed on. I have had to refer to other sources to understand that, because tax increases can often be passed on to the consumer. Apparently, the edge that the house has over the player is laid down by law, ranging from between 0.6 and 5.6 per cent. in blackjack to between 1.5 and 5.6 per cent. in dice, so the tax cannot be passed on.
      To recoup their investment, the business owners will have to make efficiencies elsewhere. Their main costs are staff and property, so staff will be made redundant. That causes a problem for the underlying commercial health of casinos, because it is important for the industry to have in-built inefficiencies. To attract people into the casinos in one capital city rather than another, they have to have subsidised food and lots of people pandering to the punters' every need. Laying off staff may undermine casinos' long-term health.
      The other danger is that gambling could be driven underground. The Gaming Act 1968 was supposed to prevent mafia-type underground gambling operations,

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      with all their appalling implications. I am sure that the Government are not trying to push gambling back that way, but such a huge increase in so short a time could lead in that direction.
      The Government are in danger of killing the goose that lays the egg. Revenues may decrease in the medium term, as casinos close or high-income gambling operations go out of the regulated sector.
      We shall oppose the Government and support the amendment. I am sure that the Government will defeat the Opposition's combined efforts, so I shall propose an alternative that they should grasp, in the form of the improvements in the regulatory regime to which the hon. Member for Sevenoaks (Mr. Fallon) alluded.
      In the dying days of the previous Government, the Home Office published some sensible proposals in a document, "Second Consultation on Casino Deregulation", which would have been implemented in the unhappy event of the Conservatives being re-elected. The proposals would have made it easier for people to apply for membership of a casino on the night or by post, and enabled casinos to market their services in a limited way. There are huge restrictions on what casinos can and cannot advertise, and the proposal was for very minor deregulation. The consultation process revealed little opposition to that, and I believe that it should be pressed ahead with.
      The casino industry and the previous Government supported other minor deregulatory measures, such as allowing up to three slot machines per table in casinos and extending the "permitted areas" in which casinos can operate. They were minor deregulations, but they would have significantly helped the industry. In response to the paper, the Gaming Board re-emphasised to the previous Government that those changes were likely to lead to a substantially enlarged industry. So my point to the Minister is that, if the Government intend to tax the casino industry in this way—as they are likely to do come the 10 o'clock Division—they should reconsider the consultation paper and those deregulatory proposals.
      I do not think that an enlarged casino industry would cause any major social problems. There are many other aspects of the gaming industry in which those problems could be looked at. The deregulatory proposals would enable the casino industry to take the effect of higher taxes in its stride and still grow and meet the extra impost that the Government seek to levy tonight. That would mean that the scenario that I have painted would not occur, and that the revenues of the Government would not fall in the medium term.
      9.30 pm
      Amendment No. 21 in my name and that of my hon. Friends was tabled not in relation to casinos but to flag up to Ministers the fact that the extra duty on amusement machines in clause 12 will cause great problems to working men's clubs and non-profit-making organisations. We want to flag that up before the Bill goes into Committee Upstairs because we want the Government to pay attention to it. We do not intend to move the amendment tonight, but we want the Government to take cognisance of our concerns about that clause. We hope that the Government can put to the Committee some alternative proposals.
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      We intend to oppose the Government tonight. The extent of this latest tax increase and the speed at which the Government are proceeding with it almost beggars belief. It is a massive increase in a very short time. The only way in which the Government can ensure that it does not damage the casino industry in the immediate future, let alone the medium term, is to come to the House at the earliest opportunity with some significant deregulatory proposals.
      Mr. Andrew Lansley: I am grateful for the opportunity to speak in this brief but none the less useful and important debate on the impact of clause 11 on the casino industry. Those who have listened to the debate or who come to read it in days ahead may regard us as a remarkably abstemious crew. I share the position of the hon. Member for Kingston upon Thames—am I right?
      Mr. Davey: And Surbiton.
      Mr. Lansley: I beg the hon. Gentleman's pardon. I had the right part of the world, but not the right constituency. The hon. Member for Surbiton.
      Mr. Davey: Kingston and Surbiton.
      Mr. Lansley: I doubly beg the hon. Gentleman's pardon. I have been wrong twice. I shall go for a third time in a minute.
      The hon. Gentleman said that he had not bet in a casino, indeed not bet anywhere. I have to say that I am not so abstemious. I buy a national lottery ticket from time to time. I recall that, in the debate on the National Lottery Bill, plenty of Labour Members said that they did not buy a lottery ticket but were happy to spend the proceeds in diverse ways. I suspect that, similarly, the Government are perfectly happy, whether or not they are players in casinos, to tax them and spend the money.
      I declare a former interest, in the sense that, in a previous employment, I had occasion to advise Ladbrokes and the Betting Offices Licensees Association. In that context, I wrote a short pamphlet on the regulation of the gaming industry—the betting and gaming industry, I should say, lest I offend it—which meant that, for that short moment, I understood something of the industry. As you may be aware, Mr. Lord, the trouble with debates in the House of Commons is that it is not at the moment that one understands something that one is invited to comment on it. I have had to relearn some of the things that I once understood about the casino industry.
      The change from 33.33 to 40 per cent. in the top rate of duty seems steep on first impression, but it is only when one begins to put it alongside the change in the bandings that one begins to realise what the overall impact is. The hon. Member for Brent, North (Mr. Gardiner)—I am pleased that he is in his place—may have the chance to help me, because I am not competent, least of all without a calculator, to work out the effective increases in the average rate of duty caused by the change in banding combined with the change of the top rate for given levels of gross gaming yield in casinos.
      The exchange between my hon. Friends the Members for Rochford and Southend, East (Sir T. Taylor) and for Sevenoaks (Mr. Fallon) made it clear that the effective

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      increase is quite steep, even for middle-range casinos, but more significant is the impact on the marginal rate. Under the changed banding structure, a modest gross gaming yield of £2 million in the half year might lead to a marginal rate of duty of 25 per cent. as opposed to 12.5 per cent.
      At the margin, tax often acts on incentives, and its impact on cash flow affects the viability of the business. The hon. Member for Kingston and Surbiton (Mr. Davey) was right to mention the inability to pass on to players the costs of such a tax; they will come straight off the bottom line, so it was not surprising that the share price reacted in such an alarming fashion. My hon. Friend the Member for Sevenoaks was right to draw attention to that. I hope that Ministers were also alarmed and that they did not foresee the consequences. If they foresaw them, they should have reconsidered the impact of the measure.
      We should also consider the scale of the measure. The previous top rate of duty—33.33 per cent.—would have applied at £5.4 million of gross gaming yield in the half year. The new figure of £2.9 million is a little over half the previous level. The two changes have perniciously been introduced together. It would have been better to leave the banding structure in place and to apply more straightforwardly the duty that the Government think is required to raise additional revenue, if it was indeed necessary to raise it.
      For casinos, the duty is not a tax paid in isolation and instead of other tax; it is paid in addition to VAT, corporation tax and modest licence fees. From the British Casino Association survey of the third quarter of 1997, I derived the figure of £141 million, so the industry pays a handsome sum to the Exchequer before the Exchequer has its further pound of flesh.
      I take account of what my hon. Friend the Member for Rochford and Southend, East said, but the burden of my argument is that the impact of the measure is disproportionately skewed towards London casinos and larger casinos. Duty was previously paid in proportion, 15 per cent. by provincial casinos and 85 per cent. by London casinos. The duty increment proposed by the Government will be paid 3 per cent. by provincial casinos and 97 per cent. by London casinos.
      There are two points of significance in that. First, the Government thought that they were aiming at a soft target and that the additional charge would be levied on London casinos with overseas players or players who are UK-based, but not UK nationals—people who do not form a political constituency. Secondly—the consequence that the Committee should find worrying—is that, in so far as the duty is levied on London casinos, the impact falls disproportionately on overseas players who bring substantial earnings to this country.
      I approach the subject not as one who is principally interested in the structure of the betting and gaming industry, although I have an interest in that, but as one who is concerned about trade and industry matters. In the trade context, it is extraordinary that, at the moment when sterling is high and it is difficult for casinos, the tourist industry and London to maintain their attractiveness to those who have to change their money to sterling to spend it in this country, the Government think it right and appropriate to impose swingeing increases that damage
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      the relative competitiveness of the London casinos—which are important contributors to our overseas earnings—and have a particular impact on certain groups of individuals of high net worth who operate in an internationally mobile environment.
      Is it any wonder that we have seen press reports—I have no knowledge as to whether they are well founded—that speculate about London clubs decamping to Las Vegas for their headquarters and operations? That would be entirely retrograde. When discussing the London casinos, we are speaking not only about significant benefits in terms of overseas earnings but about individuals who, while in London, are likely to be significant contributors to earnings of foreign exchange via hotel accommodation, investment and consumption expenditure.
      My hon. Friend the Member for Sevenoaks referred to the overseas earnings figures, which are impressive: £880 million overseas source receipts in 1997, of which the London casinos—those that benefit most substantially from overseas visitors—took in £160 million. It is worth noting that, if the United Kingdom's casinos were rendered into one company rather than one industry, their overseas earnings would put them into the top 100 exporting companies in this country. That is a measure of their value. I see the Paymaster General is interested in this point.
      Mr. Fallon: He likes big numbers.
      Mr. Lansley: Then perhaps he will be interested in these numbers: not only would those earnings put the casinos into the league of the top 100 exporting companies, but they employ a larger number of employees—11,720 in the most recent survey I have read—than, for example, Vauxhall Motors. I know that the Paymaster General has taken a close personal interest in the future of Vauxhall at Luton, so it would be retrograde were he not to take an equally close interest in the financial and competitive health of this country's casino industry, which, like the motor manufacturing industry, is a direct contributor to our overseas earnings.
      There is a tendency to talk about the importance of manufacturing, but I learned from Keith Joseph at the Department of Trade and Industry that what we really need to focus on is the internationally tradeable sector. Because of its revenue earnings from overseas sources, the casino industry in this country is a significant internationally tradeable sector, on which the measure that the Government are proposing could have a significant and damaging impact.
      The measure has three retrograde aspects. It is on the wrong scale at the wrong time for an industry that makes a significant contribution to our balance of payments. Only this morning, I was hearing about the record monthly level of adverse balance of payments running on our current account, but the measure we are discussing will do nothing to help in that respect. However, the measure is focused on the London casinos and their appeal to an overseas and internationally mobile group of people—the, from memory, about 220,000 overseas members of London casinos. No doubt those people make a substantial but unquantified further contribution to our overseas earnings and to the tourism and other earnings of the United Kingdom economy.

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      As my hon. Friend the Member for Sevenoaks forcefully and rightly argued, the measure was proceeded with without consultation with the industry—potentially, I suspect, without the Treasury's adequate foreknowledge of its implications, and perhaps even without proper consultation with Government about its likely impact and whether it was desirable in industry terms.
      The industry will be right to look to the Committee to ameliorate the measure. Amendments Nos. 14 and 15 would help to do so, especially No. 15, which proposes a change in the banding structure. With justification, the industry would look to the Government to take account of the obvious and severe adverse impact of the measure, and would look for transitional provisions—not least because of the present high level of sterling. It will hope that the Government will, this time, listen to the debate and propose, at a later stage, some measures of their own to relieve the adverse impact. I support the amendment.
      9.45 pm
      Mr. Gardiner: Ornipathology has never been my strong point, but when the hon. Member for Kingston and Surbiton (Mr. Davey) complained about the death of the goose that laid the egg, my heart did not bleed. Anxiety has been expressed in Committee tonight about the way in which the proposals may affect employees in the industry. I have received from my constituents—whom I have told that I would raise the issue tonight—letters addressed to "Dear … ", saying:
      "I am writing in connection with the serious threat posed to the London casino industry and particularly to my employer"—
      I shall not name the employer, for fear of encouraging more high rollers to visit the establishment—
      "by the proposed increases in gaming duty announced in the Chancellor's recent budget.
      These proposals have serious implications for jobs within the casino industry in London.
      Those were the cyclostyled letters that I received. Let us now examine how serious the implications are for jobs in the casino industry in London.
      We heard from the hon. Member for South Cambridgeshire (Mr. Lansley), correctly, that 3 per cent. of the effect of the measure would apply to provisional casinos—
      Mr. Lansley: Provincial.
      Mr. Gardiner: I am sorry. We have heard that 3 per cent. of the effect would apply to provincial casinos and 90 per cent. to the London casinos. I believe that that effectively deals with the intervention by the hon. Member for Eastbourne, showing that the bulk of the measure is aimed at London casinos.
      Sir Teddy Taylor: First, I am not the MP for Eastbourne. Apart from that, the proposed increase would require casinos in my constituency to pay more than an extra £300,000 in duty, which is a lot of money and amounts to an increase of 56 per cent. It cannot be said, therefore, that the increase does not matter; it matters a great deal to the medium casinos.
      Mr. Gardiner: The facts are clear. A 2.5 per cent. tax rate is being levied on the casino's gross gaming yield—
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      its gross profit—up to £400,000. In the middle bracket, which we are discussing, we are talking about between £400,000 and £2.9 million. That is the gross profit that those organisations are making.
      Mr. Lansley: Will the hon. Gentleman give way?
      Mr. Gardiner: I am afraid that I must press on because of time. In usual circumstances I would give way, but I think the hon. Gentleman will agree that we must keep our comments short before a 10 o'clock closure.
      Mr. Lansley: There is no closure.
      Mr. Gardiner: I will press on.
      On the impact that these measures are likely to have on jobs in the industry, I cannot conceive that the additional levies will be passed on to employees, the cost of whom is minute in comparison with the profits that these companies make.
      The hon. Member for South Cambridgeshire referred to problems that might arise with the balance of payments and his concerns about overseas earnings. He said that he did not want to deter the high rollers from coming to London and frequenting London casinos. As the hon. Member for Kingston and Surbiton pointed out in his arguments about the edge that must be applied, those costs will not be transmitted to the high rollers because they are limited by the edge that the casinos are allowed, by law, to charge.
      Mr. Lansley: The hon. Gentleman referred to gross gaming profit, but he will realise that it is in fact gross gaming yield. I argued not that the players—"high rollers" is a pejorative term—will be deterred by a change in the edge, but that the casinos might have to contemplate the relative competitiveness of operating in London compared with other locations.
      Mr. Gardiner: That is a spurious argument. London is an international centre, and any major casino that can locate here will want do so in order to get its market share in situ. London will not suddenly be denuded of casinos as a result of this measure.
      Mr. Fallon: The hon. Gentleman represents a London constituency. Is he seriously defending a sudden increase—introduced without warning—of 40 per cent. on the duty that top London casinos will bear? How can he, as a London Member, say that casinos in London will be unaffected and will sail on, competing on an equal footing with casinos in Amsterdam or Frankfurt, while bearing an unexpected increase of that kind?
      Mr. Gardiner: I want to nail the statement that the hon. Gentleman has now made twice in the Chamber. He has claimed that there is an increase of 40 per cent. I am sorry, but the duty will increase from 33.33 per cent. for the top rate to 40 per cent. According to my mathematics, that makes an increase of 6.7 per cent. It is important to appreciate that the top band will increase by only 6.7 per cent. It is spurious to claim that there is an increase of 40 per cent.
      There is a change in the banding, which will certainly impact on the revenue collected by the Exchequer. However, that puts an obligation on Her Majesty's

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      Opposition to state where they propose to get the additional £25 million in revenue which this measure would raise. There is no question of it damaging jobs in the industry or of casinos leaving London. There is no question either that the Opposition will be extremely hard pressed to state from where that £25 million should come.
      Dawn Primarolo: I am amused by the image that the hon. Member for Sevenoaks (Mr. Fallon) has of my hon. Friend the Paymaster General. He apparently believes that my hon. Friend possesses some qualities that I do not and that I do not know enough about casinos and have never visited any. Presumably, the hon. Gentleman believes that I do not have a playgirl image—although he felt able to make a pun about the fact that my first name is Dawn. I suppose that, in some respects, that reveals his perception of these matters—which seems rather shallow.
      The hon. Gentleman advanced the case that the previous Government were benign to the casino industry because it was important to the economy. Yet they kicked manufacturing industry all around the room in terms of their support for it.
      The proposal is not ill thought out. I shall deal with the amendment and with the Government's intentions. If the amendment was designed to encourage the Government to reconsider the proposal, the rather ungenerous tone in which the hon. Gentleman advanced his case would lead me to suggest to the industry that it should look for another spokesperson in the House, who concentrates more on the industry's case and less on scoring political points against the Government. The hon. Member for Rochford and Southend, East (Sir T. Taylor) advanced that case and described the difficulties that he foresaw.
      The previous Government did not consult on every tax rise. For various reasons, the Chancellor does not usually consult on changes to duty rates. For example, consultation may not be undertaken on measures that could lead to a temporary distortion in market behaviour. Clearly, the City did react to the increase in gaming duty, and consultation before the Budget may have exacerbated the problem. The Opposition's point about consultation is therefore spurious.
      Mr. Fallon: I pointed out that 30 per cent. of the value of two companies quoted on the stock exchange was wiped away within days of the announcement. Does the hon. Lady accept that it might have been better to consult, at least on the detail of what she was proposing?
      Dawn Primarolo: The hon. Gentleman's Government did not consult on putting VAT on fuel. Indeed, they promised not to do so, and then they did it. Now the Opposition have the cheek to say that this Government do not engage in proper consultation.
      Some serious points were made in the debate, and I shall reply to those. That is how the Committee would expect us to respond. The argument covered four categories: the phasing of the introduction of the increase; bad debt; indexation; and the structure of the bands that are being introduced, to which the hon. Member for Rochford and Southend, East referred particularly. He argued that the burden of the increase falls less on the profitable casinos and more on those in the middle band.
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      Reducing the bands would not result in casinos other than the top, most profitable clubs paying increased amounts of duty. The Government's proposal is deliberately designed to spread the burden of the tax, attaching it to those casinos most able to bear it. It is the Government's opinion that the industry pays an unfair level of tax: it could pay additional tax. The industry's response has not been to dispute whether it could afford to pay the increase or whether it should pay it, but to argue about the distribution of the tax.
      We reject amendment No. 14. as we do not believe that it provides the way forward. Moreover, it is technically flawed. Our solicitors advise us that it is not possible to amend the Bill in a way that commits the Government to the indexation of duty bands. The table in section 11(2) of the Finance Act 1997 would need to be amended with the updated figures on each occasion that the bands were indexed, and on each occasion a clause would be required specifying when the changes came into effect.
      Let me deal first with the changes to the gaming duty bands and the top rate of gaming duty. The House will wish to know that the casino industry is under-taxed compared with most other betting and gaming sectors. However, there is little scope for increasing the duty burden on smaller, less profitable casinos.
      10 pm
      There is every indication that the casino industry is thriving and can afford to pay the increased duty. Receipts of gaming duty are up on previous years, and the drop—the amount staked at a casino—has increased, particularly in larger, more profitable casinos. In the 12 months to December 1997—the most recent figures we have—the drop in larger, more profitable casinos increased by around 8 per cent. over the previous 12 months, and the gross gaming yield increased by around 10 per cent. That demonstrates the industry's ability to pay more tax.
      Secondly, I am aware of the industry's representations on indexation, and I am persuaded that there is a case for creating an environment that allows the industry and its investors a reasonable level of certainty in which to operate and plan. Therefore, I am prepared to give a commitment to index the gaming duty bands for the remainder of this Parliament.
      That said, I should make it clear that, if the business climate in which the casinos operate were to change significantly—through further deregulation, for example—we would not rule out the possibility of further restructuring the duty in future, to ensure that the level of taxation remained fair. Subject to that proviso, I accept the principle of indexation for the lifetime of this Parliament. However, the amendment proposed by the Opposition is unacceptable, in that it attempts to nullify the changes to the duty bands and rates, and is technically flawed by the way in which it deals with indexation.
      I now turn to the restructuring of the bands proposed in amendment No. 15. I am not persuaded by the argument that the amendment would reduce the liability of London casinos as the proposed changes would significantly reduce the revenue that we intend to collect from the casino industry. It is quite clear to the Government that the industry can afford to pay the additional duty.
      I am aware of the trade representations concerning the structure of the duty bands, in particular the impact of the Budget changes on some of the less profitable London

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      clubs—those with gross gaming yields of between £5 million and £12 million—and the points that the hon. Member for Rochford and Southend, East made about his experience in Southend.
      I shall continue to ensure that the forecast revenue yield on the measure is maintained, but as a member of a Government who are prepared to consult and listen, I am prepared to consider the industry's proposals on the best way forward in respect of the structure of the bands. As has already been said, my officials continue to discuss the issue with representatives of the industry. I shall report back to the House with my findings.
      The amendments are unnecessary and defective, and do not represent the best interests of the taxpayer in ensuring that the Government receive a fair tax yield from the casino industry. As I have said on a number of occasions, the industry is under-taxed compared with most other betting and gaming sectors, and we believe that it can afford and should pay the proposed increase in the name of fair taxation. Therefore, I ask the Committee to reject amendments Nos. 14 and 15, and support the Government in the clause. I hope that my comments tonight, particularly on indexation and restructuring the bands, will be helpful to the Committee.
      Mr. Fallon: This has been one of the most rewarding debates that we have so far enjoyed in Committee and, perhaps, in this Parliament. I thank my hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) for drawing the Committee's particular attention to the plight of provincial casinos. That has been well highlighted tonight, and I am sure that the Government are now aware of the impact of what they propose, which does not fall entirely disproportionately on London but, as my hon. Friend so skilfully pointed out, also impacts on some of the provincial casinos.
      I thank the hon. Member for Kingston and Surbiton (Mr. Davey) for his support for the amendment. He well illustrated the differential effect of the Government's proposals and the uncertainty caused to an industry that expected the Government to continue the well thought out deregulation proposals of the previous Government.
      I thank my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) for the detailed flaws that he exposed in the Government's proposals. Conservative Members were amazed to hear the hon. Member for Brent, North (Mr. Gardiner) sneer at the effect on London employment. In this his capital city, 4,500 people are employed in the industry. He did not seem to think that that mattered. He did not seem to think that it was even worth concentrating on the difference between gross profit and gross yield.
      Mr. Gardiner rose—
      Mr. Fallon: Before the hon. Gentleman tries again, I remind him that we are talking here not about the difference between the effective rate levied previous and subsequent to the Budget, but about the difference in duty. The difference in duty for casinos with a yield of between £5 million and £12 million, is an increase of the order of 50 per cent., and for casinos above that, an increase of between 40 per cent. and 30 per cent.—not of the order that he suggested.
      Finally, I come to the Financial Secretary's remarkable speech. We had some blustering about the Government not needing to consult. That was not what we heard last
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      night from the Paymaster General. He took a pride in the consultation. He admitted that the Government got it wrong on individual savings accounts and on corporation tax. He took pride in the fact that the Government were ready to come to the House and correct the detail.
      We heard a new theory on consultation tonight—that the Government can levy any duties that they think of, and, if they get them wrong, it does not matter. Happily for the casino industry, and happily for our future considerations on the Bill, the Financial Secretary has run up the white flag. She has accepted for the first time in our proceedings the principle of a Conservative amendment. She has said—we thank her for this—that the Government accept amendment No. 14. The first time that any Government have considered the principle of indexation for casino duty, she has said that a Labour Government have to be bound by it. Only a Labour Government could suddenly impose the kind of duties with which the industry were faced, which wiped 30 per cent. off the share value of two of London's leading operators.
      The Financial Secretary pointed out quite fairly that, in some respects, amendment No. 14 may be technically defective. Fine. But she has accepted the principle of indexation. Never again will she or her Chancellor in this Parliament come to the Dispatch Box and impose that kind of 40 per cent. increase. Tonight, the Financial Secretary has run up the white flag and said that she accepts that gaming duties should for ever be indexed to the retail prices index. We thank her for that and for her surrender, and I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Question proposed, That the clause stand part of the Bill.
      Mr. Fallon: I welcome this debate, which is necessary only because the Financial Secretary did not respond to some of the general criticism made by me and the hon. Member for Kingston and Surbiton (Mr. Davey).
      When the Conservatives left office almost a year ago, we left in train a sensible, well-planned programme of deregulation, whereby there would be new casinos in different areas of the country and—picking up on the well-worn theme of modernisation—the casino industry would be modernised. We suggested liberalising the gaming industry by allowing, as the hon. Member for Kingston and Surbiton mentioned, a more enlightened membership system that would include postal and group membership, whereby groups of visitors from America and beyond could pre-book tours of London casinos. The programme would allow a modest measure of advertising—not nationally, but in telephone directories and hotels.
      Finally, we advocated deregulating the industry to enable certain casinos to have more gaming machines. We suggested an increase from six machines to 20.
      We should not pass the clause without raising those issues, because we will have no further opportunity to do so during the consideration of the Bill. I understand that almost all that deregulation has been put on hold. Measures that were expected to be implemented last October were delayed until this spring, and, as the Chancellor of the Duchy of Lancaster confirmed to the Select Committee on Deregulation this morning, they are

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      further to be put on hold. The industry faces not simply a massive, unjustified increase of 40 per cent. in duties, but no guarantee of further progress in the deregulation that the previous Government set in train and to which we thought the successor Government were committed.
      It would not be right for us to give the clause final approval without hearing from the Financial Secretary what proposals she has to implement the deregulation measures that we set in train. If she does not want to prolong the debate or encourage me to intervene again, I hope that she will explain to the Committee why the clause should stand part of the Bill.
      Question put and agreed to.
      Clause 11 ordered to stand part of the Bill.
      To report progress and ask leave to sit again.—[Mr. Robert Ainsworth.]
      Committee report progress; to sit again tomorrow.

  Planning Permission
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert Ainsworth.]
  10.14 pm
  Mr. Oliver Heald: I am glad to have an opportunity to raise the issue of the operation of section 100 of the Town and Country Planning Act 1990. It may seem a dry subject, but when it is applied to the circumstances that have arisen in my constituency, it becomes of great importance.
  Section 100 allows the Secretary of State to revoke planning permission that has previously been granted. I raise the issue against the background of what has happened in Radwell. I shall outline the history of the case, then ask the Minister what assurances he can give. That will be the best way to examine section 100 in the context of the problem in my constituency.
  In 1992, an application was made to build a motorway service area at junction 10 on the Al(M). That site is next to Radwell, a pretty Hertfordshire village with a lake, which is well known locally as a beauty spot. There was great concern locally when the scheme was promoted; those who objected included most of the residents of the village, the parish council and local residents such as Nigel Hawthorn, who said, "No, Minister," on that occasion.
  During 1992, the campaign grew, and, early in 1993, it became apparent that a planning inquiry was required. The statutory consultees for the planning process were served with the original planning application and the plan that went with it. One of those consultees was the National Rivers Authority, which had an opportunity to consider the plan. At that stage, the scheme was to cut very little into the chalk on the top of the hill at Radwell, so it seemed that, with conditions, the scheme could be acceptable. The National Rivers Authority put forward its recommendations on that basis, although it pointed out that it had a separate jurisdiction to grant a licence for water abstraction, or consent to discharge water and sewage off the site, and it made it clear that it would look at all the environmental protection aspects at that point.
  Shortly afterwards, just before the inquiry team met in 1993, a new plan was produced. It was never shown to the National Rivers Authority. The inquiry proceeded for seven days, and was bitterly contested. After much deliberation, the inquiry inspector came out in favour of the scheme, and the Secretary of State approved it finally in September 1994.
  The background to the scheme is that the A1(M) was to be widened. A motorway service area seemed a good idea, at least to the developers. Much of the purpose of the scheme collapsed shortly after planning permission was granted, because the widening was not to go ahead within the roads programme. There was then a long delay of three years before anything else happened. At that point, an application was made for detailed planning permission.
  By that time, the National Rivers Authority had become the Environment Agency, but when it saw the detailed planning permission, it was clearly horrified because the depth by which the scheme would cut into the chalk on the hill at Radwell was far greater than it had realised. The difference between the first and second plans was that, instead of the site being developed on the top of the

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  hill, it was to be depressed by some 6 m into the hill. That was proposed for the best possible reasons: the developers wanted to screen the local landscape from the motorway service area, to meet one of the key objections.
  However, the effect in environmental terms was serious. The NRA never knew that. When the Environment Agency saw the detailed plans, it put in what could only be described as a strong objection to the detailed planning permission.
  In its objection letter of 7 October 1997, the agency said:
  "Groundwater boreholes in this area indicate groundwater level is only 4.5 metres below ground level hence the development would be positioned below the water table.
  The Agency objects to the proposed development as submitted on the following grounds. The site is located over a vulnerable 'major' aquifer used extensively for potable water supply"—
  drinking water, that is—
  "…The proposed development including storage of fuel, drainage of car parking, foul water disposal and substantial reduction of ground levels represent a major risk of pollution to ground waters at this location."
  Let me explain that a bit. The hill at the top of Radwell is a chalk aquifer like a large sponge. The water from the aquifer feeds into the River Ivel and the Radwell lake, and becomes a tributary of the River Ouse. The aquifer is therefore quite an important component of the drinking water supply in our part of the eastern region.
  There is an additional aspect. Putting the site so deep into the chalk meant not just that oil and other pollution would sink into the sponge—the aquifer—and cause a major risk of pollution, but that the two local rivers, the Ivel and the Hiz, which rely on the aquifer to be provided with water, might well be disrupted. It was possible that the drinking water supply would be contaminated, and that there would be problems affecting the supply of water from two local rivers, both of which have been dry in recent years, following the lack of rainfall. There was a prospect of serious problems.
  In its objection letter, the agency said that it would be prepared to support its decision with evidence at an appeal. Following that, the NHDC was very anxious, and took the matter up with the Government office for the eastern region. Many local residents took the matter up with me, and I have made my only inquiries with all the relevant authorities. I had the opportunity, with Michael Meredith Hardy, the campaign co-ordinator, to meet the Environment Agency regional general manager.
  When the objection letter went in, the Environment Agency thought that it might be able to stop the scheme. It is clear from my researches, however, that, once the detailed planning permission stage is reached, an issue of principle such as this cannot be dealt with at that stage. It seems that a major pollution risk may well be there, but it is hard luck, in that the decision has already been made. That is essentially what is said in letters to me, and to others, by all relevant authorities.
  To local residents, the local councillor, to North Hertfordshire district council and to me, it is simply unacceptable that such a gross error can be made in the planning process and nothing can be done about it. It simply is not acceptable that the water supply in our area can be contaminated, and rivers can be made dry, because of some mistake in the planning process. I think
  240
  that everyone locally shares that view. I ask the Minister whether it is possible for section 100 to provide some relief.
  Section 100 says that it is possible for the Secretary of State to revoke a planning permission. I understand that, when the matter has been considered in the House on earlier occasions, it has been said that, if there is a gross error and if a substantial public interest is involved, it is possible to exercise the power. Perhaps the Minister will give some reason why that cannot be done. I hope not. Plainly, there should be a fail-safe mechanism in the planning process so that such problems cannot lead to the risks that the Environment Agency has outlined. The agency is taking legal advice on the matter. I have asked for a meeting with Lord De Ramsey, who is the chairman of the agency, and perhaps a formal application will come to the Minister.
  The debate gives the Minister the opportunity to explain whether there is a fail-safe mechanism. If there is not, there jolly well should be. The scheme is a disaster for Radwell, anyway. People do not want to be illuminated all night by a motorway services area. They have been dead against the scheme from the moment it started. It is one thing to have an ugly scheme on one's doorstep, but another to have one that actively damages the environment.
  What is the Minister's response to the difficult situation in Radwell? Perhaps he could put the matter in context and explain the operation of section 100 in such circumstances.
  10.25 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I congratulate the hon. Member for North-East Hertfordshire (Mr. Heald) on securing the debate. I am grateful to him for writing to me in advance with details of his concerns, because that enables me to give a fully considered response.
  I am pleased to have the opportunity to respond, as it enables me to explain the Government's policy on the revocation or modification of a planning permission, and to cover the hon. Gentleman's concerns. I hope that, by the end of the debate, he will be reassured that there are safeguards that will protect the interests of his constituents.
  Section 100 of the Town and Country Planning Act 1990 is a default power. It enables the Secretary of State to take action to revoke or modify a planning permission, after following specified procedures. There is provision for compensation to be paid by the local planning authority should a claim subsequently be made by a person with an interest in the land.
  The Secretary of State's practice is to use the power only rarely. Like earlier Secretaries of State, he takes the view that the power should be used only if the original decision is judged to be so grossly wrong that damage is likely to be done to the wider public interest. He may also be prepared to exercise the power to revoke a planning permission when he considers that consistency is needed between a planning authority's decisions in different cases to ensure that similar circumstances give rise to similar decisions and that the provisions of the development plan, so far as it is material, and other material considerations have been fully taken into account.

  241
  It should be remembered that development plans aim to give a measure of certainty and predictability to the system. Section 54A of the 1990 Act requires that, where the development plan contains relevant policies, applications for development that are in accordance with the plan shall be allowed unless material considerations indicate otherwise. Conversely, applications that are not in accordance with relevant policies in the plan should not be allowed unless material considerations justify granting a planning permission.
  The Government and local authorities work through the planning system to reconcile the conservation of the environment with development needs. That task cannot always be carried out to everyone's satisfaction. It often involves the difficult task of reconciling finely balanced issues. It would be wrong, as well as impractical, routinely to review instances when planning permission has been granted against that background.
  I should emphasise that a planning permission may, in general, only be revoked or modified before the operations permitted have been completed. It may be modified or revoked if it has been partially exercised, but revocation or modification orders cannot affect any development that has been completed, and cannot be made in respect of a change of use once that change has taken place. That does not apply in this case, but I mention it so that the hon. Gentleman may be aware of the ground rules.
  Section 100 is available to the Secretary of State to use as he thinks fit, after consultation with the local planning authority. As I have said, intervention by the Secretary of State can be justified only in exceptional circumstances. Between 1955 and 1992, the power was utilised to revoke a planning permission in only 19 cases. Since then, there have been only two more, the most recent of which was in March this year. Although not commonplace, it is more usual for local planning authorities to initiate their own revocation or modification orders under section 97 of the Town and Country Planning Act 1990.
  To set the figures I have just given about the Secretary of State's use of the default power in context, I remind the hon. Gentleman that local planning authorities deal with up to 500,000 planning applications each year, of which 85 per cent. are approved. Revocation is the exception.
  The power is used only in exceptional circumstances, as Parliament has given local planning authorities responsibility for development control in their areas. It is for them to decide in the first instance whether a proposal should be permitted. The Secretary of State's intervention might overturn the local planning authority's judgment of a matter which is in the first place its responsibility.
  The hon. Gentleman has given much of the background to the proposed motorway service area at junction 10 of the A1(M) at Radwell in Hertfordshire. I shall recap briefly. The outline planning application was made in 1992. Following non-determination by the local planning authority, an appeal was lodged with the Secretary of State. After a local public inquiry in 1993, the then Secretary of State granted planning permission in 1994, subject to conditions and reserved matters.
  The application for approval of reserved matters was made to the local planning authority, North Hertfordshire district council, last year. At that stage, the Environment
  242
  Agency objected on the ground that site excavation would breach the water table and threaten water supplies and water courses. In October 1997, North Hertfordshire district council approved the reserved matters, but drainage and water supply conditions remain to be satisfied. That is crucial. Until those conditions are discharged, development cannot start.
  The hon. Gentleman has made much of the amended plans put to the inspector at the inquiry, which he accepted before recommending approval of the scheme. I understand that, in the interests of natural justice, the inspector asked at the start of the inquiry whether there were any objections to his accepting the amended plans. None was made, and he proceeded to determine the appeal on that basis. Had the inspector considered the revised plans to be so different as to change the nature of the proposal fundamentally, he would have declined to consider them, and the appeal—
  Mr. Heald: The difficulty was that the National Rivers Authority had seen the original plans and made its comments on them. It was unaware that there were any new plans, because it was not represented at the planning inquiry. That is one of the faults in the process that has been adopted. Does the Minister have any thoughts on that?
  Mr. Raynsford: I understand the hon. Gentleman's point. I have two comments to make in response. First, no one objected to the revised plans, although I understand that the NRA may not have been represented. Secondly, the inspector would have had to form a judgment on whether the revised plans differed so materially from the original as to make it impossible for him to consider the application. Had he believed that, he could not have proceeded with the application on the basis of the revised plans.
  I do not doubt the genuineness of the Environment Agency's concerns over a possible pollution risk to the groundwaters in the area. The hon. Gentleman is rightly concerned about that as well, because it affects the livelihood and well-being of his constituents. However, the inspector considered the issue in his report and was satisfied that, subject to certain conditions to control emissions to groundwater and streams, there would be no risks from the development. Conditions to that effect were imposed by the then Secretary of State when he granted planning permission.
  The local planning authority has not made any decisions on compliance with those outstanding conditions from the original consent. If the development is to proceed, the site owners must negotiate with the Environment Agency to find technical solutions to the drainage and water table issues. Unless that is done, the local planning authority will not discharge the outstanding conditions. If that continues to be so, planning permission will lapse in late 1999. Alternatively, it is open to the site owners to submit revised proposals to North Hertfordshire district council if they consider that another solution to the problem can be found.
  For the policy reasons already explained, I do not consider that there are grounds to justify my right hon. Friend the Secretary of State taking the exceptional course of revoking the planning permission. It would certainly be premature, given the need for negotiations to ensure

  243
  compliance with the conditions already imposed. In any case, if the Secretary of State were to take that course following a local public inquiry, a claim for compensation from the developer would be likely. Such claims can be very substantial. I should stress that the claim is not against the Secretary of State but against the local planning authority. For that reason, revocation of a planning permission must be seen as a very serious matter for the authority.
  In this case, as I hope that I have demonstrated, there is an alternative remedy. The Environment Agency has to be satisfied with the site owners' proposals for dealing with the problems in order to give its consent to the local planning authority agreeing to discharge the conditions. As I have already implied, if that agreement is not given, development cannot proceed. There is a safeguard in
  244
  place. I hope that that reassures the hon. Gentleman that his concerns are respected, and that there is a proper safeguard in place to meet them.
  I repeat that, if the development is to proceed, the site owners must negotiate with the Environment Agency to find solutions to the problems that the hon. Gentleman has identified. Unless that happens, the local planning authority will not be in a position to discharge the outstanding conditions, and therefore no development can take place. I hope that that reassures the hon. Gentleman that the fears that he has described need not arise, and that there are sufficient safeguards in place to ensure that the interests of his constituents will be properly protected.
  Question put and agreed to.
  Adjourned accordingly at twenty-four minutes to Eleven o'clock.

DEFENCE

  Clothing
  Mr. Andrew George
  To ask the Secretary of State for Defence what assessment his Department has made of the change in the degree of satisfaction or dissatisfaction among service personnel relating to the clothing they are issued with over the last five years; and on what evidence this assessment is based. [36817]

  Mr. Spellar
  The bulk of the procurement of clothing for service personnel is carried out through the Defence Clothing & Textiles Agency and I have therefore asked the Chief Executive to write to the hon. Member.

  Letter from Michael Roycroft to Mr. Andrew George, dated 28 April 1998:
  I am replying to your Question to the Secretary of State for Defence about the degree of satisfaction amongst service personnel relating to clothing they are issued with, as this matter falls within my area of responsibility as the Chief Executive of the Defence Clothing & Textiles Agency (DCTA).The degree of satisfaction amongst service personnel related to clothing can be assessed by various methods including Continuous Attitude Survey, Availability, Defect Reports and other evidence from Service representatives or their personnel. In addition DCTA produces a Monthly Bulletin, a Quarterly Situation Report to all customers and holds 6 monthly Customer Days, to which all Top Level Budgets are invited to be represented, to discuss individual item problems and forecasts of future supply shortages.Continuous Attitude Surveys are carried out on behalf of the Royal Navy, Army and the Royal Air Force by the Defence Evaluation and Research Agency. A small number of questions which relate to clothing issues are included in all three Service surveys, however, only the Army are asked questions relevant to clothing satisfaction. I attach a graphical representation of the answers received to two questions asked over the last five years in the Army Attitude Survey. These graphs show that satisfaction with combat clothing and working dress has improved with time; overall availability of working dress has improved by 27% in the last three months to February 1998. A DCTA survey into clothing issues had been prepared, but it was agreed that for the time being we should rely on the Continuous Attitude Survey.DCTA do request that personnel finding fault with clothing send in Defect Reports to us and we record defect investigation findings under the following headings: Fair Wear & Tear, Abuse/Misuse, Design Failure, Unjustified or Justified Quality Assurance Failure. Most of the findings over the last three financial years have fallen under the last two headings, although the number of defect reports is very small in number, 187 in the last year, when compared to the overall customer base of 408,000 Armed Forces and other
  64
  organisations personnel. Overall every effort is made to brief the customer of past, present and future problems. There is also a well publicised help-line for queries from Service personnel.

  'Soldiers: How do you feel about the Quality of combat clothing and personal equipment'

  percentage

  June 1993

  June 1994

  June 1995

  June 1996

  March 1997

  Very poor

  15

  12

  12.5

  10

  8.5

  Poor

  29.5

  26

  21.5

  22

  15.5

  OK

  35

  36.5

  37

  35

  37.5

  Good

  18

  21

  23

  28

  28.5

  Very good

  3.5

  5

  6

  6

  10

  Source:

  DERA CHS/HS3/5/303/1Mar98

  'Soldiers: How do you feel about the Quality of normal working dress'

  percentage

  June 1993

  June 1994

  June 1995

  June 1996

  March 1997

  Very poor

  7

  5

  6

  7

  6.5

  Poor

  16.5

  18.5

  16.5

  19

  16.5

  OK

  50

  47.5

  46

  47

  44.5

  Good

  22.5

  24.5

  24.5

  23

  25.5

  Very good

  4

  5

  8.5

  4

  7

  Source:

  DERA CHS/HS3/6/303/1Mar98

  Landmines (Falkland Islands)
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what new technology his Department is developing to assist in the clearance of landmines from the Falkland Islands. [39358]

  Mr. Spellar
  The Ministry of Defence is not developing any technology aimed specifically at clearance of landmines from the Falkland Islands. Various systems which could potentially be used for such a purpose in the future are, however, under development.

  MOD sponsors a considerable amount of research into sensors and countermine technologies in support of the military requirement to breach minefields under operational conditions, as well as to open up and clear routes in support of military operations. Some of these, such as Ground Penetrating Radar, are not yet mature enough for military use.

  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what estimate he has made of the number of landmines remaining on the Falkland Islands. [39421]

  Dr. Reid
  Landmines were used in the Falklands by our forces during the 1982 conflict, and in its aftermath. One British anti-personnel landmine remains unaccounted for although every effort has been made to clear our devices.

  We have no reliable figure for the number of Argentine mines in the Falklands. Our best current estimate is that some 18,000 Argentine mines and similar devices of various types were laid, including some 14,000 anti-personnel landmines. About 1,400 Argentine mines were cleared following the conflict, before work was suspended after a number of serious injuries to clearance personnel.
  65
  Remaining minefields, or areas where it is suspected that mines might be, have been marked and fenced. These areas are monitored regularly to ensure that remaining mines present no danger to civilian or military personnel on the Islands.

LORD CHANCELLOR'S DEPARTMENT

  Legal Aid
  Mr. Pickthall
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list the(a) 20 solicitors' firms and (b) 20 barristers who have received the largest sums of money from legal aid in the most recent year for which information is available. [38635]

  Mr. Hoon
  Payments to the 20 solicitors' firms and 20 barristers who received the largest sums of money from the legal aid fund in 1996–97 were as follows:

  £

  Barristers1

  H. David, R. Hood

  Over 320,000

  John B. W. McDonnell Q.C.

  Daniel J. Brennan Q.C.

  C. David Allan Q.C.

  270,000–319,999

  Richard Maxwell Q.C.

  Judith M. F. Parker Q.C.2

  Michael G. Bloch

  Philip J. Hoser

  Andrew D. H. Trollope Q.C.

  Ian G. F. Karsten Q.C.

  230,000–269,999

  Joanna Dodson Q.C.

  Allan E. Levy Q.C.

  190,000–229,000

  Alastair J. D. Wilson Q.C.

  Deborah A. Eaton2

  Stephen J. Irwin Q.C.

  Henry J. Setright

  Alison Ball Q.C.

  Charles J. Lewis

  Paul M. McCormick

  Charles A. F. Howard

  1 Includes payments for civil legal aid, criminal magistrates legal aid and Advice By Way Of Representation

  2 The Department was unable to confirm the figures with the individual concerned

  The figures quoted are for cash payments made by the Legal Aid Board in 1996–97. They include fees, VAT and other expenses necessarily incurred together with new payments on account less old payments on account recouped. They do not take account of the amounts received or recovered by way of contributions, costs or damages awarded. It should be clearly understood that any payment to a barrister in the year 1996–97 could well reflect payments for several years' work and should not be seen as a measurement of annual income.

  It should also be noted that these figures have been calculated on a different basis from previous years where the total amounts paid from the Legal Aid Fund in respect
  66
  of cases closed in the year in question were given. These did not include payments on account for cases still current.

  £ million

  Solicitor Firms1

  Freeth Cartwright Hunt and Dickens2

  Over 8.50

  Irwin Mitchell

  2.60–3.49

  Alexander Harris & Co.3

  2.00–2.59

  Fisher Meredith

  Nelsons

  Leigh Day & Co.

  McGrath & Co.

  Owen White

  1.80–1.99

  Joseph Hill & Co.

  Henry Hyams & Co.

  Hodge Jones & Allen

  Evill & Coleman

  T. V. Edwards

  The Johnson Partnership

  1.60–1.79

  Brendan Flemming

  Powell Spencer & Partners

  Jones Maidment Wilson

  Bindman & Partners

  The Smith Partnership

  Young & Lee

  1 Includes payments for civil legal aid, criminal magistrates legal aid, and for advice and assistance

  2 Includes payments for work done by other solicitor firms and counsel in multi-party actions which were administered by Freeth Cartwright Hunt and Dickens and which consequently do not appear in other firms' figures

  3 The Department was unable to confirm the figures with the firm concerned

  The figures quoted are for cash payments made by the Legal Aid Board in 1996–97. They include profit costs, disbursement and other expenses necessarily incurred, VAT and new payments on account less old payments on account recouped. They do not take account of the amounts received or recovered by way of contributions, costs or damages awarded. It should be clearly understood that any payment to a solicitor in the year 1996–97 could well reflect payments for several years' work and should not be seen as a measurement of annual income.

  It should also be noted that these figures have been calculated on a different basis from previous years where the total amounts paid from the Legal Aid Fund in respect of cases closed in the year in question were given. These did not include payments on account for cases still current.

  For criminal legal aid in the higher courts it is not possible to provide information in the form requested. This is because the Department's central database records payments made to individual barristers and solicitor firms in respect of closed cases only; that is where the case has been disposed of and all bills, including those of other defence lawyers, have been determined. Set out below are the 20 barristers and solicitor firms recorded as having received the highest total payments in respect of criminal legal aid in the higher courts in cases recorded as closed in the financial year 1996–97. It should be clearly understood that any payment to an individual barrister or solicitor firm in the year 1996–97 could well reflect

  67
  payments received in other years but aggregated in the year 1996–97, because final payment was received. Therefore it is not a measurement of annual income.

  £000

  Barristers

  A. Jones Q.C.

  Over 500

  M. Swift Q.C.1,2

  P. Rook Q.C.

  450–499

  E. Lawson Q.C.

  S. Batten Q.C.

  A. Arlidge Q.C.

  M. Hill Q.C.

  R. Thwaithes Q.C.

  400–119

  A. Trollope Q.C.

  S. Stevens2

  O. Blunt Q.C.

  350–399

  S. Leslie Q.C.

  W. Roddick Q.C.

  P. Feinberg Q.C.

  T. Raggatt Q.C.

  A. Berry Q.C.

  Miss C. Montgomery

  P. Doyle

  329–349

  P. Harrington Q.C.

  J. Richardson

  1 This will include some payments previously published for 1995–96

  2 The Department was unable to confirm the figures with the individual concerned

  £million

  Solicitors

  Harkavys

  Over 2.00

  Burton Copeland

  Garstangs

  1.00–1.99

  Offenbach & Co.

  0.50–0.99

  Irwin Mitchell

  Derek Attridge & Co. (Tottenham)

  Russell Cooke Potter & Chapman

  Jones Maidment Wilson

  Joseph Hill & Co.

  0.40–0.49

  Foinette Quin

  Trevor Cox

  Edward Fail Bradshaw & Waterson

  Derek Attridge & Co. (Bermondsey)

  Mackesys

  Maidments

  Fanshaw Porter & Hazlehurst

  0.35–0.39

  Powell Spencer & Partners

  J. Keith Park & Co.

  Stephenson Harwood

  R. M. Broudie & Co.

  The figures quoted above are the total amounts paid from legal aid in respect of cases closed in 1996–97. As such they may include payments relating to work done in earlier years, but do not include payments on account for cases still current. The figures are inclusive of VAT and disbursements and other expenses necessarily incurred. They do not take account of amounts received or recovered by way of contribution from assisted persons.

HOUSE OF COMMONS

  Millennium Compliance
  Dr. Lynne Jones
  To ask the Chairman of the Information Committee what assessment he has made of the level of millennium compliance within the parliamentary estate. [38917]

  Mr. Allan
  A working group of technical staff has been established to address the compliance issue for systems provided for departments of the House. An estimate of the level of compliance, and the costs of corrective action will be available after the completion of the programme of tests later this year. The Finance and Services Committee is monitoring progress. Compliance of embedded chips in, for example, passcard systems and elevators, is being addressed by the Parliamentary Works Directorate, who will report progress through the Accommodation and Works Committee.

  Equipment provided by Members for themselves and their staff is excluded from this provision and they are asked to ensure that their own systems are compliant. It may be possible to provide an avenue for advice, or to recommend external sources for assistance. No estimate of the likely costs can be made.

CULTURE, MEDIA AND SPORT

  Millennium Commission Funding
  Mr. Maclean
  To ask the Secretary of State for Culture, Media and Sport what assessment is made of the level of public support prior to a proposal for funding by the Millennium Commission being accepted. [39420]

  Mr. Chris Smith
  This is a matter for the Millennium Commission. I will reply to the right hon. Member in my capacity as Chairman of the Commission and place copies of my reply in the Libraries of the House.

  Sites of Archaeological Significance
  Mr. Dalyell
  To ask the Secretary of State for Culture, Media and Sport what research his Department has(a) commissioned and (b) evaluated on the preservation and display of sites of archaeological significance under new public buildings with particular reference to practices in Germany. [37515]

  Mr. Banks
  None, but my Department would be interested to see the results of any research which has been carried out.

  Iraqi Antiquities
  Mr. Dalyell
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his letter of 24 March 1998 (C97/44817/l5777), if he will make a statement on discussions at the Stockholm UNESCO Conference about the purloining of Iraqi antiquities. [39307]

  Mr. Fisher
  I can report that at the recent UNESCO conference in Stockholm an official from my Department sought the views of officials from UNESCO concerning the illegal excavation and looting of antiquities in Iraq. UNESCO has received representations on this subject from a group of independent scholars, archaeologists and
  69
  art historians and has distributed lists of known looted Iraqi antiquities to all major auction houses around the world. However, there is currently no more UNESCO can do.

  Football Matches (Attendance)
  Mr. Caplin
  To ask the Secretary of State for Culture, Media and Sport if he will list the total levels of attendance at(a) Premier League, (b) League Division One, (c) League Division Two and (d) League Division Three football matches in each of the last five seasons. [38995]

  Mr. Banks
  My Department does not collect this information. It is available in reference books such as the Football Yearbook 1997–98.

FOREIGN AND COMMONWEALTH AFFAIRS

  South Africa
  Mr. Pike
  To ask the Secretary of State for Foreign and Commonwealth Affairs in what ways the EU is proposing to improve South Africa's access to European markets; on what types of products he is seeking a reduction in customs duties; and if he will make a statement. [39851]

  Mr. Doug Henderson
  The EU is negotiating a Free Trade Agreement with South Africa which will cover substantially all trade, with no sectors excluded. We welcome this, and support a wide-ranging and liberal outcome. The Agreement should, over time, lead to the complete removal of tariffs for most South African exports to the EU; tariffs are likely to remain for a number of agricultural products.

  European Movement
  Sir Michael Spicer
  To ask the Secretary of State for Foreign and Commonwealth Affairs what funds the European Movement has received from his Department since 1994; and what future grants are planned. [39910]

  Mr. Doug Henderson
  This Department made a grant of £10,000 to the European Movement in 1994. No funding has been made available to the European Movement by this Department since then and no further grants are currently planned.

  Cambodia
  Mr. Stunell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he will take to ensure fair and free elections in Cambodia in July(a) through the EU and (b) unilaterally. [39763]

  Mr. Fatchett
  We are working closely with EU partners, ASEAN and other "Friends of Cambodia" to encourage the Cambodians to hold free and fair elections on 26 July. The EU is providing a 10 mecu assistance package, subject to strict political conditionality. We are also contributing £100,000 to the UN Trust Fund for election assistance, and may make further contributions if the need arises and political conditions are met.

TRADE AND INDUSTRY

  Millennium Compliance
  Mr. Campbell-Savours
  To ask the President of the Board of Trade (1) what plans she has to introduce measures for the approval of diagnostic and remedial computer equipment marketed for dealing with millennium compliance; [38528]

  (2) if she will introduce measures to regulate mis-selling by software companies of diagnostic and remedial equipment, marketed for dealing with millennium compliance. [38529]

  Mrs. Roche
  I have no plans to introduce new measures. I would urge purchasers to check whether the equipment complies with their requirements. In doing so they will be protected by a range of general consumer legislation, including the Trades Descriptions Act 1968 and the Sales of Goods Act 1979, which requires goods to be of satisfactory quality, taking account of any description of the good and fitness for all the purposes for which goods of this kind are commonly supplied.

  Power Supplies
  Mr. Hammond
  To ask the President of the Board of Trade what assessments he has made of the risk to the integrity of United Kingdom power supplies as a result of the reduction in available routes for the movement of abnormal loads to and from power stations and National Grid main transformer locations around the United Kingdom. [39042]

  Mr. Battle
  [holding answer 20 April 1998]: I have made no such assessment. I understand that officials at the Department of the Environment, Transport and the Regions are discussing this and other related matters with representatives of the electricity supply industry. My officials will keep in close touch with the progress of these discussions.

  Defence Trade Shows
  Ann Clwyd
  To ask the President of the Board of Trade if she will list the total amount of public funds extended by her Department to companies attending defence trade shows for each year since 1990. [39245]

  Mrs. Roche
  The Department provided support to UK companies to attend defence and security exhibitions under the terms of the Trade Fair Support Scheme as detailed in the following table. Without conducting major research involving UK trade associations and overseas event organisers, it is not possible to separate defence trade shows specifically.

  £

  Year

  Total funding

  1990–91

  137,565

  1991–92

  979,527

  1992–93

  834,213

  1993–94

  878,490

  1994–95

  1,011,777

  1995–96

  1,114,799

  1996–97

  1,569,415

  1997–98

  1,202,676

  Asian Aerospace 98
  Ann Clwyd
  To ask the President of the Board of Trade how many British defence companies have received public funds to attend Asian Aerospace 98 in Singapore; and what was the total amount of public funding involved. [39244]

  Mrs. Roche
  Forty-seven British companies, of which 38 received grants under the Trade Fair Support Scheme, participated in Asian Aerospace 98. Participation is open to all relevant companies and it is not possible to determine from our records how many are in the defence sector. Grant payments are expected to total £322,466.

  Whisky Scams
  Mr. Burstow
  To ask the President of the Board of Trade if she will strengthen the legal protection for investors against frauds commonly known as whisky scams. [39164]

  Mr. Nigel Griffiths
  [holding answer 20 April 1998]: A range of measures already exists to deal with fraud. The DTI has investigated the affairs of some 20 companies engaged in selling whisky or champagne for investment purposes. DTI has wound up 6 companies and continues to bring proceedings against others. Information obtained by DTI has been passed to the Serious Fraud Office which has now commenced a major inquiry across the industry embracing about 40 companies.

  Funeral Services
  Mr. Sanders
  To ask the President of the Board of Trade what studies her Department has conducted into the costs of funeral services; and if she will publish them. [39464]

  Mr. Nigel Griffiths
  The Office of Fair Trading has made a report into Pre-paid Funerals which included a study into the costs of funeral services. This report was passed to the DTI and published in 1995.

  Mr. Sanders
  To ask the President of the Board of Trade what plans she has to protect consumers in respect of the costs of funeral services. [39463]

  Mr. Nigel Griffiths
  I am pleased to inform the hon. Gentleman that funeral directors belonging to the Funeral Standards Council and the Society of Allied and Independent Funeral Directors (SAIF) are affiliated to the Funeral Ombudsman Scheme, SAIF having joined earlier this month. As the hon. Gentleman may be aware, I have previously expressed my support for a single scheme and I welcome this development. Both the Funeral Ombudsman Scheme's code of practice, and that of the National Association of Funeral Directors (who operate a separate scheme for consumer redress) require members to make a basic funeral available with its price clearly indicated. Where funeral directors do not do this, consumers must report them to the Funeral Ombudsman Scheme or the National Association of Funeral Directors as applicable. I am concerned that there is not enough transparency in this and in other aspects of the funeral business and I have asked the industry to improve consumer protection.

  Renewable Energy
  Mr. Stunell
  To ask the President of the Board of Trade, pursuant to her answer of 7 April 1998,Official Report, column 161, if she will list the UK Government's reservations on the European Commission draft white paper on renewable energy; and if she will make a statement. [39735]

  Mr. Battle
  The Government are working for a positive resolution at the Council of Ministers on 11 May, which:
  agrees the need to promote a sustained and substantially increased use of renewable sources of energy throughout the European Union;welcomes the White Paper on a Community strategy and action plan;to that end, urges Member States to develop national strategies and structures for the promotion of renewables to bring about an increase in the use of renewable energy throughout the European Union, as we in the UK are already doing; and invites the Commission to bring forward proposals for its "Campaign for Take Off'.

  Confidential Information
  Mr. Jim Cunningham
  To ask the President of the Board of Trade what action she is taking to prevent the misuse of confidential information regarding employees' private lives in the workplace. [39591]

  Mr. Ian McCartney
  The Data Protection Act 1984, which regulates the use of computerised data, applies to personal data of employees. The Data Protection Bill now before Parliament strengthens the protection provided by the 1984 Act consistent with the requirements of the 1995 EC Data protection Directive.

  Research Projects
  Mr. Ian Taylor
  To ask the President of the Board of Trade (1) what plans she has to withdraw the case against the European Commission challenging the Commission's funding of research projects on the budget line B3–4104; [38333]

  (2) what contingency plans the Government have for alternative funding of UK research projects on which the European Commission has signed agreement but not made any payments, if the judgment by the European Court of Justice is not in the European Commission's favour; [38334]

  (3) when the European Court of Justice is expected to give its final judgment with regards to the court case between the Government and the European Commission on funding of research projects on the budget line B3–4104. [38335]

  Mr. Milburn
  I have been asked to reply.

  I believe the hon. Member is referring to the case brought by the United Kingdom to the European Court of Justice in July 1996 challenging spending by the European Commission under budget line B3–4104 on "Measures to assist the elderly 1996".

  The European Court of Justice is not expected to give its final judgment in this case for many months. The Government announced their decision to maintain the challenge in a written reply from my hon. Friend the Economic Secretary to my hon. Friend the Member for

  73
  East Ham (Mr. Timms), on 4 November 1997, Official Report, column 103. The reason for the Government's decision to persist with the legal challenge was explained in that earlier reply. We do not intend to withdraw the challenge and have no contingency plans for alternative funding of United Kingdom projects on which the European Commission has signed funding agreements but not made payments if the European Court of Justice rules against the Commission.

TREASURY

  International Debt
  Ms Drown
  To ask the Chancellor of the Exchequer what criteria exist for refusing debt relief to countries which otherwise meet the Heavily Indebted. Poor Countries criteria; and if he will list the countries to which they apply. [39666]

  Mrs. Liddell
  All the creditors of the Paris Club, and members of the IMF and World Bank Boards, have given their support to the HIPC initiative. Countries that qualify for assistance under the Heavily Indebted Poor Countries (HIPC) initiative will receive it.

  Royal Mint
  Mr. Derek Twigg
  To ask the Chancellor of the Exchequer what changes he will make to the performance targets for the Royal Mint for 1998–99. [40237]

  Mrs. Liddell
  1 have set the Royal Mint the target of achieving a rate of return on average net assets of 14.3 per cent. for 1998–99 which is an increase over the target of 14 per cent. set for 1997–98.

  Ecofin
  Ms Lawrence
  To ask the Chancellor of the Exchequer if he will make a statement on the Council meeting of the Economic and Finance Ministers of the European Union held on 21 April. [40238]

  Mr. Gordon Brown
  I chaired the Economic and Finance council
  —Ecofin—of the European Union in Brussels on 21 April. The Economic Secretary represented the UK.

  The Council began by briefly considering how it should handle the Commission's Recommendations on practical aspects of the introduction of the euro. It now seems likely that the Council will note these at some point over the EMU weekend.

  The Council went on to discuss a Commission preliminary paper on pan-European risk capital markets, as part of its follow-up to the Luxembourg Jobs Summit. The paper's approach was broadly welcomed, and Member States were willing to exchange best practice, and to consider what further action might be necessary to promote risk capital, whilst emphasising the need to respect subsidiarity. The Commission will report back with further work.

  Linked to this, as part of Ecofin's contribution to the employment initiative, was the Council's political agreement on the package of financial assistance measures for innovative and job-creating SMEs. These two items
  74
  together are confirmation of the Presidency's achievement in swiftly realising two important mandates from the Jobs Summit, and progressing the economic reform agenda.

  The Council agreed in principle to balance of payments support for Bosnia and Albania, subject to the details of the grant element, budget constraints, and other lending criteria.

NORTHERN IRELAND

  Public Investment
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland if she will list the levels of public investment in the constituencies of(a) Belfast, West, (b) Foyle and (c) Belfast, South for the last three years for which figures are available, excluding social security payments. [27964]

  Mr. Paul Murphy
  [holding answer 10 February 1998]: Information on public expenditure is not held at constituency level.

  Mr. Brian Nelson
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland how many names were contained in files in the possession of Mr. Brian Nelson at the time of his arrest. [37741]

  Mr. Ingram
  At the time of Mr. Nelson's arrest he was not in possession of any files or otherwise incriminating material. Subsequent examination of documentation in the possession of military authorities indicated many names appearing on files associated with Mr. Nelson. Mr. Stevens' investigations included detailed consideration of all these matters and appropriate action was taken either in terms of criminal charges being preferred or appropriate recommendations about future methods of handling sensitive intelligence.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland how many officers involved in the handling of Mr. Brian Nelson were interviewed under caution subsequent to his arrest; and how many were subsequently (i) charged, (ii) promoted and (iii) given meritorious service awards. [37804]

  Mr. Ingram
  This information is not readily available and will take some time to research. I will write to my hon. Friend as soon as possible.

  Stevens Inquiry
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland on what date each of the recommendations of the Stevens Inquiry was implemented. [37736]

  Mr. Ingram
  All of the recommendations accepted by the RUC were implemented by May 1995.

  The only recommendation not accepted was in relation to the suggested formation of an anti-terrorist branch.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland how many members of the Ulster Defence Regiment the RUC was asked to arrest by Mr. John Stevens and how many were(a) arrested, (b) questioned and (c) charged. [37739]
  75
  Mr. Ingram
  The RUC were asked to arrest 30 members of the UDR; 30 were arrested and questioned and nine were charged.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if she will publish(a) the findings of the investigation of the fire at the Seapark RUC facility at Carrickfergus in January 1990 and (b) the assessment made by Mr. John Stevens of that investigation. [37806]

  Mr. Ingram
  The intensity of the fire and the resultant damage meant that the cause of the fire could not be categorically established. However, the investigation concluded that it had been started accidentally.

  It is important to note that the fire did not prevent the Stevens Team from taking any appropriate investigative actions, nor were any of their intended investigative actions impeded as a result of the fire. All evidence that had been gathered was stored in duplicate on computer in Great Britain.

  Millennium Compliance
  Mrs. Gillan
  To ask the Secretary of State for Northern Ireland if all the computer systems used by the emergency services in Northern Ireland will be millennium compliant by 31 December 1998. [39896]

  Mr. Paul Murphy
  [holding answer 27 April 1998]: Plans received from the Northern Ireland Ambulance Service indicate that all their computer systems will be year 2000 compliant by 31 December 1998.

  The year 2000 plans of the Northern Ireland Fire Authority indicate that full compliance will be achieved by July 1999.

  The majority of the Royal Ulster Constabulary's operational and administrative systems will be compliant by December 1998. The few remaining will be made compliant early in 1999.

  Police Complaints
  Dr. Iddon
  To ask the Secretary of State for Northern Ireland when she will lay before Parliament the 1997 Annual report of the Independent Commission for Police Complaints for Northern Ireland; and if she will make a statement. [40173]

  Marjorie Mowlam
  The 1997 Annual Report of the Independent Commission for Police Complaints is being laid before Parliament today. The report, which follows the format of previous years, comments on the work of the Commission in 1997, and looks forward to the establishment of the Office of Police Ombudsman for Northern Ireland. I am pleased to see the welcome from the Commission for the establishment of the Police Ombudsman through the Police (Northern Ireland) Bill. The Commission contributed to Dr. Maurice Hayes' review of the police complaints system, and Dr. Hayes acknowledged in his report the assistance he had received from the Commission.

  The Government are committed to see the Police (Northern Ireland) Bill's passage through Parliament completed, to enable the new Office to be established by March 1999. There is a good deal of work still to be done
  76
  at a practical level to implement the Bill; and I am grateful to the Commission for their willing and constructive involvement in this important task.

  The Government have no doubt that the proposals made by Dr. Hayes, which received such widespread support, and which we believe are fully reflected in the Bill, will command public and police confidence. These, like the rest of the changes in the Bill, represent the Government's determination to secure genuine improvements to policing, and to increase further public confidence in and active support for the police service.

  The report notes that 1997 was marked by an increase in complaints made against the police, to the highest level ever recorded by the Commission. The number of complaints rose from 2,545 in 1996 to a total of 3,111 in 1997, which constituted a rise of 22 per cent. compared to a rise of 9 per cent in 1996. The increase can be explained, to some extent at least, by the large numbers of complaints arising from Drumcree, the Derryhirk Inn incident and the events in the Lower Ormeau Road in July 1996, for which complaints were not lodged until 1997.

  I should like to record the Government's thanks to the Chairman and Members of the Commission, particularly after such a busy year, for their excellent work. I would also like to thank the staff of the Commissions, who will form the core of the staff of the Police Ombudsman's office, and are already preparing for their new task. I am sure they will provide an excellent service to the Ombudsman.

  Government policies on policing in Northern Ireland whether about police complaints and changes to policing structures in the Police Bill, or the remit given to the Commission on Policing by the Agreement, are designed to improve the police service. We want to make it even more professional, effective, efficient, fair, impartial and acceptable; to ensure it is properly accountable for its work; and that it can command widespread community support, as the Royal Ulster Constabulary, the Police Authority, and the ICPC have themselves striven, in very difficult circumstances, to achieve. Many important changes are dependent on the development of a genuinely peaceful environment. But the history of the last 30 years shows that even while terrorist threats from disaffected elements continue, worthwhile changes can be made.

  We now have the opportunity for a new beginning. I believe that the RUC, the ICPC and the Police Authority, who have worked to bring this opportunity about, are eager to make the best use of it; the ICPC Report illustrates this, looking forward to a changed future, with the creation of the Police Ombudsman.

PRIME MINISTER

  Newspaper Editors
  Mr. Gale
  To ask the Prime Minister when he last met the(a) Editor of The Times, (b) Editor of The Sun, (c) Editor of The Sunday Times, (d) proprietors of The Daily Mirror Group, (e) Editor in Chief of The Daily Mirror, (f) Editor of The Independent, (g) proprietors of Guardian Newspapers, (h) Editor of The Guardian, (i) Editor of The Observer, (j) Proprietor of The Daily Telegraph, (k) Editor of the Daily Telegraph, (I) Editor of

  77
  the Sunday Telegraph, (m) Proprietor of the Daily Mail, (n) Editor of The Daily Mail, (p) Editor of the Mail on Sunday, (q) Proprietor of Express Newspapers, (r) Editor of the Daily Express, (s) Editor of The Sunday Express and (t) Editor of The Evening Standard. [38795]

  The Prime Minister
  [holding answer 20 April 1998]: I meet regularly with newspaper proprietors, editors and journalists in order to communicate government policy as all my predecessors have, and as all serious political leaders do. As has always been the practice, details of each meeting are not made public.

  Asbestos
  Mr. Cohen
  To ask the Prime Minister if he will make a statement on his discussions on the issue of asbestos with the Canadian Prime Minister. [39747]

  The Prime Minister
  In discussions with the Canadian Prime Minister, M Jean Chretien, I have made clear that restrictions on the use of any form of asbestos in the UK are made on the basis of sound scientific evidence.

  Nuclear Waste
  Ms Roseanna Cunningham
  To ask the Prime Minister what discussions he has had with the President of the United States of America regarding(a) nuclear waste, (b) the nuclear reprocessing plant at Dounreay and (c) nuclear fuel at Tbilisi, Georgia; what advice he has sought regarding the environmental impact of importing radioactive materials into Scotland; what discussions he has had with the Secretary of State for Scotland regarding the transfer of radioactive material from Georgia to Dounreay; and if he will make a statement. [39917]

  The Prime Minister
  [holding answer 27 April 1998]: The United Kingdom is playing its part in ensuring non-proliferation of nuclear material, alongside the action of the United States, Russia and other European countries, by taking responsibility for a small quantity of nuclear material from a research site which was at risk in Georgia. This decision was taken in the normal way in consultation with Cabinet colleagues.

  The relevant authorities which have responsibility for the proper handling of nuclear materials within this country, including the Nuclear Installations Inspectorate and the Scottish Environment Protection Agency, were consulted before the transfer was made, and accepted the Government's decision.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Ferrybridge C Power Station
  Dr. Gibson
  To ask the Secretary of State for the Environment, Transport and the Regions what mechanisms exist for requiring PowerGen to fit Ferrybridge C power station with flue gas desulphurisation. [39361]

  Mr. Meacher
  The Environment Agency authorises Ferrybridge Power Station under Part I of the Environmental Protection Act 1990. It is open to the Agency to vary the conditions of PowerGen's authorisation to require such changes as it sees fit for ensuring the use of the best available techniques not 78
  entailing excessive cost ("BATNEEC") for the purpose of preventing polluting emissions, or minimising such emissions and rendering them harmless. The Secretary of State also has power to direct the Environment Agency to include conditions in the PowerGen authorisation on this basis.

  Unfit Dwellings
  Dr. Tonge
  To ask the Secretary of State for the Environment, Transport and the Regions what proportion of dwellings in the private rented sector were, as defined by the Housing Act 1985,(a) unfit for human habitation, (b) not unfit for human habitation but in serious disrepair and (c) lacking basic amenities at the latest available date. [39334]

  Mr. Raynsford
  Our latest available information indicates that 17.9% of occupied private rented sector dwellings are unfit for human habitation and 1.8% lack one or more of the basic amenities. Information is not available on the number of private rented sector dwellings that are not unfit but in serious disrepair. However it is possible to estimate, on a different definition to that in the 1985 Act, that some 6.4% of privately rented housing is fit but suffers from substantial disrepair.

  Water Charges
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what research he has(a) commissioned and (b) evaluated into different tariff structures for water charging. [39642]

  Angela Eagle
  My Department has commissioned or partly funded the following recent published research:
  W. S. Atkins (1992). "The Social Impact of Water Metering: Summary". Birmingham, UK: Department of the Environment and Office of Water Services;National Metering Trials Working Group (1993). "National Metering Trials Final Report." UK: Water Services Association: and Department of the Environment, Transport and the Regions and Welsh Office (1 April 1998) "Council tax bands as the basis for charging households", in "Water Charging in England and Wales—A New Approach", UK, DETR and Welsh Office. A fuller report of this research will be published shortly.
  We are aware of a range of further recent work which is relevant to tariff structures for water charging, including:
  Achtienribbe, G., V. Homer, E. Papp and W. Wiederkehr (1992). "International Comparison of Drinking Water Prices." Aqua Vol. 41 No 6, 3 60–3 63.Ballance, A. J. (1996). "Supply and Demand: The Importance of Demand Management." Water Environment '96, London: Chartered Institution of Water and Environmental Management and Institution of Civil Engineers.Binnie, C. J. A. (1992). "Demand Management, Tariffs and Metering." London: Institution of Water and Environmental Management, Paying for Water Symposium.Bowler, P. (1997). "Paying for Water." Waterwatch, 259 South Street, Rotherham, South Yorkshire S61 2NW.British Medical Association (1994), "Water: A Vital Resource", Board of Science and Education, London.California Urban Water Conservation Council (1994), "Setting Urban Water Rates for Efficiency and Conservation", USA.79 Chesnutt, T. W., Anil Bamezai and W. Michael Hanemann (1993). "Revenue Instability Induced by Conservation Rate Structures: An Empirical Investigation of Coping Strategies." Conserv'93 paper 2C-5. Denver, USA: American Water Works Association.Cowley, Tom (1995). "The Company-Wide Introduction of Encoded Meters for Customers: Policy and Implementation". Water Metering Technology and Practice Seminar. London: Society of British Water Industries.Consumers' Association (1996), "Water Consumption and Charges", Policy Report, London.Cunninghame, Griffin, Laws (1996) "Water Tight: The Impact of Water Metering on Low-Income Families", Save The Children.Dietz, Cynthia and Judi Ranton (1995). "Targetted Programming for Low Income Households." Conserv'96 paper I OC-3. Denver, USA: American Water Works Association.Dziegielewski, B. (1990). "Estimating Price Elasticity of Demand for Water: The Impact of Conservation Rate Structures." In Michael W. Bloome, ed., "Rate Structures to Promote Conservation: Conference Proceedings." USA: Delaware River Basin Commission and New York City Waterboard.Environment Agency (1998). "A Review of Tariffs for Public Water Supply (A Report to the Environment Agency)" J. Pezzey and G. A. Mill.Federico, K. (1990). "Experience in Mandating Water Conservation Pricing In Palm Beach County". In Michael W. Bloome, ed., "Rate Structures to Promote Conservation: Conference Proceedings." USA: Delaware River Basin Commission and New York City Waterboard.Fox, T. P. (1995). "Analysis, Design and Implementation of a Conservation Rate Structure." Conserv'96 paper 2F-1. Denver, USA: American Water Works Association.Griffith, Fred P. (1990). "Peak Use Charge: Customer Relations." In Michael W. Bloome, ed., "Rate Structures to Promote Conservation: Conference Proceedings." USA: Delaware River Basin Commission and New York City Waterboard.Hall, Darwin C. and W. Michael Hanemann (1996). "Urban Water Rate Design Based on Marginal Cost." In Darwin C. Hall, ed., "Advances in the Economics of Environmental Resources: Vol 1." LTK:JAI Press.Hansen (1996), "Water and Energy Price Impacts on Residential Water Demand in Copenhagen", Land Economics, 72(1), 66–79.Herrington, Paul (1997a). "Pricing Water Properly." In Timothy O'Riordan, ed., "Ecotaxation." London: Earthscan.Hewitt, Hanemann (1995), "A Discrete/Continuous Choice Approach to Residential Water Demand Under Block Rate Pricing", Land Economics 72(1), 2159–67.IFS (Institute of Fiscal Studies)(1993). "The Distributional Effects of Different Methods of Charging Households for Water and Sewerage Services." Birmingham, LTK: Office of Water Services.Jordan, J. L. (1995). "A Case Study of Using Price to Conserve Water". Conserv'96 paper 6F-3. Denver, USA: American Water Works Association.Merio, G. (1994). "Policies of Tariffs: National Report Italy." Water Supply, Vol 12 No 1, IR3–27 to IR3–29.Mid Kent Water PLC (1997). "Meter Pilot Project: Report 1".National Consumer Council (1991). "Paying for Water".New Policy Institute (1997). "Fair and Sustainable: Paying for Water".Nieswiadomy, Michael L. (1992). "Estimating Urban Residential Demand: Effect of Price Structure, Conservation and Education." Water Resources Research, Vol 28,609–615.OFWAT (1990). "Paying for Water: A Time for Decisions." Birmingham, UK: Office of Water Services.80 OFWAT (1991). "Paying for Water: The Way Ahead." Birmingham, UK: Office of Water Services.OFWAT (1994). "A Better Deal for Metered Customers: A Report on Tariff Rebalancing and Improvements in Optional Metering Schemes." Birmingham, UK: Office of Water Services.OFWAT (1996). "1995–96 Report on the Cost of Water Delivered and Sewage Collected." Birmingham, UK: Office of Water Services.OFWAT (1997). "1997–98 Report on Tariff Structure and Charges." Birmingham, UK: Office of Water Services.OFWAT (1997). "Tariff Rebalancing and the Tariff Basket." Birmingham, UK: Office of Water Services.OFWAT (1997). "Water Pricing: Importance of Long Run Marginal Costs." Birmingham, UK: Office of Water Services.Ozog, M. T. (1995). "Price Elasticity and Net Lost Revenue." Conserv'96 paper 6F-2. Denver, USA: American Water Works Association.Raftelis, G. A. (1993). "Comprehensive Guide to Water and Wastewater Financing and Pricing." 2nd edition. USA:Lewis.Renzetti, S. (1992). "Evaluating the Welfare Effects of Reforming Municipal Water Prices". Journal of Environmental Economics and Management, Vol 22,147–63.Russell, D. F. and C. P. N. Woodcock (1994). "Policies of Tariffs: National Report USA." Water Supply, Vol 12 No 1, ER3–37 to IR3–43.Schneider, M. L. and E. E. Vbtlatch (1991). "User-Specific Water Demand Elasticities." Journal of Water Resources Planning and Management—ASCE, Vol 11 7 No 1,52–73.Stevens, T. H., J. Miller and C. Willis (1992). "Effect of Price Structure on Residential Water Demand." Water Resources Bulletin, Vol 28 No 4,681–685.Sullivan, Dean (1995). "European Water Charges: A Comparison of 17 Cities." Centre for the Study of Regulated Industries and Chartered Institute of Public Finance and Accountancy.Thackray, John (1996). "An Overview of Current Water Use and Charges in the UK Compared to Other Countries." In Water—Conservation and Re-Use. London: Chartered Institution of Water and Environmental Managers.Whitcomb, J. B., J. W. Yingling and Marvin Winer (1993). "Residential Water Price Elasticities in Southwest Florida." Conserv'93 paper 2C-6. Denver, USA: American Water Works Association.Wiederkehr, W. (1994). "Policies of Tariffs." Water Supply, of 12 No 1, IR3–1 to IR3–11.Woo, C. K. (1992). "Drought Management, Service Interruption and Water Pricing—Evidence from Hong Kong." Water Resources Research, Vol 28 No 10,2591–2595.
  We are also aware of other research which has yet to be published.

  London Taxis
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what role(a) he and (b) other Government ministers play in determining the tariff structure set by the London Taxi Board; and what criteria are used in setting the tariff structure. [39458]

  Ms Glenda Jackson
  The London Taxi tariff is set not by the London Taxi Board, but by the Secretary of State by statutory instrument. The Secretary of State's decision is taken with reference to a formula established in 1980, which takes into account the various costs involved in operating a taxi in London. I announced in a written answer on 8 April 1998,Official Report, column 307, the new fares applying from 25 April.
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  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions if uncorroborated complaints against taxi cab drivers are kept in their personal files by the Public Carriage Office. [39485]

  Ms Glenda Jackson
  Brief details of all complaints against licensed London taxi drivers are kept in their personal files by the Public Carriage Office. All such complaints will have been the subject of an investigation or inquiry. Complaints are not recorded as "corroborated" or otherwise.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions for what reasons cabs appointed by the Public Carriage Office are required to have 6-ply-rated taxi tyres. [39486]

  Ms Glenda Jackson
  6-ply-rated tyres are specified for London taxis by their manufacturers to ensure that they have the appropriate load and speed characteristics and adequate wear resistance, particularly at the shoulders. The Public Carriage Office requires the tyres to be marked "taxi" to indicate that they are approved for use on London taxis and are of the appropriate circumference to ensure accurate meter readings.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions for how long records of court convictions are retained by the Public Carriage Office in a licensed driver's personal file. [39487]

  Ms Glenda Jackson
  Such records are retained on a driver's personal file for as long as the individual remains licensed.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what percentage of taximeters have to be retested and resealed by the BSI and again by the Public Carriage Office during the period of the annual cab licence. [39488]

  Ms Glenda Jackson
  All taximeters are returned to the BSI for testing once every 12 months and are sealed to certify accuracy of the instrument. In addition each taxi has its meter installation checked during the taxi's annual inspection by the Public Carriage Office (PCO) to ensure that the BSI seal is intact and up to date, that all linkages are sealed against tampering, and that the meter as installed is registering correctly over a measured distance.

  During 1997 the BSI tested 25,358 taximeters of which 884 failed, and the PCO tested 20,293 meter installations of which 193 failed.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what driving examination qualification Public Carriage Office test examiners are required to hold.
  [39467]

  Ms Glenda Jackson
  Although the legislation allows for any Public Carriage Examiner to conduct taxi driving tests, the Public Carriage Office permits only those examiners who have been certified by the Metropolitan Police Driving School at Hendon to conduct taxi driving tests.

  The examiners are re-assessed by the Police Driving School at intervals of about five years.
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  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what(a) total ceiling and (b) annual ceiling the Public Carriage Office places on the number of cab driver licences issued in London. [39471]

  Ms Glenda Jackson
  All individuals who meet the requirements of the Public Carriage Office in respect of good character, medical fitness, topographical knowledge of London and driving ability in a London taxi are licensed. There are no ceilings on the numbers of licences issued.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the turning circle of(a) the LTI/TXI taxi cab and (b) Metrocab Series III in taxi cabs approved by the Public Carriage Office as being in roadworthy condition. [39460]

  Ms Glenda Jackson
  The precise turning circle for each vehicle is a matter for the manufacturers. The Public Carriage Office (PCO) is satisfied that both types of vehicle comply with the turning circle requirements of the Metropolitan Conditions of Fitness for London taxis, namely that they are capable of being turned on either lock so as to proceed in the opposite direction without reversing between parallel planes 8.535 metres apart, and that the wheel turning circle kerb to kerb on either lock is not less than 7.62 metres in diameter.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions if he will introduce a requirement to make a U-turn in Public Carriage Office driving tests. [39462]

  Ms Glenda Jackson
  I have no plans to do so.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions how many(a) central and (b) suburban cab driver licences were (i) issued and (ii) surrendered in 1996 and 1997; and how many are forecast to be issued in 1998. [39469]

  Ms Glenda Jackson
  The figures are as follows:

  Taxi driver licences

  Issued

  Of which new licences issued

  Surrendered

  1996 all-London

  7,131

  575

  398

  1997 all-London

  6,753

  415

  341

  1998 estimated all-London

  6,957

  588

  332

  1996 suburban

  619

  122

  25

  1997 suburban

  762

  188

  29

  1998 estimate suburban

  773

  240

  16

  Note:

  That the figures for licences issued (second column) comprise renewals as well as new drivers' licences issued. The latter are shown separately in the third column.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what educational qualifications and vocational experience are required of Public Carriage Office knowledge of London examiners. [39473]

  Ms Glenda Jackson
  The primary requirement of Public Carriage Office Knowledge of London examiners is that they have undertaken and successfully passed the "All-London" Knowledge of London topographical
  83
  examination, or that they are able to demonstrate a similarly detailed knowledge of the Metropolitan Police District.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what is the purpose of the Public Carriage Office cab driving test. [39468]

  Ms Glenda Jackson
  A London taxi has particular driving characteristics associated with its size, weight and turning ability. The Public Carriage Office taxi driving test is designed to test a candidate's ability to drive such a vehicle safely in London's traffic conditions with consideration for passengers and other road users.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what market surveys and other evidence is used by the Public Carriage Office to establish market demand for taxi cabs in London. [39472]

  Ms Glenda Jackson
  None. There is no limitation imposed by the Public Carriage Office on the number of taxis or taxi drivers licensed in London; all that meet the necessary standards are licensed. It is up to individuals to decide whether to seek to enter the London taxi trade.

  However, my Department has commissioned a study into the supply and demand for taxis at different times of the day and in different parts of London, with a view to assessing whether any change in the structure of the taxi fares tariff would be appropriate.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions for what reasons taximeters are removed, retested and resealed by the BSI and again by the Public Carriage Office as part of the annual relicensing vehicle road test. [39461]

  Ms Glenda Jackson
  Meters are not removed from taxis by the BSI or by the Public Carriage Office (PCO); they are removed by the meter companies or their authorised agents.

  Whenever seals are broken they are replaced by the BSI, or by the PCO, as appropriate, in order to maintain the integrity of the meter installation. Seals may get broken during the course of repairs to the meter itself, the transducer, the driver cable or its illumination. Seals may also be broken following an accident, or during repairs to the taxi's transmission.

  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions how many applicants in respect of knowledge of London attended the Public Carriage Office's initial talks in 1996 and 1997 after being accepted as cab driver trainees. [39470]

  Ms Glenda Jackson
  The number was 3,357 in 1996, and 4,107 in 1997.

  Car Sharing
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what steps he has taken to introduce taximeter-controlled car-sharing in suburban areas for commuters. [39459]
  84
  Ms Glenda Jackson
  Existing legislation already provides for the establishment of taxi-sharing schemes. I have no plans to provide for introduction of taxi meters into private cars, which could give rise to confusion with licensed taxis.

  Farm Plastics
  Mrs. Anne Campbell
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what is the Government's policy towards the collection and recycling of plastics used on the farm; [39490]

  (2) if he will introduce a compulsory levy scheme to fund the collection and recycling of farm plastics. [39491]

  Angela Eagle
  We were extremely disappointed to hear of the collapse of the Farm Films Producers Group in early 1997, an industry-led scheme which organised the collection and recycling of plastic films used on the farm. It seems that the principal cause was that certain importers were not prepared to participate on a voluntary basis and that the competitive advantage thus created led to the collapse of the scheme. We are currently considering what options are likely to be most effective in this area and hope to have proposals available for consultation shortly.

  MDI
  Mr. Levitt
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the toxicity of the isocyanate MDI. [39573]

  Angela Eagle
  In preparation for EU negotiations under the Dangerous Substances Directive, expert toxicologists from the Health and Safety Executive have assessed evidence, supplied by Sweden, on the toxicity of MDI. They have concluded that the evidence meets the criteria for classification as Toxic, by inhalation, sensitising, by inhalation and by skin contact; and irritating to skin, eyes and the respiratory tract.

  Mr. Levitt
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the Swedish proposal for the EU to reclassify MDI from harmful to toxic. [39574]

  Angela Eagle
  In preparation for EU negotiations under the Dangerous Substances Directive, expert toxicologists from the Health and Safety Executive have assessed evidence, supplied by Sweden, on the acute toxicity by inhalation of MDI. On the basis of the evidence, the UK experts supported the Swedish proposal. The European Commission will now consider the next steps.

  Environmentally Friendly Vehicles
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, Transport and the Regions if he will institute an annual assessment of the most environmentally friendly vehicles produced by British-based manufacturers. [39672]

  Ms Glenda Jackson
  The Government recognise the strong role that information on the environmental performance of vehicles has to play in developing the market for greener vehicles, alongside fiscal and other instruments. Information on fuel economy for individual models of passenger car has been published for some
  85
  years in the Government's bi-annual "New Car Fuel Consumption Booklet"; this publication has recently been expanded to include details of CO2 emissions on the same model by model basis. Discussions with the industry on the further expansion of the booklet to include information on pollutants which affect local air quality, e.g. NOx and particulates, are being taken forward under the auspices of the Cleaner Vehicles Task Force.

  Traffic Congestion
  Mr. Sanders
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to her oral statement of 1 April,Official Report, column 1231, when she expects to write to the hon. Member for Torbay on traffic congestion measures. [39614]

  Ms Glenda Jackson
  I will write to the hon. Member shortly.

  Countryside Policies
  Mr. Fraser
  To ask the Secretary of State for the Environment, Transport and the Regions when the Government will publish the next report on their policies for the countryside; if the relevant statistics will be prepared after consultation with recognised countryside and wildlife groups; and if he will make a statement. [39905]

  Mr. Meacher
  Ministers are continuing to consider the best way to take forward and present the Government's policies for the countryside. We will continue to collect and monitor a wide range of statistics on the countryside, and to meet and discuss policy with many countryside and wildlife groups.

  West Coast Main Line
  Mr. Hoyle
  To ask the Secretary of State for the Environment, Transport and the Regions what feasibility studies his Department has evaluated on methods of adapting bridges for the West Coast Main line to enable transportation of freight. [39767]

  Ms Glenda Jackson
  It is for Railtrack to carry out the necessary preparatory work and it has undertaken feasibility studies on upgrading the West Coast Main Line route for both 9'6" containers and piggyback vehicles. The Department is appointing consultants to audit the engineering costs. As part of that audit, we would expect Railtrack to tell our consultants how it plans to carry out necessary work to bridges on the route in the most cost effective way possible and so as to minimise disruption to services.

  Regional Railways
  Mr. Barry Jones
  To ask the Secretary of State for the Environment, Transport and the Regions what discussions he has had with Regional Railways on measures to be taken to improve the quality and frequency of service between North Wales, Chester and Cardiff; and if he will make a statement. [39852]

  Ms Glenda Jackson
  These are matters for the Franchising Director, who holds regular reviews with all the franchised train operating companies. He requires operators to plan to provide a minimum level of service frequency through their Passenger Service Requirements 86
  (PSRs), which are a key part of the franchise agreements, and oversees their performance. The Franchising Director has powers to support new services which are not commercially viable, and would use his "Criteria for the Appraisal of Support for Passenger Rail Services" to appraise business cases for support from his budget; those Criteria are in the Library of the House. The Government are committed to establishing a National Rail Authority to provide a clear, coherent and strategic programme for the development of the railways.

  London Underground
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions how much of the investment to be made in London Underground in the two years from April will be allocated to each of the projects mentioned in his oral statement of 20 March 1998,Official Report, columns 1539–42 and what proportion of the funding has been specifically earmarked for access projects. [39944]

  Ms Glenda Jackson
  As a result of the £365 million of additional funding the Deputy Prime Minister has announced, total investment in the existing network over the next two years will be around £1 billion. London Underground is currently developing the details of its investment programme, including how to accelerate its plans to improve the accessibility of the network. It is not possible at this stage to say what proportion of the additional funding will be spent on specific projects, but the programme will be designed to ensure that the benefit of the additional funding is maximised.

  County Structure Plans
  Mr. Harvey
  To ask the Secretary of State for the Environment, Transport and the Regions if he will reduce the levels of housing provision in emerging county structure plans in counties where he assesses development could seriously damage the environment. [40100]

  Mr. Raynsford
  The Town & Country Planning (Development Plan) Regulations 1991 require planning authorities to have regard to environmental considerations in preparing structure plans and Part 1 of Unitary Development Plans. The environmental implications of plan policies should be appraised as part of the plan preparation process. It is for the planning authority to determine the level of housing provision in emerging structure plans in the light of these considerations.

  The Secretary of State examines development plans carefully to identify whether they are consistent with national and regional planning guidance and whether there are conflicts with the guidance which do not appear to be justified by local circumstances. He can object to plan proposals prior to their adoption, and also has powers of intervention to direct plan proposals to be modified before adoption.

  Mr. Harvey
  To ask the Secretary of State for the Environment, Transport and the Regions if he will require the new policies set out in Planning for the Communities of the Future to be reflected in the current round of emerging county structure plans (up to 2011). [40097]
  87
  Mr. Raynsford
  I refer the hon. Member to the reply my hon. Friend the Minister for the Regions, Regeneration and Planning gave to my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) on 1 April 1998,Official Report, columns 530–31.

  Teesside Development Corporation
  Dr. Kumar
  To ask the Secretary of State for the Environment, Transport and the Regions when the Government will publish the report on the outcome of the transfer of powers and responsibilities in respect of the Teesside Development Corporation. [39957]

  Angela Eagle
  The Teesside Development Corporation's planning powers were transferred to the local planning authorities on 25 March 1998 by Statutory Instrument (SI 1998/84). Responsibility for the Tees Barrage and the Corporation's residual property, rights and liabilities were transferred to the Commission for the New Towns on 1 April 1998, again by Statutory Instruments, (SI 1998/570) and (SI 1998/85). The Department has no plans to publish a separate report on the transfer of the Corporation's powers and responsibilities, but would expect the Corporation's Annual Report for 1997/98 to include details of the arrangements it made to wind-up its affairs and transfer unfinished schemes to successor bodies for completion.

  Dr. Kumar
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish the annual accounts for Teesside Development Corporation. [39956]

  Angela Eagle
  Yes, the Corporation has a statutory obligation to publish its Accounts. It is also required to make an Annual Report to the Secretary of State which will be laid before both Houses of Parliament. The Corporation is currently preparing both documents. The Department is aiming for the Annual Report and Accounts for 1997/98 to be laid before Parliament before the Corporation is finally dissolved on 1 July.

  CrossRail
  Mr. Bercow
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what progress has been made towards the implementation of the CrossRail project; and if he will make a statement; [39995]

  (2) if he will assess the advantages of allowing an application under the Transport and Works Act 1992 for powers to build CrossRail. [40091]

  Ms Glenda Jackson
  The Government are currently awaiting Railtrack's considered advice on Crossrail, including its possible attractiveness for private sector finance. The project will be reviewed in the light of Railtrack's conclusions, once received, and of the Government's own plans for restructuring transport priorities and responsibilities for London.

  Health and Safety at Work
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what steps he is taking to ensure that small and medium sized firms carry out a full assessment of workplace hazards 88
  to women of child-bearing age, in accordance with the Management of Health and Safety at Work Regulations 1994. [39592]

  Angela Eagle
  All employers, including those responsible for small and medium sized firms are, amongst other duties, required by the Management of Health and Safety at Work Regulations 1992, amended in 1994, to assess the risks to workers, including women of childbearing age. Health and Safety Inspectors may, where appropriate, consider the adequacy of action taken during visits to firms.

  Leaded Paint
  Miss Melanie Johnson
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 21 April 1998,Official Report, column 552, if he will list the Government departments, industry representatives and technical and design experts with whom consultations on publicising the dangers of lead in painted surfaces have taken place. [40031]

  Angela Eagle
  The Department of the Environment, Transport and the Regions has attempted to strike a balance between obtaining sufficient advice and being in a position to publicise the dangers of lead in paint and provide updated information to the public at the earliest opportunity. We do not consider that the consultations which we have so far conducted are exhaustive and we will continue to consult widely on risks from lead in all media as part of our strategic review of chemicals in the environment.

  To date, the other Government Departments which we have consulted on the dangers of lead in painted surfaces have been the Departments of Health and of Trade and Industry, the Health and Safety Executive and English Heritage.

  In addition, we have consulted the British Coatings Federation, which incorporates the Paint Makers Association, and certain individual paint manufacturers, including ICI. Further consultation with the Consumers Association, the Paint Research Association, the Lead Awareness Group, the Association of Painting Craft Teachers, and the Construction Industry Training Board has been conducted on the Department's behalf by the Building Research Establishment.

  The Portable Electric Tool Manufacturers' Advisory Panel have been made aware that consultations were being undertaken, but have not so far contributed. Some discussions have also been held with Local Authorities.

  Miss Melanie Johnson
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 21 April 1998,Official Report, columns 551–52, if he will list the representations he has received in the 12 months prior to October 1997 on the dangers of lead in painted surfaces. [40032]

  Angela Eagle
  In the 12 months prior to October 1997, the Department received no individual representations from Members of Parliament on lead in paint. In the same period, the Department received five private inquiries from members of the public on the same topic.

  London Regional Transport
  Mr. Ottaway
  To ask the Secretary of State for the Environment, Transport and the Regions if he will give the reasons for the dismissal of Mr. Peter Ford as Chairman of London Regional Transport and the level of compensation paid. [39969]

  Ms Glenda Jackson
  I refer the hon. Member to the reply my right hon. Friend gave on 22 April 1998,Official Report, column 611. The compensation payable to Mr. Ford has now been agreed at £290,000 and will be paid shortly.

  New Housing (Kent)
  Sir John Stanley
  To ask the Secretary of State for the Environment, Transport and the Regions what is the planned figure for new housing in Kent over the next(a) 10 years and (b) 20 years; and in each case what number is planned for single person households and what number for families. [39993]

  Mr. Raynsford
  The amount of new housing proposed by Kent Structure Plan Third Review for the period 1991–2011 is 116,000. This figure conforms to the advice provided in RPG9—Regional Planning Guidance for the South East. Figures relating to single person households and family households are not available centrally.

  Sir John Stanley
  To ask the Secretary of State for the Environment, Transport and the Regions what proportion of the planned new housing in Kent he estimates will be built on brown field sites and what proportion on green field sites. [39994]

  Mr. Raynsford
  A proportionate figure for recycled land/green field development has not been identified within the Kent Structure Plan Third Review. The Government expect that 60 per cent. of new homes will be built on previously developed land over the next ten years. (DETR, February 1998, Planning for the Communities of the Future, Cm 3885, page 7).

INTERNATIONAL DEVELOPMENT

  Tibet
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what assistance her Department is currently giving to Tibet. [39963]

  Mr. Foulkes
  We are currently contributing some £680,000 to five projects which are being implemented by non-governmental organisations. These projects—in the fields of education, income generation and environmental health—are helping to address the needs of rural and urban communities within Tibet and of Tibetan refugees in India.

  Debt Cancellation
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what progress has been made in discussions on aid debt cancellation programmes with potentially eligible Commonwealth countries; and if she will make a statement. [39960]
  90
  Mr. Foulkes
  Cancellation programmes have been agreed with Barbados, Dominica, Grenada, Mauritius, St. Lucia, Tonga, Turks and Caicos and Jamaica. We have also opened discussions with five other countries about their commitment to poverty eradication in the framework of the international development strategy; and the extent to which they are actively pursuing policies which promote responsive and accountable government, which encourage transparency and bear down on corruption, and are applying economic policies which encourage sustainable economic development.

  European Chocolate Directive
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what has been the outcome of her discussions with the Minister of Agriculture on the likely development effects of the European Chocolate Directive; and if she will make a statement. [39961]

  Mr. Foulkes
  Consultations between the Department for International Development and the Ministry of Agriculture, Fisheries and Food—the lead department—continue. The Government are ensuring that development concerns are carefully weighed in the preparation of a UK line; this reflects the importance attached to policy coherence in the recently published UK Government White Paper on International Development.

  The Government believe that there are significant uncertainties over the possible effects of the proposed Directive on developing countries. Long-run development strategies should be built on helping developing countries to respond to shifts in demand patterns for their products, rather than locking them into the status quo.

  Lomé Convention
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what representations she has made to the EU Commission on its green paper on the successor agreement to the Lomé Convention. [40006]

  Mr. Foulkes
  The UK produced a formal response to the Commission's Green Paper in October 1997. Since then, my right hon. Friend the Secretary of State for International Development met Commissioner Pinheiro, the Commissioner responsible for the EC's external relations with the Africa, Caribbean and Pacific States, on a number of occasions to discuss the Commission's proposals and she will have the opportunity to talk to him again at the ACP-EC Ministerial Council in Barbados on 7–8 May 1998. She has also participated in discussions on the future of ACP-EU relations at the Development Council on 28 November 1997 and the General Affairs Council on 30 March 1998, and will be chairing the discussions on EU's Lomé negotiating mandate at the Development Council on 18 May 1998. I addressed the EU/ACP Parliamentary Assembly in Mauritius on 21 April, answered questions on Lomé from the delegates and discussed the proposals with Commissioner Pinheiro. In addition, officials maintain a close dialogue with the Commission through their participation in the working group responsible for negotiating the EU's negotiating mandate, which the UK chairs as Presidency, and their informal contacts.

  Poverty
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what proposals she has made to the World Bank Group towards enhancing the focus and effectiveness with which it pursues the objectives of poverty reduction and sustainable development; and what have been the results. [39964]

  Mr. Foulkes
  The President of the World Bank, James Wolfensohn, and my right hon. Friend the Secretary of State for International Development have discussed the importance of the international development targets endorsed by all members of the United Nations on a number of occasions. We are very pleased that the Bank has adopted these targets as part of its Strategic Compact, and will be using them to provide milestones against which progress towards poverty elimination can be measured. We are also encouraging the Bank to improve the quality of the poverty assessments included in its Country Assistance Strategies, working with partner countries to develop effective poverty reduction strategies.

  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what representations she has made to the multilateral development banks and the International Monetary Fund about their impact on poverty reduction, and the efficiency and effectiveness of their operations; and what has been the result. [39962]

  Mr. Foulkes
  At the Spring Meetings of the IMF and World Bank in Washington earlier this month, my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for International Development made a joint statement to the Development Committee, in which they encouraged the multilateral development banks to improve co-ordination and collaboration in their actions to increase their effectiveness in reducing levels of poverty.

  Additionally, they met the Managing Director of the IMF, Michel Camdessus and the President of the World Bank, James Wolfensohn, to discuss ways in which programmes under the IMF's Enhanced Structural Adjustment Facility (ESAF) can take more account of

  Racial incidents in the Metropolitan Police District

  Division

  Residential population (1991 census)

  1997/98

  1997/98 per 1,000 pop

  1996/971

  1996/97 per 1,000 pop

  1995/96

  1995/96 per 1,000 pop

  1994/95

  1994/95 per 1,000 pop

  1993/94

  1993/94 per 1,000 pop

  Belgravia

  42,178

  36

  0.85

  —

  —

  12

  0.28

  3

  0.07

  2

  0.05

  Brompton

  75,460

  20

  0.27

  —

  —

  0

  0.00

  8

  0.11

  4

  0.05

  Charing Cross

  4,780

  15

  3.14

  —

  —

  0

  0.00

  7

  1.46

  0

  .00

  Fulham

  63,254

  36

  0.57

  —

  —

  36

  0.57

  37

  0.58

  41

  0.65

  Hammersmith

  85,684

  68

  0.79

  —

  —

  12

  0.14

  27

  0.32

  31

  0.36

  Marylebone

  47,286

  32

  0.68

  —

  —

  35

  0.74

  14

  0.30

  3

  0.06

  Notting Hill

  48,778

  45

  0.92

  —

  —

  8

  0.16

  13

  0.27

  14

  0.29

  Paddington

  79,525

  39

  0.49

  —

  —

  1

  0.01

  39

  0.49

  26

  0.33

  West End Central

  4,034

  7

  1.74

  —

  —

  3

  0.74

  8

  1.98

  0

  0.00

  Total: I Area

  450,979

  298

  0.66

  108

  0.24

  107

  0.24

  156

  0.35

  121

  0.27

  Barnet & Hertsmere

  278,740

  40

  0.14

  —

  —

  23

  0.08

  41

  0.15

  29

  0.10

  Colindale

  98,362

  102

  1.04

  —

  —

  83

  0.84

  127

  1.29

  148

  1.50

  Ealing

  148,878

  46

  0.31

  —

  —

  45

  0.30

  43

  0.29

  52

  0.35

  Hampstead

  79,036

  24

  0.30

  —

  —

  24

  0.30

  37

  0.47

  54

  0.68

  Harrow

  198,311

  148

  0.75

  —

  —

  128

  0.65

  113

  0.57

  128

  0.65

  Holborn

  21,102

  45

  2.13

  —

  —

  55

  2.61

  81

  3.84

  37

  1.75

  Holloway

  84,722

  72

  0.85

  —

  —

  29

  0.34

  65

  0.77

  49

  0.58

  Hornsey

  101,299

  58

  0.57

  —

  —

  44

  0.43

  34

  0.34

  35

  0.35

  Islington

  81,092

  142

  1.75

  —

  —

  197

  2.43

  215

  2.65

  84

  1.04

  92
  social issues and the effect of adjustment programmes on the poorest. To assist the IMF develop its skills base in these areas, DIFD has offered technical expertise in social development and is encouraging a closer working relationship with the World Bank, which is best placed to offer advice on poverty reduction.

  African Development Bank
  Sir Alastair Goodlad
  To ask the Secretary of State for International Development what programmes of institutional reform she has proposed for the African Development Bank. [39965]

  Mr. Foulkes
  The British Government fully support the major restructuring and institutional reform programme initiated by the President of the African Development Bank and approved by the Board of Directors in 1995. Under this programme, improvements have been made in the areas of organisational structure, the quality of Bank operations, human resource management policies and financial management. In recognition of progress in these areas, shareholders of the Bank are now close to completing negotiations on a capital increase, which will strengthen the financial ratios of the Bank and increase the influence of non-regional members such as the United Kingdom.

HOME DEPARTMENT

  Racial Attacks
  Dr. Cable
  To ask the Secretary of State for the Home Department how many racial attacks have been recorded per 1,000 inhabitants in each police division in London in each of the last five years. [39466]

  Mr. Michael
  The Commissioner has provided the following information on the number of racial incidents in the Metropolitan Police District. A racial incident is defined as any incident in which it appears to the reporting or investigating officer that the complaint involves an element of racial motivation, or any incident which includes an allegation of racial motivation made by any person.
  93

  Racial incidents in the Metropolitan Police District

  Division

  Residential population (1991 census)

  1997/98

  1997/98 per 1,000 pop

  1996/971

  1996/97 per 1,000 pop

  1995/96

  1995/96 per 1,000 pop

  1994/95

  1994/95 per 1,000 pop

  1993/94

  1993/94 per 1,000 pop

  Kentish Town

  74,614

  138

  1.85

  —

  —

  302

  4.05

  275

  3.69

  175

  2.35

  Kilburn

  110,896

  63

  0.57

  —

  —

  49

  0.44

  19

  0.17

  42

  0.38

  Southall

  125,493

  108

  0.86

  —

  —

  100

  0.80

  108

  0.86

  102

  0.81

  Tottenham

  101,650

  66

  0.65

  —

  —

  40

  0.39

  54

  0.53

  39

  0.38

  Wembley

  127,995

  34

  0.27

  —

  —

  65

  0.51

  52

  0.41

  26

  0.20

  Total: 2 Area

  1,632,190

  1,086

  0.67

  1,148

  0.70

  1,184

  0.73

  1,264

  0.77

  1.001

  0.61

  Barkingside

  168,761

  55

  0.33

  —

  —

  26

  0.15

  34

  0.20

  32

  0.19

  Chingford

  113,318

  50

  0.44

  —

  —

  47

  0.41

  0

  0.00

  37

  0.33

  Dagenham

  139,287

  121

  0.87

  —

  —

  43

  0.31

  141

  1.01

  90

  0.65

  Edmonton

  142,224

  157

  1.10

  —

  —

  64

  0.45

  47

  0.33

  38

  0.27

  Enfield

  170,007

  74

  0.44

  —

  —

  82

  0.48

  89

  0.52

  35

  0.21

  Forest Gate

  105,428

  164

  1.56

  —

  —

  155

  1.47

  152

  1.44

  129

  1.22

  Havering

  228,283

  73

  0.32

  —

  —

  38

  0.17

  58

  0.25

  20

  0.09

  Ilford

  131,726

  95

  0.72

  —

  —

  11

  0.08

  79

  0.60

  57

  0.43

  Leyton

  94,629

  49

  0.52

  —

  —

  0

  0.00

  72

  0.76

  64

  0.68

  Limehouse

  74,928

  234

  3.12

  —

  —

  392

  5.23

  368

  4.91

  422

  5.63

  Plaistow

  110,267

  310

  2.81

  —

  —

  270

  2.45

  257

  2.33

  160

  1.45

  Shoreditch & Hackney

  77,594

  167

  2.15

  —

  —

  42

  0.54

  58

  0.75

  28

  0.36

  Stoke Newington

  96.214

  97

  1.01

  —

  —

  109

  1.13

  81

  0.84

  53

  0.55

  Whitechapel

  84,715

  122

  1.44

  —

  —

  17

  0.20

  157

  I.85

  135

  1.59

  Total: 3 Area

  1,737,381

  1,768

  1.02

  1,531

  0.88

  1,296

  0.75

  1,593

  0.92

  1,171

  0.67

  Bexleyheath

  202,657

  287

  1.42

  —

  —

  292

  1.44

  109

  0.54

  286

  1.41

  Bromley & Orpington

  292,510

  95

  0.32

  —

  —

  10

  0.03

  99

  0.34

  59

  0.20

  Catford

  123,791

  227

  1.83

  —

  —

  192

  1.55

  107

  0.86

  54

  0.44

  Croydon

  111,221

  66

  0.59

  —

  —

  56

  0.50

  56

  0.50

  31

  0.28

  Epsom and Sutton

  278,028

  71

  0.26

  —

  —

  14

  0.05

  72

  0.26

  56

  0.20

  Greenwich

  109,366

  71

  1.41

  —

  —

  209

  1.91

  159

  1.45

  156

  1.43

  Lewisham

  98,355

  94

  0.96

  —

  —

  99

  1.01

  103

  1.05

  45

  0.46

  Peckham

  102,210

  75

  0.73

  —

  —

  78

  0.76

  45

  0.44

  87

  0.85

  Plum stead

  110,655

  124

  1.12

  —

  —

  122

  1.10

  393

  3.55

  13

  0.12

  South Norwood

  199,722

  98

  0.49

  —

  —

  95

  0.48

  88

  0.44

  57

  0.29

  Southwark

  59,775

  141

  2.36

  —

  —

  273

  4.57

  153

  2.56

  130

  2.17

  Walworth

  60,601

  55

  0.91

  —

  —

  67

  1.11

  71

  1.17

  75

  1.24

  Total: 4 Area

  1,764,891

  1,487

  0.85

  1,663

  0.95

  1,507

  0.86

  1,455

  0.83

  1,049

  0.60

  Battersea

  106,534

  77

  0.72

  —

  —

  20

  0.19

  10

  0.09

  20

  0.19

  Brixton

  79,186

  56

  0.71

  —

  —

  25

  0.32

  40

  0.51

  19

  0.24

  Chiswick

  77,258

  122

  1.58

  —

  —

  48

  0.62

  58

  0.75

  31

  0.40

  Heathrow

  629

  8

  12.72

  —

  —

  15

  23.85

  4

  6.36

  2

  3.18

  Hillingdon

  229,514

  160

  0.70

  —

  —

  114

  0.50

  184

  0.80

  91

  0.40

  Hounslow

  129,778

  247

  1.90

  —

  —

  271

  2.09

  193

  1.49

  174

  1.34

  Kingston

  193,078

  75

  0.39

  —

  —

  53

  0.27

  36

  0.19

  28

  0.15

  Merton

  174,136

  195

  1.12

  —

  —

  149

  0.86

  143

  0.82

  110

  0.63

  Spelthorne

  90,905

  22

  0.24

  —

  —

  11

  0.12

  11

  0.12

  8

  0.09

  Streatham

  80,770

  51

  0.63

  —

  —

  73

  0.90

  68

  0.84

  61

  0.76

  Twickenham

  161,312

  71

  0.44

  —

  —

  45

  0.28

  50

  0.31

  43

  0.27

  Vauxhall

  74,972

  46

  0.61

  —

  —

  29

  0.39

  47

  0.63

  28

  0.37

  Wandsworth

  140,713

  98

  0.70

  —

  —

  77

  0.55

  64

  0.45

  32

  0.23

  Total: 5 Area

  1,538,785

  1,228

  0.80

  1,171

  0.76

  930

  0.60

  908

  0.59

  647

  0.42

  Total

  7,106,226

  5,867

  0.83

  5,621

  0.79

  5,024

  0.71

  5.376

  0.76

  4,116

  0.58

  11996/97 figures are not available currently for divisions. This is due to the process of the introduction that year of the Met's computerised Crime Reporting Information System (CRIS).

  Note:

  This information is for the financial year provided by the Met's Performance Information Bureau.

  DNA Testing
  Mr. Syms
  To ask the Secretary of State for the Home Department what quality control tests have been evaluated into DNA testing; and if he will publish the results. [39496]

  Mr. Michael
  The Home Office Forensic Science Service has carried out quality tests on its analysis of DNA since it was first used in 1987. These are: testing and peer review of new methods before they are introduced, including scientific publication; regular
  94
  internal quality assurance trials; and personal competency testing. These are used for internal quality management purposes and are made available to external quality assessors for the purposes of accreditation to International Organisation for Standardisation (ISO) 9000 and United Kingdom Accreditation Service (UKAS) standards. Quality assurance trials for suppliers of information to the National DNA database are not published but are similarly made available to external assessors. The results are also presented to learned conferences in tabular form; control tests on an individual casework basis are also made available to the defence on request.

  Immigration Detainees
  Mr. Fitzpatrick
  To ask the Secretary of State for the Home Department what social, medical and counselling services are provided for immigration detainees with mental illnesses when they are released back into the community from detention. [39363]

  Mr. Mike O'Brien
  Detainees who are sectioned under the Mental Health Act are referred for appropriate treatment. Other detainees, who may be receiving treatment when they are released or bailed, are given a summary or copy of their own medical records. They are also given a short supply of any medication they require and told to register with a General Practitioner as soon as they are released. It would then be for the General Practitioner to arrange whatever care he or she considered necessary.

  Asylum Claims (IT)
  Mr. Clappison
  To ask the Secretary of State for the Home Department (1) what plans are in place for the use of information technology in processing asylum claims which were not in place on 1 May 1997; [39387]

  (2) how much spending on the deployment of information technology in the processing of asylum claims has been planned for, which was not planned for on 1 May 1997; [39388]

  (3) if, in respect of the 1996 contract between his Department and Siemens for computer supply at the Immigration and Nationality Department, at Lunar House, he will list the purposes for which the computer services were described as being acquired at the time the contract was concluded and, make a statement on the extent to which the computer services are currently used for the processing of asylum claims; if the computer services are to be used to a greater extent for the processing of future asylum claims; and what representations he has received from trade unions at Lunar House regarding the computer contract. [39386]

  Mr. Mike O'Brien
  When the award of the Casework Programme contract was announced by the previous Government, its purpose was stated to be to computerise the handling of immigration casework, and the present Government have decided to proceed with the project. The project extended to asylum casework in the same way as to other types of immigration casework. Under the previous Government, it was planned that staff cuts would help fund the cost of the Casework Programme. The present Government did not make the planned staff cuts in 1997–98 and those staff are currently deployed in reducing the large number of cases which the present Administration inherited.

  In broad terms, there has been no change over the past twelve months in plans for expenditure on information technology in asylum casework. The Casework Programme system is not available but the intention is to use it extensively on future asylum casework.

  The Casework Programme will allow greater flexibility in the use of resources, but the priority that can be given to asylum casework will depend on the outcome of the Comprehensive Spending Reviews.
  96
  Both my right hon. Friend and I have had meetings with the Home Office trade unions about the expected consequences of the Casework Programme.

  Immigration Detention Centres
  Mr. Clappison
  To ask the Secretary of State for the Home Department what plans he has to establish additional immigration detention centres; and what estimate he has made of the number of places thereby created. [39390]

  Mr. Mike O'Brien
  Her Majesty's Chief Inspector of Prisons was recently critical of the limited space available to the Immigration Service in detention centres and suggested that the Immigration Service needs to expand its detention estate. This proposal is being examined as part of the Detention Review which will report in due course.

  Mr. Clappison
  To ask the Secretary of State for the Home Department what plans he has to change the criteria for holding asylum seekers and illegal entrants in detention. [39391]

  Mr. Mike O'Brien
  The recently completed detention review covered all aspects of detention policy, including detention criteria. Evaluation of the review is now in the final stages and the results are expected to be made available in due course.

  Asylum Seekers
  Mr. Clappison
  To ask the Secretary of State for the Home Department, pursuant to the oral answer to the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney), on 30 March 1998,Official Report, column 882, on illegal immigrants, what is the legal basis of the rule that the position of asylum seekers is regularised after seven years; and if he will list the occasions on which the rule has been brought into operation since 1979. [39379]

  Mr. Mike O'Brien
  I refer the hon. Member to the reply I gave to my hon. Friend the Member for Battersea (Mr. Linton) on 19 March 1998,Official Report, column 682. The legal basis for this practice is the power of the Secretary of State under the Immigration Act 1971 to grant or vary leave to enter or remain. The practice has been an undisclosed feature of decision-making on immigration since the early 1990s, but information is not available centrally on the number of occasions on which it has been followed and could be obtained only at disproportionate cost. We have disclosed this practice as part of this Government's wish to be more open than previous Governments in disclosing the way in which immigration controls operate.

  Mr. Allan
  To ask the Secretary of State for the Home Department if he will provide a breakdown, by nationality, of the number of asylum-seekers who were detained under Immigration Act powers between January and December 1997 and who were subsequently(a) recognised as refugees and (b) granted exceptional leave to remain. [40029]
  97
  Mr. Mike O'Brien
  The available information, relating to the number of persons who were detained solely under Immigration Act powers at some point during 1997 and who were subsequently recognised as a refugee or granted exceptional leave to enter or remain, is given in the table. It is important to note that many of those detained are held for very brief periods, sometimes only hours, pending arrangements for their examination under the Immigration Act 1971.

  Persons detained solely under Immigration Act powers during 19971 who were subsequently granted asylum or exceptional leave to enter or remain in the United Kingdom2

  Nationality

  Number granted asylum

  Number granted exceptional leave to enter or remain

  Afghanistan

  —

  79

  Albania

  4

  —

  Algeria

  15

  6

  China

  *

  —

  Colombia

  —

  3

  Ghana

  *

  *

  Iran

  9

  *

  Iraq

  5

  *

  Liberia

  —

  7

  Nigeria

  9

  *

  Poland

  *

  —

  Somalia

  14

  23

  Sri Lanka

  3

  *

  Sudan

  *

  *

  Turkey

  *

  *

  Yugoslavia

  10

  *

  Zaire

  3

  —

  Nationality doubtful

  *

  *

  Other

  9

  *

  Total

  89

  132

  1 Persons first entering, or last leaving, detention under sole Immigration Act powers during 1997. A number will have been detained for a very brief period. Data include those cases considered substantially and those initially considered under the Dublin Convention/Third Country procedures.

  2Data provisional.

  *Denotes 1 or 2.

  Departmental Reviews
  Mr. Clappison
  To ask the Secretary of State for the Home Department, pursuant to his answer of 20 January 1998,Official Report, columns 507–10, on departmental reviews, when he expects the consultative document in respect of the Review of Immigration and Asylum Appeals to be published. [39376]

  Mr. Mike O'Brien
  The internal review of immigration and asylum appeals is complete and a consultative document will be published as soon as possible.

  Closed Circuit Television
  Mrs. May
  To ask the Secretary of State for the Home Department if he will list budgeted expenditure on closed circuit television cameras for 1998–99 by(a) local authority and (b) police region. [39880]

  Mr. Michael
  [holding answer 27 April 1998]: It is not possible to provide the details requested. Closed circuit television (CCTV) is funded in a variety of different ways: some local authorities and local partnership groups have financed schemes directly for their area while others
  98
  have involved an element of Central Government grant. As far as the Home Office budget is concerned, £9 million is available in 1998–99 to support the development of CCTV schemes. At least £1 million will be made available through round 4 of the CCTV Challenge Competition. The bids made under round 4 are currently being assessed and we hope to announce the results in May.

  Schengen Executive Committee
  Angela Smith
  To ask the Secretary of State for the Home Department if he will make available the decisions and declarations adopted by the Schengen Executive Committee. [40304]

  Ms Quin
  We have placed in the Library copies of all of the decisions and declarations of the Schengen Executive Committee, and of its subordinate body the Schengen Central Group, which are part of the Schengen acquis and are in our possession, except for six documents, or parts thereof, which are classified as 'confidential' by the Schengen states. These cover the period up to and including June 1997.

  Some of the documents are incomplete and there are some others which we have not yet received; these (together with the confidential documents) are indicated in the list which accompanies the documents deposited in the Library. As soon as we receive the missing documents, and also documents issued since June 1997, we shall deposit them in the Library.

  A number of the documents are in French or German. We are endeavouring to obtain English translations of these which, when received, we will deposit in the Library.

  Under-age Drinking
  Mr. Jim Cunningham
  To ask the Secretary of State for the Home Department what action he is taking to promote the use of proof of age identity cards as a means of reducing under-age drinking; and to what timescale. [39589]

  Mr. George Howarth
  The Government's statement of 17 July 1997 set out a programme of action which had been agreed with industry interests to tackle under-age alcohol misuse. This included commitments by retailer organisations to expand the Portman Group proof of age card scheme. We shall be reviewing the industry's progress this autumn.

SOCIAL SECURITY

  Lone Parents
  Mr. Rendel
  To ask the Secretary of State for Social Security what has been the expenditure on benefits to lone parents for each year since 1979; and what is the forecast expenditure for each year up to 2000(a) in terms of annual real growth, (b) in cash terms and (c) as a proportion of social security expenditure. [38996]

  Mr. Keith Bradley
  [holding answer 20 April 1998]: The information is not available in the format requested. Such information as is available is set out in the table.
  99

  Lone parents expenditure in cash and real terms (1997–98 prices) expressed as a percentage of grand total social security expenditure

  Year

  Cash prices(£ million)

  Real terms(1997–98 prices)(£ million)

  Lone parents expenditure expressed as a percentage of grand total social security expenditure

  1978–79

  596

  1,886

  4

  1979–80

  730

  1,979

  4

  1980–81

  856

  1,962

  4

  1981–82

  1,079

  2,254

  4

  1982–83

  1,394

  2,719

  4

  1983–84

  1,806

  3,366

  5

  1984–85

  2,034

  3,610

  5

  1985–86

  2,362

  3,974

  5

  1986–87

  2,638

  4,309

  6

  1987–88

  2,977

  4,617

  6

  1988–89

  3,528

  5,128

  7

  1989–90

  3,903

  5,303

  7

  1990–91

  4,680

  5,887

  8

  1991–92

  5,758

  6,808

  8

  1992–93

  7,108

  8,066

  9

  1993–94

  8,126

  8,962

  9

  1994–95

  8,853

  9,618

  10

  1995–96

  9,579

  10,126

  10

  1996–97

  10,133

  10,406

  11

  1997–98

  10,298

  10,298

  11

  1998–99

  10,785

  10,481

  11

  Note:

  1. Detailed Government expenditure plans for future years (1999–2000 to 2000–01) will be published after the completion of the Comprehensive Spending Review.

  2. Grand total social security expenditure includes the cost of administration as well as additional local authority expenditure on Housing, Community Charge and Council Tax Benefits.

  Source:

  1. The figures are taken from the March 1998 Social Security Departmental Report and earlier equivalents.

  Government Agencies and Local Authorities
  Mr. Goggins
  To ask the Secretary of State for Social Security what plans she has to extend joint working between Government agencies and local authorities. [38478]

  Ms Harman
  [holding answer 27 April 1998]: We want to develop a Social Security system that promotes the wider aims of welfare reform: work for those who can; security for those who cannot. We are engaged on a range of initiatives to fulfil these aims and Local Authorities have an important role to play in this process. In particular:
  pilot schemes to test the best ways of getting Income Support to those pensioners who are currently entitled but do not claim their entitlement, using the records we hold on the Department's systems like the Retirement Pension computer and Local Authority systems for Housing Benefit and Council Tax Benefit.the delivery of the Government's National Childcare Strategy. We are about to consult widely about our plans for a National Childcare Strategy and the proposals will set out in detail the important role envisaged for Local Authorities.working in partnership with the Benefit Fraud Inspectorate to actively promote good practice throughout the Social Security system; helping them improve their effectiveness and efficiency, while, at the same time, rooting out fraud.100 developing new ways of working to improve service delivery to clients, and to reduce duplication of effort and unnecessary administration—an Active Modern Service which helps people into work by cutting across boundaries between Agencies and Departments, between the public and voluntary sectors, and between central and local government.helping young people, lone parents, the long-term unemployed, and people with a disability or long-term illness through the New Deal—rebuilding welfare around the work ethic.

  Crisis Loans
  Mr. Gibb
  To ask the Secretary of State for Social Security how many people have gone to interviews for crisis loans but have been unable to make applications due to a shortage of application forms in the last three months. [39774]

  Mr. Denham
  The administration of the Social Fund is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to the hon. Member.

  Letter from Peter Mathison to Mr. Nick Gibb dated 27 April 1998:
  The Secretary of State for Social Security has asked me to reply to your recent parliamentary question asking how many people have gone to interviews for crisis loans but have been unable to make applications due to a shortage of application forms in the last three months.We are not aware of any customers being unable to apply for a crisis loan due to a shortage of application forms in the last three months. However, we are aware that some offices have had difficulty in obtaining supplies of Social Fund Budgeting Loan and Community Care Grant application forms. Contingency plans have been put in place and it is anticipated that this position will be rectified shortly.I hope that this reply is helpful.

  Winter Fuel Payments
  Mr. Gibb
  To ask the Secretary of State for Social Security (1) when the winter fuel payments were completed; [39776]

  (2) how many cases of error there have been to date in the payment of winter fuel payments, in which (a) the cheques have been dated incorrectly and(b) the cheques have been sent to people who were not eligible for them; and what are the administration costs are for correcting these mistakes. [39777]

  Mr. Oaten
  To ask the Secretary of State for Social Security how many cases of incorrect payment of the winter fuel payment have been identified as a result of out of date or incorrect addresses on official records. [39898]

  Mr. Denham
  Winter Fuel payments are one of a number of initiatives the Government have taken to help vulnerable people, especially the elderly, keep warm in the winter. A total of £400 million has been committed for two years (97/98 and 98/99), to help pensioners with fuel bills to pay. This is the first time any Government have provided additional help with heating costs to all pensioners living in the United Kingdom who receive a retirement pension or one of a number of other qualifying benefits.

  The making of this year's payments has been an enormous and unprecedented exercise. In order to establish all eligible pensioners, correctly identify pensioner households, and determine the amount each should receive, it was necessary to correlate data in around 15 million

  101
  computer records, involving 15 qualifying benefits, across nine computer systems. Overall, almost ten million pensioners, in over seven million households, have received a payment.

  The administration of winter fuel payments is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to the hon. Members.

  Letter from Peter Mathison to Mr. Nick Gibb, dated 27 April 1998:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Questions asking when the Winter Fuel Payments were completed and how many cases of error there have been to date in the payment of Winter Fuel Payments, in which (a) the cheques have been dated incorrectly and (b) the cheques have been sent to people who were not eligible for them; and what are the administration costs for correcting these mistakes.The making of Winter Fuel Payments to almost ten million eligible pensioners, in over seven million households, before the end of March 1998 has been a challenging task for the Benefits Agency. This was achieved whilst maintaining normal benefit business.Around one and half million of the poorest pensioners, those receiving Income Support or income-based Jobseeker's Allowance, received their payment of £50 during January. Almost eight and half million other eligible pensioners, for example those in receipt of state Retirement Pension, were issued with a payment of £20 or £10. The issue of these payments was completed by 24 March 1998.To determine whether £20 or £10 was due it has been necessary to establish whether the pensioner lived alone. Where we identified they were the only eligible pensioner in a household they received £20; where they lived with other eligible pensioners each received £10.Legislation requires that to establish whether £10 or £20 is due reference must be made to information held within official Departmental records. All the £20 and £10 payments issued have been based on information which originated from pensioners and is held within these official records.We are aware from subsequent enquiries from some pensioners that the official records available and used by my Agency did not always accurately reflect the correct, current address details. For example, two eligible pensioners living at the same address have differing address details held in official records and despite expecting to receive £10 each, have received £20 each.However, even though we have subsequently updated the address details the payments themselves remain correct. They have been made using official records which were in place at the time eligibility was determined. The legislation is framed in such a way that providing the payments made are supported by records held then there has not been an incorrect payment.We are therefore not aware of any £10 or £20 payments that have been made in error.Due to a computer operator error, 40,801 Income Support payments were sent out with an incorrect issue date on them. All these girocheques were replaced automatically within 72 hours at no cost to the Benefits Agency.Out of the 1.5 million £50 payments made to Income Support and income-based Jobseeker's Allowance pensioners in January we are aware that some payments were incorrectly made or duplicated. A total of 9,357 payments were made where information held within official records indicated payment was inappropriate. A further 211 duplicate payments were made to those pensioners who were in receipt of both Income Support and income-based Jobseeker's Allowance for at least one day during the qualifying week of 5 January 1998. Of the relevant payments this represents a 0.68% error rate.Details of the administration costs for correcting the above mistakes are not available.Thank you for the opportunity to explain the position. I hope that this is helpful.102
  Letter from Peter Mathison to Mr. Mark Oaten, dated 27 April 1998:
  The Secretary of State for Social Security has asked me to reply to your recent parliamentary question asking how many cases of incorrect payment of the winter fuel payment have been identified as a result of out of date or incorrect addresses on official records.The making of Winter Fuel Payments to almost ten million eligible pensioners, in over seven million households, before the end of March 1998 has been a challenging task for the Benefits Agency. This was achieved whilst maintaining normal benefit business.Around one and half million of the poorest pensioners, those receiving Income Support or income-based Jobseeker's Allowance, received their payment of £50 during January. Almost eight and half million other eligible pensioners, for example those in receipt of a state Retirement Pension, were issued with a payment of £20 or £10. These payments were issued during March.To determine whether £20 or £10 was due, an address matching exercise was undertaken using official records held by the Department. This process aimed to establish whether each eligible pensioner was the only person entitled to a payment in the household, or was one of a number of such persons. Where more than one eligible pensioner was identified as living at an address they each received £10; where no address match was made in respect of any eligible pensioner with the address details held for all other eligible pensioners, a payment of £20 was made.The relevant legislation states that official records held by the Department shall be sufficient to determine entitlement to a payment and its amount. All the £20 and £10 payments issued have been based on information which originated from pensioners and is held within these official records.We are aware from subsequent enquiries from some pensioners that the official records available and used by the Benefits Agency did not always accurately reflect the correct, current address details. For example, two eligible pensioners living at the same address have differing address details held in official records and despite expecting to receive £10 each, have received £20 each.However, even though we have subsequently updated the address details the payments themselves remain correct. They have been made using official records which were in place at the time eligibility was determined. The legislation is framed in such a way that providing the payments made are supported by records held then there has not been an incorrect payment. We are still receiving enquiries from pensioners and do not yet know many address records were incorrect at the time payments were made.As all payments have been made in accordance with the legislative requirements there have been no incorrect payments due to address inaccuracies.Thank you for the opportunity to explain the position.

  Benefits Agency
  Mr. Winnick
  To ask the Secretary of State for Social Security if letters written by hon. Members of the Chief Executive of the Benefits Agency are seen by him initially; and what procedures are followed before a reply is sent. [39729]

  Mr. Keith Bradley
  This is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to my hon. Friend.

  Letter from Peter Mathison to Mr. David Winnick, dated 27 April 1998:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking if letters written by honourable Members to the Chief Executive of the Benefits Agency (BA) are seen by him initially; and what procedures are followed before a reply is to be sent.All the letters I receive from MPs command a personal response.103 I do not see all letters from MPs initially. My office handle all my post in the first instance and scrutinise it thoroughly to ensure any deadlines are observed or urgent cases identified and suitably fast tracked in order to give a rapid response.In the vast majority of cases, my office will, on my behalf, ask the BA Parliamentary Correspondence Section to gather sufficient specific information and detailed technical input, provide me with advice on the background to the correspondence and produce a draft reply for me to consider.In order to obtain the required information, the Parliamentary Correspondence Section will invariably refer to the relevant business unit or specialist central unit within the Agency to provide the level of detail required for a complete answer.Once a final reply has been prepared, this and the supporting advice and background information are passed to my support staff for checking to ensure all points raised are covered and the answers are factually and legally correct. The original correspondence, the checked draft and supporting documents are then examined by me and may be amended if required, before the reply is signed and dispatched to the MP.I aim to ensure that all official correspondence is replied to within 20 working days.However, if I am away from the office it is not always possible for me to personally sign the letters within this time scale. On these occasions a Benefits Agency Director will act for me and scrutinise the final draft, amend it as required, before signing it on my behalf.I hope that this reply is helpful.

  Child Support Agency
  Mr. Kirkwood
  To ask the Secretary of State for Social Security (1) what estimate she has made of the value of debts outstanding to the Child Support Agency; what resources are being devoted by the Agency to their recovery; and what is the average age of such debts; [39219]

  (2) how many and what percentage of outstanding debts were recovered by the Child Support Agency over the most recent period for which figures are available; what methods were employed; and in what percentage of cases litigation was pursued; [39222]

  (3) what estimate she has made of the expenditure incurred by the Child Support Agency in the recovery of debts for the most recent period for which figures are available; and what was the total amount recovered as a result. [39225]

  Mr. Keith Bradley
  All children are entitled to the financial and emotional support of both their parents wherever they live. It is not right that so many absent fathers should seek to avoid paying the maintenance which their children are due. An extra £15 million is being invested in the Child Support Agency this year and next, specifically aimed at increasing the amounts of maintenance which are paid.

  The administration of the Child Support Agency is a matter for the Chief Executive, Mrs. Faith Boardman. She will write to the hon. Member.

  Letter from Mrs. Faith Boardman to Mr. Archy Kirkwood, dated 27 April 1998:
  I am replying to your Parliamentary Questions to the Secretary of State for Social Security about Child Support Agency debt.I am not able to provide all of the information in the precise format that you have requested, but have provided as much as is available.104 For accounting purposes, the Agency regards amounts outstanding under full maintenance assessments as the amount of maintenance debt to be pursued. The outstanding full maintenance assessment debt at 31 March 1998 was approximately £695,726,778.The total number of cases with final maintenance assessment debt at 31 March 1998, was 294,745. Information is not available on the average age of debts or the number of cases where the Agency has rescheduled debts: re-scheduled debts are those where the Agency has negotiated an agreement with the absent parent to repay arrears by instalments. The amount of debt re-scheduled (included in the above) at 31 March 1998 was £328,214,264. This amount relates to 197,137 cases and equates to 47 per cent. of the debt and 66 per cent. of the cases.During 1997/98, the number of staff years spent on maintenance collection was 1850 at a total cost of approximately £42 million. 613 of those staff years were spent working directly on debt management, enforcement and tracing (in connection with debt recovery).Where arrears of maintenance exist, the Agency contacts the absent parent to arrange payment. The imposition of a deduction from earnings order is considered when the absent parent defaults on an agreement or refuses to come to an agreement. This step is taken as a last resort and every effort is made to secure the compliance of the absent parent before a deduction from earnings order is issued. During 1997/8 the Agency issued over 50,000 deduction from earnings orders.If all other voluntary methods have failed, and if a deduction from earnings order is not a possibility, then a liability order is applied for. The Agency's intention in such cases is to secure maintenance—it is hoped that the threat of such action will be enough to ensure compliance.Throughout the debt management and enforcement process, absent parents are given every opportunity to make a voluntary arrangement to pay off their child maintenance debt. The majority do agree to make an arrangement and only in a very small minority of cases is legal action actually taken.During 1997/8, the number of cases that were referred to Agency enforcement teams for litigation action was 17,833. The number of liability orders applied for was 2,498 and the number granted was 1,353.The Agency looks to use any and all enforcement methods legally available but experiences the same difficulties as other litigants in enforcing a civil debt. During 1997/8 we have been successful in registering debt by County Court Judgment in 522 cases. Where all other action has failed, the Agency has pursued cases for prosecution; between October 1997 and March 1998 a total of 15 suspended custodial sentences were imposed.The Agency measures its performance in securing maintenance against the target set by the Secretary of State; the target during 1997/8 was for £500 million of child maintenance to be collected or arranged for direct payment from the absent parent to the parent with care. The total achieved was approximately £547 million—the portion that was collected by the Agency was £344 million.I hope this is helpful.

EDUCATION AND EMPLOYMENT

  Lone Parents
  Mr. Hope
  To ask the Secretary of State for Education and Employment what action he is taking to ensure that people in the New Deal for Lone Parents will have access to programmes which can help them get back to work. [40239]

  Mr. Andrew Smith
  The vast majority of adults in the New Deal for Lone Parents are already eligible for the programmes offered by the Employment Service to help people move from welfare dependency into work. In addition, they are eligible for work based training for adults which is managed by Training and Enterprise Councils. I am pleased to announce that we are also
  105
  extending such eligibility to those in the New Deal for Lone Parents claiming benefit for less than 6 months, or who have been out of the labour market for less than 2 years. This means that everyone in New Deal for Lone Parents will be eligible for work based training for adults, Jobclub, Programme Centres, Work Trial, Jobfinder's Grant, Travel to Interview Scheme and Jobplan Workshops.

  Whilst this decision applies to England, colleagues in Scotland and Wales are considering similar action.

  New Deal (Concessionary Fares)
  Mr. Timms
  To ask the Secretary of State for Education and Employment what discussions his Department has had with transport operators about transport concessions for unemployed people on the New Deal programme,(a) in London and (b) across the UK. [40030]

  Mr. Andrew Smith
  We have had successful discussions with transport operators throughout the country to negotiate transport concessions for young unemployed people taking part in the New Deal. From 24 May 1998 the Association of Train Operating Companies (ATOC) members will offer New Deal participants 50 per cent. reductions. The concessions will be available to New Deal participants who will be issued with a New Deal ID card. London Transport have also agreed to offer the reduction. New Deal participants will be entitled to a 50 per cent. discount on most standard tickets and Travelcards on London Underground and London Buses. In addition 55 agreements with bus and coach companies up and down the country, have been signed, resulting in discounts of between 50 per cent. and 80 per cent.

  School Playgrounds (Birmingham)
  Mr. Corbett
  To ask the Secretary of State for Education and Employment if he will list the 28 schools in Birmingham whose unsafe playgrounds are to be resurfaced with funds from the New Deal for Schools capital programme. [40090]

  Mr. Byers
  The 28 schools are:

  Hallmoor Special

  Longwill Special

  Castle Vale Nursery

  Featherstone Nursery

  Perry Beeches Nursery

  Audley Infants

  Audley Juniors

  Calshot Primary

  Firs Infant

  Green Meadow Primary

  Heathlands Primary

  Jervoise Primary

  King David Primary

  Pagenel Infant

  Pagenel Junior

  Pegasus Primary

  Perry Beeches Infant

  Perry Beeches Junior

  Sladefield Infant

  St. Laurence Junior

  106

  Timberley Primary

  Ward End Primary

  West Heath Infant

  Westminster Primary

  Wheelers Lane Junior

  Wilkes Green Junior

  Yardley Wood Primary

  Yenton Junior.

  Teacher Training (Sussex)
  Mr. Lepper
  To ask the Secretary of State for Education and Employment what assessment he has made of the impact on opportunities for teachers' professional development and in-service training in the Brighton and Hove, East and West Sussex and neighbouring local education authorities areas of the provisional allocation of Teacher Training Agency Inset Funds announced in February. [39883]

  Ms Estelle Morris
  I understand that the Teacher Training Agency reached its decisions on the allocation of the relevant funding on the basis of competitive bids from providers to deliver in-service training for teachers judged according to their quality in meeting identified national priorities. The Agency has issued contracts for the academic year 1998–99. It will be considering how to take account of regional impact in allocating funding for the interim bidding rounds in 1999–2000 and 2000–01. Final allocations for these and later years will be determined by the Agency in due course, taking account of the representations which have been received.

  Alcohol Misuse
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what assessment he has made of the recommendations of the Task Force On Under-age Alcohol Misuse on(a) alcohol education at primary school level and (b) within teacher training courses. [39590]

  Ms Estelle Morris
  We have considered very carefully all of the education recommendations of the Task Force report. Alcohol education at primary school level is already included in the requirements for National Curriculum science at key stage 2 (7–11 year olds) as part of the programme of study covering aspects of drug education. The new curriculum for teacher training requires all teachers to address pupils' personal, moral and social development; and because of the National Curriculum requirements for drug education, all primary school teachers and secondary school science teachers will be trained in it. We continue to encourage local education authorities and individual schools to improve their coverage of alcohol issues.

WALES

  Prescription Charges
  Mr. Denzil Davies
  To ask the Secretary of State for Wales (1) following the judgment of the European Court of Justice of 19 October 1995 on prescription charges for men and women at the age of 60 years or over, how many appeals against his Department's restriction of the effect of the judgment to the period commencing 20 July 1995 have been received; and how many were successful; [39348]
  107
  (2) how many eligible claims based on the purchase of pre-payment certificates his Department has received; and what has been the total cost to date of meeting the said claims. [39350]

  Mr. Win Griffiths
  The information on how many appeals have been received against the restriction of the effect of the judgment to the period commencing 20 July 1995 could be provided only at disproportionate cost. One refund was paid for the period before 20 July 1995.

  Claims were handled on a UK basis by the Prescription Pricing Authority. The Authority paid £223,670 on 4,695 prescription prepayment certificate claims originating in Wales. The Authority paid a further £3,817 on 69 combined prescription charge refund and prescription prepayment certificate claims. We estimate that Health Authorities paid approximately £23,610 on prescription prepayment certificate claims, but information is not available centrally on the numbers of these claims.

  GPs (Out-of-hours Services)
  Mr. Wigley
  To ask the Secretary of State for Wales what guidelines he has issued to general practitioners in Wales with regard to the level of emergency cover needed out of hours and at weekends and bank holidays; what surveys he has undertaken to ascertain the effectiveness of such cover; and if he will make a statement. [39643]

  Mr. Win Griffiths
  It is for individual Health Authorities to arrange for the delivery of general medical services in consultation with general practitioners within their area.

  In 1995, a number of changes were introduced which directly affected the provision of out-of-hours emergency care by GPs. The changes included the restructuring of the payment system to GPs, changes to the GPs' terms of service and the provision of an Out of Hours Development Fund.

  The intention of this Fund is to secure improvements in out-of-hours services, reduce pressure on individual GPs, and/or make more cost effective use of their time.

  The Welsh Office has commissioned an evaluation of the out-of-hours arrangements in Wales. The report is expected shortly.

  Local Government Modernisation
  Mr. Gareth Thomas
  To ask the Secretary of State for Wales when he will publish further papers in the series "Modernising Local Government in Wales"; and if he will make a statement. [40330]

  Mr. Win Griffiths
  I have today published three further papers in this series. The paper "Improving local services through best value" takes forward the Government's commitment to introduce a comprehensive regime to ensure continuous improvement in the performance of local services. Best value will also provide a much greater opportunity for local people to comment on how local services should be delivered in their areas. Best value will cover all local services and will, in due course, replace the existing compulsory competitive legislation which applies to only some local services.
  108
  The paper "Improving local accountability for council tax" sets out proposals for strengthening local accountability for levels of council tax and reducing central government's involvement in decisions on council tax levels.

  The paper "Business rates" sets out the arguments for introducing some local discretion over the business rates in the context of a strong and effective relationship between local councils and business.

  The papers are closely linked because the duty to secure best value in service delivery is a key measure in the effort to increase local accountability for financial issues. We look forward to receiving comments on all these proposals.

  Responses to the consultation exercise will be drawn on to prepare a White Paper on Local Government in Wales, which will be published in the summer.

  National Assembly
  Mr. Edwards
  To ask the Secretary of State for Wales if he will make a statement about a structure for salaries, allowances, gratuities and pensions for members of the National Assembly for Wales. [40331]

  Mr. Ron Davies
  In accordance with the undertaking made to Parliament and in the White Paper "A Voice for Wales", I have written to the Chairman of the Senior Salaries Review Body inviting him and his colleagues to consider and make recommendations on the salaries, allowances, gratuities and pensions which would be payable to members of the National Assembly for Wales. My letter sets out the full remit I am asking the SSRB to accept and I have arranged for copies to be placed in the Libraries of the House.

SCOTLAND

  Hospital Waiting Lists
  Mr. Wallace
  To ask the Secretary of State for Scotland how many new patients seeking outpatient consultations in 1997 were required to wait more than nine weeks for an appointment; and what proportion of the total number of referrals these patients represent in respect of(a) Scotland and (b) each health board of residence. [38168]

  Mr. Galbraith
  [holding answer 8 April 1998]: The number of new outpatients referrals and the number and percentage of these who waited more than nine weeks for an appointment, by Health Board of residence, in the year to 31 December 1997, is shown in the table.

  NHS in Scotland—first consultant outpatient appointments of Scottish residents. Number and percentage who waited over nine weeks for an appointment during year ended 31 December 1997, by area of residence.1

  Area of residence

  Total number of referrals2

  Number who waited over 9 weeks until their appointment

  Percentage who waited over 9 weeks until their appointment

  Argyll and Clyde

  69,680

  21,872

  31.4

  Ayshire and Arran

  45,525

  10,808

  23.7

  Borders

  20,661

  4,375

  21.2

  Dumfries and Galloway

  10,791

  2,562

  23.7

  Fife

  67,753

  25,740

  38.0

  Forth Valley

  47,970

  13,728

  28.6

  109

  NHS in Scotland—first consultant outpatient appointments of Scottish residents. Number and percentage who waited over nine weeks for an appointment during year ended 31 December 1997, by area of residence.1

  Area of residence

  Total number of referrals2

  Number who waited over 9 weeks until their appointment

  Percentage who waited over 9 weeks until their appointment

  Grampian

  89,898

  23,063

  25.7

  Greater Glasgow

  215,133

  77,015

  35.8

  Highland

  41,129

  9,932

  24.2

  Lanarkshire

  109,153

  38,891

  35.6

  Lothian

  153,350

  40,922

  26.7

  Orkney

  2,205

  188

  8.5

  Shetland

  3,832

  454

  11.9

  Tayside

  88,668

  23,593

  26.6

  Western

  3,807

  816

  21.4

  Scotland

  969,555

  293,959

  30.3

  1Provisional.

  2With effect from September 1997, monitoring of performance against the nine week target for new outpatient appointments is based on referrals from General Medical and General Dental Practitioners only.

  NHS in Scotland—first consultant outpatient appointments of Scottish residents. Number and percentage who waited over nine weeks for an appointment by area of residence1

  Area of residence

  Quarter ended 30 September 1997

  Quarter ended 31 December 1997

  Total number of referrals2

  Number who waited over 9 weeks untill their appointment

  Percentage who waited over 9 weeks untill their appointment

  Total number of refferals2

  Number who waited over 9 weeks untill their appointment

  Percentage who waited over 9 weeks until their appointment

  Argyll and Clyde

  14,622

  5,034

  34.4

  14,425

  4,599

  31.9

  Ayrshire and Arran

  18,915

  5,010

  26.5

  19,462

  4,670

  24.0

  Borders

  5,259

  1,126

  21.4

  5,011

  1,112

  22.2

  Dumfries and Galloway

  4,846

  1,412

  29.1

  5,039

  1,351

  26.8

  Fife

  18,081

  7,275

  40.2

  17,666

  7,000

  39.6

  Forth Valley

  12,074

  3,908

  32.4

  12,617

  4,191

  33.2

  Grampian

  22,455

  6,657

  29.7

  22,766

  6,284

  27.6

  Greater Glasgow

  54,425

  20,802

  38.2

  57,732

  21,942

  38.0

  Highland

  10,669

  2,719

  25.5

  10,357

  2,693

  26.0

  Lanarkshire

  27,538

  10,033

  36.4

  29,993

  11,528

  38.4

  Lothian

  38,627

  11,433

  29.6

  38,687

  11,279

  29.2

  Orkney

  591

  91

  15.4

  680

  40

  5.9

  Shetland

  983

  110

  11.2

  1,066

  98

  9.2

  Tayside

  22,848

  6,495

  28.4

  21,511

  5,902

  27.4

  Western Isles

  1,089

  251

  23.1

  263

  53

  20.2

  Scotland

  253,022

  82,356

  32.6

  257,275

  82,742

  32.2

  1Provisional.

  2With effect from September 1997, monitoring of performance against the nine week target for new outpatient appointments is based on referrals from General Medical and General Dental Practitioners only.

  Source:

  ISB Scotland.

DUCHY OF LANCASTER

  Departmental Personnel
  Mr. Hancock
  To ask the Chancellor of the Duchy of Lancaster how (1) many former Royal Navy officers of the rank of rear admiral or above are currently employed by Government departments; and what their roles are; [39937]

  (2) how many former Army officers of the rank of brigadier or above are currently employed by Government departments; and what their roles are; [39938]

  (3) how many former Royal Air Force officers of the rank of air commodore or above are currently employed by Government departments; and what their roles are. [39939]
  110
  Source:

  ISD Scotland

  Mr. Wallace
  To ask the Secretary of State for Scotland how many new patients seeking outpatient consultations had been waiting for more than nine weeks for an appointment on(a) 30 September 1997, (b) 31 December 1997 and (c) 31 March 1998 in respect of (i) Scotland and (ii) each health board of residence. [38169]

  Mr. Galbraith
  [holding answer 8 April 1998]: Unlike inpatient and day case activity, there is no centrally held list of patients waiting for outpatient appointments on a given date. Progress is monitored on the basis of activity in each quarter. The number of new outpatient referrals and the number and percentage of these who waited more than nine weeks for an appointment in the quarters ended 30 September 1997 and 31 December 1997, by Health Board of residence, is given in the table. Information for the quarter ended 31 March 1998 is not yet available.

  Dr. David Clark
  The information requested is not held centrally.

  Buying Agency
  Mr. Dobbin
  To ask the Chancellor of the Duchy of Lancaster what targets he has set for the Buying Agency for 1998. [40302]

  Mr. Kilfoyle
  I have set the Agency the following targets for 1998.
  Financial

  to generate a return on capital employed of 8 per cent.;

  to increase total sales by 2 per cent. on an accruals basis;

  Productivity

  to reduce the cost per £ of total savings by 2.5 per cent. on 1997 outturn;

  111

  to maintain the cost per £ of total sales at 1997 outturn;

  Customer Satisfaction

  to resolve 95 per cent. of customers' complaints received in the year within 1 month, except where explicitly agreed otherwise by the customer;

  to deliver 95 per cent. of direct orders by the due date;

  Internal Quality

  to secure re-accreditation under ISO 9001;

  Environmental

  to reduce the Agency's electricity consumption per member of staff at its headquarters by 3 per cent.

MINISTER WITHOUT PORTFOLIO

  Millennium Dome
  Mr. Dalyell
  To ask the Minister without Portfolio, and in respect of the Millennium Experience what studies he has evaluated into the archaeological significance of the site of the Millennium Experience. [37516]

  Mr. Mandelson
  [holding answer 20 April 1998]: The Museum of London Archaeological Service (MOLAS) was commissioned by British Gas, the original owners of the site, to produce an assessment of the area of the site now occupied by the Dome. This report was issued in 1993 and concluded that this was not a site of prime archaeological significance. English Partnerships, the Government's urban regeneration agency and current owners of the site, have appointed MOLAS to carry out a watching brief during the works on site. This activity is on-going.

  A photographic survey and recording exercise of the now demolished Phoenix Wharf on the Greenwich peninsula, including a foreshore survey, were carried out by MOLAS and the Thames Archaeological Survey. English Heritage have been consulted throughout and is content with the approach being taken.

  Public Appointments
  Mrs. Lait
  To ask the Minister without Portfolio how many of the appointments to public bodies which he has made since 1 May 1997 have been from the public appointments unit list. [33240]

  Mr. Mandelson
  I have made five appointments to the New Millennium Experience Company, formerly known as Millennium Central Ltd., since 1 May 1997. None of the successful candidates were from the Public Appointments Unit List.

AGRICULTURE, FISHERIES AND FOOD

  Lindane (Breast Cancer)
  Mr. Stinchcombe
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the possible link between Lindane and incidents of breast cancer. [38053]

  Mr. Rooker
  The Department of Health's independent Committee on Carcinogenity of Chemicals in Food, Consumer Products and the Environment (COC) reviewed the available data on breast cancer in women and levels of lindane in serum and breast fat tissue in 1995. The Committee concluded that there was no clear evidence of an association between serum and fat levels of lindane and breast cancer at the present time, and recommended that the 112
  matter be kept under review. The Department of Health is currently conducting a search for any new scientific data on lindane and if fresh information is uncovered, this will be referred to the COC for further consideration.

  Bees
  Dr. Gibson
  To ask the Minister of Agriculture, Fisheries and Food (1) what guidance he has given as to which drugs are most appropriate for treating varroa disease in bees; [39359]

  (2) if he will list the preparations known by the Veterinary Medicines Directorate to be used to combat varroa in bees; and which of these preparations the Veterinary Medicines Directorate has concerns about. [39360]

  Mr. Rooker
  As my hon. Friend the Parliamentary Secretary indicated in his statement on beekeeping on 22 April 1998,Official Report, column 772, we are considering this matter.

  BSE
  Dr. Gibson
  To ask the Minister of Agriculture, Fisheries and Food if he will estimate the amount of money spent by the Government on research(a) based on the hypothesis that the only factor in BSE causation is prion protein transmitted via contaminated foodstuffs and (b) examining other possible hypotheses for BSE causation and other contributory factors. [39362]

  Mr. Rooker
  Funding on Transmissible Spongiform Encephalopathy (TSE) related research across all Government Departments is expected to be about £69 million during the three year period 1997–98 to 1999–2000. The national research effort is co-ordinated via the Joint TSE R&D Funders Co-ordination Group on whose figures this reply is based.

  As the causative agents responsible for TSE diseases are unknown, most of the research programme makes no assumptions on this point, but rather tries to establish what the causative agents and associated factors are, how they may be identified, how they are transmitted, what is the pathogenesis of the disease caused, how many cases of each TSE disease will occur and over what timescale. Whatever the causative agent is eventually shown to be, the most robust epidemiological evidence to date indicates that the most significant route of transmission to cattle was via contaminated feed.

  The following figures have been derived from information on TSE research funding across all Government departments. The majority of projects are not based on a single premise of cause; those which relate to identifiable causes, other than the prion hypothesis, or the investigation of causal and transmission mechanisms are included in these figures.

  In 1997–98 alone the total Government spend on TSE research was estimated at £18.82 million of which £3.25 million involved investigation of causal and transmission mechanisms. The projected spend for 1998–99 is £23.27 million of which £3.23 million is so far allocated to this type of research.

  Fishing Industry
  Mr. Andrew George
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the likely impact of EU enlargement on the British fishing fleet and the British fishing industry. [39702]

  Mr. Morley
  My assessment is that maintenance of the principle of relative stability will ensure that enlargement of the EU has minimal effect on the British fishing fleet and industry.

  Fur Farming
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food if he will list the specific issues his Department assesses to require resolution before fur farming can be made illegal. [39778]

  Mr. Morley
  [holding answer 27 April 1998]: Any prohibition on fur farming must be implemented in accordance with national and international law if it is to achieve its objective. We are currently considering these issues and an announcement will be made once we have decided how to proceed. There would be public consultation on any proposals for legislation to ban fur farming.

  Cattle Movement Service
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food how much rent will be paid by the British Cattle Movement Service in each of the first 15 years of its locations in Workington. [39230]

  Dr. John Cunningham
  My Department has a ground lease for the BCMS site at Workington which costs £3,500 per annum, subject to any rent reviews in that period. This lease covers land upon which we have erected our own building.

  Under a separate lease for a building which we have refurbished, the Ministry will pay no rent for the first three years. From 2001, we will pay a market rent for the building. The level of the rent will be the subject of negotiation at the time but it is currently estimated to be about £50,000 per annum.

  Both leases are renewable in 2007 at which time the rents would also be reviewed.

  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food if he will place in the Library the details of his Ministry's cost benefit study undertaken to determine the site of the British Cattle Movement Service. [39232]

  Dr. John Cunningham
  A copy of the investment appraisal has been placed in the Library of the House.

  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food if he will list the criteria which he employed in determining the locations of the British Cattle Movement Service headquarters; and how each of the possible sites involved in the selection process was assessed against each of the site selection criteria. [39229]

  Dr. John Cunningham
  The criteria included factors such as cost, ease of recruitment and retention of staff, and whether sufficient space was available. As explained in my answer to the right hon. Member of 25 February 1998,Official Report, column 274, some 80 sites were considered, of which 7 were visited and 3 shortlisted.
  114
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food how much rent was assumed in his Ministry's cost benefit analysis on the location of the British Cattle Movement HQ for each of the first 15 years of the project for(a) Manchester, (b) Guildford and (c) Workington. [39231]

  Dr. John Cunningham
  The figures for annual accommodation costs used in the investment appraisal, including estimated rent or capital charge, and rounded to the nearest thousand points were(a) £306,000 for Manchester (b) £315,000 for Guildford and (c) £199,000 for Workington.

HEALTH

  Private Finance Initiative
  Mr. Rammell
  To ask the Secretary of State for Health how many hospital schemes have been approved under the NHS PH scheme since 1 May 1997. [38689]

  Mr. Milburn
  25 major hospital schemes have been given approval to proceed under the Private Finance Initiative in the National Health Service since 1 May 1997, of which 5 have already signed final contracts and begun building.

  Prescription Fraud
  Mr. Syms
  To ask the Secretary of State for Health what representations he has received regarding the use of bar coding to reduce prescription fraud. [38693]

  Mr. Milburn
  We have received 3 letters, two supporting the use of barcodes and one against. Barcodes would primarily be used to aid the electronic transmission of prescription data. A draft policy document and appraisal framework for electronic data interchange for prescriptions was issued for consultation by the National Health Service Executive on 21 October 1997. A final version will be issued in the near future.

  NHS Staff (Consultation)
  Mr. Best
  To ask the Secretary of State for Health what proposals he has for annual surveys of staff views in the NHS. [38694]

  Mr. Milburn
  We have made clear that we wish to see measurable improvements in the treatment and involvement of National Health Service staff. Staff surveys are important in providing staff with the opportunity to have their say on how they are managed.

  Social Services Inspectorate
  Mr. Chope
  To ask the Secretary of State for Health if he will list the further reports which the social services inspectorate will publish before 7 May 1998. [38695]

  Mr. Boateng
  Two local inspection reports will be published by the Social Services Inspectorate before 7 May. They are an Inspection on Services to Carers in South Gloucestershire and, secondly, a report on the work of the Regulation and Inspection Unit in Surrey.

  Smoking
  Mr. Canavan
  To ask the Secretary of State for Health what measures he is taking to reduce the incidence of tobacco-related illnesses and deaths. [38696]

  Ms Jowell
  The Government's comprehensive strategy to reduce smoking and smoking related deaths will be set out in the Tobacco Control White Paper to be published later this year.

  In 1998/99, the Government are funding a £1 million teenage anti-smoking promotion campaign called "Respect", and a Health Education Authority adult smoking education campaign costing £5.5 million. As part of the campaign, £700,000 is being given to Quit to operate the Quitline—a telephone helpline—which offers smoking cessation advice, counselling and support.

  In addition, a wide range of health professionals, notably general practitioners, routinely offer cessation advice and support.

  Mrs. Humble
  To ask the Secretary of State for Health what support the Government are giving to the Quitline smoking cessation helpline. [38709]

  Ms Jowell
  In 1998–99, Quit will receive £700,000 under contract from the Health Education Authority to run the smoking cessation helpline. This funding is made available from the Government's smoking education budget of £5.5 million.

  On 24 April Quitline celebrated the 1 millionth call to its helpline at an event I attended.

  NHS Direct
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Health what is his timetable for introducing NHS Direct nationally. [38697]

  Mr. Milburn
  The White Paper "The New NHS, Modem, Dependable" published on 9 December last year made clear our intention to have a full national NHS Direct Service in place by the end of the year 2000. Initial pilots covering over 1 million people were launched on 23 March.

  Long-term Care
  Mr. Keith Simpson
  To ask the Secretary of State for Health if he will make a statement on the future of long-term care. [38698]

  Mr. Day
  To ask the Secretary of State for Health if he will make a statement on the future of long-term care. [38701]

  Mr. Boateng
  We have already established a Royal Commission on long-term care for the elderly and issued priorities and planning guidance on continuing health care needs for the National Health Service; a long-term care charter is being developed and a social services White Paper will be published later this year.

  Resource Allocation
  Mr. Streeter
  To ask the Secretary of State for Health if he will make a statement on the allocation of resources for the winter period of 1997–98. [38699]
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  Mr. Milburn
  Last October we provided an additional £269 million to the National Health Service in England for use in the 1997–98 financial year. As part of this programme, nearly 1,500 initiatives were funded to ease pressures on the health and social care system during the winter period.

  Sir Sydney Chapman
  To ask the Secretary of State for Health if he will make a statement about the allocation of resources to health authorities. [38706]

  Mr. Milburn
  We are committed to distributing hospital and community health service resources to health authorities fairly using a weighted capitation formula. This is based on the healthcare needs of the local population.

  A new advisory committee on resource allocation has been established further to improve the arrangements for distributing resources for both primary and secondary care.

  Waiting Lists
  Mrs. Brinton
  To ask the Secretary of State for Health if he will make a statement on the number of patients in the NHS in England who were having to wait more than 18 months for treatment as of 31 March 1997. [38700]

  Mr. Milburn
  Health authority based figures show that 143 patients were having to wait more than eighteen months for admission to hospital on 31 March 1997. Our commitment was to eliminate such unacceptably long waiting times. Provisional management information indicates that on 31 March 1998 there were no English residents waiting more than 18 months for admission to hospital.

  "Changing Childbirth"
  Audrey Wise
  To ask the Secretary of State for Health if he will make a statement on the implementation of "Changing Childbirth"; and what plans he has for the future of the pilot schemes(a) at Hammersmith/Queen Charlotte's and (b) elsewhere. [38702]

  Mr. Boateng
  Woman-centred maternity care is an important principle of service planning in the National Health Service. "Changing Childbirth" has promoted multidisciplinary co-operation among professionals and encouraged the involvement of users in shaping maternity services. The shift of focus towards outcomes for users of services, as emphasised in our White Paper "The New NHS", will ensure that the ethos of "Changing Childbirth" is maintained.

  The midwifery pilot scheme at Hammersmith, Queen Charlotte's and Chelsea Hospitals is being reviewed by Ealing, Hammersmith and Hounslow Health Authority and the Hammersmith Hospital National Health Service Trust as part of a wider review of maternity services. There were a large number of local maternity initiatives resulting from "Changing Childbirth". We do not have details of those which were not centrally funded. We will be publishing a report within the next few months which summarises the "Changing Childbirth" development projects funded by the Department.

  Recruitment and Retention
  Mr. Jim Cunningham
  To ask the Secretary of State for Health what action he is taking to improve NHS staff recruitment and retention. [38703]

  Mr. Milburn
  We are employing a twin strategy by increasing training levels and investing in initiatives to improve the recruitment, retention and return to practice of trained staff and encourage flexible and family-friendly ways of working. We have included provision for an extra 990 new doctor training places and 1,700 new nurse training places. New student funding arrangements are being introduced which will mean a better deal for all health care professional students. From September 1998 the non-means tested bursary payable to students on nursing and midwifery diploma courses will increase by 2.75 per cent. We have also made available £14.4 million to support recruitment and retention initiatives such as return to practice programmes. A £1.2 million national nursing advertising campaign is currently underway. Early results show that the campaign has been running since the beginning of January and has so far attracted 12,500 responses, which is very encouraging. In addition a resource pack was made available in March to help local managers develop and expand their recruitment and retention programmes, using the momentum built up by the national nursing publicity campaign. Although the pack concentrates on nursing, the key messages cross all professions.

  Community Hospitals
  Mr. Rendel
  To ask the Secretary of State for Health if he will make a statement on policy on community hospitals. [38704]

  Mr. Milburn
  As part of our plans for modernising the National Health Service we shall be working with health authorities and the professions to determine the best configurations of services, including the balance of acute and community services.

  The future role of community hospitals will be part of this important debate.

  National Blood Authority
  Maria Eagle
  To ask the Secretary of State for Health what plans he has to reform the management and administration of the National Blood Authority. [38705]

  Mrs. Ellman
  To ask the Secretary of State for Health if he will make a statement on the Cash report and the future of the blood service in Merseyside. [38414]

  Mr. Milburn
  I refer my hon. Friends to the statement made by my right hon. Friend the Secretary of State on 8 April 1998,Official Report, column 353.

  Millennium Compliance
  Mr. David Atkinson
  To ask the Secretary of State for Health if he will make a statement on progress towards millennium readiness of computer systems and embedded chips within the NHS. [38707]

  Mr. Milburn
  Over 99 per cent. of all National Health Service organisations have now submitted reports to their regional offices in response to the 31 March deadline detailed in executive letter EL(97)59. This executive letter,118
  issued last October to all chief executives, required that the submission include detailed project plans, inventories and cost estimates. It is anticipated that, by the end of April, submissions will have been received from the very few remaining NHS organisations.

  New Deal
  Mr. Sawford
  To ask the Secretary of State for Health what proposals he has to extend the new deal to the NHS. [38708]

  Mr. Milburn
  I refer my hon. Friend to the reply given today to my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw).

  Teaching Hospitals (West Midlands)
  Mr. Purchase
  To ask the Secretary of State for Health if he will make it his policy to increase the number of teaching hospitals in the west midlands. [38710]

  Mr. Milburn
  Since 1993, changes in the delivery of the undergraduate medical curriculum have spread teaching to a wider variety of settings than the traditional teaching hospitals.

  Clinical training for medical undergraduates is currently carried out in twenty eight trusts and eighty two general practices in the west midlands. The selection of suitable venues for training is for local decision. There is no evidence that there are insufficient placements to meet the demand for clinical training in the west midlands region at the present time.

  Rural Pharmacies
  Mr. Todd
  To ask the Secretary of State for Health what steps he has taken to secure the provision of rural pharmacies. [38690]

  Mr. Milburn
  All health authorities are required by law to arrange access to adequate pharmaceutical services, and all health authorities do so. To help them, we have the Essential Small Pharmacies Scheme which guarantees a minimum level of National Health Service income for pharmacies more than one kilometre from the next pharmacy.

  Ovarian Cancer
  Ms Stuart
  To ask the Secretary of State for Health what guidelines are issued to health authorities for the use of Taxol in the treatment of ovarian cancer. [38691]

  Mr. Boateng
  The Department of Health looks to the medical profession to formulate guidelines for treatment. Clinical trials are still underway on the place of "Taxol" in the treatment of ovarian cancer. I understand that the latest results are due to be presented at the meeting of the American Society of Clinical Oncology next month and we look forward to discussion with the profession after that. It would be premature to issue guidelines for its use until sufficient evidence is available.

  Controlled Drugs
  Mr. Clappison
  To ask the Secretary of State for Health what expenditure his Department has(a) incurred and (b) planned for addressing the health problems created by the use of controlled drugs which was not planned for on 1 May 1997. [39392]
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  Mr. Milburn
  Expenditure in 1997/98 was within the framework of existing plans. For 1998/99, the Department has, within existing resources increased the special drug misuse allocation to health authorities for the development of services for drug misusers from £37.2 million to £41.3 million; agreed to grants of £1.3 million for a number of voluntary organisations carrying out drug treatment and prevention work under Section 64 of the Health Services and Public Health Act 1968; placed a £2 million contract with the Health Education Authority; and planned to invest a further £3 million on drug prevention activity during the course of the year.

  My right hon. Friend the President of the Council announced publication of the new drugs strategy on 27 April 1998, Official Report, columns 26–41. All future anti-drugs activity and expenditure by the Government will then be developed in accordance with this strategy.

  Prescription Charges
  Mr. Denzil Davies
  To ask the Secretary of State for Health (1) following the judgment of the European Court of Justice of 19 October 1995 on the equalisation of prescription charges for men and women at the age of 60 years or over, how many appeals against his Department's restriction of the effect of the judgment to the period commencing 20 July 1995 have been received; and how many were successful; [39347]

  (2) following the judgment of the European Court of Justice of 19 October 1995, on prescription charges for men and women aged 60 years and over, how many eligible claims based on the purchase of pre-payment certificates his Department has received; and what has been the total cost to date of meeting the said claims. [39349]

  Mr. Milburn
  The information on how many appeals have been received against the restriction of the effect of the judgment to the period commencing 20 July 1995 could be provided only at disproportionate cost. Two refunds were paid for the period before 20 July 1995.

  The Prescription Pricing Authority authorised £2,529,016 on 54,722 prescription prepayment certificate claims. The Prescription Pricing Authority authorised a further £50,948 on 901 combined prescription charge refund and prescription prepayment certificate claims. We estimate that health authorities authorised some £437,000 on prescription prepayment certificate claims, but information is not available centrally on the numbers of these claims.

  Kingston and West Middlesex Hospitals
  Dr. Cable
  To ask the Secretary of State for Health what changes have taken place in staffing levels since 1 May 1997 in respect of(a) administrative personnel and (b) nursing staff in (i) Kingston Hospital and (ii) West Middlesex Hospital. [39476]

  Mr. Milburn
  Figures on staffing levels in National Health Service trusts from the Department's September 1997 non-medical workforce census are not yet available.

  The hon. Member may wish to contact Sir William Rous, Chairman of Kingston Hospital NHS Trust and Jane Kelly, Chairman of West Middlesex Hospital NHS Trust for details.

  Hip Replacements
  Mrs. May
  To ask the Secretary of State for Health if he will list the waiting lists for hip replacement operations by hospital trust on(a) 31 March 1997 and (b) 31 March 1998. [39618]

  Mr. Milburn
  Waiting list information collected centrally is specialty based and does not show numbers of patients waiting for particular procedures.

  Mr. Bob Russell
  To ask the Secretary of State for Health (1) what is the Government's target for the maximum period for which a patient should have to wait for a hip replacement operation; [39955]

  (2) how many patients in the Colchester constituency are awaiting hip replacement operations; what is the average length of time a patient has to wait; and what measures are to be taken to reduce the waiting time. [39954]

  Mr. Milburn
  The information requested about patients awaiting hip replacement operations in the Colchester constituency area is not available centrally. Last November my right hon. Friend the Secretary of State promised that by 31 March 1998 no patient would wait more than eighteen months for admission to hospital. Provisional management information indicates we achieved this in England. We are also committed to reducing waiting lists to 100,000 below the level we inherited by the end of the present Parliament. As the numbers of patients awaiting admission to hospital start to reduce, average waiting times should also begin to fall.

  Breast Cancer
  Mr. Stinchcombe
  To ask the Secretary of State for Health how many breast screening units(a) failed to reach the national minimum standard for breast cancer detection in 1997, (b) reached the national minimum standard for breast cancer detection in 1997 but failed to reach the national expected standard and (c) reached the national expected standard for breast cancer detection in 1997; and if he will indicate for (a) to (c) how many of the units used (i) single and (ii) two view mammography at incident breast screening rounds. [39564]

  Mr. Boateng
  Annual data on the breast screening programme are for the period 1 April to 31 March. Data for 1997–98 will not be available until early 1999, when all women screened between 1 April 1997 and 31 March 1998 will have undergone appropriate follow-up and cancer detection rates identified.

  For figures for 1996–97 I refer my hon. Friend to the reply I gave on 7 April 1998, Official Report, columns 193–94.

  Mr. Stinchcombe
  To ask the Secretary of State for Health what assumptions are made about take-up rates in the over 65 years age group for breast cancer screening when the Government allocate funding to health authorities. [39562]

  Mr. Boateng
  The National Health Service breast screening programme invites women aged 50–64 for screening by mammography every three years, with screening for older women available three-yearly on request.
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  Health authorities are given general allocations to commission all hospital and community health services for their resident population.

  It is for individual health authorities to decide the level and type of services commissioned, in partnership with local general practitioners and through consultation with other agencies and local people, taking account of local circumstances and national policies and priorities.

  Diabetes
  Mr. Alan Campbell
  To ask the Secretary of State for Health what proposals he has to make pen needles for insulin dependent diabetics available on prescription. [39725]

  Mr. Milburn
  We are currently considering whether general practitioners should be allowed to prescribe insulin injection pen needles on the National Health Service. As I announced on 20 November 1997,Official Report, column 529, I have asked officials in the Department to examine, in discussions with interested parties if necessary, whether we can be more certain on the costs. They have held a number of meetings with the major suppliers.

  Mentally Disordered Patients (Deaths)
  Mr. Hurst
  To ask the Secretary of State for Health what is the average length of time between the start of an inquiry and the publication of the report for inquiries established under HSG (94)27 of 10 May 1994 into deaths involving mentally-disordered patients. [39744]

  Mr. Boateng
  This information is not held centrally. The length of time taken by independent inquiries set up under HSG(94)27 can vary considerably, depending, for example on the complexity of a particular case, the range of services involved and the difficulty in obtaining evidence.

  Non-UK Citizens
  Dr. Ladyman
  To ask the Secretary of State for Health what(a) regulations and (b) guidelines govern the treatment of non-UK citizens by the National Health Service; and what checks are made to ensure that only those entitled to treatment receive it. [39734]

  Mr. Milburn
  Regulations on the subject of charges for accommodation, services and other facilities provided as part of the health service in respect of people not ordinarily resident in the United Kingdom (overseas visitors) were first made in 1982. The current Regulations are The National Health Service (Charges to Overseas Visitors) Regulations 1989 (Statutory Instrument 1989/306) as amended by The NHS (Charges to Overseas Visitors) Amendment Regulations 1991 (SI 1991/438) and The NHS (Charges to Overseas Visitors) (Amendment) Regulations 1994 (SI 1994/1535). These Regulations apply to England and Wales.

  A manual of guidance was issued to all hospitals in 1988 with additional information provided in 1990, 1991 and 1994. The manual includes details of a two stage process for identifying patients who may be subject to the Overseas Visitors Regulations. Stage one should be applied to all patients attending hospital for the first time or commencing a new episode of treatment (unless the treatment is one which is specifically excluded from
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  charges). The majority of patients will be found to be not liable for charges at stage one. Stage two interviews should be carried out by an officer of supervisory or equivalent grade and are designed to establish the patient's status with regard to the Overseas Visitors Regulations. Copies of the manual of guidance are available in the Library.

  CD-ROMs
  Mr. Gordon Prentice
  To ask the Secretary of State for Health if he will provide a discount to public libraries on the Health CD-ROM disk 5 due to be published in June; and if he will make a statement. [39908]

  Mr. Milburn
  With effect from its next issue (No. 5 provisionally due June 1998) Health-CD will be covered by the public library subsidy scheme administered by Her Majesty's Stationery Office (HMSO). This scheme enables local authority funded public libraries to benefit from a 50 per cent. discount, applied at the point of sale.

  Social Care
  Mr. Jenkin
  To ask the Secretary of State for Health how many social care waiters there are in acute hospitals in Essex; and what the figure is for each of the home counties and each London borough. [40094]

  Mr. Milburn
  The information requested is not available in the format requested.

  Mr. Jenkin
  To ask the Secretary of State for Health what percentage of special transitional grant relating to care in the community has been spent in each year since 1993–94 on elderly people(a) in Essex and (b) in the rest of England; and if he will make a statement. [40093]

  Mr. Boateng
  The special transitional grant is allocated for community care. Monitoring processes do not collect information on the amount of the special transitional grant spent on particular client groups.

  Public Health
  Mr. Timms
  To ask the Secretary of State for Health what objectives he has set for the Health Action Zone in East London and the City. [38683]

  Mr. Milburn
  We expect health action zones (HAZ) to deliver within their area measurable improvements in public health and in the quality of treatment and care. The East London and City HAZ plans particularly to address the health needs of young people, to improve access to services and to work with highly disadvantaged communities to improve their health. The HAZ partnership has committed itself to improve mental health and reduce deaths from coronary heart disease and stroke.

  Psychiatric Services
  Mr. Flight
  To ask the Secretary of State for Health what aggregate changes he forecasts in the levels of health authority budgets for mental health and care expenditure in 1999. [38692]

  Mr. Boateng
  Resources are not allocated to fund particular services or costs. It is for health authorities and general practitioners to use resources to plan and arrange services for their residents, following an assessment of their needs, and to make decisions about the level of resources required for any particular service.

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.

Lord Sheppard of Liverpool
The Right Reverend David Stuart Sheppard, lately Bishop of Liverpool, having been created Baron Sheppard of Liverpool, of West Kirby in the County of Merseyside, for life—Was, in his robes, introduced between the Lord Runcie and the Lord Cowdrey of Tonbridge.
The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before the commencement of business, I take the opportunity to inform the House that I am to make an official visit to the European Court of Justice in Luxembourg tomorrow, Wednesday 29th April. Accordingly, I trust that the House will grant me leave of absence.

Identity Cards
2.46 p.m.
Baroness Sharpies Baroness Sharpies asked Her Majesty's Government:
Whether they intend to introduce a national identity card.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, we have no current plans to introduce a national identity card in the United Kingdom.
Baroness Sharples: My Lords, I thank the Minister for his reply, though it was not entirely unexpected. Is he aware that a driving licence identity card is due to be introduced in July? That was proposed by the previous government and is very welcome. Following on from that, why cannot we introduce a national identity card to help prevent fraud within both the social security benefits system and in relation to prescription charges? Also, are we having discussions with our European colleagues? I understand that a number of countries in Europe already use national identity cards.
Lord Williams of Mostyn: My Lords, as the noble Baroness pointed out, I am aware that there will be a photocard driving licence introduced in July. Its primary purpose is to be used as a driving licence and not as an identity document. The cost of a compulsory scheme in the United Kingdom would be £600 million, which is a vast sum to contemplate. Talks are held regularly with
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our colleagues in the European Union. Six countries—Belgium, Germany, Greece, Luxembourg, Portugal and Spain—use compulsory card schemes; five countries use voluntary card schemes—Austria, Finland, France, the Netherlands and Italy—and four have nothing at all—Denmark, Ireland, Sweden and ourselves.
Lord Mason of Barnsley: My Lords, can my noble friend assure the House that the Government have not closed their minds on this issue? Is he aware that if such a scheme had been running it would have been helpful in Question Time yesterday, because identity cards would help in finding bogus asylum seekers? Further, is he aware that the Police Federation of Great Britain is in favour of the scheme, the Select Committee for Home Affairs in the House of Commons is in favour and every national opinion poll showed that there is a majority in favour of at least a voluntary ID scheme? What is the stumbling block?
Lord Williams of Mostyn: My Lords, I can assure the noble Lord that we have not closed our minds to the scheme. We have no bias either for or against ID cards. The Association of Chief Police Officers is against compulsory cards. I repeat that the cost is vast. There is no dispute about that between the former government and ourselves—in fact the figure of £600 million came from them. There are benefits and disadvantages in such a scheme. But I must say, perhaps disappointingly to some noble Lords, that an early decision on the possible introduction of a national identity card is not likely.
Lord Hooson: My Lords, can the noble Lord give us a breakdown of the estimated cost of £600 million of introducing identity cards?
Lord Williams of Mostyn: My Lords, I cannot give a detailed breakdown. I have taken the figure from paragraph 7.12 of the 1995 consultation document put out by our predecessors, which indicated that the cost of introducing and administering a separate compulsory identity card scheme to cover the whole of the adult population could be in the region of £600 million, excluding enforcement and ongoing administration.
Lord Marlesford: My Lords, I can understand that the Government have a hang-up about identity cards, as the previous government had. But does the Minister agree that the important prerequisite is a single identity number? At the moment we all have an enormous number of different numbers, which is most cost ineffective and ineffective in terms of fraud, immigration and all the other matters for which a single number would make life a great deal easier for everyone. Will the Government at least consider trying to move to a single identity number?
Lord Williams of Mostyn: My Lords, a single number would certainly be easy to administer. Whether or not it would be easy to bring into effect is another question. We all have a large number of different numbers relating to credit cards, national insurance and

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driving licences, to name but a few plucked at random. However, I take the noble Lord's point and shall transmit it to the Secretary of State.
Lord Taylor of Blackburn: My Lords, is the Minister aware that some of us on these Benches do not believe all the figures that were produced by the previous government?
Lord Williams of Mostyn: My Lords, that really is shocking!
Baroness Masham of Ilton: My Lords, does the Minister agree with me that having a national identity card would help in controlling under age-drinking?
Lord Williams of Mostyn: My Lords, that is one possible use to which it could be put. I think it is well known that the industry itself is considering an extension of voluntary schemes relating to under-age drinking. I pay tribute to the industry for the constructive talks it has had with my honourable friend Mr. George Howarth in another place.
Viscount Chelmsford: My Lords, yesterday the Government announced legislation to support digital signatures, which are a form of identity. The Government's policy is also to support London Transport's prestige smart card, which is another form of identity. It is not a pass; it is a form whereby one is checked against a central register on a computer. Surely technology is allowing the Government, if they choose to pick it up, enormous savings which will counterbalance the large amount of money which apparently will be required for an identity card scheme. Will the Government please take technology into account?
Lord Williams of Mostyn: My Lords, the noble Viscount makes a valid point. Technology is developing. We could consider linkage with smart card functions in this context. I repeat, however, because I do not want to be misleading, that an early decision is not likely and the present estimates of costs are vast.
Lord Monson: My Lords, does the noble Lord agree that to make the carrying of identity cards compulsory would in effect mean that people would have to have a passport to step outside their front door or garden gate to post a letter or nip down to the corner shop? Is this not totally alien to our British traditions?
Lord Williams of Mostyn: My Lords, I believe that the noble Lord's observation finds an echo with a large number of people. Fortunately, we have not had an authoritarian tradition in this country. We have not had the recent history of our colleagues on continental Europe. There are a large number of people who would share the unease which the noble Lord articulated.
Lord Marsh: My Lords, is the noble Lord aware that a number of us in this House spent six years carrying identity cards and did not find any problem at all?
Lord Williams of Mostyn: My Lords, I cannot myself remember that, but I am prepared to accept anecdotal and historical evidence.
Viscount Addison: My Lords, is it not the case that technology has moved very fast and that retina recognition is something that the banks in particular are very interested in? We all know that numbers and even signatures can be forged, so should not the Government be seriously looking at retina recognition and incorporating it into a whole host of different references?
Lord Williams of Mostyn: My Lords, we shall certainly look retina recognition firmly in the eye. However, I am not sure that it would work for the kind of short journey to which the noble Lord, Lord Monson, referred; namely, going down to the shop to buy a paper.
Lord Elton: My Lords, if it is proposed that we should all have one number, will the noble Lord bear in mind that we all have one national insurance number and that it would be a pity if we then had to have two?
Lord Williams of Mostyn: My Lords, I mentioned earlier that we all have a national insurance number and I think I said that all these ideas in vacuo sound quite good at the time. However, it is the kind of administrative difficulty that the noble Lord refers to that makes us pause and be cautious about introducing a national compulsory scheme.

Prime Minister's Office: Role of Press Secretary
2.55 p.m.
Lord Peyton of Yeovilasked Her Majesty's Government:
Whether they will define the role of the press secretary in the Prime Minister's office, and its relationship with Ministers.
Lord McIntosh of Haringey: My Lords, the Prime Minister's chief press secretary advises the Prime Minister on the effective presentation of government policy. He also leads the No. 10 press office and the strategic communications unit, ensuring that the essential messages and key themes which underpin the Government's strategy are sustained and co-ordinated across government liaising closely with departmental press offices. The relationship between the chief press secretary and the No. 10 press office and Ministers is set out in paragraph 88 of the ministerial code.
Lord Peyton of Yeovil: My Lords, does not a little confusion arise from the title of chief press secretary? Is it not a fact that if Mr. Campbell had done or said anything which he ought not to have done or said he

147
would have been smacked down a long time ago? Is not his real role to save the Prime Minister from getting involved in the inevitable unpleasantness of keeping Ministers in order and in fact to play Mr. Hyde to the Prime Minister's Dr. Jekyll?
Lord McIntosh of Haringey: My Lords, the title of chief press secretary has, if not a venerable, certainly an honourable history. The press secretaries to Sir Edward Heath, to the noble Baroness, Lady Thatcher, and to John Major were all called chief press secretary. I do not know whether the same criticisms that the noble Lord makes of Mr. Alastair Campbell apply to those as well.
Lord Janner of Braunstone: My Lords, in those circumstances, would my noble friend consider having a word with Sir Bernard Ingham to see how the chief press secretary might run his office in a more reticent and self-effacing way, while at the same time helping to achieve for the Prime Minister the highest level of public acceptability of any Prime Minister since the war?
Lord McIntosh of Haringey: My Lords, Sir Bernard Ingham was a civil servant rather than a special adviser. It is well known that he refrained from any activities which could possibly be called party political and refrained from any activities which might lead him to make statements about the qualities, good or bad, of any Ministers in the Thatcher Government.
Lord Strathclyde: My Lords, the House will be indebted to my noble friend for raising what is an extremely important and serious subject. Will the Minister advise the House when the Civil Service rules were altered to enable Mr. Campbell to give instructions to civil servants? Did that include the power to instruct Ministers themselves? Furthermore, are faxes to Ministers, such as those to Mr. Field or Ms Harman, cleared in each case by the Prime Minister; and if not, will he explain the line of accountability to Parliament for such directions by Mr. Campbell to Ministers of the Crown'?
Lord McIntosh of Haringey: My Lords, I do not deny the importance of Mr. Alastair Campbell. It would he more than my job is worth to do so. However, the importance of this Question under the eye of the cosmos is greater for those who are more interested in process than in the product of government. As the noble Lord well knows, the conditions under which Mr. Campbell was appointed were determined by an Order in Council on 3rd May which provided for three special advisers, although only two are in post, who do have the power to give instructions to civil servants. As regards Mr. Campbell's faxes to Ministers, they were made with the full authority of the Prime Minister.
Lord Peyton of Yeovil: My Lords, may I express our congratulations to the noble Lord on his care this afternoon not to incur the wrath of Mr. Campbell? Has the noble Lord in his memory any incident when
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Sir Bernard Ingham actually took it upon himself, and in his own name, to advise Ministers "Go easy with the lunches"?
Lord McIntosh of Haringey: My Lords, again those who are interested in the process of government rather than its product certainly have a voice and it should be heard. I think of Sir Bernard Ingham as someone who put an end to the careers of some Ministers by such phrases as "semi-detached".

Local Government: Modernisation
3 p.m.
Lord Islwynasked Her Majesty's Government:
What plans they have for the modernisation of local government.
Baroness Farrington of Ribbleton: My Lords, over the past few months we have published a series of six consultation papers inviting comment and debate on our initial proposals for modernising local government in England. We are currently in the middle of that consultation exercise and intend to set out our firm proposals in a White Paper in the summer. I know that it will be of interest to my noble friend Lord Islwyn that the Secretary of State for Wales is conducting a similar consultation exercise, leading to a White Paper, on modernising local government in Wales. A parallel exercise is taking place in Scotland.
Lord Islwyn: My Lords, will the Minister accept that it is necessary to recruit into local government men and women of the highest calibre who will observe an appropriate code of conduct? Will she further accept that citizens are entitled to expect best value for money for the services provided? While I appreciate the Prime Minister's call for an ethical framework for local government, nevertheless will the Minister accept that over the generations Britain has been well served by its local government?
Baroness Farrington of Ribbleton: My Lords, I declare an interest before giving any bouquets. As a former serving local councillor, I agree with my noble friend that local government is well served in the overwhelming majority of cases both by elected representatives and officials of the highest standards. We maintain the importance of ensuring that the highest calibre of councillors are attracted into local government and believe that some of the proposals out for consultation in our paper Local Democracy and Community Leadership will help to establish that. My noble friend referred to the new ethical framework document. We believe that that, too, is important. I know that that has been welcomed by the Local Government Association.
Lord Beloff: My Lords, will the noble Baroness enlighten me as to the meaning of the word "modernisation" because most things that are said to be modernised are worse than they were before?
Baroness Farrington of Ribbleton: My Lords, I can well understand the concern of the noble Lord,

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Lord Beloff, after the experience of the past 18 years, that the process of change in local government has led to things being worse. That is why we are consulting widely and working together in a strong partnership with local government to ensure that this Government's modernisation proposals leave things better, not for local councillors and officials, important though that is, but for the people of the country.
Baroness Maddock: My Lords, can the Minister give some information about the consultation the Government propose with parish and town councils? I attended a national conference of the clerks of such councils 10 days ago. They were concerned to be involved and felt that they had not been involved enough so far. In her plans to modernise local democracy can the Minister assure us that the Government will not rule out having a fairer voting system for local elections with a more proportional system? The Government have put forward in their document a good case for it. However, they have not said that they will implement it despite supporting it for European elections, the Welsh assembly and the parliament in Scotland.
Baroness Farrington of Ribbleton: My Lords, perhaps I may first deal with the second point made by the noble Baroness. As the noble Baroness recognised in her question, she is aware that the Government acknowledge the importance of addressing constitutional change across many areas. We have made it quite clear that, given the wide range of proposed changes in the lifetime of this Government, we have no immediate plans to consider changing the electoral system for local government. However, we have not ruled out the possibility beyond the short term and we do not refuse to reconsider it. As regards local councils, we have had a wide range of responses to the consultation that has taken place from town and parish councils. Our assumptions have been circulated through the county networks and through their close relationship with county authorities. However, were there to be concerns should the National Association of Local Councils make direct representations we would view that very positively. We want the widest consultation and support for the proposals.
Lord Dean of Beswick: My Lords, as someone who served in local government for a long time with some distinction, can the Government give an undertaking that whatever format is produced from these discussions the top priority will be for probity and honesty in the staff who man local government in the future—whatever structure is created—because some of it has become rather tarnished lately?
Baroness Farrington of Ribbleton: My Lords, the Prime Minister personally expressed his view that there should be probity and the highest possible standards in local government and for local councillors, with "one strike and you are out". I pay tribute to the work done by my noble friend Lord Dean of Beswick during his time in local government. He was able to be involved
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because of the powers and abilities of local authorities to respond to the needs of the community. We wish to return to that following the consultation exercise.
Lord Bowness: My Lords, the forewords to the consultation papers, if not the contents of the papers themselves, suggest that the Government envisage a rosy future for local government under this administration. That being the case, perhaps the noble Baroness can tell us why the Government propose to keep their capping powers; and, further, why they propose establishing regional development agencies appointed by the Government to act for them and to interfere with, and to take powers away from, local authorities?
Baroness Farrington of Ribbleton: My Lords, as regards capping we have made it absolutely clear that we shall work in partnership with local government to ensure that the removal of the absolute and total capping system will occur when a system of best value is fully in place and working in partnership. We believe it is very important that this process takes place. The noble Lord referred to the consultation process and the importance of consideration being given to the way forward. As he is aware, consultation is necessary if we are to move forward. With the noble Lord's distinguished career in local government he will be aware that, under the partnership arrangements, this Government have a regular three-monthly series of meetings at the highest ministerial level with cross-party representation from local government.
Lord Islwyn: My Lords, can the Minister say whether a timetable has been laid down for the proposed reforms?
Baroness Farrington of Ribbleton: My Lords, there are proposals in a range of documents to which I referred earlier. They deal with the full spectrum of local democracy and community leadership, improving local services through best value, capital finance, business rates, improving local financial accountability and the new ethical framework. Following the responses to the consultation we hope to publish a White Paper in the summer to bring together the responses to the consultation.

Termite Infestation: Devon Outbreak
3.9 p.m.
Lord Methuenasked Her Majesty's Government:
What steps they are taking to control and eradicate the outbreak of termites in north Devon.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, my department is closely monitoring the situation with the Building Research Establishment which is also conducting research to determine if there is any risk of the problem spreading beyond the single property

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known to be affected at the present time. The first task for the Building Research Establishment is to research optimum means of eradicating the infestation, and it is seeking help from overseas in doing this. The report is being prepared as a matter of urgency in consultation with the industry. As soon as it is to hand, a decision will be made on what action is required.
Lord Methuen: My Lords, I thank the Minister for that information. Is she aware that the outbreak of termites in north Devon threatens a disaster comparable with that of Dutch Elm disease but is far more personal as it affects people's houses rather than just trees? It may interest the House to know that if only two of the insects—one of each sex—fly out of the existing colony they can establish further colonies. I understand that the site concerned is totally affected, including the whole of the garden and the greenhouse as well as the house and the retaining wall. If any of the colony remain after action has been taken, within only four to eight days the remaining inhabitants of the nest can produce a new king and queen further to propagate the colony. I wonder what the Minister cares to say about that.
Baroness Hayman: My Lords, I am well aware that concerns have been expressed about the extent of the problem that could be posed by termites becoming established in this country. That is why my honourable friend the Minister responsible for construction has asked for urgent advice from the Building Research Establishment on the scale of the problem, its likely impact and, most crucially, on what effective measures can be taken to eradicate the termites. I should make it clear that only one building is affected currently; that that building was affected in 1994; and that it is possible that the source of the infestation was 10 years prior to that. Therefore, I believe that the timescale involved allows us to look at the issues involved—we are doing so urgently—and take the appropriate action.
Baroness Gardner of Parkes: My Lords, does the Minister know that Australia has termites known as "white ants"? They are common—in fact, they are everywhere—but buildings are still standing. Is the Minister aware that the echidna, or anteater, is a natural predator of termites and thrives on them? If the worst comes to the worst, will the Minister consider introducing a few echidna from Australia to deal with the problem?
Baroness Hayman: My Lords, I am always grateful for the international comparisons which the noble Baroness is able to give us and for her lateral thinking on such issues. There will be a serious problem if we find that termites, inadvertently imported into this country, can survive in the British climate when we thought in the past that that was not possible. I understand what the noble Baroness says about some buildings remaining in Australia, but these pests cause great damage there and in southern Europe. If there is any danger of that happening here. we ought to take the appropriate action.
Baroness Nicol: My Lords, while the Building Research Establishment is looking into the problem, has any attempt been made under the pest control by-laws to deal with the matter at local authority level? There should be a great sense of urgency about this because, if we have a warm summer, it could become a real problem. Has the local authority been involved?
Baroness Hayman: My Lords, as I understand it, at the moment it is the Building Research Establishment which is very much involved. It is preparing a report on the building concerned. It would, of course, be willing to give advice on neighbouring buildings because it is important to know whether it is possible that the problem has spread. We are considering how to prevent similar importations in the future. Responsibility for that comes under the Plant Health (Forestry) (Great Britain) Order 1993. The Forestry Commission is at present carrying out a pest risk analysis of termites. If it indicates that certain measures are necessary, they will be taken forward.
Lord Mackie of Benshie: My Lords, is the Minister aware that Australians should not talk about the introduction of strange species into other countries given what the rabbit did to Australia? Will the noble Baroness ensure that no termites or "anti-termites" are imported from Australia?
Baroness Hayman: My Lords, these matters are covered in the Wildlife and Countryside Act, which very much takes into account the danger that the importation of species into other countries can have for the natural habitat and other species. I am sure that my colleagues will view any such proposals carefully.
Lord Campbell of Croy: My Lords, instead of eradicating this outbreak completely, will the Government consider transporting some of the termites to the government office building in Marsham Street where they could contribute to a popular demolition job?
Baroness Hayman: My Lords, I think there are other ways of dealing with Marsham Street.
The Earl of Halsbury: My Lords, do Her Majesty's Government recognise that in any occurrence or class of occurrences there is always one which, with the wisdom of hindsight, was historically the first and went unrecognised? Will Her Majesty's Government consider informing the local bug hunters in Devonshire, many of whom are amateur lepidopterists, of what to look for and who to report to if they find it?
Baroness Hayman: My Lords, hindsight is an interesting aspect of this. With hindsight, the measures that were taken in 1994, which were considered then to be substantial enough to deal with the outbreak, turned out not to be substantial enough because the problem has recurred. It is important that we recognise that and the potential of termites surviving in the more temperate parts of Great Britain. As I understand it. the Building Research Establishment is putting in monitoring stakes

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as they are the most effective way of monitoring any potential spread. I am sure that any amateur help that could be given would be much appreciated.

School Standards and Framework Bill
3.17 p.m.
Lord Whitty: My Lords, on behalf of my noble friend Lady Blackstone, I beg to move the Motion standing in her name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the School Standards and Framework Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 11,

Schedule 1,

Clauses 12 to 20,

Schedule 2,

Clauses 21 and 22,

Schedule 3,

Clause 23,

Schedule 4,

Clause 24,

Schedule 5,

Clauses 25 to 30,

Schedule 6,

Clauses 31 to 33,

Schedule 7,

Clause 34,

Schedule 8,

Clause 35,

Schedules 9 to 11,

Clause 36,

Schedule 12,

Clauses 37 to 39,

Schedule 13,

Clauses 40 to 47,

Schedule 14,

Clauses 48 to 50,

Schedule 15,

Clauses 51 to 53,

Schedule 16,

Clause 54,

Schedule 17,

Clauses 55 to 65,

Schedule 18,

Clause 66,

Schedule 19,

Clause 67,

Schedule 20,

Clauses 68 to 71,

Schedule 21,

Clause 72,

Schedule 22,

Clauses 73 to 88,

Schedule 23,

Clause 89,

Schedule 24,

Clause 90,

Schedule 25,

Clauses 91 to 115,

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Schedule 26,

Clauses 116 and 117,

Schedule 27,

Clauses 118 to 125,

Schedule 28,

Clauses 126 to 133,

Schedules 29 to 31.—(Lord Whitty.)

On Question, Motion agreed to.

European Communities (Amendment) Bill
3.18 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 Whitty.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Resumed debate on Clause 1.
Lord Moynihanmoved Amendment No. 23L:
Page 1, line 13. after ("2") insert ((except paragraph 57)").
The noble Lord said: This amendment concerns Article 1, paragraph 9 (Article F.1 of the TEU, new Article 7 in the consolidated version) of the treaty, and Article 2, paragraph 57 (Article 236 of the TEC, new Article 309 in the consolidated version)—in other words, the human rights article about which I have some reservations.
These articles empower the Council of Ministers to suspend the voting rights or, indeed, any other rights from the member state country which it claims is guilty of "serious and persistent" violations of the Union principles of liberty, democracy, respect for human rights and fundamental freedoms and for the rule of law. Such a decision, that a member was in serious and persistent breach of the Union principle, would be taken by unanimity, minus the member state in question—for the accused country is not allowed to vote. The other member states are required to consult the European Parliament and obtain its assent. Once a member state is found guilty by the Council meeting in the composition of heads of state or government and acting by unanimity any subsequent decision to suspend the voting rights of that country will be decided by qualified majority vote. There is no provision for an independent arbiter. That country would have no right of appeal and there would be no role for the European Court of Justice in this procedure.
Once found guilty, rather than be expelled from the Union the member state concerned would have all its rights suspended including its voting rights. However, it would continue to be bound by all of the obligations inherent in the treaties of the Union and any further obligations that the Council might decide to impose, although the suspension of its voting rights would preclude it from having a say in such future obligations.

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I have a few reservations about the article. First, how are the rights are to be defined? It goes without saying that in a democracy such as ours every Member of this House supports the principles of human rights, individual freedom and the rule of law. We on these Benches will do all that we can to safeguard and advance basic human rights, the need to protect individual liberty, free speech and the right to demonstrate, to have parliamentary democracy and to be governed by the rule of law. There is no division on these Benches as to those rights. But in the article that we are now considering the rights in question are vaguely defined. Does it refer to human rights as they are traditionally understood and as I have outlined—the right to free speech, to free assembly and habeas corpus—to which we all subscribe unreservedly, or does it include a wider and more controversial interpretation of human rights, such as a basic human right to a minimum wage or to abortion on demand?
In this country with our tradition of common law we would interpret "rights" as having the former meaning in reference to individual freedoms and liberties. The Bill of Rights of 1689 meant the protection of the individual from intrusion by other persons, groups of persons, the state itself or even the king. If that were the meaning here it is unlikely that the United Kingdom would ever fall foul of this article, but in Europe it could be interpreted in the latter way based on a looser definition that places an obligation on the state or on others to provide the right for the individual: for example, the right to work, the right to welfare, or the right to a pension. Therefore, in seeking to clarify exactly what the clause means it is most important to seek from the Government the definition of "rights" which will he used by the Union in the context of this article.
My second reservation is about the lack of judicial involvement. Under the Treaty of Amsterdam these questions will be dealt with not by a judicial body but by politicians sitting in the Council of Ministers; nor will there be an independent arbiter or right of appeal. Can the Minister inform the Committee whether there is a precedent in diplomacy or in law for the signatory to a treaty losing its rights but not its obligations at the behest of fellow signatories?
Thirdly, what is the true intention of this article? It will not do to claim that Article F.1 is simply a precaution against the sudden collapse of democracy in a member state. If one of our fellow members were to fall into dictatorship surely the logical response would be to end its membership of the European Union. Yet Article F.1 provides no mechanism for doing that. Instead, it specifies that the state in question would remain bound by all of the treaty obligations while losing its rights. I do not believe that that is the right way to deal with an undemocratic regime.
If the real intention of this article is to provide a remedy for really serious breaches of human rights, surely the logical remedy is expulsion or temporary suspension from the European Union of the country concerned. What justification is there for requiring such a country to be bound by decisions taken in its absence? Why were procedures to provide for expulsion not included in the
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treaty? It would be perfectly possible for other member states to give measured warnings to the offending state and to make clear that unless it mended its ways expulsion would follow. Can the Minister clarify exactly how this article will operate? I understand that it was intended as a safeguard against the possibility of one of the future member states of central and eastern Europe reneging on the fundamental principles of human rights, democracy and the rule of law.
I do not dispute that as we enlarge into central and eastern Europe where these traditions are relatively recently established and not yet entrenched some protection will be required for the integrity of the Union. As the Union is enlarged it is legitimate to consider what happens if any member state acquires a government that falls short of those fundamental standards. That involves not only new members. One of the reasons put forward for admitting Greece to the Community was to reinforce the changes that had taken place there with a return to parliamentary democracy and a proper standard of human rights. Within the European Union we have no experience of what would happen if hypothetically the Greek colonels returned to power or a military regime took over in the Iberian peninsula. I accept that these are very remote possibilities, but should that happen in any country of the European Union, or should a new member state with a short tradition of democracy fall into dictatorship and start persecuting its natural minorities, arbitrarily confiscating private property or suspending the due process of law, what would the European Union do? In those circumstances, would the other member states want that state to remain within the Union?
When one comes across serious and persistent abuses of human rights, as tragically one does in the former Yugoslavia, the response is not to invite the perpetrators of those abuses to join the European Union but without voting rights, but to apply a series of sanctions and to make clear that such behaviour is incompatible with an ambition to join the European Union. When the Commission delivered its opinions on the various pending applications for membership of the European Union a proven track record of respect for human rights was rightly one of the prerequisites. In that case, how will Article F.1 be of the slightest use? We are forced to the conclusion that Article F.1 could conceivably be used to disarm the national veto of any country that held up a measure that the other member states wanted. Can the Minister guarantee absolutely that this article will never be used or abused to deprive difficult countries of their vote on spurious human rights grounds? Further, can the Minister guarantee that the human rights clause will be invoked only if there were a massive change in one of the new or existing member states who posed a real threat to democracy? Is it not the case that the procedure can be used and abused to take away the voting rights of a recalcitrant government or member state who may have a perfectly satisfactory record on human rights but be responsible for some peculiar social provision that perhaps may be described as a breach of human rights depending on how "rights" is defined?

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The Minister may say that this is a very remote example, but if the Committee is to carry out its responsibilities in relation to the scrutiny of this treaty it is incumbent on Members to identify scenarios that may not be very likely but which may be turned to the disadvantage of this country. It is also our duty to point out the dangers. So will the Minister confirm that there is nothing in the treaty to allow that danger to be dismissed as legally impossible? Anything can happen in international relations. Even though the provisions of the treaty envisage the clause being invoked only by the unanimous vote of all the member states except the one whose conduct is under examination, ratified by two-thirds of the Members of the European Parliament, it is still not unprecedented for provisions in European treaties, to which we have signed up, to be used in a way that was never intended at the time.
I shall give one obvious example. It is the way in which QMV procedures in respect of health and safety were used to introduce the 48-hour working week. No one in the previous government who agreed to QMV for health and safety measures at the time of the Single European Act ever contemplated their use to introduce a maximum length of working week. As Opposition, it is our duty to examine the provisions of treaties such as this and to ensure that there is no scope for abuse or for their use in ways never intended at the time or which might be to the disadvantage of this country.
It is difficult to say with certainty whether those procedures will ever be invoked, because every relevant situation that arises would be a political crisis and would have to be responded to according to the facts of the case. In practice, if some military regime were to seize power and to start to abuse human rights, Article F.1 would, in my opinion, not be the end of the story. The EU could not tolerate the situation indefinitely.
Nevertheless, Article F.1 flies in the face of precedent and of our constitutional tradition. It is for those reasons that I have put the questions to the Minister in the context of the amendment, which I hope will lead to her providing clarification for the Committee as to the purpose and the definition of this important part of the treaty. I beg to move.
3.30 p.m.
Lord Wallace of Saltaire: I wish to speak also to Amendment No. 37. I do not share all the views that the noble Lord, Lord Moynihan, put forward. This is consolidation of a number of declarations previously made in the European Community. Indeed, it was originally a British proposal in the Copenhagen Declaration of 1978 by that great European Foreign Secretary, the noble Lord, Lord Owen, that we should include in a formal declaration of the European Council a number of provisions in case new members—we were then talking about Spain, Greece and Portugal—should move backwards from democracy. It was something to which the British Government attached a good deal of importance at the time as a backstop.
We have all seen the European Community as part of the process of consolidating democracy in Europe. It was, in the 1950s, part of the process of consolidating
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democracy in the western part of the continent. In the 1980s it became part of the process of consolidating democracy in a number of Mediterranean countries; and part of the process of enlargement to central and eastern Europe has the same function. It was felt by the then British Government, and by others, that a backstop was useful—now consolidated into the treaty—in case of,
"the existence of a serious and persistent breach by a Member State of principles mentioned in Article F(1)".
That is a useful backstop against that eventuality in a larger Community of countries which have not been consistently democratic over the past generation or more. We all hope that it will never be necessary but it is appropriate in a Community committed to the principles of democracy, political and civil liberties that the provision should be included.
We hope that on Report the Government will be able to give this place some assurance about the levels of information and reporting which they will give Parliament about purposes in the EU. Amendment No. 37 is one of a number of amendments which call upon the Government to report back to this place under certain circumstances. We on these Benches are concerned that the level of reporting and information provided to national parliaments should be as full as possible.
Lord Monson: It would be interesting to know whether the proposal put forward by Mr. David Owen, as he then was, referred to by the noble Lord, Lord Wallace of Saltaire, was as unbalanced and one-sided as this one. The noble Lord, Lord Moynihan, put the case for his amendment so well that there is little one can add. It is astonishing that the article gives the Council of Ministers, aided by the European Parliament, the sole power to decide upon expulsion without the intervention of any court of law. Is that not, in itself, a breach of the rule of law?
It is claimed by way of safeguard that the vote will be unanimous. Of course it will not be unanimous, because the accused state will not have a vote. Almost the worst aspect is that although the rights of the expelled nation may be withdrawn, the duties under the treaty will remain, and will have to be complied with.
The EU has always been compared by Euro-enthusiasts with a club. That is a spurious argument, as I cannot think of any club to which some members pay gigantic subscriptions, some pay very little, and others pay nothing at all but receive vast sums of money, given by the club, in order to join it.
For the sake of argument, let us suppose that one can compare the EU to a club. Is there any club which has the right to suspend members while obliging them to continue with their duties?
Lord Grenfell: Perhaps we should look more closely at Article 0, as amended, which states that,
"any European state which respects the principles set out in Article F(1) may apply to become a member of the Union. It shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the assent of the European Parliament, which shall act by an absolute majority of its component members".

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Amended Article O appears to tell us that it allows an application to be rejected or shelved on the grounds of insufficient coherence to those principles. Using the example of a club, if a nation has joined the EU and has agreed to adhere to those principles as a condition of joining, surely it is those who have set those conditions who afterwards will be able to say that if those conditions are consistently violated, then they who set those conditions are those who will decide whether or not that particular state should have sanctions brought against it, including possible expulsion. There is no mention of expulsion here, but there is a general principle that those who impose the conditions are presumably those who will be the judges of whether or not, when those conditions are broken, an ultimate sanction of expulsion should be taken.
Lord Monson: Before the noble Lord sits down, does he agree that expulsion would be a better option for the accused state? Expulsion is surely better than having none of the rights but retaining all the obligations.
The Earl of Clanwilliam: Would it not be better if we were expelled, if we were to jolly well get out and stay out? That would be a simple answer. We have the ridiculous situation where the people of Great Britain will be denied the right, by QMV, to tell the Council and the Commission that we are not interested in their proposals; it removes our right to put the matter to our own Parliament for decision. In the meantime, we are required to remain true to the acquis communautaire.
There is a gracious caveat in respect of natural persons and legal persons. I have heard it said that lawyers are a race apart, but never that they are unnatural. This is just another example of how the European language is unnatural and foreign to us in this country. It is irrelevant to the system of parliamentary government that we treasure.
Furthermore, the suspension appears to be of schoolboy nature and immature. It is allied to the fatuous idea that the Council will be acting as a team— do not know whether in short pants or schoolboy caps. The reality is that each member is a national member of one of the states. They are each there batting for their side, promoting their national interests. The amendment brings before Parliament any case for suspension, for Parliament to decide how it should react. Any part of the treaty which is more likely to engender bad blood than this Bill is hard to imagine.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): Before addressing the specific impact of the amendments before us, I wish to set out clearly the Government's position on the new clause in the treaty—the so-called "sanction clause" to which the amendments refer. The new Article F.1 of the Union Treaty provides that in certain extraordinary circumstances, the Council can decide to impose sanctions on a member state which it believes to be in serious and persistent breach of the fundamental principles set out in the amended Article F, paragraph 1, of the Union Treaty.
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The Government believe that the sanctions clause gives an important signal of the Union's determination to ensure full respect for democracy and human rights, whatever its size or membership. We have every hope that these provisions will never be used. They are carefully framed for use in only the most exceptional circumstances, such as a military coup in a member state.
The safeguards are that: the clause can be used only in the event of a "serious and persistent" breach of the principles in Article F, paragraph 1; a proposal to invoke these provisions has to be made by one-third of the member states or the Commission, and needs the assent of the European Parliament by two-thirds of the votes cast and a majority of members; the determination of a "serious and persistent breach" of fundamental principles must be made by the Council acting by unanimity minus the member state concerned.
Several noble Lords implied that they believed that the sanction might be used against the UK. The Government are confident that these provisions would never be used against the UK. As the Foreign Secretary said in another place on 12th November last year:
"so long as the Labour Party is in power, it will not be possible to find 14 EU states that will agree that the Government are in serious and persistent violation of democracy or of human rights".—[Official Report, Commons, 12/11/97; col. 912.]
Against this background, the proposed new clause is both misconceived and redundant. It is misconceived because it is quite clear from the wording of the sanctions clause itself that it will be invoked only in the most extreme circumstances, as I have said, such as a putsch. It cannot, and will not be lightly used. It is inconceivable that it would be invoked simply as a result of a court judgment.
From time to time, member states of the Union are found to have offended against international human rights obligations in certain limited respects. But the Union will not be able, nor will it seek, to impose sanctions on them as a result of minor infringements. As I have made clear, and as the treaty clearly states, the sanctions clause can be applied only in response to a breach of fundamental rights which is both serious and persistent.
The noble Lord, Lord Moynihan, asked what are these fundamental rights. Fundamental rights for the purposes of the sanctions clause are not defined, nor will they be defined by measures proposed or adopted under Article 6.a which your Lordships debated yesterday. Article F.2 of the Treaty of the European Union, which is not amended by the Amsterdam Treaty, provides that fundamental rights are primarily those guaranteed by the European Convention on Human Rights. They could also include rights in other major human rights treaties or human rights generally accepted by all other member states. The UK has long been a party to the ECHR, which is now being incorporated into UK law.
We have nothing to fear from the sanctions clause, but the noble Lord went on to ask why, if a breach was so fundamental, should not the guilty state be stripped of EU membership. Participation in the European Union gives rise to a wide web of rights and obligations to citizens, companies and governments. To erase all those

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obligations at a stroke by expelling the member state would create huge confusion and penalise ordinary citizens, and ordinary businesses, who rely on their rights of residence and free movement, to name but two.
The noble Lord, Lord Wallace of Saltaire, asked about report-backs. We will be covering the question of parliamentary scrutiny when we deal with the scrutiny amendments at a later hour. Perhaps we may deal with the point then.
The noble Lord, Lord Monson, implied that the penalties exacted could include expulsion. That is not the case, as I hope I explained in answer to the noble Lord, Lord Moynihan.
The noble Earl, Lord Clanwilliam, expressed a number of fears about the way in which the clause might be used against the UK Government. In another place, the former Chancellor of the Exchequer dealt admirably with that point. He said that he understood the fears which some people have about the article, but he went on to say that such fears did not seem to him to be credible. I echo his words; the fears expressed in your Lordships' House on this point are not credible, given the sanctions which I have explained.
3.45 p.m.
Lord Monson: Before the Minister sits down, perhaps I may put one or two points to her. She claimed that sanctions would be applied only in extraordinary circumstances. The question is: who decides what constitutes extraordinary circumstances? The Minister went on to say that she was confident that the provisions would never be applied against the UK, certainly while a Labour Government was in power. I am sure that the previous Government was confident that a compulsory four-week annual holiday could never be introduced under the health and safety regulations, but that happened nevertheless. Is it not possible that if, for example, internment had to be reintroduced in Northern Ireland as a result of a massive terrorist campaign, Britain could find itself in the dock?
Baroness Symons of Vernham Dean: Not all of us would agree that a four-week annual holiday for the working people of this country is on the same scale of disaster as a military putsch.
The noble Lord asked who would determine a serious and persistent breach. I hoped I had explained that such a determination would have to be made by unanimity between the member states, excluding the member state concerned. All the other 14 member states would have to agree what amounted to a serious and persistent—those two words are important—breach.
Lord Stoddart of Swindon: I was most interested in what my noble friend said. I, too, am pleased to receive the assurance that under a Labour Government there would be no possibility that Britain could be caught under this article. However, I am concerned that the article states that the Union will be responsible for the protection of our freedoms, democracy and so forth. As the noble Lord, Lord Moynihan, pointed out, that seems
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to exclude national governments and national states. Is it not the national governments, the national states, the national ports and the national armies which safeguard the rights enshrined in the article? Therefore, should not the article ensure that the freedoms, democracies and so forth are to be safeguarded by the states and not by the Union?
My noble friend did not answer the question: what happens if a member state which is in continuous breach of the principles stated here, and which is told that it must forfeit all the benefits, then says "We are going to leave"? In those circumstances, under this article, as the noble Lord, Lord Monson, pointed out, it would in fact lose all the supposed benefits but would have to continue to take on the burden of the obligations.
Suppose the member state said it was not prepared to do this and was going to leave the Union, what then happens? How then does the Union, the member states, insist on and enforce what they have done? Will they then impose a whole range of sanctions or send in armies? What will they do? It has to be answered but my noble friend has not answered it, at least to my satisfaction. Could she now develop that point further?
Baroness Symons of Vernham Dean: As to my noble friend's first point, the position is safeguarded by the member states, all of which are democracies, 14 of which would have to be in agreement. It is not the Union acting independently of the member states; the member states have to be part of that decision.
As to my noble friend's second point in respect of a state being in that position. with loss of benefits but still having obligations—which I am sure we all agree is very unlikely—and deciding to suspend its membership, such a state would then have to negotiate its way out of the treaty that it had freely entered into, in the same way as it would any other international treaty. It would have to negotiate a way out or be in serious breach with the other parties to that treaty.
My noble friend is trying to complicate the situation rather more than is justified.
Lord Stoddart of Swindon: I am sorry to come back to my noble friend. I am not trying to complicate it; I am trying to understand it.
My noble friend has said that member states can negotiate their way out of the Union. There is no provision within the treaties for member states to negotiate their way out. If what my noble friend is now putting on record is confirmed and member states can negotiate their way out, that is very interesting. I am glad it is on record because it will certainly be referred to in the future, particularly in relation to economic and monetary union.
The clauses on economic and monetary union state that EMU and the single currency are irrevocable. In my dictionary "irrevocable" means that it cannot be altered, that it is for good. Is my noble friend now saying that a state which is found guilty under these clauses—or any other circumstances—can negotiate its way out, despite the Maastricht Treaty provisions on EMU and the absence of any mention in the treaties of negotiating a

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way out? If she is saying that that is all wrong and that we can now negotiate our way out, I will be delighted. If she can confirm that I am quite prepared to sit down and be quiet for a very long time.
Baroness Symons of Vernham Dean: I am so tempted. Whenever anybody says that I have said something interesting, a cold hand clutches at my heart and I listen with perturbation as to what it was I said.
It is straightforward common sense. I have said no more in relation to this than we have said from the first day of debating all the motions put before the Committee. In the extraordinary, unlikely, hypothetical position we have just rehearsed, a country which declared it was going to move away, suspend, get out of its membership would have to then go ahead and tell the others to whom it was committed through treaties how it proposed to do that. What I have said amounts to no more and no less than that. I do not think it is ever going to happen.
Lord Moynihan: I thank the Minister for her reply and noble Lords for their participation in the debate.
I was a little disappointed with the Government response. I made it clear that we are not debating the Europe of today, the European Union as it currently stands. In Committee we have to search behind the meaning of the words and the articles and to look to the future. When applied to a future circumstance, however remote, the application of the treaty will have certain effects and we need to be clear what those effects may be as outlined by the Government.
These scenarios are, of course, remote, but I am sorry that they were dismissed so lightly by the Minister. There are unprecedented provisions in this treaty and, in recognising these provisions, it is important to understand exactly what they mean.
The first area was the question of rights. I sought a definition of rights from the Minister, and she rightly pointed out that there is no definition in the treaty at the present time. It is important to understand what category of rights the Government believe is covered by this article. I regret that we were not told the Government's view in answer to that question.
The second area, which is probably of greater concern, is the selected quotation of Kenneth Clarke in another place on this subject. I will enlighten the Committee as to what was debated in another place and what Kenneth Clarke had to say on the matter. He was speaking to the heart of this amendment and the important subjects and questions which have been raised by noble Lords, both behind me and on the Cross-Benches, namely the distinction between expulsion and suspension, the merits of having the opportunity to expel a member state in extreme circumstances and the effects of suspension.
In his Second Reading speech he considered Article F.1—and here the Minister was right—to be an acceptable part of the treaty. He saw no cause for alarm that the provisions would be used for anything other than the objectives which they were designed
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for—for example, if there was a massive change in one of the new or existing countries that posed a real threat to democracy, such as the establishment of an entrenched fascist government. He went on to say that he did not see why, if a military regime took over a country in central or eastern Europe, it should be released from its European treaty obligations or why the United Kingdom should sever our trading contracts and the policing of those contracts by the ECJ merely because we disapproved of that government. He said:
"I would strongly object to a Government who were not respecting human rights casting votes at the Council of Ministers, and perhaps blocking action, when vetoes were the order of the day, without effective action being taken to stop them".—[Official Report, Commons; 2/12/97; col. 195.]
Moreover, he added that should a military regime seize power and start abusing human rights in Europe he did not envisage that Article F.1 would be the only mechanism for the European Union's response.
That is an extremely important point. I am sorry that the Minister, in a very selective quotation, did not elaborate, as my right honourable friend did in another place, on the fact that if such an occasion took place, as must be envisaged and considered in the light of this amendment, suspension would be a preferable route. That is because ultimately, if it came to expulsion of a member state, there would he such a dramatic ramification and consequences, including the suspension of contracts, so great and so far-reaching, that the sanction in its own right would be a useless deterrent whereas suspension would provide a relatively effective redress.
With courtesy and respect to my right honourable friend in another place, it is important to place on record that his position, as exemplified in the Minister's answer, was not to be taken out of context but must properly come into the context of the question of expulsion versus suspension and why suspension has considerable merits over expulsion.
Many honourable Members in another place took the view that expulsion should be available and, in certain circumstances used. It was a fascinating and important debate. I hope that it is possible to engage in such a debate with the Government because it goes right to the heart of the reason why I tabled the amendment; namely, to elicit from the Government not only how they define "rights" but also what is the true intention of the article and why it was felt necessary to use the concept of expulsion. I wished to argue that case and to look in more detail at judicial involvement.
Having said that, I am grateful to the Minister and to Members of the Committee for participating in the debate. I shall return to the issue on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 23M and 23N not moved.]
4 p.m.
Lord Bruce of Doningtonmoved Amendment No. 24:
Page 1, line 13, at end insert ("other than the following paragraphs (which provide for the application of qualified majority voting in the areas cited)—

(A) Article 109q of the Treaty establishing the European Community set out in paragraph 19 of Article 2 (employment guidelines);

(B) Article 109r of the Treaty establishing the European Community set out in paragraph 19 of Article 2 (incentive measures for employment);

(C) Article 116 of the Treaty establishing the European Community set out in paragraph 21 of Article 2 (customs cooperation);

(D) Article 118(2) of the Treaty establishing the European Community set out in paragraph 22 of Article 2 (social exclusion);

(E) Article 119(3) of the Treaty establishing the European Community set out in paragraph 22 of Article 2 (equality provisions);

(F) Article 129(4) of the Treaty establishing the European Community set out in paragraph 26 of Article 2 (public health);

(G) Article 130i(1) of the Treaty establishing the European Community set out in paragraph 32 of Article 2 (framework programme for research);

(H) Article 130o of the Treaty establishing the European Community set out in paragraph 33 of Article 2 (joint undertakings for research, technological development and demonstration programmes);

(I) Article 191a(2) of the Treaty establishing the European Community set out in paragraph 45 of Article 2 (transparency);

(J) Article 209a(4) of the Treaty establishing the European Community set out in paragraph 52 of Article 2 (anti-fraud measures);

(K) Article 213a(1) of the Treaty establishing the European Community set out in paragraph 53 of Article 2 (statistics);

(L) Article 213b(2) of the Treaty establishing the European Community set out in paragraph 54 of Article 2 (independent advisory body on data protection);

(M) Article 227(2) of the Treaty establishing the European Community set out in paragraph 55 of Article 2 (measures for
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French overseas departments and the Azores, Madeira and the Canary Islands); and

(N) Article 45(2) of the Treaty establishing the European Community set out in paragraph 27 of Article 6 (compensatory aid for imports of raw materials),").

The noble Lord said: I wish to make particular reference to paragraph (J) which refers to,
"Article 209a(4) of the Treaty establishing the European Community set out in paragraph 52 of Article 2 (anti-fraud measures)".
That particular item is on page 41 of the document we are discussing. The Committee will see that it seeks to lay down, possibly with greater precision than before, the responsibility of the Community as a whole, the member states, the Commission and the Council in regard to the institution of effective anti-fraud measures.
I do not believe that anyone can query the necessity for such a clause being inserted into the treaty. Article 209a sets out the responsibilities which were seen at the time as being a desirable code and, indeed, desirable laws to which all parties should conform.
Members of the Committee will recall that in recent years there have been a number of inquiries in this House, headed by the distinguished chartered accountant Lord Benson, who spent years investigating the subject because he was convinced, as indeed was I, serving in a much more subordinate capacity, that fraud and irregularity were assuming such proportions in the Community as to imperil from time to time such reputation for integrity that it had.
For my part—and I believe that this was true also of the late Lord Benson—there could be little complaint about the way in which successive British governments tried genuinely to combat fraud against Community funds in this country. There were minor brushes from time to time in which I participated. It was pointed out to the government of the day that it was not exactly helpful, as regards checking on the absence of fraud and irregularity in relation to import duties, to cut the size of HM Customs and Excise whose responsibility it was to monitor the various transactions inside and outside the country.
Nevertheless, there can be little doubt, looking at the matter from the United Kingdom's standpoint, as one of the principal member states and, indeed, the third highest net contributor to the Community's funds, that on the whole the United Kingdom made some genuine effort. That could not be said of all member states. Without any hesitation or fear of contradiction, I mention in particular the case of Greece whose tobacco transactions and receipts from the Community, to which the noble Lord, Lord Boyd-Carpenter, referred from time to time, tended to be both fraudulent and irregular.
That left the responsibility of the institutions themselves; that is, the various agencies operating under the direct control of the Community or being part of it, the Commission and, indeed, the Council of Ministers. It is to those aspects of the matter that I now wish to turn.

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First, I deal with the question of fraud generally and irregularity in the handling of Community funds. Frauds against the Community and the irregularities associated with disbursements, receipts and accountability have been widely highlighted in the press over the years so as not to require repetition, although I shall venture to mention some cases. For that purpose, I prefer not to use my own words which may be rather more incisive than those of the academically qualified. I use those of our own Comptroller and Auditor General of the United Kingdom.
So acute was the problem of fraud that it was raised and highlighted within the negotiations on the Maastricht Treaty. Members of the Committee will remember our former Prime Minister, the right honourable gentleman the Member for Huntingdon, coming back from Maastricht claiming a very great triumph in that he had urged and had eventually obtained agreement to an amendment to what was Article 189, now Article 248, which is at page 210 of the document to which I referred. He secured the insertion in the obligations of the Court of Auditors of the following:
"The Court of Auditors shall examine whether all revenue has been received and all expenditure incurred in a lawful and regular manner and whether the financial management has been sound. In doing so it shall report in particular on any cases of irregularity. The Court of Auditors shall provide the European Parliament and the Council with a statement of assurance as to the reliability and legality and regularity of the underlying transactions, which shall he published in the official journal of the European Community."
That was claimed as a considerable victory. I am sure that the Committee will remember the claims made by John Major in that connection. It may surprise Members of the Committee to learn that little action has been taken.
Lord Wallace of Saltaire: I am sorry to interrupt the noble Lord but I thought that he was speaking to Amendment No. 24. The bulk of his argument seems to be concerned with Amendment No. 56, which comes later. Will the noble Lord confirm that he is speaking to Amendment No. 24, not Amendment No. 56?
Lord Bruce of Donington: I am referring to paragraph 52 of Article 209a(4) of the treaty.
I do not propose to give my account of what has happened but will report the considered verdict of the Comptroller and Auditor General on the annual report of the European Court of Auditors 1996—I shall refer to the date aspect later. The Comptroller's report was published four or five days ago and came into my possession last Friday morning. He stated that,
"it is a matter of serious concern that for the third year in succession the Court have declined to provide a positive assurance on the Community's payments because of the large number of errors identified".
He adds that,
"the number of exceptions to the Court's assurance on the reliability of the accounts is also a matter of concern, indicating that the Commission have some way to go before they attain the quality of financial reporting expected of public sector financial statements. such as government accounts in the United Kingdom: and the Commission should produce clear and simplified financial statements of the Community Budget with more accessible
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financial information, prepared in accordance with generally accepted principles in so far as appropriate. The Statement of Assurance could also be published with the financial statements of the Community Budget. Making these two changes would he in line with the recommendation in February 1996 of the Committee of Public Accounts."
Then, our own Comptroller and Auditor General continues—and I am not embellishing any of the errors that he reveals—with these words:
"In relation to the Common Agricultural Policy — the Council did not act on the Commission's proposals to eliminate the over-compensation of farmers arising from unexpected movements in world market prices."
He adds that,
"the high level of error found in payments from the Structural Funds was unacceptable. For instance, 31 out of 69 Social Fund Payments had errors with a measurable financial impact."
The Comptroller and Auditor General states at page 13 that,
"the Court estimated that farmers were overcompensated under the arable aid programme by some £2.2 billion … in 1995£96. and that producers had been overcompensated by at least £0.6 billion … under beef and veal premium schemes over a four year period …; the extensive use by the Community financial system of advances which were accounted for as actual expenditure."
I could go on about the number of fully grounded complaints. Members of the Committee can read the Comptroller and Auditor General's report any time you like. It continues that,
"cash at hank, recorded in the balance sheet as £8.6 billion … was not accurately reflected in the accounts".
For example, advances to non-European countries of £3.1 billion were omitted. The total value of advances and payments on account which were recorded as budgetary payments but which had not yet been definitely accounted for was at least £14 billion. I could go on but I do not intend to do so. Those observations are sufficiently grave to enable the Committee to form a judgment. The report sums up:
"The Court estimated that for some 4.3 per cent. of Community payments it was impossible to obtain sufficient evidence to reach a firm opinion as to the correct use of Community funds.
That is not good enough. I am confining my criticisms to the Council of Ministers for the time being—and to the extent that my own country is involved because it is a member of the Council of Ministers and in particular of ECOFIN.
4.15 p.m.
Lord Wallace of Saltaire: The noble Lord has been speaking for 15 minutes on the subject of Amendment No. 56, not Amendment No, 24. I have trouble following the relevance of his remarks to Amendment No. 24. The Committee will not make progress unless it sticks to the relevant amendment under discussion. Some of us will be here when Amendment No. 56 is reached—I trust that noble Lord will be here. We shall make much better progress if we deal with each amendment in turn.
Lord Bruce of Donington: It is always easy to make agreeable progress when the facts revealed are agreeable. I can understand the noble Lord's discomfiture on having these matters brought to his

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attention. That will not deflect me from my duty in these matters, to which I have devoted 25 years of my life. I owe it to the Committee to explain the position as I see it. Members of the Committee may disagree with me but I ask them to bear with me a little longer. After all, I did not spend one and a half hours yesterday discussing the completely irrelevant subject of the social chapter. The matters now before the Committee are of considerable importance and should be attended to.
Why is it that after three years the Council of Ministers—which normally operates, at ECOFIN level, in a responsible manner—has not able to allow the Court of Auditors to certify accounts in accordance with the requirements laid upon it by the treaty? If the Community's accounts and the auditor's report were furnished to member states and Governments immediately after they were submitted, the Council of Ministers would have an up-to-date picture. Instead, the following procedure is adopted in striving for financial regulation, to which I objected at the time in the European Parliament.
Before the report of the Court of Auditors is published it has to go back to the Commission for its replies. But by the time that the Commission has completed those replies another six months has elapsed, which means that when the Council receives the document it is already obsolete. At that point, the Council may be disposed to think, on the basis of the voluminous explanations provided six months later by the Commission, that some progress is being made and may, therefore, decide to "let it go".
It is almost the same as a public company in the United Kingdom withholding the circulation of its report to the public and its shareholders until after the directors have had an opportunity to comment on the auditors' report which accompanies the accounts. Everyone knows that that would be quite an impossible position. If a public company tried to hold up the publication of its accounts until after the directors have had an opportunity to comment on them, it would, however short the delay, probably lose its quote on the Stock Exchange. That is what is wrong and is what should be altered.
I am afraid that there will have to be an exercise of courage and determination by governments of member states. I expect and hope that, far from allowing this matter to slide year after year with millions of pounds being lost through fraud and irregularity, our own Government will in the current year at ECOFIN put their foot down and demand the necessary explanations and the necessary changes. I beg to move.
Lord Whitty: I believe it would be helpful if I were to intervene at this point. I share some of the concerns expressed by the noble Lord. Lord Wallace, but I thought that my noble friend was probably coming towards the end of his remarks at various points in his speech, especially when he started talking about the mechanism involved. I say that because this amendment deals with the mechanism and it was grouped with all the other amendments on QMV that we debated at
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length last night. I do not intend to go over that ground again—and I do not think that the Committee should—on the basis of this amendment.
In relation to fraud, as the noble Lord, Lord Wallace, pointed out, there will be a substantive debate in that connection when we discuss Amendment No. 56 later tonight. I do not suggest that the Committee has the substantive debate at this time. Therefore, unless other noble Lords persist in pursuing the debate now, I shall confine my response to saying that everything that my noble friend said about the necessity for tackling fraud is shared by the British Government. However, it is an overwhelming case for what this amendment actually deals with; namely, moving from a paralysis of unanimity required on anti-fraud measures to one of QMV. Indeed, the noble Lord made more eloquently than any of us could the case for not accepting this amendment and for accepting the change in the Treaty of Amsterdam to move to QMV for anti-fraud measures—and the quicker the better.
Lord Bruce of Donington: With the leave of the Committee, and with considerable thanks to my noble friend, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 25 not moved.]
Lord Stoddart of Swindonmoved Amendment No. 26:
Page 1, line 18, at end insert ("and the Protocol annexed to the Treaty establishing the European Community on the Application of the Principles of Subsidiarity and Proportionality"").
The noble Lord said: In moving this amendment, I believe that it will be convenient for me to speak also to Amendments Nos. 26A, 30 and 54C. The Maastricht Treaty was sold to Parliament—that is, to the House of Commons and to the House of Lords—on the whole question of subsidiarity. Far from being a centralising treaty, as many of us believed that it was, we were told that it would be a decentralising treaty and that in future, far from being more centralised and gathering more power to itself, the European Community would give back to member states powers which had been taken from them and that it would be very strict about not taking any further powers.
Indeed, the subsidiarity clause says that:
"The Community shall act within the limit of the powers conferred upon it by this treaty and of the objectives assigned to it therein".
Some of us expected that that would be taken seriously and that we would see a whole raft of measures, which had gone for decision by the Community, returned to national governments and national parliaments. However, so far as I know, no significant item has been returned to the jurisdiction of national governments and parliaments at all under the subsidiarity clause. So far as we can see, a number of inquiries carried out since then have elicited the following information: subsidiarity cannot apply to any measure to do with the single market; in other words, nothing to do with the single market can be returned. That means, in effect, any measure dealing with economic activity. Even if certain products are not sold on the Continent but either

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domestically or to third countries, they have to comply with single market regulations. Further, despite various promises, not one single piece of Community legislation has been withdrawn, as I have already mentioned, in accordance with the principles of subsidiarity, though there has been some vague talk about legislation not being presented because of it. But, once again, we cannot have a list of those particular measures.
The new definitions of subsidiarity make it clear that the concept cannot question the powers of the Community defined by the treaty, as interpreted by the Court of Justice. The criteria will not apply to any area where the Community has exclusive competence. These have always been defined by the Community itself; in other words, it remains true that the decision of what is and what is not subject to the concept of subsidiarity is decided at the centre—not at the periphery and not by the member states. It is decided by the centre. So decisions are to be taken from the top down rather than from the bottom up. I believe that even the Liberal Party will be concerned about that aspect. I say that because we all know—at least, I have always been taught so—that in a real democracy, such democracy grows from the grassroots upwards. It is not imposed from the top downwards, because that is not democracy at all.
The new clauses on subsidiarity concentrate on the form that Community action should take rather than its substance. The following paragraph is added, in case anyone should get any strange ideas:
"Member States are required to take all appropriate measures to fulfil their Treaty obligations and not to prevent the attainment of the Treaty objectives".
Paragraph 2 of the Protocol on Subsidiarity and Proportionality also adds that these principles,
"should take into account Article F(4) of the Treaty on European Union, according to which 'the Union shall provide itself with the means necessary to attain its objectives and carry through its policies"',
whatever they may be. The worries expressed about this particular article at the time of the Maastricht debates have been fully justified. It is incompatible with any serious application of the concept of subsidiarity, which we all believed in and which we all said we wanted; but in fact it is what we have not got.
The concept of proportionality is supposed to take over from subsidiarity to limit the scope of Community action and to ensure that this does not go beyond the terms of the treaty. Again, the definition is from above rather than from below. The whole system is self-referential and circular. It has not resulted in less or less detailed legislation, as we have seen by the rafts of directives and regulations that keep coming from the Community to be put into operation by national governments.
According to leading European jurists, subsidiarity is not a legal but a political term. In the last resort it is the European Council that decides on the criteria and their fulfilment.
On the subject of the extent of legislation, it is worth noting that even official European Union publications are not certain how many legal Acts are in force. It is
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almost inconceivable, if not laughable, that they do not know how many legal Acts are in force. If they do not know how many are in force, how can they enforce them and how can people obey them? If the European Union does not know what the law is, how on earth can everybody else know what the law is?
Since many of the directives are amendments of old ones and are not counted as separate pieces of legislation, though they clearly are that, the closest anyone has come to giving a figure is the Danish MEP, Jens-Peter Bonde, who calculated that by 1996 there were 23,027 pieces of EEC/EU legislation in force—23,027. I repeat that figure so that it should sink into people's minds. But even he admitted that that is not completely accurate because "there are no complete statistics of the EU Acts".
According to a recent reply in the House of Lords, there were 1,845 pieces of secondary legislation, mostly regulations, which do not go through national legislatures at all. In 1997, at the same time, 1,124 such pieces were repealed or expired. That left a net increase of 721. But that, of course, did not include directives. It is not clear, so far as I can see, whether decisions or Commission opinions are included in that figure, so the whole business of EEC legislation seems to be shrouded in doubt, if not secrecy.
This may be a convenient moment to raise the question of accountability. The main initiator of legislation in the EU is the Commission, as we all know, though most directives are passed by the Council of Ministers. Whether the Council of Ministers always know what they are talking about is another matter, but those who have attended Council meetings will know more about that than I do. Neither of those bodies is, strictly speaking, accountable to anybody—the Commission obviously so, while the Council of Ministers regularly flouts agreements of obeying the will of national legislatures. We, in this Parliament, cannot bind Ministers to do what we believe they should do. Of course, under QMV, it would not matter anyway as long as the decision was taken by QMV in Europe.
It is also important to remember that of all the EU legislation, only directives have to be approved by the national legislatures. Mostly, they go through this place, the House of Commons and ourselves, in the form of statutory instruments. In other words, they are not debated at all. Regulations and other pieces of legislation are, on the other hand, effective from the date of publication or the designated date directly on individuals.
It seems to me that we need some proper answers on subsidiarity: what it means, what it is going to mean in the future and when we can expect the subsidiarity proposals to be put into effect. It is about time our Government, perhaps together with other governments, reviewed all the directives, all the measures that have come from the EU and which are operated by them, to see, first, whether they are still necessary—and if they are not necessary they should be repealed—and whether the European Union is exercising powers which ought now, in the light of experience and further experience, to be exercised in the member states. Above all, we

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ought to know just how many laws are in operation. The European Union or the Commission should be told that that is essential information which people and governments want if they are to understand exactly what is happening within the Community itself.
So I hope that my noble friend does take this matter seriously, that he really does believe, and this Government believe, in subsidiarity, that decisions should be taken at the point nearest to the people that those decisions will affect. Increasingly those decisions are being taken away from those whom they affect. I hope that on this issue the whole House will be able to unite, including my noble friend, in getting the subsidiarity proposals in proper context and to make them work as they were meant to work and as we were assured they were going to work when we discussed the Maastricht Treaty. I beg to move.
4.30 p.m.
Lord Moynihan: All Conservative members welcomed the principle of subsidiarity in another place, and I believe noble Lords from all sides of this House would echo their support for this principle. Subsidiarity or decentralised decision making is at the very core of what should be the appropriate vision for Europe, a vision of partnership of nation states in a competitive, decentralised and efficient Europe. But Amendment No. 26A and the new Clause 54C that I have tabled are both designed to highlight the unsatisfactory nature of the wording of the new protocol on the applications of the principles of subsidiarity and proportionality contained in the treaty and, in particular, paragraph 2.
Despite the new protocol's length, far from strengthening that important principle I have reservations to the effect that it will weaken it. From these Benches our main concern is that the principle of subsidiarity will not be developed and enhanced by Protocol 7 but instead its purpose will become confused and its progress impeded.
The principle that action should be taken at European level in areas where objectives cannot be achieved by action at national level, leaving only those areas where solutions need to be found by international agreement to be taken at Community level, was advanced by the former Prime Minister, John Major, during the Maastricht negotiations. Its inclusion in the treaty was a major achievement with a capital M. Following Maastricht, the previous government sought to develop the principle of subsidiarity at subsequent European councils in order to achieve a careful balance. On the one hand, the principle ensured that action at the level of the nation state should be the rule and community action the exception, while on the other hand it was important to ensure that subsidiarity could not be used to avoid single market obligations or, indeed, to circumvent requirements for the proper management of funds from the European Community budget.
It was the initiative of the previous government that led to proposals being brought forward to entrench subsidiarity further into European decision making. It was decided to include in the Amsterdam Treaty
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elements of the detailed rules for the application of subsidiarity, which had been agreed at the 1992 Edinburgh European Council. Indeed in 1996 the Government's White Paper, The Partnership of Nations, which set out Britain's negotiating position before the IGC, stated,
"The Community should only act where it has been given express competence and where action at the European level will bring clear benefits which cannot be achieved by member states acting alone".
In other words Brussels should play no part in matters best left to nation states. The Opposition believe that this principle is an essential safeguard against remote, bureaucratic and unnecessary interference. But, equally, it allows matters that require common action to be handled at European level such as migration, environmental degradation, nuclear proliferation, political instability to the east and, especially, drugs. It is fair to say that once again people throughout Europe are benefiting from an idea that stems from the Conservative Party and the United Kingdom, formed by enshrining subsidiarity as an established principle of the European Union by which to determine European decision making. The treaty provided an important safeguard against over-centralisation and represented a major success for the British vision of a decentralised and deregulated Europe.
There are critics of subsidiarity and it is important that the Committee considers their views. They ask, for example, what regulations have been changed or what direct action has been taken as a result of subsidiarity. They complain that the Maastricht Treaty made few or no provisions for making the concept of subsidiarity a reality in the European Union. However, I think it is right and proper that I point out to those critics and to the Committee that the volume of new European Union legislative proposals being put forward has fallen rapidly with only 19 proposals for principal legislation in 1996 compared with 61 six years previously in 1990. I accept that this partly reflects the completion of the legislative programme which was required for the creation of the single market, but it also reflects the change in approach to Europe symbolised by the concept of subsidiarity.
Before Maastricht it should be remembered that there was no general presumption in favour of action at national level in any of the treaties, nor have we ever claimed that Article 3b of the Maastricht Treaty was perfectly applied and implemented. But the principle is an important one, as the noble Lord, Lord Stoddart, has mentioned. Article 3b represented a step in the right direction. We look forward to further steps as a result of the Amsterdam Treaty. But we have been gravely disappointed. The former Prime Minister, John Major, said,
"Take subsidiarity which I call national precedence. Subsidiarity enshrines in EC law the principle that the Community should not he permitted to do what member states can do themselves".
I believe this is a critical set of amendments. It focuses on subsidiarity which represents an honest attempt to assert the primacy of the nation state. In my view such a concept connects particularly favourably at this time with what most people in Europe want. An increasingly integrated Europe is out of step with the

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heartbeat of most of the people of Europe. A major factor in people's concerns about the European Union is the perception that Europe generates too much legislation which is intrusive, over-regulatory and unclear. People fear integration by the back door and subsidiarity is a welcome response to that fear—a measure to improve the quality of legislation and to resist integrationist developments.
Against that background I believe the Committee needs to go further and ensure that subsidiarity has indeed become, as I am sure the Government will claim, a more effective safeguard as a result of their negotiations. We certainly look to those negotiating to ensure that the Treaty of Amsterdam achieves that. The aim of reinforcing the principle of subsidiarity through a treaty protocol, particularly to ensure that the European Union makes laws only when individual member states are not better placed to do so, was chief among the previous government's objectives for Amsterdam. That is why it was such a grave disappointment that the Government's new protocol on subsidiarity failed to fulfil this objective and represented no improvement, as the noble Lord, Lord Stoddart, has pointed out. We should look at the relevant wording which is critical. Let us consider the relevant wording in the Maastricht Treaty. Article 3b states,
"the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot he sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community".
That is clear, but we must now consider what Protocol 7 in the Amsterdam Treaty achieved, especially key paragraph (2) which states,
"The application of the principles of subsidiarity and proportionality shall respect the general provisions and the objectives of the Treaty, particularly as regards the maintaining in full of the acquis communautaire and the institutional balance; it shall not affect the principles developed by the Court of Justice regarding the relationship between national and Community law, and it should take into account Article F(4) of the Treaty on European Union, according to which 'the Union shall provide itself with the means necessary to attain its objectives and carry through its policies'."
The noble Lord, Lord Stoddart, was right; this is greater centralisation. That paragraph shows that for the first time the principle of subsidiarity has been expressly subordinated to those very principles, pillars and institutions, that created the supra national activity in the first place.
It is clear that paragraph (2) of Protocol 7 makes the concept of subsidiarity subject to the acquis communautaire, the European Court of Justice and Article F(4). Far from being improved by Protocol 7, the principle of subsidiarity has to a great extent been neutered and emasculated. As a result I put it to the Committee that subsidiarity will not be more effective—as I hope everyone in the Committee would wish—but less. Is it not the case that rather than genuinely clarifying and tightening the application of subsidiarity, this key paragraph (2) ensures that the sum effect of the protocol is that the principle of subsidiarity will mean what the Council, Commission and Court of Justice intend it to mean at any one time?
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Under Maastricht the European Union unleashed a watchdog and they allowed it full licence to roam throughout the Community to restrict the extent to which the European Union sought to do those things that could be better done at national level. People may have reservations about the effectiveness of that watchdog, but at least there was such a sentinel. According to The Times the Government brought back from Amsterdam,
"a dog's dinner of a treaty".
In the case of this protocol it is truly a dog that is muzzled and cannot whimper, let alone bark. Protocol 7 is now long and complex. Instead of stating a simple principle which everyone understood, even if it was ineffectively implemented, we now have a lengthy and unwieldy protocol full of contradictory statements. This will prove fertile ground for the European Court of Justice which will be able to interpret the protocol according to its vision of and attitude towards European Union development. Does anyone believe that such an interpretation will enhance and support the principle of subsidiarity? I believe it risks giving free rein to dominance by the institutions of the European Union and it will serve to confuse and undermine the principle.
The Government have said that the protocol is an improvement because if we believe a matter should be dealt with under subsidiarity and the Commission does not deal with it in such a way, it will be open to any nation state, including ourselves, to go to the European Court of Justice to redress the matter, whereas such a course would have been difficult under the previous provisions. But surely now the Court of Justice in effect becomes the arbiter on what is, or is not, subsidiarity and proportionality. Therefore the benefit of this will be dependent on the way in which the court chooses to interpret the confused and contradictory provisions of the protocol.
I very much hope, and indeed believe, that it will be of considerable assistance to the Committee if the Minister can respond to the legal points that arise from these comments. Will he reassure the Committee that the application of the principle of subsidiarity has not taken a backward step thanks to the complex Protocol 7, which has indeed been improved and enhanced? I also hope that when the noble Lord responds he will clarify the apparently contradictory nature of some of the paragraphs of Protocol 7.
On his return from Amsterdam. the Prime Minister said:
"The treaty gives subsidiarity, ensuring that decisions are taken at the European level only if there is real added value in doing so—real teeth through a binding protocol".
On my interpretation, he was wrong. I believe that the protocol has in fact pulled the teeth of the principle. It seriously undermines it; and that seriously damages the national interest.
The basis of this country's approach to Europe has been one of balance—between the nation state and the European Union; between integration and intergovernmental action; between action at European level and decisions which are best left to individual

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nation states. From these Benches, we seek assurances from the Government that they will not act to disrupt the balance any further.
4.45 p.m.
Lord Renton: This group of amendments is very important. It could be thought by some to deal with a somewhat technical matter. But I am sure the Committee will agree, having heard the speeches of the noble Lord, Lord Stoddart, and my noble friend Lord Moynihan, that the amendments relate to a matter of fundamental importance—a complicated matter, unfortunately, but of great importance.
The European legislative process has become so difficult that at times it is almost unworkable. I mentioned earlier in this Committee stage, and perhaps I may remind noble Lords, that the principal lawyer who, a year or two ago, was responsible for supervising the negotiations on harmonisation among the 15 member states was almost in despair when he spoke at the European law conference in Rome which I attended. He said that we have to have fewer laws, and better laws. The problem is two-fold. It is partly due to the fact that there are now 15 member states with 11 different languages and at least half-a-dozen different types of legal systems. That makes harmonisation, which is an obligation under the Treaty of Rome, almost impossible and a very dilatory process—one which, frankly, is being achieved (a point that he made quite clearly) by a lot of fudging and proposed compromises which may be acceptable to some countries and not to others.
The principle of subsidiarity to some extent, though not so great an extent as we might wish, mitigates the problem. There is no doubt that our then Prime Minister, Mr. John Major, and our then Foreign Secretary, my noble friend Lord Hurd, did a great thing in persuading the representatives of the other European countries to agree to the principle of subsidiarity. There was one unfortunate result. Some members of the Commission produced a memorandum in an attempt to explain the application of subsidiarity, and did so in such a lengthy and complicated a way that the British representative on the European Court of Justice at that time (three or four years ago) described the memorandum as gobbledegook.
With that background, surely it is right that we should have some provision on the lines of Amendment No. 30, and go a little further, with a provision along the lines of Amendment No. 54C, in order that our own Parliament and people can be kept informed as to the effect of the attempt at harmonisation, modified by subsidiarity, upon our own laws, most of which have been established for years. Of course, we have to keep on legislating to keep up with modernity, but fundamentally our basic laws, and the principles that apply to them, have been with us for generations.
We must be very careful, however earnest some of us may be about wanting the European Community to succeed, to ensure that it does not merely create a new superstate which ignores the liberties, and the laws on which those liberties are founded, of the various member states. That is why this group of amendments
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deserves application by the Government. We are not pressing for amendments at this stage. However, I should very much like to see this group of amendments, and some other groups, passed by this place in order to give the Government and Members of the other place the opportunity to think again for the benefit of our people.
The Earl of Onslow: When we came to the Maastricht Treaty all those years ago, subsidiarity was extraordinarily difficult to define. The only then known definition was the subsidiarity as run by the Vicar of Christ in Rome, who allowed his subsidiary bishops sufficient leeway over matters in which he was not interested. That seems to be exactly what has happened in relation to subsidiarity within the European Community.
My noble friend Lord Moynihan says that there has been a watchdog about the place, looking to make sure that subsidiarity has actually been present. The watchdog strikes me as being a rather neutered chihuahua compared with the amount of subsidiarity that has actually been brought about.
I merely wish to ask what subjects have been declared subsidiary; how much subsidiarity there has been; and whether any matters have been repealed. In other words, has any acquis communautaire been "de-acquis communautaired"—if that is the right term? That is what we were promised in the Maastricht Treaty, and it appears there is an attempt to promise it in the Amsterdam Treaty. To someone like myself, who is becoming more and more doubtful, it seems to have some good provisions. However, if it goes on as it is, it will make the European Community quintessentially unpopular. There will be a terrific row and it will break up, unless we get the legislation more in tune with the wishes and desires of our people. I wish to know what has been declared subsidiary since 1992 and what action has been taken on it.
5 p.m.
Lord Grenfell: We need constantly to remind ourselves that the subsidiarity principle relates to areas where the Community does not have exclusive competence. I am therefore rather puzzled by the fear in the heart of the noble Lord, Lord Moynihan, when he considers paragraph (2) because he obviously has considerable difficulties with it.
It would be sensible to read paragraph (2) in conjunction with paragraph (4). In effect, paragraph (2) simply reflects the principle—particularly the part in the paragraph which says:
"it should take into account Article F(4) of the Treaty on European Union, according to which 'the Union shall provide itself with the means necessary to attain its objectives and carry through its policies'".
That reflects the principle that subsidiarity must be related to what is exclusively in the competence of the Community and what is not.

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I notice that the noble Lord was rather shy about referring to paragraph (4). I am not sure I heard him spell the words out. Paragraph (4) states clearly that:
"For any proposed Community legislation, the reasons on which it is based shall be stated with a view to justifying its compliance with the principles of subsidiarity and proportionality; the reasons for concluding that a Community objective can he better achieved by the Community must be substantiated by qualitative or, wherever possible, quantitative indicators".
That seems to me to be an extremely sensible and hard test. If one reads paragraph (2) in conjunction with paragraph (4), I do not think the two are contradictory. Paragraph (2) sets the scene in which the subsidiarity principle might or might not apply. Paragraph (4) spells out clearly the hard test that the Community must go through in order to prove that it has the prior right to legislation.
The Earl of Clanwilliam: Before the noble Lord sits down, I should point out that paragraph (1) states:
"In exercising the powers conferred on it, each institution shall ensure",
compliance with the principle of proportionality. Here we have proportionality raising its ugly face in competition with subsidiarity. As proportionality is the responsibility of the Commission and subsidiarity is the responsibility of ourselves, it is the Commission and the Council which exercise proportionality. That is in paragraph (1), so it totally negates paragraph (4) which the noble Lord dealt with.
Lord Wallace of Saltaire: The subsidiarity principle is extremely important and I have much sympathy with what was said by the noble Lord, Lord Stoddart, at the start of his speech. We see government as most effective when it is as close to the people as possible.
I also believe that from the outset the European Commission had certain centralising tendencies, a natural belief by the French fonctionnaires who established it that whatever was done in Brussels was done better. It has been important to establish with the principle of subsidiarity that we need to change the basis of a much larger and more diverse Community.
We must distinguish between politics and law here. A number of the arguments we have heard this afternoon suggested that unless absolutely everything is written into the treaty, they will not be contained. It was suggested at one point that if it were not in the treaty that a member state could leave, then it would not be possible. It was not in the Act of Union with Ireland of 1801 that Ireland could leave the United Kingdom, but it did. One cannot write absolutely everything into law.
The subsidiarity principle was written into Maastricht. I agree with many of those who have spoken so far that it has not yet been used as effectively as it should. The last Conservative Government must share part of the blame for that. They failed to build coalitions with like-minded governments—and there are some—in order to push the principle through. The British and the French
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Governments produced lists of items which they would like to be returned to national sovereignty; they were rather different. It was a standing joke in Brussels two or three years ago that the British Government were arguing at the same time that all animal welfare issues were better dealt with at Brussels than at national level, but that no human welfare issues, social welfare, should be better dealt with at Community level. We must be rather more consistent in arguing for subsidiarity.
However, the principle is now there to be used. The European Union is a process of continuing negotiation. I hope that the strengthened protocol within the treaty will be more effectively used by the British Government than the weaker version in the Maastricht Treaty which was used by the previous government.
Lord Beloff: I wish to dissociate myself from something which the noble Lord, Lord Stoddart, said. It was that when subsidiarity was brought back as part of the Maastricht Treaty, everyone applauded. I thought it was nonsense then; I think it is nonsense now.
There are two forms of recognised government in a civilised world: unitary governments and federal governments. Having spent most of my life studying the latter, it seems to me a perfectly valid form of government which, in a proper federal constitution such as that of the United States or Australia, can last for a long time. It does not give rise to endless tensions and is something to which the ordinary citizen can refer, to ascertain whether a particular exercise of governmental authority is federal or for the state and the province.
The European Union is neither a centralised government—if it admitted to that there would be universal expansion, not just in this country—nor, alas, is it a federal government because there is no clear division of powers to which the ordinary citizen can refer and upon which, as in the United States, Australia or Canada, a court can ultimately judge whether the boundaries have been correctly set.
For once, I agree with the noble Lord, Lord Wallace of Saltaire. The Union is in a constant process of negotiation and renegotiation. I believe that it takes up the energies of this Government and other governments which could be much better spent in measures to improve the lot of their own populations. Subsidiarity is a word which when I started teaching government, no one had ever heard except, as has been pointed out by the noble Earl, Lord Onslow, a few theologians. The introduction of the word has simply been a camouflage for the attempts of particular parts of the European institutions to acquire power under the cover of distributing it. We can get nowhere with this system. I can only tell the Committee that its time in dealing with the treaty is largely wasted because it will not survive.
Lord Renton: Before my noble friend sits down, may I ask him whether he agrees that, bearing in mind that all the European countries in the European

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Union are committed to subsidiarity, each of them should have the right to be told how it is working, if at all?
Lord Beloff: They may be committed to subsidiarity, as someone may be committed to a belief in astrology. It does not get us any further.
Baroness Park of Monmouth: I do not believe that I shall get the matter much further either. I wish to ask the Minister a question. If we consider paragraphs (4) and (5) of the protocol, and we recognise that the Community will act on its own only if there is no national way of doing something, what have we managed to establish formally as the time for scrutiny which we are to be given? That is one of the major problems. Matters are decided but because they come to both Houses so late it is virtually impossible to consider what the outcome will be. Whatever we think about subsidiarity, it is vital to establish an effective mechanism for keeping track and being given an opportunity to express a view. The protocol states on page 86, in paragraph (9):
"Without prejudice to its right of initiative, the Commission should: … except in cases of particular urgency or confidentiality, consult widely before proposing legislation".
Who will decide whether it is so urgent that they do not have to consult? Also, I should also like to know more about the actual control of scrutiny within the mechanism of the Community. The representative states in paragraphs 129 and 130 of House of Lords Paper 25 on advancing parliamentary scrutiny of the third pillar:
"We looked at what was done in the Irish Presidency and something like 31 measures went through … but only seven of those measures actually went through the Council of Justice and Home Affairs Ministers".
The committee asked,
"Do you mean that they went through other Councils?"
The answer was:
"They went through other Councils. I think five measures were adopted without debate by other Councils which never went to the Council of Justice".
He went on to say that those Councils, as far as the representative knew, had no particular competence to make a specific decision. I am anxious to hear from the Minister therefore what we have done to ensure that we have effective, reasonable time for scrutiny.
Lord Pearson of Rannoch: I hesitate to embarrass my noble friend on the Front Bench who has done his best to defend the previous government's position on the introduction of subsidiarity. Indeed, I have just noticed a noble Lord leaving the Chamber. I am not surprised. He was a member of that Front Bench at the time when we spent many hours locked in combat over the Maastricht Treaty in 1993. I must point out to my noble friend that in his quote of Article 3b, as it was, of the original Maastricht Treaty, he missed out the vital 10 words which start the subsidiarity clause and which give the game away as to the whole intention of the clause. That is not in the least bit contradicted by the amendment we
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now see before us on the protocol on the subsidiarity provisions of the Amsterdam Treaty. The intention is merely confirmed.
To explain this point fully and to put it yet again on the record in your Lordships' Chamber I shall read the start of Article 3b, as it was. The vital 10 words are,
"In areas which do not fall within its exclusive competence".
It then continues:
"the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community".
A question which I first asked in a debate in your Lordships' Chamber on the Maastricht Treaty before it arrived here, in February 1993—many other noble Lords who have doubts about the entire European exercise have been asking the question steadily ever since—was: who decides which areas fall within the "exclusive competence" of the Community?
The answer is, and always has been, "the Community". That is merely confirmed with knobs on by Protocol 30, the protocol on subsidiarity in the Amsterdam amendments to the Treaty of Rome. I will not weary your Lordships by reading them out again. They have been fairly quoted today. However, I say to the noble Lord, Lord Grenfell, who prayed in aid paragraph 4 of the protocol, that the extract he quoted from that paragraph confirms my point exactly. When I ask who decides what is and what is not within the exclusive competence of the Community, the answer has always been the Community, not the nation states. From paragraph 4 the noble Lord quoted as follows:
"the reasons for concluding that a Community objective can he better achieved by the Community must be substantiated by qualitative or, wherever possible. quantitative indicators".
But in the charge of whom? Who decides? The answer remains "the Community".
It is perfectly simple; the whole business of subsidiarity has always been a fraud. It is a fraud now. It is confirmed as a fraud in the Amsterdam Treaty and we should not look for any form of succour or defence for our national sovereignty from it.
5.15 p.m.
Lord Simon of Glaisdale: It is with great trepidation that I intervene in a debate on the various treaties which is being carried on by acknowledged experts who have been assiduous in their attendance in the debates. I do so because I saluted with enthusiasm the inclusion in the Maastricht Treaty of the word "subsidiarity".
The noble Lord, Lord Beloff, said that that word is new. It may be. If it was not in the vocabulary when he was teaching, it is undoubtedly new. But the idea behind it is not in the least new. It has been a matter of consideration by everybody who has been concerned with the science of government since the days of the ancient Greeks.
Subsidiarity is a perfectly simple idea. It means that no decision should be taken by any decision-making body which cannot reasonably be taken by a decision-making body which is closer to the person who

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is affected by the decision. For example, that principle was argued over between the confederationists and the federalists at the time of the American revolution.
I may say that I speak with diffidence in the presence of the noble Lord, Lord Beloff, since his preface and explanation in his edition of the federalist papers where it is a locus classicus. But it is not only concerned with federalism and confederation. Where shall the power lie? We have had to consider it in connection with our own local government from the days when local government stood up against central government—or perhaps it would be fairer historically to put it the other way round.
The question must be asked: who then decides? It seems to me that there is no alternative except to say that it is a court of the institution which decides how the principle will affect in any specific situation. In saying that, we must bear in mind that any institutional court is a centralising body. We must be on our guard against that. The European Court, like all similar courts, is a centralising body and so of course is the Commission. Like any body exercising power, the Commission has the greater power. That is why power corrupts. It corrupts, first, by creating a desire for greater power.
So we have two bodies—a court and the Commission—which will be trying to reverse and hold back the principle of subsidiarity. We saw it immediately after the Maastricht Treaty. It had been referred to in the memorandum which was designed to try and mitigate the inclusion of the principle which I venture to submit to the Committee.
What then should our Government be doing? They should be using all their powers to insist that the principle of subsidiarity is observed not in general but from case to case. In doing so they will be up against the two centralising bodies which I have mentioned, but they can still have an effect. I hope we shall hear from the Minister that that is what will happen.
Lord Pearson of Rannoch: Before the noble and learned Lord sits down, can he tell the Committee how he thinks that the British Government, with the best will in the world, can overcome a qualified majority vote which goes against them in this matter, as such votes usually do?
Lord Whitty: This has been a quite fascinating debate. It has been almost a consensual debate in certain respects in that everyone in the Chamber reflects what their view of subsidiarity is and thinks that we should have more of it.
The general difficulty that we have had with the concept since it was first introduced at Maastricht is that everyone has some concerns about the way in which European law is being made. They are not quite clear who ultimately is responsible for it and they had hoped that the words in the Maastricht Treaty would help to sort out more clearly and mechanistically how subsidiarity applied. I think it is true to say that everyone feels some disappointment that that clarity has not yet emerged.
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Part of the reason is that we are not dealing with either a centralised state or a federal state, as the noble Lord, Lord Beloff, said; we are dealing with something that is organically changing in the light of negotiations between a number of independent member states, as the noble Lord, Lord Beloff, and the noble Lord, Lord Wallace, in unusual accord, seemed able to describe the European Union. In those circumstances we have to accept that an old medieval philosophical concept is a little bit of a jelly and quite difficult to apply in specific circumstances. Nevertheless, lying behind that is a very firm political intent by those who negotiated the Maastricht Treaty and by those who negotiated the Amsterdam Treaty.
Unfortunately, it is also true to say that some of the aspects of subsidiarity referred to here, particularly by my noble friend Lord Stoddart, with whom I have some sympathy, are somewhat broader than those which were incorporated in the Maastricht Treaty and which have been built on by the Amsterdam Treaty. At the end of the day, interesting discussion though this is, we are here at the Committee stage of the Bill and we have to look at the words that are changing as a result of the changes negotiated at Amsterdam. It is therefore important that we go back to those words.
The subsidiarity principle introduced at Maastricht states, as other noble Lords have said:
"In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community".
The third paragraph of Article 3b goes on to say:
"Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty".
That is the proportionality principle. So Maastricht had set out those general principles of subsidiarity and proportionality but it was felt that it did not deal adequately with their application and that detailed guidelines were necessary. That is why we got the Edinburgh guidelines, put forward by the previous administration and supported by the then Opposition. Those guidelines set out detailed procedures for the institutions to follow to ensure that subsidiarity was properly adhered to.
At the intergovernmental conference prior to the election the previous government had argued that it was important to write the details set out at Edinburgh on the substance and the application of subsidiarity into the treaty itself in a legally binding and detailed form. We, as the Opposition and subsequently as the Government, agreed with that. When we entered the IGC negotiations last May a draft of the subsidiarity protocol was already in the treaty text which had been reached in draft by that stage. I must pay tribute to the Opposition for their part when in government in achieving that text. I therefore hope that they will welcome the outcome.
What I cannot quite understand is how the noble Lord, Lord Moynihan, can say today that that text is weakening the previous application of subsidiarity which was written into the Maastricht Treaty. I can see,

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as many noble Lords have indicated, that they may well wish that the words were stronger in the Amsterdam Treaty but I cannot understand the concept that they have weakened the position. They are based on the initiative at Maastricht but they are explicitly taking into that what was previously regarded as a negotiating triumph by the previous government at Edinburgh.
Lord Pearson of Rannoch: Perhaps I may help the noble Lord as one who did not regard the negotiation at Maastricht as a triumph. The new protocol on subsidiarity specifically removes any possibility that the acquis communautaire could be weakened or diluted by the subsidiarity clause introduced at Maastricht, which is what many people hoped it would do. The specific words are perfectly clear and have been quoted before. They say that
" the application of the principles of subsidiarity and proportionality shall respect the general provisions and objectives of the treaty"—
fair enough—
"particularly as regards maintaining in full the acquis communautaire and the institutional balance."
They give greater power to the court, which we all know is the engine of the treaty. This is knobs on. Subsidiarity means what we said it meant at the Maastricht negotiations of 1993, not what the Conservative Government said or those who thought it might be of any use to us said.
Lord Whitty: The point I am making is that the changes between Maastricht and Amsterdam do not weaken the position. The reference to the acquis communautaire was present to start with in Article B of the treaty on the European Union negotiated at Maastricht but then it was specifically reinforced in the Edinburgh guidelines. Those references to the preservation of the acquis communautaire were there already. We have not gone backwards. We may not have done what the noble Lord wanted but we have not introduced something which is less pro-subsidiarity than the previous text, which is what I thought the noble Lord, Lord Moynihan, and several other noble Lords were arguing.
The Earl of Onslow: Perhaps I may ask the noble Lord what to me is an important question. Can he please give me and the Committee an example of where subsidiarity has actually kicked in and where the European Commission or the court has said, "That is nothing to do with us. It is only to do with you?"
Lord Whitty: There are two categories of that. One is where, explicitly, proposals that the Commission was bringing forward before the Maastricht protocol and the Edinburgh guidelines existed were abandoned on grounds of subsidiarity, of which there are between 15 and 18 examples, which is perhaps not the long list which the noble Earl would have wished. Those would otherwise have come forward had they not been rejected on grounds of subsidiarity. Those are matters that were in the pipeline prior to Maastricht and Edinburgh. Secondly, as the noble Lord, Lord Moynihan, said, the
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totality of primary legislation coming forward has greatly reduced, in part because proposals which would go counter to the principle of subsidiarity have not been put forward by the Commission.
So there is a dog that did not bark in the night dimension to that argument. Nevertheless, the reality is that every proposition within the Commission now has to be subject to the subsidiarity test. No doubt there are people in the Commission who, for whatever motive, are attempting to get round the proposal, but measures are pushed through. This measure has led to fewer and fewer new propositions of competence and law. I believe that that will be a cumulative process. The provision with the acquis communautaire rolls it back in a significant way. Nevertheless, it is true that the acquis communautaire is not a fixed body of law. It can expand and contract. There are no great examples of it contracting at this point. Nevertheless, the acquis communautaire is not a fixed or constantly expanding body of law. Decisions can be made in the Community to reduce the acquis communautaire.
Lord Pearson of Rannoch: The noble Lord said that the acquis communautaire can expand and contract. Can he give any examples of where it has contracted or it is planned to do so?
5.30 p.m.
Lord Whitty: A significant number of transitional arrangements have been deleted from Community law over the years. I am sure that there will be greater ones. Nevertheless, the noble Lord is broadly correct: the total scope of the acquis communautaire has not retreated, but many regulations have been removed from Community law. The new atmosphere arising from the Maastricht and Edinburgh guidelines being applied within the Commission and Parliament, has led to situations which have not materialised which would have done otherwise. I can see that the noble Lord. Lord Pearson, is not totally convinced of this argument, but it is the best that he is going to get at the moment!
The new subsidiary protocol, which includes the Edinburgh guidelines, contains the following. It requires the Community to consider whether an issue under consideration has transnational aspects which cannot satisfactorily be regulated by individual member states; whether action by member states alone would conflict with the requirements of the treaty; and whether action at Community level would produce clear benefits by reason of its scale or effects compared with action at the level of member states.
Moreover, the Commission has to consult widely and, whenever appropriate, publish consultation documents before proposing legislation. All those feeding into that consultation process have in mind the issue of subsidiarity. These principles are gradually bringing about—I agree that it is gradual and not comprehensive—better, more appropriate and effective law-making regulations at European level. Those changes resulting from subsidiarity should not be seen in isolation. They go hand in hand with other efforts that the Community is making in that direction. I refer to the Amsterdam guidelines for improving the quality of

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legislation. I am sure that Members of the Committee will welcome that. There is also the campaign for simpler legislation in the internal market, which I am sure that the business sector will welcome greatly.
So there has been some progress as a result of the subsidiarity principle being written into the process. But it is not a mechanical application and in the present circumstances it cannot be so. The Commission has withdrawn some legislative proposals and it has not come forward with others. I cannot see that the protocol we have adopted as a result of the Amsterdam Treaty in any sense weakens the influence exerted at Maastricht. Since then it has extended gradually through the institutions in order to establish that what is done at nation state or lower levels should be done at those levels and not automatically assume a European involvement in such legislation or other action.
There is a slight tone in some of the debate that because the subsidiarity principle has not worked perfectly we should not pursue it but reject this protocol and therefore the treaty. That is what we would be doing. But this is an important part of the future atmosphere of law-making for the Community. This protocol will help the law-making to work better.
We have to accept that there has been some achievement so far. Those who work in and out of Brussels will have seen that in drafting legislation the Commission has taken a different and often more sensitive approach to national circumstances. The result has been that the amount of primary legislation we have had to consider has gradually fallen. Although that may not have happened in the past year, the amount of primary legislation has certainly dramatically fallen from the years in which concerns about subsidiarity were particularly strong.
The Earl of Onslow: I know that the amount of primary legislation has fallen, but the amount of regulation arising from the primary legislation has increased. So it has just been a different shape rather than a different volume of legislation.
Lord Whitty: That is not the easiest thing to measure. But clearly, once one has primary legislation then regulations flow from it, as with national legislation. The point about the acquis communautaire is that the scope of what should be done at European level as against national level has not increased; the rate of new primary legislation has not increased. In order to carry out that primary legislation there may have been some increase in the level of regulation.
The whole question of law-making in the European Union is extremely complex. But I believe that towards the end of the debate Members of the Committee were addressing the issue that although subsidiarity is not perfect, at the end of the day the question is who decides what is appropriate. It is clear that there is no satisfactory answer for those who regard anything that the Community does with deep suspicion.
Naturally, at the end of the day, the Community will decide what it does within its own area of exclusive competence. But as regards subsidiarity, ultimately there
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must be a role for the Court of Justice but it will be a longstop role. The decisions on subsidiarity will reflect the Commission taking into account the requirements of subsidiarity as regards the proposals for legislation. The Council of Ministers will take account of subsidiarity when it comes to consider those proposals.
The protocol has set out what subsidiarity means for all the institutions and the procedures the institutions must follow during the legislative process. It is true that, in the last resort, the court will be better able to ensure that the subsidiarity principle is properly applied on the firm legal basis of the explicit protocol written into the treaty. In our view that is a power for the court. But it is an advance on the general language of Article 3b of Maastricht and the Edinburgh guidelines which were not themselves justiciable. The Government are confident that the European Court of Justice will implement this protocol effectively in line with the general view across the European Union that the principle of subsidiarity has to be enforced.
The Earl of Clanwilliam: Is it not the duty and the responsibility of the Court of Justice to ensure the ever deepening and widening of the Community, and that therefore its card is already marked in advance against the use of subsidiarity?
Lord Whitty: The role of the Court in this respect is to ensure that the terms of the treaty are applied and to resolve disputes over the application of those terms. Therefore, the Court will be acting as would any court in deciding what those terms mean.
Lord Pearson of Rannoch: If there were to be a dilemma in the mind of the Court—I agree with my noble friend Lord Clanwilliam that that is extremely unlikely—surely the Court would have to find in furtherance of the
"ever closer union of the peoples of Europe",
which is in Article A of the treaty. The Court is the engine of the treaty. Why would it wish to go in any other direction?
Lord Whitty: The Court is the arbiter of the treaty; it is not the engine of the treaty. The Court acts as would any national court in interpreting the legislation which is applied in the institutions which it governs. That is the role of the Court. That is the only way in which the Community can operate on any effective constitutional and legal basis. I appreciate the fact that the noble Lord does not want any of those institutions, but if we have any of the institutions, we have to have a court to ensure that the rules apply. That applies in the area of subsidiarity just as elsewhere.
The noble Baroness, Lady Park of Monmouth, referred to the question of scrutiny. That matter is probably best taken in the next debate, which will relate to the national parliaments.
As I have said, this is a bit of a jelly of a topic. However, it is a very important principle. We need to find new ways to ensure that what we all mean by "subsidiarity" is effectively followed by the institutions

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of the Community. We believe that the Treaty of Amsterdam improves on what was there before, but it is not perfect. None the less, I think that we all agree that the principle should be supported. Therefore, I ask the noble Lord to recognise that the wording of this protocol reflects that principle at least in part, even if not sufficiently for his purposes. Therefore, I hope that he will be prepared to withdraw his amendment at this stage.
Lord Renton: The noble Lord has not yet mentioned the Government's attitude with regard to Amendments Nos. 30 and 54C which are grouped with this amendment. Whether or not the principal amendment is accepted, I should have thought that either of those two amendments, which enable our Parliament to be kept informed, should be welcome to the Government. The noble Lord's views on these two amendments would be helpful.
Lord Whitty: Amendment No. 30, which deals with reporting to Parliament on the principle of subsidiarity, is couched in such terms that it requires reports on the application of the principle of subsidiarity throughout the Union. It would not be possible for the Government to produce that report. The institutions of the European Union could produce such a report which would then be subject to scrutiny by this House. Indeed, the Commission has already undertaken work on its current annual review which is, I believe, entitled Better Law Making. It provides documentation which is subject to the scrutiny processes of this House. It includes the Commission's report on the application of subsidiarity within its processes and will, in the normal way, include the British Government's comments on the Commission's report.
Lord Renton: That answer does not apply to Amendment No. 54C which stands entirely on its own. The Minister has not considered that.
Lord Whitty: I am not sure of the distinction which the noble Lord is making. However, perhaps the question of reporting should be dealt with in the whole context of scrutiny because subsidiarity is only one aspect of the way in which we consider Community legislation in this House and in another place. It would probably be better to deal with those amendments in that context. The Government are in no way reticent in allowing in this House and in its committees debates on proposed European legislation and on the Commission's reports on such legislation.
5.45 p.m.
Lord Stoddart of Swindon: This has been a long and fascinating debate in which we have had many sensible contributions. I do not want to spend too much time replying, but there is a dispute about exactly what "subsidiarity" means and about its effects. It is absolutely true that those who expressed doubts about the principle during our Maastricht debates have been proved right, as the noble Lord, Lord Pearson, said,
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because neither my noble friend nor anybody else has been able to show that subsidiarity has worked in any tangible way. My noble friend said that some legislation that might have been introduced was not introduced, but, unfortunately, we shall never be able to judge whether or not that is so. There are no tangible examples of how subsidiarity has helped to slow down or to prevent the centralising tendencies of the European Union. That is what this debate has been about.
As the noble Lord, Lord Moynihan, said, the debate is also about whether the protocol helps or hinders the position of subsidiarity. I do not know how we can reach a decision on that, but what worries me is that a simple statement of principle has now been cluttered up by 13 paragraphs, of which I believe 10 are additional. Once the Commission and the Court get their fingers, eyes and minds on that, there is no knowing what they might do. As the tendency is to centralise, they are almost bound to try to undermine the principle of subsidiarity. I am afraid that my noble friend has not reassured me on that point.
As the noble Lord, Lord Renton, said, one unfortunate result of the provisions on subsidiarity has been that the Commission produced a memorandum on the matter which was so gobbledegookish that apparently nobody understood what it was talking about. If no one knew what the Commission was talking about, can we be sure that the Commission itself knew what it was talking about? We must bear such points in mind and take into account the strictures of the noble Lord, Lord Renton, in saying that we must ensure—apparently, we all believe this—that the European Union does not become a European superstate by ignoring the laws and traditions of member states which have been operating not just for a few years, but for many generations. I believe that we should heed that.
The noble Lord, Lord Wallace, said that we cannot write everything into law. That is true. But the problem is that in matters European, the Commission wants to write everything into law. It wants to put everything down on paper in order to bind the member states to its policy and its direction. Our own law gives a certain flexibility for interpretation by the courts. As far as I can see, it is the European Union and the Commission which want to tie everything into words so that there can be no doubt and no escape for member states.
The noble Lord, Lord Beloff, said that he did not agree with me that everybody applauded the subsidiarity clauses in the Maastricht Treaty. He is absolutely right. I did not applaud them myself. As usual, the noble Lord goes right to the heart of the matter in saying that they do not matter and we are wasting our time discussing this particular clause. It is the job of this House and another place to scrutinise legislation. Even though we may believe that we are wasting our time we should nevertheless scrutinise it.
The noble and learned Lord, Lord Simon of Glaisdale, saluted the insertion of the word "subsidiarity" into the Treaty of Maastricht. He told us that it was a very good thing. He said that subsidiarity was all about the science of government. Who could quarrel with that? Unfortunately, he went on to say that the Commission

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and the European Court would make decisions towards centralisation because that was what they were all about. Perhaps I more than anyone else respect the noble and learned Lord for his legal knowledge but, most unusually, he appeared to contradict himself. Although he applauded the system of subsidiarity nevertheless he believed that the people who would implement and interpret the provisions would do their best to undermine them. I hope that I do not misrepresent the noble and learned Lord.
Lord Simon of Glaisdale: Perhaps the noble Lord will allow me to intervene. The difficulty that arises is that these institutions are manned by human beings. The principle of subsidiarity is well established. But I ventured to say that the Court would try to centralise because that was in the nature of a constitutional court. Similarly, the Commission will try to mitigate the principle, as it did immediately after it was enunciated with a powerful memorandum at the Edinburgh Conference. One must accept that, but it does not mean that the principle itself is not one that is well worth laying down and that the Government should not do all that they can to vindicate that principle whenever it arises. I speak as a strong pro-European.
Lord Stoddart of Swindon: I thank the noble and learned Lord for underlining the whole principle and explaining that subsidiarity can operate only as long as it is worked at and we can undermine the baleful centralising influence of the Commission and the European Court.
My noble friend Lord Whitty did his best to provide the Committee with some reassurance about subsidiarity. I am not sure that he succeeded. However, it is not his fault. It is very difficult to give an assurance about subsidiarity. The problem is that there are no examples. I felt rather sorry for my noble friend. He sought to reply to a debate that was highly critical of what had happened on subsidiarity without being able to refute what had been said. But I am quite sure that my noble friend is a strong supporter of subsidiarity and wants more devolved power from the European Union. He does not want to push power up; he wants some power to come back down. If I understand my noble friend correctly, he and his colleagues will do their best to ensure that the principle of subsidiarity really works this time and will take forward the matter. Because I believe that he will do that, I seek leave to withdraw the amendment.
Amendment by leave, withdrawn.
[Amendments Nos. 26A and 26B not moved.]
Lord Moynihanmoved Amendment No. 26C:
Page 1 line 18, at end insert ("and the Protocol on the Role of National Parliaments in the European Union"").
The noble Lord said: I beg to move Amendment No. 26C. In introducing this amendment, I am grateful to my noble friend Lady Park for her insight into the matters that I am about to raise. She would have introduced this amendment far better than I am capable of doing. I believe it is important that the issues she raises are considered in detail by the Committee. It is
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with some pleasure that I move this probing amendment. This is not a matter in respect of which there is any difference of principle with the Government. I believe that there is a good deal of common ground between us on this matter. The purpose of the amendment is to give the Committee an opportunity to debate the role of national parliaments within the European Union.
The amendment deals with the provisions of the treaty contained within the protocols to allow a minimum six-week period for scrutiny of Community and third pillar proposals by national parliaments. The protocol also provides a new consultative role for COSAC (the Committee of National Parliamentary Scrutiny Committees). It will come as no surprise to the Committee to hear that these Benches welcome the fact that the treaty includes measures to permit better scrutiny of Community legislation by national parliaments.
The previous government led the way in Europe to ensure that the Treaty of Amsterdam contained such a measure and that national parliaments were given a greater role in scrutinising European legislation. The requirement for a six-week notice period before the Council decided on legislative proposals had its origin in important work carried out by the Select Committee on European Legislation. Declaration 13 of the Treaty of Maastricht on the role of national parliaments in the European Union stated the importance of encouraging greater involvement of national parliaments in the activities of the European Union. It called for the exchange of information between national parliaments and the European Parliament to be stepped up and for national parliaments to receive Commission proposals for legislation in good time for information or possible examination.
But the previous government were keen to make the main elements of Declaration 13 of the Treaty of Maastricht legally binding by entrenching them in the treaty, for it was clear that a legally enforceable provision was sorely needed. In 1994, in the first of its reports on the 1996 Intergovernmental Conference, the Select Committee on European Legislation was scathing about the lack of openness and accessibility of the process. According to the report, not only was the principle of making information available to national parliaments in good time before a Council decision routinely ignored, but the unpredictability and lack of notice led that committee to conclude that laws for European citizens were "to be made in a private club".
I quote from paragraph 61 of the 24th Report of the Select Committee:
"The process of legislation in a democratic society always contains the elements of proposal, consideration, amendment if necessary, and approval. This process works only if what is proposed is clear, if it is widely available, if there is publicity and public consultation, and if there is time to consider the proposal before decisions are taken".
European law accounts for a large and growing proportion of the law of each member state, as we have learned again in these Committee proceedings, yet increasingly it appears "to be made in a private club".

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The committee listed a selection of 42 documents which in the previous 14 months had been found to be of legal or political importance but which it had had to consider without an official text. The committee singled out for criticism the use of unofficial texts and the absence of a minimum period of notice for legislation to be considered in the Council. The Committee will be aware that that was compounded by difficulties in obtaining documents attributed to translation, transmission and organisational delays.
Such difficulties have long been a problem for national parliaments, and particularly for those like the Westminster parliament with a demanding and extensive European scrutiny system. Other problems arose from unpredictable Council agendas, late Commission proposals, and the bunching of business towards the end of a presidency notice. As a result, in its report, the Select Committee recommended a 4-week period of notice to protect the interests of national parliaments and the citizens they represent. It stated:
"It seems to us that the minimum period of notice should be four weeks",
that is, four clear weeks between the official text of a document being available in the appropriate language in every national capital and a decision on the document being taken in Council.
However, on the publication of the Select Committee's 27th report on 18th July 1996—a year and a day after that recommendation had been made—the situation worsened. That report listed a selection of 75 documents of legal or political importance which the committee was forced to consider without an official text. It excluded documents where the committee had an unofficial text, or the Commission document and no expectation that there would be a change. But, as the Committee is aware, an unofficial text is not a depositible document available to this place and to the public more widely—not least to those who may be affected by the legislative proposal contained within it.
The Select Committee again attributed that "lamentable state of affairs" to four main causes: the unpredictability of Council agendas; late production of proposals and other documents by the Commission; the preparedness of the Council to take items at short notice; and the slow transmission of documents. The Select Committee acknowledged also the previous government's role in working to resolve that unacceptable situation. It stated:
"No blame attaches to the Government for the situation. Following our report last summer, Foreign and Commonwealth Office Ministers and officials have kept up pressure on the Commission and the Council Secretariat for quicker production of documents and more orderly organisation of business, and have raised with them the particular difficulties which we have encountered".
The committee reiterated its recommendation of the previous year:
"In our view the difficulties will only be solved by the introduction of the binding four-week period of notice which we recommended last summer".
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On the recommendation of that Select Committee, which was endorsed unanimously by all the European affairs committees of parliaments of member states' at the COSAC meeting in October 1996, the British Government tabled a treaty amendment which formed the basis of a draft protocol. That appeared in the treaty text presented to the Dublin European Council in December 1996. As a result, the period of notice now enshrined in the protocol is legally enforceable. That is the good news.
Now for some perceived problems associated with the protocol. In the preamble to the protocol that appeared at Amsterdam, the desire to enhance the ability of national parliaments to express their views on matters which may be of particular interest to them is indeed expressed, but is it not the case that national parliaments have to have an interest in everything the Union does and legislates for, for it is binding on all their people? Will the Minister confirm when the starting point for the six-week period of notice between the depositing of Commission consultation documents before the European Parliament and the Council of Ministers and the date when they are to be discussed within the Council will be? I believe that my noble friend Lady Park is interested in that point. We need to know the starting point for that six weeks, and I should welcome the Government's clear answer to that question.
Will the Government give an assurance that the six weeks will start from the date that the relevant documents are delivered to national governments over whom national parliaments have control rather than the date the documents are made available to the European Parliament and the Council as a whole over whom national parliaments do not have control, in order to avoid the possibility of a delay in transmission? Will the Minister confirm that it can take up to six weeks for documents to be sent on from Brussels? So unless the six weeks start when Westminster receives its copy, it would seem that the time allowed would frequently still be insufficient to permit parliamentary scrutiny.
There is of course an exception to the six-week rule on the grounds of urgency. I would be grateful if the Minister could assist me by defining what is an exception on the grounds of urgency. What type of legislation does the Minister envisage that that exception would cover? Does the Minister agree that it is essential to ensure that that provision is defined tightly to avoid the exception becoming the norm, and that the Council should be required to state formally the grounds of urgency?
Those are specific, detailed questions on an important part of the work done by the Government in negotiation. I am sure that the Minister will have no difficulty in clarifying the two points that I have raised. I underpin a broader more general important point; that on these Benches we believe that national parliaments remain the primary focus of democratic legitimacy within the EU, for it is they who hold national Ministers to account.
Will the Minister confirm—this is no light question in the context of a further shift in powers towards the EU institutions—that the Government concur that

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national parliaments remain the primary focus of democratic legitimacy within the EU? In a Europe which is to flourish as a partnership of nations, national parliaments must remain the bedrock of democratic legitimacy and accountability. They represent the primary forum for the exercise and application of democracy, and for the expression of the will of the people in elections.
Far from acting as the guardians of democratic accountability of our national Parliament, at Amsterdam the Government allowed many powers to be diminished and undermined, and transferred to the European Parliament, and into the hands of unelected officials, as we debated at length last night with regard to the presidency of the Commission. I have asked specific questions, and I shall be grateful if the Minister could reply to the wider and critically important issue of national parliaments remaining the focus for our democratic legitimacy? I beg to move.
Lord Bruce of Donington: I am happy to endorse and agree with practically everything that the noble Lord, Lord Moynihan, has put forward on behalf of himself and the Opposition. There can be no doubt as to the accuracy with which he has presented the whole question to the Committee. I support him warmly.
I shall refer briefly to the protocol itself. One notes a slight tendency to indulgence in the national parliaments. The second paragraph of the protocol states:
"Desiring, however, to encourage the greater involvement of national parliaments in the activities of the European Union and to enhance their ability to express their views".
That is a tepid expression of the real position in this matter of national parliaments. Members of the Council of Ministers are responsible to their respective parliaments and to the members of parliaments. It is not merely in order that members of parliaments may express their views, but in order that they may be able to exercise such powers as they may have over their own Ministers before their Ministers, in the Council of Ministers, come to decisions on proposals put forward by the Commission. It is a vital part of British national life that Members of Parliament should be informed fully of Commission proposals and other important documents in good time for them to be able to consider them.
I hope that your Lordships will forgive me when I say that I have studied European bureaucracy for a long time. In general terms, I know how it works. It is not unique to Europe; it applies to all bureaucracies. Bureaucracies can easily establish their ascendancy over politicians by flooding them with paper so that they have no real chance to read through documents in detail, and still less time to present them to their Ministers. It must be said immediately that we have had a surfeit of paper flooding in from Brussels and elsewhere. Sooner or later, that must give rise to the corresponding ways in which the British Parliament, through its Ministers, makes its ideas known to its public when, as a specific condition of the Commission's proposals, a directive, draft regulation or whatever is required.
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We must face the fact that our own bureaucracy, to whom I offer my warmest support, finds it difficult to deal with the flood of paper. The Council of Ministers, whether at Ecofin or wherever, is fully sensible of the position. That is why COREPER reveals most matters which go before the Council of Ministers. It has before it proposals, decisions, draft regulations and so forth. COREPER, which members of the Commission attend, arrives at its own decisions—presumably after consultation, if necessary, with London in the case of the United Kingdom—as to what needs to be considered and decided upon by the Council of Ministers. It decides and puts on List A what can be signed and agreed by the Council of Ministers without any particular discussion or deliberation at Council level. That makes it more practical to deal with the flood of paper, and I have no objection to that.
However, it must be admitted that even after that, and even on the assumption that the document is delivered in the United Kingdom giving six weeks' notice under the protocol, it takes some time to go before the various Select Committees. In the House of Lords, there is the Select Committee on European legislation or one of its sub-committees, and there is a Standing Committee and a Select Committee in the other place. It is clear that some documents do not go through the committees because only the most important of those which arrive—or what the civil servants of the House decide are the most important—are considered by the Committees. That does not apply only to unimportant documents, or to items which are deemed to be unimportant.
However, the fact must be faced that some legislation which is prepared at Commission level, the importance of which is a matter of opinion—it is not always universally agreed—can go on to the statute book without it having official governmental approval purely because at some level it has been decided that there are not the facilities or the time to deal with it. We must face that fact.
I wish to touch on one of the most important documents. One of the most important proposals which comes from the European Commission is the Community budget. It is an important proposal. As your Lordships are fully aware, and as I have previously indicated, we are the third largest net contributor. In the current year, we will contribute more than £1.5 billion net out of the Consolidated Fund and therefore we have an interest in such matters. I was perturbed, therefore, to read in confirmation of a matter that has long been conveyed to me unofficially and verbally, the observations of our own Comptroller and Auditor General in his report published last Friday. At paragraph 2.18, he states:
"In their 1995 Statement of Assurance, the Court noted that the Community's financial statements were internal documents, had never been published, and were presented to the Council and Parliament only in French. The Court concluded that it would be better if the accounts of the European Community could be published, preferably with the Statement of Assurance, but that the Commission would need to make the decision".
At paragraph 2.19, he states:
"In February 1996 the Committee of Public Accounts noted that the full accounts of the Community Budget were produced as an internal Commission document and were not available in English.

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The Committee were concerned that improvements should be made to the Community's financial statements, in order to provide more usable information and enhance the accountability of the Commission for the use of the Community Budget. The Committee recommended that the United Kingdom Government press for the publication of audited accounts in a clear format accompanied by the Statement of Assurance. In their response the Government promised to raise the matter with the Commission".
Those are not my words; those are the words presented in a cool and factual form by our own Comptroller and Auditor General.
It is the case that there are delays. I will not say that they are deliberate—far be it for me to impute motives in these matters, save where they are obvious on the face of it. It is remarkable, for example, that Sub-committee A of the House of Lords' Select Committee on European legislation was unable to obtain a copy of the 1998 budget in time for it to be given consideration. Therefore, there is no examination this year of that very important document, the Community budget. It shows not only the total income and expenditure, the proportionment, the abatements and so forth, but it shows the individual items of expense all through the titles. It also enables detailed questions to be asked and enables English Members of Parliament to become aware of exactly what is happening in Europe.
I do not need to tell businessmen and companies that life is about money and that money makes the whole thing run. Therefore, I hope and assume that the Government will be forthright about the issue. During years in opposition one cannot have the resources to enable even a large and well financed party to study all such questions in detail. I know that as a result of personal experience, cost and time during the past 25 years. It is not possible for any government to do everything at once and I am satisfied that the Government will do their best. Perhaps I might respectfully suggest that they must not only do their very best, but that they must stick their neck out and insist that we receive the documents to which we are entitled. I am sure that even those most preferred supporters of a federal state in Europe will agree with that. I sincerely trust that I shall receive support from the Liberal Democrat Benches for such a mild proposition.
In the belief that they will do something about this, I ask Her Majesty's Government to insist on our proper rights. There is no reason why, in this respect, we should lag behind Germany and France who have their own special arrangements under the Elysee Treaty of 1963. It is time that we asserted ourselves. The House may feel constrained to agree that something has to be done.
Lord Wallace of Saltaire: I shall be brief. I welcome the protocol that strengthens the role of national parliaments. It is clear that national parliaments need to have greater and more rapid access to Community documents and more time to consider them. We have to make it work.
Last Thursday evening, when I took part in a debate on the report on the convergence criteria which joined the ratification of the Maastricht Treaty, I noted that there had been carried in the Commons an amendment
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insisting that the Government should report each year to Parliament. While I had the pleasure of listening to the noble Lord, Lord Mackay of Ardbrecknish, giving a very detailed exposition of how this year's financial projections fitted in with that criteria, the House was extraordinarily empty. If we are to carry these amendments through and insist on greater parliamentary scrutiny, we have to make it work.
With the greatest of respect to some of my colleagues, there is a Gresham's Law of parliamentary scrutiny, that Euroscepticism drives out reasoned criticism. That is one of the reasons why on those occasions the Benches of the House are so often very thinly occupied.
The Government already provide agendas for future council meetings and reports them in Written Answers in Hansard. I hope noble Lords are aware of that. I tear them out each month. I sometimes even look at them.
Lord Stoddart of Swindon: I have just listened to the extraordinary statement that Euroscepticism drives out reason. That presumably means that any scepticism drives out reason. I have always believed that it was scepticism which brought reason, not drove it out. If parliamentarians, whether they are Eurosceptical or Eurofanatical, cease to be sceptical and to discuss all these matters, I do not know where we are going and what our purpose is.
Lord Wallace of Saltaire: I think the noble Lord nevertheless took my meaning and I am sure he understands what I intended to say.
I have been serving on the European Communities Committee for a short time. I note that the Government do not always very quickly manage to get documents received from the Commission through to the National Committee for scrutiny. That is something on which we would like some assurance from the Minister, either now or at Report stage.
I welcome the developing co-operation between National Parliament Scrutiny Committee, which is fostered by COSAC although it does not only come through COSAC. We have begun to exchange information about how much each national committee has got out of its government and what documents have been provided. That is a welcome step forward. The next meeting of COSAC, which will be in London in a month's time, will enable us to talk about how we may improve parliamentary scrutiny of the third pillar. We intend to do that now with the British presidency.
It is important that this protocol is not only carried into effect in the treaty but that we have every possible assurance from Her Majesty's Government that they will make it work in practice as well as they can.
Baroness Symons of Vernham Dean: We have had a remarkable and unusual degree of agreement in Committee this afternoon on these amendments. In speaking to Amendment No. 26C I will speak also to Amendments Nos. 36 and 38 which are grouped with it.

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The Government are determined to build a European Union that is more open and more democratic. The Council of Ministers, the European Parliament and, in particular, national parliaments all have a part to play in this effort.
We argued successfully in the IGC for more openness: a treaty-based public right of access to documents, including in the second and third pillars; publication of Council votes on legislation; and publication of new third pillar proposals. As presidency, we have now tabled further, follow-up proposals.
The requirement for greater democratic oversight is very strong. It is a requirement that has been espoused by all sides of the Committee this afternoon. Again we made some progress in the IGC by providing for co-decision with the European Parliament in legislative areas that are subject to majority vote in the Council.
As the noble Lord, Lord Moynihan, said, the principal source of democratic legitimacy in the European Union is national parliaments. It is to national parliaments that governments are answerable; it is to national parliaments that people most readily identify. That is true in all member states. We must therefore reinforce the role of national parliaments too.
I am pleased to say that here too the IGC recorded real progress, including on proposals made by the Government, which are reflected in the treaty we are discussing today. For the first time the role of national parliaments is now recognised in proper, legally-binding form in the treaty.
Before Amsterdam the treaty said nothing about national parliaments. Maastricht achieved no more than a declaration on the need to send documents to national parliaments in good time. A Conference of European Affairs Committees was set up in 1989 to bring together national parliamentarians. The noble Lord, Lord Tordoff, is one of its most distinguished contributors. Yet COSAC has gone unmentioned in the treaties.
The protocol agreed at Amsterdam changes that. The protocol's main feature is to create a legally-binding minimum period of six weeks between the circulation of a proposal and a Council decision on it, except in genuinely urgent cases. This will greatly facilitate scrutiny by national parliaments.
The protocol also provides for an enhanced role for COSAC. The role will be non-binding and consultative. That is sensible because, as COSAC has recognised, COSAC cannot formally represent the views of national parliaments but it is the best specialist source of a collective view. It is right that the treaty should acknowledge this expertise.
The Government strongly supported the protocol. We pay tribute to those in this House and another place, including the noble Lord, Lord Tordoff, and his committee, whose thinking and reports first inspired the protocol.
We successfully proposed extending the protocol. First, at our suggestion, its provisions apply to third as well as first pillar documents. We recognise the great interest of this House in justice and home affairs issues. The protocol will help this House to pursue those issues.
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Secondly, we proposed, and partners agreed, that the minimum notice period should be extended from four to six weeks.
We sought this extension because of the time it takes from a proposal being sent to the Council Secretariat for it to reach member states in Brussels and then arrive in capitals. Two years ago it took an average of 40 days. That period is now much reduced but it can still take up to a fortnight. The effect of our proposal is to ensure that national parliaments will still have four clear weeks to study draft legislation. We hope that an electronic transmission pilot project now under way will help further in that respect.
I wish to be clear on this point because the noble Lord, Lord Moynihan, asked me to be specific. The six-week scrutiny period begins when the document is received by the Council Secretariat. It is then translated and distributed to member states. It is exactly because of that provision that member states decided to extend the period in the national parliaments' protocol from the four weeks proposed by the committee of the noble Lord, Lord Tordoff, to the six weeks that now appears in the protocol. I remind the Committee that the Government are already committed not to agree proposals until they clear national scrutiny, however long that takes. That commitment will remain.
But existing parliamentary rules rightly allow the Government to agree urgent confidential or trivial proposals before they clear scrutiny. That reflects the fact that business can arise at short notice and may, on occasions, require urgent attention.
6.30 p.m.
The Earl of Onslow: Will the noble Baroness give an example of something which will be so urgent that it need not come back to Parliament? That would help everybody. It is easy to use words like "urgent" and "trivial", and examples would help.
Baroness Symons of Vernham Dean: For example, it may be that urgent sanction measures were needed in respect of a particular country, or that there had been an ecological disaster which needed urgent action. There may be an outbreak of an epidemic on which nations in the EU feel that there should be urgent action. I hope that provides a flavour. I do not wish to go too far into the matter, but I hope that I have provided examples where urgency may require that clause to be invoked.
The point is that the provisions of the new protocol will strengthen national parliaments' role in ensuring democratic legitimacy. They will help to rectify weaknesses in our national scrutiny system and we shall build on the new provisions in our separate proposals to update and strengthen our national arrangements.
My right honourable friend the President of the Council published a memorandum in January setting out our broad proposals. The memorandum takes account of proposals made by the relevant committee of this House and another place. It has been sent to the committee of the noble Lord, Lord Tordoff, whose views on its contents we very much look forward to receiving.

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Our plans include giving Parliament a strengthened formal role in the scrutiny of second and third pillar business. Detailed arrangements must reflect the specific characters of those pillars. For example, in the second pillar, the nature of business means that confidentiality is vital and decisions are often needed at short notice. That may require explanatory memoranda to be submitted after adoption of a proposal.
Our plans include also extending the scope of the scrutiny reserve to cover documents subject to scrutiny under the inter-governmental pillars and to cover legislative proposals on which agreement is reached at the European Council. We propose also to strengthen arrangements for reporting to Parliament on meetings of the Council of Ministers.
As the noble Lord, Lord Wallace of Saltaire, said, we already report on all such meetings orally or in writing. We consider that more detailed reports in the form of letters to Select Committee chairmen will ensure that Parliament is better informed on the detailed outcome of more important issues, particularly those which have been the subject of special interest and debate in Parliament.
The national proposals that I have outlined will reinforce the EU-wide provisions laid down in the Treaty of Amsterdam. The treaty rightly provides for a stronger role and a clearer voice for national parliaments. I believe that those provisions should be welcomed and I commend them to the Committee, particularly as reinforced by the additional provisions which I have been able to outline to the Committee.
My noble friend raised a number of questions in relation to the Comptroller and Auditor General and his reports. We certainly agree that there should be as much transparency as possible in the European Community's financial affairs. We agree also that the British Parliament must be entitled to as much information as can be made available. I shall certainly draw the detailed comments of my noble friend to the attention of my colleagues who are responsible for Community finance.
I indicated that I should like to address also the specific concerns raised on Amendments Nos. 36 and 38. Before each meeting of the European Council, the Foreign Secretary sends to the Foreign Affairs Committee of another place a memorandum detailing subjects for discussion and listing the main documents to be discussed. That memorandum is made available to both Houses. Each month, the Government give details, by means of Written Parliamentary Questions, of the agenda of the following month's councils. All proposals for legislation and other important documents are submitted for formal parliamentary scrutiny within two days of their receipt in London. They are then the subject of detailed explanatory memoranda provided by the Government.
By tradition, those matters have always been dealt with by resolutions or Standing Orders both in this House and another place. The Government believe that
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that remains the more appropriate route, rather than that of primary legislation. I hope that, on that basis, the noble Lord will feel able to withdraw his amendment.
Lord Moynihan: I hope that I can do so but I am sure that the Minister will allow me to make one or two comments on her useful reply and on the contributions made by other Members of the Committee.
I asked the noble Baroness two specific questions. I am not as happy as she would like me to be on either of the two answers which she gave. First, my noble friend Lord Onslow raised the definition of "urgency". The Minister answered that to the best of her ability, and I understand that it must be very difficult to give precise hypothetical examples for the future.
However, the thrust behind the question was not so much a request for a detailed list of exceptions on the grounds of urgency but rather to seek an assurance that this Parliament will know the moment the Council has determined that a subject is an exception on the grounds of urgency so that it can be aware that the procedure of the six-week rule, which has been outlined, will be waived. When the noble Baroness takes into account the representations of the noble Lord, Lord Tordoff, I ask her to give due account also to the arguments put forward during this debate and in particular the importance which the Opposition attach to the need for the Council to be required to state formally and immediately when it decides that there will be an exception on grounds of urgency.
Equally, the Minister will no doubt be aware that I am rather disappointed in relation to my hope that the six weeks would start when the documents arrived in Westminster. I appreciate the argument that she put forward so clearly and I recognise that the period was extended from four weeks to six weeks to enable those additional two weeks to be used for the delivery of such documentation. If we knew that that would work, we should be a lot more confident. The critical issue to take into account is not so much the date on which the documents are received by the Council Secretariat but rather the date on which Westminster receives its copy. The Minister recognised that that is an important issue. I understand that some experiments are under way to address that subject.
Once again, I urge the Minister to consider the comments that have been made about the importance of time for due consideration of documents and whether or not we can find a mechanism to ensure that Westminster receives the paperwork well in advance and preferably on a specific date in advance of consideration by the Council.
In conclusion, I thank the Minister and other Members of the Committee for their contributions. I welcome the Government's commitment to the role of national parliaments. There have been occasions during the proceedings when some of us have had cause to doubt the Government's position, not least in our lengthy debates last night in regard to qualified majority voting. As it is so important that national parliaments must remain the primary focus of democratic legitimacy in the European Union, I ask the noble Baroness to

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consider my two questions and the important intervention of my noble friend Lady Park of Monmouth.
Baroness Park of Monmouth: I want to make one additional point about the need for scrutiny as long as possible. In my limited experience in one committee, things usually arrive from the Commission necessarily with no cost benefit analysis or one that is not real or relevant. To achieve one requires consultation and various agencies must be asked to give evidence. That is not easy to do in a hurry. It is difficult to make a serious recommendation to the Government on scrutiny if one is not able to deal with that dimension. I urge that in any representations that are made, that issue is taken into consideration. I thank my noble friend for his kind remarks.
Lord Moynihan: My noble friend reinforces the sentiments of the Committee and adds considerable weight, from her great experience, to the points made to the Government for their consideration. I thank my noble friend and others who have participated in this debate and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
6.45 p.m.
Lord Pearson of Rannochmoved Amendment No. 27:
After Clause 1, insert the following new clause—
REPORT ON ECONOMIC AND MONETARY UNION
(". A Minister of the Crown shall lay before both Houses of Parliament a report containing details and an assessment of—

(a) the constitutional impact,

(b) the monetary and financial impact, and

(c) the impact on economic and social progress,

on and in the United Kingdom of any measure adopted, or decision taken, by the Union pursuant to the objective set out in Article B of the Treaty on European Union of establishing economic and monetary union ultimately including a single currency.").
The noble Lord said: This has been billed as a tidying-up debate on European economic and monetary union after our lengthy debate on 12th March, which we did not conclude then because the noble Lord, Lord Bruce of Donington, was unable to move Amendment No. 27—which remains on the Marshalled List.
I propose to deal with just one of the loose ends left from that debate but an important one. Those of us who believe that European monetary union is a most unfortunate project sometimes point out that among its many weaknesses is that the proposed euro area is not an optimum currency area. We mean that the separate national economies that are to form the area are not and will not be genuinely convergent, even if there has been a good deal of fudge to meet the Maastricht Treaty's criteria for the countries concerned to qualify for EMU.
When one economy will be in boom, another will be in decline. The most important weapon normally available to an independent economy in those circumstances is to be able to raise or lower interest rates. The foreign
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exchange rate will also fluctuate in line with the judgment of foreign exchange markets. The instrument of taxation is also available to a national government.
Those of us who criticise EMU point out also that a third solution to ease economic shocks in an optimum currency area occurs if its labour is comparatively mobile and can move from depressed areas to prosperous areas and vice versa. Mobility of labour in the United States of America is much greater than in Europe.
Those who support EMU often reply to those fears by pointing out that the USA is not an optimum currency area and nor is the United Kingdom, so what are we fussing about? It may be that there is no single optimum currency area. Certainly the English have only just discovered that they in effect pay a lot of money every year to support public services and so on in Scotland. The northern Italians are steadily growing less happy with the substantial support that they give every year to the Mezzo Giorno.
In our debate on 12th March at col. 347, the distinguished economist, the noble Lord, Lord Peston, took that line rather strongly and emphasised why the USA is not an optimum currency area. He told the Committee that one of the favourite exam questions that he used to set when teaching in that country is whether it would have been advantageous for West Virginia, which at the time had serious economic problems, to have its own currency so that it could devalue. Thus the noble Lord explained why the incredibly successful United States of America, as he called it, is not an optimum currency area.
On 12th March, I failed to put an obvious point to the noble Lord, Lord Peston, but will put it now to the Government. I am sure that we all much regret the absence of the noble Lord, Lord Peston, who would otherwise join in. It may be true that the USA is not an optimum currency area, but it is true that that country's people accept interstate transfers, which can amount to as much as 12 per cent. of a state's gross domestic product. The American Embassy informed me that in 1995, the average per capita contribution from the federal budget throughout the United States was about $863. Moreover, the inhabitants of Virginia—which has presumably recovered economically since the time that the noble Lord taught there—accepted in 1995 that they received only $535 each from the federal budget, in the knowledge that each inhabitant of the State of Columbia received no less than $3,926 or a difference of $3,391 per person.
The inhabitants of Europe are not at all used to paying each other such subsidies—certainly not to nationals in other countries of Europe. The European Union's present budget amounts to little more than 1.67 per cent. of national GDP. European countries do not need to make those transfers because their economies can respond individually to economic shocks through the adjustment of interest rates, tax rates and fluctuations of their separate exchange rates on the foreign exchange markets.
What will happen in the EMU zone when there is only one interest rate and one foreign exchange rate? When the Minister answers, he will no doubt agree that for the foreseeable future labour will be less mobile in Europe than in the United States of America. A clause

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in the Treaty of Rome says that one state should not bail out another, although Mr. Delors did not appear to agree. Indeed, EMU's birth certificate—or the Delors report of 1991—ominously foretold:
"EMU will necessitate greater fiscal disbursements at EU level."
How do the Government foresee the situation developing under EMU, whether or not we are in it? If there are not to be massive interstate transfers to countries whose economies are in decline from countries that are more happily placed, what will happen to countries in recession? If there are to be such transfers, how will the inhabitants of the donor countries react? That question goes to the heart of the EMU debate and I look forward with interest to the Minister's reply.
Lord Stoddart of Swindon: Amendment No. 27 asks for a report on economic and monetary union that will take into account the constitutional impact, monetary and financial impact, and the impact on economic and social progress. These are important matters. While it is true that we discussed the wide implications on a previous occasion, nevertheless, we have not discussed this particular amendment. It asks first: what is the constitutional impact? The Chancellor of the Exchequer told us that there is no constitutional bar to our joining the third stage of EMU and a single currency. He may very well be right to say that there is no constitutional bar; but, let us make no mistake about it, there are constitutional implications.
As the noble Lord, Lord Pearson, just explained, this is a political project. Indeed, if it goes forward it is almost certain that it will have taxation implications for the British people and the ability of the British Parliament to decide the levels and forms of taxation that may be applied. So there are indeed constitutional issues involved, and I believe that we should know what they are and how the Government feel about them. We are not just talking about an economic project. Indeed, the European countries—certainly Germany, France and Italy—see economic and monetary union as the biggest and, perhaps, the final step towards complete political union. We are therefore entitled to know the constitutional impacts and to have a report.
What about the monetary and financial impact? It appears that the House of Commons is today publishing a report. According to an article in the Sunday Telegraph it will make some very serious statements. Indeed, the article says:
"The credibility of the Government's strategy on the single currency will be dealt a serious blow by an influential committee of MPs this week, on the eve of next weekend's landmark European summit to agree the launch of the euro … [the] pro-European [committee] will warn the Government that its current timetable for deciding whether to join a single currency will mean taking a decision before the full economic facts are known. Their warning challenges the wisdom of the Government's intention to decide whether to join monetary union early in the next parliament".
Indeed, the article continues to say that both Tony Blair and Gordon Brown,
"will this week restate their view that, in principle, membership of the single currency would be of benefit to Britain, and that the determining factor will be whether it is in Britain's economic interest".
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It is quite clear that the Select Committee believes that it is not in the best interests of this country to join such a union, certainly for the next five years and until we know just exactly what the effects will be. Therefore, it is very reasonable for this Chamber—and, indeed, for Parliament as a whole—to ask what the monetary and financial impacts will be.
We should certainly know what the impact will be on economic and social progress. That is vital. I say that because all attempts at monetary union in the past have ended in disaster. For example, let us think about the Werner Report, which introduced the economic and monetary system in the 1970s. What happened to it? We found that it did not serve its purpose of giving us stable money and low inflation. Moreover, during the whole period industrial growth in Europe actually fell by 5.9 per cent. Of course, that had very bad implications for unemployment and for the progress of people's standard of living. So the Werner Report and the "snake" ended in disaster. They then progressed to ERM, and we all know what happened to that. We all know that that ended not only in disaster for the country—high unemployment and a slump—but also in total disaster for the Tory Government at the last election. It is no wonder that they are a little worried about imposing the single currency too soon, or perhaps at all.
Those are very good reasons as to why we should have a report. Another reason is the manner in which things are done in Europe. I believe that I described what has happened over economic and monetary union when I last spoke. Germany. France, Italy, as well as the Belgians and the Dutch—the British Government are not of this view—want economic and monetary union at any price. Of course, the prime movers are Germany and France. They will do virtually anything and make any deal as long as they get what they want. However, France and Germany do not always agree. At the Dublin Summit, when they were agreeing the stability pact, it appears that they were at severe loggerheads about how the pact should work. Indeed. Jacques Chirac took the view that the stability pact, which the Germans feel is absolutely vital for the sake of EMU, was,
"an invention of German technocrats".
He went on to say that he believed that that was against the national interest of France. The quarrel spilled over into the main session and at one stage, according to the BBC television programme screened last Sunday night, it appears that Chancellor Kohl and Jacques Chirac got up, went into a corner and started quarrelling and arguing between themselves. All the other delegates eventually gathered around to watch what was going on as if it were a prize fight.
It seems that that is the way that things are done in Europe. I do not want them done that way here. In this country we do things in a rather different way—at least I hope that we do. I also hope that my noble friend can assure me that we do, that we have a decent, well thought-out and considered position and that we take time to ensure that we get the right answers. I therefore make no apology for saying these things at this stage of the proceedings. I recommend to my noble friend that he writes to the BBC—and, indeed, this applies to the whole of the Cabinet—and asks for the videotapes of those three

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programmes on how the EMU programme has been formed. I am sure that the BBC will be only too pleased to send the videotapes; indeed. I believe that it will be an eye-opener. Any other Member of this Chamber who takes an interest in such matters—and, by God, they are interesting programmes—should also send for the tapes.
Therefore, I hope that my noble friend will give some replies to the matters that have been raised and that he will indeed consider accepting the amendment. It would certainly do no harm and, indeed, it might do a lot of good.
7 p.m.
Lord Bruce of Donington: Perhaps I may ask my noble friend to give serious consideration to the proposal contained in Amendment No. 27. I am sure he will agree from his own long experience of politics in many fields—as other Members of the Government will realise also—that in political action timing is everything. When considering the steps that may or may not be taken by the European Union which affect ourselves—and in particular with regard to economic and monetary union—one has to make sure that, subject to whatever considerations may arise later, the date fixed for a specific action which has an effect on our constitutional, financial and economic and social progress, is sufficiently far ahead for us to be able to take into account the events that are likely to take place in the interim—that is to say before the proposed Union action is taken. One has to take particular account of steps that are already in the pipeline of which we may not become aware until the action takes place.
Perhaps I may give a specific example. Because the sum involved is billions of pounds, we shall have to consider the impact, for example, of the abolition of duty free. That will have considerable effects on the financial fortunes of the country. It may, therefore, have some indirect effect one way or the other in due course on our fiscal policy. One has to bear in mind also that there are proposals in the pipeline—I have seen them—which are not due to come into operation for another couple of years in regard to Commission proposals for the standardisation of VAT throughout Europe. These are important matters that we have to consider at the same time that we deliberate upon proposals emanating from the European Commission and from the Community.
If there is one thing that all of us may have learned—on the assumption that all of us can do with a bit of extra learning—it is that we are living in a state of flux. Things do not stand still for us to consider them, they progress the whole time. It has been stated very authoritatively this afternoon, and I think very temperately, that the constitution of Europe, if there is to be any kind of constitution, is a varying, developing quantity. We have to fix a point in time which enables us adequately to be able to assess the position, without wishful thinking, to make quite sure that what is to be done has definite effects on the way in which we conduct our affairs here. That is what I conceive to be underlying Amendment No. 27. There should be a straightforward appraisal in the Government's view of exactly how this will affect us, within certain fluid
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limits, obviously, because the whole thing is flexible. In that spirit, I venture to commend the amendment to the House and to the Government.
Lord Mackay of Ardbrecknish: It is particularly appropriate that we should be discussing these important matters today. After all, this weekend the Council of Ministers will have to meet under the British presidency in order to decide the states which will join the first stage of the monetary union; the rates between the currencies; and the interesting question of who should be the candidate for the president of the European Central Bank. All those questions may take a little time, and I suspect the president of the European Bank may take perhaps a little more time than just the weekend.
It is also appropriate because today the Treasury Select Committee in another place has produced an interesting report which the noble Lord, Lord Stoddart, has already mentioned. It is not often that I am ahead of the noble Lord but I have had a quick read of the report. I did not have to read the press speculation of the weekend. The noble Lord was busily engaged in the Chamber while I was happily sitting in my office reading through this most interesting report.
It starts off by simply reminding us that this weekend has a significant importance as regards the economic and monetary union. Some serious decisions will be made over this coming weekend. It is interesting that some of the decisions relate back to the last time that the noble Lord, Lord McIntosh, and I faced each other across the Dispatch Box; namely on the Bill regarding the independence of the Bank of England. I mentioned the matter in my speeches on the Bank of England Bill but the noble Lord brushed it aside. It is interesting that it is underlined in the Treasury Select Committee report from the other place. It is this. The legislation this House has just spent many happy hours passing about the Bank of England is not nearly sufficient for a single currency. Indeed, the Government will have to bring forward another Bill on the Bank of England if the Prime Minister ever gets the courage of the Chancellor's convictions and decides to join the single currency, or to apply for membership of the single currency. The Government will have to remove its powers to set an inflation target, for example. The Monetary Policy Committee will just become an advisory body rather than a decision-making body; and the Treasury will have to give up its right to override the Bank in exceptional circumstances. I recall that the noble Lord, Lord Peston, in an intervention at Report stage in the Bank of England Bill, said that he felt that the European Central Bank legislation would be deficient if it did not have some power within it to allow the politicians—the Commission, I suppose it would have to be—to override the decisions of the Bank in exceptional circumstances. So it will be interesting to see this Bill at some stage when the Government make up their minds on the subject.
Perhaps more interestingly from my point of view, the term of office of the members of the Monetary Policy Committee will have to be increased to five years. The noble Lord, Lord McIntosh, will have to eat some pretty strenuous words of his own. When I suggested that three

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years was far too short a period, he told me that I was absolutely wrong. He said that it would be wrong to contemplate five or seven years, or whatever, and that three years was the right period. So the poor noble Lord who will reply will have to eat his words if we ever start to go through another Bill on the Bank of England in order to allow us to join the single currency.
I return to the important decisions to be made this week and to the amendment before us which asks for a report. It is interesting to note that the Treasury Select Committee's report published today states clearly one of its serious conclusions on the whole survey. The Treasury Select Committee of the other place is composed of members of all parties: the Conservative Party, the governing party, and even the Liberal Democrat party. They all seem to have managed to agree on these conclusions. Perhaps I may read out paragraph 40 because it underlines the need for a report containing details of the monetary and financial impact, and the impact on economic and social progress. Paragraph 40 states:
"We agree that if the Government decides to recommend that the UK should join it is imperative that a 'final report' be produced. We recommend that it should also contain a comparative assessment of the consequences of entry and of staying out in the long term. For the reasons we have outlined, it would not be desirable for the final report from the Government before any referendum simply to contain an updated assessment of the five tests".
Those are the five tests that the Chancellor has drawn up. I shall say a few words about them later. The report continues,
"However, we conclude that it will not be possible to judge 'clearly and unambiguously' either the 'success' of EMU or the answers to all of the Chancellor's five tests for at least five years".
According to anyone's calculations, that means a date well into the next parliament. The report continues,
"It will remain the case that the UK's decision will have to be made on a political and economic assessment of the balance of national advantage".
If I may say so, that paragraph sounds extraordinarily similar to my party's policy on these matters, which was from time to time derided by the governing party. I am delighted to note that the noble Lord, Lord Barnett, is present as he also took part in the debate on the Bank of England Bill. He will no doubt wish to take part in the next Bank of England Bill when these provisions will have to be changed.
What will the report that we are discussing have to contain? The report is called for not only by the noble Lords, Lord Shore of Stepney, Lord Stoddart of Swindon and Lord Pearson of Rannoch, but is now also quite clearly called for by the Treasury Select Committee in another place. The report will have to contain a number of measures. But before we reach that stage, the all-important weekend will take place when the tests will be discussed. I believe that ECOFIN has already stated that 11 out of the 15 members have passed. I speak as a former schoolteacher when I say that if I was told that some of them had passed, I would think that arithmetic had been stood on its head because by no stretch of the imagination can it be said that all 11 countries have passed the Maastricht criteria which were established some years ago.
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As I said last Thursday evening in this Chamber, the European countries have made strenuous efforts to meet the criteria and they have done extremely well. However, they have not all succeeded in meeting the criteria and, more importantly, some of them have attempted to meet the criteria in ways which cast doubt on whether they can meet the stability pact subsequent to meeting the criteria. When I spoke on these matters from the Treasury Bench I used to tell the Chamber that it is not just a case of getting under the wire of meeting the criteria that is important, but rather it is important to meet the criteria in the long run. That is where the stability pact is hugely important.
It is because the markets do not believe that the euro will be a hard currency and that the convergence criteria will lead to a rigorously obeyed stability pact, that we have the problem of sterling being set at such a high value. Manufacturing industry is suffering considerably as a result. Some people point to the high interest rates imposed by the Monetary Policy Committee because it has only one weapon in its armoury and one objective and, naturally, it must use that one weapon to achieve that one objective. I believe that the members of the Monetary Policy Committee have increased interest rates in this country five times since the general election in May of last year. That, of course, attracts money into this country but it is not the whole reason for the increase in the value of sterling. Part of that increase in the value of sterling is due to the fact that the markets do not believe from what they see and read that the euro will be a strong currency. On the contrary they believe that it will be weak.
Deficit levels have fallen. As I used to say, the convergence criteria are worth following regardless of the euro because they make for sensible economic policies. We followed those sensible economic policies. That is why we have left this Government with a golden economic legacy which, frankly, they are frittering away. As regards the convergence criteria, 14 out of 15 potential members now have deficits below the 3 per cent. reference value. It must be recalled that some of them have taken one-off measures to get below the deficit level. I hear someone say, "Of course they have'', as if that is fine. But how do they keep below that level and obey the stability pact that arises later if their measures are only one-off measures?
The Italians have done extraordinarily well, and one has to admire them. They have achieved that reduction partly through the sale of state owned agencies. It is interesting to note that the Government now approve of the sale of state owned agencies, but that is another story. The Italians have also achieved that reduction by means of a one-off tax. But how will they manage to keep below these reference values next year when they no longer have the one-off tax? That is not a question for me to answer; that is a question for—
7.15 p.m.
Lord Pearson of Rannoch: I am anxious that my noble friend should not miss the best part of the story about the Italians' one-off tax which is, of course, that the Italian Prime Minister, Sig. Prodi, has just appeared

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on Italian television to assure the Italian people that once they have got under this hoop he will give the money back.
Lord Mackay of Ardbrecknish: My noble friend illustrates the point I am trying to make. They will get under the wire on a one-off basis. I think that the Commission and the European Central Bank will find it extremely hard to keep the stability pact in order. I have some confidence that the Bundesbank will at least try to keep it in order but I think it will have some difficulty in doing so. As I said, we can pay tribute to all the member states of the European Community for having met the deficit reference value. However, as regards the average debt level, the story is slightly different. According to the Treasury Select Committee, 11 of the 15 potential EMU members currently have debt levels over 60 per cent. of GDP. The Netherlands at 70 per cent.—10 percentage points above that figure—is not doing too badly. Sweden has a figure of 74.1, but it does not want to join EMU and so I suppose we can set it aside. Italy has a figure of 118.1 per cent., which is 58.1 percentage points out. I am told that the Italians are reducing that figure. They are indeed doing so. However, I saw some figures the other day which suggest that two years ago the figure was about 122, and about 120 to 121 the year before last. Now it is 118.1. I hope my memory has served me correctly as regards those figures, but if it has not I am sure that someone can correct me. That is not exactly a Christopher Chataway sprint—perhaps that shows my age!—towards 60 per cent. Speaking as a simple mathematician rather than an economist I would not consider that to be a fast rate of approach towards 60 per cent. The figure for Belgium is 118.1 per cent. despite the fact that vast amounts of European money are spent in that country to support the people who run the European Community. Its rate of approach to the 60 per cent. level would not fill me with much fear if I were running away from it, if the Committee understands what I mean.
We have an interesting situation where suddenly the rules can be fudged for those two countries and indeed for the others as regards the 60 per cent. of GDP rule. The Treasury Select Committee points out that the European Monetary Institute commented that,
"there is an evident ongoing concern as to whether the ratio of government debt to GDP will be 'sufficiently diminishing and approaching the reference value at a satisfactory pace' and whether sustainability of the fiscal position has been achieved".
It is interesting to note that by the time the report that is called for in this amendment and in the Treasury Select Committee's report is published, we shall know whether continuing progress has been made to achieve these targets. I have my doubts, because of the undeniable pressures that will build up when the single currency comes into being and, with it, a single interest rate. That is extremely important. I might say in passing that, thanks to the sensible economic policies of the previous government, interestingly enough the UK satisfies the debt, the deficit and the long-term interest rate and inflation criteria. So this country fulfils all the criteria. But of course, thanks to the opt-out negotiated by my right honourable friend John Major at Maastricht,
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we are able to decide for ourselves whether or not to enter. I cannot remember that opt-out being cheered by the Opposition—but then, the world changes; not only do they cheer it in retrospect, but they are prepared to take advantage of it.
The Treasury Select Committee goes on to state an important matter that would have to be included in any report; namely,
"The sustainability of the EMU project depends not only on debt ratios and deficits but on high levels of employment, employability and social cohesion".
I recall, again when I was speaking from the Treasury Bench, that the then Opposition kept telling me that those other criteria, in addition to the three laid down at Maastricht, were every bit as important and we ought to be demanding that they be met. Is it the Government's intention to address the high level of employability, employment and social cohesion? After all, despite the fact that we have unemployment problems in this country, they are nothing as compared to those of many of our colleagues in the European Union. It is interesting that, after having denied that the Conservative Government's labour market policies were having an impact on employment, the party opposite is lecturing other countries in Europe to take up the same kind of employment policies that this party pursued and they opposed. I just hope that European politicians do not have a long memory. Otherwise, they might have fun at the expense of whichever government Minister will try to persuade them that the policies pursued by the United Kingdom are the right ones, when just over a year ago in opposition they were saying that those policies were wrong.
As I said, the economic and social progress report will include the five criteria laid down by the Chancellor in his interesting document. The Select Committee draws attention to a comment by Christopher Johnson, who is UK adviser to the Association for the Monetary Union of Europe. Writing in a personal capacity, he said:
"The Chancellor's tests arc so loosely defined that anyone will he able to say that they have been either passed or failed according to the dictates of political expediency".
That is a exactly the position that we face in relation to the tests. We need more rigorous tests than those applied by the Chancellor. We need not only the three tests that I have already mentioned; we need tests in relation to employment. I am amazed that the Labour Party is prepared merely to brush aside such important matters.
For example, paragraph 32 states that the Governor of the Bank of England argued that,
"wide divergences in unemployment rates pose a real question as to the sustainability of that situation in the absence of much more flexibility in labour markets in Europe"—
"that situation" being the rising unemployment on the Continent in contrast to falling unemployment here. He referred to:
"high unemployment persisting in some parts of the area with potentially inflationary pressure persisting in others".
That is one of the matters that the report will have to address in whatever number of years to come. Having one interest rate for the 11 member countries which, it appears, will join the currency will cause very

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considerable pressures in two directions. The first will be that of the "over-heaters"—Spain, Portugal, the Netherlands, Ireland, and eventually Italy. In economic terms the conditions in those counties will be too loose. They will have high growth but, with it, the danger of inflation returning to haunt them. On the other hand, because of the single interest rate, Germany and France are likely to be the stagnators. Their monetary policy will be too tight, and they will see GDP growth accelerate only modestly. As a result, it will be doubtful whether they are able to do much, if anything, in relation to their high unemployment rate.
We do not have to gaze into a crystal ball. We have only to look back at 1992 and compare Italy with France. As noble Lords will remember, that was rather a traumatic year. The noble Lord, Lord Stoddart, referred to it. There is an element of truth in the idea that the ERM and the problems of our exit from it caused the Conservative Government's troubles which haunted us all the way to the general election.
To compare Italy and France, the interesting point is that Italy also left the ERM in 1992. Thereafter, monetary conditions in Italy were considerably loosened in comparison with those in France. The net result was that Italy's exports overtook those of France in terms of percentage growth year on year. The Italian position has improved greatly, as I acknowledged earlier, and as almost everyone who studies these matters knows.
The question is this. Had the Italians not been able to leave the ERM and devalue their currency, what would the picture be for Italy? It would certainly not be the picture that allows even a generous interpretation of the Maastricht criteria. The Italians would have been in a very sorry economic state had they not been able to do that and had their interest rates been fixed by some central organisation.
I make no secret of the fact, and noble Lords who heard me speak before Easter will know, that I understand and appreciate the arguments that can be made in favour of a single currency. However, I believe that the dangers of a single currency can equally be argued. The dangers have always been that the imposition of a single interest rate over economies at different stages in economic cycles could be such as to blow the whole European experiment apart. As a supporter of the European Union as it is at present, I should certainly not welcome that.
Some noble Lords will recall listening to one or two interesting speeches from the noble Lord, Lord Dahrendorf, from the Liberal Democrat Benches. The noble Lord is not in his place today. In a much more knowledgeable way than I could, the noble Lord underlined that point. I hope that he has not changed his view; I see no reason why he should have done. The noble Lord's view is simply that his idea of Europe—which is the Europe that we see now—could be hugely damaged by a single currency that failed to work.
It is therefore important that we examine very seriously all the issues outlined in this amendment. It is important that there should be a report. I do not know what the Government intend in relation to the Treasury Select
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Committee report. Clearly, if they reject this amendment, they will have to reject the proposal of the Treasury Select Committee; namely, that a final report should be produced. In conclusion, I underline this point. The Select Committee believes that it will take at least five years before this country can be in any position to decide whether or not the single currency experiment has worked and whether or not it is in our interest to enter into the currency. That makes a lot of sense; it is the policy of my party as expounded by Mr. Hague that it will be at least well into the next Parliament, and even the Parliament after that, that we can arrive at a conclusion on behalf of the United Kingdom.
7.30 p.m.
Lord McIntosh of Haringey: It falls to my lot as Deputy Chief Whip to address the induction courses which this House holds for new Peers. I tell them, as I have to, that particularly in legislation we have no time limits; particularly in Committee we have no restriction on the number of times that Members of this House may speak. Because we have no Speaker, there is no control over the relevance or length of the speeches in this House. Those who come to the induction courses hear me with incredulity and disbelief, especially those who come from the House of Commons, where they are used to somewhat more disciplined procedures.
There is another induction course next Tuesday. I shall cut short my speech and just say: "Please read Hansard for 28th April. Please read the debate on Amendment No. 27 and pay attention not only to what was said but also to where the speakers came from". It is noticeable that those speakers who were Members of the House of Commons feel their freedom most keenly and use it most liberally.
I remind the Committee of the status of the amendment. On 12th March we had a four-and-a-half hour debate on economic and monetary union. After four hours, when I had finished my wind up speech from the Government Front Bench, my noble friend Lord Stoddart—as is his right—asked whether it was possible to decouple Amendment No. 27 from Amendment No. 2, which had been the subject of debate for four hours. After another half hour—because my noble friend Lord Shore of Stepney took half an hour to wind up, as is his right—my noble friend Lord Bruce of Donington said, "But I wanted to speak to Amendment No. 27." So in acknowledgement of the undoubted right of my noble friend Lord Stoddart to ungroup Amendment No. 27, I said: "We haven't reached it yet". That was pretty foolish of me.
We had four-and-a-half hours' debate, in which we covered all aspects of European and monetary union except perhaps the question which is raised by Amendment No. 27—that is, whether there should be a report containing details and an assessment of:

"(a) the constitutional impact,

"(b) the monetary and financial impact,

"(c) the impact on economic and social progress",

of decisions taken by the Union,
"pursuant to the objective set out … of establishing economic and monetary union".

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I am grateful to both noble Lords who paid some marginal lip service to the wording of the amendment and the subject under debate. Other noble Lords did not even try. I shall answer the debate about the amendment. I shall respond as best I can and then make such observations as are possible. Given that I had no notice whatever of the wide range of irrelevant matters which were raised, I shall make such response as I can to the other parts of the debate.
Lord Pearson of Rannoch: With leave, we are in Committee at the moment. The Minister is free to answer any parts of the debate that he wishes. Nevertheless, I thought I detected a slight imputation that perhaps my remarks were not earthed in the amendment. Nevertheless, when the Minister comes to read Hansard tomorrow, if he allows me to take the amendment as read because it will be printed in Hansard, he will find that my remarks were targeted entirely on those aspects. The remarks were repeated by my noble friend Lord Mackay on the Front Bench. If the noble Lord answers nothing else, he should at least try to tell the Committee what will be the result of a single interest rate in an EMU of disparate and diverging economies.
Lord McIntosh of Haringey: That question does not arise in the amendment. As I have said, I shall do my best to answer points which noble Lords have made, however irrelevant they are to the amendment.
Amendment No. 27 would require a report on all EMU measures and decisions. The first category of the report would be the constitutional impact—that is, decisions over the participation of a member state in EMU. At least, that is what I take it to mean. Of course, the Act will not be enforced within the next seven days. But I remind the Committee that tomorrow and on Thursday the European Parliament will adopt an Opinion on the Commission and EMI reports on monetary union.
The Earl of Onslow: The impact of disparate interest rates all over Europe is certainly covered by:
"the impact on economic and social progress".
Therefore, it is slap bang in the middle of the amendment.
Lord McIntosh of Haringey: If the noble Earl is dissatisfied with my answer when I have completed it, he will have an opportunity to say so at such length as he chooses. Such are the procedures of the House.
Tomorrow and on Thursday the European Parliament will express its opinion on the Commission and the European Monetary Institute reports. On Friday, ECOFIN will make a recommendation on which states can be taken to have fulfilled the criteria. On the morning of Saturday, the European Parliament will adopt an opinion on the ECOFIN recommendation which will have been made on Friday. On Saturday afternoon, the heads of states and the governments will confirm the member states who are to join European
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monetary union on 1st January 1999. Over the weekend, on Saturday and Sunday, ECOFIN will announce the bilateral conversion rates which will come into force.
Those decisions are not subject to amendments in this Bill, which will not have completed its passage through Parliament. So what constitutional matters referred to in the amendment will arise after next weekend? Of course, the important matter to which I am sure Members of the Committee who dealt with the amendment were referring was the question of UK participation. I remind the Committee that the Government have already made it absolutely clear that if they decide in favour of participation, they will not seek entry without the agreement of Parliament and of the people in a referendum. The European Communities (Amendment) Act 1993 requires an Act of Parliament before the UK can move to Stage III of EMU. So there can be no doubt that the object of:
"(a) the constitutional impact",
in Amendment No. 27 will be achieved. It must be achieved by law and the Government have no intention whatever of skimping on reporting to Parliament or on the other measures which have been promised.
The second and third categories of decision referred to in the amendment are:
"the monetary and financial impact, and … the impact on economic and social progress".
I acknowledge what was said by the noble Earl, Lord Onslow: it covers anything. It is legitimate, within the scope of the procedures of the House, for noble Lords to speak about any subject, however remotely related to economic and monetary union, in the course of the debate on the basis of those words. That is what Members of the Committee have done. The noble Lord, Lord Pearson, made a most interesting analysis of optimum currency areas. He drew comparisons with the United States and asked me a number of specific questions about the future of economic conditions in the 11 member states which we expect to join after EMU has started. The noble Lords, Lord Pearson and Lord Mackay of Ardbrecknish, recognised the degree to which convergence has been achieved. The latter paid tribute to Italy no fewer than five times, I counted, in the course of his entertaining speech.
It is common ground that the fears which existed a year or two ago that there was no hope of convergence on the monetary criteria laid down at Maastricht have now been largely laid to rest. Of course, there will be accusations of fudge, accusations that many of the monetary measures which were laid down at Maastricht have been achieved on a point basis rather than on a sustainable basis. We shall see what results from that. We do not believe that achieving convergence on a point basis is satisfactory. Our whole approach to economic and monetary union has been the need for sustainable convergence over a period of time. That is why, in addition to the monetary criteria, the Chancellor laid down the economic criteria to which reference has already been made.
The Chancellor set out five tests which will indicate whether our joining economic and monetary union is in the national economic interest. Those tests are, first,

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achieving macro economic stability through sound fiscal and monetary policies; secondly, setting the right framework for low inflation through our reforms to the Bank of England and our commitments to monitor the inflation target in the light of the practices of the European Central Bank; thirdly, ensuring that our fiscal rules and deficit reduction plan continue to be consistent with the terms of the stability pact underlining our commitment to avoid an excessive deficit; fourthly, promoting greater flexibility in the UK economy and in Europe; fifthly, negotiating to secure the best interests of our financial sectors and to open up the single market in financial services.
The noble Lord, Lord Mackay, reading from the Treasury Select Committee report produced this afternoon, quoted an extract from my old and dear friend Christopher Johnson. As the noble Lord knows, he is a lifelong and devoted Euro enthusiast; some would even say—I do not believe he would mind—he is a Euro fanatic. Of course, for somebody who is a total Euro enthusiast some of the wording in the criteria is bound to be a little loose.
I must say to the Committee that I am no more bound by the quoted words of Christopher Johnson than by the quoted words of the Sunday Telegraph, anticipating a report which only came out this afternoon, or by the quoted sight—I saw them as well—of the three Channel 4 programmes on economic and monetary union showing a huddle around President Chirac and Chancellor Kohl. We do not make policies in this country on the basis of press reports of that kind. They were wonderful programmes. I pay tribute to them. They were enormously helpful, but we will not make policy on who huddles around whom at an international conference.
My noble friend Lord Stoddart at least made an attempt to relate the matters of which he spoke—on more than one occasion—to the amendment before us. The noble Lord, Lord Pearson, thinks that he has done so. If, when I read Hansard as he suggests, I find that he has done so and that his most interesting academic disposition on optimal currency areas relates to the amendment, I shall gladly send him a handwritten note to acknowledge that he was right.
The noble Lord, Lord Mackay, simply made fun. He knew perfectly well that his speech on 12th March was a Euro enthusiastic speech from which he had to recover at the last minute. The Leader of the Opposition was sitting beside him so he leapt free and expressed his scepticism about economic and monetary union in order to maintain his well-deserved place on the Opposition Front Bench. He got his own back this afternoon; he quoted at length from a report which he knows—because I have been here on the Front Bench—that I have not seen. He knows that I am not in any position to reply to his detailed criticisms.
My understanding from the chairman of the Select Committee is that it is a much more balanced report than Members of the Committee suggest. It pays some attention to the dangers of staying out of economic and monetary union as well as to the undoubted risks of
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going in and the undoubted requirements there will be for detailed consideration by the Government, by Parliament and by the people.
To return, as I must, to the amendment, I suggest to the Committee that the amendment would not serve any useful purpose which is not already served by the Government's intentions. I therefore invite the noble Lord, Lord Pearson, to withdraw it.
7.45 p.m.
Lord Pearson of Rannoch: I will not press the Minister on the point made by my noble friend that, if the Government reject this amendment, they are rejecting the Treasury Select Committee's report which asked for a similar amendment. That would be unfair until the Minister has had the opportunity to read the report in question. The Government can then come to their own conclusions.
I am not an economist, but even I understand the relationship between a single interest rate and an optimal currency area. A single interest rate is only safe in a currency area if the economies within it are not widely divergent. If we do not have that, then we will have massive transfers of resources within the area or unrest within the area.
In that sense, my remarks and the remarks of all Members of the Committee who spoke—to whom I am extremely grateful—were targeted on Amendment No. 27, particularly paragraphs (b) and (c). Even if the United Kingdom does not join EMU, as I sincerely hope it will not, the effect of the others joining will be great indeed on monetary and financial affairs, economic and social progress and on employment. I am a little surprised that the Minister cannot grasp that fact and accept the amendment. But, in view of the hour, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 28 to 43 not moved.]
Lord McIntosh of Haringey: My Lords, I beg to move that the House be now resumed. In moving this Motion, I suggest that the Committee should not start before 10 minutes before nine o'clock.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Badgers and Tuberculosis
7.48 p.m.
Lord Lukerose to ask Her Majesty's Government what assistance they will give to those farmers whose farms are outside the badger culling study areas proposed by Professor Krebs and whose herds are affected by outbreaks of tuberculosis.
The noble Lord said: My Lords, the Question I am asking this evening concerns an issue that has been exercising the minds of scientists and politicians for a considerable number of years and is, of course, a highly emotive subject.

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It was first recognised well before the turn of the century that milk infected with the bovine strain of tuberculosis could infect human beings, particularly infants, though at that time far more cases of TB in humans were caused by the human strain of the disease which was, and still is, highly infective.
Attestation of herds as being free of the disease did not really start until after the war. It was highly successful. In 1961 only some 15,000 out of over 9 million cattle in the national herd of dairy cattle reacted positively and were slaughtered. In other words, the prevalence of TB in dairy cattle had fallen to less than one-fifth of 1 per cent. compared with approximately 40 per cent. 30 years early.
But that improvement was not uniform and in some areas the incidence of reactors was far higher than the national average. Those areas were the south west and particularly Cornwall. A MAFF team of vets in 1972 found no answer to that but, at the same time, a farmer in Gloucestershire, whose farm had suffered from repeated infections of TB, found a dead badger. A post mortem showed that the badger had suffered from an extensive infection of bovine tuberculosis.
Tests on badgers then took place widely and many badgers were found to have the disease, probably forming a reservoir for the disease in certain areas of the south west from which reinfection took place. Further experiments and trials took place based on this through the years, but with little tangible effect. Several inquiries have also been instituted; notably that of the distinguished zoologist Lord Zuckerman in 1980. None of those solved the problem, and the Conservative Government asked Professor Krebs to set up a committee to look into the matter again in as scientific a way as possible. His main suggestion is to set up trial areas in the south west to try to establish once and for all how much badgers contribute to the spread of bovine TB. One of his other suggestions is that there should be a complete ban on the culling of badgers outside the trial areas. Hence my Question—and I must apologise for its long time in coming.
Compensation for slaughtered cattle, and more particularly to farmers hit by subsequent movement controls and the inability to carry on a viable business, has never been considered by farmers to have been either fair or adequate. It is for this main reason that experiments in the past have not worked, as the farmer has carried on illegally slaughtering what he considers to be his main antagonist, the badger. For the recommendations of Professor Krebs to work at all, it is essential for compensation to be paid to farmers to persuade them to co-operate totally with the trials, or these will be worse than useless and lose all scientific credibility.
The Krebs report proposes a five-year study of the effects of badger culling in 30 sites, each 10 kilometres by 10 kilometres, in the south west of England, chosen as the areas which have suffered the most repeat breakdowns, or next door to them, over the four years to 1996. Of those, 10 sites will have a proactive culling strategy; 10 sites a reactive strategy; and 10 sites no culling whatever. It is estimated that in these squares
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some 67 per cent. of total breakdowns will be covered. That leaves approximately some 33 per cent. of breakdowns which will occur, or are likely to occur, in areas where there will be no study work at all. If one then adds in the 10 squares where there will be no culling, it follows that a total of some 55 per cent. of all breakdowns will be occurring in areas where there will be no assistance to farmers to deal with the problem. The sites for the trials are all in the hot-spots of the south west, which means that the areas where breakdowns are occurring now, such as the Welsh borders, Shropshire and Staffordshire, will he untouched by the trials.
Farmers' compensation payments are based on the average market price for the two months previous to the month in question. This means that on a falling market payments have dropped from a maximum of £666 last summer to a maximum of £537 in April this year. What are the Government planning to do to help these farmers outside the area where the cull will take place? Are they aware that many farmers are threatening to take the law into their own hands and start destroying badgers, which, although it cannot be condoned, is surely understandable in the circumstances in which they find themselves? Will the Government consider creating some sort of cordon sanitaire round those areas where breakdown numbers are increasing to stop the spread of the disease further into the north west of the country and the Midlands? Might the Government consider increasing the percentage paid, especially to those farmers outside the control areas, or possibly freezing the compensation so that it does not fall any further?
A major problem for farmers affected by breakdowns is the imposition of movement restrictions, which mean that cattle can leave an infected farm only to go direct to slaughter. This means that many dairy farmers who sell calves or young store cattle cannot do so other than through the calf processing scheme, under which they are slaughtered immediately. This obviously means, in turn, that once the scheme ends, as it is expected to do shortly, farmers with herd breakdowns will not be able to sell any calves. The result of these restrictions is that farmers often face serious accommodation problems in keeping all their stock until the time for slaughter. Yet there is no assistance for all those extra costs incurred. This aspect is often the one that causes farmers more problems than the issue of compensation. So will the Government urgently review the present movement restrictions with a view to easing the problems caused to farmers who are suffering from continued breakdowns in areas where badgers are not being controlled?
The Government have not yet made any announcement about the costs of implementing the research proposed by Professor Krebs. What estimates have they made of the cost of fully carrying out the work, and will they undertake to ensure that the validity of the trials is not jeopardised by a shortage of funding? Can the Government ensure that when cattle have tested positive they will be removed from a farm within 48 hours?

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I look forward to noble Lords' speeches and in particular to that of the noble Lord the Chief Whip. I believe that an opportunity has come to settle this matter once and for all if—and it is a big "if'—the Government deal with it in the right way. I think they have made a good start in announcing that MAFF will conduct research into finding a vaccine for cattle. Can the Government confirm that work on the development of a vaccine to prevent bovine TB in badgers began under the Conservative government in 1994 and that some £1.5 million has been spent to date? Will this continue while the new work is begun on seeking an effective vaccine for cattle? What do the Government believe to be the major obstacles to the efficient application of vaccines to both cattle and badgers?
The badger is an attractive animal which does not deserve to be, as I fear it undoubtedly is, the villain of the piece.
7.57 p.m.
Lord Hardy of Wath: My Lords, the House should be grateful to the noble Lord, Lord Luke, for giving us the opportunity to discuss a serious matter. I hope that my noble friend, in replying, will be able to respond particularly in regard to the question of vaccines, to which the noble Lord referred a moment ago.
Perhaps I should first explain that I have a longstanding interest in this species, which I was able to watch and study for a long time before I became a Member of the other place in 1970. I always took the view when I became a Member of the other place that my interest in nature conservation should remain a matter for private relaxation. But, unfortunately, in the early 1970s a gang of badger diggers in south Yorkshire attacked virtually every sett and behaved with the utmost brutality. The last straw came when one of them placed a gin trap by the side of a badger sett and also at the side of a nature trail set out for schoolchildren, including some of those whom I had previously taught.
I thought it appropriate to present a Private Member's Bill in the other place and one was also started in this House. Those initiatives resulted in the Badgers Act 1973. It was not a particularly extensive Act—a modest Private Member's Bill rarely is if it is to be successful, as that one was. But shortly afterwards I was fortunate in securing first place in the Private Members' ballot, and I presented the Bill which became the Conservation of Wild Creatures and Wild Plants Act 1975. We touched on badgers' interests in that Act. However, by that time, the Ministry of Agriculture had developed suspicions about the relationship between badgers and bovine TB, and we could have nothing in those Bills which in any way prevented the Ministry of Agriculture from taking appropriate and sometimes hard action. That was understandable. But it is over a quarter of a century since the first of the badger Bills was presented. I had hoped that by now the problem would not have persisted, but it has.
There are causes for anxiety. The noble Lord has touched on a very serious one. How can Professor Krebs' research be truly scientific if people are going to
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destroy badgers in areas where the scientific research requires them to be unmolested? We have to ensure that farmers are not allowed to disregard the need for an adequate scientific base in the research.
There is another anxiety. There is a very serious reason why I was eager and willing to accept that we should not seek to interfere with the Ministry's control of this disease or problem. I was fearful that the popular press might seize on the issue in the 1970s and indulge in the most astonishing and sensational treatment of the matter, which might well have encouraged all sorts of people to feel that badgers should be destroyed, even though there was not a problem and is not a problem in much of England. Fortunately, such sensational treatment did not develop and the Ministry acted properly.
The Ministry accepted the view that I then expressed that if any control of badgers was to take place, the responsibility should be the Ministry's alone. For example, it should not harness the efforts of the badger diggers, who would have been delighted to receive an invitation from the Ministry of Agriculture to control the badger population. They would have done so with the appalling brutality which has disgusted many of us in those areas of England where such gangs operate.
So we sought protection, but not complete protection. The Ministry had a virtually free hand. It continued to have a free hand when badger protection was further developed under the Wildlife and Countryside Act 1981, which strengthened matters a little further. There have been successive private Member's initiatives such as that of my noble friend Lord Islwyn in the late 1980s. Indeed, as far as I can see, the framework of protection is now complete, and yet we still have this problem.
My hope is that, whatever the Ministry does now, it will seek to ensure that there is no feeding of rumour and suspicion which might extend the persecution of badgers in areas where this problem does not arise. I hope that my noble friend is also going to ensure that steps are taken to validate the research that is proceeding. That may well mean that the question of compensation arrangements, to which the noble Lord referred, should be considered.
There has to be another step taken as well. It may be that there are some cases of bad husbandry. If a farmer is to behave in a way which is scarcely responsible, it is hardly reasonable for the taxpayer to pay out on an unlimited basis, or for the badgers to be destroyed simply because of someone else's carelessness. I am not making a general accusation, but it is touched on in the views expressed by the RSPCA. It makes the point in its representations that the scientific validity has to be considered and the question of bad husbandry should not be ignored.
There is another possibility. It was almost by accident that the badger was found to be infected with bovine TB. It is at least a possibility that there are other creatures that can also be infected which may well be playing a part in the change and development of this dreadful condition.

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I hope that the Government will also consider that the badger is a popular animal. The noble Lord said that it had become a villain. It remains a very popular animal indeed. It is the subject of countless successful television programmes. I saw one such programme on television the other day. It is the emblem of the County Naturalists Trust. It is certainly highly favoured in the Yorkshire Wild Life Trust area. I am a patron of that trust and have been a member for many decades.
To put it mildly, it would be injudicious if the Government were to make decisions which inflamed the anger of the conservationists; offended the people who care for the badger; and irritated those on the badger groups who have done so much to ensure the survival of the species. They ought to be a little more careful than they have been in suggesting that the badger population is substantial and robust. It is not as strong and robust as many believe. The sett may be formidable and the excavation may appear to be substantial, but there may be very few badgers in the sett. We lose a lot on the roads and we have lost a lot because of the destruction of the habitat. We have seen large numbers of badgers destroyed by the cruelty of diggers. I hope that we shall not see any unnecessarily destroyed by the Ministry.
8.5 p.m.
Lord Soulsby of Swaffham Prior: My Lords, the House will be grateful to the noble Lord, Lord Luke, for introducing this debate. I have every expectation that the farming community, especially dairy farmers, will look to the reply of the noble Lord, Lord Carter, with great interest because this matter is of great interest and concern to livestock farmers in this country.
My noble friend Lord Luke provided an interesting and comprehensive account of bovine tuberculosis and the wild badger. At one time bovine TB was the scourge of the national dairy herd, with 40 per cent. of all dairy cattle affected by tuberculosis and an estimated 0.5 per cent. of all milk containing the tubercle bacillus. Before eradication that was responsible for 2,500 human deaths from bovine TB, particularly of children, with the untold misery associated with that.
The eradication programme was commenced in 1935, and it took 30 or more years to reach the level that my noble friend indicated. By 1965 the reactor incidence in the national herd was 0.06 per cent., representing 1 per cent. of the national herd. That was achieved by routine tuberculin testing, the clinical examination of cattle, the slaughter of the reactors and the introduction of the pasteurisation of milk.
Bovine TB in humans is now virtually non-existent: it is a rarity. It is about 1 per cent. of all the tuberculous cases in the human population. By any measure, that has been a splendid effort on the part of farmers, who have co-operated with the eradication programme over 30 years, of veterinary surgeons, and of the then Ministry of Agriculture and now MAFF, which continues with the eradication programme.
However, as we have heard, progress towards eradication has slowed down. That has been associated with a spill-over of bovine TB into the wild badger
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population. Now 20 per cent. to 30 per cent. of badgers are infected. Many have severe infection and open lesions, which leads to the contamination of grass and pasture. The weight of epidemiological evidence implicating the infected badger as the principal source of bovine infection now is beyond controversy.
Tuberculosis is endemic in certain badger setts in certain areas of the country. It has been shown that badgers are an ideal host for TB. They can survive for long periods while infected and infectious. They can produce viable young, and the disease does not seem to affect numbers or the structure of the badger population. Indeed, the Krebs report states that the evidence is "compelling" that badgers are implicated in the transmission of TB to cattle. As has been mentioned by my noble friend Lord Luke, in response to that finding the Krebs report proposes the setting up of 30 experimental areas in hot spots, each being 10 kilometres in size, to compare proactive culling, reactive culling and no culling at all over a period of five years to obtain firm scientific evidence on the role and mode of transfer of TB from badgers to cattle, and whether culling has any effect, temporary or permanent.
It is recommended that there should be no culling outside those areas. It is that aspect of the report which causes particular concern and disappointment that a more robust approach to the problem has not been proposed. Bearing in mind that fanners and vets worked hard and willingly to eradicate TB over a period of 30 years, many now feel that they deserve more sympathetic consideration and that firmer action is warranted.
Many questions arise. What will happen if new hot-spot areas develop outside the three control areas? Will badgers in those areas remain untreated and unculled as TB infection spreads? What compensation will be offered to farmers with TB-positive cattle in the non-culling areas? Will the so-called simple husbandry techniques contained in the Krebs report to be applied outside the hot-spot areas receive financial assistance?
A simple husbandry technique would be to fence off badger setts, but those who work on farms know that fencing to prevent badgers moving outside an area and to prevent cattle entering it costs money. Farmers who have experienced TB in their herds know well about the loss of income and the expense arising from movement restrictions, as was mentioned by my noble friend Lord Luke; the increased stocking rates when that occurs; the secondary diseases that may occur because of overcrowded farms and the increased veterinary bills that result.
Wider concerns relate to human health. Such concerns have not yet been mentioned, but raw milk is sold and used in this country. The original danger to humans from bovine tuberculosis came through milk. Should we be concerned about that? I believe that we should be. Much raw milk is drunk on dairy farms and it may well be that cows are secreting infected milk before the infection can be detected by the tuberculin test.
Another area that has not been taken into account is that badgers infected with TB often carry enormous burdens of the bacterium and spread it through urine and

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open lesions on to the grass and herbage. There is a fear that they will contaminate suburban areas, including vegetable gardens and leisure areas for the human population. There is a danger that humans, and particularly children, will become infected from using play areas or eating contaminated vegetables.
There are many areas on which the expert group to be set up to consider vaccination and other matters will need much guidance. It will need much guidance from Her Majesty's Government. I hope that they have it in mind.
Finally, I would not suggest for a minute that there should be any persecution of badgers, but I believe that the human health implications of the dangers of badgers and dairy cows with tuberculosis must also be considered.
8.14 p.m.
Lord Islwyn: My Lords, I endorse the thanks that have already been expressed to the noble Lord, Lord Luke, for initiating this short but useful debate. I am afraid that my approach to the subject will be a little different from his and more in line with the words of my noble friend Lord Hardy of Wath who spoke so eloquently earlier.
First, I must declare a certain interest, although not a financial one. As a Member of another place, I was responsible for a private Member's Bill which became the Badgers Act 1991. It sought to protect badgers from cruel persecution by evil people. It laid particular emphasis on protecting badger setts. There is still a need for that Act. About a week ago, on 22nd April, a report on the front page of the South Wales Argus gave details of a party with dogs and spades, digging out a sett on the outskirts of Newport. The men were digging up the sett to capture the cubs born this year so that they could train their dogs on them. Apparently, the same sett was dug up 12 months previously when the cubs were ready to be weaned.
On 16th December last year, Mr Jeff Rooker, MP, the Minister responsible for food safety, announced in the other place that the Government had accepted the Krebs report. The report, by Professor John Krebs, recommended a four-point strategy for dealing with TB in cattle and badgers. It called for the ending of the current policy of limited culling of badgers and suggested that that should be replaced by a policy of no culling in most parts of the country.
There has been much conjecture about the link between badgers and TB. As I understand it, the jury is still out. Indeed, it is suggested in some quarters that TB is given to badgers by cows in the first place.
My first question is: how many badgers will be culled under the new policy? Krebs estimated that 10,000 badgers would be culled over three years, but I understand that the figure could turn out to be almost 20,000 because it is suggested that Krebs underestimated the number of badgers in certain areas. We must recognise that many of those badgers will not be infected with TB. It is reckoned that between
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1,000 and 2,000 badgers are killed annually. Therefore, the new policy will mean a huge increase in culling. Can that be justified? I very much doubt it.
I understand that 703 herds are affected out of a total of 119,000 in the country as a whole. Over the past 23 years, more than 25,000 badgers have been officially culled in an attempt to eradicate TB, but the disease is still increasing in cattle herds. Despite what the noble Lord, Lord Soulsby of Swaffham Prior, said, it is now widely believed that culling badgers is not an effective solution to the problem of TB in cattle and badgers. What we need is an integrated approach involving better cattle husbandry, the use of vaccines and more focused research into the transmission of TB, as well as improved detection in cattle. Yet under the so-called five-year trial period many thousands of badgers over large areas of Wales, the South West and the West Midlands will be killed. Such an onslaught on this lovely wild animal can never be justified. It is suggested that farmers are taking the law into their own hands and killing badgers. I believe that they should be given an official warning and if they refuse to accept it they should be prosecuted.
Finally, I tend to disagree with the noble Lord who presupposes that badgers are solely responsible for TB in cattle. There is insufficient evidence to justify such a conclusion. Other wildlife may be involved. Studies in Ireland have indicated that even the weather may be a factor. Should cattle be kept in for a longer period during a rainy spring? These kinds of considerations lead me to believe that Professor Krebs may have got it wrong. I hope that there will be a rethink on the part of the Government.
8.21 p.m.
Lord Beaumont of Whitley: My Lords, as has been said, this Question is a timely one. The noble Lord, Lord Luke, is to be congratulated on having brought this matter before the House. It places before us the multifarious difficulties associated with the problem that has been raised by noble Lords. Some noble Lords have a great deal more expertise than I having introduced Bills and other measures into Parliament on this subject. My only connection is that my great-uncle and the great-uncle of the noble Lord, Lord Gainford, wrote an early book on badgers entitled The Life and Habits of the Badger—I regret to say that it is not in your Lordships' Library—but that does not make me an expert.
It is quite clear that in the immediate past too little urgency has been applied to this problem. The one matter on which everyone I have spoken to is united—I have spoken to quite a number of people—is that the previous administration whiffled about and got nowhere. I am delighted to hear this evening that they did put money into research into vaccination. I believe that to be a very important part of what needs to be done. I shall return to that in a moment.
The Krebs study will extend knowledge, but in my view it does not get to the heart of the problem. I do not follow the previous speaker in believing that it has not got its facts and deductions right. On the whole I believe

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that it has. But the heart of the problem is to assume what most people are sure about; namely, that badgers and cattle infect each other. What we must do as a matter of urgency is find a vaccine with which we can immunise both. I am not a great defender of the scientific establishment, but I know from experience that if it is given a problem with a high priority and is given the resources it will come up with solutions.
I do not advocate that we throw money at the problem but that we move it sharply up the pecking order of priorities. Until we come up with the answers farmers outside the study areas must be given permission to cull or be fully compensated for what happens as a result of their inability to cull. That is the hard choice that the Government must face. But much more important than any of those matters is the need to begin looking for a vaccine. The Krebs study will produce very interesting information which may have a considerable bearing on what we do in future. But we need a vaccine quickly to inoculate both badgers and cattle. I think it is now accepted that they infect each other.
8.24 p.m.
Baroness Anelay of St Johns: My Lords, I too thank my noble friend for giving the House the opportunity to discuss the consequences of the implementation of the Krebs report for those farmers who will not be allowed to cull badgers even though their cattle suffer breakdowns. As my noble friend has pointed out, 55 per cent. of breakdowns will occur outside the cull areas.
I welcome the response of the Government to the Krebs report. Bovine TB has posed problems for a very long time. I recognise that it raises very sensitive issues of animal welfare. It is a matter of animal welfare between species— badgers and cattle—and between animals and humans. There are threats to the farming economy and potentially to human health. Those sensitive issues are not easily resolved. I listened with great interest and humility to the experiences of some noble Lords who have had the interests of badgers at heart for even longer than I am able to remember, if I may dare say so.
During the experimental period it is vital to maintain the confidence of farmers and conservationists alike. We are looking forward to a period of five years. Even if it is possible to develop a vaccine for cattle—I hope that it is—the report itself says that it may take 15 years. Therefore, we are in for a very long haul while farmers suffer a threat to their livelihood. That is not a matter of criticism of anybody but simply a practical point.
The questions that I put to the Government this evening concentrate on the issues involved in maintaining the confidence of both farmers and conservationists during the coming years. The Krebs report makes recommendations as to study areas and timescales. Will the Government consider adopting the CLA's recommendation that the experimental areas should be doubled on the basis that to increase the sample size can reduce the time taken to obtain conclusive results? That would make it three and not five years.
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My noble friend has already referred to the costs of the experiment and the need for the Government to guarantee that the costs will be met. Do the Government agree with the National Farmers Union that direct financial contributions by the farming industry to control a disease of national interest is not an option? What will the Government do to meet the Krebs recommendation that the role of the MAFF should be to provide incentives to the industry to participate, or do the Government intend to follow the New Zealand example quoted in the Krebs report where the farming community contributes to the costs of both bovine TB research and bovine TB control?
As other noble Lords have explained this evening, it is vital that the research is successful, and for that to happen it is essential that it is not disrupted. What steps will the Government take to ensure that the trials are not disrupted by those farmers who are outside the culling area and feel aggrieved that they cannot safeguard their herds? Will the Government need to put in place new statutory or regulatory powers to take all badgers in control areas perhaps regardless of the views of landowners and animal welfare organisations? If new legislation is not required, which existing procedures and powers can the Government use to guarantee the integrity of the culling procedure?
I also have particular concerns as a result of paragraph 31 of the Government's response to the Krebs report. Do the Government recognise that they have a special duty in respect of compensation to farmers in relation to culling in response to Krebs? As I understand the legal position, it is not possible for an individual to sue for damages for negligence in respect of pure economic loss. Is that a correct interpretation of the law of tort? Even if farmers outside the culling areas suffered loss because the Government had forbidden them to mitigate their losses by culling, they would have no legal recourse via the courts. Surely, that places the Government under a greater duty of care to those who suffer loss as a result of being excluded from experimental culling areas. I believe that that may put us in a new situation that is not covered by the existing principles that govern compensation.
Finally, I turn to the question asked by noble Lords about the potential impact of good husbandry upon bovine TB outbreaks. The Krebs Report states:
"We suggest that areas outside the experiment would be suitable for an experimental comparison of proactive husbandry methods … As part of its role in encouraging a more proactive and constructive approach to husbandry, we recommend that the government should also give further consideration to whether incentives might be offered".
Have the Government done so, and. if so, what incentives are planned? What discussions have the Government had with farmers' representatives about the recommendations in the Krebs Report with regard to husbandry practices? Do the Government recognise that at times special local circumstances can frustrate the best attempts to separate badgers and cattle? For example, it may not just be the cost of fencing that could be a problem for the farmer. Secondary fencing is not allowed in certain parts of the south west, particularly in national parks. I understand that there could be difficulties with regard to rights of way.

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I return to paragraph 31 of the Government's response—do the Government intend merely to impose sanctions of lower compensation upon those who do not adopt good husbandry practices, bearing in mind that Krebs talks about incentives and not penalties? I look forward to hearing the Government's response.
8.31 p.m.
Lord Carter: My Lords, like all other noble Lords, I thank the noble Lord, Lord Luke, for raising the issue of bovine TB and the culling of badgers. All noble Lords' contributions have been valuable. Bovine TB is, thankfully, a relatively uncommon disease in Great Britain as a whole. New confirmed TB infections were detected in 471 cattle herds in 1996. The provisional figure for 1997 is 515 herds.
The disease is concentrated in certain parts of the country. There are some areas—for example, that of the noble Lord, Lord Luke, in Bedfordshire—which experience little or no TB infection in cattle. In other areas the disease is more common. In parts of south west England, new confirmed cases occurred in over 1 per cent. of herds in 1996. Where the disease occurs, it is potentially a serious problem for the affected farmers. Despite the limited badger culling policy of the "interim" strategy, the annual incidence of bovine TB has been increasing in south west England since the late 1980s.
In 1990 the figure for south west England was 104 new confirmed breakdowns. By 1997 that had risen to 414. That is a provisional figure. It has also been occurring in areas with no recent history of infection in the West Midlands and South Wales. As we have heard, there has been considerable debate about the role of the badger in the spread of bovine TB, particularly in the light of increasing badger populations.
As has been said, in November 1996 Professor John Krebs and a team of leading scientists began an independent scientific review on behalf of the then government into the links between bovine TB and badgers. Their report was published in December 1997.
The Krebs Report concludes that the sum of evidence strongly supports the view that badgers are a significant source of TB infection in cattle. However, it points out that it is not possible to state how large a contribution badgers make to cattle infection as the relevant data have not been collected and analysed. Moreover, the report makes clear that there has been no proper experimental study to enable firm conclusions to be drawn about the effectiveness of culling as a means of controlling bovine TB.
The report concludes that control of TB in cattle is a complex problem for which there is no single, simple solution. It therefore recommends a combination of approaches on different timescales. We view the bovine TB problem very seriously and are determined to tackle this issue in a rigorous and scientific way. That is why we welcomed the report by Professor Krebs and his team. We believe that that represents the best available scientific advice across this area and the Government are, therefore, disposed to accept the report's
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recommendations in principle, subject to further consideration of the public expenditure, legal and practical implications.
The report recommends a proper experimental trial of the effectiveness of badger culling in areas at highest risk of TB infection in cattle. Professor Krebs concludes that such a study is the only way to test rigorously the effect of different strategies: it would provide unambiguous evidence on the role of badgers in cattle TB. Most importantly, it would also yield quantitative data for a cost-benefit analysis of different strategies, including the absence of culling.
The Government therefore plan to carry out the culling experiment recommended by Krebs. That is worth doing only if it is robust and gives a sound basis for long-term policy. We have appointed an independent expert group to advise on the experiment design and implementation and are seeking everyone's co-operation. The first task of the expert group is to advise on the design of a trial which will produce scientifically robust conclusions. To do so it will assess the implications of the various practical, welfare and other problems which have been raised.
Outside the trial areas, Krebs recommends that no culling should take place and we have therefore ended the "interim" strategy. Even if culling were effective in reducing breakdowns (and that remains to be tested by the experiment), extending it into areas of lower breakdown rates would provide diminishing returns in terms of the number of breakdowns prevented. The expert group will, however, monitor the TB situation closely, and it will be open to it to recommend new areas be recruited to the experiment at any stage. I shall return later to the point about the West Midlands.
Farmers affected by bovine TB continue to be compensated under the current rules, which are long established. Most importantly, however, it is essential that money spent in this area is directed at finding answers to the key questions underlying the problems we face with cattle TB.
A small proportion of farmers will experience TB breakdowns. That may affect farmers in areas where pro-active and re-active culling is being tested as well as those in areas where there is no culling. The Government realise that the effect of breakdowns on farmers can be serious. Except for cows for slaughter, movements in and out of the herd are restricted until all the animals in it have been tested with negative results.
In order to help contain the outbreak, the cattle which react to the TB test, and animals which have been in close contact with them, are compulsorily slaughtered. There is, of course, compensation for those animals which are compulsorily slaughtered. It has been pointed out that compensation is 75 per cent. of the value of animals slaughtered, subject to a limit linked to a proportion of the average value of dairy cattle. Compensation is 75 per cent. of 125 per cent. of the average market price for two months before valuation. If my arithmetic is correct, that is effectively 95 per cent. of the average market price. There is 100 per cent. compensation of the value of animals slaughtered because they have been in close contact. There is also payment of the costs incurred in

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valuation of the animals. Those arrangements are long established and were introduced, as we all know, after discussion with the farming industry.
In the light of Krebs, the Government have considered requests to increase compensation to recognise the disruption and economic loss that TB breakdowns can cause, but we do not see grounds for distinguishing TB from other diseases which cause disruption and loss, and for asking taxpayers to meet a larger share of farmers' losses from TB. As Krebs pointed out, there are other measures in place to ensure that TB in cattle does not pose a threat to public health. There is also the possibility of insurance, although I am aware of the expense and of the limited coverage of insurance in areas of infection. It has been argued tonight that farmers deserve additional compensation because they are prevented by law from taking action to protect their herds by culling badgers. However there is little evidence that the interim culling strategy was working effectively to control the spread of TB. I have already referred to the increase in incidence.
More fundamentally, Krebs has argued that neither the precise role of badgers nor the impact of the culling strategy has been properly evaluated. That is why he recommends the experiment and the various pieces of research to improve our understanding of the causes of herd breakdowns and the effects of the currently available strategies to reduce breakdowns.
We believe that farmers' interests are best served by the full implementation of the report and the development of the scientifically based control strategies which are sustainable in the long term. We understand that the NFU is preparing a case for additional compensation. When we receive it, we shall certainly study it carefully, but we can offer no assurances beyond that. We need to be satisfied that the money that is spent in this area is best directed at finding answers to the key questions underlying the problems we face with cattle TB. That is a key point when we are talking about taxpayers' money. That aim is essential if we are to achieve our objective of controlling and ultimately reducing the incidence of TB.
Professor Krebs recommends a refocusing of research priorities for bovine TB. These are reflected in the research requirements document which was issued on 20th April.
A key recommendation concerns the gathering of improved data on herd breakdowns so that we can better analyse and understand factors contributing to local variations in the risk of herd breakdown.
The Krebs Report further concludes that improved husbandry methods by cattle farmers may play an important role in reducing bovine TB outbreaks in the longer term.
We will be pursuing discussions with the farming industry on establishing an experimental comparison of different husbandry methods in areas outside the culling trial. We agree with Professor Krebs that it is important that the farming industry itself takes a clear lead in this area.
Perhaps I may respond to some of the points that were made in the debate. Due to pressure of time tonight, and for reasons that we all understand, I will undertake to
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write to all noble Lords whose questions I do not have time to answer. A large number of important questions were asked.
The noble Lords, Lord Luke and Lord Beaumont, asked about the possibility of a vaccine. We can confirm that work on the development of the badger vaccine began in 1994 and that £1.5 million has been spent on that work to date. The Krebs Report recommends that the best prospect for the control of TB in British cattle is to develop a cattle vaccine and that this should have a high priority. However, it also makes clear that a cattle vaccine is a long term policy and that it will be 10 years or more before a vaccine is likely to be available even for field trials. Its success cannot be guaranteed. The report also recommends that the option under the badger vaccine should be retained as a fallback position in case the more stringent requirements of a cattle vaccine cannot be met. Much of the work done in the early years of developing a cattle vaccine will be applicable to the badger vaccine.
As regards a cattle vaccine, I highlight two crucial aspects which are relevant to application. First, any vaccine will need to be complemented by a diagnostic test which would enable the naturally infected animals to be distinguished from the vaccinated animals. The diagnostic test which is currently used does not allow that. Secondly, there will be a need to amend the current European legislation which governs TB testing so that properly vaccinated cattle will not be subject to trade restrictions.
A badger vaccine will clearly present problems in terms of development and delivery. Moreover, we do not yet have an experimental system enabling the development and testing of a badger vaccine. Section 6.4 of the Krebs Report sets out in some detail the key issues surrounding the development and application of both the cattle and the badger vaccines and I commend that to your Lordships.
I turn to the inclusion of the West Midlands area. Determination of criteria and the selection of areas to be included in the experiment is a matter for the independent expert group which has been set up to advise on the design and implementation of the experiment. It clearly seeks to ensure that the areas selected will best meet the needs of the experiment. Selection for inclusion in the experiment does not mean that a culling regime will be applied in that area. Krebs recommends that one-third of the trial area should allocated to a no culling policy.
The noble Baroness, Lady Anelay, asked what the Government will do to meet the Krebs recommendation that the MAFF role should be to provide incentives to the industry to participate and discussions with farmers' representatives. Professor Krebs recommended that the Government should consider whether incentives might be provided to farmers in the context of an experimental evaluation of husbandry practices. The Government agreed that it is important that industry should take ownership of this issue and take a lead role because that will ensure an evaluation that is best able to deliver results. As with the culling trial, the benefits of any results will accrue to the industry.
We are currently considering responses to the consultation on this and other recommendations in the report. Ministers will make a further announcement as

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soon as possible. In the meantime, preliminary discussions have been held by officials with all the key interest groups and Ministers have made clear their intentions to ensure that close contact is maintained with all the relevant interest groups as we move forward with implementing the report.
The noble Baroness asked whether the Government will need to put in place new statutory regulatory powers and which existing powers the Government can use to guarantee the integrity of the culling experiment if new legislation is not required. Those are important issues. A number of important practical issues must be addressed before we can move forward with the current trial. The first task of the expert group is to advise on the design of a trial which will produce scientifically robust conclusions. The Government expect to receive advice from the group in June.
It is in the interests of farmers and landowners, conservationists and all who care about our countryside that the trials should work and achieve valuable results to help us combat TB.
I am running out of time, but I will ensure that all noble Lords receive a written answer to all the questions that were asked. I repeat my thanks to the noble Lord, Lord Luke, for tabling the Question. It is an important matter which involves human and animal health. Noble Lords can be assured that the Government are fully aware of the problem and consult extremely widely as further recommendations and suggestions come forward.
Lord Hoyle: My Lords, I beg to move that the House do now adjourn during pleasure until 8.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.46 to 8.50 p.m.]

European Communities (Amendment) Bill
House again in Committee.
Lord Moynihanmoved Amendment No. 43A:
After Clause 1, insert the following new clause—
DECLARATION ON OVERSEAS COUNTRIES AND TERRITORIES
(" . Within six months of the passing of this Act a Minister of the Crown shall lay before both Houses of Parliament a report on the budgetary implications for the United Kingdom of Declaration 36 (on the Overseas Countries and Territories) appended to the Treaty of Amsterdam.").
The noble Lord said: I beg leave to move the amendment standing in my name and, with the agreement of the Committee. I shall refer also to Amendment No. 43B. I accept that that amendment is separately listed, but it will assist the Committee. I know that the Government Benches are content with that. I shall not be moving Amendment No. 43B because I shall be covering the points that I wish to make under Amendment No. 43A, which relates to the Declaration on Overseas Countries and Territories.
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The proposed new Clause that I have tabled requires a report to both Houses of Parliament on the budgetary implications for the United Kingdom of Declaration 36 on Overseas Countries and Territories which is appended to the Treaty of Amsterdam. This declaration recognises the need for special arrangements for Overseas Countries and Territories. It notes that the number of OCTs has declined significantly since the existing arrangements were first established in 1957. The declaration points out that these arrangements for association of OCTs were designed for countries and territories which were numerous, covered vast areas and had large populations. Today, however, there are only 20 OCTs and they are extremely scattered island territories with a total population of approximately 900,000.
This reduction in numbers of OCTs came about because member states no longer have empires and many of the territories referred to have since become welcome independent countries. The special association arrangements in place have hardly changed for decades and the Council has therefore been invited to review the association agreements between the Community and the OCTs and to come forward with proposals on how to assist the remaining 20 or so more effectively.
The review has a four-fold objective. Promoting the economic and social development of the OCTs more effectively; developing economic relations between the OCTs and the European Union; taking greater account of the diversity and specific characteristics of the individual OCTs, including aspects relating to freedom of establishment; and ensuring that the effectiveness of the financial instrument is improved. The review will be concluded before February 2000, at which point the old arrangement runs out. Decisions on the review in the council will be taken by unanimity.
Did the Prime Minister or Foreign Secretary, during the negotiations at Amsterdam which led to the inclusion of this declaration, raise the possibility that Spain might veto a future deal on the Community's association arrangements for OCTs because of the status of Gibraltar?
The Committee will have noticed that my brief consultation on Gibraltar in this context is very different to my earlier, somewhat forensic, assessment of the Government's hole-in-the-wall debacle and the secret Amsterdam tapes. This is a very different issue. Up against the threat of a Spanish veto, the Government would be faced with a choice between resisting such a threat and potentially allowing the OCT agreement to fold without a replacement, or giving in to Spanish demands. In such circumstances I am keen to elicit a response from the Government.
This is far from a fanciful scenario. Certainly the Chief Minister of Gibraltar, Peter Caruana, has no doubt that Spain would have no hesitation in deploying its veto. The Chief Minister said:
"We in Gibraltar have no doubt whatsoever that Spain will deploy her veto unless the UK agree to exclude Gibraltar from the application of the Schengen arrangements.

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"Our fears and concerns of the existence of the Spanish veto on a future British entry into the Schengen arrangements are not imaginary. Spain will exercise the veto, just as she did in relation to the application of air liberalisation to Gibraltar, from which we are still excluded, and just as she vetoed the External Frontiers Convention unless Gibraltar was excluded from it."
He continued:
"As far as Spain is concerned the very same issues arise in respect of Schengen."
Mr. Peter Caruana also commented that:
"A future British government would be placed in the invidious position of having to choose between advancing the UK's greater interests at Gibraltar's substantial expense or sacrificing the UK's greater interest for the benefit of Gibraltar. The last time the UK found itself in this position related to the air liberalisation directives and Gibraltar was indeed excluded."
What guarantees did the Government seek in order to avoid potentially placing the United Kingdom in such an invidious position? What guarantees did the Government get that Spain will not use its veto again in respect of the Overseas Countries and Territories review? What assurances can the Minister give to the people of Gibraltar in this context?
The Committee will agree that this assurance is vitally important because, as it knows well, the status of Gibraltar has been a matter of disagreement between the United Kingdom and Spain for nearly 300 years, ever since the rocky promontory at the foot of the Iberian Peninsula was ceded to the United Kingdom in perpetuity under the terms of the Treaty of Utrecht.
Spain has always laid claim to Gibraltar and has sometimes used its notoriously hostile strong-arm tactics in staking its assertion of sovereignty to the Rock, culminating in General Franco's unilateral decision to close the border between Spain and Gibraltar in 1969, effectively severing links between the Rock and the mainland for over 13 years.
Despite the Brussels process established in 1984 to discuss a range of Gibraltar-related issues, including sovereignty, the people of Gibraltar are still beset by an unsubtle blend of harassment, threats and restrictions contrived by Spain. Spain continues to create practical difficulties for Gibraltar, and Spanish tactics include unacceptable delays at the Spain-Gibraltar frontier and discrimination between European Union nationalities; incursion into Gibraltar's waters and air space, obstacles to cross-border development; effective prohibition of transport links between two territories of the European Union, since there are no ferry services between Gibraltar and Algeciras and no direct flights between Gibraltar and Madrid; exclusion from the European Union open-skies policy; refusal to recognise Gibraltar's international direct-dial code; impediments to the expansion of Gibraltar's telephone system; refusal to recognise Gibraltar's identity cards, which have been accepted by the European Commission; insistence that Gibraltar should be excluded from the European Union Convention on External Frontiers and insistence that Gibraltar should be excluded from certain European Union directives.
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Those are critically important points in the context of the overseas countries and territories. I have focused on one example this evening and I shall now make a few comments on the island regions and turn to my amendment on that subject.
The Amsterdam Treaty amends Article 227 of the TEC, Article 299 of the consolidated version. Paragraph 2 now provides for the phasing in of the application of the provisions of the TEC in French overseas departments. The new article recognises the particular social and economic situation of the French departments—the Azores, Madeira and the Canary Islands—and provides for specific conditions in applying provisions of the treaty. For example, it instructs the Council to take into account areas such as customs and trade policies, fiscal policies, free zones, agricultural and fisheries policies, conditions for supply of raw materials and essential consumer goods, state aid and conditions of access to structural funds and to horizontal Community projects.
Just as the declaration on OCTs states that the purpose of association is to promote the economic and social development of the countries and territories, it recognises also that as a result of their severe geographical and economic handicaps, most OCTs lag far behind in structural terms. Article 227 acknowledges that factors of remoteness, insularity, small size, difficult topography and dependence on a few products can adversely affect the structural, social and economic situation of the island regions. The permanence and combination of those factors can severely constrain their development.
Moreover, the declaration on island regions acknowledges that Community legislation should take into account the specific structural handicaps faced by island regions and provides for specific measures to be taken in favour of those regions. The declaration states:
"The Conference recognises that island regions suffer from structural handicaps linked to their status, the permanence of which impairs their economic and social development. The Conference accordingly acknowledges that Community legislation must take account of these handicaps and that specific measures may be taken where justified in favour of these regions in order to integrate them better into the internal market on fair conditions".
Most importantly, and again in the context of Gibraltar, paragraph 3 of Article 227 refers to the list of overseas countries and territories with special arrangements for association set out in Annex 2 to which Part IV of the TEC applies. Members of the Committee can read that list and it will be immediately clear that the lengthy list leaves out some of Britain dependent territories. That is because the treaty does not apply to those overseas countries and territories having special relations with the United Kingdom of Great Britain and Northern Ireland which are not included in the aforementioned list.
As Members of the Committee will know, Gibraltar's omission from that list is a serious bone of contention. I should very much like to see a clarification of the Government's policy on that issue. Do the Government consider that Gibraltar has structural handicaps and that therefore specific measures should be taken in favour of Gibraltar to integrate it better into the internal market

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on fair conditions in accordance with that declaration? What response did the Government make to the Chief Minister of Gibraltar when we asked whether that treaty provision, giving special attention to the outermost island regions, could be extended to include Gibraltar? Does the Minister agree with Mr. Caruana that Gibraltar shares with many of the named places the same structural, social and economic situation, and that the situation is likewise compounded by remoteness, virtual insularity, small size and economic dependence on a few products, all of which serve to hamper Gibraltar's development? Does the Minister agree further that Spanish actions have adversely affected Gibraltar's development, that Spain's tactics have had serious practical consequences for the people of Gibraltar, and that as a result, many people have regarded Gibraltar as existing in a state of relative economic siege—with its development impeded and its potential unfulfilled?
What is the Minister's response to the Chief Minister's assertion that Gibraltar is likewise a small territory severely burdened and constrained by the need to apply certain Community obligations? Although those burdens have now been recognised in respect of the above-mentioned European Union territories, that excludes Gibraltar. Did the Government negotiate to extend that new regime to Gibraltar? If not, why not? Does the Minister agree with the Chief Minister of Gibraltar that that represents a missed opportunity to benefit Gibraltar in a way which recognises that it too suffers many of the disadvantages mentioned in Article 227 and in Declaration 30? I should be very grateful for any assistance which the Minister can give me on government policy in relation to those points, believing, as I do, that the two amendments calling for reports on the budgetary implications will provide both Houses with the necessary opportunity to consider the important position of Gibraltar, on a regular basis.
9 p.m.
Lord Whitty: I propose to comment on the amendments as they stand. The noble Lord has, by concentrating on Gibraltar, mixed up three rather than two separate areas. First, we are talking about the overseas territories of member states which are those islands dotted all around the world; secondly, the island regions, which are regions of the EU like the Azores, and so on; and, thirdly, the outermost regions which include some of the same but also some continental areas of Europe.
The second amendment relates to island regions. However, the first amendment relates to overseas countries and territories. It requires that we give a report on the budgetary implications of the declaration on overseas countries and territories. I argue that that is an otiose amendment because there will not be any budgetary implications arising from that declaration. As the noble Lord said, the association agreement has existed since 1957 and the EU has provided funds for those countries from the European Development Fund. It includes generous trade provisions and Community grants similar to those of other groups of developing countries, duty-free tariffs and so on. In the course of
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the Amsterdam negotiations, France put forward a draft declaration that simply reaffirmed the objectives of the OCT Association. That was prompted by the need to renegotiate the association decision in 1999, partly for the reasons that the noble Lord described—the great reduction in the populations of those territories. The French were anxious that we should reaffirm the position that had existed since the 1950s, whereby the European Union would take special responsibility for the territories of colonial powers that are members of the EU.
The declaration on the Final Act, which is an annex to the treaty, was based on that draft and is a useful agreed political statement of the continuing commitment. It commits us to review the association agreements by February 2000. It should be useful in helping us to preserve the benefits that our overseas territories enjoy. The amendment does not in any sense change the force of the declaration. It will oblige us to provide a report. As I said, there are no direct budgetary consequences because we are already meeting the financial costs.
We debated the Gibraltar issue at great length the other night. Gibraltar is not one of the OCTs because it is part of the European Union and is treated for most purposes as part of the European Union, despite the difficult circumstances that exist in respect of Spain. The provisions of the declaration do not apply to Gibraltar, so it is difficult to see that Spain would veto or attempt to veto any OCT agreement.
Baroness Park of Monmouth: If Gibraltar is a member of the European Union, why does it not have a vote?
Lord Whitty: My noble friend Lord McIntosh explained that matter in detail the other night but, if the Committee wishes, I will refer to it later. From 1976 onwards, under the European Parliamentary Elections Act, Gibraltar was excluded from representation in the European Parliament. That immediately followed British accession and predated the creation of a directly elected European Parliament. Unscrambling that would require unanimity, which would need the agreement of Spain. We accept absolutely in principle and in all morality that Gibraltarians ought to have a vote and be represented in some way in the European Parliament. However, it is not possible for us to negotiate that, so it is not sensible to proceed on those lines. We discussed ways of ensuring that Gibraltar can make its views more directly known to the European Parliament, but direct involvement in elections is not feasible. I regret that situation, but that is the reality of the matter. It means that Gibraltar is not affected by the OCT agreement. Therefore, any threat of a veto is at best extremely remote.
It means also that under the second amendment, with its reference to the island regions and therefore to internal economic assistance under structural or regional funds, Gibraltar already qualifies. Gibraltar already has objective 2 status under the structural funds and benefits substantially—I would argue, to a greater extent than do other overseas territories under the OCT agreement.

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Under the Amsterdam negotiations, a declaration was agreed that the particular problems of island regions should be recognised. The amendment would require us to report again on the budgetary consequences. There are no direct budgetary consequences. Any such assessment would take place within the overall assessment of structural and other funds. The relative pressures in the complex negotiations on Agenda 2000 that are continuing now on the future of the structural funds and on urban and less-developed areas and areas of industrial decline obviously involve some consideration of the island regions. They will involve consideration of Gibraltar's status, as they will the status of every territory currently receiving structural funds within the mainland of the United Kingdom.
The Commission's current proposals are not acceptable in their present form to the British Government. As it happens, they would not adversely affect Gibraltar. They will be subject to a lengthy period of negotiation. I do not believe that it is necessary for us to agree in this context to producing a report on the consequences of the declaration that island regions have particular problems. Clearly they do, but so do other regions. The financial consequences involved in terms of structural funds will be subject to a much more detailed, wide ranging and difficult negotiation at a later stage, which will no doubt be reported and discussed at length in this Chamber, but not in the context of this treaty. In the light of that explanation, I hope that the noble Lord will feel able to withdraw his amendment.
9.15 p.m.
Lord Stoddart of Swindon: I do not want to detain Members of the Committee for long, but I should like to say a few words on the subject, especially in regard to Gibraltar. I am sure that my noble friend knows that not only myself but also many others on this side of the Chamber are very sympathetic towards the problems that Gibraltar experiences and would like to see them solved. As regards the treatment of Gibraltarians—and, indeed, of others—wishing to travel to and from the Rock, we believe that Spain interferes unduly with such movements. That causes people living in Gibraltar a great deal of trouble and heartache. I understand the difficulties that we may have with Spain but, nevertheless, we ought to tell the Spanish that both they and Gibraltar are part of the European Union. They should know that Gibraltar, as such, is entitled to the full consideration and the full protection that the European Union is supposed to give. If it does not do so, then the European Union is failing in its duty. I believe, therefore, that our Government should be pressing for action through the European Union to bring Spain to book.
There is another solution with which Spain ought to be faced. I feel quite sure that this country—certainly the people of this country—would give a sympathetic hearing to Gibraltar if it applied to become part of the United Kingdom. Of course, if it became part of the UK it would be eligible for representation in the European Parliament. So there are one or two things that we can say to Spain to get that country to treat Gibraltar in a better way.
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I understand that we are also dealing with the island regions. I should like my noble friend to comment on the question of the Channel Islands and the proposal to extend tax harmonisation to them. My noble friend will be aware that the Channel Islands are not part of the European Union, but it would be useful to know that the Government, of which my noble friend is a member, will resist any attempt by the French through the European Union to impose taxes on the Channel Islands, which the latter do not wish to impose.
The other matter in relation to the Channel Islands that I should like to raise relates to the French and their demands to depredate the fishing areas of the Channel Islands and to go in without let or hindrance, without being stopped by the British Navy. There is also their claim to overflight without proper consent. It should be remembered that the Channel Islands are under the suzerainty of the British Crown. Therefore, I hope that my noble friend will take those matters on board and perhaps give a short reply in that respect.
Lord Whitty: Even after five days in Committee, I have to say that the course of this debate has stretched a little too wide of the original amendment. My noble friend and I, the Foreign Secretary, and others, have expressed concern about the position in Gibraltar. We are in constant discussion with the Gibraltar authorities about its future both directly and in the context of the review of all our overseas territories, on which an announcement is likely to be made at about the end of June.
I do not believe that it is appropriate for such an amendment to be used to produce a debate within this Chamber on what are very delicate constitutional future arrangements for Gibraltar and on the manoeuvres and the negotiations that will be required in that connection. It would be far better if we were to await the outcome of the review on the future of the overseas territories and then dealt with it in that context. It is certainly not appropriate for us to take the matter further tonight.
Lord Stoddart of Swindon: If my noble friend is unable to reply to me tonight, perhaps he will be good enough to write to me about the position of the Channel Islands.
Lord Whitty: If my noble friend really wants me to send him a postcard from Jersey I shall be quite happy to do so. But the Channel Islands, likewise, are not covered by any of the designated territories for OCTs, island regions or outermost regions; indeed, they are not part of the EU. Therefore, they are not actually relevant to any debate on the Amsterdam Treaty even within the wildest stretches of imagination that we have so far managed to reach. Nevertheless, I shall try to keep my noble friend informed of developments regarding the Channel Islands.
Baroness O'Cathain: May I just mention the point made by the noble Lord, Lord Stoddart, to the effect that the French were to impose some sort of jurisdiction over the Channel Islands in terms of tax. Do I take it from

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the reply of the noble Lord the Minister that the French will have absolutely no locus whatever in the Channel Islands?
Lord Whitty: Absolutely.
Lord Moynihan: I thank the Minister for his comments although I have to say that I am surprised that he was unaware of the potential, when tabling amendments such as this, to enable specific cases to be brought before this Chamber for detailed consideration. It is a perfectly proper procedure, and a great advantage of tabling amendments calling for a report on budgetary implications, that it does allow the Committee to explore specific points. There is no doubt at all that in the context of overseas countries and territories there was a very real concern, as expressed by the Gibraltarians, about the implications of a potential Spanish veto. So to say that this is not a matter for discussion tonight and should not be touched on in this context I think is totally wrong. I was using a form of words which would allow us this evening to look very carefully at an important case.
I have to say that there was a clear difference in tone between the last comments that the Minister made and his earlier comments. In his earlier comments he went quite a long way on the subject of the voting rights of Gibraltarians. Having discussed at such length this afternoon the basic human rights of European Union members to vote, it appears that he is not now prepared to negotiate on that. I believe I heard him correctly. I would very much hope that he would be prepared to negotiate on that. When he sees the record and sees the way in which the example of Gibraltar was brought into the context of this debate, quite legitimately, and the extent to which exchanges took place on both sides of this Committee, I hope that he will reflect that it should be central to the Government's ethical or foreign policy to place the interests of the Gibraltarians at the very top of the agenda and to ensure that a right to vote was examined and developed and brought forward as an essential and important principle of the Government's foreign policy. I shall give way to the Minister.
Lord Whitty: I have never said that we do not have sympathy with the people of Gibraltar in their aspirations for a vote for the European Parliament. What I have said is that the negotiating situation looks impossible. I should like to ask the noble Lord why, if he is now so concerned about this issue, since this has been the case since European elections first started in 1979, did the previous government not ever take this up with our partners within the European Union. I assume it was for the very same reason, that they knew that Spain would veto it. I am just stating the reality. It is unfortunate, but that is where we are.
Lord Moynihan: I have never heard a government Minister, on either side of this House, say that they regard it as impossible to make progress on this issue. We have a very clear statement from the Government. It makes this particular set of amendments even more
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important for the people of Gibraltar that it was debated this evening. We shall be able to reflect on it and certainly we will be coming back to the Minister. I do not see it as impossible; I see it as a vitally important issue for government, a vitally important policy issue. I regret the position that the Foreign Office now take.
Against that background and against the exchanges this evening, I am grateful to the Minister for the other comments he made and to the noble Lords who participated, and I beg leave t withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 43B not moved.]
Lord Moynihanmoved Amendment No. 43C:
After Clause 1, insert the following new clause—
AMATEUR SPORT
(" . Within six months of the passing of this Act a Minister of the Crown shall lay before both Houses of Parliament a report on the particular characteristics of amateur sport mentioned in Declaration 29 (on Sport) appended to the Treaty of Amsterdam.").
The noble Lord said: At this point I have pleasure in moving the amendment standing in my name. I understand that there will be a change in the ministerial team at this point. It is always welcome to come back into the world of sport with the noble Lord and to debate issues of importance in that context. I do so because this is the first time that the European Community has formed a declaration regarding sport. I simply rise to welcome the interest expressed by the Community in sport, to raise one or two potential concerns but specifically to encourage the Minister to give the House a clear indication of how he sees the interpretation of the declaration which states:
"The conference emphasises the social significance of sport, in particular its role in forging identity and bringing people together. The Conference therefore calls on the bodies of the European Union to listen to sports associations when important questions affecting sport are at issue. In this connection, special consideration should be given to the particular characteristics of amateur sport".
The sports sector has operated for a long time within Directorate General X of the European Commission and it has been responsible for much good work ensuring intra-Commission and inter-institutional co-operation on sports issues and facilitating co-operation with the sports world. It manages two major programmes for the funding of sports activities and has launched an information service called Sport Info Europe.
The sports sector organises the annual meeting of the European Sports Forum and the annual meeting of international sports federations with the Commission. What it has done, which I believe will be important for the future, is to recognise the importance and indeed the pre-eminence of national governing bodies in various countries and the international sporting federations without at any stage intending to become a government of sport in its own right. I urge the Minister to underpin the importance that must be attached to the role of the European Union in supporting national governing bodies and international federations and in recognising their pre-eminence.
I speak with an element of trepidation as when I was a junior Minister in another place I entered this Chamber for the first time to hear the Minister and others express

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a less than favourable view on the important work I was attempting to do with regard to the football spectators' Bill. Unbeknown to the Minister I was standing at the Bar listening to the most damning indictment that I had heard in my career of any House of Commons Minister. That must have occurred well over 11 years ago. This is the first occasion since then that the Minister will respond to my comments on a sporting matter on a face to face basis. I know that the comments he made 11 years ago were deeply felt. Lord Howell sparred with me on this subject on many occasions. I deeply regret his passing, as does the Committee. I hope that the Minister will examine this subject which is close to my heart and that he will bear in mind that the European Commission has started to take an active interest in football and motor sport.
I refer to the European Court of Justice ruling—after a case brought by Jean Marc Bosman—that clubs have no right to buy and sell players at the expiry of their contracts. The law now demands that in both the United Kingdom and Europe no transfer fees should be paid for that kind of deal. The Bosman ruling dates back to December 1995. For some time there was confusion as to whether or not it applied to the United Kingdom. I am sure the Minister will accept that it led to something of a legal farce because it was possible to buy and sell a player within the United Kingdom by transferring him to a European team for 24 hours in between in order to avoid paying the UK transfer fee.
As I say, the Commission is studying this issue. However, I am anxious about the position of the smaller clubs in this regard. Although the larger clubs maintain that the new system has brought down barriers and provided more freedom for players, they are likely to say that because they can afford to buy expensive foreign players and are now doing so for far less money than used to be the case. People criticise some clubs for being swamped by foreign talent. That does not encourage British clubs to bring on promising young UK players when an unproven talent in a lower division can be bought from abroad at a much cheaper price. As I said, that does not encourage domestic players. Smaller clubs are missing out on the transfer fees which once helped them to survive. I regret to say that some of them, although not all, are becoming less keen to take on youth players who are expensive to train and who might leave them.
As regards motor sport, the main issue is whether or not the European Parliament can, as it intends, legally ban tobacco advertising for sport. It would be inappropriate to go into detail on that extremely complex and emotive case. Suffice it to say that I am trying to make a point about the importance of the European Commission seeking an accord with the governing bodies, looking to the international federations which set the rules and regulations for those sports and working with them in a supporting role, rather than trying to dictate to the world of sport how best to operate.
It is against that background that I look forward to hearing from the Minister—as I said, with a great deal of trepidation after what I went through 11 years ago. At least I have not done myself the discourtesy,
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especially if he believes that those words were accurate, of introducing the personal references which are on the record of my contribution at that time on what was an extremely difficult measure. At least in this debate we are celebrating what should be an important step forward in sport rather than the somewhat more difficult job of introducing a football spectators' Bill, which I recall well, and for one particular reason.
Perhaps I might briefly remind the Committee that I had the difficult job of introducing that Bill. Nicholas Ridley took an intervention during the Second Reading debate, and was asked pointedly, before a full House, when he had last attended a football match—to which he replied, without a moment's hesitation, "At Eton, under duress". My christening was worse. I rose to wind up the debate, totally terrified. There was that moment's pause, as ever. The House of Commons was full to overflowing when it came to matters of sport. During that moment's pause before I started speaking, the noise from the Front Bench opposite came from Dennis Skinner, who said: "It's all right for 'im, 'e can get in under the turnstiles". With those memories fresh in my mind, I am grateful to give way to the noble Lord the Minister to hear his comments on matters sporting.
9.30 p.m.
Lord Renton: We have all enjoyed my noble friend's remarks. They are based on valuable personal experience. I find this a rather vague declaration. Perhaps it is just as well that it is vague. I should not think it right for one of the "bodies", whatever a body may be in this context, of the European Union to start organising international sport. What are the bodies going to do, having listened to a sports association, when important questions affecting sport are at issue? It is all very vague. Nevertheless, we might as well support the proposal.
The most important matter in relation to sport is that it should be part of education. It should be taught in schools to make young people fit, to give them the right sort of instincts and to give them some pleasure and provide relief from their devoted studies. But there is no mention of that. I do not think that the European Union should exist for that sort of provision; however, I hope that member states will encourage each other to encourage sport in schools to the greatest possible extent.
My only reminiscence that might interest your Lordships is this. When I was at school, I was very keen on cricket but not very good at football. Once, when I became frightfully bored while watching a school football match, instead of standing at the front and cheering our side on, I went to the back of the other boys and started reading a newspaper. For that, as happened in those days, I received corporal punishment.
Lord McIntosh of Haringey: First, I congratulate the noble Lord, Lord Moynihan, on his incredible powers of endurance. As he rightly pointed out, there are three of us on the Government Front Bench, while he has taken the lead on every single amendment today, apart from the one spoken to by the noble Lord, Lord Mackay of Ardbrecknish. Three to one does not

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seem to me the right way to play a four-person game, but I admire him for it. He reminds me of the football spectators Bill 11 years ago, which I had forgotten. I shall have to go back to Hansard and read how rude I was. Since I never raise my voice in anger in this Chamber, I am a little astonished at what the noble Lord says, but if he says it, he must be right.
I took part in a debate on listed events last week in which I confessed my lack of interest in sport, so it is no good my pretending a personal concern about sporting matters. It is on the record that at school I used to escape from sport as much as I possibly could, notably by going to the movies in the afternoons.
I hope I can reassure the noble Lord, however, by saying something about the Government's attitude to sport in general. We intend to take the lead in extending opportunities for participation in sport which will embrace all sections of the community, regardless of where they live, social background, age or ability. Our aim is to ensure sporting enjoyment and opportunity for the public. We recognise the need for developing sporting talent and investing in the future by supporting sport at grassroots level.
Sports opportunities and success create a sense of community. Young people in particular—and the noble Lord referred to this—gain confidence and self-discipline and are introduced to good habits which set patterns for a lifetime.
Our starting point is much the same as that of the noble Lord, Lord Moynihan. He rightly reminded the Committee that the impetus for the declaration came from the Bosman decision in December 1995 which found that the European Community Treaty rules on free movement of workers applied to rules laid down by sporting bodies such as the Belgian Football Association and UEFA. It decided that the transfer fee system and the three foreign player rule breached Article 48 of the treaty. That meant that no transfer fee could be charged for out-of-contract players. It has also contributed since then to an influx of foreign players to the United Kingdom. I suppose not surprisingly, a number of sporting bodies felt that their powers of self-regulation were being undermined. They wanted to ensure that Community competence did not develop over sport and that European Community law did not impede their freedom to regulate and organise sports activities. So they lobbied for a binding protocol. They did not succeed with the lobbying. What they got instead was the legally non-binding declaration to which the amendment refers.
It may not be legally binding, but it is an important statement which we expect the European Union to uphold. The declaration requires the Community to consult sporting bodies more in the future when their interests are directly at stake. It underlines the importance that sport, not merely professional sport, has in our national life. As the last sentence says:
"special consideration should be given to the particular characteristics of amateur sport".
I agree with the noble Lord, Lord Renton, that the declaration is mildly expressed; some would use the insulting phrase "warm words" for it. If we were
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drafting the declaration from scratch, we would not seek to highlight professional sport apart from amateur sport because both are important. But the significant aspect of the declaration is that Community institutions should keep the interests of sport—professional and amateur—in mind when important questions affecting sport are at issue. We welcome that and the perhaps limited protection which the declaration gives.
Lord Moynihan: How the passage of time heals! I am most grateful to the Minister for his generous opening remarks. I am also grateful to him for his observations on sport which I endorse. The intervention from my noble friend Lord Renton was apposite. It is an important start for the European Union to recognise the importance of sport and recreation for all those who live in member countries. In the context of the comments made by the Minister and in the spirit of the words of the declaration, I am most grateful to the Committee for listening to this exchange. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 43D not moved.]
Lord Moynihanmoved Amendment No. 43E:
After Clause 1, insert the following new clause—
WELFARE OF ANIMALS
(" . Within six months of the passing of this Act a Minister of the Crown shall lay before both Houses of Parliament a report on the interpretation of the welfare of animals "as sentient beings" and the corresponding rights set out in the Protocol on the Protection and Welfare of Animals annexed to the Treaty of Amsterdam.").
The noble Lord said: From these Benches in principle we support Protocol 10. It requires animal welfare to be properly taken into account in the development of Community policies on agriculture, transport, the internal market and research. Our support is unsurprising given that the provision was inspired by the previous government's recognition of the high level of public concern in relation to animal welfare. It was thanks to the persistence of the then Prime Minister—John Major—that a declaration on the protection of animals was appended to the Maastricht Treaty. Likewise, it was the previous government which, at the IGC in 1996, sought agreement to have that declaration converted into a legally binding protocol which would place a formal obligation on the European Council to take animal welfare into account when formulating policies.
Britain has a tradition of high standards in the protection and welfare of animals. We have long been at the forefront of the drive to change attitudes in Europe. The previous government were committed to the highest possible standards of animal welfare both at home and abroad. Indeed, after the 1979 election we set up a new, powerful welfare body to monitor the humane treatment of animals. With scientists, livestock farmers and veterinary surgeons, the Farm Animal Welfare Council carried out a range of studies over the past 17 years on animal welfare, many of which were incorporated into new legislation and welfare codes.

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I am sure that the Minister will give assurances that the Government will continue to work for higher standards across Europe and the rest of the world and, equally, will also ensure that UK standards should never be compromised by being levelled down anywhere in the world or, indeed, in Europe.
But against that background, the protocol before the Committee today raises a number of interesting points, one of which may not help to secure the level playing field that we seek. First, the text refers to respect for the welfare of animals as "sentient beings"; secondly, it provides that the Community shall have full regard to the welfare of animals while at the same time respecting the legislative or administrative provisions and customs of the member states relating in particular to religious rites, cultural traditions and regional heritage.
On the first point, will the Minister give the Committee a definition of the phrase "sentient being"? It may be of assistance for me to say that the Oxford English Dictionary defines "sentient" as follows:
"[First,] That [which] feels or is capable of feeling; having the power or function of sensation. [Secondly,] Of organs or tissues; responsive to sensory stimuli. [Thirdly,] Characterised by the exercise of the senses".
While the noun "being" can be used to refer to existence and the state or fact of existing, it can also be used to refer to the self or something that is thought to exist, especially something that cannot be easily assigned to a category; for example, a being from outer space. It can of course even refer to a human being. Does the Minister agree that the meaning of the phrase "sentient being" may be construed as obscure even in one language, let alone in the languages of all the European Union members?
This is important. I should like the Minister to consider how the European Court of Justice might interpret the phrase "sentient being". The ECJ played a large role in determining the scope of application of animal welfare measures. For example, it has always been the case that under the Treaty of Rome the member states could not ban the export of live animals on animal welfare grounds because of the general provisions; namely, those contained in Article 36 which strictly limit the circumstances in which freedom of trade within the Union can be curtailed. That has meant that a unilateral ban on the export of live animals from the UK would not be effective. Not only would it be illegal under the single market, but it would also put British farmers at a disadvantage while doing nothing to help improve animal welfare on the Continent.
The recent ruling of the European Court of Justice has served only to confirm this interpretation; for last month the court ruled that European free trade laws meant that the United Kingdom was not legally entitled to ban the live export of calves to be reared in veal crates on the Continent. Even though the present Government have pledged to stop such exports resuming once the BSE ban was lifted and even though the Advocate General had advised the court that a country in which the health of animals was a matter of public morality could impose a ban, the High Court of the European
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Court of Justice still ruled that a ban under Article 36 was not permissible and that the practice of rearing young calves in crates complied with European Union minimum standards of animal welfare. So the fact that Britain chooses to adopt stricter standards than those required by the directive does not entitle it to ban live exports to other member states whose farms comply with the EU directive on minimum standards for animal welfare.
Therefore, can the Minister explain how the inclusion of the phrase "sentient being" is likely to sway the European Court of Justice in its consideration of whether member states are allowed to restrict the export of live animals? By introducing a potential element of ambiguity in a court of law, how does this contribute to strengthening European law or animal welfare? For surely this is the way forward. Just as it did under the previous government, the UK must continue to lead the way by example and by lobbying for better European laws on animal welfare so that, where necessary, we are satisfied that it is being levelled up to the standard of our law. I could give a number of examples but I think it would be valuable to hear first from the Government as to their views on this extremely important and detailed point.
I want to turn to a second very interesting point raised by the protocol which, as I said, is the requirement for member states to pay full regard to the welfare requirements of animals while respecting the legislative or administrative provisions and customs of the member states, relating in particular to religious rites, cultural traditions and regional heritage.
I interpret this to mean that the Community must have full regard to the welfare of animals and at the same time must respect the religious customs, cultural traditions and the heritage of individual member states and that the member states themselves must also have full regard for animal welfare with the same provision on regarding customs, traditions and so on.
Can the Minister clarify whether under this protocol a member state may not take action on what it considers to be animal welfare if such action is deemed to conflict with the customs, religious rites, cultural traditions and regional heritage of this country? Clearly this protects against action which would affect religious slaughter—for example, for kosher and halal meats—on the grounds that this is a religious rite. Likewise, neither Spain nor the Community will be able to ban bull fighting, so both matadors and the treatment of animals in Spanish festivals would not be affected by this protocol on the grounds that they represent a cultural tradition and part of Spain's regional heritage.
I am sure it was the intention of this passage to provide such exemptions. But where does this leave certain country sports in the United Kingdom? Whatever views an individual holds on the rights and wrongs of fox hunting, it is certainly a cultural tradition and part of the United Kingdom's regional heritage. Upon signing this protocol, therefore, does this mean that the United Kingdom could not take measures to prevent fox hunting within its own boundaries without breaking the terms of the protocol?

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I look forward with interest to the Minister's reply to that specific question. From these Benches we fully support the Government in taking steps at European level to achieve a real and lasting improvement in animal welfare standards. My amendment is intended to clarify some of the ambiguities of language as well as the meaning contained within this protocol.
Lord Wallace of Saltaire: I intervene briefly to say that I am a little puzzled by the approach of the noble Lord, Lord Moynihan. My understanding of the intergovernmental conference was that this protocol was mainly pushed forward by the last British Conservative Government. Its exact phraseology stems from that government. The Minister might care to suggest to the noble Lord, Lord Moynihan, that he asks his friends and colleagues what they intended it to mean.
Earlier today the noble Lord made an extremely strong speech on the importance of the principle of subsidiarity. He has just urged that the Community should now add a whole host of new regulations raising animal welfare standards across the Community as a form of vast centralisation. We have to be consistent here. On grounds of subsidiarity, we should resist pushing too many animal welfare matters to the top. It is one of the areas in which the British Government have been a centraliser in the European Union. Therefore, I hope that the Government will interpret this protocol in as strong a subsidiarity fashion as possible.
The Earl of Clanwilliam: A great deal of subsidiarity will be required across the borders of Europe as regards the description of sentient animals. Every country except our own seems to have a much more overt approach to animal welfare. As a result of the health and safety rules exercised by the European Union, half the abattoirs in this country have been removed with the result that animals are suffering enormously from having to travel vast distances in order to get to the only available abattoir left. I do not believe that that has been an advantage.
We might be able to introduce mobile abattoirs to the Europeans. But whether they will accept anything that we like, I do not know. If one is to talk about sentient animals we must talk about chicken farms. These involve the most ridiculous and appalling activities that have been invented, but perhaps that is not relevant to this debate.
Baroness Ludford: Perhaps I may ask the noble Earl about abattoirs. As I understand it as a result of consistent listening to "Farming Today", the question of abattoir regulation is very much an example of mass gold plating of EU directives. The Ministry of Agriculture lay a regulation. As I understand it, it was more to do with Whitehall than with Brussels that we have lost some of the smaller abattoirs. It is not entirely fair to say that it was due to EU regulations.
The Earl of Clanwilliam: If this is another attack on the wretched Ministry of Agriculture, Fisheries and Food, then so be it. We should have regard to welfare
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which is contrary to the natural nature and traditions of ideas of animal welfare across Europe. There will be a great deal of difficulty in procuring an agreeable degree of consent throughout Europe on this subject.
Baroness Symons of Vernham Dean: The Government are very happy to recognise the role that the previous government played in the efforts to secure the protocol that we are discussing in this amendment. We welcome it. But it might be as well for me to remind the Committee that the protocol recognises that animals are sentient beings and requires that their welfare needs are properly taken into account in the development of Community policies on, specifically, agriculture, transport, the internal market and research. I can see that the noble Lord, Lord Moynihan, has this off by heart. It is important that the protocol focuses on those four areas.
I do not suppose that the noble Lord will be surprised to learn that the Government cannot accept his new clause. The animal welfare protocol is legally binding. Failure to abide by it can be challenged in the courts. In the end, it is for the courts to interpret its provisions. It is important to note that the protocol has been welcomed by the RSPCA which, after all, has a record second to none in this country on matters relating to animal welfare and rights. I hope that I can explain the Government's thinking on the term "sentient being" and deal with the other questions raised. A number of noble Lords have asked what the word "sentient" means. The Oxford Dictionary is good enough for us. "Sentient" means capable of sensation or feeling. It is the acknowledgement that animals are sentient that is the additional justification for the Community's protection of animal welfare, so that animals are no longer regarded solely as "goods". I am sure that there are many arguments about what adds up to a degree of feeling or sensation. I suspect that it is the degree of development of the central nervous system of the animal concerned, but the basic point is that animals have a central nervous system and feel sensation and pain.
The noble Lord raised a number of points, including religious rites, cultural traditions and regional heritages. We believe that the effect of the provisions will be very limited. We expect it to be interpreted narrowly and not to reduce dramatically the effect of the new protocol. However, the noble Lord is right that it does not involve matters such as religious slaughter and bull-fighting. I am sure that the noble Lord will be pleased that it will not restrict fox-hunting because the protocol is restricted to agriculture, transport, the internal market and research. That means that it does not include fox-hunting. There may be many strong feelings about fox-hunting in this House, as elsewhere, but that matter is not affected by the introduction of the protocol.
The noble Lord also asked about the role of the ECJ. Its role will be to ensure that the Council has, as the protocol requirements set out, paid full regard to the welfare requirements of animals. It will not be for the ECJ to reach a judgment on what the welfare requirements are; that is for the Council. I hope that

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I have dealt with the noble Lord's specific points to his satisfaction and that he will now feel able to withdraw his amendment.
Lord Renton: Before my noble friend replies, although I was very interested in what he said, he has had a most effective answer from the Minister and I very much hope that he will therefore withdraw his amendment.
Lord Wallace of Saltaire: There is a question over whether foxes which are being hunted in Northern Ireland and then cross the border do not fall within the scope of the provisions, but I do not want to press that matter at this stage.
Lord Moynihan: I am somewhat reeling from those comments from both sides of the Committee. I refer first to the intervention of the noble Lord, Lord Wallace of Saltaire. I never believed that I would stand before your Lordships' Committee in this European debate and hear that we were being more communautaire than the noble Lord would like us to be on any subject. However, that will not sway me from supporting Protocol 10 for the many reasons that I outlined in my opening remarks, but it will provide a cause for reflection in the future. Equally, I did not expect to hear such eloquent and fulsome praise for the Minister's reply to the amendment that I moved and the urging of my noble friend Lord Renton that I should not press my amendment to a vote this evening. Suffice it to say that on this occasion I am in agreement with him, although I do not believe that I would have put it quite so fulsomely.
I believe that the answer provided by the Minister was admirable. I tried to lead her down a logical road to be trapped by fox hunting, but I did not succeed. Obviously, she was aware that that argument might be deployed this evening before the Committee. I am grateful to her for the important and serious points that she raised in the context of animal welfare within the European Union. Against that background I am happy to seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10 p.m.
Lord Moynihanmoved Amendment No. 43F:
After Clause 1, insert the following new clause—
BROADCASTING
(" . Within six months of the passing of this Act a Minister of the Crown shall lay before both Houses of Parliament a report on the meaning of "public service broadcasting" set out in the Protocol on the System of Public Broadcasting in the Member States annexed to the Treaty of Amsterdam.").
The noble Lord said: Amendment No. 43F concentrates on broadcasting. I am aware that a number of my noble friends will intervene in this debate. The new clause on public broadcasting relates to Protocol 9 which deals with the system of public broadcasting in the member states. Protocol 9 permits member states to finance public service broadcasting in individual countries on two conditions: first, that the funding to broadcasting organisations is for the fulfilment of public
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service broadcasting; and, secondly, that it does not affect trading conditions and competition within the European Union to an extent that would be contrary to the common interest. In the words of the protocol broadcasting
"is directly related to the democratic, social and cultural needs of each society".
I have tabled the new clause for one specific reason. Nothing can be more central in demonstrating that public broadcasting is directly related to the democratic, social and cultural needs of each society than the work of the BBC World Service. The term "public broadcasting" is not adequate to express both the critical importance and the deep social and democratic significance that the work of the World Service holds for many people in the world. I crave the indulgence of the Committee if I focus on this point for three or four minutes.
In this Committee there is overwhelming consensus that the BBC World Service sets accepted standards of excellence. By providing an objective and accurate source of information, it is internationally acclaimed—most rightly so—as an upholder and promoter of democracy. For millions, including world leaders in the fight for democracy, such as Aung San Suu Kyi, the pro-democracy leader in Burma, and Nelson Mandela, now President of South Africa, the World Service has provided a beacon of fair, trusted and respected news coverage—more so than any of its free world rivals. This is a broadcasting service with over 138 million listeners worldwide. Listeners in Europe value and appreciate the news bulletins and other business, sport, music and arts programmes which it broadcasts in English round the clock. Further, 17·5 million people listen in Europe in any language. For a total of 104 hours a week Germans, Greeks, Poles, Slovenians, Czechs and Hungarians can all listen in their own languages. Right now a special service is also being provided for Europe. To coincide with the UK presidency of the European Union, a tailored series of programmes linked to the issue of enlargement is being broadcast in English and other European languages. These programmes will include in-depth analysis of issues related to the accession process as it affects individual applicant countries, as well as focusing on the themes of education, agriculture, harmonisation of legislation and economic convergence. In reaching an audience of millions of central and eastern Europeans and helping them to understand and be fully aware of the historic process of enlargement of the European Union, these programmes are invaluable.
As the protocol permits funding of public service broadcasting, insofar as that funding is granted to broadcasting organisations for the fulfilment of the public service remit as conferred, defined and organised by each member state, and that in funding such broadcasting the realisation of that remit should be taken into account, I should like to ask the Minister for an update on the work of the joint FCO/BBC World Service working group which reconvened last autumn.
As the Committee will be aware, the working group, with access to independent advice, was set up in 1996 to ensure that concerns over financial arrangements and

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fears of a sacrifice in the quality raised by the BBC Director-General's restructuring proposals were addressed as well as the requirement to maintain editorial independence. What action have the Government taken to implement the 20 measures to safeguard the World Service agreed by the FCO/BBC World Service working group in October 1996, and what further suggestions have been proposed since it reconvened?
It is clear that the World Service is a source of great pride to this country. It requires and deserves our fulsome and vigorous support. It is incumbent upon us to provide such support, particularly when we consider that the World Service is a uniquely powerful asset on the world stage. It projects those critical and fundamentally important values of democracy, objectivity and fairness, which are then identified by opinion formers as British values. Its voice helps shape this country's reputation and image.
I look forward to any assurances that the Minister can give, in the belief, on this occasion at least, that I have moved an uncontroversial amendment which has allowed me to focus upon the important work of the BBC World Service which comes so neatly into the work expected of those who broadcast under Protocol 9. I hope that the Minister will comment briefly on that. I do not expect a long answer. I gave her no notice of the questions that I was going to raise. I shall stop at that point, because I know that my noble friend Lord Inglewood wishes to intervene in this debate on some of the issues raised in Protocol 9. I beg to move.
Lord Inglewood: I hope that it is in order to raise three points of a technical nature. I appreciate that the Minister may not be able to respond instantly. The first point relates to the wording of the protocol itself. It is somewhat strangely worded, and I do not know whether there is any significance in that.
The protocol is entitled:
"Protocol on the System of Public Broadcasting in the Member States".
In the first considérant reference is made to the system of public broadcasting as opposed to public service broadcasting. In the main paragraph reference is made to the funding of public service broadcasting. I do not know whether that is a deliberate differentiation in the use of words, but it is worth recalling that in this country the Channel 3 ITV companies and Channel 5 are private broadcasting entities which execute a public service remit.
Secondly, in the main body of the text there is reference to "public service remit" which is circumscribed by the words:
"as conferred, defined and organised by each Member State".
Nevertheless, is it the case—I shall be interested to hear the Government's view on this—that despite the general wide effect of the words, "conferred, defined and organised" whatever any particular member state may care to use as its definition for the purposes of this protocol, it must fall within the general ambit of the generally understood meaning of the words "public service broadcasting"?
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Finally, can the Minister explain to us how, in the event of funding being given to a broadcaster which is in breach of the protocol, the matter will be dealt with? Should the affected party go to the Commission, using the provisions available for problems caused by unfair state aid, or will the matter be directly justiciable under the protocol itself?
Lord Renton: The amendment moved by my noble friend Lord Moynihan is narrower than I would prefer to see. I would like the Government to be required to lay before both Houses of Parliament a report not merely on the meaning of "public service broadcasting" but on the extent to which the protocol to which we are a party has been observed by our own broadcasting authorities.
My point will be familiar to my noble friend Lord Inglewood because in the previous Parliament he, as Parliamentary Under-Secretary of State in the Department of National Heritage, had to reply to debates supported by Members on all sides of the House complaining about the amount of violence and sex in television programmes. Too much of the so called "entertainment programmes" was not entertainment but a mere portrayal of unpleasant people being unpleasant to each other. There was too much of that and there still is.
I hope that on Report my noble friend Lord Moynihan will table a wider amendment than that calling merely for the meaning of "public service broadcasting". I realise that the Government Front Bench does not have a responsibility for broadcasting—far be it that it should have—but I hope that the Government will invite the attention of the broadcasting authorities in this country to what is stated in the protocol about public broadcasting being democratic, social and relative to the cultural needs of society. I am afraid that our broadcasting goes far beyond that, but I believe that our World Service is splendid and needs no criticism in that respect.
Lord McIntosh of Haringey: I am grateful to Members of the Committee who have taken part in this short debate. I strongly agree with most of their comments. Perhaps I might first explain the background to the protocol and then comment on what it achieves. As the noble Lord, Lord Moynihan, will know, the pressure for the protocol came originally from public service broadcasters. They in turn were afraid of pressure from commercial operators who were claiming that state funding of public service broadcasting contravened state aid rules; that is, Article 92(3)(d) of the competition law. During the discussions on the Amsterdam Treaty, some member states seemed to be pushing for their own public service broadcasters from those rules. We argued—and I hope that it will be agreed that it was right—that we wanted clarity of purpose rather than exemptions for particular forms of public service broadcasting. I will expand on that in a moment.
The protocol seeks to protect the public funding of public service broadcasters for the fulfilment of a public service remit. In response to the first point made by the noble Lord, Lord Inglewood, I do not know why

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the first text paragraph of the protocol refers to "public broadcasting". I suspect that he has found the deliberate mistake. If so, he should be awarded the Schuman or Monnet medal for finding a mistake in a European document. I can see no conceivable reason why the protocol should move from the phrase "public service broadcasting" to "public broadcasting" and back again.
The protocol does not exempt broadcasters from state aid rules as such, but it gives a strong interpretative steer to all parties, including the Commission and the European Court of Justice. In particular, it should ensure that the BBC's funding arrangements are not challenged for the foreseeable future. It should also ensure that the Commission continues to monitor any abuse of state aid within the broadcasting sector.
The noble Lord, Lord Renton, thought that the amendment was too narrow in seeking principally a definition of public service broadcasting. I have to take the amendment as it is, and—I may be foolhardy—I shall attempt a definition of public service broadcasting. There is no single definition that covers public sector broadcasters across the European Union but perhaps we could agree that they share certain characteristics.
First, they focus on the audience—in other words, public sector broadcasting should be for the benefit of viewers and listeners. Secondly, there is a commitment to quality programming; thirdly, a commitment to diversity and choice. That includes programmes for entertainment, information and education and programmes for minority audiences. All those are familiar to the noble Lord, Lord Inglewood, who had responsibility in this House for the last Broadcasting Act. Fourthly, there is accessibility—that is, geographical coverage of services and broadcasting programmes which many people find enjoyable and interesting. Those are two definitions of accessibility. Fifthly, we come to editorial independence—decisions about programmes being taken by broadcasters or broadcasting authorities and not by government or other interest groups. Also, and perhaps this is risky, there is national identity, reflecting the national interest and cultural traditions of the audiences.
The reason for not seeking to be too precise about the type of public service broadcasting is that there are a number of different types, as the noble Lord, Lord Inglewood, said. In the UK alone there are three public corporations: the licence fee-funded BBC, which operates under a Royal charter; Channel 4, which is advertising funded; and S4C, the Welsh fourth channel authority, which receives an annual grant from the Department for Culture, Media and Sport. In addition, the advertising-funded Channel 3 broadcasters have similar public service organisations.
The regulatory framework is not the same in each case. The BBC is self-regulating, as is S4C, although it is required to adhere to ITC codes on consumer protection and impartiality. Channel 4 and Channel 3 companies are regulated by the ITC. That is the diversity in this country.
The diversity across the member states of the European Union is much greater. Any definition of a public service broadcaster would have to recognise the
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diversity across Europe. Public service broadcasting cannot be equated with the output of particular organisations; it cannot be equated with the output of publicly funded bodies; and it is not confined to or defined by particular strands of broadcasting. That is why, in answer to the second question of the noble Lord, Lord Inglewood, the fulfilment of the public service remit has to be conferred, defined and organised by each member state.
I do not know the answer to the noble Lord's third question about how infringements of the protocol would be dealt with and whether they would go to the European Court of Justice or be tackled directly. I shall write to him on that point.
The noble Lord, Lord Moynihan, made proper reference to the relationship between the Foreign and Commonwealth Office and the BBC World Service. He paid a well deserved tribute to the BBC World Service. I am answering this amendment because of my responsibility at the Department for Culture, Media and Sport. My noble friend Lady Symons is the Minister within the Foreign Office responsible for relationships with the BBC World Service. She tells me that she meets Sam Younger of the World Service at least once a month and that there are continuing discussions on the 20 points to which the noble Lord referred. It is expected that the growing coverage of the World Service will continue to increase. The Government have a continuing commitment to the World Service, but that has to be seen in the context of the comprehensive spending review. That is not a particular threat. It applies to all aspects of government expenditure. The noble Lord may be encouraged to know that the World Service web site is already achieving 5 million visits every month. I hope that that is evidence that the World Service is in good shape and flourishing.
I am grateful to the noble Lord for enabling us to have this short discussion. It has shown support for public service broadcasting and for the independence of public service broadcasting in this country and throughout Europe. For that, the Government are grateful.
Lord Moynihan: First, I thank the Minister for a comprehensive reply to the points that were raised. He made detailed reference to the speech of my noble friend Lord Inglewood, and he was right to do so. My noble friend's expertise in that area is second to none. His questions this evening were pertinent and deserved the fulsome response that they received from the Minister.
My noble friend Lord Renton said that there was a need for a wider amendment than that which I drafted. That will give me considerable food for thought in the next few days as to whether that is an appropriate issue to revisit on Report, when there may well be merit in analysing some of the important points made by the Minister in that context. I cannot say to my noble friend at this stage that I shall return with a wider amendment but a compelling case has been made for a further review of the important issue which has been debated this evening.

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I praise the Minister on the specific answers which he gave and in particular, the definitions. I wanted to achieve a clearer understanding of the definitions and the Minister made a brave attempt to do that and it will lead to much further consideration.
Finally, perhaps I may pass a message through the Minister to his colleague in the Foreign Office. In the context of the discussions with Sam Younger, perhaps through agreement with the usual channels, it may be appropriate to have a regular update made to the House on those monthly meetings. The future of the BBC World Service receives support on all sides of the House. There is a significant degree of cross-party interest in the matter. As a result of either myself tabling a Question on a regular basis or some other mechanism of parliamentary procedure, the House would benefit greatly by a regular update on what I hope are successful monthly discussions, moving towards a strong and well-supported BBC World Service in the future.
Against the background of those reflections, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Rawlings: moved Amendment No. 43G:
After Clause 1, insert the following new clause—
REPORTS ON APPLICANT COUNTRIES
(" No later than one year after the passing of this Act, and at annual intervals thereafter, a Minister of the Crown shall lay before both Houses of Parliament a report of any assessment made by the European Commission of the applicant countries to the European Union who have not been accepted into the first wave of applicants, of their progress and of any possible changed status.").
The noble Baroness said: We had an exceptionally wide ranging debate on this matter on Second Reading and earlier in Committee. Inasmuch as it has related to the substance of the Amsterdam Treaty, it focused primarily on what the treaty does and the consequences of its provisions. In my first and only intervention in Committee, I want to focus—as did my noble friends Lord Moynihan and Lord Garrel-Jones—on what Amsterdam failed to do, which was to prepare the European Union and its institutions for enlargement.
On Second Reading, my noble friend Lord Moynihan called enlargement the historic challenge of our generation, and both Euro realists and Eurosceptics appear to agree at least on that. Enlargement is desirable and important for strategic, political, economic and moral reasons. We hope that enlargement will promote the stability and prosperity of a large region that historically, culturally and politically is clearly part of Europe—no longer the forgotten Europe. That should in no way detract from our continuing relationship and friendship with the United States and the Atlantic Alliance.
On the first day in Committee, the Minister said that the Amsterdam Treaty was,
"the essential precursor to the start of our enlargement process".— [Official Report, 12/3/98; col. 316.]
The debate in Committee, fuelled by a record number of amendments, explored most other aspects of the treaty and reflected a crucial shortcoming. Amsterdam
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failed to address enlargement, which needs to be brought back to centre stage. The amendments to which I am speaking give me the opportunity to do so, at least in this forum. It may be helpful to debate also Amendments Nos. 46 and 47.
Further enlargement will fundamentally change the nature and functioning of the European Union. Enlargement to the 10 central and east European countries will add 28 per cent. to the EU's population but only 4 per cent. to its gross domestic product. It is expected to require about 75 billion ecu from the Union's budget between 2000 and 2006. That amount represents just over 10 per cent. of the European Union's budget and only one thousandth of its GDP.
According to the Commission, enlargement with Poland, Hungary, Czech Republic, Slovenia and Estonia may occur in three and a half years. The countries that need to make up the most ground are Bulgaria, Latvia, Lithuania, Romania and Slovakia. They do not expect to follow for some time. Judging by the length of the negotiations for the accession of Greece, Spain and Portugal, that enlargement may take more time than expected—especially considering that, in the present climate, it is highly unlikely that extra funding will be available for those nations. Enlargement, I fear, will take much longer because neither the east nor the west are ready for it.
Several applicant countries are simply not ready for accession. That is particularly evident after skimming the opinions of the Commission on Bulgaria, Latvia, Lithuania, Romania and Slovakia in Agenda 2000. We have reason to be concerned on two fronts. Between 2000 and 2006, those countries are expected to receive less money from the European Union than the five front runners— 400 ecu and 900 ecu per head respectively. As a consequence, adjustment may be hindered and a feeling of exclusion engendered among the second-wave applicants.
Will the Government put forward proposals to redistribute financial assistance among applicants? The European Union, in order to fulfil its pledge to adopt an inclusive approach to enlargement, may opt for premature accession. That would be disastrous for the more fragile five and disruptive to a number of sectors in the European Union.
Those concerns form the background to Amendment No. 43G, which requires that one year after the passing of the Bill, a Minister shall lay before Parliament the further assessments made by the Commission on the progress of the fragile five. It is right that national parliaments should have the opportunity to be informed and to debate such matters.
At the same time, the European Union is not ready for enlargement— neither its institutions nor its policies. When the 1996/97 Intergovernmental Conference began its work, the preparation of European institutions for enlargement was clearly on the agenda. The issues comprised a reweighting of the voting within the Council of Ministers away from over-represented small countries, reforming the Council presidency, reducing the number of Commissioners and capping the size of

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the European Parliament. Perhaps I may quote my noble friend Lord Cockfield on Second Reading, when he said:
"The issue was dodged in the run-up to the previous enlargement; it was dodged again in Maastricht; and it has been dodged once more at Amsterdam. We simply cannot go on dodging it".—[Official Report, 16/2/98; col. 56.]
As Members of the Committee know, the only progress achieved was on the last of those four issues. The size of the European Parliament was capped to 700. However, no progress was achieved on the first three: the re-weighting of voting within the Council of Ministers and the reduction of the number of Commissioners were postponed to a year before the next enlargement. That will take place at the earliest in the year 2001; hut, realistically, we may well be looking at a much later date. Finally, the reform of the presidency just fell off the agenda.
The purpose of Amendment No. 46 is to put pressure on the European Union not to dodge the issue any longer. It makes the entry into effect of the Amsterdam Treaty conditional on the reduction of the Commission which, in turn, is conditional on the re-weighting of the votes. The purpose of the latter part of Amendment No. 47 is the same. We are not alone in upping the pressure. Some member states—notably, France, Spain and Germany—want re-weighting of votes as a pre-condition of enlargement. I should like to take this opportunity to thank the noble Lord, Lord Whitty, for the assurances that he gave us on Second Reading that,
"we give up our second commissioner only if we are satisfied on the far more important issue of the re-weighting of votes in the Council of Ministers". —[Official Report, 16/2/98: col. 1111.]
What criteria must a re-weighting of votes fulfil to be satisfactory? What is the Government's view on the suggestion of my noble friend Lord Garel-Jones that, in a smaller Commission, the five main portfolios should he allocated as a rule to the five larger member states; and that the presidency of the Commission should be entrusted to a small or medium-sized member state? What are the Government's proposals for the reform of the Council presidency? Would they support a year-long presidency provided by a troika of one large, one medium and one small member state? These are weighty enough matters, without going into the conundrum—indeed, the nightmare—of 22 official languages in a European Union of 26 member states.
The European Union's lack of readiness is equally alarming in relation to its policies. That brings me to the first part of Amendment No. 47. It would make entry into force of the Act conditional on the reforms of the common agricultural policy and the regional funds. Those issues do not strictly pertain to the treaty, but they are an integral part of the process of enlargement. Moreover, they are being discussed in great detail elsewhere. I shall, therefore, make only a few remarks of a general nature about them. Last July, Agenda 2000 was launched mapping out the work that has to be done in order to reform the European Union's policies. That work was embodied last month in a package of Commission proposals, including a new instrument to strengthen the pre-accession strategy, the Partnership Agreements.
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The European Union has been slow in developing those proposals and it is doubtful whether they amount to a coherent strategy. In some fields, notably structural fund reform, we are only at the beginning of a long negotiation process. However, I am pleased to say that I shall not take up the time of the Committee by going into its details at this point. In other fields, especially CAP reform, it is clear that the Commission proposals are fraught with problems and that they are probably inadequate to fulfil the objectives set out in Agenda 2000. Overall, it is clear that the Commission has opted for an incrementalist approach of "business as usual".
When considering these matters, I am led to ask: why is no one ready for enlargement, almost nine years after the fall of the Berlin wall? Is it perhaps for a lack of leadership and political will? The UK Government would argue that, during their EU presidency, they are providing the necessary leadership. They made enlargement one of their main priorities and they claim that, with the London European Conference on 12th March, they gave enlargement a flying start. A flying start to where, I ask?
The adoption of accession partnerships and the opening of negotiations with the five plus Cyprus does not represent a change of gear with the past. The same can be said about the reform of the European Union policies. The Government's work programme says that it will "take forward" Agenda 2000, "make a start" on negotiations for reform of the structural and regional funds, and "expects to start detailed work" on post-1999 financing arrangements. I cannot detect the dynamism of a new Britain in this carefully couched bureaucratic language. What substantial proposals are the Government proposing to transform this plodding start to the enlargement process into a truly flying start? I beg to move.
10.30 p.m.
Lord Taverne: This is my first intervention in tonight's debate at Committee stage and it will be brief. I agree with a very large proportion of what the noble Baroness said. It makes sense to have annual reports on the applicant countries, including those who are not part of the first wave; it makes sense that we should make progress on the re-weighting of votes in council; and nearly all the points she made under Amendment No. 47 also make sense, so I shall not repeat them. I agree with much of what she said, subject to an important reservation.
I mention in passing that there will also have to be considerable changes on the part of the applicant countries. In the case of Poland there will have to be changes in their agricultural system. In the case of the Czech Republic there will have to be major improvements in their capital markets, which are extremely weak. There has been a great deal of corruption and one would wish to see more progress made, for example in strengthening the powers of the Securities Exchange Commission.
I do not want to repeat, therefore, what the noble Baroness said, except for this. It does not make sense to make the coming into effect of the Amsterdam Treaty

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conditional on these developments. These are matters for negotiations. They should be actively pursued. But the Amsterdam Treaty is a perfectly sensible treaty which should be supported and we cannot delay it any further.
Lord Grenfell: I should like to echo the words spoken by the noble Lord, Lord Taverne. It does not make any sense. I would say not conditional. I would go further and say, "held hostage to", because that, in effect, would be the result of this particular amendment. Clearly, for some time to come, it would exclude an enormous number of the provisions in the Amsterdam Treaty which could be brought into effect right away, to the great benefit of the Community.
I should like to return, for a moment, to the issue of Amendment No. 43G in the reports. The Community will be awash with reports on the progress of the applicant countries towards meeting the acquis communautaire and their readiness to enter into the European Union. I was, therefore, somewhat surprised by the query posed by the noble Baroness, Lady Rawlings, who asked why, nine years after the fall of the Wall, there were not applicant countries already in a position to come into the European Union. I should have thought that was really rather obvious. As the noble Lord, Lord Taverne, has already suggested, there are serious problems still faced by many of these countries. In the discussions that we had in Select Committee A on the cost of enlargement of the European Union, in our discussions with the representatives of applicant countries, they themselves, although they were enthusiastic about getting in as soon as possible—
Baroness Rawlings: I think the noble Lord misunderstood me. I meant that the European Union itself was not ready, not the applicant countries.
Lord Grenfell: I thank the noble Baroness for that correction. I think the same can be said in that respect. I do not think that the European Union could have been ready to receive them nine years afterwards. The European Union cannot be in a position to welcome countries into the European Union that are not ready. One has only to look at some of the work that still has to be done in those countries. Even if allowances are made in some cases and some countries do not have to fulfil all the conditions of the acquis communautaire for entry—it is perfectly realistic to say that they cannot overnight suddenly meet all of the provisions of the single market—there is nevertheless a huge amount of work still to be done. Nine years after the fall of the Wall, the European Union could not possibly consider that it was appropriate at this stage to accept them into the European Union.
Poland, for example, will have to spend about 3 per cent. of its GDP simply on cleaning up the environment. It cannot do that overnight. A long period of time will need to be spent in preparing for entry. I am afraid that a number of the governments of applicant countries will be disappointed. Poland speaks
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of coming in in 2003 or 2004 but it will probably be much later, and others will probably take even longer. Poland is expected to be the first to come in. The amendment asks for,
"a report of any assessment made by the European Commission of the applicant countries to the European Union who have not been accepted into the first wave of applicants".
In this regard we are looking at a time far into the future.
I believe it would be a tremendous mistake to accept Amendment No. 47. That would hold the whole Amsterdam Treaty hostage. That would be a grave mistake.
The Earl of Clanwilliam: I agree that the treaty would be held up, but it seems to me that we are rushing headlong into the lions' den in a totally unprepared way. No matter how much re-weighting of votes occurs and no matter how many reports are issued, the fact remains that the applicant countries and the European Union—as has been said by those on all sides of the Chamber—are totally unprepared. I support what my noble friend Lady Rawlings said about the common agricultural policy. Unless that is reformed before any enlargement takes place, there will be total disaster. As the French or the Germans are determined that the CAP will not be reformed, it seems to me quite nonsensical to attempt further enlargement until those matters have been properly resolved.
Lord Grenfell: It is not true to say that the French and the Germans do not want the common agricultural policy reformed. They know that it will have to be reformed; the question is on what terms it will be reformed. On that point they have differences with some other countries.
Lord Pearson of Rannoch: It is not only a question of upon what terms it will be reformed; surely it is a question of whether the votes will be available to reform it. That looks extremely likely. That, in turn, makes European enlargement quite possibly a pipe dream.
Lord Stoddart of Swindon: I agree with all speakers who have said that if enlargement is to proceed there will have to be institutional reform, and indeed a radical reform of the common agricultural policy. Unless the agricultural policy can be reformed, and fairly quickly, I do not believe there is any prospect that other countries can join in the foreseeable future. At present 51 per cent. of the European Union's population enjoy either agricultural subsidies or regional aid. That simply cannot be right. Before these other countries can be admitted there will have to be reforms.
I should also draw the attention of your Lordships to the fact that there is grave reluctance on the part of existing member states to increase the financing of the European Union any further. The Germans in particular are not only refusing to increase their net contribution; they want it reduced. So there are very severe difficulties before the applicant countries can be admitted.

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My central point is this. Is enlargement desirable? I do not know about my own party, but noble Lords in the party opposite always saw enlargement as being a check to the centralisation of the European Union and its institutions. In fact, that is not proving to be the case. As Mr. Santer has already said, widening is not an alternative to deepening; if you widen, you have to deepen—and by deepening, you centralise. So what appeared to be the objective of the previous government—to prevent deepening through widening—is simply not going to happen, because if you widen, the Commission itself will demand more powers in order that it can control more people.
I therefore believe that we should examine the whole concept of widening. If this goes wrong, if the proper reforms have not been made, if we have not made it clear that there will be no further centralisation, then it will be a disaster not only for the European Union but for all those applicant countries which wish to join. They could be pauperised even more than they are already by some of the restrictive practices, particularly in relation to trade, imposed upon them by the European Union.
I could talk for a long time on this matter, but I know that your Lordships want to go home—perhaps unexpectedly. I shall therefore merely ask my noble friend to make some short comments on the points I have made.
10.45 p.m.
Lord Whitty: Perhaps I may begin by concentrating on the effect of the amendments, and then respond to the general points. I think that at this hour noble Lords will not want a response that is too wide-ranging on the whole strategy for enlargement.
Amendment No. 43G, although superficially sensible and attractive, is unnecessary. There is adequate reporting from the Commission on a regular basis on all of the central European applicants. Those reports will be accompanied by recommendations from the Commission to the Council, which could include a recommendation that they came in to the formal negotiations. Those reports, like other Commission opinions, will be depositable documents and will therefore be submitted to Parliament for scrutiny in the usual way.
I take the point lying behind the noble Baroness's advocacy of this amendment that the position of the second wave five, if I may so call them, needs considerable attention. It is certainly not the intention of the Council or the Commission that the resources going into those countries should be detrimentally affected by the fact that they are not immediately in formal negotiations; indeed, rather the opposite ought to be the effect. The allocation within Agenda 2000 represents the amount of money, the transfer of Community funds into those countries, that is assessed as being absorbable by them. There is a slight differential in favour of the first six, but it is not as substantial as the figures given by the noble Baroness. In any case, there is a need to ensure that those countries keep up and are in a position to take part in formal negotiations as rapidly as possible.
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Amendment No. 46 is a bit of a wrecking amendment. It trades off the advantages which we debated last night in terms of the extended powers of the European Parliament against the overall institutional agreements which the noble Baroness rightly says we failed to achieve at Amsterdam. However, we made rather more progress at Amsterdam than she suggested. We regard the advance in the powers of the European Parliament in co-decision as an important gain in its own right and would not wish to see those two traded off against each other.
As to the final amendment, as my noble friend Lord Grenfell implied, it is a wrecking amendment on a pretty grand scale. It makes ratification of the treaty subject not only to the institutional changes wanted by the noble Baroness but also to the reform of the common agricultural policy and the structural cohesion funds. That is a pretty tall order and I am afraid the Government must reject it.
I wish to make a few remarks tonight about the whole strategy on enlargement. I share the disappointment expressed by the noble Baroness, Lady Rawlings, that Amsterdam did not fully resolve the institutional reform. When we came to the negotiating table on 1st May there was already deadlock on the linked questions on the size of the Commission and the weighting of votes on the Council. We did our best to broker a deal in six weeks. At Amsterdam, if we had had a little more time we might have reached agreement, but ultimately there was no consensus. There was some progress: we agreed a protocol which represents a step forward. It sets out the mechanisms by which the outstanding issues will be resolved in advance of the next enlargement process. Explicitly, Article 1 of the protocol states that when the next enlargement of the Union takes place the Commission will comprise one national per member state, provided that the weighting of votes in the Council has been modified to increase the relative clout of the large members. In other words, we commit ourselves to reform of the Commission, but only provided it is subject to the more important issue of giving greater weight to Britain in the Council of Ministers' weighted voting.
The noble Baroness asked about the criteria for re-weighting. We argued for a system which went one way to rectify the gradual erosion of the representativeness of citizens from larger states. I was perhaps putting it too crudely—I have been in this debate for too long—by saying we wanted more votes for Britain. I should have expressed in a slightly more communautaire way what I said just now about rectifying the erosion in the representation of citizens from larger member states. I do not think it sensible at this hour to present the Committee with mathematics as to how we achieve that. Nevertheless the issues are eminently able to be resolved and must be resolved before we move to the first stage of enlargement. However, I do not believe that it is such a colossal problem for the existing members of the European Union to achieve agreement. I certainly do not think that it is something which should hold up the tremendous task of enlargement on which we are now embarked.

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The noble Lord, Lord Stoddart, asked me whether enlargement was desirable. It is eminently desirable. It is probably the most important task facing the current political leadership of Europe. It is desirable because it will finally bring an end to the divisions of the Cold War; it will bring democracy and prosperity to 100 million people and will re-unify this continent in a way that will give security, peace and prosperity to us for many generations. That is a prize worth working for.
It is, however, not an easy task. I was rather sad that the noble Baroness slightly denigrated the flying start to the enlargement process that we achieved during March. We had a very successful European conference. We have started enormously detailed negotiations with six countries and an almost equally detailed process of review for the other five countries. That is a quite important diplomatic achievement and it will show progress even in time for the Cardiff summit. Certainly, the process will take years in total before we achieve the final outcome. There will be setbacks, problems, trade-offs, difficulties and enormous diplomatic rows. But the prize is there and it is one which we have started to achieve in the months of the British presidency.
Changes are needed within the European Union itself. The institutional changes of which we have just spoken are actually the least difficult, particularly if people do not start re-opening the whole range of institutional change that was originally on the table in Amsterdam and confine themselves to resolving those issues which are covered by the protocol referred to in Amendment No. 43G. If those issues are resolved, we can move to the first stages of enlargement. If people start saying that major fundamental institutional reform is needed before enlargement can take place, they are really arguing against enlargement. I do not believe that that is in the interests of the peoples of Europe—east or west.
There are some much more difficult problems which the existing members of the European Union have to face—the reform of the CAP, the restructuring of the budget, the whole question of structural fund reform and the way in which the budget will be controlled and reorganised over the period 2000 to 2006, with some markers as to where we go beyond that. In my view, those budgetary issues are at least as important as, and much more difficult than, the institutional issues referred to in the amendments. But the task of enlargement ahead of us is a great task. It will be a huge political achievement if we make it. The Treaty of Amsterdam, while it may not have facilitated that process as much as some may at one stage have wished, it certainly does not inhibit it and has cleared the way for us to start on that road. The British presidency followed that up over the past few months in the way I described. I hope therefore that the noble Baroness can withdraw her amendment.
Baroness Rawlings: I thank the Minister for his clear answers. I was most interested in the points raised by the noble Lord, Lord Grenfell. But the noble Lord, Lord Stoddart, will not be surprised to hear that I cannot
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agree with him. I hate to disillusion him, but widening and deepening will have to go hand in hand if we want the European Union to continue to exist and succeed.
Lord Stoddart of Swindon: I do not see how the noble Baroness can make that assertion. The European Union consisting of 15 members does not depend for its continuation on the extension to six, nine, 10 or other countries to the east. It will continue. And if the noble Baroness asks Mr. Heath, he will agree with me.
Baroness Rawlings: Perhaps the noble Lord will accept that on every enlargement process we had to have institutional changes to cope with the enlargement. I am sure, therefore, that we will have to have institutional changes if we want to enlarge into further areas.
Lord Stoddart of Swindon: That was not the issue. The noble Baroness said that the European Union would collapse unless it was enlarged. That simply is not true. The continuation of the European Union as an entity does not depend on enlargement. If we do not enlarge it will continue, presumably, though I should like to see it not continue.
Baroness Rawlings: Perhaps we should leave that point until a later date. Enlargement is obviously one of the most important parts of the Bill, and we will have to come back to it at Report. However, at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
[Amendments Nos. 44 to 54 not moved.]
11 p.m.
Lord Moynihanmoved Amendment No. 54A:
After Clause 2, insert the following new clause—
QUOTA-HOPPING
(" . This Act shall come into force only when each House of Parliament has come to a Resolution on a motion tabled by a Minister of the Crown considering the legal protection for British fishermen afforded by the Treaty of Amsterdam on the issue of quota-hopping.").
The noble Lord said: We now move on to the important issue of the need for reform of the common fisheries policy and the problem of quota-hopping, which is an area where, when measured against the tangible benefits secured for the British people, the Government's negotiation at Amsterdam is found wanting.
There is consensus in the Committee that the conservation of fish stocks depends vitally on international co-operation. Europe must have a joint policy in this area. Hence the need for a common fisheries policy. There is consensus, too, that we must improve the operation of the present policy, which has been unevenly enforced, which has failed to overcome the central problem of overfishing in Europe's waters and which has proved inequitable in practice. The

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previous Minister of Agriculture, Fisheries and Food made that clear with the following quotation:
"what Europe has to face is that the Common Fisheries Policy as now constituted is not working. It is over-bureaucratic, it is open to abuse and above all it is not fair to the British fishing fleet".
There is further consensus that the practice of "quota hopping"—that is, foreign owned and foreign crewed ships landing their catches abroad—is a particular problem, not least because it prevents fishing communities from enjoying a secure benefit from national quotas, thereby undermining the whole intention of the quotas. The CFP was expressly designed to ensure that national fishing fleets would be given fair access to Europe's fish stocks. But quota-hopping, which now accounts for about 20 per cent. of the tonnage of Britain's offshore fleet, is frustrating that very purpose.
The previous government were committed to a successful future for the British fishing fleet and were determined to address this and other problems in the CFP, and to leave no avenue unexplored in that quest. The stage was set at the IGC for the fulfilment of this promise, even though the issue of quota-hopping was not officially on the agenda. That is why, in July 1996, the previous government tabled a protocol at the IGC to ensure that the British fishing quota went to British fishermen.
It was a key priority, and the former Prime Minister made that clear before the general election, when he said:
"The IGC won't come to a successful conclusion until we are satisfied that among our other objectives the problem of quota-hopping is resolved satisfactorily".
Despite an election manifesto which contained just one sentence on fishing, the then opposition's policy appeared to be equally robust in refusing to tolerate the continuation of quota-hopping. The current fisheries Minister, Elliot Morley, stated in March:
"The Minister"
—that is, Tony Baldry—
"said that it [quota hopping] will he pursued vigorously at the IGC and we support that approach".
Likewise, Tony Blair, then the Leader of the Opposition, promised our fishermen a firm line. On the BBC "World at One", he told the country:
"we certainly have not ruled out holding up IGC business in order to get the right changes to fishing policy in the British interest … where Britain's interests are at stake, we are perfectly prepared to he isolated. Of course we are".
But when it came to the summit itself, the Prime Minister lacked the stomach for a fight. Something clearly caused him to change his mind and to decide that the interests of British fishermen were subordinate to the prospect of being isolated in Europe. If that is not the case, we have the opportunity to hear from the Minister why the Government did not back the protocol for treaty change tabled by their predecessor.
The reason the Government have given is that there was no support for the protocol among our European partners; not that it was a bad or unfair protocol, but that it had no support. Why did the Prime Minister
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change his mind about holding up IGC business to get a deal? Perhaps he took advice from the noble Lord, Lord Whitty, who said that the last government's,
"threat … to sabotage the whole IGC process if we did not get agreement to a protocol, for which we had no support whatsoever in any single European state",
was "foolish" and "counterproductive". So much for being prepared to hold up IGC business; so much for being prepared to be isolated in Europe; so much for the interests of British fishermen. Instead, when he announced the deal the Prime Minister said that the Government had made,
"real progress in Amsterdam on the problem of quota hoppers—fishermen from other Member States who fish against British quotas".
If the Government have got such a good deal on quota-hopping for Britain's fishermen, why did the chief executive of the National Federation of Fishermen's Organisations describe it as "a hopelessly inadequate fudge"? What very tough line did the Prime Minister take to defend the interests of British fishermen? Is it not the case that the Government lacked Conservative resolve to restore 20 per cent. of our national fishing capacity at the IGC? In its place followed empty rhetoric.
We have been told about the Prime Minister's exchange of correspondence with the president of the Commission, but in actual fact the Prime Minister won a meaningless letter of condolence from the president which does no more than re-state the existing situation, confirming Britain's rights to issue licences requiring 50 per cent. of fish caught against the UK quota to be landed in British ports. Can the Minister tell the House this evening whether the letter from the president of the Commission has any legal authority and exactly how the provisions set out in that letter differ from the previous arrangements on quota-hopping?
British fishermen already know their rights, but they need help from the Government to enforce them; help that was promised. That promise appears to have been broken unless the Minister can guarantee that in a legal challenge from Spain which has won four European court rulings defending its rights to buy access to British quotas, the Commission will unequivocally support Britain. After all, it is the same Commission that agreed to Spain's demands that quota-hopping should not form any part of the negotiations on the treaty.
Will the Minister confirm that the Prime Minister's deal actually depends entirely on the Commission's good will; a Commission which will seek to look after the interests of not just this country, but the Dutch, the Spanish and other interests as well?
So we are left with the cold conclusion that the Government U-turned on the pre-election consensus that quota-hopping could only be effectively dealt with by treaty changes. The Spaniards have since poured scorn on the Prime Minister's claim to have solved quota-hopping. British fishermen have poured scorn on it and it is likely that the courts will pour scorn on it. Perhaps I may read to the Committee the comments of the "Save Britain's Fish" campaign, which identifies the strengthening of the discrimination laws and the Prime

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Minister's precious letter from Jacques Santer as the main issue of concern for British industry arising from the Amsterdam negotiations. They state:
"Tony Blair came away with nothing new, and clutched a worthless piece of paper. His Government has shown that they do not understand the Common Fisheries Policy, the importance of the discriminatory laws and are charging up the wrong track".
Indeed, even the Prime Minister has admitted that he perhaps overstated the progress made when he said,
"I in no way pretend that the agreement solves the whole problem—that would be a foolish illusion and it would be wrong to suggest it".
His definition of real progress certainly owes more to the fantasy league of European Summit triumphs than to reality.
But what does all this say for the Government's claim for leadership in Europe and to standing up for Britain's interests in Europe? Clearly, the Prime Minister was serious when he said that he would never be isolated in Europe even if it meant sacrificing the interest of Britain. With that approach such a Government could never be able to emulate the success of the previous government in negotiating key concessions to our national interest such as our rebate and our opt-out of monetary and economic union. That is why this evening I have tabled this amendment to consider the legal protection for British fishermen afforded by the Treaty of Amsterdam, for the truth is that it affords no legal protection. The Government's guarantees have come to nothing; their promises to fishermen are broken; their deal is worthless and they clearly do not regard the fishing industry as key to British interests.
So in the light of that and in the light of the amendment I have tabled, I look forward to the Minister's reply regarding how Amsterdam has given our fishermen anything besides zero guarantees and zero prospects. I beg to move.
Lord Pearson of Rannoch: I rise briefly to return to a question that I raised with the Minister, the noble Baroness, Lady Symons of Vernham Dean, in our debate last night. She anticipated that we would return to it briefly this evening. The question was: what is the legal basis of the common fisheries policy? My curiosity was aroused by a Written Answer from the noble Lord, Lord Donoughue, dated 24th April but which is printed in Hansard today. In that Answer the noble Lord said that the legal basis for the common fisheries policy is Article 3 of the EC Treaty and Articles 39 to 47 of the treaty. I thought that I had better go through it again, so I went to Article 3 of the EC Treaty, which says that the activities of the Community shall include, among other things, a common policy in the sphere of agriculture and fisheries. To me, that means—the Minister may not agree—a common policy for agriculture and a common policy for fisheries.
Turning to the other articles which the noble Lord mentioned in his Written Answer, Articles 39 to 47 of the treaty—that is, as they were numbered, although they are now numbered Articles 33 to 38, the former Article 47 having been repealed—and there is no mention of fishing. The words "fish", "fisheries" or
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anything to do with "fishing" do not appear in those articles. It is true that the earlier article, Article 32, says that the Common Market shall extend to agriculture and trade in agricultural products and that "agricultural products" means the products of the soil, of stock farming and of fisheries and products of first-stage processing directly related to those products. If that is all there is as a legal basis—
Lord Randall of St. Budeaux: I am grateful to the noble Lord for giving way, but will he tell us what all this has to do with the amendment?
Lord Pearson of Rannoch: We are discussing the question of quota-hopping, which, like it or not, is an evil which is visited upon us by the common fisheries policy. I am merely asking whether or not the common fisheries policy has a legal basis.
Lord Thomas of Macclesfield: Am I to understand that the Opposition oppose competition? Did not British fishermen sell their licences to other European countries? Is it not open to our fishermen to buy licences from other European countries? Are the Opposition saying that they oppose competition?
Lord Pearson of Rannoch: The noble Lord will appreciate that, as usual in matters European, I do not speak for the Opposition. The question he addresses to me is concerned with the specific aspect of quota-hopping.
Lord Thomas of Macclesfield: I know that the noble Lord has a different point of view from his Front Bench, so I shall address the Front Bench. Are the Opposition opposed to competition? Is the Conservative Party opposed to fair competition? British fishermen sold their licences to the Spaniards and others. Is it not open to us to buy—
Lord Pearson of Rannoch: With the greatest respect, the noble Lord is now out of order because I think it would be normal practice for him to allow me to finish my intervention and he will then be free to address any queries that he may have to the Opposition Front Bench or to his own Front Bench on the matter of quota-hopping.
To return to where I was, as a result of a brief exchange with the Minister last night and as a result of putting on a wet towel and examining the Treaty of Rome again—
Lord Stoddart of Swindon: The noble Lord is being challenged as to whether he approves of competition, whether in relation to fish or anything else. Is it not a fact that quotas are not about competition but about conservation and are anti-competitive? That is probably the answer that the noble Lord should have given to my noble friend.
11.15 p.m.
Lord Pearson of Rannoch: I would be especially grateful if the noble Lord's noble friend accepted that

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answer. But we would be here for a very long time if we discussed the many aspects of the common fisheries policy; for example, whether it encompassed competition. Another aspect is discards, whereby 4·7 million tonnes of fish annually are thrown back into the sea dead, in the name of conservation. That is a silly policy even by the standards of the European Union. It is also a fact that my right honourable friend Sir Edward Heath gave 80 per cent. of the fish in European waters away as the price of entry into the absurd construction that the Committee is now discussing.
I should like to return to the simple question that I wish to put to the Minister. What is the legal basis for the common fisheries policy? I cannot find it in the articles enumerated by his noble friend Lord Donoughue. If there is no legal basis perhaps it will be a great relief to everyone.
Lord Thomas of Macclesfield: Perhaps I may now address a question to the Opposition Front Bench. Is the Opposition opposed to competition? The issue of conservation is a non-argument because it is a matter for the whole of Europe. It does not matter who catches the fish; what matters is the total amount. In terms of competition, one can buy or sell in the market place. Is the Opposition saying that there is no secondary market to compete on a national basis in fisheries?
Lord Whitty: This has developed into an interesting debate on the common fisheries policy, but I do not believe that that is relevant this evening. I have some further advice on the basis of the common fisheries policy. However, I believe that I should put it in writing to the noble Lord. I need to check that I do not inadvertently contradict my noble friend Lord Donoughue, which I do not wish to do. We should compare notes before communicating with the noble Lord, Lord Pearson.
The common fisheries policy is clearly unsatisfactory and has serious problems. I had hoped—I apologise if I give signs of slight irritation at this time of night—that one year after the election and nearly a year after the signing of the Treaty of Amsterdam we would have left behind such pre-election posturing. This is a re-run of pre-election posturing that has done absolutely nothing to benefit the fishing communities of this country. What we achieved in Amsterdam—small though it was in face of the problem—was of benefit to the fishing communities. We never said that we could achieve that by means of a treaty but that we would insist on achieving something in Amsterdam. We did so.
What happened before Amsterdam when the noble Lord's government presented their protocol in the negotiations is a mystery. I have it on the good authority of my right honourable friend the Foreign Secretary that when he first met the German Foreign Secretary, Herr Kinkel, prior to the Amsterdam negotiations and raised the issue of the previous British government's draft protocol on quota-hopping his counterpart looked totally blank. It was quite clear that the previous government's negotiators had not impressed our partners one jot on the importance of this issue to the
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fishing communities and the people of this country that they were proclaiming domestically. I regard that as posturing.
As to the letters exchanged between the Prime Minister and President of the Commission, as a result of the Amsterdam negotiations conducted in parallel with the treaty negotiations, that is an important step forward. It records explicitly the Commission's interpretation of how a member state may within the rules of the single market establish an economic link between the fishing activity and fishing communities and make that a condition of a licence or access to quotas. That means that we should now be able to specify and enforce economic links and establish rules which will ensure that the benefits flow to our fishing communities.
We expect that the Commission will respond shortly to the proposals that we are now making to implement the economic-link licence conditions, and Ministers will make an announcement at the appropriate time. The fishing industry has not been, and I doubt whether it will be, entirely satisfied with that, as Members of the Committee have said. I have to ask, as I have before, where the blame for that rests. We made some progress at Amsterdam and we are following that through.
The previous government tabled a protocol which would not, incidentally, have secured the removal of one quota hopper from the UK register. They said that they would block the Amsterdam Treaty if that protocol were not agreed. The protocol was not supported by one other member state, and they would have left Amsterdam empty-handed.
The noble Lord, Lord Moynihan, referred to the previous government leaving no avenue unexplored. The previous government had 18 years during which to address the problem which we inherited six weeks before the IGC at Amsterdam. Those 18 years were marked by a succession of failures on the CFP.
Baroness Nicholson of Winterbourne: Would the noble Lord like to remind the Committee that Ministers of the previous government refused to meet Emma Bonino the Fisheries Commissioner? She waited eight months for a meeting and eventually had to come to Britain to meet the fishermen, without meeting one Minister, because the previous government would not meet her.
Lord Whitty: That is correct. That was indicative of how, throughout those years, the previous government approached fishing policy. They failed at the beginning of the CFP; they failed to modify it satisfactorily at the time the Spanish and the Portuguese acceded; they failed to ensure that the economic conditions of the UK fishing industry made it profitable and to secure for our fishermen such an income as to enable them to hold on to their quota, which caused the problem in the first place; they failed to pick up the money which the Commission at one point put on the table to subsidise decommissioning; and they failed to recognise that the UK regulation which they put down would be challenged on the basic and fundamental issues of the right of establishment and would be overturned by the ECJ.

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That is a catalogue of failures and a complete let down for Britain's fishing communities. The Opposition are not in a position to criticise the Government's conduct at Amsterdam or since. Much remains to be done for the fishing community. I draw attention to the recent successful prosecution of Anglo-Spanish vessels for over-fishing. Those responsible have been ordered by British courts to pay more than £1 million in fines and costs. The process to which I have just referred in terms of our proposals to the Commission involved a long period of consultation with the British fishing industry. There are difficulties in different sections of the industry, and different views on how we should proceed. So it took several months to complete the consultation process.
Lord Pearson of Rannoch: There is, however, one matter which the new Government could do in that respect, which is to stop the £12 million per annum that this country pays to Spain to repair boats and build new boats to come to steal our fish. That is £12 million more than they give to our fishermen to destroy their boats and their livelihoods.
Lord Whitty: I am not sure on what basis the noble Lord claims that we pay £12 million. Perhaps he will explain that to me in writing.
That slow and difficult process to put the bones on the exchange of letters between ourselves and the Commission and to turn them into regulations here will shortly bear fruit. We are still awaiting the Commission's final opinion on those proposals which were put to it at the end of January. We hope to give the British industry some better news for a change. I have nothing to apologise for in terms of the Government's conduct. The Opposition should be shame-faced about pushing this amendment when they let the fishing industry down for the past 18 years.
Lord Moynihan: I am grateful to your Lordships for contributing to the debate. It is only appropriate to make a few concluding observations on some of the comments made, not least by the Minister. He seemed to rely exclusively on the performance of the previous government as he saw it. He paid no attention to the fact that, whatever may have happened in the election campaign and whatever exchange of views may have taken place over the inheritance of this Government, that is no excuse for the Government.
They said that they would hold up the IGC business if they did not obtain a deal on fishing. They obtained no deal. Their Prime Minister, Tony Blair, told the country, "We certainly have not ruled out holding up IGC business in order to get the right changes to fishing policy in the British interests. Where Britain's interests are at stake, we are perfectly prepared to be isolated". But, oh no, despite the importance he attached to the matter, and despite all the difficulties which the Minister believed that the Government had inherited, they washed their hands of it. By doing so they washed their hands of the interests of British fishermen.
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That is the truth. It is no use the Minister talking about his interpretation of the past. The reality is that at the IGC the Prime Minister failed to obtain a deal. He said that he would be prepared to be isolated in Europe, but he did not support the former government's protocol because no other member state supported it. That was not because it was important for British interests, not because it was important for British fishermen, but because both of those interests could be binned in the greater interest of not upsetting any other member state.
It is no good saying that he did not go to the IGC with a clear mandate and a clear picture of what the Conservative Party would have done in the same circumstances. A clear 10-point package set out the way forward for the British fishing industry in the run up to the general review. The package aimed to insist that the six- and 12-mile limits were not negotiable; to give fishermen more say in policy; to give a further £12 million to decommissioning; to exempt small vessels from regulations; to press the technical conservation measures; to give agency status to MAFF fisheries laboratories; to give the best value from UK quotas by working with the industry; to reject the idea of a single European fleet managed and policed from Brussels; and to invest in fisheries dependent areas.
Crucially—dealing with the point about competition and the relevance of quotas in the context of the policy—the package sought, I thought with unanimous all-party agreement, to ensure that the quota-hopper problem was dealt with once and for all at the IGC. The problem was not to be buried in rhetoric about what had happened during the election campaign, but we were to ensure that the IGC would allow UK quotas to provide an economic benefit to UK fishing communities and not to fishing interests in other member states. That is what the Government went to Amsterdam to achieve and that potentially included pressure to amend the Treaty of Rome to stop the practice of quota-hopping if the problem could not be resolved within the framework of the existing treaty and the CFP. If treaty changes proved to be necessary, the previous government alleged that they would seek them. The current Government ditched them. That is not posturing; that is an accurate reflection of exactly what happened and I have gone into that in detail.
Lord Thomas of Macclesfield: Surely, that is posturing. The noble Lord read out a long list of aspirations. What did his party achieve when it was in government?
Lord Moynihan: We achieved a tough and consistent line by government to ensure that the necessary changes—
Lord Thomas of Macclesfield: But—
Lord Moynihan: No, I have not finished. Will the noble Lord please do me the courtesy of hearing me out? We achieved a tough and consistent line that built up to a package which was widely publicised as our agenda for Amsterdam. I have outlined that package to the House tonight. It was made clear by the former

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Prime Minister, John Major, and his Cabinet and it was on the basis on which we were going not only to the IGC—
Lord Whitty: Will the noble Lord—
Lord Moynihan: In a moment. I can answer only one question at a time. We were going to carry that through from the IGC to the Treaty of Amsterdam. Tonight's amendment does not focus on what happened in the previous government. If the noble Lord, Lord Thomas, is unhappy about the performance of his Government and would like to see us cross sides we would happily take over the reins again. Sadly, I have not had the privilege of debating with the noble Lord during 18 hours of Committee in the past two days. What he will have seen is that we have consistently and without hesitation questioned the Government on a whole range of issues, put to them what have been their failures and commended them where they have succeeded.
The reason why I proposed the insertion of the new clause under Amendment No. 54A is because at Amsterdam this was an area of clear failure. It is for that reason that tonight we are questioning the Government. I have summarised the points I have made and outlined the strongly-held views that we have on this issue. Despite being very strongly pressurised by my noble friends to push a vote on this issue, I shall refrain from so doing.
I thank the Minister for his comments and other members of the Committee for their interventions. We shall reflect on the points that were raised and consider whether this is an appropriate issue to bring back at Report stage and, possibly under strong pressure, move a vote on that occasion. I again thank the Minister for his comments and beg leave to withdraw the amendment standing in my name.
Amendment, by leave, withdrawn.
11.30 p.m.
[Amendments Nos. 54B and 54C not moved.]
[Amendment No. 55 had been withdrawn from the Marshalled List.]
Lord Pearson of Rannochmoved Amendment No. 56:
After Clause 2, insert the following new clause—
COMMUNITY FINANCES AND FRAUD: REPORT
(" . This Act shall not come into force until—

(a) a Minister of the Crown has laid before both Houses of Parliament a report setting out the implications of the Treaty for the sound management of Community finances and the prevention of fraud in relation to Community expenditure; and

(b) the report has been approved by resolution of each House.").

The noble Lord said: I apologise if the wording of Amendment No. 56 appears somewhat weak to some of your Lordships who may feel that the British Houses of Parliament should not merely have to approve a report saying what the Amsterdam Treaty might do to
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prevent fraud and financial mismanagement in the Community. They might feel that we should be free to withhold the vast amount of money that we send annually to the European Union until we are satisfied that its finances are run as honestly and as competently as our own. That is a very distant prospect indeed, and one which may never be achieved if the EU continues on anything like its present path.
I suggest that that is because the scale of fraud and mismanagement in the Community is simply too large, its perpetration too endemic and profitable for too many recipients and the will to do anything about it too weak. Indeed, the scale of such fraud and negligence is now admitted by the EU's own court of auditors to be around 5 per cent. of its budget, or some £4,000 million per annum.
When I had the honour to sit on your Lordships' European Select Committee a couple of years ago, we feared the figure might have been more like double that. Indeed, there have been no less than four reports on fraud in the Community compiled by your Lordships' Select Committee over the 10 years from 1984 to 1994. I understand that these reports are still regarded as the most authoritative analyses of this vast scandal, however uncomfortable their conclusions.
Perhaps these reports' most depressing finding was the lack of will in the Community to stop the rot. So the reform of fraud is like reform of the common agricultural policy and, indeed the common fisheries policy. It has been talked about for many years but no progress has been made, and one is forced to the conclusion that these problems may never be solved because too many votes in the Council come from people who are doing too well out of them.
The recent annual report from the EU's own Court of Auditors confirms this unhappy position. Amongst other things, it finds that the agriculture compensation scheme regulations have failed to take account of changes in world market prices. This has resulted in unnecessary expenditure; for example, £2·2 billion paid out to arable farmers.
It finds that advances to member and non-member states were accounted for as actual expenditure and substantial funds have remained for long periods in the hands of intermediary authorities.
Then it reveals that the structural funds are riddled with errors which make it impossible to give any kind of sensible evaluation, even of their effectiveness. Finally, it finds quite simply that the member states and the Commission have failed to develop appropriate systems of accounting.
The report makes depressing reading. It carries many examples of lack of supervision and accountability, overpayments, unnecessary subsidies and all the lack of care and responsibility which inevitably occurs when human beings are at two removes from the source of the money they are frittering away, which is, of course, the taxpayer.

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And we should not forget that these criticisms come from the EU's internal Court of Auditors. Six days ago, our own Treasury, notwithstanding its presumable allegiance to the Government's charm offensive in Brussels, had this to say about the court's report:
"The European Court of Auditors makes few observations about the motivation behind the 'errors"',
and the word "errors" is in inverted commas,
"in legality and regularity which it identifies".
Another little vignette which helps us to understand the attitude to money of the European Commission—that guardian of the Treaty of Rome—came recently when a Member of the European Parliament, Caroline Jackson, had the audacity to ask the Commission to reveal the net contributions from each member state to the Community budget, a perfectly fair question, one would have thought, and one which the Commission should be proud to answer accurately, especially as it has just been exhorted by the Court of Auditors to produce,
"clear and simplified financial statements of the Community budget with more accessible financial information".
But the Commission refused to answer the question, saying that the actual amount of money which each member state pays to keep the Community's employees in the style to which they have, alas, become accustomed is really not the point. The point, in the view of the European Commission, is instead all those wonderful, if intangible, benefits which membership of the European Union bestows on its fortunate paymasters, benefits which so far outweigh the mere vulgar money which they contribute as to make those contributions unworthy of analysis or, indeed, disclosure.
It is with this sort of attitude in mind that one has to doubt whether the proposed Amsterdam amendments to Article 209a, now Article 280, will make the slightest difference. One only has to glance at the new bits to see that it is just so much waffle. The new paragraph 1 of Article 280 reads:
"The Community and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Community through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States".
The best one can say about that is that it is a pious hope, is it not?
We then come to a couple of the original clauses, with which I need not trouble the Committee, one of which exhorts member states to counter fraud affecting the financial interests of the Community in the same way that they counter fraud affecting their own financial interests; and that does not give much comfort.
Clauses 4 and 5 of the new article are equally ineffective, I fear. They state:
"The Council, acting in accordance with the procedure referred to in Article 251, after consulting the Court of Auditors, shall adopt the necessary measures in the fields of prevention of and tight against fraud affecting the financial interests of the Community with a view to affording effective and equivalent protection in the Member States. These measures shall not concern the application of national criminal law and the national administration of justice".
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That is just as well.
Clause 5 states:
"The Commission, in cooperation with Member States, shall each year, submit to the European Parliament and to the Council a report on the measures taken for the implementation of this Article".
So the good news is that we are to have annual reports, which will no doubt be just as anodyne as these clauses which will have inspired them.
At this stage in the debate, European integrationalists usually advance the theory that the only way to cut out fraud against the Community is to give the Commission power to root it out in all member states. Bad workmen must be given newer and sharper tools. That plan would mean such a massive extension of what is known in the jargon as Community competence, which actually usually means incompetence, that it is luckily unacceptable to our own Government and other Governments.
A solution could be at hand—a solution that has always been the only sure way of avoiding fraud. That is, to remove the money from the reach of the fraudsters. I make that suggestion because some of us have come to see that there really are not any benefits at all from our membership of the European Union. The widespread pretence that there are any such benefits is perhaps the biggest fraud of all. That discovery is not just the product of a rabid Euro sceptic mind. It is shared by a growing number of British people and has been well articulated by my right honourable friend Mr. Norman Lamont, who had the educating experience of being our Chancellor of the Exchequer when the foreign exchange markets were good enough to eject the United Kingdom from the exchange rate mechanism in 1992.
All frauds depend on two things—access to the cash and sleight of hand. One of the smoothest sleights of hand, through which many of our people have not yet seen, is the pretence that we get any money at all from the European Union. We do not. We are net contributors. So all the talk about our poorer regions, research budget, farmers or any other British interest being blessed by European Union munificence is, in fact, so inaccurate as to be dishonest.
Despite the Commission's refusal to give us the figures, I understand that our contribution to the budget amounts to some £11,000 million per annum. Of that, the Community gives us back some £7,000 million per annum, provided of course that it is spent on projects which are designed to enhance the Community's own image—thus helping to propagate the fraudulent claim that it is the EU's money, for which our people should be grateful, when it is not. It is our money, spent through the Community's profligate and corrupt filter. If we spent it all ourselves, we could make far better use of it—not only the £4,000 million a year that we give the EU, when no doubt it is largely wasted, but our £7,000 million which it gives back to us.
As I have indicated, this is the sort of story which makes some of us see that there is really no longer any point in our staying in the European Union; or that there really is not any point in the European Union continuing at all. There are other problems which contribute to that view. The common fisheries policy, for instance—

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which we have just debated—is one of them. But perhaps this is not the moment to rehearse those problems.
I come back to where I started, to say that the only way sure way to stamp out fraud and maladministration in the Community is to withhold our contribution until we are satisfied that the disease is indeed cured. I fear that the Government are unlikely to take that obvious course, so I hope that they will see the amendment as a useful step in the right direction.
Lord Wallace of Saltaire: I do not entirely follow the noble Lord, Lord Pearson of Rannoch, in his wider speculations. I do, however, agree that fraud continues to be a major problem for the European Union. I share also the noble Lord's view, as do many others on these Benches, that the balance of the budget is still perverse and that reform of the common agricultural policy is an important part of reducing levels of fraud and the perverse flows that adversely affect the United Kingdom.
I disagree with the noble Lord that we do not have allies from other countries. Commissioner Likkonen, the Finnish Commissioner, is doing extremely good work at present in beginning to put into effect reforms of some of the more inefficient sections of the Commission from which we have suffered far too long.
As this is the last amendment of the evening, rather earlier than I had expected, I take the opportunity to congratulate the noble Lord, Lord Moynihan, on his remarkable stamina over the past two days. I think that he may well have been on his feet for more or less five hours during that time. That is, indeed, quite a remarkable achievement. I rather hope that the noble Lord will not have to he on his feet for very much longer.
11.45 p.m.
Lord Moynihan: I am grateful to the noble Lord. It is important for the sake of the record for me to point out that I was not on my feet for five hours at a stretch. At every stage of the detailed consideration of this Committee work I did attempt to keep my remarks as brief and concise as I could. Nevertheless, as I am sure the noble Lord accepts, there was much detail to be covered in some of the groupings of amendments. I apologise if, on occasion, I had to speak for 15 or so minutes in order to cover those details. However, I shall not do so on this last amendment, although I welcome the fact that we appear to have a quorum in the Chamber for the first time. That is probably because of the fascinating and detailed intellectual argument that I am about to rehearse in the context of Amendment No. 56. Indeed, I cannot think why else it should be so.
I shall simply make one important point; namely, that in the context of the fight against fraud there is the question about the use of QMV. In the Amsterdam Treaty, the Government agreed to give the Community enhanced powers to combat waste and fraud by creating a specific legal basis for measures to combat fraud against the Community budget to be adopted by QMV.
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Article 209a of the TEC, at paragraph 4, provides for the Council to act according to the co-decision procedure of Article 189b, to adopt,
"necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Community".
The Government have frequently used fraud to justify the massive extension of QMV. On his return from Amsterdam the Prime Minister told another place:
"It is important for this country that we have QMV in certain areas … Fraud is one such area".
As I understand it—although I would like confirmation from the Government Front Bench—the argument runs that, if we are to have an effective provision to tackle fraud, it has to be decided by QMV. Otherwise, if a country were accused and redress demanded because of the misdemeanours and mismanagement of funds by that country's officials or institutions, without QMV it is very unlikely that the EU would be able to ensure that any country used the money that it was allocated for that intended purpose. If there were no QMV and if unanimity was required, that country could veto any measures proposed.
As I understand it, the argument continues that, if one believes in an effective European Union, any objective examination of the issues leads one to conclude that QMV must be extended. I have just heard a call from behind me asking what QMV may be: it is qualified majority voting. Perhaps that noble Lord was fortunate enough to have escaped some of the detailed deliberations of this Committee; indeed, we went into that question at great length. So the argument goes that this is a positive example of where it is essential to extend QMV. That is why powers to combat fraud and waste were increased at Amsterdam by allowing the Council to take action by QMV to prevent and combat fraud against the Community budget and by strengthening the powers of the Court of Auditors to investigate the use of Community funds.
However, there is a counter argument upon which I would appreciate the Government's comments. As with many of the Government's arguments, we believe that this fails to take into account how, on occasion, Europe would work in practice. As has long been agreed, one of the fundamental reasons for retaining the veto is to enable better negotiations to take place than would otherwise be the case. The fact that Conservative proposals on fraud at the IGC did not attract full support one, two and three months before the summit does not, in my contention, mean that they would not have been agreed at the weekend of the summit itself.
As the Opposition is only too well aware, things are often agreed at the very last minute at European summits. Countries who preserve their veto and who are prepared to use it are those who can bring others to the negotiating table. In our view, that is how the law on fraud should be made—by unanimity. Then the enforcement measures of that law can be made by QMV in the ordinary course of events.
I should like to ask the Minister specifically about the requirement in amended Article 209a, paragraph 2 (Article 2, paragraph 52 of the Amsterdam Treaty) which states that:

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"Member states shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests".
what effect does the Minister really believe that that requirement will have in the fight against fraud?
There are a number of other points I wanted to raise in the context of fraud but I think they were admirably covered on two other occasions during our proceedings. A speech at an earlier stage this afternoon by the noble Lord, Lord Bruce of Donington, referred to the issues of fraud, and there was a more comprehensive speech in the context of QMV yesterday. A series of speeches was given by noble Lords on this subject, so I shall not delay the Committee any longer by developing some of those themes. But I have to put on record that a number of them were worth going into in much greater detail than we had the opportunity to do at the time.
In conclusion, I thank the Minister and his colleagues for the courteous way in which they have responded throughout Committee proceedings to many detailed questions that have come from these Benches. I personally believe that in comparison with similar Committee stages that I have either attended in another place or read about on European matters, this was conducted in a very constructive spirit, one which analysed questions about what was best for Britain, and also how Britain could best contribute in Europe. Where noble Lords felt that we should not be contributing, strong arguments were made by them and listened to and respected. For those reasons, and from the Opposition Benches, I thank the Government Benches for the work that they have done to ensure the success of that, and particularly the Whips.
I conclude by asking the noble Lord whether he would answer the point that I have raised and to thank noble Lords on all sides of the Committee for their much appreciated constructive approach to this very complex subject, to which we will return at Report stage.
Lord McIntosh of Haringey: I am delighted to see that the noble Lord, Lord Pearson of Rannoch, is determined to go out of this Committee stage with a bang rather than a whimper. He has always been a fundamentalist; he has always taken the view that Britain should withdraw from the European Union. He has now gone further in saying that the whole project should be abandoned. We have to admire the consistency and the stringency of his point of view, whether or not we agree with it. It is quite clear that this Government, like the last Government, do not agree with that point of view.
On the issue of fraud, of course he is right in pointing out the seriousness of the problem. The National Audit Office published, only last week, an assessment of the report of the 1996 account which was prepared by the European Court of Auditors. The National Audit Office takes the view, as do the Government, that the accounts reveal unacceptable levels of fraud. We are talking about an amount of £3 billion, which is 5.4 per cent of the European budget. Having said that, this figure includes not only fraud but also errors in implementation. many of which reflect genuine
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differences of opinion between the European Court of Auditors and the Commission about the interpretation of the rules on eligibility. That figure is not an estimate of wastage because it includes a number of technical infringements; for example, about the timing of payments. But of course the noble Lord is right, as are other noble Lords who have taken part in this debate, including the noble Lord, Lord Wallace of Saltaire, that this level of errors is a cause for serious concern.
When the European Court of Auditors' report was published last November, Ministers made it clear that much work remains to be done before Community finances are as well managed as our national Budget. This is a priority during our presidency. Before I leave that point, I express my regret that my noble friend Lord Bruce of Donington is not with us at this late hour. He has pursued the issue of fraud with indomitable application. He probably knows more about it than any other Member of this Chamber. His contribution, even at this late hour, would have been valuable.
I have said that we believe this matter should be a priority during our presidency. I shall return to that point in a moment. I ought to respond to the noble Lord, Lord Moynihan, and mention ways in which the Amsterdam Treaty has the potential to reduce fraud and to improve financial management. There will be three main changes. First, the role of the European Court of Auditors in detecting fraud and mismanagement is strengthened. The treaty gives the Court of Auditors recourse to the European Court of Justice to protect its right to audit Community funds. This means that if the Court of Auditors is blocked by another institution from properly carrying out its duties it can take that institution to the Court of Justice. The Court of Auditors' right to audit those in receipt of Community expenditure right down the line to end users is clearly set out. That removes any past ambiguity. The Court of Auditors' right to audit Community funds managed by the European Investment Bank will be protected even if the agreement under which the audit is carried out breaks down. The Court of Auditors is now doing very useful work, and member states and the Commission are taking its reports more seriously. Further increases in the European Court of Auditors' powers under the Amsterdam Treaty should ensure that this continues.
The second main change concerns the Community's ability to take action against fraud, which is enhanced. That relates to the points made by the noble Lord, Lord Moynihan. Under the revised Article 209a, a specific legal base is created for adopting measures against fraud. Previously these had to be adopted under the cover-all provisions of Article 235, which requires unanimity and results in delay and less efficient legislation. In future—as the noble Lord has said, and as the article states—measures will be adopted by majority voting. Apart from anything else, this will permit quicker action to be taken. The use of qualified majority voting should not be seen as a threat; it is a tool to be used, and in this case it will be possible to take decisions unencumbered by the threat of veto from an offending member state. In that regard I confirm what the noble Lord, Lord Moynihan, said. That does not mean that there is not still a role for negotiations. I think it would

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be perverse if we were to object to this extension of QMV when it is so clearly in everyone's interest that there should be the power to take this action to prevent fraud.
The noble Lord asked me about the significance of paragraph 2, which states that member states shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests. I should have thought it was rather obvious that if we believe—as we do—that our own public accounts are conducted effectively, we should try to bring the Community accounts up to the same standard. I hope that applies to all other member states, but it is certainly a valuable criterion for this country.
The third major way in which the Amsterdam Treaty will reduce fraud is through a requirement placed on member states to co-operate with the Commission to ensure sound financial management of Community funds. That is what the Amsterdam Treaty does. It is not as dramatic as some people would like. It is not as dramatic as the Government would like, but these are significant changes. What will we do during our presidency in this regard? A lot of work on financial management and the fight against fraud is already under way.
During the presidency we are concentrating on taking forward existing initiatives, rather than distracting attention by launching new ones. The Commission's SEM 2000 initiative—sound and efficient management—is the focus of work on financial management. It has already made considerable progress, particularly in improving co-operation between the Commission and the member states. For example, the Commission's financial controller has signed bilateral co-operation agreements with the financial controllers in many of the member states. There have also been improvements in budget forecasting and execution, and we are pushing forward with SEM 2000 work during our presidency. We hope to get agreement to amendments to the financial regulation which sets out detailed rules for drawing up, implementing and auditing the EU budget.
In addition, under our presidency we are using the budget discharge procedure to highlight key financial management issues such as the need to set clear aims for expenditure and evaluate results against these; to better
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define eligibility criteria; and to ensure proper follow-up to previous Court of Auditor reports. We are working to pass on good practice in financial management to central European applicants for membership so that they develop effective financial systems before they join the European Union. They have been invited to a financial control conference in London in June.
Following the European Parliament's report of last year on transit fraud, which highlighted the vulnerability of the Community transit system to fraud and suggested that co-operation between European Union Customs authorities should be strengthened, we are encouraging that as well. We are also pursuing work on criminal fraud in the Justice and Home Affairs Council as part of the recent action plan on organised crime. We plan to use the 19th May ECOFIN to focus further on financial management and fraud issues, including a further report on SEM 2000, the annual fight against fraud reports, and member states' responses to the ECA report.
The amendment would require us to make an annual report on fraud issues. Let me make it clear that we are already doing so and that this amendment is therefore unnecessary. I hope that the noble Lord, Lord Pearson of Rannoch, will withdraw it.
Finally, since this is the last amendment in our extended Committee stage, although it is customary in this Chamber to confine pleasantries and congratulations to the end of a Bill, I certainly echo the thanks of the Government Front Bench to all who have made constructive contributions to our Committee stage.
Midnight
Lord Pearson of Rannoch: I do not know whether it is in order for me to echo from the Back Benches the sentiments of gratitude which have been offered to the Government Front Bench for the patience and detail with which they have answered our queries. I am especially grateful to the noble Lord, Lord McIntosh, for the generosity of his comments about this particular amendment, which, in those circumstances I have much pleasure in withdrawing.
Amendment, by leave, withdrawn.
Remaining clause agreed to.
House resumed: Bill reported without amendment.
House adjourned at four minutes past midnight.

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