Sitting of 25 February 1998

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MADAM SPEAKER in the Chair]

Health Inequality
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]
9.34 am
Ms Joan Walley: I am grateful for this Adjournment debate because never has it been more important for the House to debate inequalities in health. After 18 long years when the divide between those in good health and those in bad health got worse than ever, for the first time we now have positive action from the new Labour Government and a commitment from the Minister for Public Health, my hon. Friend the Member for Dulwich and West Norwood (Ms Jowell), whom I am pleased to see in her place this morning, to do something about health inequality.
I have spent 11 years representing North Staffordshire, so it is not surprising that, along with my colleagues from the area, I want us to address the issue of health inequality. I want the Government's actions to mean something and to make a real difference to my constituents' lives. That is why I asked for this debate.
It is also fitting that, 150 years after the first public health Act and 50 years after the birth of the national health service, we now have a public health Green Paper, "Our Healthier Nation". We have until 30 April 1998 to submit our comments, so we need a countrywide debate on public health. That would be a first step towards improving the nation's health, and I hope that this morning's debate will stimulate that debate.
I want people in both the urban and rural areas of my constituency to discuss public health, and I want the debate to take place at local level: at work; in schools; in youth clubs; in voluntary organisations—I have received many representations from voluntary organisations about the importance of this morning's debate; in the community; in councils and in parish councils in rural areas; in sports halls, churches, halls, clubs, pubs and working men's clubs; in doctors' surgeries and clinics while people wait for treatment; and wherever people get together.
I welcome the four main categories set out in the Green Paper: heart disease and strokes; accidents; cancer; and mental health. It is important to debate the targets for those categories. I spent many years as president of the West Midlands Home Safety Council, which, along with many other organisations, such as the Royal Society for the Prevention of Accidents, has long pressed for more to be done by local authorities to prevent accidents in the home. Obviously, more also needs to be done to prevent road traffic accidents, and accidents and disease at work.
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I welcome the targets to reduce heart disease and strokes by a third, cancer deaths by a fifth and suicides by a sixth. I doubt whether anyone would challenge or question those laudable objectives and I hope that they will be discussed at length as the debate about public health takes place throughout the country.
I am concerned that, while the Government get on with changing the structure and framework of the NHS through the new NHS White Paper, I do not want them to lose sight of the important, all-embracing, over-arching concept of sustainable development, which recognises that the principles behind public health are part and parcel of all aspects of public policy. I welcome the White Paper, as it lays the foundation for beginning the process of modernisation and especially accountability, so that we can deliver uniformly high standards of health care. It consults, and puts a clinical focus on the four main targets.
This is a challenge for us all, and we must support our Minister for Public Health, no matter which side of the House we are on. We must help her in her co-ordinating role to ensure that the comprehensive spending reviews that are taking place across all Departments recognise the importance of public health policies. The Advisory Committee on Resource Allocation must tackle real needs, and the new health improvement programmes, which identify and meet local needs, must have the resources to do what is necessary.
I shall mention some of the consultation documents that are being discussed across the country. The Department of the Environment, Transport and the Regions has produced a White Paper, "Building Partnerships for Prosperity"; a review of planning guidance and of planning for the communities of the future. The housing conditions survey is important, as housing is crucial to health. A consultation document on contaminated land is due shortly, and a review of water charging is currently out for consultation.
The DETR has also produced a document on opportunities for change and a new strategy for a sustainable future. There are reviews of the crucial matter of national air quality and of regulation strategy, which are being undertaken by the Department of Trade and Industry, and new lottery legislation will bring in many bids across the country. All are integral to the promotion of an enhanced quality of life and improved public health.
The public health Green Paper makes many healthy references to the need for local authorities to work in public health partnerships with NHS trusts. A duty on local government and health trusts to work together to produce local health improvements is proposed. However, we must not fragment public health provision by leaving councils with insufficient means to close the huge health gap between the rich and the poor.
Health inequality is tied up with domestic metering of water and disconnections; energy efficiency in the home; the fact that the worst sewers are often in the oldest parts of urban areas; poverty wages, low-income households and the condition of people's homes; and a lack of sports facilities. Many schools in my constituency lack proper sports facilities: how can people take up healthy, active life styles without them?
Health inequality is also tied up with poor diet; unsound agricultural practices, such as the use of untreated abattoir waste as fertiliser for crops and the risk of that getting into the food chain; polluted air; stress; and low educational

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achievement—we know all about that in North Staffordshire. Unemployment also has an effect, and, in parts of my constituency, people are on a four-day working week. We must also urgently address the failing child support system.
I speak as the vice-president of the Institute of Environmental Health Officers. Environmental health officers often do not get the recognition that they deserve: they come a poor third in health authority partnerships. Indeed, a MORI survey for the Anchor Housing Trust showed that only 56 per cent. of health authorities consulted environmental health departments when putting together plans for 1998–99.
Just as Edwin Chadwick—an engineer, not a doctor—inspired medical officers of health and developments in public health, we must, as the millennium approaches, recognise the importance of public health to all areas of policy if we are to reduce ill health and health inequality. Ordinary people, just as much as doctors and clinicians, can contribute to improving public health.
That over-arching framework is as relevant to Europe as to the United Kingdom. I urge the Minister to press urgently for wider European Union public health competence through an extension of article 129 of the treaty of Rome when she chairs the European Union Health Council. The Institute of Environmental Health Officers would welcome the opportunity to work with the Government to achieve that.
The truth is that the previous Government failed to recognise the effects of their blatant cumulative under-resourcing of local authorities through the standard spending assessment formula and the abandonment of the resource allocation working party, which did much to redress the balance. Those of us who have been around for a while know that RAWP attempted to iron out the health inequalities that left people in many parts of the country suffering appalling ill health. Such people lived in rundown inner-city areas which traditionally depended on heavy manufacturing industry, but there were pockets of deprivation in rural areas, too.
Ill health reduces daily living to a remorseless and painful struggle for survival. Month by month, our national health services are merely firefighting. Hospital waiting lists are unacceptably long; efficiency savings to pay for treatments have to be made despite our injection of extra money; and litigation costs have to be paid because underfunding has meant that services cannot be provided.
We could start to improve the service if we were able to prevent ill health. The Green Paper will help, but the reality, at least for many of my constituents, is a world apart. That brings me to the second part of my speech—why I want the House to discuss these issues.
Health, good or ill, depends largely on where people live and on their circumstances. I do not think that it should. We in North Staffordshire consider ourselves fortunate. We are a proud community, and we look after one another as best we can. The performance of the Staffordshire ambulance service trust is such that an ambulance arrives at life-threatening emergencies after an average wait of six minutes 11 seconds. The average in all other cases is seven minutes nine seconds. That performance is not bettered anywhere in the United Kingdom; I doubt whether it is bettered in Europe.
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In this financial year, the Staffordshire ambulance service trust has responded to 90.28 per cent. of life-threatening emergencies in eight minutes, 97 per cent. in 14 minutes, and 99.36 per cent. in 19 minutes. That is excellent, but there the good news ends. The bad news is that, in an area of 1,000 square miles, the trust had responded to 48,285 emergencies by 20 February this year.
We must learn the lessons of best practice from the trust, and recognise its experience and the improvements that it has made. That must be fed into the review. But the downside is the high death rate from chronic heart disease, which must be treated in the short term, and prevented in the long term.
In my constituency from 1981–92, the odds of people dying before their 65th birthday were 25 per cent. higher than the British average for someone of their age and sex. Furthermore, those odds were more than 75 per cent. higher than in Esher and Walton and in South Cambridgeshire, the constituencies with the lowest rates of premature mortality.
Hon. Members know that people can use statistics to show whatever they want. Whatever figures I consult, however, I receive the message that North Staffordshire, and Stoke-on-Trent in particular, rank highly in terms of relative deprivation. The public health common data set figures show that, in regard to most causes, Stoke has a standard mortality rate of more than 100. In the case of heart disease in men, the rate is 123, 23 per cent. above the average. That makes us 30th out of the 358 local authorities in England. In terms of accidents among women, we rank 23rd.
As for premature and infant mortality, in 1996 there were 5,597 perinatal deaths in England and Wales; there were 689 in the west midlands, and 57 in North Staffordshire. Since 1983, our rate has been consistently higher than the average, and consistently higher than the west midlands rate and the west midlands rate trend, never falling below 10 per 1,000.
Contributory factors include poor nutrition, social deprivation, teenage pregnancy—there is a high risk of teenage pregnancy in North Staffordshire—smoking and drinking alcohol during pregnancy, and inadequate standards of obstetric and paediatric care. Such inadequate standards have been identified as causes of some deaths in confidential inquiries throughout the United Kingdom, and North Staffordshire is clearly no exception.
It is not just infants who start off with reduced life expectancy. The Association of Retired Persons over 50 campaigns for the rights of older people. I am sure that many of us who are present today, if we have not quite reached 50, are not all that far from it.
The North Staffordshire pensioners convention and North Staffordshire Healthwatch campaign for improved services for older people, believing that discrimination on the basis of age rather than need leads to the delivery of inappropriate treatment and, in some instances, the complete absence of effective care. They are worried about the widening gulf between the treatment of older people and the treatment of those under retirement age. I do not want that to happen in my constituency.
Screening for breast cancer in women over 60 is a matter of special concern. I know that the House has discussed the issue before, but I want to flag it up briefly today. There is also a lack of adequate preventive

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treatment for osteoporosis and prostate cancer. I am especially concerned about health issues affecting women, because I think that women's health care is very important.
In North Staffordshire, we have a particular problem. It is no accident that we have a relatively high number of long-stay continuing-care beds. In our area, older people cannot necessarily afford private health care. Despite an extensive campaign to keep our NHS long-stay beds, 37 beds are mothballed at Stanfield hospital, and so far no progress has been made on a proposed private finance initiative bid for reprovision of beds at Westcliffe hospital, although it has already been formally agreed through consultation.
There is a good deal of fear and anxiety, because the legacy of underfunding—not just of the health service, but of social services—has left us short of resources for community care. I feel that I have a debt of honour to my elderly constituents. We must plan for the long term and the short term, and also plan transitional arrangements.
I have been inundated with briefings from a number of organisations that want to hammer home to the House just how unfair the system is to those who happen to live where services are insufficient, and whose particular illnesses are not given the priority allocated to them in other parts of the country. We have had another campaign in Stoke-on-Trent to prevent the proposed closure of the fertility unit by the health authority. Although we have had a minor victory, in that the unit has been reprovided, it has been reprovided in a private clinic. There is not enough money from the national health service to pay for treatment there. Those living elsewhere have access to fertility treatment, but there is a definite ceiling on the amount of money available in North Staffordshire.
Dental care is another problem. It is barely possible to gain access to a dentist at present. We currently have applications for extra bids to help the provision of dental care on the NHS in North Staffordshire. Our children have the worst dental health care record in the west midlands—hence our bid.
There are many indicators relating to coronary heart disease, strokes, lung cancer, schizophrenia and suicide. In every instance, the North Staffordshire rates are worse than the west midlands rates, and worse than the rates in England and Wales. I hope that the Minister will have a chance to examine the figures.
There are even worse figures. The extent of ill health in North Staffordshire is illustrated by data showing an increased use of health services in Stoke-on-Trent and North Staffordshire. In 1996–97, there were 170,230 finished consultant episodes at the two NHS trusts in North Staffordshire. That represents about 360 per 1,000 of population, compared with 230 for England as a whole.
The problems that my constituents face daily are illustrated by the fact that the average GP list size in North Staffordshire was 2,077, higher than the England average of 1,881. That average was the highest in the west midlands, and the ninth highest in England, as of 1 April 1997, according to statistics from the NHS executive.
Yesterday, I received a telephone call from a constituent aged 74, who had hardly ever had any NHS treatment. He, his wife and his son—who has had a stroke—have all been struck off by their GP, who does not have to give a reason. We have a shortage of GPs.
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Not enough trained GPs are being provided, and, in an area without a medical school, we cannot train the people we need.
I do not like painting a black picture, and I do not intend to do so this morning. We all live with the position daily in North Staffordshire, and we know how urgent is the need to deal with it. Some 10 years ago, the city council published a report called "Health of the City", which remains a blueprint for action, and confirms what I know from my surgeries.
It is clear that there are pockets of extreme ill health and deprivation in North Staffordshire's health authority area that urgently need to be tackled. The key indicators of risk of poor health in certain wards have led to their being designated health action areas. We are making progress, and doing a great deal to offset the problems. The designation of health action areas is a result of joint action that Stoke-on-Trent city council and Staffordshire Moorlands district council have already taken with the health authority. In those health action areas, the Jarman score is unacceptably high, but it is clear that we are making progress.
The problem is that many people cannot wait to be treated, no matter how much we are doing to put in extra money. Many cannot easily see doctors or dentists, and many must wait too long for social work support. Many cannot easily reach clinics. I am currently doing my best to stop the closure of a clinic in Fegg Hayes. We are hoping for a joint initiative to retain clinics in areas where they are needed, to provide family planning and other services.
It is obvious that there are not enough services to meet the needs of people in North Staffordshire. That may lead the House to conclude that our trusts, councils and voluntary organisations are not doing their best, but nothing could be further from the truth: they are doing the best that they can in very difficult circumstances. I want the Minister to know that. They are working in partnership to reduce health inequality in North Staffordshire, especially in those pockets of deprivation where health is worst.
The Green Paper sets out targets relating to specific illnesses, and calls for local initiatives jointly to tackle specific local problems.
We have already started that joint work in our health action areas, but we could do much more. There is a new unitary local authority in Stoke-on-Trent, and it could also do much more. As a result of wanting to do more, it has submitted a proposal for a health action zone. I want that bid to succeed, because it shows that we have the will and the vision and that there is local co-operation to address our specific problems.
I understood that need would play a large part in determining the areas that would succeed in being designated as health action zones. We in North Staffordshire are convinced that our bid is based on need, and we want it to succeed. We are concerned that the panel that is advising Ministers seems already to have excluded our bid. Only three of the six bids from our region are being forwarded with a regional office recommendation for consideration. There will be a decision at the end of March, and I fear that North Staffordshire will not be chosen, because our bid has not been forwarded. I urge the Minister to look in detail at our needs and our bid. We should be pleased to co-operate if she wishes to arrange a meeting.

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I am unaware of the criteria under which bids have been reviewed by the NHS executive, because that information has not been made public. In the spirit of openness and accountability, I urge the Minister to consider carefully how she can assist us. If our bid has demonstrated the need for a health action zone but falls down in its detail, I ask the Minister to show some flexibility and offer us advice so that we can redraft our proposals and intensify our present action to address health inequality.
By asking for this debate, I could be accused of building false optimism and unreasonable short-term expectations. The Government warned us against that on page 82 of the Green Paper. North Staffordshire people are realistic and understand that they need long-term, sustained and co-ordinated effort. We realise that there are no quick fixes, but we want an understanding of how much there is to do, and a Government commitment to support us in our efforts.
10.2 am
Mr. Jonathan Sayeed: I congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley) on securing a debate on a thoroughly important topic that affects the lives of many people. The publication of the White Paper on the national health service and the Green Paper on public health, both of which build on the considerable achievements of the previous Administration, means that the debate is timely.
The hon. Lady spoke about a range of inequalities in health care. I hope that she will understand when I say that I shall speak on only one—cancer care provision in the United Kingdom. Cancer remains our greatest medical problem. One in three people suffer from some form of cancer; one in four will die of it, and demographic changes mean that, by 2020, one person in two will get some form of cancer.
It is essential for the Government to support the previous Government's recognition that cancer is one of the main challenges facing our health service. The previous Government commissioned a report on a strategic plan for cancer services. It was published in 1995 and became known as the Calman-Hine report. It is one of the best reports that I have read in the past 20 years. It was practical and focused, and it has already led to considerable achievements in the provision of cancer care. However, there is still much to do.
The aim of the Calman-Hine report was to ensure that all patients
"received a consistently high level of service regardless of where they lived."
It highlighted
"variations in recorded outcomes of treatment"
and advocated that
"all patients should have access to a uniformly high quality of care in the community or hospital".
Much work was carried out under the previous Administration to make that strategic plan a reality, but much remains to be done. I urge the Government to take the opportunity that is presented by the Green Paper on public health to make fair and equal access to specialist, high-quality cancer care their priority.
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Perhaps I may be allowed a short commercial. For some years, I have worked with the Cancer Macmillan Fund, which is a superbly run charity. It does not waste money, but does what it is meant to do, which is to help people. It does that in a number of ways, one of which is by working with the NHS and with Government. It does not spend its time complaining but gets on with the job. My commercial is that those who are thinking of giving money to charity should put the Cancer Macmillan Fund on their list.
That charity has made it clear to me that there are significant variations in the availability and quality of services—the so-called cancer lottery. I congratulate the charity on its work with the NHS, which has benefited many patients. Much of its pump-priming work will be known to the House. It is the only charity that works with the NHS and others to provide cancer patients with expert nursing and medical care. It also provides a service that is often lacking in the NHS because it offers emotional and practical support from the point of diagnosis onwards, so that patients and their families may continue with productive working lives.
There are many examples of health care inequalities in tackling cancer, but I shall give just a few, because I know that other hon. Members wish to speak. Fewer than 50 per cent. of cancer patients are referred to a specialist for treatment, and only a fraction have access to clinical nurse specialists such as Macmillan. There is considerable evidence that some black and ethnic groups and older people are less well served than other members of the community. For instance, there is a low uptake among the Asian population for screening and palliative care, and there is a chronic shortage of information in languages other than English.
People in rural areas also have limited access to specialist services. I have not even touched on the widely differing arrangements for different types of cancer. For example, lung cancer patients often receive what is coyly called sub-optimal treatment whereas breast cancer patients rightly have a fast-track diagnosis.
One fundamental element links all those issues, and it is the lack of appropriate patient information on the types of services that are available, on the nature and course of the disease and, most importantly, what patients have the right to expect from those who are caring for them. Such information is not expensive to produce, but it is critical if we are to deal with what is already a scourge and will get even worse. Patients can demand better services only if they have access to the most basic information on their condition. Too often, that information is lacking.
The Government have made some welcome commitments in their recent White Paper and Green Paper, which I hope will end those forms of health inequality. However, fine words have to be supported by action and backed by resources. There is—to give one specific example—a considerable shortage of clinical and medical cancer specialists. The Government have given a pledge: to ensure that everyone with suspected cancer will be referred to a specialist within two weeks of their general practitioner recommending that course. That will be achieved only if action is taken now to recruit and train new postholders—otherwise, it will not happen.

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I urge Ministers to seize this opportunity to work with the national health service and with voluntary organisations, such as Macmillan, to make Calman-Hine—one of the best reports of the past 20 years—a working reality.
10.10 am
Mr. Gareth R. Thomas: I congratulate my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on introducing this debate on health inequalities—an issue that Ministers in the previous Government completely failed to address properly. One of the most disappointing features of the debate following the Green Paper's launch by my right hon. Friend the Secretary of State for Health was the continuing inability of Opposition Front Benchers to recognise the clear links between ill health and poverty, ill health and unemployment, and ill health and poor housing.
The London Research Centre—one of many research bodies working in the subject—has published many excellent reports, which have consistently highlighted the link between ill health and deprivation. Mortality rates in London are consistently worse in areas of deprivation. In the most deprived inner-London boroughs, mortality rates are up to twice as high as in some outer-London boroughs.
Therefore, one of the most positive aspects of the recent Green Paper on public health is the Government's commitment to improving health for the worst-off in our society and to narrowing the obvious health gap. Other positive features of the Green Paper are explicit recognition of the link between childhood injuries and social deprivation; of higher mortality rates for coronary heart disease and cancer among men of working age in the bottom social classes; and of rising incidence of poor mental health, particularly among the socially disadvantaged.
It is frustrating that it has taken so long for Government health policy to address health inequalities. As far back as 1980, the Black report concluded:
"much of the evidence on social inequalities in health can be adequately understood in terms of specific features of the socio-economic environment."
We should not have had to wait until 1998 before the Black report's conclusions were listened to and acted upon.
The failure to acknowledge and address the socio-economic factors affecting health was the most serious omission of the 1992 document "The Health of the Nation". The document's only reference to those socio-economic factors was made in section F of the appendix, which mentioned
"variations in health status between different socio-economic groups".
Sadly, it went on to conclude:
"the reasons for these variations are by no means fully understood".
In cold light, such apparently wilful ignorance of the causes of health inequality is astounding. I do not believe that those who drafted "The Health of the Nation" simply did not know or understand the causes of health inequality. The previous Administration—who were responsible for great increases in poverty and inequality—simply did not dare to admit that growth in the numbers of those on low incomes might have wider social
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consequences. They chose instead to focus almost entirely on individuals' own behaviour, failing completely to own up to the consequences for the nation's health of economic policies that generated increasing poverty, poorer-quality housing and higher unemployment levels.
As the Green Paper clearly states, poverty and unemployment can result in problems in keeping the home warm, may inhibit healthier life styles and increase the likelihood of accidents. The Government's welfare-to-work programme to tackle unemployment by offering a new deal to young people, the long-term unemployed and lone parents will be crucial—with the introduction of a national minimum wage—in beginning to tackle immediately those two key causes of inequality: low incomes and lack of employment opportunities.
Establishment of the Prime Minister's social exclusion unit—focusing on the needs of those on low incomes, who face a combination of social problems—will generate welcome longer-term initiatives to tackle health inequalities.
In my constituency, my local authority is due to receive next year about £2.3 million under the capital receipts initiative—part of a national programme that will, over the next two years, provide almost £800 million to enable a much more ambitious programme of repairs and improvements to our housing stock than would have been possible had the previous Administration's plans been continued. The measures will help tenants in social housing—who are usually the least well-off and most vulnerable to ill health—to be able to live in healthier domestic environments, free from the twin spectres of damp and overcrowding that not only damage our lungs and our respiratory system but increase the likelihood of accidents, sleeplessness and the spread of infections.
Increased energy efficiency programmes will be deliverable by the Energy Saving Trust now that the threat of a £5.5 million funding cut has been lifted by the Deputy Prime Minister and the Chancellor has cut value added tax on energy saving materials. Those programmes and the resources provided under the capital receipts initiative will be crucial in tackling the health problems of the least well-off that are caused by living in cold homes.
The Government have begun the task of confronting the inequalities in income, housing and job opportunities that are also the causes of major health inequalities. We have to ensure that international, national, regional and local partnerships for health improvement are developed by all key stakeholders. Such partnerships must be sustained and rigorously monitored to ensure that they are appropriately targeted and successful in narrowing—and eventually eliminating—health inequalities.
The success in Europe of my hon. Friend the Minister for Public Health in securing European Union agreement on ending tobacco advertising and sponsorship is one positive example of international action to reduce the greater incidence of smoking in low-income families. If our targets are to be achieved, it is essential also that effective work across Departments—which has already started, as the Green Paper demonstrates—continues.
Focused and co-ordinated policies in delivering long-term reductions in health inequalities will be crucial also at a regional and particularly at a local level. I look forward to a London regional development agency and a Greater London strategic authority focusing on health inequalities across the London region.

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Too often, public health has been the cinderella service for health authorities, to the chagrin of many of the staff working in those authorities. Public health has not been singled out for development and has often been the first service to be targeted for service cuts. I welcome the important development of primary care groups, which will rightly shift health authorities' thinking to focus much more on improving health and away from concentrating on episodes of illness.
I look forward to my own Brent and Harrow health authority developing—in tandem with the council, local voluntary groups and other statutory bodies—a health improvement programme to help achieve the Green Paper's national targets and to tackle local priorities. Health action zones are a particularly welcome initiative in the Green Paper to focus investment and to generate impetus in tackling health inequalities in areas of considerable deprivation. The zones must generate long-term and sustainable strategies to confront those health inequalities.
Despite my constituency's relatively wealthy image, it has some significant pockets of poverty and poorer health. Just as Harrow will benefit from the health authority's—I hope successful—bid for a Brent health action zone, so we must ensure that best practice in the health action zones that are established is quickly identified and disseminated to all health authorities.
The most effective initiatives to date in tackling health inequalities have been born out of partnerships between a range of agencies and groups of local people. As my hon. Friend the Member for Stoke-on-Trent, North recognised, new duties on local authorities and NHS bodies to work together to promote well-being in their areas will help to deepen and cement the effective local joint working which is crucial to the success of the Green Paper.
The desire to improve health must also be at the core of regeneration initiatives in our inner-city areas and on rundown estates and part of the Government's wider drive to make urban areas more attractive and healthier neighbourhoods in which to live.
An integrated transport policy—for example, the provision of safe cycling and walking routes—will help to ensure better air quality, improve levels of fitness and lead to fewer accidents in areas of deprivation. In many such areas, banks and shopping facilities have been withdrawn, making access to the cheapest and most nutritious foods difficult. Credit unions, food co-operatives and local exchange trading systems all have a role to play in improving access to a range of services that tackle inequalities.
As regional development agencies work to increase investment, I hope that they will focus specifically on areas of high deprivation and will have a strong public health dimension to their work.
Measures to make sport and physical activity in general more accessible are essential components of a healthy environment, whether at school, in the workplace or in the wider community. Research by the English Sports Council clearly shows the link between unemployment and a sedentary life style. I share the concern of my hon. Friend the Member for Stoke-on-Trent, North about the
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lack of decent sports facilities in many areas. In my constituency, a number of key communities are a considerable distance from proper sports facilities, and this problem needs to be tackled.
I congratulate some of our major sporting governing bodies, such as the Rugby Football Union and the English Sports Council, on targeting some of their development work on areas of great deprivation. I hope that the White Paper, when it appears after the consultation period, will encourage increased partnerships between sporting clubs and their communities to tackle health inequalities. The decision to stop the sale of school playing fields is a crucial step in the development of healthier schools, where pupils take regular exercise and are encouraged to participate in sports.
I especially welcome the proposal for a network of healthy living centres, funded by £300 million from the lottery, to complement the drive to focus statutory bodies on the health of their communities. Healthy living centres will be an important boost in tackling health inequalities in areas of deprivation. They will enable local communities to have access to a range of health-related programmes appropriate to local needs in areas where, perhaps, existing health and fitness facilities are either off-putting or, as in my constituency, difficult to get to.
At last we have a Government who are focusing on the key link between inequality of income and inequality of health. The nonsensical idea that poverty and poor health were not related has at last, thank goodness, been discredited and discarded. Using the tools in the Green Paper, I look forward to working with the Government, the new Greater London authority, and, especially, stakeholders in my constituency to tackle health inequalities in Harrow.
10.22 am
Dr. Peter Brand: I congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley) on her wide-ranging and comprehensive introduction to this important debate. She clearly showed that there is inequality in health, and I think that every hon. Member could have made a similar speech, perhaps using different examples.
The problem is that we have no longer a national health service but a fragmented one. What one can expect depends not on one's clinical need but on where one lives—it is a lottery by postcode. We need the Government to declare what they will deliver to users of the health service and what people's core entitlements are. If we cannot deliver a comprehensive entitlement, let us be honest about it. It is wrong to leave it to clinicians to cover up for politicians who are not prepared either to raise the money or to suppress the expectations of the people who rely on the health service.
Mention has been made of the allocation of resources. We can make wonderful speeches about what we are trying to achieve, but without resources we cannot do anything. We need to look again at how resources are allocated. RAWP, the resource allocation working party, went a long way, but it was very insensitive. We must have a system that considers not only patients' profiles—including age, incidence of illness and social and economic deprivation, which are important factors in determining the input of resources to a particular area—but the cost of delivering care.

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It is more expensive to deliver comprehensive core services in an isolated area. I know that the Government are examining rurality as one aspect of this problem, but I make a special plea for those who experience a unique aspect of isolation—those who live in island communities in England. Such communities in Scotland are recognised as having a greater need, and I hope that there will be a similar recognition south of the border.
The hon. Member for Stoke-on-Trent, North made a very good case for partnership and the encouragement of partnership. I welcome the health action zones that the Government have introduced as pilot projects. I hope that they will be bold and choose a wide range of pilots. It is sad that they are restricting themselves to 10 to 12, and I hope that they will have a rethink.
We are getting messages telling us that we may or may not be successful in respect of the pilot projects, but I hope that the Government will encourage local enthusiasm where it exists, because enthusiastic people tend to deliver, no matter what the resources. If one thing has kept the NHS going in spite of all our concerns, it is the commitment of the people working in it. It is for the politicians to encourage that commitment, and a wider acceptance of health action zone bids will go some way to fostering that.
10.26 am
Mr. Patrick Nicholls: I too congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley), not only on securing the debate, but on introducing it in the way she did. As is clear even from this debate, we might have different views and different suggestions as to how to tackle the problems, but there is no doubt that there are inequalities in health provision.
The hon. Lady drew on her constituency experience as a starting point, but the figures for her constituency also tell a wider tale. She referred us to the public health common data and the standardised mortality ratios. They show that Stoke is below the national average only in cerebro-vascular disease. That is bad news: I am not saying that Stoke is a terrible place to live, any more than she did, but it clearly concerns her.
However, the picture is mixed, because the same figures show that Stoke is below the national average when it comes to infant mortality rates, with about 5.5 deaths per 1,000 live births compared to 6.1 per 1,000 in England as a whole. That brings us to the "gap" about which we have heard so much today.
In 1995, the age-standardised death rate per 100,000 of the population in Stoke-on-Trent was 860, compared with 1,056 in 1985. Both those figures for Stoke were higher than the averages for England in those years, which were 748 and 894 respectively. Interestingly, if one compares the average rates in 1985–87 with those for 1993–94, one finds that, in percentage terms, the reduction has been greater in Stoke than nationally. One could ask, "Is my glass half full or half empty?" I accept that one could say that there was more room for improvement in Stoke, so the decline would be greater. That is a perfectly fair point, which needs to be made.
If the health gaps between social classes widened in the 1980s, that must be seen in the context of a declining mortality rate for all classes. For men aged
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35 to 64, age-standardised death rates fell by 32 per cent. for classes one and two between 1976–81 and 1986–92. The highest fall—44 per cent.—was experienced by socio-economic group three, whereas there was a 21 per cent. fall for groups four and five.
The hon. Member for Stoke-on-Trent, North reminded us that we all use statistics to back our particular cases, but I mention those figures because they show how careful one must be in using the gap as a measure of success or failure. I suspected that the hon. Lady—I hope that she will take this as a compliment—was going to make more of the gap, as the hon. Member for Harrow, West (Mr. Thomas) did, but she was right not to.
The gap is a relevant fact and indicator, but what matters more is the absolute standard of treatment that the poorest and most disadvantaged members of society receive. We could, for example, imagine a situation in which the gap had narrowed even though the absolute position of the poor had worsened. No one would regard that as a measure of success. It is too simplistic to argue—as people often do—that the continuing gap between the rich and poor must mean that the situation is worsening. I compliment the hon. Member for Stoke-on-Trent, North on not overplaying that argument.
In the debate, there has been more than a hint of the great cry,
"Four legs good, two legs bad".
It was suggested that everything that happened under the previous Administration was bad, whereas everything that will happen under this Administration will be good, and that the previous Government allocated insufficient resources, whereas things will be much better now. I do not think that the figures substantiate that argument.
Ms Walley: I made it clear that the setting up of the health action areas has made a significant difference. I want us to address the current situation.
Mr. Nicholls: I am sure that the hon. Lady is absolutely right in that, but it is not the case that, when the new Government took office, they found that the previous Government had applied manifestly inadequate resources. I shall not blind the House with statistics, but the previous Government spent some £80,000 every minute on the national health service. One can always cry, "Even more should have been spent," but that was a substantial sum.
The third progress report on the "Health of the Nation" project, which was published in July 1996, showed that progress had been made on 18 of the 21 targets. The death rate from coronary heart disease for those under 65 had fallen by 19.2 per cent. and by 12.5 per cent. for those between 65 and 74. The death rate from breast cancer in women aged 50 to 69 had fallen by 9.6 per cent. The death rate from strokes among those aged between 65 and 74 had fallen by 14.3 per cent., and the death rate from lung cancer among men aged under 75 had fallen by 13.9 per cent.
We are debating this subject against a background of substantial improvement in the nation's health. As the hon. Member for Stoke-on-Trent, North said, we do no good by saying that the position is worse than it is.

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Numerous studies have made the connection between poverty and ill health. The hon. Member for Harrow, West seemed to take the view that the wicked old Tories had always said that there was no such link. I am not trying to avoid a good argument—I am always in favour of one if necessary—but the hon. Gentleman is wrong. People sometimes advance the view that the cause of ill health is poverty, and that ill health will disappear at a stroke if poverty is abolished. That is an attractive view, but numerous studies show that it is not so.
The Minister may mention—or we may hear about them in the continuing debate—the various reports that are cited as evidence that poverty causes ill health. Sir Douglas Black's report is the most famous; it is often cited as showing the linkage beyond doubt. However, the Black report said that the argument is much more subtle and complicated. For example, it found that health inequalities related not so much to poverty as to the way in which different parts of the population used health services. It suggested that the lower occupational classes made greater use of general practitioner services, but that their use of preventive health care was markedly lower than that of higher occupational classes. That argument was confirmed in a study by the King's Fund in 1995.
There are other factors that are not directly related to poverty. The Policy Studies Institute report on aspects of health inequality, which received some publicity, argued that the differences between ethnic groups and between ethnic groups and whites could not be explained by the disadvantage that was experienced in the country of birth; those who were born in Britain or migrated at early age were, if anything, likely to have less good health.
The report also emphasised the significant variations within specific ethnic groups, and said that a key factor appeared to be socio-economic status. Nevertheless, it said that it was unlikely that that was the only cause; if it were, it would be hard to explain why ill health in one group was demonstrated through increased risk of hypertension, whereas in another group it manifested itself in heart disease. The report also suggested that biology and culture, with other factors such as the knowledge and experience of racism, might also be relevant.
I make those points not to muddy the waters; I want to clarify the arguments. The link exists, but it is more complicated than has been suggested. People may be poor because they are in ill health, and there are a range of other factors, including environmental and genetic.
We should also consider life styles. We now know that smoking wreaks devastation on the population's health. No one—whether rich, middling or poor—much above the age of 10 does not realise that smoking is harmful.
Mr. Gareth R. Thomas: The example of smoking is particularly apposite. Does the hon. Gentleman recognise that the incidence of smoking is greater among low-income families than among high-income families? Does not that demonstrate the need to tackle inequalities of income as well as the other inequalities to which he has referred?
Mr. Nicholls: The hon. Gentleman is mistaken; one cannot say that poverty drives people to smoke. We have
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to accept that, ultimately, people are responsible for their health. Some people use poverty as an excuse and ignore what is in their best interests. One cannot say that people who are poor or on low incomes are entitled to turn away their faces from the damage caused by smoking.
Smoking, whether one has a high, middle or low income, is devastating. I give the Government full credit for the fact that they have made that abundantly clear, and done a great deal to publicise the damage that smoking does. I believe that a forthcoming White Paper will make the same point.
Whatever we may have had to say in the past—it may be relevant to say it again in the future—about the fact that sometimes, even in taking forward a good policy, one can unexpectedly strike an uncertain note, the fact is that the Government have made it clear where they stand on smoking, and that is a jolly good thing.
I want to leave sufficient time for the Minister for Public Health to respond, but first I shall comment on a note that I detected, more in the speech by the hon. Member for Harrow, West than in that by the hon. Member for Stoke-on-Trent, North—perhaps because, like me, the hon. Lady has been in the House long enough for a certain cynicism to sink in—to the effect that, somehow, everything will now be sweetness and light.
I do not necessarily see that. Yes, some things in the Green Paper on public health were worth while, but the targets were cut from more than 20 to four. So far as one can compare them—that is not easy, and it probably was not intended to be—the four targets are less exacting than those in "The Health of the Nation".
The Minister will correct me if she thinks that I have it wrong, but I see nothing in the Green Paper that deals with inequalities in health in particular. Obviously, that is the dimension of the national health service that we are talking about today.
I am not the only one who says that. Let us look at the reception that the left-of-centre press gave the Green Paper. We now have four targets, none of which seems to address health inequalities specifically. That aspect has been criticised by both health groups and journalists.
The Financial Times said:
"ministers have dropped plans for targets to cut the health gap between the social classes. Karen Caines, director of the Institute of Health Service Management said: 'on this most crucial issue of health inequality they have bottled out. Without measurable targets, even over a long time-scale, there will be less pressure for change and less scope to hold them to account.'"
There was a leader in The Guardian, too. On the whole, Guardian leaders do not give comfort to Conservative spokesmen—[Interruption.] I suspect that that intervention was good enough to put on the record, but I did not hear it.
Mr. David Jamieson: We have not found them helpful, either.
Mr. Nicholls: It is always nice to enable a Whip to record something for posterity. Let me assure the hon. Gentleman that he will not find what I am about to read helpful, either, but he may find it true.

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The Guardian leader said:
"The Government is wrong to shrink the number of targets from 27 to four … Most serious of all is the absence of targets for reducing health inequalities. Anti poverty campaigners must insist on their inclusion. There must be a specific commitment to close the gap".
There is more from the Health Service Journal in the same vein:
"King's Fund chief executive Julia Neuberger said, '… we do have to measure progress in reducing inequalities, otherwise there is a danger that no one will take responsibility and be held to account'".
I could read out more of the same sort of thing.
I must say in passing that the wholesale closure of hospital facilities in London, although the Labour party said a little while before the election that it had no plans—[Interruption.] I shall go through it all if hon. Members want. There is the closure of the accident and emergency department at Guy's and of the Greenwich district general hospital; there is the transfer of facilities from Queen Charlotte's hospital to Hammersmith hospital, and many other similar developments throughout London. It is all about hospital closures and the reduction of facilities in areas of high social deprivation.
It is not only Conservatives who are entitled to raise doubts about the idea that nothing was done under the previous Government and nothing like enough was spent, yet that, under the present Government, everything will be different. The left-wing press is expressing the same doubts.
The argument is not as easy as it may seem. Inequalities in health must be addressed, but as for the idea that simply by a change in Government one can produce a brave new dawn in which complex problems become simple, I do not believe it. But I shall wait and see what the Minister has to say.
10.43 am
The Minister for Public Health (Ms Tessa Jowell): I begin by adding to the congratulations offered to my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on prompting the debate and providing an opportunity for one of the best debates on the issue that we have had for some time. We are grateful to my hon. Friend for that, and for the way in which she has raised issues of such direct concern to her constituents.
I shall deal first with some of the general issues arising from the Green Paper on public health and the response to it. It has two broad aims. One is to increase the length of healthy life, and the second is to close the health gap. For the first time in 18 years, there is the recognition that inequalities in health linked to social class have got worse.
For example, if, between 1991 and 1993, all men had had the same death rate as those in social classes I and II, there would have been more than 17,000 fewer deaths each year. Children born today into social class V are five times more likely to be killed in an accident before they are 15 than children born into social class I. The litany of evidence in support of the existence of health inequality goes on.
We should not take a simplistic view of health inequality, but we must start by recognising that it exists. The poorer people are, the more likely they are to be ill. For example, people in social class IV or V are more likely to face every illness—except, I think, melanoma—than people in social class I or II.
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The case for the existence of health inequality—the link between poverty and ill health—is clear, but the story is not as simple as that. That is why the Green Paper does not take a simple deterministic view of ill health and poverty, but recognises the important role of confronting poverty as a way of improving health.
We also draw attention to the inequalities between different ethnic groups and between regions. The rate of heart disease is three times lower for men in Oxfordshire than for men in Manchester. We need to take such regional inequalities as seriously as other manifestations of inequality, including inequalities between men and women.
When we talk about tackling health inequality, we are talking about tackling the reasons that divide us as individuals in our enjoyment of good health, and about recognising the many factors that are brought to bear. Some of those are determined early in our lives and others later, and they result in a differential expectation of good health between men and women, and between people from different social classes and ethnic backgrounds. The expectation even varies according to where people live.
The inheritance is complicated, and things were not helped by the previous Government's refusal to recognise the link between poverty and ill health, and to confront the complex nature of inequality. The targets that we have set to meet our two overriding aims of improving healthy life expectancy and tackling the health gap aim to yield two results.
The first is a reduction in avoidable deaths. More than half the people who die under the age of 65 die from cancers or from circulatory disease, including heart disease or stroke. If we are to make an impact in reducing preventable death, we have to concentrate our efforts on those areas which represent the greatest risk.
It is important to recognise the need to establish a proper balance between nationally determined targets and those that measure specific problems in relation to particular local needs. It is not true to say that we have refused to set inequality targets. The better informed commentators—the leader in the British Medical Journal, Professor Julian Le Grande and others—have made that absolutely clear. They have endorsed the Government's approach in reducing the number of targets, and linking targets to a clear strategy for action.
Setting national targets for inequality is a complex and inexact science, which is why the Government have commissioned Sir Donald Acheson to review the evidence relating to inequality and to provide guidance on the areas of Government policy where action to reduce health inequality which impacts on other aspects of policy is likely to be most productive. In that respect, as in all other aspects of our health policy, we are pursuing a common approach, which is to apply what works, based on the best available evidence. Through consultation, and in the light of Sir Donald's conclusions, we shall reach a judgment as to whether or not to set national inequality targets; but we shall urge local health authorities to set inequality targets in the context of health improvement programmes.
We are determined to deliver a strategy, and it is one of the toughest challenges facing the Government. As my hon. Friends the Members for Harrow, West (Mr. Thomas) and for Stoke-on-Trent, North made abundantly clear, delivering improvements in health, especially to the poorest, will rely on successful

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Government policy across a range of issues, including getting people off benefit and into work, improving educational standards and tackling environmental problems such as air pollution and congestion. Those are all vital ways of improving health and reducing avoidable death, as well as being policies for economic renewal and regeneration.
Cross-Government working and partnerships at local level will also be key, but we need to recognise that success in delivering the strategy will rely on effort in three broad areas. First, the Government must take the action that only the Government can take. Secondly, through health action zones, the single regeneration budget, education action zones and the range of regeneration initiatives and health improvement programmes, we must ensure a local fit to local circumstances when addressing local priorities.
Thirdly, we must all recognise that we bear a responsibility to ourselves and to our families for improving and safeguarding our health. Only if we secure properly balanced action in those three areas—Government action, local intervention and action and personal responsibility—will we begin to see progress in those areas where progress has been elusive thus far. That is the essential national contract for better health which sits at the heart of the Government's approach.
I shall now deal quickly with some of the important points made by my hon. Friend the Member for Stoke-on-Trent, North. With other hon. Members, she pointed out the extent of inequality whereby areas of poverty and poorer health can exist alongside areas of relative affluence. Her own constituency clearly illustrates that point.
The national average mortality from heart disease is 42 per 100,000 people, whereas it is 53 per 100,000 in North Staffordshire, and that picture is repeated when we look at other causes of premature death: death rates from stroke are worse than average, as are those from lung cancer; infant mortality is worse; and schizophrenia and suicide are more common. Those are only averages, which conceal pockets of deprivation and poor health in wards that suffer problems equal to the worst in the country.
I should also underline the evidence of great enthusiasm and resilience shown by voluntary organisations, the local authority and the local health authority in the face of that deprivation in my hon. Friend's constituency. I have read with great interest their recent bid for health action zone status and of their bid to the single regeneration budget, and their work with the World Health Organisation on the healthy cities initiative. All those initiatives, to which so much effort has been devoted, show that there is real spark and a commitment to get to grips with the problems facing her constituents.
I am sure that my hon. Friend will forgive me if, having given her every assurance about the careful consideration being given to the health action zone bids from her constituency and that of my hon. Friend the Member for Harrow, West, I do not make any announcements today about successful applicants. However, whether or not their bids are successful, all the 41 authorities that have bid for health action zone
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status should use the effort and partnerships developed for the bid as the foundation for continued progress in tackling health inequality.
I reiterate the concerns expressed by my hon. Friend the Member for Stoke-on-Trent, North about fertility services in North Staffordshire. I note that the health authority has been taking positive action to compare its expenditure on fertility services with that of other health authorities.
Although I am conscious that all health authorities need to balance local spending with local need, I would encourage my hon. Friend's local health authority to ensure that provision is in keeping with the level of service available elsewhere in the country. In passing, I pay tribute to the Staffordshire ambulance service: it is a beacon to other services, and another example of successful local endeavour.
Let me now deal with some of the other aspects of the broader relationship between the Government's approach to public health and the regeneration of the national health service. The Government view the White Paper "The new NHS: Modern—Dependable" and the Green Paper "Our Healthier Nation" as components in the plan to improve the health of the people of this country.
Let me restate the guiding framework, which was set out in our election manifesto and repeated in the NHS White Paper and within which treatment—whether for cancer or for any other condition—will be delivered to the people of this country:
"If you are ill or injured there will be a national health service there to help; and access to it will be based on need and need alone—not on your ability to pay, or on who your GP happens to be, or on where you live."
We are deeply concerned about inequalities in access to treatment, which is why the fair access dimension is one of the key performance measures for the new NHS. We are also concerned that areas whose residents are in greatest need of health care may not be getting their fair share of health care resources. We are determined to make every possible effort to ensure fairness in access and in treatment.
Mr. Sayeed: Will the Minister give way?
Ms Jowell: I hope that the hon. Gentleman will forgive me if I do not. We have almost run out of time, so I shall not take his intervention, other than to say that I accept his analysis that the cancer care framework set out in the Calman-Hine report provides a model for the development and delivery of health care services in other areas. The Government have made it clear through the development of service frameworks that we intend to build on that approach to provide an integration of prevention, health promotion, community care, primary care and acute care, available where it is needed and on the basis of need alone.
Let me finish by recalling the words of William Farr, the first Registrar-General, who said 150 years ago:
"Good health is as dear to the rich as it is to the poor."
We are determined to remove the many obstacles which stand in the way of the poor enjoying the good health to which they are entitled.

Strategic Defence Review
11 am
Mr. Keith Simpson: Mr. Deputy Speaker, I thank you and the House for the opportunity to have an Adjournment debate on this important subject. I applied for an Adjournment debate on the strategic defence review before Christmas, as I thought it unlikely that we would have an opportunity to have a major debate on it before it was published some time in the spring or summer. It is coincidental that the debate has been selected this week, against the background of the Iraq crisis. There is no conspiracy in the Speaker's Office; this also happens to be the week in which the Defence Committee visits Washington, but this is not a method by which we can debate defence in the absence of the distinguished members of the Select Committee.
This is an opportunity for hon. Members to question the Minister about the strategic defence review and for him to provide an interim report on where we are. There is a rumour that the Secretary of State for Defence, apart from official appearances in the House, is now in purdah and will no longer accept outside speaking engagements for fear of lifting the veil on the strategic defence review.
We last debated defence in the two-day defence debate in October. Since then, we have had a good Adjournment debate in November, introduced by the hon. Member for Chorley (Mr. Hoyle), on the defence industry. I compliment the hon. Gentleman on his assiduity and his great interest in defence. In December, we had an Adjournment debate, introduced by my right hon. and gallant Friend the Member for Haltemprice and Howden (Mr. Davis), on the important subject—given the Iraq crisis—of anti-missile defence.
It is usual at this time of the year, as more experienced hon. Members know, to have single-service defence debates. Perhaps at the end of the debate the Minister will confirm whether the Ministry of Defence intends to go ahead with the single-service debates, or whether we will have a further hiatus.
The strategic defence review is as much about continuity as change. One thing we should establish this morning is how much is continuity and how much is change and what that change means for the United Kingdom and for defence. I do not have to tell the House that defence is still important. I would like to believe that there is a consensus among the majority of hon. Members that the defence of the United Kingdom, our people and our interests is of paramount importance and cannot be taken lightly. It cannot be cut back, nor can the capability be given up lightly as we may be forced to readopt it in the event of a major crisis. Ultimately, the defence capability of our country is a war-fighting capability. The defence of our country gives us the political leverage that is important in the new world disorder in which we live.
The defence budget, of nearly £22 billion, is by no means the largest in Whitehall; it comes well below social services, health and education. I do not need to remind the House that the MOD has 210,000 regular service personnel and employs 109,000 civilians. It is UK industry's largest customer—11,000 UK companies have a defence interest. Defence affects virtually every Member of the UK Parliament. Some 10 per cent. of all UK industrial employment and 11 per cent. of all
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industrial output is connected with defence. Defence exports are probably worth in excess of £4 billion a year. It is a major earner for UK plc.
During the Prime Minister's statement to the House yesterday on the Iraq crisis, my right hon. Friend the Leader of the Opposition asked whether the Prime Minister agreed that the
"strategic defence review, which is now approaching completion, could not reasonably conclude that there is scope for reducing the defence budget?"
The Prime Minister replied:
"I have always thought and said that this country's defence forces are vital to our foreign policy and Britain's standing in the world. That is precisely why the strategic defence review will ensure that our armed forces have a secure and certain future."—[Official Report, 24 February 1998; Vol. 307, c. 177.]
On that, we would all agree, and that is the litmus test for the review. I sincerely hope that those words of the Prime Minister will not come back to haunt him in six months' time.
I want to take the Government at their word. They claim, not only on defence but across the board, that they are into greater openness and public accountability. The Government have continued, and indeed expanded, the policy of previous Conservative Secretaries of State by providing more information about defence. It is exceptionally good that the wide range of expertise in our universities and establishments of higher education on defence and security matters has been consulted. The defence industries have been brought in, as have non-governmental organisations, which have much to offer. The public have also been consulted. We can all agree on that and the Government have undertaken a major programme.
That is the easy bit. The hard bit is making decisions. How do we assess the progress of the Government's strategic defence review? How do we judge the strategic defence review when it is published? I suggest five tests. First, does it provide effective security and defence for the United Kingdom? Secondly, does it succeed in meeting the United Kingdom's national and international obligations? Thirdly, will our armed forces be organised, manned and equipped to meet those obligations? Fourthly, has the strategic defence review taken into account the twin revolutions in political and military affairs? Finally, will the financial resources be allocated to meet this remit? That final point is the crunch in terms of the strategic defence review.
There are two ironies connected with the Iraq crisis. One is a question of national identity, the other a question of defence direction and capability. Certain elements of the new Labour Government—the Minister does not fall into this category—have been keen to rebrand Britain as cool Britannia, whatever that means, yet there is a certain irony that the reality of sending a task force to the Gulf in the Iraq crisis has been more traditional and—without jingoism—more rule Britannia than cool Britannia.
Secondly, despite all the Government's allegations of how weak the defence capability was after 18 years of Conservative government, the reality is that the command and control system set up as a consequence of the experience of the Falklands and the Gulf war—the Cabinet, the MOD and the permanent joint headquarters—was established by the Conservatives. The remit to send a task force was established and tested by the Conservative Government, as were the doctrine, weapons, equipment, manpower and resources.

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Here is a great irony. If the Government think that our forces were in such an appalling state, how did they successfully command, control and organise a task force of the type that was sent to the Gulf, and which has made such an important contribution to maintaining international security? There is a certain bijou irony there.
Some observers might argue that fulfilling major deployments such as Bosnia and the Gulf while undertaking the strategic defence review places great strain on our services. Thirty years ago, another Labour Government were—surprise, surprise—carrying out one of their many defence reviews. Later, the then Secretary of State for Defence, now Lord Healey, observed the contradictory nature of simultaneously deploying and trying to review defence. Later he wrote:
"I did not think it made sense to carry out an appendix operation on a man while he was lifting a grand piano".
I suggest that many members of our armed forces feel just like that man or woman attempting to lift a grand piano.
In opposition, new Labour faced reality. It moved away from unilateralism and argued that there was a need for a strategic defence review that would stop the decline in Britain's defences. The Labour Opposition said that they would properly assess Britain's strategic priorities and that the process would be foreign policy led. Every question asked by hon. Members—Conservative and Liberal, at least—to ascertain more detail was met with what appeared to be the reasonable holding answer that Labour Members could not commit themselves until they had looked at the Ministry of Defence books.
Nevertheless, in the lead-up to the general election, the Labour Opposition felt able, without looking at the books, to commit themselves to maintaining our strategic nuclear deterrent and to honour the Conservative commitment to Eurofighter—a commitment, at that time, of about £16 billion. That blew a hole through the carefully constructed arguments for a strategic defence review. On what basis did the then Labour Opposition decide to maintain Trident and Eurofighter when the strategic defence review was supposed to be foreign policy led? Why did they not commit themselves to order Challenger tanks or purchase carriers? Where did the information come from that they said in other areas was so vital that they would have to wait until they had looked at the books?
Our military friends have a saying; a bad commander—for that read politician—does not appreciate the situation, he situates the appreciation. That is exactly what Labour did before the general election.
Let us move on from the flawed logic behind the strategic defence review and see how an assessment of British foreign policy could provide the driver for the strategic defence review.
The Minister for the Armed Forces (Dr. John Reid): Will the hon. Gentleman give way?
Mr. Simpson: I gladly give way to the Minister.
Dr. Reid: The hon. Gentleman has finally tempted me to the Dispatch Box with his phrase, "flawed logic". Will he explain why the Conservatives spent the period leading
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to the general election complaining, "You can't trust Labour; they won't keep Trident or the Eurofighter" and have spent the time since then complaining, "Labour can't be trusted because they are going to keep Trident and the Eurofighter"?
Mr. Simpson: I think the Minister should allow me to continue my point. He should not have allowed himself to be tempted.
If, in opposition, people argue a perfectly acceptable case—that they cannot commit themselves before looking at the books—and maintain that they will carry out a strategic defence review because they lack information, where does the information come from to cause them to say that they will keep Trident and Eurofighter but that they cannot commit themselves to other important areas? By making that declaration, they largely determined the outcome of the strategic defence review, which was supposed to be foreign policy led. I thank the Minister for his intervention.
I shall now examine the flawed logic behind the strategic defence review and see how an assessment of British foreign policy could provide the driver for it. We know, in general terms, from what the Foreign Secretary said when he launched his Foreign Office mission statement on 12 May 1997, that UK security will remain based on the North Atlantic Treaty Organisation and that the Government want to be an active member of the United Nations.
However, we still do not know the foreign policy baseline for the strategic defence review. Both the Foreign Secretary and Secretary of State for Defence have refused to publish it. Several times, the Secretary of State has replied to any question about the foreign policy baseline by saying, "Nudge nudge, wink wink, you will find bits of it in the defence debate in October 1997 and in some of the speeches that I have made to outside bodies."
Why the coyness? Why not publish the foreign policy baseline? This is open government. It is crucial that we establish what, if any, foreign policy commitments have changed and how they will impact on defence capabilities and—even more significant—resources. In default of a foreign policy baseline, Opposition Members—and I suspect that there is a nagging doubt among Labour Members—are forced to conclude that the Treasury is unwilling for the foreign policy baseline to be published before the tough negotiations that are about to start between it and the MOD. If the foreign policy baseline is not published here, on the official record, it can always be massaged to fit the budgetary restraints.
I challenge the Minister: prove me wrong. Stand up today and tell us what the foreign policy baseline is or give us a commitment. If he fails to do that, the strategic defence review is fatally flawed.
On 12 May 1997, the Foreign Secretary made great play of launching a Foreign Office mission statement, saying:
"Every modem business starts from a mission statement that sets clear objectives".
Quite so. This is now the requirement for most business and industry and, indeed, the military. By any definition, the Ministry of Defence is a very large modern business, worth £22 billion, so where is the Ministry of Defence mission statement?

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I asked the Secretary of State that question in June 1997. On 16 June 1997, the Minister for the Armed Forces replied:
"We intend to issue shortly revised aims and objectives for my Department in the form of a mission statement."—[Official Report, 16 June 1997; Vol. 296, c. 15.]
Since then, despite repeated requests by several hon. Members, there has been no MOD mission statement.
Ironically, 50 or 100 years ago, if someone had asked an old-fashioned and politically incorrect Minister, either Labour or Conservative—or, if we go back far enough, a Liberal—he would probably have said that the mission of the Ministry of Defence was killing the Queen's enemies. That is not so today; it is a politically incorrect statement. Therefore, as the MOD moves forward the complex process of the strategic defence review, it lacks, according to the Foreign Secretary, who is laying down the foreign policy baseline, those clear objectives so essential to any modern business—or perhaps they form part of that foreign policy baseline, which remains unavailable to parliamentary scrutiny.
My second challenge to the Minister this morning is, can he either tell us the Ministry of Defence mission statement or tell us a date in the near future when it will be published?
That logically brings me to the central issue of resources. Across the board in Whitehall, the Government face the dilemma of keeping their election pledge not to raise taxes while maintaining the Conservative Government's public expenditure plans for the first two years and at the same time delivering on Labour's priorities of education, health and employment. We know that, although the Prime Minister has pledged to maintain strong defences, the defence budget will remain static at best—and at worst it will probably be reduced.
A real strategic defence review, which genuinely examines our foreign policy, our capabilities, and our possible commitments—a real one, such as the Australians had—might broadly reflect Conservative foreign policy commitments, the need to be proactive in the United Nations and to undertake the wider requirements of defence diplomacy, the need to purchase new weapons and equipment that are required and the need at least to maintain the pay and conditions of service personnel. Such a review might conclude that the defence budget should be increased—but we know that that has been ruled out, so this is not an objective strategic defence review.
The political and financial realities confronting the Secretary of State for Defence are almost insoluble. First, his constituency, the parliamentary Labour party, backs defence cuts. In a survey of Labour Members published on 11 May 1997 in The Observer, a ratio of 6:1 favoured defence cuts; the ratio rose among the 1997 intake to 12:1. Not only are many Labour Members sceptical about the need to maintain the present defence budget, many of them believe that that budget provides a milch cow for education and health.
Secondly, despite Labour denials that the strategic defence review would not be Treasury led, the evidence proves the contrary. In October 1997, the Ministry of Defence was forced to make savings of £168 million after the Treasury claimed that there had been overspending and that the savings would help to avert a winter shortage of national health service beds.
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There is continual pressure—I know that the Minister is affected by it—from the Treasury to offload the cost of British peacekeeping operations in Bosnia from the contingency reserve on to the Defence vote. However, I suggest that the real financial squeeze will come from the Treasury's comprehensive spending review, which was announced in June last year and should be completed this summer. We know from the answer to a question asked in this place on 3 November 1997 that the strategic defence review is the Ministry of Defence's contribution to the comprehensive spending review. That review is tasking Departments to look for savings—it does not require them to come up with ideas for obtaining new money from the central reserve.
Thanks to the delay in completing the strategic defence review—I remind hon. Members that its publication was promised in December last year, but the completion date has now slipped and we expect it in the first half, perhaps May or June, of 1998—the Ministry of Defence's ideal solution of a quick bilateral deal with the Treasury appears to be receding into the distance. The strategic defence review is being dragged further and further into the orbit of the comprehensive spending review.
Whitehall rumours—who am I to gainsay them—have suggested that the Treasury is seeking long-term cuts of £2 billion, or 10 per cent. of the current budget, or even £4 billion, or 20 per cent. of the budget. If that is not bad enough, the MOD—like other Departments—will have to introduce resource accounting by the financial year 1999–2000.
Dr. Reid: The Tories introduced it.
Mr. Simpson: I assure any hon. Members who have not come across them that resource accounts will have a major impact on Government Departments. They will involve valuations of the MOD's assets, inflate the size of the MOD budget and make the MOD appear to other Departments even more of a Whitehall milch cow. The Ministry of Defence will be seen as a soft touch.
Mr. James Gray: Did my hon. Friend hear the seated intervention from the Minister a moment ago? In response to my hon. Friend's comments about resource accounting, the Minister said the Conservative Government introduced it. Does my hon. Friend agree that it sounds as though the Government are planning to abolish it?
Mr. Simpson: I thank my hon. Friend. I am not certain that the Government know what they are doing in this area. However, they intend to go ahead with resource accounting, which will have a major impact on the Ministry of Defence.
In the short term, the MOD budget will be under considerable strain and, in the medium term, it will be very vulnerable. That will seriously constrain the Secretary of State's strategy of paying for the MOD's one "big idea". A young officer who works at the Ministry of Defence told me recently that the staff are thinking about putting up a series of signs around the Ministry—rather like in "Alice's Adventures in Wonderland"—that will point to "The Big Idea". Ministers and their special advisers might find it one day—but it will be in the boiler room.

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The Ministry of Defence's one big idea—which is largely a product of MOD studies; it has nothing to do with Ministers—is an expeditionary force capability. There is a certain irony here because, if we had been sitting in the Chamber 90 years ago, we would have been discussing the formation of an expeditionary force capability under a Liberal Secretary of State for War, Richard Burdon Haldane. We have turned a full circle in 90 years.
Even if savings are found elsewhere in the MOD budget, an expeditionary force capability will require new weapons, equipment and information technology that will not be compensated by internal savings. Even if assumptions are made that our allies will provide many of those capabilities, the United Kingdom will still require a minimum stand-alone capability, which I do not at present envisage the Government's being able to fund.
Quite correctly, the Government have emphasised the quality of our armed forces personnel and the need to sustain their morale and that of their families. We all agree about that, but how do service personnel judge the strategic defence review? We know the answer to that question because a leaked Ministry of Defence report provides the damning evidence. At the end of last year, the MOD conducted a three-week assessment of 1,500 personnel from all three services at 14 different establishments, covering all ranks from private to two-star general. In a damning phrase, the strategic defence review liaison team assessors found almost unanimous suspicion that the review is a
"cost-cutting exercise dressed up in policy rhetoric".
In the spirit of openness, I ask the Minister whether he will place that report, and any other studies of service morale that he has commissioned, in the Library.
Furthermore, as the publication of the strategic defence review has slipped and slipped, many service personnel and local communities have experienced a great period of unease about their future. In my constituency, the 9th/12th Lancers—an armoured regiment based at Swanton Morley that is currently deployed in Bosnia—are concerned about their future. My constituents at Coltishall and the surrounding villages are concerned about press reports regarding the future of the Jaguar force at RAF Coltishall based in the constituency of my hon. Friend the Member for North Norfolk (Mr. Prior).
Despite all the promises and good intentions of Ministers, we are forced to conclude that the strategic defence review lacks a purpose. To paraphrase Winston Churchill, this strategic defence review lacks a theme. We are unable to determine the foreign policy baseline that is supposed to form the basis of the MOD's defence review. Ministers have been unable to produce a departmental mission statement with a clarity of purpose. The defence budget is vulnerable to pressure both from within the parliamentary Labour party and from the Government's own comprehensive spending review—and that is reflected in the mood of our service personnel. Sadly, the strategic defence review will probably come up with a requirement to do even more with even less.
Finally, I remind the House of the five tests by which I believe hon. Members should judge the strategic defence review when it is published: does it provide effective security and defence for the United Kingdom; does it
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succeed in meeting the United Kingdom's national and international obligations; will our armed forces be organised, manned and equipped to meet those obligations; has the strategic defence review taken into account the twin revolutions in political and military affairs; and will the financial resources be allocated to meet that remit?
11.26 am
Mr. John Wilkinson: We are extremely indebted to my hon. Friend the Member for Mid-Norfolk (Mr. Simpson), who, in a wide-ranging speech, covered all the main areas of concern regarding the strategic defence review. I shall concentrate on two or three narrow issues.
I whole-heartedly welcome the strategic defence review: it will do the Ministry of Defence no harm to re-examine its fundamental practices. I also believe that it is worth while for the Ministry of Defence to make sure that it is operating cost-effectively at every stage. As for the principles which should underlie the review, I turn to the views enunciated by the former French chief of staff, General Ailleret, a few years ago. He enjoined France to embrace "défense à tous azimuts"—which I interpret to mean "multi-polar defence".
British defence has been largely Eurocentric since the beginning of the cold war—and understandably so. With the dissolution of the Warsaw pact and the multiplicity of risks and potential threats to our security and our interests around the world, that Eurocentric approach must change. We must also eliminate the old shibboleths which went with it. In a sense, those shibboleths were understandable and comprehensible.
Following world war two, we were committed to the Brussels treaty requirement to maintain a standing army of 55,000 men and a tactical air force in Germany. That requirement has been overtaken by events, and we now have only two main air bases and an armoured division in the federal republic. I urge Her Majesty's Government to re-examine our contribution in Germany. Our clear purpose should be to ensure that our armed forces possess mobility, flexibility and fire power to meet those wide-ranging threats and future potential commitments. I do not see that maintaining an armoured division and two air bases on German soil accords with those wider objectives.
The RAF is to withdraw its Harrier squadrons from RAF Laarbruch this year. I hope that they come back as soon as possible. The Tornado wing at RAF Brüggen is due to stay until 2002. For the life of me, I do not see why it cannot be returned to the United Kingdom forthwith. The headquarters has already gone back. We need to concentrate our forces in the most appropriate manner. It will be necessary to make space for those units and personnel in the United Kingdom, and this must be done.
The armoured division is a more difficult problem, especially as regards training areas, but increasingly the training facilities in Poland and Canada are being used. It is too high a price to pay for the maintenance of a three-star position as commander of the Allied Command Europe Rapid Reaction Corps that we should be committed for ever and aye to keeping an armoured division in Germany.
The French have withdrawn from the federal republic. The argument that we must be in the federal republic to maintain a United States commitment to western Europe

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does not stand up. There is defence in depth now in central Europe. Were Russia ever to become a military threat again, and the countries of eastern Europe joined NATO, we would have a collective security apparatus on the continent which did not require the maintenance of extremely costly British forces on German soil.
To pursue the three objectives of mobility, flexibility and fire power, I endorse also the efforts towards more joint operations. The idea of a joint helicopter support force seems entirely sensible. I can see no inhibition or fundamental problem. Likewise, the precedent has been well established and proved in the Gulf for joint Royal Air Force-Royal Navy air groups on Her Majesty's ships. This, too, is eminently sensible. I am sure that we will see more such developments in the defence review, and rightly so.
I hope that we will recognise the United Kingdom's special contribution to European defence in the maritime and air elements, and in air mobility and amphibiosity, rather more than in highly inflexible, static armoured forces. If there must be a balance, that is the way that we must go. It can only be good for the Royal Navy. I am pleased that HMS Ocean is shortly to enter service—an appropriate decision by the previous Conservative Administration to provide a landing platform for helicopters for Her Majesty's fleet.
Beyond that, we will need to replace the Invincible class. We have seen the benefits of maritime air power in the Gulf crisis. A force can be deployed relatively rapidly. It can be poised offshore. The political inhibitions to maritime air operations are minimal.
The difficult decision will be whether to replace the three Invincible class carriers with two 40,000-ton fleet carriers, or whether we go for smaller carriers of 20,000 tons or thereabouts. I would argue that it is better to have three smaller carriers than two big carriers. One will always be in refit, and we must be able to rotate the vessels, as we are doing now between Invincible and Illustrious, knowing that it is always possible to keep one on station.
I tend to favour the smaller carriers for the United Kingdom, but I question whether it will be necessary to have quite as many Horizon 2000 anti-aircraft frigates or destroyers as was previously envisaged. The best air defence of the fleet is, of course, the aircraft carrier. I imagine that the naval staff will examine closely whether Horizon 2000 makes as much sense now as it used to do in the days when the Soviet naval air arm and the Soviet air forces posed a real threat to the NATO navies in the north Atlantic.
As for the Royal Air Force and the need for power projection and the ability to intervene—whether to preserve peace, to fight wars, or to extricate our nationals or friendly nationals—central to this capability must be an integral heavy lift capacity, particularly if it will be necessary to deploy armoured forces rapidly. We need a spectrum of capabilities to meet every contingency.
If we were unable to provide the heavy lift, we would be dependent on the United States, whose political objectives and priorities might conceivably be different in some instances, and we would be too dependent on civil carriers. The C17 has all the characteristics required for the role—the ability to operate forward, the ability to be both a freighter and a troop transport, and more significantly, a tanker for air-to-air refuelling.
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I recognise that the Ministry will have difficult decisions to make about the nature of future air power. We have seen in the Gulf that air power is decisive not just to win wars, as was the case in the Gulf war, but to prevent war, by an early application of political pressure. Therefore, for the front line of the Royal Air Force to be cut at this time would be a step backwards. The Jaguars are extremely cost-effective until the Eurofighter comes into service. They are just undergoing an update at relatively low cost which will enable them to maintain an effective capability well into the next century.
A joint strike fighter will be needed. As the House knows, we have seen how the FRS2s of the Royal Navy and the GR7s of the Royal Air Force are working well together aboard Her Majesty's ships. If we had a joint strike fighter—essentially a common air frame—for both roles, it would be a sensible procurement. It could be beneficial for British industry not only because the Americans are buying it, but because a host of European allies are likely to buy it—perhaps the northern four, which have the F16, and possibly also the Italians, the Portuguese and other air forces.
Sir Geoffrey Johnson Smith: My hon. Friend knows a great deal about the Royal Air Force. Does he have in mind the American version of the joint strike fighter, in which British money has already been invested?
Mr. Wilkinson: That is indeed the aircraft which I have in mind. My right hon. Friend speaks wisely about the funding that the Ministry of Defence has already put in. British contractors could benefit considerably from the programme.
I offer two concluding thoughts, as I promised to be brief. The first is the importance of sustainability, for which reserve forces are crucial. The Government must not make the mistake of allowing the reserves to be cut further as a consequence of the review. The reverse should be the case.
If regular manpower must be drawn down, we must use reserve manpower much more. That makes sense if we are using our own resources as a community in the most cost-effective way. It makes sense if we no longer have to deploy so many people to Germany. With the legislation now in place, it is a great step forward that the various categories of reservists, not least the reserves who operate as contractors for companies already working for the Ministry of Defence, can be subject to military discipline. I hope that the Government will take advantage of it.
Finally, we should not forget the importance of the control of space for future military operations, both for reconnaissance and signals intelligence, and for ensuring the defence of these islands against potential ballistic missile attack. We will have to intensify our efforts to provide a ballistic missile defence system for this country and for our allies on the continent, and I hope that efforts in this direction will not be nullified as a consequence of the review.
11.40 am
Mr. Lindsay Hoyle: I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on securing the debate. It is important that defence is discussed in

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the House. The debate has presented us with an ideal opportunity to discuss many of the issues about which we all have questions. I am pleased that my right hon. Friend the Secretary of State is with us.
I am worried slightly about the hon. Member for Mid-Norfolk, whose knowledge about defence matters is second to none in the House. The hon. Gentleman goes on about defence reviews and expresses views on virtues and values along with other points of view on all matters of defence. The problem is that the hon. Gentleman did that also for the previous Government.
We are having to have a strategic defence review because of that Government's mistakes, and that is the problem. Major mistakes were made and they must be rectified. It is no use pretending that the hon. Gentleman was not involved when those mistakes were made. Certain Members were involved then; we are all involved now for the future. That is why we all wish to ensure that the strategic defence review works, and ensures that we have the right forces with the right capability to take us through the next 30 years. That is what we are talking about.
We must get things right because we cannot afford to make any more mistakes. I think that we can all agree that mistakes were made previously and that they were Treasury led. This time, we want the review to be led by the defence team. Smart procurement by a smart defence team will leave us with a smart defence force that is capable of moving around the world to ensure that a peace capability is implemented. That is why we are all here and that is what we all wish to see.
The previous Government lost out. There was no confidence on the part of the forces or among the defence industries. That is why so many Conservative Members lost their seats at the general election. As I said, we must ensure that we get things right this time.
As for the Eurofighter, the House was rightly united on what we believe will be the right aircraft for the Royal Air Force. [Interruption.] That is right. The initial decision was taken by the Conservatives and then they fudged it. The final decision was left to the Labour Government. We had to show commitment and place the orders with British Aerospace.
We all watched the "Panorama" programme. It was tragic to see ex-Members, who were members of the previous Government, questioning whether the right decision had been made or whether money had been wasted. I thought that the programme was obscene and scandalous. It did not fairly reflect the merits of an aircraft that we believe will be right.
Dr. Julian Lewis: The hon. Gentleman says that many Conservative candidates lost their seats at the election because of mistakes made in defence. Only on a few issues did the polls show the Conservatives to be leading Labour in the run-up to the general election. Well, there was just one issue, and that was defence.
Mr. Hoyle: I remind the hon. Gentleman of my constituency, Chorley, and of South Ribble and the Portsmouth and Blackpool seats. How many more constituencies does the hon. Gentleman want to be reminded of? It is easy to have a memory of convenience, but let us have a memory of fact in future.
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I shall move on to talk about aircraft carriers. I do not believe that it would be right to have 20,000-ton vessels. They should be of 40,000 tons plus, because such vessels will present us with greater options. The issue involves options and costs. I see the re-emergence of the Royal Navy and the corps—the Royal Marines and the Royal Navy together will be the spearhead of any defence capability. I want to see vessels that are capable of taking a fixed-wing, one-strike aircraft. What better aircraft would be available than the Eurofighter? Let us have a Fleet Air Arm version of the Eurofighter, and let us ensure that we get the right carrier for the future.
We are talking of a mass in the form of an aircraft carrier that sits, as it were, near trouble spots. The carrier can sit beyond the horizon. We are not talking about aircraft that fly out and must return to a land base; the carrier can sit near the trouble spot. There are despots around the world and we must ensure that we have the right capability.
As for Iraq, we have deployed one carrier. What better solution would there be than to have a larger carrier to ensure that we have the right back-up with aeroplanes of the right capability. Those who voted for the Government on the Iraq issue can feel that they played their part in securing the peace that may emerge. That outcome did not derive from talks alone. The threat of defence that backed up the talks ensured peace for the time being. We do not know how long that peace will last, but those Members who supported the Government will be able to hold up their heads with pride at the end of the day. That is important.
The strategic defence review will be all-embracing. I have already touched on aircraft carriers, the Navy's ships generally and the re-emergence of the Royal Navy. There has been talk of HMS Ocean, and I accept that it is the result of a decision made by the previous Government. I am pleased that I shall be seeing HMS Ocean when it is commissioned. I am pleased to be with the Royal Marines, who have a major part to play. They have been on an exercise in Norway that was bigger than those held in previous years. That proves that the Government are willing to invest in the right troops—the right people generally—to ensure that a strong capability will continue.
We must consider British defence needs and United Kingdom manufacture. The C 17 is a wonderful aircraft that is capable of specific actions where needed. However, it does not have a true capability, and that is the difficulty. A future large aircraft really can provide the options required by UK defence needs. The FLA is a variant aircraft—it can be a tanker and it can take and lift everything except the battle tank. We know, of course, that we need a mixed fleet of aircraft. I believe that the FLA can back up what is already in place.
I should like to see us investing in UK defence, thereby creating UK jobs and ensuring that UK technology, which will be delivered in the form of defence contracts, will be transferred to the civil sector. Defence is extremely important and we cannot introduce advanced technology into the civil sector unless we have a strong defence manufacturing base. I believe that we can retain that capability, and that is why British Aerospace is important, along with Royal Ordnance plc, Vickers and many other companies that can still build aircraft, arms and ships.

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Our shipbuilding capability was virtually lost when the previous Government were in office. I believe, however, that we can rebuild that capability.
We are present in the Chamber because we believe in strong defence. I did not think it fair to take potshots at the Government, who are ensuring that they can rectify the mistakes made by the previous Government. That is why I am proud to speak in this debate.
11.46 am
Mr. Alan Clark: In a safe at the Ministry of Defence there will probably be found a copy of the first defence review of the past decade, which I wrote. Without wishing to emulate my right hon. Friend the Member for Henley (Mr. Heseltine), who takes every opportunity to claim authorship for, and enthusiasm concerning, the millennium dome, I wish to tell the House that, were I to place a copy of my review in the Library—which I probably could do because I do not think it is classified, as I wrote it—it would be shown that all the conclusions set out in it have been validated by what has happened since.
Seven years ago, I based the review on three assumptions. The first was that the cold war was over and that our defence policy need no longer be, to use the expression of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), Eurocentric. There is no longer any direct threat to the security of these islands and to the people who dwell therein. Secondly, the world remains a dangerous, deceitful and disagreeable environment in which nothing can be predicted with certainty. Thirdly, if the United Kingdom is to assert its influence and strength and reinforce its foreign policy, its strategy must be maritime.
There will be many hon. Members who are not present this morning, especially Labour Members, who will ask, "Why should the United Kingdom bother any longer? Its security is no longer threatened. We are a nation of only about 50 million people. We have perpetual constraints and bothers with our public spending. Surely this is a sector that we can abandon."
That would be an extremely dangerous decision, and one difficult to reverse. It would involve the final derogation of the United Kingdom from its role as a member of the United Nations Security Council. The UK would no longer be able to justify its seat in the G7 and on other international bodies that determine what will happen in an increasingly close and interdependent world. There would be certain circumstances—one cannot predict what they are—when United Kingdom citizens would be at the mercy of despots, just as we as a nation would be at the mercy of the super-powers in policy decisions. Our input into what is happening—so well illustrated by the way in which the Prime Minister and the present Government instantaneously reacted and deployed strength in the recent crisis—will no longer be feasible.
I fully accept that there are colossal budget restraints on the Department—my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) illustrated these and reinforced them with excerpts from the rumour mill in Whitehall. If the Department is to have a serious shot at attaining the change in emphasis that is necessary for the United Kingdom to sustain its international position over the next 20 or 30 years into the millennium, there will have to be a drastic shift in resources in service allocations. We will
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have to revert to the pattern of 100 years ago, when the Army was little more than a colonial gendarmerie, and our security and instrument of foreign policy was the Royal Navy. There will be immense resistance to this in the Department, as the Minister has probably already experienced. For far too long, soldiers had too prominent a say in what happened and in the decisions that were taken by the Ministry of Defence. The need to deploy and maintain a large force of infantry and armour on the continent of Europe was a hangover from the second world war, and it continued into the cold war. That is no longer the case. We can reduce to a small, elite force.
We listen with interest to the rumours about the air cavalry and to those about subsuming the Parachute Regiment into this new force. I spoke earlier about soldiers and their prejudices, and their malign influence in certain sectors of the Ministry of Defence. We all know that, for the past 40 years, the Army establishment has been determined to get even with the Parachute Regiment, to cut it down to size and, preferably, out altogether if it can. Although the idea of an air cavalry is attractive, let us hope that it is not simply used as a device to get rid of the Parachute Regiment and to subsume it into the mass infantry career structure. We do not know, but we watch.
Soldiers have to be few in number, well trained, well equipped, mobile, but should not take anything like as large a proportion of the defence budget as they do at present.
We must move towards—several hon. Members mentioned this—the certainty that a fixed-wing carrier will be the central weapons system of our armed forces over the next 50 years. It must be; there is no other way to project force and carry out the operation—illustrated so effectively, but, fortunately, not carried to the extreme—that we have seen in recent weeks.
A fixed-wing carrier or two—three would be excessive—can be bought for a relatively small sum, if one compares it with the colossal sum that is allocated to Eurofighter. I always listen to the hon. Member for Chorley (Mr. Hoyle) with great attention, but we are not of totally the same mind on Eurofighter. If the sum devoted to Eurofighter were cut in half, it would buy a couple of respectable fixed-wing carriers.
Carriers do not come on their own. There are immense ancillary costs: software, electronic counter-measures, and the support vessels that have to defend the carrier. My hon. Friend the Member for Ruislip-Northwood said that a carrier's best defence is the carrier itself, but it is a vulnerable target. The Americans have found that, to support a carrier, one needs a considerable flotilla of ancillary vessels that carry missiles and have a counter-measure capability to ensure that it is not hit. If a carrier is lost—the House will recall that that was a primary apprehension during the Falklands conflict—the expedition is cut off at the knees.
There is one other factor of which the House should be aware when considering the strategic defence review: defence policy should be considered only as part of a geostrategic review, which has to have input from the Foreign and Commonwealth Office when considering our foreign policy. It should not be Foreign and Commonwealth Office led, but that Department must have input. The Ministry of Defence is the largest client of the manufacturing industry in this country. We must be clear about the industrial implications, not just in isolation

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but as they interact with the geostrategic considerations; the extent to which we shall be dependent on other suppliers, particularly foreign suppliers, or the United States; the extent to which we can take the risk of making things on our own; and the extent to which we can reassert our industrial independence, which we have neglected. All those things have to feed into a proper and round consideration of what the review should include. Only then can one start to calculate minimum force levels.
With the greatest respect to the Secretary of State, who, unfortunately, is not able to attend this interesting debate, there is scope for a commission, which the Prime Minister must chair, because only a Prime Minister can overrule the predatory, insatiable demands of the Treasury, as they will be arrayed. The Prime Minister has, as we have seen, acquired a taste for strutting the international stage and posturing as an international statesman and arbiter of the way in which our affairs are ordered—
The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): Look what he has just done.
Mr. Clark: Indeed; I have already applauded him, but perhaps that was before the Under-Secretary came into the Chamber. Unless the Prime Minister exercises his authority over the decisions and the counter-pressures that the Treasury will apply to our defence policy, the time will come—perhaps sooner than is comfortable for him—when he no longer has the muscle when he needs it to back up the posture that he is adopting.
11.57 am
Mr. Mike Hancock: I congratulate the hon. Member for Mid-Norfolk (Mr. Simpson) on being successful in securing the debate and on his speech this morning, but he was a little idle in his research. He failed to mention the miserable existence that service personnel and civilian employees have endured over the past 18 years, facing the consequences of successive Tory defence reviews that were misplaced, mishandled and disappointing, and dispiriting to the personnel involved. I represented my constituency in the 1980s, so I know from first-hand experience how demoralising were the successive reviews, which were never transparent in their conception and were pretty damning in their delivery. However, he gives us an opportunity—the importance of which is shown by the number of hon. Members who are present—to address once again the difficult questions of defence and the strategic review.
Mr. Gerald Howarth: The hon. Gentleman attacks the Conservative Government, despite our belief in strong defence, but is it not true that the Liberal Democrats were in favour of cutting defence by a third just before the deployment of our forces in the Gulf, so he is not really in a strong position to criticise the Conservative party?
Mr. Hancock: The hon. Gentleman makes his point, but those who were around at the time will consider the historical facts and discover that what the hon. Gentleman is saying is not only misplaced but downright mischievous because it is inaccurate.
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I share hon. Members' concern that we have failed miserably to put before the House or, for that matter, the wider community, the rationale behind the foreign policy initiatives on which this defence review is based. It cannot be right for that to persist even now. Like other hon. Members, I had hoped for some appreciation in the House of the priorities. I am disappointed that that has not happened.
As considerable numbers of my constituents are serving in the Gulf, it would be wrong not to appreciate and applaud their work, and to ask the Minister to pass on good wishes and hopes for a speedy return to all the crews and personnel, men and women, serving in our fleet and on land in the Gulf. It would also be wrong to miss this opportunity to say that many families of the crew of the Invincible would be interested to know when she will return to the United Kingdom. I hope that there will be good news on the near horizon for them. I also thank my local newspaper The News for its work in pushing the story of the efforts of those people and keeping the crews and personnel down there informed of the good wishes of the people back here.
The Iraqi crisis has shown us two things. First, it has shown us that the United Nations still has a vital role to play. As a nation which took such an active part in the recent Iraqi crisis, we must use the strength that we now have to insist that the UN strengthens its position on such topics. Secondly, it raises the question of joint European defence. During the past few weeks, we have seen how difficult it is to get our European partners to agree on something as important as Iraq. We should seriously question on what they would agree.
Some of us were present at a recent North Atlantic Assembly briefing in Brussels when it was interesting to see the frustration on the faces of our American colleagues when all sorts of allegations were made about why they were in Iraq. More worrying, from a European point of view, was their riposte that they should not be pushed too hard or they would sort out the Bosnia situation by seriously considering whether Congress and the Senate wanted American forces to remain there. That was an ill-tempered threat, but it was directed at those European partners who were less than enthusiastic about why we were even considering taking action against Iraq. Once again, we missed the opportunity as a nation to use our leadership in Europe to bring our European colleagues on board. We set an example, but we were unable to lead our European colleagues to back us more enthusiastically. That is a disappointment that many share.
Like other hon. Members, I had hoped that we would have got to the bottom of where foreign policy issues were taking the defence review. Many of us who would be accused of being cynical would say that, because the Foreign Office initiatives have not been published, they have moved up the road from the Foreign Office to the Treasury. Before they come here, the Chancellor and his colleagues are running their beady eyes over them. As a result, the House is being denied the opportunity properly to evaluate the defence review in its true light.
We have been told time and again that the review would be an exercise in transparency which would involve people. Hon. Members have had the opportunity to be involved and I am sure that the Minister will tell us how many members of the public have joined in enthusiastically in one form or another, but the Government have failed to be straight and honest about

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what was driving it. Was it the Treasury's insistence on substantial cuts or a genuine attempt to allow foreign policy, for the first time, to be open enough to drive a defence review that would realistically address the defence ambitions of the British Government and the British people?
I support the views that have been expressed about the fixed-deck carriers. The country cannot afford three, but we shall need two. HMS Ocean is a major addition to Britain's fighting capabilities. However, I also agree with the points made by the hon. Member for Chorley (Mr. Hoyle) about the role of the Royal Navy and a strengthened Royal Marine corps, and their strategic responsibility in defending the foreign policy issues that Britain holds dear.
If we lose this opportunity, we shall fail miserably. People will not forgive the Government for denying them the real opportunity to bring together our defence and foreign policy objectives. It is unfair and unforgivable to insist that men and women in our armed forces should take on more and more tasks without the proper resources. It would be unforgivable if the Government were to repeat the awful mistakes that many experienced during the 1980s and the early part of this decade.
12.5 pm
Mr. Robert Key: I congratulate my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) on his tenacity in securing the debate. He is right to have persisted since before Christmas. The Ministry of Defence currently has other things on its mind, but Ministers have repeatedly made it clear to the House that, with regard to the strategic defence review, the show must go on.
I thank my hon. Friends for their contributions. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) shared with us his deep knowledge and my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark) showed us his particular insight and his important vision of the way forward. It is always a pleasure to listen to the hon. Member for Chorley (Mr. Hoyle)—whose heart is in the right place, even if he does have a tendency to rewrite history—and the hon. Member for Portsmouth, South (Mr. Hancock), with his particular responsibilities as a Member of Parliament representing Portsmouth.
Recent events in the middle east have given the Royal Navy a providential opportunity to demonstrate its strength in force projection. Not since the first world war has chemical and biological defence assumed such importance for British forces. All three services have reacted swiftly and efficiently at a time of international crisis, and we congratulate and thank them.
What lessons have the Government learnt, what conclusions will they draw and how will they inform the strategic defence review?
Defence is rarely the subject of political knockabout. It rarely attracts large numbers of hon. Members to Question Time and debates. However, today it is important to note that the Secretary of State has been here for part of the debate, the Minister for the Armed Forces is here and the Under-Secretary was here. No doubt, the Minister for Defence Procurement is watching on his television in another place.
I emphasise that Her Majesty's forces know that a comparatively small number of Members of both Houses have a deep knowledge of, and commitment to, Britain's
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defence, and that they can be relied upon to be persistent and tenacious in pursuing military matters. They also know that, at times of tension, both Houses of Parliament can be relied upon to swing behind them with generous cross-party support. Most service men and women would wish that defence was not a party political issue. Defence should stand astride the common ground between the parties.
After 18 years in opposition, Labour's understanding of defence issues was incomplete. It reformed its party's defence stance and the Labour Government's policy is now on trial. They pledged that they would have a defence review, but they did not know what to expect, and that is clear 10 months on. Labour chose the big bang approach, rejecting our philosophy of continuous review with occasional necessary reforms. They have not said, and we do not know—I doubt whether they know either—whether they will revert to the continuous review process or adopt the Australian and American pattern of a review every three or four years.
We were told that the SDR would be over in six months and that the uncertainty in the armed forces and the defence procurement industry would be worth putting up with. Apart from the Secretary of State, no one believes that the review is now foreign policy led. Clear as he was about the downward ratchet in defence spending—I hope that he took note of the wise words of the Chairman of the Defence Select Committee in last week's debate on Iraq—the Secretary of State has been consistently unclear about the nature of Foreign Office and Treasury involvement.
My hon. Friend the Member for Mid-Norfolk has already drawn attention to the lack of a clear statement on foreign policy baselines, as has the hon. Member for Portsmouth, South. The Secretary of State continues to expect us to believe that his speech at the Royal United Services Institute on 18 September last said it all. It said virtually nothing new—I read it again this morning. It will not do for him to pretend that we know about those baselines. They remain secret and out of date.
Both the early consultations and the establishment of the foreign policy baselines last August have receded so far into the past, and world events have moved forward so quickly, that serious doubt must be cast on the validity of both. We have also had a long period of silence from the Secretary of State. According to the Ministry of Defence, since he was appointed last year, he has made just four speeches on defence policy, only one of which was on the strategic defence review. He made two speeches on NATO and one on defence diplomacy, a concept originally introduced by the Conservative Government in their 1981 defence review White Paper. Will there be no more speeches from the Secretary of State until the SDR is safely out of the way?
Ministers now appear like rabbits caught in the Treasury's headlights. The military input will be complete by the end of March as promised. Defence Ministers will no doubt reach conclusions by the end of April. Then all that work will disappear into the black hole of the Treasury and the Cabinet Office. The comprehensive expenditure review will take time to resolve. We might be lucky and have a statement on the SDR by June, or it might slip to the last week of July—perhaps to the last day that Parliament sits before the recess. All that will give the Treasury an opportunity to push the whole exercise into the next public spending round, implying no

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real movement on the SDR until April 1999. Two years after the Government's election pledge, with the world a different place, the Government will hope that the Opposition will support the results of the review.
Defence Ministers should be aware that they are putting at risk cross-party support by their failure to listen and to answer the concerns expressed not just by Opposition Members but by Labour Members. I absolve the Minister for the Armed Forces from that accusation. We recognise that he is a tireless worker for the armed forces and that he can be relied on, with his grasp of detail and his patience and courtesy, which are much appreciated. However, I wish that he would have a word with the Secretary of State and the Under-Secretary because routinely in debates, questions have been asked and points raised, which are apparently not heard and certainly not answered. Even in last week's debate on Iraq, my right hon. Friend the Member for North-West Hampshire (Sir G. Young) made some good points and asked some straightforward questions but received no answers.
I mentioned the new significance of chemical and biological defence. The proliferation of chemical and biological weapons is a major threat to the peace and security of the global community. The previous Government recognised that and invested in substantial facilities to combat the threat. The time has come for further appraisal of active and passive defence against chemical and biological attack, both military and civilian.
It is our choice to stand by the United States. We must be as good as the United States. The 1999 US defence budget will add $1 billion to counter chemical and biological threats. How much new investment will the strategic defence review suggest for us? How much will the Treasury then allow us?
Similarly, we cannot afford to be left behind, following the revolution in military affairs that now informs so much defence planning. Since last May, the world has become less stable and more dangerous. British military forces are under increasing pressure and peace in Northern Ireland is more fragile. Abroad, Bosnia remains the top priority for Britain's and NATO's long-term commitment. In Bosnia, we must consider the need for a smaller but more permanent and established presence, and we need to overcome the current lack of a corporate memory. Escalating ethnic tensions in Kosovo could provide the next flashpoint in the Balkans.
Will the SDR require cuts in our contribution to NATO, material and financial? The "Partnership for Peace" process absorbs substantial resources, mostly to good effect, but there is little Mediterranean dialogue. NATO's troubled southern flank poses threats to Europe's political, economic and military stability. Further afield, we cannot ignore the potential for trouble over the Spratly Islands in the South China sea, nor events involving our dependencies in Commonwealth countries. More immediately, tensions in the middle east will require our constant vigilance and continuing military presence. Our military relationship with Turkey should have a higher priority.
Back home, the Green Papers on the Defence Diversification Agency and the future of the Defence Evaluation and Research Agency are now three months late. Unclear of their priorities and befuddled by their
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vision of Europe, the Government want to maintain their special relationship with the USA while demanding that our defence industry merges our efficient world-class companies with some of the nationalised, subsidised, dinosaur industries elsewhere in Europe—answers by 31 March please, on one side of a postcard.
Above all, the performance of our forces depends on our people and their training, equipment and morale. If we are to recruit and retain good people, we must spend what it takes to achieve that. If we want their families to follow the flag, we must not skimp on housing, education, medical services and the quality of their lives.
Last July in Coventry, I attended a consultation seminar on the strategic defence review. The Secretary of State said that there should be no expectation of an increase in defence expenditure. He asked me whether I thought that there was a case for an increase and I am glad that I said yes. I say it again today. If we are to relate this nation's defence policy to the real world rather than to some diplomatic utopia, this is no time to contemplate further cuts. We should not rule out the case for increased defence spending, review or no review.
12.16 pm
The Minister for the Armed Forces (Dr. John Reid): So many questions have been asked and there is so little time to answer.
I doubly congratulate the hon. Member for Mid-Norfolk (Mr. Simpson): first, on obtaining this debate and on the wisdom that he brings to it; and, secondly, on having discovered a new smelting process for brass necks, which produces those of a quality, strength and thickness that have never previously been invented. He combined that with modesty: in his own modest way he failed to declare an interest, in all humility, as an architect of the Conservative Government's policy of the past 10 years.
Had the hon. Gentleman declared an interest as a special adviser to a previous Secretary of State for Defence, he would have had more difficulty convincing us that we must not cut defence spending, when he advised cutting defence expenditure by 30 per cent.; that we must not reduce personnel numbers, when he advised reducing them by 32 per cent.; or that we must produce a mission statement within six months, when he failed to do so in 18 years. I understand the hon. Gentleman's modesty. In a consensual fashion, I had not intended even to refer to the Conservative Government's record, but I thought that we should place in context some of the remarks that have been made.
Let me say from the outset that our commitment in opposition to conducting a strategic defence review, rather than a cost-driven exercise, was central to our determination to provide Britain with strong, capable and modern armed forces. That was our analysis of the need then, and it remains our goal now. Events have proved how right we were to make that decision, for three reasons. First, a policy-led review is the only way comprehensively to assess how our forces should be structured, equipped, trained and deployed to meet the challenges of the 21st century. Only that approach has the potential to afford the armed forces and the Government the coherence and clarity of purpose that they deserve.
Secondly, inherited shortfalls have led to inadequacies, some of which were identified during the strategic defence review. We were unable fully to appreciate them:

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as the hon. Member for Mid-Norfolk correctly pointed out, the information was not at our disposal until we came into power.
Headline issues arising from the strategic defence review bear repetition. I allocate no blame, but we must face up to the fact that we cannot transport forces quickly enough or provide the necessary logistic support once they have deployed. Our medical services are thoroughly inadequate. Some parts of the forces cannot communicate effectively with other parts. We face a vicious circle of undermanning and overstretch, which feed on, and exacerbate, each other.
I am not being party political, but we have to admit that there are real problems before we can begin to solve them. It is the easiest thing in the world for politicians at the Dispatch Box to use rhetoric that gets more robust the weaker their arguments become, rather like the Jesuit who comes to the part of his sermon about which he has doubts and writes in the margin, "Shout louder." Surely the days are gone when the services are burdened with increasing inadequacies so that political leaders do not have to find the moral courage to face up to the hard choices. Those problems must be tackled to ensure that our armed forces can be deployed rapidly, flexibly and effectively.
Thirdly, undertaking the strategic defence review was the right decision. We owe it to the brave men and women who risk their lives on our behalf day in, day out—not only when they are in the headlines—to ensure that we have a coherent vision of the future use and structure of our armed forces. Paying further tribute to the men and women of our armed forces is timely. Last night, Kofi Annan, the United Nations Secretary-General, congratulated the Prime Minister on being "the perfect UN peacekeeper". That was not only a justification of the Prime Minister and of the House, and of our commitment to the UN; the accolade was also for the men and women who serve in our armed forces. I cannot convey how proud I am to be associated with them and their efforts day in, day out. It is the Government's duty to give them a coherent vision of the future that recognises their vital contribution. We owe it to them to ensure, through regular scrutiny, that the means at their disposal match their commitment to the tasks set for them by the Government. Only a truly strategic defence review will allow us to address those issues.
I shall quickly cover the main points arising from the debate. First, despite the banter that goes on in the House, our approach has, from the start, been to try to achieve consensus. To use an old cliché, I believe that Britain works best when we work together. Defence is too important to be a political football. I agree with the hon. Member for Salisbury (Mr. Key) that, where possible, national security should be above party politics, which does not mean that there will not be any criticism and that the Opposition should not oppose. Our desire to achieve such a framework arises as much from the acknowledgement of our past mistakes as from our commitment to try to avoid them in future.
Whatever the criticisms, there has been unprecedented consultation during the review. Hon. Members have been involved, and more invitations are going out to members of all parties; seminars have been held; we have involved journalists, academic institutions and ex-military people as well as the Foreign Office and the Ministry of Defence; and industry and trade unions have also played a part. We
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have spent a great deal of time on the review: the message that comes back from the forces is that it is better to get it right than to rush it.
We have been particularly keen to listen to the troops. For the first time, a strategic defence review liaison team was established. The team has met thousands of service men and women outside the chain of command. As requested, it responded robustly and frankly, and told us exactly what has been said. There is good will among the troops and morale is high, but there is concern that our review may be the same as those undertaken by the previous Government, which were perceived to be Treasury led.
The hon. Gentleman would have given a fuller picture if he had said that concerns arise not because people are suspicious of what we are doing, but because of their experience under the previous Government. Therefore, we are making every attempt to show that the review is foreign policy led: it is based on a fundamental reassessment of our essential security policy and defence needs and was conducted in its early stages jointly by the Ministry of Defence and the Foreign Office.
We have outlined the conclusions that are emerging, but there is dispute over the extent to which the work should have been done earlier. First, our armed forces have inescapable national commitments. Military aid must be provided to the civil power in Northern Ireland: we hope for a lasting political settlement in the Province, but will not count our chickens before they have hatched. We are responsible for the internal and external security of our dependent territories.
In Europe, we must ensure European and British security by making a commensurate contribution to the maintenance of the North Atlantic Treaty Organisation, which was a manifesto pledge. The collapse of the Soviet Union has radically reduced the threat of all-out war in Europe, but it has given rise to a plethora of risks—nationalism, border disputes and ethnic tensions—that were suppressed by communism. We have wider global interests, but they do not extend equally and we are most likely to be involved in such problems in Europe, the Gulf and the Mediterranean, where our economic and security interests are most closely engaged.
Other global threats form part of our policy baseline. Recent events in the Gulf have brought home to us the risks from nuclear, chemical and biological weapons. Just as the citizen has rights and responsibilities, this country, as a national citizen in the global community, has rights. Our armed forces will defend them, our territories and interests, abroad and at home. We have responsibilities commensurate with our position at the United Nations and in NATO, and as a leading country in Europe, and we shall discharge them.
Mr. Keith Simpson: Will the Minister give way?
Dr. Reid: No. I have only 14 minutes in which to respond to the debate.
Additionally, we have embarked on a defence diplomacy initiative, which means using the military assets necessary for the defence of our country in such a way as to lessen the likelihood of their being deployed in anger in war. My right hon. Friend the Secretary of State for Defence co-operated on that sensible, relevant and modern policy framework with the Foreign Office. As is

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the case in every Department, the Treasury has been consulted. That is the normal business of government—but it does not mean that this review, like the rest, has been led by the Treasury, or by any arbitrary dictates of the Treasury. The starting point has been foreign policy.
Of course resources matter. We live in the real world. I have tried to deal with the main points in the limited time available, but let me make one final point. The cliché that people are our most precious resource is no less true because it is often uttered. People are at the centre of our strategic defence review. We are looking at a range of policies—not only because that is morally good, but because the third element of fighting power, morale, is the most underestimated. All the equipment and all the doctrine in the world mean nothing if we do not ensure that our people are properly protected and resourced. We are proud of what we have done in the Gulf, and will justify that—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must move to the next debate.

Special Needs Education (Croydon)
12.30 pm
Mr. Richard Ottaway: The House debated special educational needs as recently as December. The Under-Secretary of State for Education and Employment, the hon. Member for Birmingham, Yardley (Ms Morris)—who I am pleased to see is replying to today's debate—set out her proposals and priorities for special educational needs in the light of the Green Paper published in October 1997. She made it clear that the Government were not adopting a cost-cutting approach to SEN—a message that, regrettably, was not heard by Croydon council.
The Minister and others also acknowledged that life had not started on 1 May 1997, and we were grateful for the tribute that she paid to the last Government's work in developing what was a rather grey area. I myself pay tribute now to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), who, as Minister of State in the Department, did much to address the issue.
I broadly welcome the Government's six principles, enshrined in the Green Paper, and their detailed approach to the subject. We are talking about some of the most vulnerable people in society, whose needs go far beyond the imagination of those with healthy children. No political ideology is involved; we all owe it to under-privileged children to give them the best education that our nation can provide.
An important principle established in the Green Paper is the need to work with parents. The Green Paper rightly says that parents of children with special educational needs face exceptional pressures, and the Government rightly say that they want to help parents cope with those pressures and to give them real opportunities to influence and contribute to their children's education. During the December debate, the Minister reminded us that partnership between home and school is crucial for all children.
By and large, special needs education in Croydon is, in the words of the weather men, fair to good—with one notable exception. We have two schools, Redgates and Priory, helping those with severe learning difficulties. The main thrust of the borough's provision of services for those with moderate learning difficulties comes from two schools, St. Nicholas in my constituency and Bensham Manor. Each school originally provided for the five-to-16 age range. They are excellent schools, and they catered respectively for the north and the south of the borough.
In a fairly controversial move that upset many parents, the two schools were reorganised so that St. Nicholas provided for the five-to-11s and Bensham Manor for the 12-to-16s. Unfortunately, that means that, on reaching the age of 12, children in the south of the borough must make a long journey to the north.
This is a highly relevant factor in Croydon's education service. Croydon is a large, wedge-shaped borough with crowded roads, which makes travel from south to north and into the heart of London very difficult. Services must be provided in the south for all age groups. Having been educated at St. Nicholas, in the leafy glades of the suburbs, children are obliged to undertake the journey through those crowded streets to a strange part of town with which neither they nor their parents are familiar. The north-south divide in Croydon is the real cause of many of the borough's problems.

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Last summer, St. Nicholas was found to contain asbestos, and it has been necessary to relocate the school temporarily at the Heath Clark adult education centre. I understand that it will return in September, and that the building will then have been fully refurbished. I congratulate the council on its prompt response to a particularly difficult problem.
St. Giles school in Pampisford road is an inspiration to all who visit it, showing them what can be achieved. It contains facilities not only for those with physical mobility problems, but for those who are deaf and blind. I pay tribute to the staff of St. Giles. If the Minister ever wants to see a good example within easy range of her office, that is where she should go.
There were four day care centres for the under-fives, one of which was the Hazelglen special educational needs school—the only one in the south of the borough. In September 1997, Croydon council published a document entitled "Policy for Pupils with Special Educational Needs". It is well drawn up, and its principles largely coincide with those in the Green Paper. It builds on the work of the last Government and the last administration in Croydon.
Regrettably, the words of that document contrast markedly with the actions of the politicians on Croydon's Labour council. It was produced after the outrageous closure of the Hazelglen special educational needs school for the under-fives. That closure was in blatant disregard of the principles in Croydon council's code of conduct, and the six principles in the Green Paper. Today, I want to know the real reason why the school was closed. If the Minister cannot give me the reason, I shall call for an inquiry into why the closure took place in breach of the Government's stated principles that this is not a cost-cutting area and that parents will be involved.
In the 1994 London borough elections, the Labour group, in its manifesto, issued a number of pledges on education and on special educational needs in particular. Under the heading "Nurseries and Child Care", it stated:
"Labour will provide more nursery facilities to enable parents to find jobs".
Under "Nursery Education", it stated:
"An Education Officer will be given enhanced designated responsibility for the under-fives and will work with the Social Services Department, the Health Authority and the voluntary sector to develop an integrated borough approach to the needs of the very young".
Under the heading "Special Educational Needs", it stated:
"We will provide clearer and more consistent funding for the special educational needs of pupils".
Finally, under the heading "Services for people with learning disabilities", it stated:
"A Labour council will aim to provide a variety of day care centres".
It is clear as a bell that Labour was committed to maintaining and improving the system, and on that basis people voted for it. It was a clear pledge, and people expected Labour to deliver.
The Hazelglen centre provided SEN facilities for children under five. Typical of the children who went there were the children of Sioban and Tom Foster, who have cystic fibrosis. They needed physiotherapy, a special high-fat diet and extra vitamins and drugs. In addition, one of the children has cerebral palsy and hydrocephalus.
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They depended on the centre for the support that they needed. Others—the Kellys, the Finlays, the Traffords—also depended on Hazelglen, and relied on Labour's commitment, which they were entitled to view with optimism. Accordingly, their lives were shattered when on 5 February parents received a letter stating that the school was to close. It said:
"The decision to close the Centre is a financial one and is not connected in any way to the quality of service provided by the staff."
Offering parents a chance to meet the officials involved, the letter went on to say that, "for this reason", the officials
"will be at Hazelglen at 10.00 am on Thursday 6th February so that you can raise any issues directly."
That was just 24 hours after the announcement of the closure.
The closure was the end of the principle of working with parents. It undermined parents in a cruel and uncaring way. It was an absolute bombshell for parents who, having had their lives shattered on learning of their children's problems, were now being completely undermined.
In addition to dismay about the broken promises and short notice, there is concern about the way in which the closure was carried out. It seems that the manager of the centre was told about it three months before it happened, and was asked to keep his mouth shut. Accordingly, it was no surprise when the staff of the social services department wrote to members of the council's social services committee stating:
"As a caring Team committed to our work, we feel that the council's meetings and the length of time it has taken to inform us of proposals devalued the professional manner in which we work and operate the centre."
I could not have put it better myself. It is already apparent that not only the school's merits but educational needs were ignored, and that the matter was completely financial.
The Labour councillors behaved no better, slipping figures into a social services budget report. There was no statement or explanation, no debate, and not even social service minutes on the closure. Only the Conservative councillors are recorded as voting against the budget when the first inkling of the decision was revealed.
The parents of the children at Hazelglen could not understand that, while the school was being closed, £1 million was being spent on decorating Croydon's pavements with red bricks; £750,000 was being spent on producing a glossy magazine; £350,000 was being spent on a pavilion in South Norwood; and £61,000 was being spent on lasers to light up Croydon. Thousands of pounds were spent to buy mobile phones for Labour councillors. Against that, a mere £24,000 was saved by closing the Hazelglen day centre.
The illogicality becomes apparent when we note that some of the children are now being placed in private care that is paid for by the council. That makes a mockery of Labour's pledge in opposition and in government.
All was revealed when Mr. Tony Foster wrote to the Croydon Advertiser, a newspaper that has done much to disclose the scandal of Hazelglen. His letter states:
"My response comes in the context of being both a campaigner against this closure and as a local Labour Party member.

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The truth of the matter is that Hazelglen is caught up in the internal politics of the Croydon Labour Party. The decision to close Hazelglen is therefore political and not financial. Hazelglen, unlike the other day care centres in the North of the borough, has suffered from budget cuts every year since Labour took office. The closure has been planned for years and is not the result of 'financial pressures' from this year's tight settlement.
Having realised the paucity of the financial argument Labour has resorted to claiming that Hazelglen is not as accessible as the other centres. This is despite of it being located on top of not one, but two BR stations (Sanderstead and Purley Oaks) and with local bus stops also. Incredible!
Hazelglen is, therefore, the nursery that is being closed for no reason and in this entire process the Labour council has shown contempt for the principles that the Labour party should stand for: democracy, social justice, decency and integrity. I believed that Labour was set up to fight injustice, not to cause it. Maybe, I was idealistic, but the disappointment is profound."
As I say, that letter was from a Labour party member.
Most amazing of all was the fudge and obfuscation of Labour councillors and Ministers. I took up the matter with Mr. Charlie Burling, who at that time was chairman of Croydon council's finance committee, and asked him to receive a delegation of parents. In a letter under the slogan "New Labour, New Life for Britain", he refused. His refusal to meet a delegation was to cover up the internal rows in the Labour party.
The bluster and cover-up continued. I wrote to the Secretary of State for Education and Employment, and his reply on House of Commons notepaper states:
"The closure of Hazelglen was authorised by the previous government".
I decided to take up the matter with his Under-Secretary of State, the hon. Member for Yardley, who is replying to today's debate. In the debate on 5 December, I asked her to look into the matter, and she courteously agreed. She carefully relied on advice on the closure that was given to her by Croydon social services department, and in her letter she gave the following reasons, quoting Croydon:
"the centre was not best located for families in the West and South of the Borough; the average occupancy was lower at Hazelglen than at the other day care centres in the Borough; and the level of need in the areas covered by the centre was not as marked as in the south east and north of the Borough."
None of those reasons is true. Although I said that they were totally contrary to the explanation that was given by the council to the parents, which was that the decision was financial, the Minister wrote to me again stating:
"I understand from Croydon Social Services Department that the decision to close Hazelglen was based on the factors cited in my previous letter, but that this was prompted by the financial situation facing the Council."
The Minister's letter contains a slight shift of emphasis. It continues:
"You also say that the closure of Hazelglen means that there is now no special needs nursery education in the south of the Borough. Croydon Education Department have explained that all nursery classes in the borough are expected to support children with special education needs. I understand that specifically in the south of the Borough there are a total of 184 nursery places in schools receiving significant input from other agencies, a further 156 places in schools situated in areas of relative deprivation and a pilot project at an infant school which provides 104 places."
That information is simply not correct. First, the Minister should know that there is a big difference between nursery classes that focus only on educational needs, and day care, which is what many of the children at Hazelglen needed. Secondly, Croydon council's nursery
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expansion programme reveals that only 15 per cent. of any additional nursery places will go to the south of the borough.
According to a council report that I received only yesterday, the most generous interpretation is that there are only 65 special needs places in the southern part of London's largest borough. It is worrying that there is a complete absence of a good explanation for the closure. It was badly handled and upsetting, and stressful to all concerned. It was in breach of Labour's manifesto commitment, of Croydon's policy on special educational needs, and of the Green Paper principles; and it is a breach of faith with the parents and children of Hazelglen.
I shall give the Minister a final flavour of how the parents feel about this matter by reading a poem for Croydon Labour councillors. It reads:

"A teardrop trickles down my cheek,

Looking for a place to hide.

Why couldn't you be honest,

Not cheated us and lied?

I wonder if you mock us

When we're no longer there,

If you laugh we voted LABOUR

And we fell into your lair.

Did you ever really worry?

Or was it simply fun,

To pull the strings of people's lives

And watch the damage done?

We took you all for honest.

We thought you would be true.

A victim of your silly games,

Now what are we to do?

We feel the pain so deeply,

We only wish you knew,

Of all that we have suffered,

As a result of trusting you!"

That poem is signed "From the parents of Hazelglen". Is that what new Labour is all about?
12.47 pm
The Parliamentary Under-Secretary of State for Education and Employment (Ms Estelle Morris): I congratulate the hon. Member for Croydon, South (Mr. Ottaway) on again managing to bring the needs of his constituents, especially for early years special education, to the House. He made an important contribution to our debate on the matter before Christmas and to the Green Paper, which I appreciated. I recognise his continuing concern, not only about SEN but for the children of his constituents.
I shall continue from where we left off in the previous debate on the matter, which took place just after we published our Green Paper on SEN, which, I am pleased to tell the hon. Gentleman, has resulted in more than 3,500 responses. That is a massive response, on a subject that has not had as much attention in the past as it deserved. Croydon was one of the local education authorities that responded. We look forward to analysing the detailed responses and taking the agenda forward.

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I share the hon. Gentleman's concerns about SEN and about early identification and assessment. Whatever differences we may have in the rest of the debate, I know that we shall share concerns about those matters in the years ahead. Such issues unite the House, and I am happy to pay tribute to all those hon. Members who put them at the centre of their concerns.
I mentioned the importance of early identification and assessment and, in view of the passion with which the hon. Gentleman spoke about the closure of the nursery in his constituency, it is necessary to give the reasons for that importance.
I know that the hon. Gentleman will be concerned about early identification and assessment. He knows that, unless we get it right in those crucial early years, we stand little chance of getting it right elsewhere in the education system. Moreover, I agree with him that early identification is even more necessary for children with SEN than for any other identifiable group.
Although I would never pretend that early intervention and support will remove the need for support later in a child's school career, they accomplish three crucial objectives: first, they reduce the need for later support; secondly, they send a message that we have high expectations of all children, including those with SEN; and, thirdly—I know that the hon. Gentleman will be in accord with this objective—they establish at an early stage the vital relationship between parent and teacher and all the other professionals who work with children with SEN.
I share the hon. Gentleman's long-standing concerns about nursery provision for children with special educational needs in Croydon. As he said, we have corresponded—I think twice now, although he has corresponded also with the Secretary of State—about the closure of Hazelglen nursery.
As the hon. Gentleman knows, closure of the nursery is a matter for the Croydon local authority. As it is not a school, neither the Department for Education and Employment nor the Department of Health has any statutory powers to intervene. However—because of our shared concern about special needs—I am concerned if he feels that its closure has meant that the south of the borough, which he represents, will have no provision for nursery-age children with special educational needs.
I have spoken to Croydon—which will inevitably be one of the sources of information used by the Department. The comments made in this Adjournment debate also will be taken on board and investigated by the Department. Moreover, I shall happily reply to the hon. Gentleman if he wishes to continue our correspondence.
I have been told by Croydon that its policy is to ensure that all the nurseries it maintains offer places for children with special educational needs. Almost 450 places are available for nursery-age children in south Croydon. Specifically, the borough maintains four nursery schools that give priority to children with SEN and are resourced to do so. Two of those are in the south of the borough.
Additionally, nursery places are attached to two special schools, and 35 nurseries are attached to mainstream schools—15 of which are in the south of the borough. All those nurseries can and do offer places to children with special educational needs. Currently, 54 nursery-age children in Croydon are statemented, and all of them have nursery places.
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I hope that that information will at least partly allay the hon. Gentleman's concerns. I should add that 65 children in the borough currently benefit from the portage system, which is a very valuable part of early years service.
I heard what the hon. Gentleman said about the special needs of SEN youngsters. I would not be happy if those needs were not being met specially within an early years institution. However, I should not be keen to make the judgment that those needs can be met only within a special educational needs nursery, although they have a very valuable role to play. I am sure that he will agree that nurseries that do not specialise in SEN children could, with support, offer a very good-quality service to those children. As the Green Paper indicated, such matching and variety of provision is the route that we want to pursue.
My information from Croydon is that it offers those two categories of service and specialised support. In Croydon, 43 per cent. of children with statements of special need are in special schools, whereas 57 per cent. are in maintained schools with either units or people to support statemented children. I think that such a varied, and I hope flexible, approach to children with statements of special educational needs shows the way forward.
Mr. Ottaway: Neither the letters from Croydon council nor these from the Minister to me gave those reasons for the closure. If those are the reasons, why were they not given? The truth is that they were not the reason why the school was closed.
Ms Morris: All I have attempted to do is state the provision that Croydon feels it is offering for special needs children. That is the pattern on which it has embarked in making nursery provision for all its statemented children.
I understand what the hon. Gentleman said about Hazelglen day centre. Any closure and any change is disturbing and distracting for parents and young children. As a constituency Member of Parliament, I realise that, every time a school is closed or threatened with closure, someone's life is affected. Such changes perhaps cause that person temporarily to have a more disjointed existence. However, I hope that the hon. Gentleman will agree that we would never make progress if we set everything in stone.
Croydon's letters to me, and certainly my second letter to the hon. Gentleman, acknowledged that, on the basis of last year's financial settlement—not on the basis of the financial settlement that this Government have offered for next year, although I do not attempt to make political points—the financial situation was one of the factors that drove it to reassess the matter.
In my letters to the hon. Gentleman, I said also that the reassessment was prompted by the fact that
"the centre was not best located for families in the West and South of the Borough",
and that average occupancy was lower than in other day care centres. I wrote also that Croydon had said that
"the level of need in the areas covered by the centre was not as marked as in the south east and north of the Borough."
I would defend a local authority's right to replan its provision. Authorities must occasionally do that, because it is right for them to assess where they are at and where

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they want to go. Croydon maintains that Hazelglen is part of that redevelopment, and part of the necessary change in achieving its vision for meeting the needs of children with SEN and their parents in the borough of Croydon.
Croydon gave a commitment—I am sure that the hon. Gentleman will tell me if it is not being met—to the users of Hazelglen day care centre that the children there would receive alternative services. I am told that that commitment has been honoured, and that many of those children are moving into nursery and reception classes. I am sure that the hon. Gentleman will tell me if he feels that what Croydon has told me is not an accurate reflection of the situation there. However, I accept that a period of change is sometimes difficult to handle.
The hon. Gentleman gave the impression, both in his correspondence to me and in his speech today—it is important to get it straight now—that Hazelglen was a special needs nursery. Hazelglen was established not as a day care centre to meet the specific needs of special needs children and their parents, but to offer a wider service. That includes children with SEN and their parents, but it also includes other children and parents. It is right to establish that fact.
I am pleased also—I am sure that the hon. Gentleman will welcome it—that the Hazelglen site will be developed as a family resource centre. Croydon has an agreement with Barnardo's—a national children's organisation of very high repute—to implement that planning—
Mr. Ottaway: Maybe.
Ms Morris: I am told that it is a bit more than "maybe", and I hope that it comes to fruition. I very much
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hope that—if we were to return to this debate in a year or even less—the hon. Gentleman will be able to say that, "Yes; as ever, the period of change was difficult and challenging, but the new facility on the site is continuing to offer provision that meets the needs of families in my area."
Although I do not under-estimate for a minute the hon. Gentleman's concerns about children and parents at Hazelglen, I was pleased to hear his tribute to other providers—schools and units—in Croydon. In preparing for this debate, I inevitably became better versed in what is happening in Croydon. I was very pleased to note the match of provision—the special schools and units—provided by Croydon. St. Giles school, which he mentioned, is one of those in which a special unit for the hearing and visually impaired has been attached. That is very attractive.
For all that the hon. Gentleman has said about Hazelglen, he represents a constituency in a borough that has, over the years, provided for the needs of special needs children in an imaginative manner—which, as he said, he has supported. Although I do not want to put a time limit on it, I should like to accept his offer to visit St. Giles school—which he has offered to the House as an example of good practice. That is how we want to develop policy—by learning what works, seeing who has got it right and then letting the rest of the country know about it. I am sure that some of the changes taking place in Croydon with regard to early years provision and how to meet the special needs of certain youngsters will in time be the sort of good practice from which we can learn and which we can spread to the rest of the country.
Again, I congratulate the hon. Member for Croydon, South on keeping the needs of his constituents at the forefront of our mind. I also want the needs of this particular group of people to be met, and I very much hope that the hon. Gentleman's fears will be allayed in the near future.

Utilities (Foreign Ownership)
1 pm
Mr. John Cryer: I must first thank Madam Speaker for selecting this debate. I also thank my hon. Friend the Minister for Science, Energy and Industry for being here to listen and respond to it. I am sure that my hon. Friend will expect me at some point to call for public ownership of the electricity utilities, and I will not disappoint him in that regard. I support public ownership and see it as the only answer in the long term to the problems in the utility companies.
American companies in particular have bought into the United Kingdom electricity market over the past three years. They now own about 60 per cent. of our electricity distribution and supply companies. The reasons why American companies want to move into Britain are clear. First, British companies represent cash mountains—the money can be siphoned off for use in other, sometimes fairly dubious activities, usually in north America. Secondly, the American firms are fairly fond of our pretty lax regulatory regime. Thirdly, they see Britain as a springboard to the European electricity market at some point in the future.
I should like to make it clear that I am not being a little Englander in criticising the activities of American energy companies, but to me it is as plain as a pikestaff that if the control and ownership of electricity utility companies is concentrated not in Britain but in institutions and individuals thousands of miles away in America, it will be that much more difficult to call those institutions and individuals and to account, to ensure that they act in the best interests of the people they employ and of those to whom they supply electricity.
The American ownership of UK companies that has been taking place over the past three years is merely the latest stage in a process that began in 1989 with the privatisation undertaken by the previous Government. The electricity industry was privatised at rock-bottom prices, and it is almost an exercise in showing how the idea of a sort of people's capitalism, which Baroness Thatcher, the former Prime Minister, evoked, has failed.
Seven million people bought shares in the electricity companies at knockdown prices. Today, only 2 million individuals own shares. The number is still falling and will probably continue to fall for the foreseeable future. Privatisation has not been a form of people's capitalism; in fact, it has meant huge job cuts, attacks on pay and conditions, such as sickness benefits, the greater outsourcing of work, with all that is attendant on that, and huge pay rises for the directors of the privatised companies.
The industry lost 66,000 jobs in nine years, which is about 45 per cent. of the work force. Eastern Electricity, which supplies my area and much of eastern England, has lost 3,000 jobs, while the pay bill for the directors has risen by something like £1.2 million or £1.3 million.
At the same time, the privatised companies have forced employees to bargain in ever smaller units rather than have national collective bargaining. Often the companies have refused to negotiate with full-time union officials, but negotiate directly with lay members to undermine the strength of the unions. That has meant that pay and conditions have been continually attacked through
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outsourcing. The inevitable consequence of outsourcing is that work goes to smaller companies that pay lower wages and offer inferior conditions.
The whole process has been and will be exacerbated by the arrival of the big companies with real market power. The Southern Company, for example, which bought SWEB, cut the work force and attacked sick pay entitlement. Incidentally, Southern has an absolutely appalling environmental record in the United States. The idea that our already weak regulatory regime will be able to protect our constituents against the ravages of big companies with market muscle is laughable at best.
Despite all the cuts, the regulator has reduced electricity prices to consumers in England and Wales by only 9 per cent. and in Scotland by only 7 per cent. Price cuts were going to be the one great advantage of privatisation. The idea was that the regulator would be able to reduce prices enormously. In fact, the reductions have been fairly insignificant, or peripheral to everything else that has happened.
At the same time, the regulator cannot even command the supply of electricity. The reality is that since privatisation, thousands of cash meters have been fitted in homes across the country. That means that the number of disconnections has dropped considerably—there are only a handful these days, whereas there used to be 100 or 200 a year. However, if someone cannot afford to feed the meter, he effectively cuts himself off. Therefore, there are still disconnections, although the figures belie that fact.
Eastern Electricity which, as I said, supplies my area, is currently the subject of what looks like a fairly vicious takeover battle between Pacificorp and Texas, two large United States firms. We are now in the absurd situation where jobs, security of supply and people's living standards in eastern England are subject to the whims of a takeover battle that is centred thousands of miles away among individuals and institutions that probably know absolutely nothing about eastern England, and still less about the people whom the company that they are looking to take over supplies or employs.
I have no doubt that both companies regard Eastern Electricity as the cash cow for their activities in north America. I note that Texas has been engaging in some fairly aggressive lobbying since it launched its takeover bid. It wrote to me asking whether I would like to meet the vice-chairman—I have to say that I am not particularly interested in doing so. I understand that it has written to other hon. Members, too.
Texas has a big problem with an old nuclear plant in north America, which it wants to decommission. That would be very expensive, and I am sure that the company intends to divert the cash from Eastern Electricity to America to pay for that decommissioning.
The new management of those companies talks continually about wanting "greater flexibility". The other great refrain is "human resources management". If ever a phrase was worthy of Joseph Goebbels, it is "human resources management". In fact, those phrases mean massive job cuts and the removal of any union or collective representation from the work force, so that the workers can be picked off and kicked when the time is right.
The British electricity industry is now effectively utterly at the mercy of market forces. I cannot see that position changing while we continue to allow the large

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companies to dominate the industry. There is another problem on the horizon—the Organisation for Economic Co-operation and Development's multilateral agreement on investment, which means that companies will be able to sue Governments whose laws interfere with those companies' profits.
For example, if a company moved into Britain's electricity supply industry and wanted to burn orimulsion in one of its power stations—orimulsion is the dirtiest fuel on the planet—what would the Government do? The sensible thing, which I am sure that the Government would do, would be to tell the company that it was not allowed to burn it. However, under the OECD's MAI, the company could sue the Government because the prevention of the burning of orimulsion would potentially interfere with the company's profits. Such a case is currently under way in Canada under the North American Free Trade Agreement. The danger is that we are taking that very route.
To my mind, all those problems clearly establish the need for public ownership. The only way that we can make the electricity industry work on behalf of the public is for it to be publicly owned and publicly accountable. Clearly, that becomes increasingly difficult as more electricity companies are owned and run by organisations based in north America. Now is the time for us to move—we should think about taking the companies back into public ownership before the British electricity industry is entirely owned by companies based in north America.
People have often objected to public ownership on the basis of cost, but that argument does not hold water. When the power, coal, rail and steel industries were nationalised in the late 1940s, the Government paid for them in bonds, not cash. There was no huge outflow of money from the Treasury—the Government did not have it anyway—and the bonds were paid for year by year. We could repeat that and bring the electricity industry into some form of public ownership and public accountability, so that it could work for the public good in future generations.
1.10 pm
Dr. Ian Gibson: I congratulate my hon. Friend the Member for Hornchurch (Mr. Cryer) on obtaining this Adjournment debate, and thank him for giving me the opportunity to add some brief points at what is an appropriate time for my constituents.
The key issue concerns the two American giants that are buying Energy Group plc, of which Eastern Electricity is a major component. Energy Group is valued at billions of pounds, despite the windfall levy, which we were told would cripple it. Far be it from me to suggest a further squeeze to the Chancellor, but the money might not come amiss and might help to alleviate some of the other problems that we face.
My interest stems from my constituents, who pay money loyally to Eastern Electricity. I, too, pay loyally, although I owe £43; if anyone from the company is present, I should say that the cheque is in the post.
I want to take up the issues that were expressed in early-day motion 710, such as whether the companies that are attempting the takeover have the relevant experience and competence. Massive profiteering is almost certain. I want consumer satisfaction to be met through the
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provision of cheaper electricity, not least to pensioners, of whom there are many in my constituency. I also want long-term investment to improve services; Eastern Electricity is to be congratulated on improving its services in Norwich, North after consulting me.
Safety and environmental issues are most important. I do not want nuclear power to act as a substitute for other sources in the attempt to ensure safe electricity production. How will the American companies meet the Government target of a 20 per cent. reduction in CO2, emissions by 2010? Nuclear power is not an acceptable answer.
I hope that the Minister will say something about renewable components in the supply industry. Let us hear about energy efficiency, not share prices. Any Government worth their salt would take care of those factors before allowing such a takeover.
1.12 pm
The Minister for Science, Energy and Industry (Mr. John Battle): I thank my hon. Friend the Member for Hornchurch (Mr. Cryer) for securing a debate on these matters, and my hon. Friend the Member for Norwich, North (Dr. Gibson) for his remarks. Some of our debates on energy have not raised the wider questions, so I am grateful to my hon. Friends for the context in which they have set the debate. I appreciate the forthrightness and consistency of my hon. Friend the Member for Hornchurch in calling for renationalisation. I respect his position, but I say at the outset, as he perhaps expected, that I do not agree with it, as I shall explain.
The previous Government' s privatisation programme massively changed the shape of the industry. There are now 63 licensed electricity suppliers, some of which were not traditionally involved in the industry, such as catalogue companies, supermarkets and banks. The shape has changed since the days of the Central Electricity Generating Board, for which my father worked. The industry has been broken into fragments: generation—the range of fuel sources—the distribution and grid system, and the regional electricity suppliers have been separated.
The change and dynamism in the sector have been far greater than was anticipated. Buying back and piecing together the industry would not be as easy as my hon. Friend the Member for Hornchurch suggests, and it is not one of the Government's priorities—it is not on our agenda. We want competition where possible, but regulation where necessary.
My hon. Friend referred to regulation of the industry, which I believe to be of vital significance not only to consumers but to the economy as a whole. Given the impact of the regulated utilities on our lives, work, homes, environment and public services, it is crucial that we ensure that the regulatory relationships are right.
We recognise, for example, that when a licensed utility, such as a regional electricity company, is acquired by another company, whether British or foreign, there may be vertical, horizontal or diagonal integration—water or gas companies buy electricity companies and regional electricity companies break away from the generators. Whatever the merger or takeover, it raises the key issue of regulation, on which we should focus. We want to ensure that any utility can be regulated after an acquisition as effectively as before. My hon. Friends are right to emphasise that consumers should not lose out.

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In all mergers, all aspects of United Kingdom public interest, including safety, can be considered under the Fair Trading Act 1973. I want to move on and suggest that there is more for us to tackle. When the Government came to office, we said, on the basis of the preparatory work that we had carried out in opposition, that we were not happy with the regulation regime in place. We believed that the dynamism, the fragmentation and the maelstrom of change in energy markets meant that we had to get regulation right; we did not think that the current system was appropriate.
In opposition, we set up a consultative review of regulation, to determine whether we could get the shapes right to take us through into the brave new world of these changing markets. We said that, in government, we would review the system of utility regulation that we inherited, to set the new shapes that could provide a transparent and accountable regime for the industry in the 21st century.
Regulation used to be rather limited; it was focused on stimulating a market—I think that that was the expression—and introducing competition, and it existed mainly as price regulation. The classic economic definition was narrow; regulation mattered only in getting the price right. The price formula—retail prices index minus X—and driving prices down were emphasised.
We want new elements to come into play. I see regulation as a triangle. At the apex is an emphasis on prices—of course, prices are important; we want a reduction in prices rather than the profiteering that my hon. Friend the Member for Hornchurch mentioned. The triangle has two other corners, however: social obligation and environmental responsibilities. We have a three-pronged approach to regulation, as opposed to a narrow focus on prices.
My hon. Friend mentioned disconnection and pre-payment meters. He was right to say that we did not have to wait for a review of utility regulation to tackle the question of pre-payment meters. In opposition, I shouted from the rooftops about the fact that people were disconnecting themselves because of pre-payment meters, which was why the real toll that they took was not known. People were dying from hypothermia because they did not have fuel to heat their homes in the winter; if they did not have money to put on the cash card, they could not clock up the meter and had to go without energy.
What are we doing now? Now that we are in government, we have already challenged the pre-payment meters and the fact that people who use them effectively subsidise those with direct debit accounts at the top end of the scale. That was a classic case of the poor subsidising the rich, rather than the other way round. We have asked the regulator to move in and ensure that that injustice is not perpetuated.
Social obligations form one corner of the triangle. Another is environmental responsibility. It means that we must match our targets for carbon dioxide emissions, as well as ensuring that the wider responsibilities to which my hon. Friend referred—in connection with safety as well as with the environment—are built into regulation.
That is precisely why we set up the utility regulation review announced last year by my right hon. Friend the President of the Board of Trade. The review is aimed at ensuring open, predictable regulation that is fair to everybody, promotes environmental objectives and sustainable development, and ensures that there are investment incentives.
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Why are investment incentives important? I must tell my hon. Friend that they mean, for example, ensuring that companies have the people working for them and invest in keeping the system going. As he may know, there was a debate in January in which some of our hon. Friends asked about wires that had come down in the Norweb area, in Wales and elsewhere, over Christmas.
The question asked was: had those companies stripped and outsourced to such an extent that there were not enough people—that is, enough engineers—to keep the power lines up? The whole purpose of the system is that companies can be regulated under the price formula only if they invest and employ the right-sized work force for the job that needs to be done.
After the review of regulation, we shall produce a consultation document setting out our proposals, which I hope will appear in the near future. It will set out and sharpen our approach to regulation, and set it on a footing that will take us into the future.
Seven of the 12 regional electricity companies in England and Wales are now owned by American companies. That is the right figure for the present, but the Energy Group, which owns Eastern, is the subject of a takeover bid by a United States company. It is important to remind ourselves that it would not be the first time that Eastern has been acquired, because it was previously taken over by the Hanson group.
That merger was considered and cleared under the Fair Trading Act 1973 by the previous Administration, at which time the regulator made several modifications to the conditions of the licence to ring-fence Eastern's regulated electricity activities from the rest of the group.
The ring-fencing is important, because the changes were made to ensure that Eastern would continue to have access to adequate financial and management resources to fulfil its obligations as a public electricity supplier and to maintain standards and the quality of supply. Actions by the parent company that could have prevented that were prohibited. The ring-fencing was set up precisely to ensure that companies could not whisk the money straight across to America without falling under regulation. Otherwise, even price regulation could have been undermined.
The key, of course, is to ensure that regional electricity companies remain within the reach of the regulator. That is why we are examining the structure of the regulatory regime, to ensure that we can insist that that happens. At the time of the bid by Hanson, Eastern was required to trade at arm's length from other group companies, and if the licence conditions are breached, the Director General of Electricity Supply has statutory powers to take enforcement action. In the last resort, the licence could be revoked.
As my hon. Friend said, the key is to ensure that the companies remain within the reach of the regulator and abide by our structure and our arrangements covering price, social obligation and environmental responsibilities.
As for recent bids, in the short time available, I cannot go through the whole history of the bids for Eastern. I know that hon. Members are concerned that electricity companies must have particular duties and responsibilities that follow through from their role in ensuring secure supplies of electricity. Of course, that factor must be considered in any decision about mergers that the President of the Board of Trade has to take in connection with regional electricity company takeover bids.

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The director general has proposed that should Pacificorp's bid for the Energy Group proceed to acquisition, he will further strengthen the ring-fencing conditions by inserting additional safeguards against cross-default provisions. As hon. Members may be aware, the director general has published a consultation paper suggesting further modifications to the licences of the public electricity suppliers that have already been subject to takeovers. There is a proposal to require other public electricity suppliers in every case to seek and maintain investment-grade credit ratings, and to prohibit cross-default provisions in any borrowing agreement.
The paper also mentions ensuring that the investment plans are there, and that the people are working in the company to carry the work and the investment forward. That means checking actual investment against the plans and measuring the quality of the service that regional electricity companies provide for their customers. The director general would be able to revoke the licence if the requirements were not met.
Pacificorp has made a bid. I understand that a statement of interest by Nomura, which my hon. Friend raised in early-day motion 710, with my hon. Friend the Member for Norwich, North, has now been withdrawn, and it is uncertain whether the American Texas Utilities is still interested. But it is clear from the press speculation that Pacificorp is still interested, and the question now is whether the shareholders will accept, so I cannot comment.
What we need to be sure of is that if a deal takes place, the assurances agreed between Pacificorp and the regulator on the licence conditions proposed are accepted and respected. The Monopolies and Mergers Commission had several important concerns about the merger originally proposed, but concluded that the licence conditions meant that the proposed merger would not operate against the public interest. None the less, it said that it wanted to stiffen the licence conditions to take that possibility on board.
Among other possible bids is one for the Energy Group by Texas. The company has announced that it is in talks with the Energy Group that may lead to a bid. Were there to be a bid that fell to be considered under the Fair Trading Act, it would have to be treated on its merits in the usual way. I am sure that my hon. Friend understands that I am not in a position to comment in detail on whether such a bid would be approved. The President of the Board of Trade would decide, in the light of the advice received
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from the Director General of Fair Trading and of the views of the electricity regulator, whether it should be referred to the MMC.
In formulating that advice, the regulator will take account of any representations received from parties to the merger or from any other third party. That is an important point. It is not only companies that can put in evidence; it is open to any third party to give evidence and say why it does not believe the deal to be in the public interest. That opportunity should be taken more often.
Nomura suggested at one time that it would be interested in a bid, but it seems that it has now stated publicly that it is no longer in talks. I hope that my hon. Friend will understand that it would be inappropriate for me to comment specifically on any particular bid.
As for the multilateral agreement on investment, to which my hon. Friend referred, there was a debate earlier this week, on 23 February, in which the Minister for Small Firms, Trade and Industry spoke at length about it and spelt out the fact that it does not prevent sensible regulation of the environment. Decisions on whether to allow orimulsion or any other fuel to be used would not be affected by that agreement.
I must remind my hon. Friend that it was the present Administration who, when we came to office and were faced with the possibility of an orimulsion plant—in Pembroke, I believe—insisted on a public inquiry before the project could go ahead. I understand that as a result of that decision, the company pulled out of the proposal. So there is no orimulsion plant in Britain now, and I do not know of any current bid for one. Questions were asked at the time and we took the relevant action.
The MAI is not yet settled and there is still work to be done, but we shall press hard for an unambiguous reaffirmation in the agreement of commitments to sustainable development and to core labour standards; for close association of the MAI with the OECD guidelines for multinational enterprises, which are collective recommendations by all the OECD Governments to multinationals on good corporate behaviour; and for strong and binding provisions on not waiving environmental or labour standards to attract particular investments, which is one of the matters on which we shall take a strong line in negotiations. It was our Government who proposed the review of the MAI and its environmental policy, and we shall continue to press on those matters.
The debate has given us a welcome opportunity to hear my hon. Friend's views—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

Security Service Files
1.30 pm
Dr. Julian Lewis: I am grateful for the opportunity to discuss this subject in the House. I am especially grateful to see the Home Secretary preparing to answer personally on this topic, which is increasingly close to his heart. I have written to the Labour Members in this House and to those in another place whom I propose to mention if time allows, and I am gratified to see that that is one way in which to ensure that the House is not too poorly attended for my oration.
I suggest that we take a trip back in our imaginations to 1945. Let us imagine that the outcome of the 1945 general election had been different and that, as widely expected, the Conservatives had won. Let us imagine that, shortly after that victory, one of their fairly senior figures—a Minister with perhaps not the most spotless reputation—had announced that he was determined that the Security Service, MI5, should destroy all the files on fellow-travellers with Oswald Mosley and the British Union of Fascists. There would have been an outcry—and rightly so—because it is not right for future historians to be denied the opportunity to see what the records say about what people in public life did before—and, I would contend, after—the war, in collusion with or in support of totalitarian, fascist or communist regimes.
How does that relate to today's debate? The answer is, quite simply, that on 22 September 1997, The Guardian published a story about the Minister without Portfolio, headed:
"Mandelson wants MI5 files pulped".
The article began:
"Peter Mandelson, Minister without Portfolio, yesterday called on MI5 to destroy all files on 'subversives' created during the cold war after receiving an apology from the head of the Security Service over the leaking of details from his own file."
It continued with Mr. Mandelson saying:
"'I was not a subversive or a threat to national security—I was a teenager holding ordinary leftwing views'.
He said MI5 should find the resources to 'weed out and destroy' such files, collected during the cold war, 'which are now entirely redundant'."
I was interested in his explanation of his period in the Young Communist League, because it had already been challenged in The Daily Telegraph of 27 August 1997. That article said:
"Mr. Mandelson conceded that, 'disgusted' with the Labour Government's support for the Vietnam war, he had briefly been a member of the Young Communist League in the early 1970s.
'It is true that, for a very short period between three and six months, I was a member of the Young Communist League.'
But former political associates of Mr. Mandelson who knew him at the time said he and some friends had actually set up a branch of the Young Communist League after falling out with the Young Socialists.
They also poured scorn on his reason for leaving the Labour Party, pointing out that Harold Wilson's support for the Vietnam war had come in the 1960s and that, by the early 1970s, the party was no longer in power."
I first raised this matter at the tail end of a speech in the defence debate on 28 October, when I pointed out that
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it smacked of George Orwell's "Nineteen Eighty-Four" in that the past was being airbrushed. It will be remembered that Orwell's Big Brother state used the slogan:
"Who controls the past controls the future: who controls the present controls the past."
I began once again to think that power had gone to Labour Ministers' heads. I therefore wrote to Stephen Lander, Director General of the Security Service, on 16 October—shortly before the defence debate—saying:
"I intend to raise this matter in the House of Commons as soon as Parliament returns later this month. So far as I can see, there is no question of inaccuracy in any of the information that was held on Mr. Mandelson's political activities as a member of the Young Communist League in the early 1970s. It is therefore quite deplorable and unacceptable that he should have made his reported demands.
I should be much obliged if you will take the trouble to reassure me that there is no intention on the part of your service to destroy files containing accurate information about Communists and their allies who were active in this country at the height of the Cold War—particularly at the behest of one of these formerly misguided individuals."
The Home Secretary replied on behalf of Mr. Lander in a letter dated 28 October—the same date as the defence debate, but received afterwards. He wrote:
"The policy of the Security Service is to retain only those records which it needs to carry out its statutory functions, or which are of historical importance. Files held by the Service are therefore reviewed against those criteria periodically as resources permit. There is no question of consigning whole categories of files for destruction without proper review."
Mr. Alan Clark: The key question is the judgment of what is "of historical importance". The problem is that, almost invariably, that judgment is made by civil servants—although, laughably, Ministers may occasionally try to get something taken out to protect their political reputation. For a historian, the really obstructive thing is when civil servants, to defend their reputation as administrators or having made colossal errors of judgment, weed out or repress things that will reflect badly on them.
Dr. Lewis: My right hon. Friend is an extremely distinguished historian; I am a far less distinguished former military historian and it is precisely from the historian's point of view that I am approaching this matter.
The Home Secretary's letter to me finished:
"On the other hand, given the need to ensure that files are not retained unnecessarily the Service will not retain files which do not seem to merit retention on any of the grounds I have mentioned."
On 30 October 1997, 20 Members of Parliament tabled early-day motion 377, which
"notes the recent admission by the Minister without Portfolio, that he was active in the Young Communist League when MI5 opened a file on him in the early 1970s; regards as unacceptable his excuse that this amounted to the holding of ordinary left-wing views; deplores his reported demand that MI5 files on Cold War subversives should be destroyed; and urges the Director-General of the Security Service to resist partisan and self-serving political pressure from the Minister without Portfolio."
Mr. Dennis Skinner: As the hon. Gentleman is one of the Opposition's conspiracy theorists, would it not be a good idea to tell us the full story? He is well versed in this matter. He was a spy in Newham Labour party; he was

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a fellow-traveller; he infiltrated deliberately to try to expose people in the Labour party; and then the Labour Member of Parliament, Reginald Prentice, crossed the Floor of the House and joined the Tory party. To be honest, the hon. Gentleman should tell us the full unvarnished truth about his own activities.
Dr. Lewis: The hon. Gentleman makes my point for me. If I have my way, my MI5 file—if one exists—will be there so that people can see whether or not what he says is true. That is the irony. Twenty years after my engaging in controversial political activities, my political opponents see fit to bring them up, but, less than that time after controversial political activities in which they engaged, they want to airbrush the record and destroy the evidence of what they did. I thank the hon. Gentleman for supporting my case.
I wrote on 4 November to the Home Secretary to say:
"I quite agree with the criteria set out in your letter. It is certainly of historical interest for future historians to know the extent to which people in British public life co-operated with, or espoused the cause of totalitarian, fascist or communist ideologies before or after the Second World War."
I asked the Home Secretary to be more specific about the assurances he was giving me and, on 8 December, he replied. He said:
"Files which are destroyed are those which are either no longer required by the Service to carry out its statutory functions or are judged not to be of historical importance or both. There can therefore be no danger of the indiscriminate destruction of files by the Security Service."
As an innocent and virginal Back Bencher, I was taken in by this. On 10 December, I wrote to the Home Secretary and said:
"I am grateful for your further letter about the danger of Cold War files being indiscriminately destroyed. I regard your response to my concern as being entirely satisfactory and I thank you for writing back in such a straightforward way."
As far as I was concerned, that was the end of the matter—poor fool that I am.
On 11 January, the front page of The Sunday Times said:
"MI5 orders end to spying on political activists."
The report said:
"The security service MI5 is to announce an end to spying on activists, radicals and insurgents. In a decisive break with its cold war past, it will destroy tens of thousands of files naming anti-nuclear campaigners, trade unionists and others whose organisations were once considered a threat to national security."
The Guardian, on 12 January, said:
"MI5 is speeding up the destruction of thousands of files on individuals it once considered subversive as part of an attempt to modernise".
Evidently, it is now the people's Security Service.
On 15 January, I tabled 12 written questions to ask about the criteria that would be adopted in retaining or disposing of files. Some of the questions were technical and some even went back to criteria used in 1945. I was extremely impressed by the fact that, within five days, I had my answers—although not quite all of my questions were answered. Ten were answered within five days, but a week went by and then another week, and I still received no answers to my remaining two questions.
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In the short amount of time I have available—I wish to allow the hon. Member for Lewes (Mr. Baker) to intervene—I shall refer to the two questions. I fear that I shall disappoint Labour Members whom I warned I might be naming, as I will not have time to do so. [HON. MEMBERS: "Shame!"] I will be happy to do so after the debate. The two missing questions were these—one would not have thought that it would take three weeks to answer them. The first was:
"To ask the Secretary of State for the Home Department how many representations he has received in favour of the destruction of Security Service files from (a) Labour hon. Members, (b) Labour peers, (c) Ministers, (d) trade union officers and (e) journalists."
The second question was even easier.
"To ask the Secretary of State for the Home Department, what representations he has received from the Minister without Portfolio for his MI5 file to be destroyed; and if it is to be destroyed."
One would have thought that these were easy questions to answer. However, it took almost three weeks before the Home Secretary came up with a reply—after I had telephoned his office to remind him I was still waiting. He said:
"If I receive any representations from individuals about the possible existence of Security Service files, my practice is to explain the approach of the Security Service to destroying files. It is not my practice to give information about any representations from hon. Members or Ministers or from the other sources listed any more than it would be for me to disclose whether the Service holds or has held files on any individuals."—[Official Report, 3 February 1998; Vol. 305, c. 589.]
I would have thought that, if that were the Home Secretary's position, he could have told me so straight away.
I conclude with three questions. Does the Home Secretary accept that it is of legitimate interest to future historians to know which public figures in politics, trade unionism, business or the media consorted with fascists or communists before or after the second world war? Does he accept that it is important that, if files were improperly held, they should be kept so that the Security Service can be called to account in the future? Above all, does he accept that it is especially important for a Labour Government not to preside over the destruction of files that are likely to show some of their Ministers, hon. Members or supporters in a discreditable light?
1.43 pm
Mr. Norman Baker: I shall be brief, and I am grateful to the hon. Member for New Forest, East (Dr. Lewis) and to the Home Secretary for allowing me to intervene. This is a serious matter which I approach from a freedom of information point of view. MI5 is important and necessary, but I would suggest to the Home Secretary that a number of steps could be taken, in line with the Government's commitment to freedom of information, which would enable the matter to be progressed in a manner consistent with Government policy.
First, we do not know whether there is a file on the Home Secretary himself—an allegation that has been made. In a written answer on 4 December, he said:
"I have not asked to see, nor have I seen, any file which the Security Service may hold on me."—[Official Report, 4 December 1997; Vol. 302, c. 297.]
In response to a later question, he indicated that there were circumstances in which MI5 was permitted to determine that files were not suitable for ministerial eyes—although

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the Home Secretary is responsible for MI5. There is a democratic deficit there. It is up to Parliament to ensure that procedures are put in place to ensure that MI5 is properly accountable.
There are a number of points that the Home Secretary could usefully pursue which will not endanger national security in any way, but which are consistent with the Government's approach to freedom of information. First, why are non-security matters dealt with by MI5 not subject to the Data Protection Act 1988—particularly matters in support of the police? Why is MI5 excluded from freedom of information legislation, when the test of substantial harm could be applied to its activities in the same way as it is applied to anything else? That may well mean that most of what is dealt with by MI5 does not come out, but some might—instead, we have a proposed blanket exemption. Why are the budgets for MI5, MI6 and GCHQ—the Government communications headquarters—shown not separately, but as one figure in the vote?
Why is the number of individuals on whom files are held not published? The Home Secretary has said that he is looking at that matter, and that no security problem is involved in publishing the number of files held on individuals. Why are telephone tap warrants not given out one per line, so we have an understanding of the number of telephone lines being tapped? At the moment, one warrant can cover an organisation such as the Campaign for Nuclear Disarmament, which may involve hundreds of people.
What steps have been taken to improve parliamentary scrutiny of MI5 and the security services? At the moment, insufficient information comes to Members of Parliament, and it is in the interests of the Government and the country that MI5 should be accountable and should be seen to be accountable. That will give more confidence in the Security Service than at present exists.
1.47 pm
The Secretary of State for the Home Department (Mr. Jack Straw): The debate presents the House with a useful opportunity to discuss aspects of the accountability of the Security Service, and of myself as Home Secretary for that service.
Security Service investigations usually involve the painstaking collection of information about suspects—whether individuals or organisations—whom the service has reason to believe might present a threat to national security. The information must be recorded carefully and systematically if it is to be of any use in investigations. Consequently, the management of records is bound to be a natural consequence of the service's work.
Since 1989, the Security Service has operated under powers granted by Parliament contained in the Security Service Act. The service's practice of collecting information about people is not one that Parliament has treated lightly. The director general is under a statutory obligation to ensure that the service collects only information that it needs for the purposes laid down in the Security Service Acts of 1989 and 1996—to protect national security; to safeguard the economic well-being of the UK against threats posed from abroad; and, since 1996, to act in support of the law enforcement agencies in the prevention and detection of serious crime.
The hon. Member for Lewes (Mr. Baker) refers to our commitment to freedom of information and to our commitment to greater openness. I am grateful to him for doing so, because we are indeed committed to that.
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That is reflected in the publication of the freedom of information White Paper, and will be reflected in the publication of the freedom of information Bill.
The hon. Member for Lewes asked me why the freedom of information Act will exclude the operation of the intelligence agencies. We all recognise, as have successive Administrations, that it is not possible to be open about everything. If we removed the ability of the Security Service to operate in secrecy, we would fatally undermine its capacity to defeat terrorists and spies, who themselves exploit the cover of secrecy. However, as I have told the hon. Gentleman, I believe that we should be prepared to be open about the things that we can reveal without harming the service's capabilities. The service shares that view, and in recent years a great deal of information that would previously have been kept secret has been revealed.
Early on, the hon. Member for Lewes asked me what was the oldest file still kept secret in the Home Office relating to the activities of the Security Service or its predecessors. It turned out that it was a file that dated from 1874. I had that file seriously examined and I agreed that it should be placed in the Public Record Office, following representations. I am grateful to him for that.
However, interestingly, I agreed that, as the file related to the Irish Secret Service, pre-dating the current Security Service, the names of the informants, which were on the file, should be kept secret. Although it is now well over 120 years since the events to which the file relates, given the folk memory in Northern Ireland, if those files were made available, some living individuals could be placed at risk. I am grateful to the hon. Member for Lewes for recognising that.
I believe, as does the service, that the idea of making more information available is right, and I commend the previous Prime Minister and my predecessors as Home Secretary for doing so following the 1989 Act. I am examining, therefore, whether and to what extent it is possible to give details of the number and categories of files held by the Security Service. That answers another question raised by the hon. Member for Lewes. I hope to be able to make an announcement on that subject before the summer recess.
I shall make some general points about the Security Service's file holdings as a whole—
Sir Raymond Whitney: Answer the question.
Mr. Straw: I am answering the question directly. The way in which the service manages its files is described in some detail in the Security Service commissioner's annual report for 1991. The commissioner observed that the procedure for opening a file was strictly controlled. Once a file is open, it is subject to a regime known as "traffic lighting". The reason for that description becomes apparent when I explain that all permanent files are initially given a "green" coding. While a file keeps its green coding, inquiries may be made about the subject of the file.
At the end of the green period, the coding changes to "amber". During the amber period, inquiries about the subject are prohibited, but any relevant information that the service receives about the subject may be added to the file. At the end of the designated amber period, the file is

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coded "red". During that period, the service may neither carry out inquiries into the subject nor add substantive information to the file.
Finally, after a period of red coding, the file is microfilmed, the hard copy is destroyed and the entry for the file in the service's central index is transferred from the live index to the research index. Access to the research index is limited, and I understand that it is seldom consulted. For example, it is not consulted in vetting checks.
It will be apparent from what I have said that only a proportion of the service's files are current, in the sense that inquiries may be made about the subject of the files. A substantial proportion of the files are closed. Inevitably, over the years, especially during the long, 40-year period of the cold war, many files were opened and, later, closed. It is worth repeating that no inquiries may be made on the service's closed files unless new intelligence justifies reopening the relevant files within the criteria that I described earlier.
I shall say a few words about one target of the Security Service investigations, which featured in some of the closed files and which was mentioned by the hon. Member for New Forest, East (Dr. Lewis)—those involved in subversion. One of the Security Service's statutory functions is to protect national security from actions intended to overthrow or undermine democracy by political, industrial or violent means. That is what we mean by subversion today, and it is what we have always meant by it.
It happens that our parliamentary democracy is not currently threatened by the activities of subversive groups, but that was not always the case, and it was especially not the case during the cold war. It was concern about subversive activities which led the then Prime Minister, Clement Attlee, to announce the introduction of new vetting processes, designed to deny members of those groups access to sensitive information. That policy was endorsed by all subsequent Governments, and was most recently set out by the then Prime Minister, in a statement in December 1994.
The threat from subversion declined rapidly following the collapse of Soviet communism, and so did the service's work against that threat. The limited resources that the service currently devotes to its counter-subversion function are now focused on monitoring the position, so that it will be able to respond, should the threat resurface.
I shall deal with the central issue raised by the hon. Member for New Forest, East—the policy on the destruction of Security Service files. The Security Service has no wish to retain piles of records that no longer serve any useful purpose. On the contrary, it is the service's policy to keep only those records that it needs to keep, either to carry out its functions or to comply with its statutory obligations. Those include the obligation, which I accept fully, to retain records that are likely to be of historical interest.
As the hon. Member for New Forest, East mentioned, I set out in detail the criteria for keeping records that are regarded as of historical interest in a written answer that I gave him on 20 January 1998. Each file is examined individually and then considered on its merits as a whole as a file, but no collective decision is taken about categories of files.
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The examination includes asking whether the file relates to a major investigation; whether questions were raised concerning important subversive figures, terrorists and spies; whether the file concerns individuals involved in important historical events or causes celebres in a security context; whether the file contains original papers of historical interest; whether the file documents major changes of Security Service policy, organisation and procedures; and whether the file is in some way a period piece, illustrating clearly Security Service attitudes or techniques of the time, and milestones in the service's history.
In 1992, following the end of the cold war, the service launched a review of its file holdings, and started to destroy documents that were no longer relevant to its requirements and did not need to be retained for statutory or historical reasons. As individual judgments are made about each file, the process is resource-intensive and has had to compete with the service's other pressing priorities, such as its work against terrorism. More recently, the work has been accelerated, and I hope to be able to inform Parliament before the summer recess of the progress that has been made.
It has to be for the professional judgment of the service itself to decide which files it can safely destroy and which must be retained for operational, statutory or historical reasons. I make it absolutely clear that the service does not, and will not, take decisions about which files to retain or destroy on the basis of representations from outside the service. It would be wrong to do so in respect of private individuals; it would be even more wrong to do so at the behest of hon. Members or, in particular, of Ministers.
Parliament deliberately inserted into the Security Service Act 1989 the safeguard that the service must take no action to further the interests of any political party. Therefore, I make it clear to the hon. Member for New Forest, East that there can be no question of the service retaining or destroying any of its records with a view to securing a party political advantage for any party or any individual, including the Government of the day.
I pay tribute to the men and women of the Security Service, who spend their lives working to protect the citizens of this country from the type of threat that emerged, for example, last year, during the trials of two ruthless terrorist gangs. That work by Security Service staff, whom I have been privileged, in my time as Home Secretary, to meet and get to know, goes on, by and large, out of the public eye. Every one of us has reason to be grateful for what they do on our behalf.
I shall continue to seek opportunities to shed a little more light on the work of the service, but I shall also continue to draw a clear distinction between information that may be disclosed and that which must be withheld in the interests of the effectiveness of the service. We would be failing in our duty to the public if we forced the service to operate—ineffectively—in the full glare of publicity.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

PRIVATE BUSINESS
  TYNE TUNNELS BILL
  Read the Third time, and passed.
Oral Answers to Questions
  INTERNATIONAL DEVELOPMENT
  The Secretary of State was asked—

  Bosnia-Herzegovina
  Dr. Naysmith: What assistance her Department is providing to Bosnia-Herzegovina; and what plans she has to visit that country. [29610]
  The Secretary of State for International Development (Clare Short): My Department has provided more than £400 million of humanitarian and reconstruction assistance to Bosnia-Herzegovina since 1992. I visited Bosnia from 1 to 4 February to review progress.
  Our priority now is to strengthen Mr. Dodik's new Government in Republika Srpska, given his public support for the Dayton agreement, and to support and encourage refugee return. I am pleased to announce today additional funding of £1 million immediately in budgetary support for the new Government in Republika Srpska and £1.1 million for refugee return and reconciliation work with the stabilisation force and other partners.
  Dr. Naysmith: I thank my right hon. Friend for that reply. Does she agree that the election of the new Government is really good news, particularly with regard to the possible return of refugees and the effect that that may have on implementing the Dayton agreement?
  Clare Short: I agree completely with my hon. Friend: this is a massive opportunity to make significant progress in Bosnia. The new Government in Republika Srpska support the Dayton agreement and want to encourage refugee return. If the international community can reinforce that agreement, if people in Republika Srpska can feel the benefits that will flow from the involvement of the World bank, the European Union and Britain, and if the Government do well in the September elections, there is a chance of real progress in returning refugees. We must seize that opportunity.
  Mr. Faber: I welcome the right hon. Lady's announcement that further funds will be made available for Bosnia. Bosnia is one of many east European and central Asian countries that currently receive funding from the European Union under the PHARE and TACIS democracy programmes. Can the right hon. Lady confirm that the Commission is currently conducting an internal review of those programmes, the focus of which is to remove funding from the majority of countries that need it most, such as Bosnia, and to reallocate it almost exclusively to the first wave of applicant countries for EU membership—supposedly to assist their accession to the European Union? Is that not a blatant attempt at empire building by the Commission at the expense of the more deserving developing democracies, such as Bosnia? Will the right hon. Lady do everything she can to fight any such misuse of aid during Britain's presidency of the EU?
  Clare Short: I agree that the European Union has had difficulty disbursing its funds in the past. The process has
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  been terribly slow and the programmes have not been as effective as they should. There is now a differentiation between the programmes that will help the accession countries and those that will assist the remaining transition countries. I think that that distinction is sensible because the tasks are different. The task of helping the more advanced countries to adjust to the rules of the European Union is different from helping the less advanced countries, which face terrible problems with poverty and high crime levels and are still only half way to building market economies and democracies. We must differentiate our efforts, but we need to ensure that both European programmes operate more effectively and do not ignore either need.

  Development Assistance
  Mr. Baldry: If she will make a statement on the role of non-governmental organisations in the delivery of development assistance. [29611]
  Clare Short: We have strong links with British NGOs which, as the hon. Gentleman knows, are involved in a wide range of tasks supporting development. We also have strong links with community groups and other NGOs in developing countries. We intend to launch a formal consultation on how those relationships can be updated to complement the strategy outlined in the Government's White Paper.
  Mr. Baldry: Everyone will welcome NGOs' being more involved in the development of Government policy. Does the right hon. Lady agree that when one considers Britain's contribution to development overseas, it is not just a matter of how much we give by way of gross domestic product; into that account should be put the enormous work and effort of the UK NGOs, which make a considerable contribution to promoting development overseas? For example, the British Red Cross, which yesterday received a new charter direct from the Queen, has done work in northern Turkey with the Kurds and in Angola. Every day, thousands of UK volunteers are working in various parts of the world. Their contribution should never be forgotten when we are considering the contribution that Britain as a whole makes to trying to ensure a fairer world.
  Clare Short: I agree with the hon. Gentleman. It matters what we put in as a Government—how effectively we disburse our assistance—but the massive contribution of NGOs shows where the heart and the concerns of the British people lie. There is a long track record of engagement with and concern for people overseas, of support for development and in humanitarian disaster relief. We can be proud of the contribution of our NGOs and we should give them all honour and praise for the work that they have done over the years.
  Mr. Dalyell: The House will recollect that at the end of his statement on Iraq yesterday, the Prime Minister referred to the role of NGOs. How does my right hon. Friend see NGOs bringing much-needed help to the people of Iraq, as opposed to the regime?
  Clare Short: I have been talking with officials in my Department about how we can make a stronger

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  contribution to bringing relief to the people of Iraq. The whole world is concerned at their suffering. We know that much of it is the responsibility of Saddam Hussein, but none the less we all feel for their suffering. My Department tells me that the number of NGOs working in Baghdad-ruled Iraq is limited; our capacity to disburse more funds is therefore limited, as there are relatively few people there. I can give my hon. Friend the assurance that we will do everything we can to increase our bilateral assistance to all parts of Iraq and to ensure that, when the oil-for-food swap is increased, we shall do all we can to ensure that relief in the form of food and drugs gets through to the people.
  Sir Alastair Goodlad: Further to the point raised by the hon. Member for Linlithgow (Mr. Dalyell) and the Prime Minister's statement, can the right hon. Lady say which NGOs are involved with British citizens and what advice has been given to them in respect of their personal safety in Iraq?
  Clare Short: I am sorry; I shall have to write to the right hon. Gentleman. That is foolish, because I was discussing with my officials that very matter and what more we can do, but I cannot authoritatively recall the names of the organisations. I do not believe that there are currently any worries about security, especially after Kofi Annan's great success in getting the Saddam Hussein regime to back down on inspections. I shall look into the question that the right hon. Gentleman raises and write to him.

  Development Programmes
  Mr. MacShane: What recent contacts she has had with the Trades Union Congress about the role of trade unions in development programmes. [29612]
  Clare Short: One of my priorities is to secure respect for the International Labour Organisation's core labour standards throughout the world. That is key to ensuring that the fruits of globalisation are fairly distributed, otherwise capital moves around the world chasing cheaper and cheaper labour. My Department is in frequent contact with the TUC to help to achieve that. We are working together on plans for a conference on trade unions, development and human rights, which I hope will generate widespread interest among union members.
  Mr. MacShane: I am grateful for that answer. My right hon. Friend has answered my supplementary, so with your permission, Madam Speaker, I shall sit down.
  Madam Speaker: Very sensible, too.
  Mr. Garnier: Sadly, the right hon. Lady's reply did not answer my question. Can she be more precise? We listened with interest to her answer, but can she give us a little more detail and set out with greater clarity what she meant?
  Clare Short: I am always happy to speak at greater length. The hon. and learned Gentleman will know that more and more major British companies are interested in working with my Department, with NGOs and with the trade union movement to get agreement on codes of
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  conduct for sourcing produce overseas in order to satisfy the pressures from the ethical consumer movements that are growing and strengthening across society. One of the agreements involving people of good will, including employers, trade unionists and NGOs, is that respect for core labour standards—basically, the right of labour to organise, to protect health and safety and not to accept environmental degradation—is one of the fundamental principles of ethical sourcing. We agree with that. We support the work of the International Labour Organisation and we are working with various companies that agree with the principle. I agree with those who hope that there will be a human rights clause in the World Trade Organisation, which would mean basic rights for people worldwide and that capital will not be driven into seeking ever cheaper labour, with all the instability and the race to the bottom on environmental standards that that can entail.

  Land Mines
  Mr. David Marshall: What assistance her Department is providing to reduce the number of active land mines throughout the world; and if she will make a statement. [29613]
  Mr. Jim Murphy: If she will make a statement on progress on land mine clearance programmes. [29619]
  The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): We were all delighted when my right hon. Friend the Secretary of State for International Development signed the Ottawa convention on behalf of the United Kingdom Government. We are doubling our expenditure on de-mining and we are working for greater international co-operation and building up more local capability in order to speed up de-mining worldwide.
  Mr. Marshall: My hon. Friend is well aware that the Inter-Parliamentary Union was the first international forum to debate anti-personnel land mines and that it continues to give this issue high priority. What specific plans do the Government have to speed up the clearance of land mines and to help the tragic victims of these horrific weapons?
  Mr. Foulkes: I was glad to be present as a delegate when the IPU discussed these matters. I heard my hon. Friend's eloquent speech. I can assure him that we are giving substantial support through the Red Cross, the World Health Organisation and NGOs for victim support, as well as through our bilateral country programmes.
  As for speeding up the clearance of land mines, as president of the European Council we are working for much greater co-ordination of our activities. We are having discussions with the Americans and the Japanese. We are also playing a leading role in developing new techniques for mine clearance.
  Mr. Murphy: Is my hon. Friend able to confirm that the policy that the Government inherited would have left the world with land mines planted in it for more than 1,000 years? That is what would have happened if the clearance operation had not been speeded up.

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  Mozambique recently recovered from civil war but found itself much diminished in resources for education and health. What structures and plans do we have to ensure that the dangerous litter of land mines in Mozambique is cleared?
  Mr. Foulkes: My hon. Friend is absolutely right. There are land mines in Afghanistan, Angola, Bosnia, Cambodia—Egypt has mines from the second world war—the Falkland Islands, northern Iraq, Laos, Libya and, as my hon. Friend mentioned, Mozambique. There is a huge task to be undertaken. We need to do more, and we will do more in co-operation with other countries to try to remove this scourge, which affects women and children particularly, as quickly as possible.
  Mr. Fabricant: I hope that the Minister will pay tribute to the previous Government, who helped to set up the Ottawa convention. Is the hon. Gentleman aware that there are possibly more than 100,000 unexploded land mines in Cambodia and other parts of south-east Asia? Will he tell the House what measures the British Government are taking in that region?
  Mr. Foulkes: I can assure the House that we are active in Cambodia. We are supporting the mines advisory group and other groups working in Cambodia.
  The initiative for the Ottawa convention came from the Canadians—from their Foreign Minister, Lloyd Axworthy. My right hon. Friend and her Cabinet colleagues, with others, rightly took up the initiative. I was pleased that it was my right hon. Friend, on behalf of the Government, who signed the convention.
  Mr. Home Robertson: As my hon. Friend knows, I have done a bit of NGO work in Bosnia. The presence of mines is a genuine worry, especially for people with young families. What progress is being made on de-mining in Bosnia? What co-operation are our authorities receiving from the former warring factions on information about the whereabouts of mines?
  Mr. Foulkes: I pay tribute to the work that my hon. Friend has done. I think that he has driven twice to Bosnia with humanitarian assistance, showing graphically how individuals are contributing to the effort there. I can assure him that we are working with the Japanese Government and our own Ministry of Defence. We are doing everything possible by mapping the position of mines and then de-mining as quickly as possible. I am grateful for his comments.

  Multilateral Agreement on Investment
  Ms Drown: What measures she is taking to ensure that the needs and views of poorer developing countries are taken into account during the drafting of the multilateral agreement on investment. [29614]
  Clare Short: My Department is working closely with the Department of Trade and Industry, which leads on the multilateral agreement on investment. We are determined to ensure that the agreement does not damage the interests of the poorest countries and are pressing hard for strong
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  and binding provision prohibiting any lowering of environmental or labour standards in order to attract investment.
  Ms Drown: I thank my right hon. Friend for that reply and congratulate the Government on the work that they are doing to ensure that environmental and labour standards are protected. Does she agree that a key element of development programmes is that a Government should be able to control and filter inward investment and that a developing country should be able to protect its domestic industries just as Britain should be able to protect hers?
  Clare Short: With respect, I do not agree with my hon. Friend. Most developing countries, especially the least developed countries, need to attract more inward investment. It is not a question of protecting their own investment, which is limited; they desperately want to attract responsible, beneficial inward investment. The multilateral agreement on investment is meant to cover Organisation for Economic Co-operation and Development countries. It is not meant to apply to developing countries. We are concerned to get accession terms that protect their interests should they seek to join and to get a model that will influence the World Trade Organisation's proposed agreement on investment—a model that will cover all countries. The least developed countries desperately need more, not less, inward investment if they are to develop and achieve sustained economic growth.
  Mr. David Heath: I am grateful to the Secretary of State for her comments. Does she agree that we are in the latter stages of the negotiations and many people are still not convinced that there will be no adverse effect on developing countries and environmental standards, and that there are binding responsibilities on multinationals, as opposed simply to rights? Will she give a clear assurance that the Government will not sign the agreement—certainly not in April, which was the original target—until they are assured on all those issues?
  Clare Short: The hon. Gentleman knows that there is no chance of that now. The American Administration have made it clear—[Interruption.] May I answer the hon. Gentleman's question? The American Administration have made it clear that there will not be a signature by April, so OECD Ministers have to decide whether to extend the time. The British Government have made it absolutely clear that we will not support the agreement unless there are binding provisions on labour and environmental standards. That is our position, and it is the position of many countries. Some of the campaigns about the agreement are misinformed. A regulated system that makes inward investment more secure and draws it in is in the interests of developing countries. There are possible benefits for the whole world in preventing country after country from competing with one other to attract inward investment by lowering environmental and labour standards. Those are now the top issues for the agreement and it will go through only if it secures what is beneficial.
  Mr. Dafis: Is not the danger, though, that developing countries will be prepared to take that investment because they desperately need it, even though the conditions that the MAI negotiated between the OECD countries are not

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  appropriate for them? Is not the whole process in difficulty because of the large number of exemptions that are being negotiated by some countries to protect their local economies? Is not it best to have a proper postponement—about a year—which is what the NGOs, through the World Development Movement, are asking for, so that we can have an acceptable process of developing agreements on investments and trade?
  Madam Speaker: I said only a few days ago that hon. Members should ask only one question. There were about three there and a lot of comment.
  Clare Short: The World Development Movement's campaign on the agreement is misinformed. It is essential to obtain binding agreements on labour standards and the environment and accession agreements that can protect the proper development interests of developing countries. The British Government are committed to those things and, if we obtain them, they will be wholly beneficial. The suggestion that it is Armageddon now is just wrong.
  Mr. Alan Simpson: Is Britain pressing for the inclusion of a clause in the MAI which guarantees the right of developing nations still to impose domestic reinvestment obligations on multinational companies developing in their areas?
  Clare Short: As I have already said, the agreement is meant to apply to OECD countries; it is not designed for developing countries. The principle in it is that inward investment should not be treated any worse than domestic investment, and that investment that has come in should not be taken over without proper compensation, for example. We are adding the labour and environmental clauses. I assure my hon. Friend that we are determined to protect environmental interests, labour conditions and the interests of developing countries, and I am confident that without that there will be no agreement.

  Education Programmes
  Mr. St. Aubyn: If she will make a statement on the role of non-governmental organisations in delivering education programmes. [29615]
  Mr. Foulkes: The delivery of universal basic education, which is one of our major priorities, is primarily the responsibility of Governments. However, we welcome the involvement of NGOs in the education sector. They have an important role to play in empowering local people to demand quality provision. They are also particularly effective in the education of excluded children, such as child workers, and in adult literacy programmes.
  Mr. St. Aubyn: Is the Minister aware that the Project Trust, a successful NGO which, during 30 years, has sent 4,000 school leavers on projects teaching overseas, recently expressed concern that the work of such bodies might be hampered by the increasing cost of a university education for students who might not be able to afford to offer this volunteer work during their gap year?
  Mr. Foulkes: We do not fund the Project Trust, but we recognise that it is a worthwhile, character-building
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  organisation. I understand that the hon. Gentleman went on one of its volunteer programmes, so he eloquently demonstrates what a success it is.
  The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): Oh no he does not.
  Mr. Foulkes: I must agree with my hon. Friend since it is his birthday today, on which I congratulate him.
  We support voluntary service organisations such as International Voluntary Service and the Voluntary Service Overseas that send volunteers overseas. I was disappointed to see in The Observer on Sunday that there seems to be a downturn in the number of people volunteering to go overseas. We are now considering what can be done to encourage more people to volunteer to help in developing countries.
  Mr. Campbell-Savours: My hon. Friend might recall that Labour's policy document on overseas development, "A World of Difference", argued that development studies should be introduced, by one means or another, to the national curriculum. What developments in secondary education has my hon. Friend to report?
  Mr. Foulkes: The development awareness working group has been set up. Everyone who was invited by my right hon. Friend the Secretary of State to serve on it has agreed to do so. The first meeting will be on 31 March. I look forward to chairing it and hearing all the recommendations, which I hope will take forward what was included in that report and in our manifesto.
  Mr. Ian Bruce: I am sure that the hon. Gentleman knows that many NGOs that work with street children are particularly involved in their education. Will his Department make it easier for British-based NGOs to bid for project funding from his Department to increase the effectiveness of that excellent work?
  Mr. Foulkes: I recognise the hon. Gentleman's particular interest in this area and assure him that NGOs, particularly those working and based in developing countries, can apply through our country programmes for assistance. We will give them sympathetic consideration. [Interruption.]
  Madam Speaker: The House will come to order. It is too noisy and we can hardly hear each other.

  Sudan
  Mr. Hanson: What discussions she is undertaking with aid agencies regarding refugees in Sudan. [29616]
  Clare Short: We are in frequent contact with UN agencies and our partners from non-governmental organisations working with internally displaced Sudanese and refugees in Sudan. Since April 1994, we have provided about £4.8 million bilaterally to support their work. We were the fourth largest donor of bilateral emergency assistance in 1997.
  Mr. Hanson: Will my right hon. Friend pay tribute to the many people in my constituency and elsewhere who

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  are now busily raising money for the aid agencies to spend in Sudan to help alleviate the distress of those refugees? Will she ensure that, as well as providing such excellent aid—she mentioned £4.8 million—she works with the Foreign Office to ensure a political solution by bringing the warring parties back to the table so that refugees can find their way back to their own homes?
  Clare Short: I pay tribute to the generous people who collect money for and care about the suffering of the Sudanese people. I agree with my hon. Friend: the real answer for the people of Sudan is a political settlement and an end to the civil war that has resulted in so many refugees and internally displaced people. The destruction of the Sudanese economy is a tragedy for Sudan and that part of Africa. We must do all in our power to support a political settlement.

  Caribbean
  Mr. McAllion: What steps she is taking to promote development in the Caribbean. [29617]
  Mr. Foulkes: Caribbean countries have been making great strides in recent years. Our White Paper distinguishes between the needs of the poorest countries, which require resource transfers to develop basic services, and middle-income countries—such as those in the Caribbean—which need access to technical assistance and know-how. We have had two consultations on this matter with Caribbean high commissioners and I had a useful and positive discussion with Caribbean Governments at the recent UK-Caribbean forum in Nassau in the Bahamas.
  Mr. McAllion: Cuba is the most important island in the Caribbean—[Interruption.]
  Madam Speaker: Order. We can hardly hear the hon. Gentleman who is on his feet. I have already asked the House to come to order and it must now do so.
  Mr. McAllion: I was saying that Cuba is the most important island in the Caribbean and I know of my hon. Friend's great interest in Cuba. Does he agree that the best way that Britain can help the embattled people of Cuba in their struggle against the illegal aggression of the United States of America is through constructive engagement by forming closer political ties and building better trading links with Cuba? To that end, will he undertake to become the first Minister to visit Cuba since the Labour Government were returned to power in 1997?
  Mr. Foulkes: I would certainly like that opportunity at some time. We already support Cuba through the Department's small projects scheme and through our contribution to the European Community's humanitarian programme. We have been encouraging the Commonwealth Development Corporation to develop an investment programme in Cuba. I have met the Cuban ambassador and visiting Ministers from Cuba and discussed with colleagues in other Departments how we can further our co-operation with Cuba.
  Sir Peter Tapsell: Does the Minister agree that, while new forms of development are urgently needed in many
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  of the English-speaking islands in the Caribbean, any benefits that that development will bring will be overshadowed if the European Union, responding to pressure from Germany, is permitted to destroy the export of their agricultural products, particularly bananas and sugar?
  Mr. Foulkes: I was hoping that the hon. Gentleman would raise the issue of bananas and I was not disappointed. I assure him that we are doing everything we can to protect the interests of the Caribbean banana producers. I pay particular tribute to my right hon. Friend the Minister of Agriculture, Fisheries and Food, who went to St. Lucia to see for himself the banana producers' problems. When he then went to the Agriculture Council he was able to speak with first-hand knowledge. Like other Ministers, he has been fighting hard to protect banana producers' interests.

  Endangered Species
  Mr. Baker: What steps she is taking to ensure endangered species are not adversely affected by her Department's policies. [29618]
  Clare Short: The White Paper emphasises the central place of the environment in our efforts to eliminate poverty and promote sustainable development. We are clear that the best way forward is to assist poor people to find sustainable livelihoods so that they can improve their lives and sustain natural resources. Every bilateral Department for International Development programme is subject to an environmental screening to ensure that it does not adversely affect endangered species, or the environment as a whole.
  Mr. Baker: I agree with the Secretary of State, but may I draw to her attention the fact that there were 80,000 tigers in the world in 1900? Now there are fewer than 5,000, 3,000 of which are in India. Her Department could play a major role in ensuring the tiger's survival. Will she ensure that the global tiger forum is formally convened, and will she also investigate the detrimental impact of the joint forestry management programme with the Karnataka forest department in the western Ghats?
  Clare Short: We all want to make sure that the tiger survives, but I remind the hon. Gentleman that my Department exists to work towards eliminating poverty, not just to protect endangered species. Our view is that, if the poor can live in a way that is good for them and sustains their natural environment, that is the way to look after the planet and its people.
  The hon. Gentleman referred to forestry. We are working in many areas to give poor people who live near forests some sort of ownership of the future of those forests. That, and technical support, will allow them to sustain their own forests: we will protect the planet and the animals that live in the forest.

  Montserrat
  Mrs. May: When she plans to visit Montserrat to discuss aid to that country. [29620]
  Clare Short: I have no plans to visit Montserrat. The hon. Lady may know that the Foreign and

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  Commonwealth Office has lead responsibility for the dependent territories and for co-ordinating the work of all Departments that assist Montserrat and the evacuees. I am therefore very pleased that my right hon. Friend the Foreign Secretary was able to visit Montserrat recently.
  Mrs. May: Does the Secretary of State accept that her decision not to visit Montserrat could be seen by the islanders as a snub? Does she further accept that the Government have lessons to learn from their handling of the issue of Montserrat, not least whether the Department or the Foreign Office is leading? Will she commission a full, frank and impartial report on the lessons that the Government have to learn from their handling of the problems in Montserrat?
  Clare Short: No, I do not accept that for a minute. In fact, a junior Foreign and Commonwealth Office Minister and my own junior Minister have visited Montserrat three times between them. The Foreign Secretary has also visited Montserrat, whereas the Foreign Secretary in the previous Government did not. There are 2,800 people left living in Montserrat. My Department has spent £55 million on this complex emergency. We have responsibilities to poor and needy people all over the world. We have done much to improve the efficiency of the administration of Montserrat: we inherited from the previous Administration an inefficient system with many layers of decision making, but we have put much of that right.

  The Prime Minister was asked—

  Engagements
  Mr. Evans: If he will list his official engagements for Wednesday 25 February.
  The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. Later today, I shall have further such meetings.
  Mr. Evans: Before Sunday's march of 250,000 people through London, will the Prime Minister come to Longridge in the Ribble Valley tomorrow night? I shall be lighting a beacon, one of thousands which will unite the whole United Kingdom and send a clear message on behalf of those who live in and love the countryside. They are fed up and have had enough of the Government's relentless attacks on them. They see their way of life being ruined and, with farming in crisis, the countryside is at risk. Will the Prime Minister tell country people how long and how loudly they need to shout before he will listen to them and give them the help that they need?
  The Prime Minister: There is no campaign of greater hypocrisy than the countryside campaign launched by the Conservative party. When the hon. Gentleman lights his beacon tomorrow night, perhaps he will tell people that there are 30,000 more hectares of green belt under this Government. The farming industry is receiving £85 million more of help than under the last Conservative
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  Government. The problems of farmers are immense, but their main problem is the BSE crisis created by the Conservative Government.
  Mrs. Butler: Does my right hon. Friend agree that a House of Lords with more than 750 hereditary peers is indefensible in a modern democracy? Does he look forward to the support of all the other parties for the short sharp Bill to end those peers' voting rights?
  The Prime Minister: I certainly look forward to the support of the Leader of the Opposition and the Conservative party for reform of the House of Lords. It is not entirely clear what is happening on the other side of the House, but Labour Members consider it quite wrong that hereditary peers should end up deciding the laws of the land.
  Mr. Hague: When the Prime Minister cut lone parent benefit in December—we supported him—did he do so to save money, or because he believed in the principle that the benefits system should not discriminate against married couples?
  The Prime Minister: We did not believe that the system should discriminate against married couples, but we believed that putting in extra money to help lone parents to get off benefit and into work—some £300 million more than the Conservatives put in—was the right way in which to spend the public's money.
  Mr. Hague: After fighting so hard to bring about that cut in December, why did the Government let it be known this morning that they intend to more than compensate lone parents with hundreds of millions of pounds of extra benefit? Why is the Prime Minister now backsliding on his vow—the vow on which he has staked so much—to reduce welfare spending and tackle welfare dependency?
  The Prime Minister: The short answer is that we are not backsliding, and that those stories are wrong.
  Mr. Hague: It is no good the Prime Minister telling us not to believe what we read in the press, because we have come to learn that we are far more likely to read Government announcements in the press than to hear them on the Floor of the House of Commons. It is just like last week: we all know a U-turn when we see one.
  Is it not the case that, faced with Back-Bench rebels and a grass-roots revolt at Labour party roadshows where people have thrown eggs at the Chancellor of the Exchequer, the right hon. Gentleman's Government have begun to lose their nerve? When the Green Paper is finally published next month, will it at least contain clear targets for the reduction in welfare spending that he has long promised?
  The Prime Minister: I am afraid that the right hon. Gentleman formulated that question before he heard my answer, in which I said that the story was wrong. There is no U-turn; there will be no change in the regulations governing lone parent benefit. As for talking about U-turns, I think that, after his constitutional speech yesterday, the right hon. Gentleman is rather unwise to do so.
  Mr. Hague: My speech laid out a clear set of principles—a concept unknown to the Prime Minister.

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  Let him answer my actual question: will the Green Paper, when it is published, contain clear targets for the reduction in welfare spending that he has long promised?
  The Prime Minister: I am afraid that the right hon. Gentleman will have to wait for the Green Paper on welfare, but the Government are already carrying out substantial welfare reform—not least in the welfare-to-work programme, a £3.5 billion programme to get our young people off benefit and into work. That programme has been opposed by the right hon. Gentleman and the Conservative party, although it has been welcomed by business and young people throughout Britain.
  Mr. Hague: The Prime Minister says that we will have to wait for the Green Paper. We have been waiting a very long time for the Green Paper, which the right hon. Gentleman said would be published around the turn of the year. We do not know around the turn of which year he meant.
  The Prime Minister has promised the country that he will reduce welfare spending. Today, on the lunchtime news that he always watches, his Back-Bench rebels have welcomed the news of his U-turn. The right hon. Gentleman knows that he can have the Opposition's support on this issue; so, on this issue, why does he not stop trying to govern the Labour party, and start governing the country?
  The Prime Minister: That would have been a great finale if it had not been for my original answer, which was that there had been no U-turn. I am very sorry, but the only party that is serious about welfare reform is this party. The Conservative party had 18 years in which to reform welfare; instead, it left us with a situation in which poverty is up, more children are living in poverty, more pensioners are living in poverty and there are more workless households—yet spending is up. That is a record of failure that we will turn into success.
  Ms Jenny Jones: Is my right hon. Friend aware that two thirds of pensioners on income support are women who therefore live out their old age in poverty? As the previous Government did nothing to tackle that problem, can my right hon. Friend assure me that the Government's pension review will give a high priority to the needs of women?
  The Prime Minister: We are particularly looking at how we help low-income families and pensioners on low incomes. My hon. Friend will know that, by cutting VAT on fuel, as we promised we would do, and did, and by the additional help this year and next with pensioners' heating bills—£50 for pensioner households on income support and £20 for pensioner households that are not—we are already making sure that we put the priorities of low-income pensioners first.
  Mr. Beith: Although it is understandable that the Prime Minister will give a sharp response to the party that has been in charge of the countryside for the past 18 years, during which the problems have built up, does he recognise that the anxieties are serious and deep? Half the villages now have no schools; three quarters of them have no daily bus service; and services such as the health
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  service and those for the elderly are threatened by cuts which started under the previous Government but which he has continued against the background of a crisis in the countryside's basic industry.
  The Prime Minister: Let me first say where I agree very much with the right hon. Gentleman. In relation to the countryside, issues such as health, schools, crime and transport are every bit as important to people in the countryside as many of the things that the Conservative party continually raises. Since coming to power, we have put substantial additional resources via the new deal, the release of capital receipts and extra money for schools into rural areas. It will take time to turn around the mess that we inherited from the Conservative Government. In particular, we need to make sure that we hold firm to tight public spending to get rid of the big structural budget deficit which we inherited on 1 May.
  Mr. Beith: Why does it always seem to be the rural areas to which the message is delivered that the cuts must be impacted on them? When it comes to the signal that the Government give to people in rural areas, how is it that the powers of the Rural Development Commission were given to the regional development agencies and the Government set up a social exclusion unit and said that it would deal only with urban problems? Many country people now feel very excluded.
  The Prime Minister: That is simply wrong. We do not say that rural areas should be discriminated against. Indeed, that is why I say that the additional money on national health, in relation to schools and in respect of the new deal is going to rural areas as well as inner-city areas. It is essential for us to make sure that we do not lose the tight grip on public finances that is at the heart of removing the threat of boom and bust that we had so many times under the Conservatives, and to make sure that we have prudent, stable economic management for the long term. When we get the public finances sorted out, we can give to rural areas and others the help that they desperately need.
  Mr. David Taylor: Is the Prime Minister aware that a warm welcome will be given to today's consultation paper on wider access to the open countryside, especially in areas such as North-West Leicestershire, where so much is closed to us? In view of our disappointing experience over the decades in establishing voluntary agreements, would he care to comment on the need to establish a statutory right of access?
  The Prime Minister: We have made it clear that, if voluntary means fail, we are prepared to legislate. It is also right that, if we can, by voluntary means, establish greater access to the countryside, we can obviously have that access far more quickly and far more easily. There is no intention whatever—this again has been subject to some misconstruction—to have people roaming through land that is cultivated or developed. The vast bulk of affected land is open countryside such as moorland to which people would like greater access. If it can be done by voluntary access, so much the better: if it cannot, we stand ready to legislate.
  Mr. Wilkinson: Has the Prime Minister had time to read today's letters in The Times, particularly one five-paragraph letter from a justice of the peace, Mr. Wilding, who complains about financial constraints and reductions in qualified staff and courthouses, and another, a rather more dignified and discursive 16-paragraph letter from a learned and noble art connoisseur—the Lord Chancellor—about his state apartments? Which letter does the Prime Minister think that the British public believe better addresses the problems confronting the British legal system?
  The Prime Minister: That was not a very wise intervention. The House of Lords Committee that approved the matter that the hon. Gentleman mentions included Conservative peers, who fully supported it.
  Mr. MacShane: Has my right hon. Friend seen the remarkable survey by Income Data Services of many small and big business firms which shows that they are adjusting their wages to ensure that they will not be paying below a national minimum wage? Does he agree that the survey shows, first, that the business community is joining the Government in their drive to eliminate the low pay rates inherited from the previous Government, and, secondly, how out of touch the Conservative party is as it continues to defend poverty pay for the poorest of the land—which no business man is willing to support?
  The Prime Minister: My hon. Friend is right: the survey is very interesting, and shows that companies are already trying to deal with the low pay of specific parts of their work force. The evidence is that companies are doing so without any ratcheting up of differentials—which was always the criticism made of a minimum wage. I believe that there is no future for Britain as a sweatshop economy, and that a minimum wage is part of any decent, civilised society. I note that the Conservative party has still not told us whether it would reverse the minimum wage legislation that we have introduced. Perhaps, at some point, Conservative Members will tell us.
  Mr. Bercow: The Prime Minister will recall saying:
  "I never try to tell people what to do for their own children."
  Does he therefore agree that, if parents vote to keep the Royal Latin grammar school, in Buckingham, their children should be able to receive a grammar school education without further disruption or uncertainty for the duration of their careers at that school?
  The Prime Minister: I do not know about the particular circumstances of the hon. Gentleman's school, although I should be perfectly happy to write to him about it. The rules that will apply to that school are the rules that will apply to any school. The rules have been clearly stated in the Government's proposals.
  Mr. Pike: My right hon. Friend will know that many people are worrying about the benefits review. Will he take this opportunity to assure them that they are worrying unnecessarily, and that the
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  Government's main objective in the benefits review is to tackle the failures of the current system and to ensure that we have a better and fairer system?
  The Prime Minister: Yes, that is absolutely right. As I made it clear to disabled groups when I met them, we want to ensure that those who are disabled are given the help that they obviously need. The reason for reform is perfectly simple: as I said a moment ago, spending is up, but poverty is also up. There is a consensus in the country that the welfare system is not working. We have now to proceed to the principles of reform, which will be stated in the Green Paper which will be published shortly. We shall then move to the detailed proposals, each of which will be subject to proper discussion and debate. I think that that is the way to proceed with reform.
  Sir Teddy Taylor: Is the Prime Minister aware of the problems facing Back Benchers, probably mostly Labour, in coping with representations from groups of people—such as the university students who are outside the House today, the disabled and trade unions representing national savings—who claim categorically that they were shamefully misled during the general election and have since been sold down the river? Although we fully appreciate that there can sometimes be misunderstandings and that people sometimes do not read the small print, would it not strengthen our democracy if an independent body were established—perhaps by extending the powers of the ombudsman—to look into allegations of electoral fraud? Does the Prime Minister not appreciate that—irrespective of who is the Government—if we do not something about it, our democracy will be undermined?
  The Prime Minister: First, on student finance, since we said specifically, as, indeed, did the Conservatives, that we would abide by the outcome of the Dearing committee report, I think that it is the richest possible hypocrisy for the Conservative party, having supported those proposals, now to denounce them.
  As for electoral fraud, a judgment will be made at the general election. A judgment was made at the last election on the party that the hon. Gentleman supported, and that judgment was pretty resounding.
  Mr. Mullin: Has my right hon. Friend noticed that all opinion polls show that the overwhelming majority of country dwellers are opposed to hunting with hounds? Has he also noticed that there is a considerable overlap between the so-called countryside alliance and the bloodsports wing of the Conservative party? Is he aware that many of those who will be attending next Sunday's demonstration will be there not by free will but because they are employed by landowners and fear for their tied cottages and tenancies? Will he bear those points in mind when considering what weight to give to representations made to him by this so-called countryside alliance?
  The Prime Minister: Unlike the Conservative party, I certainly believe that love of fox hunting is not the same as love of the countryside.
  Mr. Brady: Does the Prime Minister recall the pre-election pledge that he gave to my

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  constituents that the future of their grammar schools would be decided by local parents? Will he take this opportunity to explain to my constituents why he is breaking that promise by allowing people living outside Altrincham and Sale to vote on the future of our schools?
  The Prime Minister: Again, I am not aware of the situation to which the hon. Gentleman refers, but we have not broken any such promise in relation to that situation or any other.
  Ms Keeble: Is the Prime Minister aware that most working families in my constituency live on just below average earnings? Is he also aware that the East Midlands legal services committee recently estimated that some 9,000 people in Northampton have serious debt problems? Will he set out the Government's strategy for providing support for working families so that people in my constituency can look forward to a financial future that is more secure than the time they had under the Tories?
  The Prime Minister: We want to ensure that we provide greater help and support for working families. Of course, that is one of the issues that my right hon. Friend the Chancellor will address in the Budget. In addition, one of the greatest causes of family poverty throughout the country is the absence of work in households where there should be work. That is precisely why the welfare-to-work programme is so important. It will for the first time give hundreds of thousands of people the chance to get decent skills, a decent education or a job with a private sector employer and allow them to bring a wage into a household that is at present dependent on benefits. I am sure that that is the single best way in which we can tackle poverty in this country.
  Mr. Hayes: Is the Prime Minister currently, or has he ever been, personally associated with an offshore trust?
  The Prime Minister: No.
  Kate Hoey: Does the Prime Minister realise that, among the hundreds of thousands of people at the countryside march on Sunday, there will be many thousands from urban and inner-city areas who care passionately about the countryside? Does he agree that the Deputy Prime Minister's statement this week was greatly welcomed across the country by people who want to see the end of the divide between country and town? Does he share my view that, in view of the hugely divisive nature of hunting, perhaps now is the time to set up some form of independent inquiry—a kind of royal commission—to examine the issues dispassionately and without emotion, while recognising that there are hugely different views on either side of the argument and that people feel very strongly about it?
  The Prime Minister: We do not have plans to establish such an inquiry, although of course the debate will go on and people will make their points and raise the issues that are relevant to it. In relation to the countryside and the points that my hon. Friend raises, it is important to point
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  out that the Deputy Prime Minister's announcement means that the amount of brown-field building and green-belt land will increase. In relation to the real problems that are felt in the countryside, by farmers in particular, again, additional support is being given.
  I hope that my hon. Friend would agree that it is unfortunate not only if townspeople are ever ignorant of what is happening in the countryside, but if people who live in the countryside—I speak as someone with a countryside constituency—believe that all townspeople are either ignorant of or dislike the countryside. That is not the case, and attempts to divide town and country are wrong and misguided.

  Government Policies (Lichfield)
  Mr. Fabricant: What assessment he has made of the effects of the Government's policies on the people of Lichfield.
  The Prime Minister: In relation to the hon. Gentleman's constituency, I would say, for example, that unemployment has fallen since the general election; that the South Staffordshire health authority is receiving a real-terms increase of £4.3 million for next year, with £1.7 million this winter; and, of course, that the poorest pensioners have been helped with their heating bills. All three things will be of enormous benefit to people in his constituency—and I am happy to give him more particulars.
  Mr. Fabricant: I am grateful to the Prime Minister for that helpful answer; I am sure that the whole House will welcome the unemployment rate of 2.8 per cent. Does he accept that some businesses in my area feel that they are at risk and, more important, that the 2.8 per cent. unemployment rate in Lichfield is at risk? There have been five interest rate rises, and the pound has a high value, which means that businesses are facing great difficulties in exporting. More worryingly, the Organisation for Economic Co-operation and Development has reported that the economy—of the whole nation, let alone Lichfield—could go into recession at the end of this year as a consequence. What heart can the right hon. Gentleman give the people of Lichfield, and those from other parts of the country, who voted Labour?
  The Prime Minister: I will say exactly what I would tell the hon. Gentleman on the interest rate rises and the management of the economy. As I said earlier, we inherited two significant problems on 1 May in relation to economic management. First, inflation was back in the system, as the Conservative Government had refused to raise interest rates despite being advised to do so. Secondly, there was a large structural budget deficit.
  We know what happened when we did not tackle those problems at the end of the 1980s: two years on, we ended up with boom and bust under the Conservatives, 15 per cent. interest rates for a year or more and the largest borrowing requirement that the country has ever known. It is precisely to avoid the dangers of that boom and bust that we have ensured that we have sorted out the public finances and put monetary policy on a sound footing for the long term.

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  I say to the businesses in Lichfield and elsewhere, and to people in the country, that those measures are tough and difficult, but they are right for the country's long-term future. We shall not shrink from making the long-term decisions necessary to build British economic strength.

  Ministerial Visit
  Sir Robert Smith: When he will next visit the north-east of Scotland.
  The Prime Minister: I am afraid that I have no immediate plans to visit the hon. Gentleman's constituency.
  Sir Robert Smith: I am obviously sorry that the Prime Minister cannot see the delights of the north-east of Scotland, but I hope that he can tell me the Government's view of the importance of the oil industry to the economy of this country and the north-east of Scotland in particular. Will he send a message to the many small and medium businesses that contract to the industry and are building a very important export market that he wants the industry to thrive and grow, and that they should have the confidence to invest and expand?
  The Prime Minister: I certainly want the industry to thrive and grow. The hon. Gentleman will remember that the last Labour Government started the oil industry and put it on its feet. Of course we want both the jobs and the benefits which investment in that industry brings.

  Engagements
  Mr. Syms: Will the Prime Minister now rule out, perhaps by a leak to The Guardian, cutting or taxing disability living allowance?
  The Prime Minister: We have made it clear that a review is under way. When the results of that review are published, we will make them available to the House.
  Liz Blackman: Can my right hon. Friend confirm the fact that the Government have excellent relations with our European partners, including Germany? Will he join me in roundly condemning the offensive remarks made a few days ago by a Conservative Member?
  The Prime Minister: We do have excellent relations with our European partners—[Interruption.] I am sorry that that is a cause for criticism by the Conservative party. I am delighted to see the Leader of the Opposition sitting next to the shadow Secretary of State for Trade and
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  Industry. I know that the shadow Secretary of State made the criticism that Chancellor Kohl should not be given the freedom of the City of London; perhaps it is time the Leader of the Opposition gave the shadow Secretary of State the freedom of the Conservative Back Benches.
  Mr. Whittingdale: Has the right hon. Gentleman had time to study the petition delivered to 10 Downing street, signed by 7,914 of my constituents and calling for the maternity unit at St. Peter's hospital in Maldon to be kept open? Is he aware that the closure of maternity units in rural areas such as Maldon, Braintree, Clacton and Harwich flies in the face of the Government's policy set out in "Changing Childbirth"? Will he intervene to stop such closures, which will deny choice to thousands of mothers?
  The Prime Minister: As the hon. Gentleman well knows, the reason for the present tight financial constraints is that we inherited them from the previous Government. What is more, we are putting in an extra £1.5 billion into the national health service. If the hon. Gentleman is going back and telling his constituents that, under a Conservative Government, things would be different, he is simply not telling them the truth—but then what would be new in that for the Tory party?
  Mr. Derek Foster: Will my right hon. Friend the Prime Minister join me in congratulating the world-class management and work force of Black and Decker in Spennymoor, which have secured an extra 350 jobs, although the original plan was for total closure of the plant, losing 1,200 jobs? Does he agree that the northern work force has a great deal to gain from lifelong learning strategies, and will he ensure that the Government give as much priority to lifelong learning as to the schools agenda?
  The Prime Minister: I am delighted with the news about Black and Decker. I know that my right hon. Friend has worked hard to play his part in helping that investment to come there. Of course, Black and Decker used to be in my constituency.
  What my right hon. Friend says about lifelong learning is absolutely correct. As part of the education and skills revolution which we need in this country, we must encourage adults to upgrade their skills and learn new skills throughout their working lives. The imaginative proposals announced today by my right hon. Friend the Secretary of State for Education and Employment, plus additional money to help people get the skills that they require, especially in new technology, will play a big part in boosting jobs and ensuring that Britain is on its way to achieving our aim, our vision, which is to have the best educated, best skilled work force in the western world.

Right to Roam (Consultation Document)
3.32 pm
Mr. Tim Yeo(by private notice): To ask the Secretary of State for the Environment, Transport and the Regions in what circumstances a copy of a consultation document on the right to roam became available to the Ramblers Association before it was available to Members of Parliament, to whom else the document became available, and if he will make a statement.
The Minister for the Environment (Mr. Michael Meacher): The House will be aware that we have published today our consultation document, "Access to the Open Countryside in England and Wales". I held meetings with four national organisations yesterday to outline the Government's thinking in broad terms. In view of the complexity and detail of the issues, I allowed each organisation to have a copy of the document to examine overnight. I emphasised that it was for personal use only and that the contents were not to be disclosed to anybody else.
The organisations concerned were the Country Landowners Association, the Moorland Association, the National Farmers Union and the Ramblers Association, all of which have been involved in extensive discussion with my Department on this issue.
I completely understand the hon. Gentleman's concern that non-governmental organisations should have had copies of the document before it was available to the House. I have discussed this matter with my right hon. Friend the Deputy Prime Minister and apologised to him. [Interruption.]
Madam Speaker: Order. I will have hon. Members keep quiet when an important statement of this nature is being made to the House. I am sorry, Mr. Meacher.
Mr. Meacher: My right hon. Friend the Deputy Prime Minister made it clear that he regarded what has happened as unacceptable, and I share that view. He accepted my wish to make a full and unreserved apology to the House, and that I now do.
Mr. Yeo: I welcome the fact that the Minister has made an unreserved apology, and I was interested to hear his explanation of the circumstances. The facts are these: a policy document was in preparation for months; the timing of its release was entirely under his control; and he chose to give it to four outside organisations a full day before it was available to Parliament—presumably in order to try to buy off criticism in advance.
Does the Minister accept that he should have made a statement about the policy here in the House, so that hon. Members, including those who, like myself, are opposed to his policy, could question him on it? Does he agree that this is further proof of how power has gone to the heads of Ministers? From the Prime Minister—who, characteristically, has not waited in the Chamber to hear this exchange—downwards, Ministers refuse to answer questions in the House, they decline to debate issues in the House, and they refuse even to meet hon. Members to discuss issues of concern to our constituents.
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Spin doctors and soundbites may be what the Government depend on, but parliamentary debate is what democracy depends on. Parliamentary traditions have been centuries in the making. Men and women have given their lives for them, yet they are now being consigned to the gutter by the Labour Government. Does the Minister understand that his behaviour is an insult not only to the House of Commons, but to every one of the men and women who elected us?
Mr. Meacher rose—
Hon. Members:Resign.
Madam Speaker: Order. We need order in the House for these exchanges.
Mr. Meacher: I have already made it clear that I apologise to the House, and I have to say that, in that rant, the hon. Gentleman has completely overreached himself. The fact is that it is not a policy document; it is a consultation document. In addition, I have already answered a written parliamentary question today.
I should also point out that the previous Government routinely made major policy statements without any recourse to Parliament. One example was the basic pensions-plus document just before the election. It was leaked to the press overnight and published on 5 March at a Government press conference in Downing street, and Ministers refused to make a statement in the Commons. If there is a desire on the part of the House to have a further debate on this document, we shall be pleased to do so.
Mr. Robin Corbett: May I congratulate my right hon. Friend the Minister on doing the honourable thing and coming directly to the House to make his apology? Will he simply confirm that it has long been the practice of Governments to release not only consultation documents, but policy documents on an embargoed basis to interested organisations and the press—including that lot opposite, when they were in government?
Mr. Meacher: I have made my position clear on that. It is certainly the case that the previous Government on many occasions did exactly what my hon. Friend has said. If I am to be condemned, the hon. Member for South Suffolk (Mr. Yeo) and other persons on the Opposition Front Bench should also apologise to the House.
Mr. Charles Kennedy: Given, as the Minister said in his statement, that it was perfectly proper that the request for the private notice question should have been made and then granted by you, Madam Speaker, does he acknowledge that most of us will probably think of the common-sense advice our parents tend to give us when we are growing up—that there are occasions when one should apologise, but there are also occasions when one should, with grace, accept an apology? This afternoon is a good example of that.
Going back to a question by the hon. Member for Vauxhall (Kate Hoey) during Prime Minister's questions, could not this issue and other countryside concerns be addressed by a royal commission, which would enable all

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the groups to make their input more openly? It would certainly enable the House to consider and reflect on any legislation which may come forward in due course. It would also give the parliamentary Conservative party the chance to make a more considered response to the document than it managed this afternoon.
Mr. Meacher: I am most grateful for the hon. Gentleman's opening remarks, with which I fully agree. The whole point of a consultation period is that there should be open and genuine consultation of all the relevant parties. I expect the Country Landowners Association, the Moorland Association, the National Farmers Union and the Ramblers Association to discuss the matters fully. They will certainly be listened to with great care before we come to our decision.
Mr. Dennis Skinner: Following some of the requests from the Opposition in the past few weeks as they have launched a campaign against members of the Government for making statements outside this House, I decided to do some research in advance of this statement. Is my right hon. Friend aware that I have already counted 41 occasions during the 18 years of Tory government when requests were made for statements, but the Tory Government had made them on the media? That is 41, and still counting.
Mr. Meacher: I am grateful for what my hon. Friend has said. He is a diligent Member of this House, and is well known for his research. The hon. Member for South Suffolk may, in due course, rather regret raising this point.
Mr. Nicholas Soames: The whole House will have noted with approval the handsome apology made by the Minister. Although what he did was wrong, his coming to the House has been the right thing to do. Does he agree that the House should establish a rule whereby Ministers and Departments are forbidden under
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convention and by code of practice to put such documents before other people before they put them before the House?
Mr. Meacher: I listened with great interest to the hon. Gentleman, and I am grateful for his earlier comments. His proposal could be considered, but it is a matter for the House as a whole.
Mr. Nicholas Winterton: The Minister has come to the House with a total and unreserved apology, and the House should accept it. Would you, Madam Speaker, protect the integrity of this House and give guidance to Government—of whichever party—about this practice, and express your view that it should be deplored?
Mr. Meacher: That is a matter for you, Madam Speaker, rather than for me.
Sir Nicholas Lyell: While we welcome the unreserved apology from the Minister, did we not hear him on "Today" this morning, discussing this matter? He said that, unless landowners entered voluntary agreements, there would be legislation. We heard today that there would be full and open consultation of a genuine nature. Which is the truth? Is the former Government policy? If it is, is it not remarkably like bullying?
Mr. Meacher: The two matters are entirely consistent. I would expect someone with the legal and logical mind of the right hon. and learned Gentleman to be able to see that.
Mr. Steve Webb: On a point of order, Madam Speaker. I am concerned that the instance of disrespect for the House that we have just heard is not isolated. When the primary school class sizes money was announced, the information was given to Labour Members the day before other hon. Members, together with a press release for them to send out, and a suggestion that they go to a primary school in their constituency to get the credit for that spending of public money. Do you share my view that that is not in order, and not an appropriate way for the House to proceed?
Madam Speaker: It is a party political matter. It is nothing to do with the Speaker of this House.

International Bribery and Corruption
3.44 pm
Mr. Hugh Bayley: I beg to move,
That leave be given to bring in a Bill to create offences of international bribery and corruption; and for connected purposes.
The Bill would make it a criminal offence for a United Kingdom resident or a United Kingdom company to bribe, or attempt to bribe, a public official in another country. It is a serious crime to bribe someone in the United Kingdom, but it may surprise some hon. Members to know that, under British law, it is perfectly legal to bribe someone abroad. It is a case of one law for the United Kingdom and another for the rest of the world.
Not only is bribery legal, as long as the act of bribery takes place offshore, but in some instances it is still a tax-deductible activity. A year ago, I introduced to the House the Overseas Development Co-operation Bill, which sought to target more of our British aid on poor people in poor countries, and to end the scandalous misuse of aid as a sweetener for arms sales, such as that which took place in the case of the Pergau dam.
Now those principles have been reflected in the Department for International Development White Paper, "Eliminating World Poverty: A Challenge for the 21st Century", and, since the 1997 general election, both the European Union and the Organisation for Economic Co-operation and Development, with support from our Labour Government, have adopted conventions against international bribery. This Bill seeks to incorporate those conventions into UK law.
There is a comforting but fictitious belief that bribery is not a serious problem in Britain—that only in the third world is it a way of life. Well, it takes two to tango. The British business man who pays a 20 per cent. commission without asking too clearly where the money goes, is as guilty as the third-world politician or general who pockets the money.
Bribery is a global problem. Only four years ago, Gordon Foxley, a Ministry of Defence civil servant in this country, was gaoled for accepting £1.3 million in bribes.
There is rapid inflation in the currency of bribery. Last year's Mr. Five Per Cent. is this year's Mr. Fifteen Per Cent. or Mr. Twenty-five Per Cent.
In the past, British business has been fairly relaxed about bribery, but no longer. Adair Turner, on behalf of the Confederation of British Industry, told the Los Angeles Times:
"Most British companies support the OECD goals."
He also said:
"Corruption's become a big issue because it just costs business so much these days."
However, the consequences of international bribery are most serious in developing countries. Corruption can go right to the top. Two former Presidents of the Republic of Korea have been prosecuted and indicted for bribery. A President of Brazil has been impeached on corruption charges.
The sums of money are enormous. In the 1980s, Zaire's foreign debt rose to $5 billion, but the personal wealth of President Mobutu, the country's President, exceeded $4 billion. What was true of Mobutu was true of Ferdinand Marcos of the Philippines or Emperor Bokassa of the Central African Republic.
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The problem in some developing countries is not a shortage of capital but the fact that the capital is owned by a tiny elite and held offshore. That money ends up being invested in European and north American property markets and stock markets, instead of in the economic development of those Presidents' own countries.
Bribes—I mean big bribes—are always paid in hard currency, usually directly to an offshore bank account, which robs the developing country of the foreign exchange it needs to promote its development.
The cost of bribes falls primarily on the poor. When a corrupt contractor from this or some other rich country pays a 15 per cent. bribe, he adds that to the price of his contract. His power station or irrigation scheme will cost more, and the little people—those who buy the electricity or the water to irrigate their crops—will pay the price of that bribe. Bribery is a direct transfer of money from the poor to the rich.
According to the EC representative in Kenya, the French contractor who was awarded the contract to build the Turkwel gorge dam—there was no international competition for the project—charged 2.4 times the cost of a comparable dam and power station on the Tana river in Kenya. The Kenyan officials charged with monitoring the contract did not complain because they gained, in the words of the EC official, "high personal advantage".
When bribery takes root, people start buying things that they do not need. Last year, the chief of naval staff in Pakistan resigned amid allegations of bribery in connection with a £580 million purchase of submarines. To Pakistan's credit, the Government have since launched an "Accountability, Accountability, Accountability" campaign—I am glad to see that the rhetoric of new Labour has a global application—designed to root out corruption, and some 85 officials have already been suspended. The Pakistan President estimates that corruption in that country costs the Government 2 billion rupees a day. Many other developing countries—such as Botswana, Uganda and South Africa—take the problem of bribery very seriously.
The International Monetary Fund, which has been the unwitting financier of many big bribes in the past, is now taking a tough line. A "not for public use" document produced in September last year states:
"Conditionality will be attached to … safeguard the use of Fund resources."
That may explain why the IMF decided last week not to restore loans to Kenya, because of continuing concerns about the failure of Daniel arap Moi's Government to stamp out corruption.
In 1977, the United States took the lead in combating corruption when President Carter's Administration secured the passage of the Foreign Corrupt Practices Act. It is still the only legislation in the world that makes international bribery an offence. The Act has worked well. It has been used, and it has led to convictions and prison sentences. It has changed the culture of American business.
My Bill seeks to do the same in this country. It is needed because it will be good for business in this country. It is needed because it will be good for international development, and, above all, because it is morally right to put it on the statute book. Politics without morality is the first step towards corruption.
3.52 pm
Mr. Michael Fabricant: I congratulate the hon. Member for City of York (Mr. Bayley) on presenting his Bill with such passion and force. However, I oppose the Bill, because I think that it is fundamentally naive, and that it is wrong to introduce such legislation at this time.
The Organisation for Economic Co-operation and Development is endeavouring to find a package of best practice with which to address the problem of bribery around the world. The European Union is also examining that problem at present. However, the House must consider several questions before agreeing to the Bill.
How do we define bribery? If a United Kingdom contractor pays commission to an agent, which is common practice in third-world countries, and that agent passes on some of the commission to those who must decide whether they will purchase the services offered by that contractor, does that constitute a bribe—even though it is once, twice or thrice removed? Would we make it illegal for those companies to give commission? If a company finds that, in order even to be considered for a contract abroad, it must make a percentage contribution to the corporation advertising the contract, would that company also be committing an offence?
It is not by accident that it is not illegal for bribery to be paid to overseas companies from the United Kingdom. If the hon. Gentleman's Bill were enacted, it would probably rule many British companies out of applying for contracts abroad, which would simply fall into the hands of French, German, Japanese, American and other competitors in those countries. What consideration has the hon. Gentleman given to the jobs that would be lost in this country if his Bill became law?
The question of bribery is almost like the question of unilateral nuclear disarmament. Everyone would like the world to disarm itself of nuclear weapons, but Britain and now the Government have resolutely decided that to do so unilaterally would be wrong. I argue that, if the hon. Gentleman's Bill were passed into law, it would be wrong. It would lose valuable jobs, especially in high-tech areas in the sunrise industries in this country.
Although the hon. Gentleman presented his Bill with passion, it reflected an underlying naivety about the way in which business is done in this country and around the world. I say to the hon. Gentleman: wait. His dreams for a bribeless world may well come about. As I said, the European Union is examining the issue, as is the Organisation for Economic Co-operation and Development. As the hon. Gentleman correctly pointed out, the White House is examining the problem. If the Bill is passed now, it will cost jobs in this country. For that reason, I oppose it.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
Bill ordered to be brought in by Mr. Hugh Bayley, Mr. Gerald Kaufman, Mrs. Maria Fyfe, Mr. Peter L. Pike, Ms Diane Abbott, Mr. Charles Clarke, Dr. Phyllis Starkey, Dr. Ashok Kumar, Helen Jackson, Mr. Malcolm Wicks and Ms Rosie Winterton.

INTERNATIONAL BRIBERY AND CORRUPTION
Mr. Hugh Bayley accordingly presented a Bill to create offences of international bribery and corruption; and for connected purposes: 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 128].

GOVERNMENT OF WALES BILL (PROGRAMME)
Motion made, and Question put forthwith, pursuant to Order [15 January],
That paragraph 1(1) of the Order [15th January] relating to the Government of Wales Bill (Programme) be amended by substituting for the words "Ten o'clock on the seventh day" the words "Eleven o'clock on the seventh day; and on that day paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to the proceedings on the Bill for one hour after Ten o'clock.".—[Mr. Pope.]
Question agreed to.
Motion made, and Question put forthwith, pursuant to Standing Order No. 82 (Business Committee),
That the further Report [24th February] from the Business Committee be now considered.—[Mr. Pope.]
Question agreed to.
Report considered accordingly.
Resolved,
That this House doth agree with the Committee in its Resolution.—[Mr. Pope.]
Following is the report of the Business Committee [24 February]:
That it had come to a further Resolution [24th February] in respect of the Government of Wales Bill, which it had directed him to report to the House:
That the Resolution of the Committee reported to the House on 19th January be varied so that—

(a) the sixth and seventh days allotted under the Order [15th January] to proceedings in Committee shall be allotted in the manner shown in the following table, and

(b) each part of the proceedings in Committee on those days shall, if not previously brought to a conclusion, be brought to a conclusion (in accordance with the Order) at the time specified in relation to that part of the proceedings in the third column of the table.

TABLE

Allotted day

Proceedings in Committee

Time for conclusion of proceedings

Sixth day

Amendments to subsection (2) of Clause 118 beginning before line 11 on page 56 of the Bill

6.00 p.m.

Other amendments to subsection (2) of
Clause 118

7.30 p.m.

Clause 118 so far as not disposed of

8.30 p.m.

Clause 119, Schedule 9, Clause 120, Schedule 10, Clause 121, Schedule 11, Clauses 122 to 131

9.00 p.m.

Clause 132, Schedule 12, Clauses 133 to
136, Schedule 13, Clauses 137 to 140

10.00 p.m.

Orders of the Day

  Government of Wales Bill
  [6TH ALLOTTED DAY]
  Considered in Committee [Progress, 3 February].
  [SIR ALAN HASELHURST in the Chair]

Clause 118

  EXTENSION OF FUNCTIONS
  3.58 pm
  Mr. Denzil Davies: I beg to move amendment No. 374, in page 56, leave out lines 9 to 13.
  The Chairman of Ways and Means (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: No. 493, in page 56, leave out lines 10 and 11.
  No. 523, in page 56, line 11, at end insert—
  '(aa) in paragraph (a), for "or any" substitute "and every", and'.
  No. 519, in page 56, line 13, at end insert—
  '(d) after paragraph (d) insert—
  "(f) to promote social equity in Wales.".'.
  No. 540, in page 56, line 26, at end insert—
  '(e) after paragraph (i) insert—
  (j) to encourage the development of exports from Wales.'.
  Mr. Davies: The amendment focuses on two aspects. First, there is the insertion into section 1(2)(a) of the Welsh Development Agency Act 1975 of "and social" after the word "economic". For the future, if the clause is accepted as it is drafted, one of the purposes of the Welsh Development Agency—it has to operate through its purposes—will be not merely the furtherance of economic development throughout Wales but the furtherance of economic and social development. That being so, the WDA will take upon itself the purpose of social development as well as and in addition to its present purpose of economic development.
  The second focus of the amendment is on the replacement—if the clause becomes law—of the word "industrial" with "business" and "businesses" in relation to the purposes of the WDA. When it comes to the agency's functions, "industrial" is replaced by "business". I wish to consider the definition of "business", which is contained in paragraph 2 of schedule 10 to the Bill. The definition of "business" is important in relation to the replacement of "industrial" with "business".
  I shall deal first with the importance of the words "social" and "social development", as I have explained, after "economic development". We are faced with a major change in the function and the purpose of the WDA. It may seem to be a small matter, but it presents a major change.
  My right hon. Friend the Secretary of State, in one of his memorable soundbites during the referendum campaign, referred to an "economic powerhouse". Perhaps that was the most memorable phrase of all. The WDA was to be, rightly, after devolution, an economic powerhouse. It was a ringing phrase that sounded well.

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  However, when we read the clause, we see that the WDA will not be an economic powerhouse. Instead, it will be a "economic and social powerhouse". To my ear, that is not such a ringing phrase as "economic powerhouse". I am not even sure whether a body can be a social powerhouse, but perhaps that is possible. It is clear that something has happened on the journey from the devolution and referendum campaign to this awful drafting of proposed legislation, which always concentrates the mind.
  We now have an economic and social powerhouse—in other words, a change or addition to the functions of the WDA. The insertion of those few words—this may seem pedantic—changes the nature of the WDA. I always thought—some of us were in the House of Commons and in government when the WDA was established—that under old Labour, which was very old-fashioned about these things, it was brought into being as a wealth-producing agency or an agency to promote wealth production.
  Mr. Richard Livsey: Does the right hon. Gentleman agree that it was a previous Labour Government who introduced the Development Board for Rural Wales, which has social functions? In fact, those social functions stood rural Wales in good stead, and we would have been sore put if we did not have them.
  Mr. Davies: I shall refer at length to the debates that took place in the Welsh Grand Committee. These were not on the words "social function" but on the exact words that are to be inserted into the proposed legislation. Again, it was old Labour intervening in the economy.
  The Welsh Development Agency was supposed to promote wealth creation. If the changes are carried out, the WDA will have a mixed role. To an extent it will have a contradictory role, not only in wealth creation but in social function or social facilities. There could be problems along that path.
  The hon. Member for Brecon and Radnorshire (Mr. Livsey) is right. I take him back to the Development of Rural Wales Act 1976, which applies, until it is done away with, to a small but important part of Wales, Powys, Meirionnydd and Cardiganshire—or Ceredigion—and has been extended, perhaps, to parts of Carmarthenshire. I am not sure. The words "social development" are plain for all to see in that Act. They were taken originally from the Highlands and Islands development board legislation. I do not keep up with Scottish affairs, so do not know what happened to that board. It has probably gone, but whether it exists is immaterial.
  There is no definition of "social development" in the Bill, and there is none in the 1976 Act. I do not complain about that; it is not an easy phrase to define. I do not know about the Highlands and Islands development board, as I have not checked. The hon. Gentleman will be interested to know that there was interesting discussion in Standing Committee K on the meaning of "social development". I refer to the Standing Committee debate in 1976, when these matters were debated, and to what was said by my hon. Friend the then Under-Secretary—who represented
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  Flint, East at the time but who now represents Alyn and Deeside (Mr. Jones). At the time, amendments were tabled to change the wording from "social development" to "social needs". My hon. Friend resisted, saying:
  "I must resist the amendments and I will explain why. The amended wording could be construed as restricting in some way the activities that the board might support".
  These are the important words:
  "The board should be able to provide facilities"—
  social development facilities—
  "in the form of additional physical amenities such as halls"—
  I take it that he meant village halls—
  "and playing fields, and that explains why the Government are right and the Opposition are wrong. The board should be able to support the activities undertaken in those halls by voluntary bodies"—
  indeed, voluntary associations appeared throughout the debate—
  "if they contribute to the growth and development of the area and enrich its culture."
  My hon. Friend continued:
  "There is no reason why the wording of the Bill should be restricted in a way which would throw doubt on whether the board could assist social activity."
  We are approaching some kind of definition, or at least a description. Social development means, quite properly—I have nothing against it—helping village halls and voluntary associations, and assisting in what is called social activity. My hon. Friend said that the definition of the words was taken from the legislation governing the Highlands and Islands development board.
  My hon. Friend continued:
  "A check on any possible and reasonable exercise by the board of the powers"—
  there was an argument that the words were too wide and that there should be some kind of check—
  "to support social development is not to be found in the legal definition of the powers"—
  there was no legal definition—
  "but rather in the need for the consent which the board"—
  the Development Board for Rural Wales—
  "must obtain from the Secretary of State"—
  that is, my right hon. Friend until the Bill becomes law and the orders are made—
  "and the Treasury for any assistance offered".—[Official Report, Standing Committee K, 22 July 1976; c. 82–83.]
  Will my hon. Friend the present Under-Secretary of State deal with that specific point? Where will the checks apply in future? My hon. Friend the then Under-Secretary of State properly referred to such checks. He said that there was no check in the legal definition—the courts might check that, and I shall return to that in a moment—but that rather there was a check in the need for the consent of the Secretary of State and the Treasury.
  What will be the position when the Bill becomes law and we have an assembly? Will the check, if there is to be one, be transferred from the Secretary of State to the assembly, and will Treasury consent still be required? Will there be no check at all, or will the assembly be some kind of check? That is a subsidiary question, as to how any check will operate on moneys paid for social development, which would include social activity, village halls and voluntary bodies and associations.

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  On 28 July 1976, my hon. Friend the then Under-Secretary mentioned assistance to rural councils and voluntary service councils—I am not sure what that means. He referred to assistance to the Council of Social Service for Wales. I am not sure whether that still exists. Again quite properly, he referred to assistance to the Welsh Committee—I am not sure what that refers to either—and then to young farmers' clubs. They do a wonderful job in rural Wales. I do not decry any of that at all. But my hon. Friend, who was describing what was meant by "social development", was saying that assistance to young farmers' clubs fell within that phrase, although he seemed to imply that the requirement of the consent of the Secretary of State and the Treasury would be a check.
  My hon. Friend then referred to the splendid Association of Welsh Weavers. I am not sure whether that still exists. Perhaps the hon. Member for Brecon and Radnorshire has a Welsh weavers association in his constituency. I hope that he does. I hope that it still exists. If it does, it is surely a worthy body. I am trying to explain what Ministers in the previous Labour Government who introduced the phrase "social development", which is now being taken out of the Development of Rural Wales Act and put into this Bill, understood by that phrase.
  My hon. Friend continued:
  "'social development' is the wider term"—
  wider than social needs—
  "and includes what is suggested as community development."—[Official Report, Standing Committee K, 28 July 1976; c. 196.]
  There had been speeches by the then hon. Member for Merioneth about the importance, perhaps rightly, of community development. According to my hon. Friend the Under-Secretary, community development was encompassed by the phrase "social development".
  Mr. Livsey: The right hon. Gentleman will agree that the social development work carried out by the Development Board for Rural Wales has been extremely beneficial, and if it is incorporated in the Bill, it will benefit other parts of rural Wales. For example, the development of the Brecon jazz festival and the Hay festival of literature would not have occurred without the DBRW's social development powers. It has created a lot of employment and interest in the locality.
  4.15 pm
  Mr. Davies: The hon. Gentleman is right. The only comment with which I take issue is that incorporation in the Bill would enable those benefits to continue to go to rural Wales. Of course, they would, but the point that I am making is that it would enable the benefits to go everywhere in Wales: to Rhymney or Llanelli—if the hon. Gentleman can have a jazz festival in Brecon, I presume that we shall get the same benefits as his constituents now get.
  It would have been perfectly possible for the draftsman to incorporate the phrase in the Bill and confine it to the areas covered by the DBRW. It could have been said that social development should apply to a part of Wales, which could be defined as Powys, Ceredigion and Meirionnydd—the same areas covered by the development board. The hon. Gentleman made a good point. Indeed, he made the point for me. We are extending
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  a measure that was properly conceived for a small but important area of rural Wales to the whole of Wales: Cardiff, Newport—
  Mr. Dafydd Wigley: Will the right hon. Gentleman give way?
  Mr. Davies: I appreciate that Caernarfon was not included and that now it will be. I am sure that the right hon. Gentleman is delighted about that.
  Mr. Wigley: Does the right hon. Gentleman accept that, during the DBRW's 20 years' existence, several areas of Wales, particularly Dinefwr, Preseli, Glyndwr and Dwyfor, which are just as rural as areas in mid-Wales, argued strongly that they needed the powers that were available to the DBRW, but were not available under the WDA? This change at least meets that agenda.
  Mr. Davies: Indeed. Many areas would have liked to be encompassed within the 1976 legislation, and now they will be. Urban areas are now encompassed within the measure, including the middle of some of our towns. Tredegar, Ebbw Vale, Merthyr and Port Talbot will all now be able to ask the Welsh Development Agency for assistance for their village halls, jazz festivals or drama festivals, because those are all functions that fall within the phrase "social development".
  Mr. Gareth Thomas: I have been listening closely to my right hon. Friend's argument. I hope that he will forgive me for characterising certain parts of it as overly legalistic. Will he accept two points: first, that those concerned with the regeneration of communities appreciate that there is an artificial distinction to be drawn between economic and social development; and, secondly, that the main focus of the enhanced WDA will be economic development? It will be important for the new agency to be enabled to carry out incidental and ancillary functions, including social development in all areas, and remain intra vires, to use a legal term.
  Mr. Davies: I am sorry if I am being legalistic, but there is nothing incidental about the phrase "social development". I suppose that it could have been made incidental when the Bill was drafted. Although my hon. Friend might not like to read those legal words, if he bends his mind to it, he might see that "social" is put on the same plain as "economic". It is not incidental in any way. Indeed, interventions by Liberal Democrat and Plaid Cymru Members—is the party still called Plaid Cymru?—show how much they value payments to young farmers' clubs, jazz festivals and village halls, which will now become available, if the funds exist, to anyone in Wales. My hon. Friend may think that a good thing, but this is a major change in the function and purpose of the WDA. When it was established under poor old Labour, it was concerned solely with wealth creation. Now it is moving into the social field.
  Mr. Nigel Evans: Does not the right hon. Gentleman agree that changes could have been made to the WDA in the past, had it been thought necessary to include social development in its remit? There is social deprivation in Swansea, Neath, Port Talbot and parts of

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  Cardiff. If the changes are made, they will get in line along with the rural areas and argue for their fair share of the cake.
  Mr. Davies: That is the point. I would not blame them for doing so. I take exception to my hon. Friend the Member for Clwyd, West (Mr. Thomas) chiding me for being legalistic. I am not being legalistic: dozens of voluntary associations will queue up with their tin cans outside the WDA and outside the assembly, because the proposal is a charter for voluntary associations. I do not know how many there are in Wales, but there are many. I tabled a question to my right hon. Friend the Secretary of State for Wales, asking him to list them. He did not know how many there were, but said that he would put a list in the Library. It has not arrived yet—I do not criticise him for that—but the list will be very long.
  The Welsh are good at voluntary associations, and we have never had problems with social development—we are marvellous at it. Our problem has been with wealth creation. It is no good my hon. Friend chiding me for being legalistic. The Welsh economy is not the strongest in the United Kingdom. It may suffer considerable problems over the next year or two as a result of factors outside its control.
  Mr. Bernard Jenkin: Monetary union.
  Mr. Davies: I do not even include that. Other, global factors could cause problems.
  The Welsh economy needs wealth creation. Conservative Members may argue that the WDA was interventionist and old Labour, which believed that Governments should help with wealth creation. Such views are unfashionable these days, but that was the agency's purpose. We all agree with social development, but it is dangerous to mix it with wealth creation. That is my first point about the change to providing for social development.
  I do not know where the money will come from. My hon. Friend the Minister might tell me that the WDA budget will be expanded, but if its purposes and functions increase and the sum of money provided stays the same, something will have to be cut, I do not know what. There will be considerable pressures on the WDA, from voluntary associations, for example. The WDA will be responsible to a democratic assembly, not to the Secretary of State, who will not have the economic powers that he holds at the moment.
  Mr. Oliver Letwin: Does the right hon. Gentleman agree that the Welsh Development Agency will still depend on the Secretary of State in one respect, that is, the extent of its borrowing powers?
  Mr. Davies: That may or may not be the case, but the budget will be determined by the assembly. We shall have an Athenian-type assembly that will want to obtain as much money as it can. If it can tell the WDA that its functions include building village halls, it will do so. There will be considerable pressure to cut back on economic development, as we shall all be pressing the WDA for money for social development.
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  It may be said that that is only incidental, and that there will be judicial reviews. I am sorry to talk about lawyers again. Sadly, local authorities are becoming fairly accustomed to people saying—understandably—"You have powers to help dyslexic children, or to provide speech therapy. You are not exercising those powers properly." They take local authorities to court on those grounds, but the courts usually say that, if there is no money, authorities cannot provide such facilities. That might well be the case with the WDA, but there will be pressure through the courts and the political system. I urge my hon. Friend the Minister to think again. It is perfectly possible to confine social development to the areas to which it is currently confined.
  The other aspect that concerns me—in fact, the two aspects must be considered together—is the replacement of the word "industrial" with the word "business". I shall not be "old Labour" on this occasion, and say that we must keep the word "industrial". There is no great magic in a definition of the word, which has been used for centuries in Britain and France to cover all sorts of activity. I do not object to the change from "industrial" to "business"; indeed, I can see that it makes sense in the world we live in. What worries me is the extraordinary definition of "business" in schedule 10.
  Paragraph 10(2) gives that definition. I welcome the fact that there is a definition, for a change, and I suppose that "business" is not an easy word to define. The draftsman starts perfectly sensibly, saying that "business"
  "includes any industrial, commercial or professional activities".
  I do not object to that. Solicitors and accountants in Cardiff who will receive large fees from the WDA will now be able to obtain other forms of assistance from it. I do not object to "professional activities" in the modern world: wealth can be created through them.
  The definition continues, however, with the words—in brackets—
  "whether or not with a view to profit".
  The draftsman clearly felt that a business is normally carried out with a view to profit, whether or not it achieves that profit—but not, it seems, in the new WDA. Profit does not really matter. It seems that someone engaging in a professional activity without a view to profit can now obtain money from the WDA. That is a strange and unnecessary extension of the functions and purposes of the agency.
  I have asked myself what sort of organisation would conduct a business without a view to profit. I hate to mention it, but I suppose that the Welsh Rugby Union could be said to be conducting a business nowadays. It has sponsorship and money; it is engaged in business activities, but certainly not with a view to profit, on or off the rugby field. Some organisations could describe themselves as businesses, but without a view to profit.
  Why on earth do we need that provision, given the purposes and effect of the WDA? The WDA is there to foster wealth creation. I am sorry if this is another "old Labour" view of the world, but what the Welsh economy needs is profit, and lots of it. Let us tax it by all means, but let us have it. We have very little of it; that is the problem.
  Mr. Wigley: My constituency contains a village co-operative called Antur Waunfawr, which is not geared to making profits. It employs people with learning

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  difficulties who would not otherwise obtain work, and it supplies commercial goods. Surely that body could legitimately be aided by the WDA.
  Mr. Davies: That is a legitimate body, but my question is whether it should be mixed in with a body such as the WDA, whose ostensible purpose is to create wealth from a profit base in the Welsh economy. I understand that that is an old-fashioned view, but perhaps the legislation is a kind of third way—capitalism with a human face. The Welsh economy needs commerce, industry and professionals, all of them producing profit. There is always a place for the sort of community activity that the right hon. Gentleman mentions, and it is good to see it, but as I say, I question the sense of mixing it in with an economic powerhouse, which is what the WDA was supposed to be, although it will not be any more.
  4.30 pm
  Not only does the schedule mention activities that are carried on without a view to profit, but it refers to
  "the activities of any government department or any local or other public authority".
  The whole range of government, including quangos, public authorities, non-governmental bodies, voluntary bodies and those that do not make profits are included. Everything is to be thrown at the WDA. Local authorities will be able to ask the WDA for money. Even Departments will be able to do that. The idea is bizarre. Will the Treasury ask for some of its money back? All those bodies will be like bees at the honeypot of the Welsh Development Agency, poor thing. Apparently it will be entirely different from what it was before.
  Perhaps the WDA's budget will be doubled, and that is fine, but I question the effect of what is proposed. Despite the criticisms of some of my hon. Friends, the WDA has been a successful interventionist body and has helped to create real wealth in Wales. We need more of that, but perfectly enlightened social activities are to be mixed in, and that is dangerous. I hope that the Minister will deal with those issues, which I hope will not be a by-product of the DBRW and WDA merger. That is not necessary, and the matter could have been ring-fenced in the legislation. I hope that the Minister will explain that matter, which is important for our constituents.
  Mr. Evans: I should like to speak to our amendment No. 493 in this group, and I welcome the opportunity to focus on the extension of the Welsh Development Agency's functions, the possible impact on Wales and the potential for the greater devolution of the social role. I enjoyed the speech by the right hon. Member for Llanelli (Mr. Davies). He said that he thought that the WDA would be an economic and social powerhouse. For a second, I thought he said that it would be an economic and socialist powerhouse. However, I understand that we are all new Labour now, so that could not possibly be the case.
  The WDA, which was set up in 1976 by a previous Labour Government, is one of the great success stories of Wales. In a recent debate, the Attorney-General said that he had had the privilege of setting up three bodies in Wales that had survived 18 years of Tory rule. He said that they had survived because the Conservative party could not think of anything better. That was a tribute to
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  the Attorney-General, although it came from himself. It seems that the new Labour Government can think of something better.
  The WDA has been built on by successive Secretaries of State for Wales, but there is a fear that the proposed changes may endanger its success. Its remit has been prescribed and the Development Board for Rural Wales has taken over a similar, but more targeted role for areas such as Ceredigion, Meirionnydd, parts of Powys and swathes of rural Wales. That will end with the fusion of the Land Authority for Wales into one super-quango.
  We should not underestimate the real success story of the Welsh Development Agency. I think that the right hon. Member for Llanelli fears that the proposed changes will jeopardise the wealth creation focus of the WDA, which, in the 1980s, played such an important role in helping to restructure the traditional industries of coal, slate and steel in parts of Wales, especially steel in Llanwern and Port Talbot.
  The Welsh Development Agency also met the task of land reclamation with gusto. I am sure that it would have tackled the task with even more gusto if it had had a larger budget. The WDA also worked on town developments, which were praised by the right hon. Member for Llanelli.
  The Welsh Development Agency has helped to transform Wales, which has loosened its grip on its industrial past to become the enterprise centre of Europe. We fear that that role may be jeopardised by changes that will occur under the assembly.
  I congratulate the chairman and the entire team of the Welsh Development Agency on its success. We can tell how good the agency has been by the fact that it is being copied not only in other parts of Europe, but across England. The new challenge will be posed by regional development agencies in England—which will receive the help and advice of secondees from the WDA, which is another enormous compliment to their skill.
  Another fear is that the Welsh assembly and its 60 politicians may become overly intrusive in the agency's daily affairs. I seek assurances from the Secretary of State—
  The Secretary of State for Wales (Mr. Ron Davies)indicated dissent.
  Mr. Evans: I see him shaking his head. I am partly reassured by that, but perhaps, later in the debate, we shall receive a bit more—verbal—reassurance that that will not be the case. I am sure that he has taken heed of the fears expressed by the Confederation of British Industry about the lack of a clear demarcation between the assembly's strategic role and the performance of the WDA's daily functions.
  This group of amendments seems to propose assigning many extra tasks to the Welsh Development Agency. Some hon. Members have been critical of the agency, saying that it did not pay due regard to areas outside the M4 and A55 corridors, which have acted as investment magnets. However, if we get the changes to the agency wrong and those areas no longer attract the same investment levels—for example, 20 per cent. of all inward investment into Britain has been in Wales—and if those changes divert the agency from its core responsibility, damage will be done not only to the areas along the M4 and the A55, but to other areas that had planned on

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  gaining some of the extra social development funding. Those areas will be badly let down, particularly if new investment does not materialise.
  If we get the changes wrong, the social deprivation that will be caused in parts of Wales—north, south, east and west—will be absolutely enormous, and the tin can that the right hon. Member for Llanelli mentioned in his speech will most certainly find its way to the agency, to the Welsh assembly and to local authorities. We must fully consider the exact consequences of what we are asking of the WDA.
  The steer that was given to the WDA—asking it to concentrate on areas away from the M4 and the A55—was absolutely right. The 1996–97 figures show that of £2.2 billion of indigenous and inward investment and 18,400 new and safeguarded jobs, 6,200 of those jobs were safeguarded or created outside the eastern M4 and the A55 corridors. That is absolutely right, and it is exactly what we wanted. The same is true of the Development Board for Rural Wales. We wanted to ensure that more of its money and job creation activities went to a wider area within rural Wales, and that was starting to happen.
  New regional development agencies are being created. Despite the concordats that we have heard so much about, we are still unsure about what will happen to Wales's success story when Wales has to compete with those RDAs and with Scotland. Who will be the umpire?
  Other problems that will confront not only Wales, but other parts of the United Kingdom are the minimum wage, Europe and farming. Farming is a particular problem for rural Wales, and the WDA will have to pick up the pieces of the crisis that has hit Welsh farming. However, it is not only farmers who are being hit, but the small rural businesses such as tractor suppliers, builders and many others which have grown up around farming. They will now have to look to the WDA. Many small towns and villages will also have to ask the WDA for extra assistance. The greatest social development assistance that can be given to any community is to ensure that there is proper, sustainable work. Without that, there will be severe problems.
  Businesses have been hit by five interest rate rises since 1 May. They are probably already working on tight margins and have now seen their borrowings increase and their charges go up. Those which were already marginal may have gone bankrupt.
  We have to re-examine the whole subject of Europe if there is to be any re-evaluation, as we understand there is, of the way in which regional aid will be doled out strictly according to the unemployment figures. In many parts of Wales, the unemployment figures are looking good, but we are still told that the gross domestic product of communities in Wales is low compared to many other areas, especially areas in Europe.
  We could find ourselves in the absurd situation of seeing areas such as Catalonia attract regional aid that would be taken from areas such as Wales. That would mean a £1 billion hole which the WDA would be asked to fill. We seek some assurances from the Secretary of State in that regard, although I expect that he is battling hard to ensure that any changes in Europe will not disadvantage the parts of Wales that have benefited greatly from regional aid.
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  I am sure that there is a reason for the way in which social development assistance was targeted on certain rural areas, and a reason why the work was not given to the WDA. If the three bodies to which I have referred are to be merged, we must ensure that social development assistance continues to be given to the parts of rural Wales that need it. The right hon. Member for Llanelli suggested that one way in which to do that would be to include in the Bill more specific references to social development areas. Another way might be to involve local authorities.
  As the Minister knows, I was a county councillor in West Glamorgan for six years, and one of my joys during that time was to sit on one of the grant committees. The right hon. Member for Llanelli wondered how many voluntary bodies there are in Wales—I can tell him that there are a great many. They used to ask our committee for support month after month, and we used to dole out money for various bodies. Mention was made of the young farmers, but we gave money to the cubs, boys bands and others. All organisations have a voluntary body to assist them, especially those involving young, disadvantaged and disabled people. We used to go through our budget, which was small in relation to our other budgets, doling out what money we had to assist those good causes.
  In the spirit of devolution—and in anticipation of the development of the partnership council—more power could be devolved from the new super-quango WDA to local authorities, particularly if resources are to be limited. Money could then be allocated to the areas that currently enjoy social development status.
  I hope that the Minister will closely examine the role of the 22 local authorities, which know their own areas well. If the Government do not carefully reconsider their proposals, they will throw out the baby with the bath water. The WDA's capacity to create wealth could be jeopardised; it will have to fill up the holes created by the other problems that will arise. Social development money will be given to Swansea, Port Talbot and Neath, for example, where there are areas of deprivation that will require money. The WDA will spend so much of its time looking after them that it may ignore rural areas of deprivation.
  4.45 pm
  Mr. Ted Rowlands: All of us who were at the birth of the Welsh Development Agency will naturally wish to scrutinise any recasting or revamping of its role such as is proposed in the clause. That is partly because we feel a sense of parenthood, but mostly because we believe that the agency has a fundamental role to play in the regeneration of the community. Having read the clause and discussed the amendments, I ask a simple question: will the changes create an enhanced WDA that is capable of doing more and better for communities such as the one I serve?
  The clause recasts the agency by amalgamating it with other organisations. It also goes further, however, and I hope that the Minister will say whether the redefining of the agency's role and objectives is consequential on the amalgamation, or whether the agency is expected to play a different, wider and more significant role in the context of a Welsh assembly.
  I hope that this does not sound like counter-bidding or, indeed, immodesty, but I think that even the Attorney-General, my right hon. and learned Friend the

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  Member for Aberavon (Mr. Morris), would concede that I was the inventor of the Land Authority for Wales. As a Minister, I devised the idea and took it through Cabinet Committees. I was able to put the Community Land Act 1975 on to the statute book only after a mammoth session in Standing Committee—the record has only recently been broken—in which we sat from 10.30 am until lunchtime the next day to push the Welsh clauses through. By that time, I was already a Minister in the Foreign Office, so I found myself in a curious position.
  As a result, I have always had a fond feeling for the Land Authority for Wales, especially as it was also an early example of the Welsh Office striking out on its own in legislative terms. I do not know how many hon. Members recall the Community Land Act, but in England, the powers were vested in local authorities, so we had contentious debates with Welsh local authorities about the establishment of the Land Authority for Wales.
  We managed to establish the authority, and I think that it has served a practical and useful purpose. It is one of the great survivors. The rest of the Community Land Act has all but disappeared, but the land authority has survived. Therefore, I feel some sort of fondness for the organisation.
  I make no complaint about the fact that the authority is now to be incorporated into the revised and revamped Welsh Development Agency—except to say that we should not oversell the change. The land authority was doing a perfectly good and effective job on its own terms, and it was one of the rare quangos that did not cost the state anything. It was a wealth-creating, profit-making quango in that one respect.
  The land authority is to be incorporated into the Welsh Development Agency, but it could usefully have continued to serve its purpose outside the agency—although I have no reason to believe that it will not do so within the agency.
  Mr. Denzil Davies: I hate to carry on reminiscing, but while we are talking about the profitability of the Land Authority for Wales, may I ask my hon. Friend whether he was the Welsh Office Minister who came to me, when I was a Treasury Minister, asking for additional legislation to exempt the authority from taxation on its profits?
  Mr. Rowlands: I was not, but I certainly would have been party to the attempt. I think that it was Baroness White.
  Mr. Davies: The answer was no.
  Mr. Rowlands: The Land Authority for Wales represents a modest practical success story, and I am sure that that should be able to continue under the aegis of the new Welsh Development Agency in the context of the assembly. All I ask of my right hon. and hon. Friends on the Front Bench is that they do not exaggerate the significance of the change. The authority is already carrying out its function, and will simply continue to do so in its revised form.
  We have, however, heard many exaggerated claims for the new, revamped Welsh Development Agency. I read one recently, and in the context of the clause and the amendments tabled to it, I ask my right hon. and hon. Friends to what extent it is correct. I refer to the belief
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  that the combination of a new assembly and an economic powerhouse will somehow create a new political momentum for a Welsh energy policy. I have heard that proposition debated in the context both of the assembly and of the proposed changes to the WDA.
  When the provisions were recast, was it intended that in all the changes in the functions of the new, or rather revised, WDA, there would be any new kind of power or responsibility for devising, encouraging or developing a Welsh energy policy? Is that consequential upon the changes? I cannot see that it is.
  I am sorry to say that the context in which I most recently read the claim that the changes would lead to a new momentum for a Welsh energy policy came from those who want massively to extend opencast coaling throughout south Wales. I have my doubts, therefore, about whether such a development is really consequential on the changes that we are making.
  The key to that side of the policy is what will happen with consents for power stations. Will the power to give consents be vested in the assembly, or will it remain with the Department of Trade and Industry? Will the changes in the clause and the rest of the Bill, including the existence of the assembly, make any difference to who consents to power stations? If there is one instrument that could enable one to, or prevent one from, devising an energy policy, it is the power to give power station consents.
  What I am about to say will be in a sort of shorthand form, because I do not really mean it in a pejorative sense. My right hon. Friend the Member for Llanelli (Mr. Davies) was right to ask seriously whether the changes proposed in the clause would dilute or deepen the role of the Welsh Development Agency. As my right hon. Friend asked, will we be setting up even more competitive pressures on its budget, both inside and outside the agency? Those pressures are already there in powerful and significant form, even on the traditional functions that we all agree are central to the agency, but which have become Cinderellas in the context of its changing role, even in its existing form.
  I am thinking especially of the agency's derelict land function. My right hon. Friend will know how, when we were in opposition, we had to apply continuous pressure to ensure that the WDA's budget for the derelict land programme was safeguarded and maintained in the face of all the other pressures. Will not the new, enhanced economic powerhouse WDA lead to even greater competitive pressures? Both my right hon. Friend and I have felt that the derelict land programme has become something of a Cinderella programme as the WDA's policy, programmes and budgets have evolved. Will it not continue to be a Cinderella and have to compete with other Cinderellas?
  That question is serious. I have a vivid illustration: the Deep Navigation site is tied into millennium money, and we have been begging the WDA to come up with its share of the money. We have often thought that we had got the money, but then question marks have been placed against whether the WDA will budget for it. Even at this late hour, the question mark persists and I hope that it will be erased soon. That is an example of the set of pressures that already exist within the agency, but will not those pressures multiply within the new, revised agency, with the result that the agency's role in the regeneration of

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  communities such as the one I represent will be diluted and not enhanced? That is a serious question, which requires an answer.
  In some ways, I suspect that the redefining of the functions and role of the agency contained in the clause reflects the changes in society and in the Welsh economy—
  The Chairman: Order. I have been listening carefully to the hon. Gentleman's speech and he appears to be in danger of making a clause stand part speech. The amendments to the clause are very particularly grouped, and the hon. Gentleman appears to be ranging over them in a way that takes him outside the group that we are discussing.
  Mr. Rowlands: I am sorry, Sir Alan. I had not intended to do that. I think that one will find that most of my remarks refer to the alteration in the wording, whereby the word "social" is added and the word "industrial" is changed to "business". I intended to illustrate that in the point that I was about to make when you, understandably, intervened to ensure that I stayed on the straight and narrow.
  My point is this: does not redefining the word "business" and excluding the word "industrial", as my right hon. Friend the Member for Llanelli suggests, extend the WDA's role into an area in which the WDA has thus far steadfastly refused to become involved? I do not know whether other colleagues have received representations on this subject, but companies that repair motor vehicles or garages have thought that they could benefit from the WDA. Does the redefining of the role from industrial to business mean that the WDA will now incorporate activities in the service sector, in which it had previously refused to become involved? That is relevant to the amendments, Sir Alan, and relevant to the points that I have put to Ministers.
  Mr. Gareth Thomas: Will my hon. Friend accept that there is a real need in Wales to invest in the service sector and the research and development sector? In that respect, why does he not welcome the broader scope of functions of the new enhanced agency in that it encompasses not only industry in the old-fashioned sense, but business in the wider sense?
  Mr. Rowlands: My hon. Friend anticipates my final observations on the amendments, because I intend to address the argument concerning the industrial sector versus the service sector, as well as the indigenous versus inward investment argument, which has raged through some of the discussion that the clause has engendered outside the House of Commons.
  I said earlier that the wording of the clause reflected changes in society that have already taken place. When preparing for the mighty efforts that we are going to make in respect of the new deal, I found that a portrait of the Merthyr Tydfil county borough now shows that the proportion of total employment supplied by the industrial manufacturing sector has fallen to 26 per cent.—that statistic coming from the heart of a great industrial manufacturing base. The service sector has been growing
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  as a proportion of the total. My hon. Friend is right to draw attention to the changes, and to the fact that we must accommodate them.
  We should not rest the regeneration of local economies primarily on the shifting sands of the service sector. The thing that makes our communities distinctive from service sector communities is our manufacturing role, tradition and skills. I challenge the assumption that one has not only to accept that the WDA should change its role, but to want it to change its role. I do not want it to change its role in one fundamental respect. I would like the WDA to continue to see itself fundamentally as an agency to regenerate the manufacturing sector. The agency can do that in two ways. It can support indigenous local industry—where that exists—and it can encourage major inward investment. I was interested to see the figures for new jobs created in Blaenau Gwent recently, where Tesco and Festival Shopping Ebbw Vale created 300 jobs each. That reflects the incredible changes that are taking place.
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  In my area, Halla—despite its problems—is trying to regenerate and rebuild the manufacturing sector by inward investment, as are US CAN, Candy and the St. Merryn Meat company. These inward investments were achieved by a powerful partnership: the Secretary of State for Wales with a regional selective assistance budget and executive functions working with the WDA. While I do not oppose the fundamental role that the new economic powerhouse will have—especially in the development of indigenous industry—I am queasy about breaking up that powerful partnership.
  My real worry about the WDA is not that it will not fulfil the tasks it has been given, but that the role it has played in inward investment—which has played a fundamental part in the regeneration of economies such as mine—will be damaged. I hope that my right hon. and hon. Friends can give me the reassurance I seek.
  Mr. Wigley: The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) referred to the fact that he was in at the birth of the WDA. I almost claim the right to have been in at the conception because, in 1970, Professor Phil Williams and I were trying to draft a plan to create such an agency. I am aware that there were many before that who also had ideas.
  The WDA was opposed by the then Conservative Opposition when it was created. The Conservatives have seen the light since then, and they understand that bodies such as the WDA can play, and have played, a significant part in development. The creation of the WDA was fought tooth and nail by the Conservatives, who opposed it on Second and Third Reading. The Conservatives learned from experience—as, no doubt, they will learn from a similar experience regarding the National Assembly for Wales in due course. It may take a little longer, given the present generation, but time will tell.
  Mr. Robert Syms: Does the right hon. Gentleman agree that when there is strong debate in this place on issues such as the WDA, perhaps because there is opposition and people focus on the clauses, it produces good legislation which stands the test of time?
  Mr. Wigley: In that case, the Conservatives should not have voted against Third Reading. However, I take the

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  point. The WDA has played a significant role in Wales. I am not one of those who knock the WDA. There are shortcomings, and there is not a single body that has not make mistakes at some time. By and large, the overall benefits to Wales have been massive.
  I shall now discuss amendment No. 374, in the names of the right hon. Member for Llanelli (Mr. Davies) and the hon. Member for Merthyr Tydfil and Rhymney, and amendments Nos. 523, 519 and 540, which we tabled. Although there is a need for a social dimension in the Bill, I understand the arguments made by the right hon. Member for Llanelli and the hon. Member for Merthyr Tydfil and Rhymney. I believe that the primary role of the Welsh Development Agency, in its new form as in its old, must be the economic regeneration of Wales. It must be about creating job opportunities throughout Wales.
  Some aspects of the work of the Development Board for Rural Wales have had a social edge—we heard some examples earlier. I could quote examples such as the provision of television masts, with which the DBRW was able to help in the rural counties of mid-Wales, but for which there was no facility outside that area, so other areas could not benefit. Obviously, if the work of the DBRW is now to be included in the overall work of the new powerhouse agency, there needs to be some function to continue such provisions, in the areas where they are appropriate.
  I agree with the right hon. Member for Llanelli that it is fundamental to get the economic emphasis right. What will happen if the focus of the Welsh Development Agency is shifted entirely to trying to respond to initiatives that are not strictly economic? Unless there is work for the communities living in the old towns and villages of the slate-quarrying areas of my county of Gwynedd, as in the old coal mining areas of the valleys of Glamorgan and Gwent and in east Dyfed, we shall have depopulation, an aging population and all the social and economic problems that flow from that. Therefore, the organisation must do a positive job in providing the economic base that sustains social and cultural life and the other aspects of life in those areas.
  This has been a useful debate, in which valuable arguments have been made from the Conservative Front Bench. I am glad that among Conservative Members there appears to be a change of emphasis and approach to this issue. Perhaps the Leader of the Opposition is giving a lead in rethinking his policy on devolution. If so, I welcome it.
  I hope that when the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), replies to the debate, he will put to rest the issue of the balance between the agency's social and economic responsibilities. I hope he will tell us that the Welsh Development Agency will have primarily an economic role, and that the social role will facilitate the economic role but not take over from it. It is a question of getting the balance right.
  I shall now speak to the amendments standing in my name and those of my hon. Friends. Amendment No. 523 inserts, instead of the words "or any", the words "and every". That may seem a very simple amendment. It refers to the need for economic regeneration to occur in all parts of Wales, not just in the pockets of Wales that have benefited so much recently. I shall not bore the
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  Committee by repeating our arguments about unbalanced development in Wales. I summarise by saying that, until fairly recently, during the period of Conservative government, the Welsh Office had a strategy that accepted that 80 per cent. of new jobs coming to Wales by way of inward investment went to two small pockets—one around the M4 corridor in south-east Wales and one around the Wrexham-Deeside area in north-east Wales.
  I grant that, in March 1997, a month before the general election was called, the Conservative Government had a change of mind—a deathbed conversion—and changed that distribution to 50:50. I believe that the incoming Government have changed the distribution a little more, but the pockets of severe unemployment in Wales are to a large extent outside those two catchment areas.
  Development needs to take place so that there are economic opportunities and job opportunities within reasonable travelling distance of every part of Wales. I am not saying that it is possible to have equal development in every town and village—obviously, that would be nonsense—but it is reasonable to expect that there should be a fair range of job opportunities within travelling distance.
  In areas such as south-west Wales, in Pembrokeshire and other parts of the old county of Dyfed, in north-west Wales—in my constituency and that of my hon. Friend the Member for Ynys Môn (Mr. Jones)—and in other pockets, there are severe on-going levels of unemployment. The strategy is not yet meeting that challenge. Perhaps the Minister will announce some good news for some of those areas. I hope that there will be a change of emphasis in that direction.
  We are seeking to alter the wording in the Bill so that the new powerhouse agency will know from the start that it is not a matter of ensuring that the overall figures for Wales look all right and forgetting the pattern throughout Wales. The agency has a responsibility towards every part of Wales—not just those lucky corners that have done so well recently. Amendment No. 519 would
  "promote social equity in Wales."
  In undertaking its economic responsibilities, the agency must guard against the gulf that can grow between areas of severe social and economic deprivation and those that are doing very well thank you. As I have said, we must strike a balance.
  Amendment No. 540 is timely. It deals with encouraging the development of Welsh exports and the interface between the Welsh Development Agency and the rest of the world. I am very much aware of the press reports this week about that issue. Yesterday's edition of the Financial Times referred to the apparent need for the Welsh Development Agency to cut expenditure and overseas staff. The report said that the agency is facing a £3 million cut in administrative costs. The Financial Times states:
  "After staff costs, the area being targeted for savings is expected to be the 11 overseas offices, where the agency is believed to be considering using Invest in Britain Bureaux".
  Mr. Letwin: On a point of order, Sir Alan. I may have misunderstood, but I thought that the timetabling

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  prevented discussion at this stage of amendments that relate to lines beyond line 11. The right hon. Gentleman is discussing amendment No. 540, which relates to line 26.
  The Chairman: Order. The hon. Member for West Dorset (Mr. Letwin) may not realise it, but he is questioning my selection of amendments. The fact is that the amendments are perfectly in order if I have selected them in this way.
  Mr. Wigley: I am grateful, Sir Alan. I think that the Minister wishes to contribute.
  The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): I am grateful to the right hon. Gentleman for giving way. I take this opportunity to deny specifically the Financial Times report. There is no truth whatsoever in the claim that the WDA intends to close its overseas operations, which have played an important role in encouraging investment to Wales under both this and the previous Administration.
  Mr. Wigley: I am very glad to hear that. On Monday morning, I met Brian Willott, the chief executive of the Welsh Development Agency, to discuss the implications of the cut—I had heard rumours of them before the story appeared in the Financial Times. Mr. Willott was concerned about having to cut costs by £3 million. I assume that the Minister does not refute the idea that there will be a £3 million cut—it is simply a matter of where it will hit.
  Mr. Hain: I do not refute the fact that the Government have asked the three quangos that will join to form the new powerhouse under the WDA to make administrative savings. I am sure that the right hon. Gentleman will agree that we must have an efficient operation. There must be scope for savings among three bodies that performed similar functions, many of which were duplicated.
  Mr. Wigley: I am sure that there will be scope for savings—the question is whether it will come from the overheads at the headquarters of those bodies in Cardiff and elsewhere or whether it will come from the administrative budget and undermine the WDA's activities at the sharp end. That matter concerns the agency and hon. Members who represent Welsh constituencies. We want the agency to build on its established track record.
  We are aware of the on-going attack on the ability of the Welsh Development Agency to attract overseas investment to Wales. There is constant sniping from certain people outside Wales whose agenda seems to be to pull down the work of the Welsh Development Agency. I realise that Wales has benefited: we have received 20 per cent. of inward investment to the United Kingdom, which is more than "our share". However, we certainly needed it. If there is a feeling in north-east England that Wales is doing particularly well, surely that area should rise to our level rather than trying to pull Wales down. This structure is helping to deliver the goods in Wales. If there are lessons to be learned about attracting inward investment to the north-east or the north-west, I wish those areas the best of luck. However, the Welsh Development Agency must not be shackled.
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  5.15 pm
  I have read and heard of the rumblings in the Department of Trade and Industry, which—even before the advent of the new Welsh Development Agency—is trying to tie up the new super-body and establish a hold over it. That would be a severe disservice to Wales. I ask Welsh Office Ministers to provide some assurances in that regard when they respond to the discussion.
  I have tabled parliamentary questions about exports. Encouraging exports is the flip side of attracting inward investment. The creation of the interface and the networks and the generation of faith in the economy that provides the exports can be significant factors in identifying and helping to develop overseas investment in Wales. Manufacturing opportunities in Wales or in other parts of the United Kingdom may be identified and products may be exported to the country of origin or to other parts of the world.
  Mr. Evans: The WDA is already doing that to a great extent through "Source Wales". Those activities would be damaged if the WDA pulled back any of its people from abroad, particularly from countries such as Japan. The WDA is doing a good job, but there is a fear that indigenous Welsh companies will suffer.
  Mr. Wigley: We must develop the "Source Wales" approach. There is immense untapped potential. Much good work has been done, but there is scope for more. Components imported from Japan, Taiwan and the far east that are used by companies such as LG and ACER could be made in Wales—or at least nearer the source. That would benefit the economy of the United Kingdom in general and of Wales in particular. That area must be developed. Proactive work must be undertaken in countries such as Japan, South Korea and Taiwan to achieve our objectives.
  I hope that the WDA office in Tokyo is receiving the full, proactive support of our embassies and other United Kingdom organisations. We must not see the sort of infighting that sometimes occurs—the petty jealousies, the empire building and the desire to take credit for any achievements. It is true that the Welsh Development Agency has done some tremendous work, but it would be hamstrung if it were not working as part of a team. I seek the Minister's assurance that the team approach will continue and that the WDA will receive support from all United Kingdom representative bodies, whether they are embassies, the Invest in Britain Bureau or the DTI.
  I received an interesting answer from the Scottish Office when I asked a question about the statutory provisions that enable it and its agencies to help firms located in Scotland to develop export markets overseas. The Minister for Education and Industry, Scottish Office replied:
  "My Department, through Scottish Trade International, a joint organisation between The Scottish Office and Scottish Enterprise, assists the delivery to Scottish-based companies of support from the Government's Overseas Trade Service, funded by my right hon. Friend the President of the Board of Trade. In addition, Scottish companies benefit from export advice and assistance from Scottish Enterprise on the basis of section 1(a) of the Enterprise and New Towns (Scotland) Act 1990 and from export advice now funded by my own Department under the Industrial Development Act 1982."— [Official Report, 10 February 1998; Vol. 305, c. 147.]

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  In other words, the Scottish Office has a positive, proactive role which will transfer to the Scottish Parliament to develop overseas trade. That is clearly beneficial.
  I asked a similar question of the Welsh Office and the Under-Secretary of State for Wales, the hon. Member for Neath, replied on 10 February. He stated:
  "Section 1 of the Welsh Development Agency Act 1975 provides the necessary statutory powers for the activities of the Agency. The Agency has a number of initiatives and schemes which assist companies in Wales to develop overseas business opportunities."—[Official Report, 10 February 1998; Vol. 306, c. 156.]
  The Minister said that he would arrange for me to have a letter from the chief executive of the agency and for a copy to be put in the Library. Such a letter has not come, nor has it reached the Library, but no doubt it will arrive some time.
  From comparing those two answers, I get the strong impression that the role of the Scottish Office has been considerably more advanced than the role of the Welsh Office in developing that trade aspect, and that that is beneficial to Scotland's attempt to attract inward investment. The best of luck to Scotland—I do not begrudge it. The Scottish Office is going out and doing the job. On three occasions during the past two years, I happened to be in places overseas where Scottish Office Ministers had just been, trying to draw in investment. That has helped to create the networks that Scotland needs to attract inward investment.
  We need that same proactive approach. Bodies such as the Department of Trade and Industry and Invest in Britain must understand that our agenda is to achieve as advanced a model as the one from which Scotland benefits, not to be reined in because of the agenda that the DTI seems to have.
  If the Welsh Development Agency and its successor body are to do the job that we need, they will need resources. I hope that the Under-Secretary will respond to the points made by the hon. Member for Merthyr Tydfil and Rhymney and the right hon. Member for Llanelli about the need for resources to deliver the objectives.
  In recent months, we have seen the danger of large-scale projects such as LG, which of course is valuable and worth having in its own right, swallowing up the available resources; resources are not available for other parts of Wales where, by now, there is an even greater need for economic stimulation and job creation. If the new body is to have a chance of attacking the agenda that awaits it, it needs those resources. I hope that some assurance will be given that, although we read in the Financial Times about cuts in resources, adequate resources will be made available.
  Finally, as this is our debate about the WDA, I hope that there will be some clarification of the appointment of people who will take over the responsibilities in the new super-body, and what will happen with regard to the senior jobs in the new structure. There is great uncertainty in all the bodies. People in post want to know where they stand. Will they be appointed by existing bodies, or can the appointments be made only after the new body has come into existence? I realise that that is tangential to
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  the debate, but it all comes together in our amendments. We need a structure in place to develop exports and promote balanced development throughout Wales.
  The Chairman: Order. I remind the Committee that this is not the only debate about the Welsh Development Agency. There are several groups of amendments that relate to it.
  Mr. Rhodri Morgan: Taken as a whole, the amendments in this group relate to the question of how social, as well as economic, the Welsh Development Agency cum economic powerhouse should be, after the merger with the Land Authority for Wales and the Development Board for Rural Wales.
  I shall not reminisce about the period in the mid-1970s, almost a quarter of a century ago, when the three agencies were set up under the previous Labour Government, because obviously I was not there, unlike my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), but I recall the period. The curious fact about our debate today about a three-way merger and the terms on which it should take place is that that was also true at the setting up of the WDA.
  The WDA was a merger of the derelict land unit, the Welsh Industrial Estates Corporation, which built the factories, and the Development Corporation for Wales, which was the punter-hunter for the body that marketed Wales in England and the rest of the world. It tried to draw companies in to occupy the factories that would be built by the Welsh Industrial Estates Corporation, sometimes on cleared land that used to be covered in slag heaps from the coal mines.
  In that three-way merger, probably the same consideration of priorities took place that we are undertaking in debating the amendments. We should not expect the functions of a body on day one of a merger to remain the same over the next quarter of a century. Clearly, the priorities will change. When the original merger took place, one of the main priorities back then would have been to clear the slag heaps. It was not all that long after the Aberfan disaster, and people were still conscious of it from eight years previously.
  People saw that as a high priority for two reasons: first, it released land; and, secondly, it improved the environment and made the environment in the valleys of north-east Wales and especially in industrial south Wales more attractive to industrialists. Accordingly, factories were built on the cleared land, and the parts that could not be made flat enough on which to build factories were landscaped.
  Rather than discussing how social the Welsh Development Agency cum economic powerhouse should be, at that time we would have been discussing how environmental it should be, and to what extent it should be allowed to dilute—
  Mr. Denzil Davies: That is made perfectly clear in the Welsh Development Agency Act 1975. One of the four purposes set out in the Act is
  "to further the improvement of the environment in Wales".

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  That means clearing the slag heaps. Another purpose is
  "to further the economic development of Wales".
  Mr. Morgan: That is precisely my point. The question was how environmental the WDA should be. The question now is whether the social aspect dilutes that function. That was the point made earlier by my hon. Friend the Member for Merthyr Tydfil and Rhymney. In other words, if functions are added to an economic development agency, is its focus diluted?
  There was great criticism of the environmental aspects of the early WDA. [Interruption.] My right hon. Friend the Member for Llanelli denies that, but I can tell him that it is true. I wrote an article on the subject. My right hon. Friend is not the whole of the human race and he may not remember that, so he should not rush to denials too quickly. He may not remember my article in the Western Mail, but that is his problem, not mine.
  The issue is the same: is the focus of an economic development agency diluted when functions are added to it? Is it better for the agency to concentrate solely on economic agencies, and for other agencies to specialise in other functions? Are merged functions a good idea, because they would help along the general process of improving the wealth and prosperity of the Welsh nation? Should that be done by several agencies, or by a merger of three agencies, as we did when we set up the WDA in the mid-1970s and as we are doing now?
  The issue is complicated by the fact that one of the predecessor agencies had a social function. For the DBRW, the main problem was not unemployment, but depopulation. Unemployment was quite low, but the young people would not stay because they had none of the facilities of town life. The DBRW thought that, with more social development, people would not mind staying in the area. People did not want to stay on the farms and little villages.
  Mr. Lembit Öpik: Does the hon. Gentleman agree that exactly the same problem persists, particularly in areas such as mid-Wales, and that that is one of the most powerful arguments for the proposals in hand?
  Mr. Morgan: I think that the hon. Gentleman is confirming what I thought about the basis of "social". If the word is put into the Bill, will there be a dilution throughout Wales in both rural and urban areas? That point was made by my right hon. Friend the Member for Llanelli. Such a dilution would put pressure on the social side of the budget. If the word is not inserted—I think that that is what the Tory amendment seeks to achieve, although I did not hear the hon. Member for Ribble Valley (Mr. Evans) arguing this—and social development does not feature at all, it cannot be applied in mid-Wales, let alone urban Wales. It seems that that is the meaning of the Tory amendment. The hon. Gentleman may not wish to advance that argument but it seems that that is the meaning of the amendment.
  5.30 pm
  Mr. Evans: I am not sure whether the hon. Gentleman was listening carefully enough. The right hon. Member for Llanelli (Mr. Davies) suggested that we could either
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  demarcate the rural areas that now receive social development aid to ensure that they, and only they, continue to receive it, rather than places such as Swansea, Port Talbot or Neath, which would have arguments to advance for social development, or devolve down to the local authorities. Both suggestions could be carefully considered.
  Mr. Morgan: The hon. Gentleman is saying that he was speaking in defence of the amendment tabled by my right hon. Friend the Member for Llanelli. I was saying that the hon. Gentleman was not speaking to the Conservative amendment, which would remove the ability of the economic powerhouse or super-agency even to continue what the three predecessor agencies are now able to do, especially the Development Board for Rural Wales, in promoting social development in mid-Wales.
  I hope that my hon. Friend the Minister will deal with whether the addition of the words "and social" will allow the merged agency to continue what the DBRW does now in mid-Wales and with whether the intention is to extend the social development function to rural areas of Wales that are not in mid-Wales. Finally, is it intended that there should be social development in any part of Wales, be it urban, non-mid-Wales rural or a continuation of the area of mid-Wales?
  Mr. Denzil Davies: There is no question of intent; we are dealing with what the legislation will provide. Social development will cover the whole of Wales. It will not be restricted to Powys or rural areas generally. It is not a matter of intent. Perhaps my hon. Friend will read the proposed legislation.
  Mr. Morgan: I do not know why my right hon. Friend thinks that I do not understand that. Perhaps the issue is whether ministerial replies have any purpose. I am saying that ministerial replies have a function in the proceedings of the House of Commons. That being so, there is some purpose in asking the Minister to explain what the clause is intended to mean in terms of the operation and budgeting of the agency and what the merged agency will be told to do, for as long as he has any influence over it. My hon. Friend will be aware of the influence of judicial reviews in grey areas. We know that what Ministers say at the Dispatch Box counts in grey areas. That is why I am asking the Minister to perform the usual function that Ministers undertake when they reply to debates in Parliament.
  It is obvious from the way in which the Bill is structured that we are terminating, through the legislative structure of the Bill, the DBRW and the Land Authority for Wales. We are making the WDA the taking-over body, legislatively, of the other two agencies to which I referred. This may be a merger in the minds of Ministers, but legislatively there will be a takeover. That is clear from the structure of the Bill.
  The issue is whether we should try to buy off the possible opposition of those who work in or are served by, in the case of mid-Wales, the DBRW, including those who have a particular interest in urban regeneration and land development, by saying, "Do not worry. As we are making the WDA the superior agency, we shall try to curry some favour with you by doing something for you in the wording of what will be an Act—for example,

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  adding the words 'and social'—so that it is clear that the DBRW will have a continuing influence even though its legal being has been terminated."
  The same process is occurring with staffing levels. My right hon. Friend the Secretary of State has already said that the chairman of the WDA will be the successor chairman, and that the chief executive will be the successor chief executive. Including the words "and social" could be seen as the quid pro quo for these two processes. Even this is being said, "The WDA can take over the other two bodies and we shall be the superior body, but we shall draw back from some of the activities of the WDA that the DBRW never undertook, including inward investment from abroad by having offices abroad." The international division of the WDA feels very much under threat precisely because of that quid pro quo.
  We have the words "and social"; a parallel in terms of the staffing structure is that the WDA gets the chairman and the chief executive. At the same time, the DBRW-type attitude that business services are important while inward investment is not so important will be reflected in the staffing structure. That is an alarming prospect. The parallel structure to what is proposed in the amendments will gnaw away at the international division and the overseas representation of the WDA.
  The WDA is already the smallest of the bodies that serve the British Isles through overseas representation. The development authority for Northern Ireland has 57 people working abroad. The Locate in Scotland office has 37, the Northern Ireland Industrial Development Board has 33 while the WDA has 25 from 1 April. Perhaps these words are being used, "We know that the WDA will have the chairman and the chief executive, but do not worry. There will be a lot of DBRW and LAW influence below that level. We are showing you that by shrinking the international division. The DBRW was never so involved in mid-Wales because the WDA always acted for you. The styling of the agency is to withdraw from some of the overseas markets and no longer to have a presence abroad." That would be a tragedy.
  The parallel that can be drawn from the amendments is a structure that will work away at staffing levels. Given the staffing structure being devised in the merged arrangements and the announcement that was made a few days ago about the chairman and the chief executive, we shall have not an economic powerhouse but an economic power mouse. There will no longer be the ability to draw in firms from abroad. The pass will have been sold. In effect, it will be said, "The WDA can have the top jobs, but after that we shall start drawing in the horns of the old WDA function because it was expensive. There were offices in Seoul, Tokyo, north America and elsewhere. If we pull out of that, the Invest in Britain Bureau in London will be very happy, as will the Department of Trade and Industry. We shall pull out of all that."
  That having been done, the WDA will not be an entirely dominated organisation in future, because it will not involve excessive resources and savings of £3 million will be achieved, at least partly by pulling out from some of the admittedly expensive offices abroad. However, if the WDA is already the smallest of the big four organisations that represent the parts of the United Kingdom—Northern Ireland, Scotland and Wales—and is already operating at a level that barely amounts to a critical mass in most of the key markets for inward investment, there will be difficulties. If there were a cut
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  while trying to maintain a share, which the right hon. Member for Caernarfon (Mr. Wigley) was talking about—cutting a body with only 25 staff abroad to 15, for example—the agency would not be viable. There would then be pressure from the IBB to wind the whole thing up because it would not be worth running.
  Mr. Livsey: I am grateful to the hon. Gentleman to allow me to intervene, because it seems that I shall not be able to make a speech during the debate. I apologise for being absent earlier. Some Territorial Army units in my constituency are under threat and I had to leave the Chamber on that account.
  The news yesterday was that the international division of the WDA might be cut by four people while the DBRW might be cut by 60. If that is true, the social development and business connect functions of the DBRW are under threat. I hope that the Minister will reassure us that these cuts will not take place as a result of amalgamating and restructuring the WDA into a powerhouse.
  Mr. Morgan: If what the hon. Gentleman is saying is true, we want to know from the Minister from where the savings of £3 million will come. Will each part share the cuts and misery proportionately so that ex-DBRW parts are subject to a cut, along with the WDA and its international division? Will it be proportional? The suspicion is that the international division will be subject to the biggest cut and may, as a result, fall below the level of a critical mass in overseas matters.
  Mr. Letwin: I shall be brief, as time is pressing. My speech flows from the remarks, as has often been the case during the Bill's consideration in Committee, of the right hon. Member for Llanelli (Mr. Davies). I draw the Committee's attention to a constitutional question that arises as a result of the definition of social development.
  I remind the Committee that there is something procedurally odd about what is going on in this clause, as clause 29(1) gives the Welsh assembly enormous powers to redefine, as the Secretary of State has eloquently described on other occasions, the role of the Welsh Development Agency, and, indeed, to terminate its functions entirely, if I am not mistaken. It is therefore odd that the Government have chosen to extend the WDA's role by statute of the House rather than allow the assembly to make that decision, as the assembly will be allowed to do in relation to the continuance or restriction of the WDA's function. We must therefore look at what importance will be attached to the change in the WDA's function.
  Like the right hon. Gentleman, I have looked at different sources for a definition of "social development". The European literature, which will be extremely important guidance to United Kingdom courts in determining this, has a much wider definition than that suggested by the right hon. Gentleman. The transfer of functions order lists all the classes of activity that could be classed as economic.
  When one sees the classes of activity that will be transferred to the assembly, it could be argued—if time permitted, I would do so—that each and every one of the remaining non-economic functions could be classed as social development. There is at least a risk—perhaps a severe one—that the WDA, if it so chose, could gradually establish a right to intervene in every area of government in which the assembly will also have a right to intervene.

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  Section 1(6) of the Welsh Development Agency Act 1975 states what the agency's powers are in relation to its scope. It says:
  "The Agency shall have power to do anything"—
  a remarkable statement—
  "whether in Wales or elsewhere, which is calculated to facilitate the discharge of their functions … or is incidental or conducive to their discharge."
  That is the widest definition that could be given of the powers that a body could have, given to it by statute. If the scope of power given to it by statute broadly approximates that given to the Welsh assembly, there will be two bodies in Wales—one will be reformed; the other established—both of which appear to have, within roughly the same scope, broadly unlimited powers to do broadly anything, so long as they do it procedurally in the right manner.
  We must then look at where the money flows. We have, I fear, a confused picture. Perhaps the Minister can reassure us that I have misunderstood the position. I believe that, although the assembly will be responsible for the current expenditure of the WDA, under section 18(3) of the Welsh Development Agency Act 1975, which does not appear to contain an order-making power that is being transferred under the transfer of functions order, the Treasury and the Secretary of State will determine the total expenditure of the WDA, because it falls to them to determine its aggregate level of external financing.
  Looking some years ahead, to an assembly that is dominated by a political party or parties different from those that dominate the House and constitute the Government of the United Kingdom, we see the classic recipe for constitutional tension: an agency which can do everything which, broadly speaking, the assembly can do; which has the widest powers in relation to that scope; which is funded, at least in part, directly from the Government of the United Kingdom; and which can set itself up in opposition to the Welsh assembly.
  The assembly will, of course, in part be the agency's paymaster. What a fertile field in which constitutional problems can arise, for example, if the Secretary of State of the day or the Treasury seek to use the WDA as a means of directing funding through the external financing limit powers, against the interests of its nominal paymaster—its current expenditure paymaster—and the body that is meant to be in charge of it.
  I am not trying to argue that all these problems will arise at once; I am trying to argue that, by inserting the word "social", with its wide connotations—I doubt that whatever the Minister says at the end of the debate will much influence the judges in this matter—the Government will have created the ability for the two bodies to be in tension in a way that the Government, or their successors, will come to regret.
  5.45 pm
  Mr. Hain: I am sorry to have to reply to the debate at this point. I realise that I might have stopped some of my hon. Friends from speaking, for which I apologise.
  Amendments Nos. 374 and 493 would mean that the social development powers of the Development Board for Rural Wales were lost with the abolition of the board.
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  That is the important point. The White Paper "A Voice for Wales" set out the Government's plan to consolidate the functions of the DBRW and the Land Authority for Wales into the WDA, to provide a unified and comprehensive range of services for the whole of Wales. Indeed, that is done at local authority level, where regeneration plans reflect a comprehensive approach, involving economic, social and environmental development.
  In the past, the DBRW has made effective use of its social powers to contribute to the development of rural communities, complementing the role of local authorities—for example, a £25,000 project in Ceredigion to convert a warehouse into a sports centre. Other instances include support for jazz and music festivals, opera performances and youth clubs.
  The Bill clearly establishes the powers of the new agency to be a full and effective partner in economic and social development schemes all over Wales. Obviously, the way in which this power is used in the future will be subject to the wishes and guidance of the assembly, but these amendments would deny any prospect of progress in that direction.
  I shall respond specifically to the typical probing and forensic points made by my right hon. Friend the Member for Llanelli (Mr. Davies). He raised legitimate points, in contrast to the somewhat legalistic points of the hon. Member for West Dorset (Mr. Letwin). I would not for a moment accuse the hon. Gentleman of misunderstanding the Bill, but he missed its point entirely and sought to confuse it in an argument—one that is fundamental to the Conservatives' opposition to the Bill—about tension between Westminster, which sets the funds for the assembly, and the assembly, which would control the new WDA powerhouse agency.
  The social activities envisaged are pretty small-scale. I gave examples a moment ago. They would not threaten the overwhelming industrial and economic focus for the activities of the powerhouse. The new WDA will, of course, be accountable to the assembly. Its programmes, including social development, will therefore be subject to scrutiny by the assembly under section 1(14) of the Welsh Development Agency Act 1975. No Treasury consent will be required. If there were any question about the activity of the powerhouse veering too much, say, in a social direction, the assembly would be able to call it to account. It would scrutinise that and deal with any problems that arose.
  My right hon. Friend the Member for Llanelli and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asked about the definition of the term "industrial" and the balance between business and industry. We propose to substitute the term "business" or "businesses" for "industry" or "industrial", which is used in the Welsh Development Agency Act. We have made that change simply to use a more up-to-date expression which better captures the nature of the modern Welsh economy.
  I note that my right hon. Friend accepted that that change was fine, but he made some specific points, to which I shall come later. The change does not imply that the term "industry" provides too narrow a definition of the type of body that could be supported under the Welsh Development Agency Act or any other legislation.

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  With regard to my right hon. Friend's point about profit, the definition in the Bill, in particular in paragraph 10 of schedule 10, is really to ensure that there is no attempt to exclude, for example, co-operatives. The intention was to make the WDA's remit as wide as possible. Other examples might be a business conducted by a charitable trust on a break-even basis, or a village shop run by a local community. Therefore, there is not a great deal to be concerned about, although my right hon. Friend was right to press us on that.
  Mr. Evans: Why does the definition of "business" also include public bodies? Does not that mean that even the Welsh Office could apply for grants for, for example, business efficiency? Why is the definition so broad as to include public bodies?
  Mr. Hain: The hon. Gentleman should read the Bill carefully.
  Mr. Jenkin: Answer the question.
  Mr. Hain: If the hon. Gentleman will allow me to do so, I shall answer the question.
  The definition in schedule 10 is clear. It rightly gives the new WDA extremely wide powers. Unlike the hon. Member for Ribble Valley (Mr. Evans), we do not want to shackle it.
  My hon. Friend the Member for Merthyr Tydfil and Rhymney asked about service. I agree that the heart of any successful economic strategy for revitalising the Welsh economy must focus on manufacturing and industry. That has been terribly neglected in the past couple of decades—a point on which we have often agreed, and I continue to do so. I think that my hon. Friend claims that the birth of manufacturing took place in Dowlais, and he may have a point there.
  It is important that service industries are included. For example, a call centre might well be classed as a service business rather than a manufacturing industry, self-evidently. I agree that manufacturing must be given priority, both in terms of inward investment and indigenous investment, which has particularly been neglected in the past 18 years.
  Mr. Rowlands: In the past, when motor vehicle repair businesses or garages applied for some support from the WDA, it said that that was not a service sector which it should support. In the changes that have been made, would it now be included in the responsibilities of the WDA?
  Mr. Hain: It is quite possible that it would be. The broad remit for the powerhouse would reflect that. It is an attempt not to shackle it, but to empower it, so that it can conduct the necessary economic support activity.
  The right hon. Member for Caernarfon (Mr. Wigley) raised some pertinent points, for which I thank him. I emphasise that the balance must be in favour of economic, industrial and business activity. We have set specific targets to shift investment westward. It is difficult, but we are determined to continue with that.
  As to the wish to make it a function of the agency to promote social equity in Wales, I remind the Committee that, for the first time, the Bill empowers the agency to
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  address social development. Social equity is better achieved by a cohesive partnership between public and private bodies involved in service provision. That means not just the agency but the assembly, local authorities, the voluntary sector and many other bodies. I am sure that the social development powers of the Development Board for Rural Wales, which the Bill will transfer to the agency, will help it to contribute to the effort. Amendments Nos. 374 and 493 would prevent that transfer.
  Mr. Letwin: If the Minister is admitting that social equity could be included within social development, can he name any activity that would devolve to the Welsh assembly which might not be considered as falling within the remit of the WDA?
  Mr. Denzil Davies: Not many.
  Mr. Hain: That is probably true. We intend to create a powerful agency.
  The hon. Member for Ribble Valley made an important and legitimate point—for a change—about whether the assembly would be meddling in the WDA's activities. The answer is no. The assembly will set clear targets for the new powerhouse. It will monitor it and hold it accountable for delivering the strategy which it determines as an assembly. But decisions on day-to-day matters, such as inward investment and the level of grants in attracting inward investment, would be made by the powerhouse, not by some Committee of the assembly.
  I am aware of the interest of the right hon. Member for Caernarfon in the comparative arrangements for export promotion and development in Scotland and Wales. He made some important points. I am pleased to reassure him that the existing WDA legislation provides the necessary powers for it to undertake export promotion activities, so his amendment is not necessary.
  At the moment, the Welsh Office is the main provider of export and advice services throughout Wales, while the services provided by the WDA are often sector specific. Other bodies, such as the chambers of commerce, training and enterprise councils and export associations, have been working with the Welsh Office to review and improve services to help small and medium enterprises in Wales to export more. We will bear the right hon. Gentleman's points in mind.
  I also listened with care to the right hon. Gentleman's points about the WDA's vital international role, and his Scottish point, which we note with interest. My right hon. Friend the Secretary of State has made it clear that there will be no Whitehall veto over his powers in respect of financial arrangements and so on, and therefore over the assembly's powers with regard to inward investment.
  My hon. Friend the Member for Merthyr Tydfil and Rhymney asked whether there would be a Welsh energy policy. The power to give consents for power station development will still reside with the Department of Trade and Industry, but the WDA will obviously have an interest, as it has at the moment in promoting the power station development at Baglan.
  Mr. Denzil Davies: Will my hon. Friend give way?
  Mr. Hain: I am sorry, but I have only a couple of minutes left.

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  I can tell my hon. Friend the Member for Cardiff, West (Mr. Morgan) that I deny emphatically that there is any attempt to run down the international activity of the WDA. I owe my hon. Friend a letter on that point, and I shall write to him addressing the points that he raised.
  My right hon. Friend the Secretary of State has asked for the resignations of all 27 members of the three quangos which are to be merged to form the economic powerhouse for Wales—the WDA, the DBRW and the Land Authority for Wales. They will stand down this autumn, when the new body is created and a new body is appointed. We shall shortly advertise those appointments, and, in addition to new candidates, I have no doubt that many of the existing members who have given dedicated service to Wales will wish to put their names forward.
  We are determined that all other board members of the new powerhouse will be appointed in the same fair and open way as the chair of S4C. The new board will not be open to accusations of cronyism; nor will any other appointments made in the new Wales. People are looking to Wales to give a lead in establishing new, more open and accountable ways of managing public bodies and the Government are giving the lead. We are making a clean break from the old, scandal-ridden quango state, and I urge my right hon. and hon. Friends not to press the amendments.
  Mr. Denzil Davies: My hon. Friend the Minister made it clear that the Government have no intention of shackling the WDA, and that the purpose of the changes was not to do so. There will thus be a considerable extension of the WDA's powers.
  I realise that I will not get an answer now, but may I ask my hon. Friend rhetorically whether the money will still be shackled? If the powers are to be unshackled, will the moneys be similar in quantum to the current powers?
  Mr. Hain rose
  Mr. Davies: I am sorry, but I shall not give way to my hon. Friend. I have one minute, and I intend to use it. I am sure that he wants me to withdraw the amendment when the time comes.
  Let us have extra powers for social development, but let us also have the extra money that goes with it.
  Mr. Hain indicated assent.
  Mr. Davies: My hon. Friend is nodding, so I presume that the Secretary of State will go to the Treasury and say that we want more powers.
  I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  6 pm
  Mr. Cynog Dafis: I beg to move amendment No. 517, in page 56, line 11, leave out from `Wales' to first 'and' and insert
  'leave out "economic" and insert "sustainable economic, environmental".'.
  The Temporary Chairman (Mr. Barry Jones): With this, it will be convenient to discuss the following amendments: No. 518, in page 56, line 13, at end insert—
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  '(c) after paragraph (d) insert—
  "(e) to promote the environmental sustainability of economic activity in Wales; and".'.
  No. 522, in page 56, line 26, at end insert—
  '(3A) After subsection (4) there shall be inserted—
  "(4A) In allocating its resources and setting its priorities, the Agency shall have regard to the need for sustainable economic development throughout the whole of Wales.".'.
  Government new clause 38—Sustainable development.
  New clause 18—Principle of sustainable development—
  '(1) The Assembly shall make appropriate arrangements with a view to securing that its functions are exercised with due regard to the principle that there should be economic and social development which is environmentally sustainable.
  (2) The arrangements referred to in subsection (1) shall include an annual review of the implications for Wales of any relevant quantitative targets for the United Kingdom set by Parliament or by Ministers of the Crown.
  (3) After each financial year of the Assembly, the Assembly shall publish a report containing—

  (a) a statement of the arrangements made in pursuance of subsection (2) which had effect during the financial year, and

  (b) an assessment of how effective those arrangements were in promoting sustainable development.'.

  New clause 37—WDA board member to have responsibility for sustainable development—
  '.—Section 2 of the Welsh Development Agency Act 1975 shall be amended by inserting the following subsection—
  "(3A) One member of the Agency shall be responsible for monitoring progress on the sustainable development aspects of the Agency's work.".'.
  Mr. Dafis: I welcome the opportunity to debate at last, after several attempts, sustainable development. There is hardly a more important topic in considering a national future for Wales and the roles of the national assembly and the new development agency.
  Some of the amendments and new clauses in this group apply to the assembly and others apply to the development agency, but none applies to both. We welcome the Government's long-awaited new clause 38, which applies to the assembly but not to the development agency. Inserting that new clause in the Bill may mean that our national assembly will be the first national legislative body to have a statutory duty to consider sustainable development. That is welcome and, if it is taken seriously, it could be highly significant for the future of Wales. We strongly believe that both the assembly and the development agency should be subject to such a duty, and I shall explain why later.
  Amendment No. 517 inserts the words, "sustainable economic, environmental" in place of the word "economic" in relation to the WDA's functions. Amendment No. 518 would add the words:
  "to promote the environmental sustainability of economic activity in Wales"
  in line 13. Amendment No. 522 refers to the need to allocate resources and set priorities for the agency, and says that those
  "shall have regard to the need for sustainable economic development throughout the whole of Wales."

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  The concept of the "whole of Wales" has already been discussed and I am sure that it will be discussed under the next group of amendments when we consider rural policy.
  New clause 37, which I like to think is ingenious, would require one member of the agency's board to be responsible for monitoring the progress of the sustainable development aspect of the agency's role. Just as some organisations have a sustainable development unit, it would be useful to have one person on the board with the job of monitoring progress.
  New clause 18 concerns the assembly and would have a similar effect to the Government's new clause. By the way, a small error appears in new clause 18, subsection (3)(a), in which reference should be made to subsection (1) rather than subsection (2).
  Sustainable development is not just environmental protection, important though that is. It is certainly not just preservation, which has its place. Nor is it about keeping matters as they are. It is about making improvements in efficiency, prosperity and people's quality of life in a way that sustains and strengthens the natural environment and social equity. The concept of social equity was discussed briefly under the last group of amendments. I shall not spend too much time on it, but it might be worth bearing in mind the development advocated by David Adamson of the university of Glamorgan as part of the process of economic regeneration. He advocates taking hold of an area where there is social deprivation, helping the people to acquire skills, empowering them to use fashionable terms, and bringing about economic regeneration from the bottom up as well as from the top down. That example of using an agency's powers for social purposes is functional in relation to economic development. It is also an aspect of sustainable development.
  Thus, sustainable development means integrating—that is the important word—environmental and social equity considerations into all aspects of policy. Implementing sustainable development means identifying and then actively pursuing opportunities for development that bring those three elements together. It is not possible for the Welsh Development Agency or the assembly to pursue only sustainable development. We live in a world where a great deal of development is unsustainable. That may come to an end at some stage, but if one is committed to sustainable development, one is always looking out for opportunities that bring those three elements together. It is not always easy, but the scope is great and it will become greater as policies change at all levels: global, European, British and Welsh.
  I am confident that the national assembly will meet as sustainable development rises to the top of the political and economic agenda. Achieving the transition to sustainable development will be the dominant theme of the new century. We are all caught up in that global process to a greater or lesser extent. The latest phase is the Kyoto agreement on greenhouse gas emissions. The process extends from the global to the local level through the Agenda 21 process.
  We have a serious opportunity to put Wales at the forefront of that transition to sustainable development, just as Wales was at the forefront of the transition to industrialism 200 years ago, when our resources of energy were a crucial consideration. The assembly therefore has every reason to adopt sustainable development as a central theme for Wales. Until now, there has been a significant
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  failure in Welsh Office policy in that regard. In 1993, the Government published their first sustainable development strategy and established an advisory panel on sustainable development, chaired by Sir Crispin Tickell. It established a useful round table, which has been meeting regularly and proposing policy recommendations. Both those bodies have done useful work.
  On the day in February when that launch occurred, the Scottish Office, when Ian Lang was Secretary of State for Scotland, set up an advisory panel on sustainable development and a sustainable development unit within the Scottish Office. I am told that both do useful work within the Scottish Office. That did not happen in Wales. The then Secretary of State for Wales refused to do that, and opportunities have been lost as a result. No working group was set up and the previous Administration rejected my request in a debate in this House, and requests from others, to establish such a process. We have had nothing of that seriousness in Wales.
  Consultations on the Government's new sustainable development strategy document, "Opportunities for Change", which was published a fortnight ago, will be completed by the end of the year. That process must be used to develop a distinctive Welsh agenda on this subject: it should not be an appendix or a pale imitation of what is happening in England or throughout the United Kingdom.
  If the Government have ideas that are ready for implementation and that will put Wales at the forefront, the assembly will hit the ground running when it meets in the summer of next year. A distinctive agenda could be part of the brand image of Wales and establish Wales's reputation in Europe and the world. How will the Secretary of State use the consultation process for such purposes?
  The energy sector is relevant to sustainable development. Wales has major sustainable and renewable energy resources. The Government are committed to generating 10 per cent. of electricity from renewable resources by 2010. That would enable us to develop diversity and security of supply at competitive prices.
  Mr. Denzil Davies: I am following closely the hon. Gentleman's argument about energy and sustainable development. Does he agree that nuclear power stations do not transgress the principles of sustainable development?
  Mr. Dafis: No, I do not. Some people suggest that nuclear energy enables us to meet CO2 emission targets because carbon is not used. However, it is unsustainable because of problems with decommissioning nuclear power stations and disposing of wastes. There is a debate on the issue. My view is that substituting nuclear for fossil fuel-based energy is not sustainable, but other options are.
  Sustainable or renewable energy involves a dispersed and decentralised pattern of production and offers significant wealth creation and job opportunities in rural areas. Many of those opportunities are frustrated by the nature of the debate on renewable energy in Wales. The assembly and the agency should ensure that we have a more sophisticated understanding and a more intelligent debate. Wales could take a lead. The debate is not just about renewable energy. Offshore oil and gas resources will not be subject to decisions of the assembly, but it should influence the way and degree to which they are exploited.

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  Environmental technology—pollution control, emission measurement, end-of-pipe technologies and alternative clean production systems—is an expanding industrial sector that is set to overtake the chemical industry at the global level by the end of this century. The WDA should target this key sector for inward investment. There will be important opportunities in forestry and agriculture and the Secretary of State's initiative on the all-Wales agri-environmental scheme will be helpful.
  Sustainable tourism—which is the right sort—and links with economic activities such as farming should be encouraged, and sustainable agricultural areas and woodlands could be a focus for tourism. Sustainability is a pervasive theme that will be terribly important in the planning process. The planning process should actively facilitate rather than frustrate renewable energy projects. Sustainability should be prominent across the curriculum at all levels of education and a key factor in research. Organisations such as the Institute for Grassland and Environmental Research are involved and universities in particular are doing good work and could do more.
  6.15 pm
  Mr. Rowlands: Wind farms are contentious in certain communities. Is the hon. Gentleman suggesting that the right to object should be reduced to make planning more positive and proactive? What is he suggesting in that respect?
  Mr. Dafis: I am suggesting that the planning process should be part of an all-Wales strategy. There should be targets for electricity produced from wind power, and that might lead to a search for, and designation of, appropriate sites. I do not favour removing the right to object—that would be dictatorial—but the planning process can be used positively. Planners must understand the significance of a scheme when they make their decision. I believe that many planners are not sufficiently well informed.
  Mr. Öpik: Does the hon. Gentleman agree that acrimony arises in local communities over issues such as wind farms precisely because of the absence of a sustainable energy development strategy? If there were such a strategy, perhaps wind farms would not be built piecemeal and communities would not be upset.
  Mr. Dafis: I do not want to get into a protracted argument about wind farms.
  The Temporary Chairman: Please do not.
  Mr. Dafis: If we are to have a sustainable development strategy for Wales, we must also have a sustainable energy strategy.
  The assembly will have transport responsibilities. Wales needs an integrated transport policy to reduce road traffic. As the Government are committed to achieving a reduction in road traffic, how will the assembly develop such a policy? The Welsh road and rail network was conceived outside Wales. It is peripheral to the English network—no wonder we have poor north-south links. A sustainable communications policy must contain the right mix of transport modes—road, rail and air—which the Welsh Office has been promoting recently.
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  Getting investment priorities right will be difficult because the assembly will no more be responsible for rail than is the Secretary of State. There is a clear case for further devolution. The assembly will have to co-operate closely with the Office of Passenger Rail Franchising, the franchising authority. Opraf should be in that list of bodies, set out in schedule 4, that the assembly can require to attend its meetings. I hope that the Minister will consider tabling an amendment to bring that about. The successor body to Opraf—the strategic railway authority—will subsume the franchising functions.
  Electronics play a crucial role in communication policy, enabling communication without physical movement, rendering distance irrelevant and reducing the need for road traffic.
  Sustainable development is about opportunities, and opportunities for all parts of Wales. It is about industrial areas just as much as rural areas. We shall discuss rural policy later, but it is worth noting that Professor Gareth Wyn Jones, an expert on the subject, suggests that
  "a comprehensive strategy for the sustainable use of renewable natural resources in rural Wales could create about 10,000 new jobs".
  Given the multiplier effect, the professor reckons that as many as 14,000 jobs could be created.
  That is just one reason why I consider it essential for sustainable development to be a duty for the new WDA, not just for the assembly. A revamped WDA will, after all, be up and running before the assembly meets, and sustainable development should be one of its key considerations from the outset—it has not been one in the past. The agency needs to build a sustainable development culture. It needs to get its head around the philosophy and the principles of sustainable development, and it needs to develop expertise.
  The Welsh Development Agency Act 1975, which the Bill amends, refers to the environment, but the wording shows that the agency's environmental functions are seen separately from its other functions. It has tended to interpret the Act's provisions in aesthetic rather than deep sustainability terms. After all, the Act predates Brundtland, Rio and the process that has resulted from all that.
  I understand that sustainable development is to be a duty of the English regional development agencies. That is in the Bill, and I want to know why the same does not apply to the WDA. May I also ask whether the Secretary of State has received any representations from the WDA opposing the duty of sustainable development? It should be at the heart of the agency's responsibilities, not at the fringe. It should not be an add-on, as it has tended to be in the past. The agency should be able to explore the environmental implications of development at an early stage, in order to avoid many of the damaging, costly conflicts that can develop during the process of pursuing a particular kind of development.
  The subject is linked to the question of land use planning. I hope that the Secretary of State can assure us that the assembly will have the power to produce strategic planning guidance for Wales, which would help the agency—for instance, in relation to the location of inward investment projects. It would be stimulated, or indeed required, to locate inward investment projects, and other development projects, on previously developed land—what the Deputy Prime Minister now calls recycled land;

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  it used to be called brown-field sites. In that way, we could integrate land use in industrial development. The use of such areas, rather than green-field sites, should be preferred, if not exclusive.
  We have a major opportunity to make sustainable development a defining theme for Wales and its assembly. I hope that I have shown how important it is that the WDA, as well as the assembly, has a duty to bring about such development.
  Would the Secretary of State consider strengthening the wording of new clause 38 at a later stage? It uses the word "promoted", but it has been suggested to me that we should instead refer to the "achievement" of sustainable development, as other legislation does. For example, the Environment Agency has a responsibility to bring about—or aim to bring about—the achievement of sustainable development. It is a small point, but that duty should be seen as really important, and there should be no way of avoiding its implications. However, I admit that some of our amendments also refer to "promoting".
  I look forward to hearing from the Secretary of State, and from other hon. Members.
  Mr. Chris Ruane: I intend to make only a short speech, based on my personal experience of the area that I come from in north Wales.
  I welcome new clause 38, which recognises the importance of sustainable development. If the Welsh assembly adopts a strong sustainable development policy, we shall lead the way in the United Kingdom on the issue. Sustainable development is important in all areas of Wales, but especially in areas that depend on the environment for employment. In my constituency, the towns of Rhyl and Prestatyn developed, grew and prospered because of their location and their seaside environment. As well as its coastal environment, however, my constituency is blessed with an area of outstanding natural beauty, which straddles the Clwydian range and sweeps down into the vales of Clwyd and Elwyn.
  Unsustainable economic development has had a devastating effect on all parts of Wales. The whole north Wales coast has suffered from environmental degradation caused by past Governments, councils and industries that have used the environment as a cheap means of disposal. There has been a knock-on effect for subsequent generations—including this one—and on today's environment and economy.
  Let me give an example drawn from my own constituency in the 1960s. Rhyl urban district council decided to use a 60-acre salt marsh on the River Clwyd—one of only three north-facing rivers in north Wales—as a rubbish dump. It was seen as a cheap option. Domestic and industrial waste was taken across north Wales and dumped on that haven for wildlife. No record was kept of the rubbish that was dumped there over a 20 or 25-year period, and no one knows to this day what was dumped. It is a chemical time bomb. The rubbish was piled 40 ft high, and bulldozed over with a metre of topsoil. The land is now so polluted that it cannot be used for housing or industrial purposes. Methane is bled out of the rubbish tip by valves, and rain water washes out leachates into the surrounding mud banks and into the Irish sea. The land has been polluted for over a generation, and will probably be polluted for many generations to come.
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  That is just one example. I could give many others. There is the dumping of sewage into rivers and the Irish sea; the dumping of radioactive waste from Sellafield into the Irish sea; chemical and industrial dumping along the River Mersey; the dumping of armaments, including chemical weapons, into the Irish sea over the past 50 years; and the cleansing of ships' tanks in Liverpool bay. A Welsh assembly armed with a sustainable development policy will drastically reduce the possibilities of such environmental degradation in the future.
  I am pleased that the implementation of the new clause will not be delegated to a committee or an individual. I am glad that the sustainable development policy will be monitored and updated regularly, and I am also glad that the assembly will consult appropriate bodies before making, remaking or revising the scheme. I hope that the assembly will consult widely and listen carefully to the expert advice that it is given, in order to draw up a policy that will learn the lessons of the past and serve this and future generations.
  Mr. Evans: I support new clause 38. I hope that the Secretary of State will not fall off his seat when he hears me say that. [Laughter.] Even I do not believe what I am saying. I think that the new clause is a sensible way of approaching an issue that is vital not only to all of us, but to future generations. That is what sustainable development is all about. It involves thinking about present and future generations.
  Everybody is "green" nowadays and it will be interesting to see whether the Secretary of State chooses a green-field site, or recycles city hall or the guild hall in Swansea for the assembly. I understand that there will shortly be an announcement about how green he intends to be on its siting. I am told that Ministers are giving up cars and walking. As Gwydyr house is not far from here, I expect that the Secretary of State is doing that. Perhaps his car follows him carrying his red box or perhaps he carries it himself.
  Mr. Dafis: The hon. Gentleman speaks about the assembly building. I hope that he and the Secretary of State agree that it presents an opportunity for energy efficiency. It may produce some of its electricity by means of new technology such as photovoltaics, and it is important that it should be accessible by public transport.
  6.30 pm
  Mr. Evans: I am sure that if the hot air from the Chamber was recycled, it would heat the Palace of Westminster and some other buildings. The hon. Gentleman makes an important point, and if the Secretary of State chooses a green-field site for the development, it will be necessary to examine the project at the planning stage. That is the best way to ensure energy efficiency, and I hope that that will be taken into account.
  We are building on Agenda 21 and the second Earth summit, which was preceded by the Rio summit in 1992. New clause 38(6) refers to a yearly account to show exactly how the assembly has implemented its proposals, and that will enable people to measure how seriously the assembly takes sustainability. I hope that the partnership council's discussions with local authorities will give direction and a fresh impetus to an all-Wales strategy. The

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  hon. Member for Ceredigion (Mr. Dafis) spoke about that. It will also enable people to see how local authorities are fulfilling their agendas.
  Mr. Ron Davies: The hon. Gentleman mentions an interesting concept. Perhaps he will explain why he and his colleagues voted against the partnership council.
  Mr. Evans: We voted against it because we thought that it would not have any teeth and that it was to meet only once a year. As the right hon. Gentleman knows, I spoke about it meeting perhaps eight times a year. I hope that the other place can look again at the partnership council and give it some real teeth. There should be proper discussion between local authorities and Members of the Assembly on matters such as sustainable development. One of the assembly Committees could examine sustainability as part of its environmental remit. It must be given impetus in Wales rather than lip service.
  The hon. Member for Ceredigion mentioned other areas that we should examine; one of them is traffic. I know that local authorities will look at traffic problems in their areas; we appreciate that large cities are not the only places with such problems. The assembly can offer guidance and support to local authorities on traffic management. For example, perhaps the railways could carry much of the freight that will result from new investment in Wales.
  I was born in Swansea, and I suspect that if sustainability had been on our consciences in the 1960s, the Mumbles railway would still be operating in Swansea. Because of a wanton act of vandalism, that railway is no more. It is unlikely that it will be brought back, but at least its fate enables us to learn from our mistakes and discover ways in which we can protect other features in Wales for future generations. If the Mumbles railway had been retained, it would not have produced the amount of exhaust gases that are currently pumped out by cars using the Mumbles road.
  The hon. Member for Ceredigion spoke about giving the WDA a bigger role. The assembly can give guidance and encourage development and new investment on brown-field sites. At the design stage of buildings for new industries, more heed could be paid to sustainability and more environmentally friendly ways of building. On energy policy, we all carefully follow planning policy guidance 22. Wind energy was mentioned, and it would be remiss of me if I did not speak about that, because Wales has suffered more than most areas from the erection of wind turbines in places where they should not be.
  Mr. Dafis: Does the hon. Gentleman agree that Wales enjoys a large amount of wind energy development? Such energy is clean, and involves no extraction, transport, processing, combustion or emissions. Can the hon. Gentleman think of a better way of producing electricity?
  Mr. Evans: As the hon. Gentleman knows, I disagree with him on that issue. I am president of Country Guardians, and I was in touch with Ann West, who lives in Powys and has written to me today about the problem of wind energy generators in Wales. If the wind turbines
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  are put in suitable areas in accordance with guidance that is issued by the Department of the Environment, Transport and the Regions under PPG22, they are acceptable. If changes are proposed, I should be interested to hear about them.
  The assembly could give its views on sustainable energy. The hon. Member for Ceredigion spoke about a target of 10 per cent. of renewable energy by 2010. We support that, but it could mean that an area the size of Birmingham would be covered in wind turbines. We must examine all renewable sources and concentrate not just on an inefficient one, which is the wind turbine. Hydro power is far more efficient. Future wind turbine technology may make that system more efficient, so that fewer turbines are required.
  As the Minister knows, some wind turbines are 300 ft high and create noise problems. Sunshine is reflected from them into houses, and they scar the countryside because they can be seen for miles. They cannot be hidden because their purpose is to catch the wind. People who live close to large farms of wind turbines take a certain view of them. I hope that any scheme or strategy that is presented by the assembly will ensure that people can have a say about the sustainable or renewable energy that they want for the future.
  The hon. Member for Ceredigion spoke about the new branding for Wales. Of course, it is a green and pleasant country. We want to ensure that it remains just like that.
  The Welsh assembly has a great opportunity. I am delighted that the Government have tabled new clause 38, and I hope that the people of Wales and the assembly will grasp that opportunity.
  Ms Julie Morgan: I am pleased to speak in the debate, and I especially welcome the Government's new clause 38 on sustainable development. Like the hon. Member for Ceredigion (Mr. Dafis), I think that the new clause will provide an opportunity for Wales to be in the forefront of thinking, by enshrining the principle of sustainable development in legislation. We do not want the public to continue to think that it is always a matter of the environment versus the economy: we want them to realise that one is strongly linked to the other. We want also to integrate successfully economic and environmental goals with social objectives, and to safeguard the environment of Wales.
  The debate on this group of amendments and new clauses—especially new clause 38—is therefore a very exciting occasion. I think that sustainable development will be at the heart of the assembly's policies, and I hope that it will be considered as a part of every action taken and policy developed by the assembly.
  I have thought about the sustainable development issues that might arise in my constituency of Cardiff, North, which should be dealt with within a strategic framework. In my constituency, the town is gradually encroaching up the M4 towards the mountains, and the A470—which is probably one of the busiest roads in Wales—comes down from the valleys, surging through the Taff gorge and into the constituency, with traffic pouring down towards the centre of Cardiff.

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  We want a strategic plan to deal with those issues: to preserve the green belt; to maintain the gap between Cardiff and Caerphilly, and between Cardiff and Newport; to allow development in specific areas; to encourage a strong integrated public transport corridor; and to deal with issues such as transportation of radioactive waste, which is one of the big issues in my constituency. If we have an integrated strategy to deal with all those issues, we shall be able to make not only my constituency but all of Wales a much more pleasant and better place to live in.
  The location of the assembly has been mentioned in the debate. I should like to say very strongly that I hope that the assembly will be located on recycled land in the centre of a city, in a recycled building and very close to good transport links—such as a five-minute walk from a major station. Only one place fits that description.
  Environmental groups have raised some issues on certain aspects of new clause 38, and I should like to have the Secretary of State's reassurance on some of them. One is the use in the new clause of the phrase "with due regard". Does that mean that a duty will be placed on the assembly? Will it require the assembly to promote sustainable development? I am not accustomed to the legalistic language used in Bills, and I should therefore like the Secretary of State to clarify that point.
  The new clause also does not mention any measurable targets or indicators. I therefore assume that the Secretary of State expects that the assembly will include such targets in its annual reports. Nevertheless, I should like his reassurance on the matter.
  The hon. Member for Ribble Valley (Mr. Evans) mentioned establishing some sort of forum in which environmental groups could meet, and referred to the partnership council. Does the Secretary of State think that the assembly will establish such a forum? Does he think that establishing one should be encouraged?
  The Government's new clause represents an historic occasion, putting sustainable development at the very heart of the National Assembly for Wales.
  Mr. Öpik: One of the greatest things about living in Montgomeryshire is that it is such a beautiful place: unspoilt, with such a good quality of life that—[Interruption.] I shall deal in a moment with wind farms, although I am not terribly convinced that the hon. Member for Ceredigion (Mr. Dafis) was entirely feasible on the subject. [Interruption.] With the potential exception of wind farms, the view is quite nice, if one looks on misty days or in certain directions—
  Mr. Elfyn Liwyd: Yes—towards Meirionnydd.
  Mr. Öpik: I shall take the hon. Gentleman's advice and look toward Meirionnydd, and be grateful that I do not have even more wind farms than I currently have.
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  6.45 pm
  The quality of life in Montgomeryshire is good. In the rural areas of Wales, that quality of life is determined largely by the cleanliness and rejuvenating nature of those areas. I agree with the suggestion of the hon. Member for Ceredigion that we could use an environmental theme as a branding point for Wales. In the company that I formerly worked for, Procter and Gamble—I stress that I have no vested interest in saying this—
  Mr. Evans: Whiter than white.
  Mr. Öpik: Yes, it has a very white image, even at today's lower temperatures. It woke up to the fact—[Interruption.] It awoke—
  Mr. Ron Davies: Ignore them.
  Mr. Öpik: I shall take the Secretary of State's advice and ignore the comments on Procter and Gamble, which realised that there was a marketing opportunity in being serious about the environment. The same is true for the Welsh assembly and for all of Wales.
  We should remember that Wales, particularly rural Wales, is experiencing difficult times economically—it is perhaps even in a deep recession. In the past two months, we have lost almost 100 jobs in Montgomeryshire. Therefore, there is a most urgent employment and economic aspect to including environmental considerations in decision making. Perhaps we could tie in our work on the environment with job creation. However, I shall not dwell on that matter, as it diverts from the main point dealt with in this group of amendments and new clauses.
  We should remember also that we are not debating sustainability simply as a nice-to-have policy: it will crucially determine our descendants' quality of life. If we do not wake up to the fact that, as a society, we must include sustainability in our strategic outlook, we shall—at the very least—bequeath serious problems to future generations, and they will have to pay dearly to clean them up.
  Wales has great opportunities in many spheres such as energy, which has already been mentioned in the debate. I whole-heartedly support any suggestions that hydroelectric and solar energy should be pursued emphatically as alternative energy sources.
  I must now refer to wind power, which—although it has a place—has been non-strategically implemented. In Montgomeryshire, we have had the most terrible divisions in local communities, for the simple reason that wind turbines are a form of pollution. It is incorrect to suggest that there is no social or environmental cost to covering hillsides with wind turbines. I recognise that there is benefit in having a sensitive approach to wind farm power generation, and there might be some creative solutions that offend no one—for example, coastal farms could make a substantial contribution. However, we should make it clear that a visual scar on a hillside should be regarded as every bit as damaging as some other forms of environmental pollution.
  The hon. Member for Ribble Valley (Mr. Evans) made some good points about noise and other concerns. It may not always be possible to quantify them in financial terms,

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  but if we are serious about sustainable energy production, we must also be serious about taking into account the more unusual consequences of investing in, for example, wind turbines. There are also some concerns about safety. I am currently holding discussions with at least one of the wind farm companies, because there was recently a fire at a wind turbine. I dwell on that point only because I do not want the Committee to be misled into thinking that there are no social or environmental consequences of wind farm generation. Having said that, I believe that it is appropriate for the Welsh assembly to consider how best to mix its energy generation solutions in the context of a green Welsh agenda.
  We sometimes forget that if we could reduce the need for energy, we could adopt an even more sustainable approach. We could have greatly reduced our energy needs in the United Kingdom, as could western society as a whole, if, in the early stages of planning buildings and an integrated transport system, we had thought of the environmental consequences of what we were doing. In that sense, we should encourage the Welsh assembly in its deliberations on sustainability to adopt a formal strategy for reducing energy requirements across Wales, thereby obviating the need for quite so much energy production.
  In the context of sustainability, I shall deal briefly with transport, brown-field development and agriculture. We all agree that we must create an integrated public transport system, and I applaud Ministers' comments in that regard. I must point out, as I always do when I mention transport, that there are potentially substantial environmental benefits to be gained from having an integrated air network across Wales. A well-used twin-engine commercial aircraft can use less energy getting people from north to south Wales than a car, which is probably the alternative.
  It goes without saying, of course, that any such network would be guaranteed success if it used what I hope will one day be Welshpool international, or at least regional, airport. I have nothing but praise for Ministers' enlightened attitude to that proposal, which I have made many times.
  We have discussed various aspects of creating a sustainable economy in the countryside. As I said at the beginning of my remarks, it is vital to recognise that the crisis in agriculture also presents Wales with an opportunity to invest in agri-environmental schemes, which might create not only jobs but a sustainable agri-environmental strategy. I hope that the Welsh assembly will be absolutely wedded to the idea of creating a more sustainable agricultural environment.
  We might even recognise that having a sustainable environment in the countryside might not mean having the most efficient system in terms of the number of people employed on the land. We might want to increase the number involved in producing food, on the basis that that might be the most sustainable way to run the countryside.
  I deal now with brown-field sites. I agree with hon. Members who have suggested developing the perhaps slightly more expensive brown-field sites rather than running to the countryside when we need new buildings and areas for industry. I must sound a word of caution, however. Our policies for sustainability have to recognise
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  that some development on green-field sites is necessary. We have to strike a careful balance between the need for rural housing and the necessity of not giving in to the temptation to build on green-field sites when brown-field sites are available.
  Finally, I shall cite a rather persuasive document provided by the Royal Society for the Protection of Birds. It states that sustainable development
  "means pursuing those options for development which maximise the benefits for present and future generations."
  It goes on to mention the quality of life, an integrated approach and landscape improvement. All those things underline the importance of taking account of the big picture. We must think of the environment not as a separate issue, but as one which should affect all the work of the assembly.
  New clause 38 will greatly improve the Bill. Proposed subsection (6) states:
  "After each financial year of the Assembly, the Assembly shall publish a report of how its proposals as set out in the scheme were implemented in that financial year."
  They are perhaps the most important words that we are debating. I should like to think that they are our insurance policy, to ensure that the Bill's provisions do not simply end up as more rhetoric about the environment, but are implemented.
  The future will be our judge, but we have a great deal to be responsible for at this point. We must ensure that the Welsh assembly cannot run away from some of the difficult decisions that it must make with regard to the environment. If we carry out the actions that go with our fine words, we have a good chance of achieving the dream of the hon. Member for Ceredigion, which is to create an attractive brand image of Wales as a green and pleasant place.
  Mr. Martin Caton: Like all hon. Members who have spoken, I warmly welcome new clause 38. The requirement on the assembly to carry out its functions with
  "due regard to the principle that sustainable development should be promoted"
  is an historic measure in the constitutional history of this country.
  Sustainable development has become one of the buzz phrases of the past decade. Like much terminology that becomes fashionable, it is in danger of losing its real meaning in knee-jerk repetition. The thought discipline and philosophy that gave birth to the concept risk being lost behind the jargon. People legitimately ask, "Are there theories at the bottom of your jargon?" To be honest, one of the problems with sustainable development might be that there is a whole family of theories at the bottom of our jargon.
  Definitions range from "an intention to maintain and even accelerate economic growth, while seeking to protect the environment as far as possible" through to "a commitment to leave future generations with the same capacity as now for improving human well-being by living within this planet's environmental limits". Like the hon. Member for Ceredigion (Mr. Dafis), I think that we should be aiming to move towards the latter. However, despite the breadth of interpretation, I would not want to narrow the term "sustainable development" any further in the Bill.

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  I believe that it will be up to the assembly clearly to identify its objectives for environmental protection and improvement when it establishes the scheme that the new clause requires. It will then be up to Members of the Assembly to make sure that, in every aspect of their work, their environmental objectives, as set out in the scheme, are adhered to.
  The annual report, to which the hon. Member for Montgomeryshire (Mr. Öpik) referred, is an important safeguard for ensuring that the sustainable development scheme is more than just fine words, but I hope that the assembly will consider developing further mechanisms for keeping environmental sustainability at the heart of its decision making. I hope that it will look to develop means of measuring every action that it proposes to take against its sustainable development policies—a sort of environmental impact assessment for every proposal.
  It is vital that the assembly finds a way in which to hold sustainability at the centre of all policy making, because the subject and service areas for which the assembly will have responsibility are some of the most important in terms of environmental protection and improvement: agriculture, forestry, fisheries, economic development, highways, housing, transport, industry, tourism, planning, water and flood defence, and health. Almost all the policy areas that will be dealt with by the subject Committees of the assembly are crucial for the future of the environment in Wales and for ensuring that our contribution to the global environment is positive. The new clause provides us not only with theories at the bottom of our jargon, but with the basis for best practice.
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  Mr. Letwin: The hon. Member for Ceredigion (Mr. Dafis) spoke, as the Committee would expect, powerfully and thoughtfully about sustainable development. Like many other Conservative Members, I greatly sympathise with his argument. Listening to the debate, however, one would have thought that we were talking about certain matters of substance, not about a constitutional Bill which will establish a set of bodies.
  Amendment No. 517 and Government new clause 38 illustrate beautifully the problem that the Government face. As my hon. Friend the Member for Ribble Valley (Mr. Evans) said, new clause 38 is a slight but admirable restriction of the sort that might be applied to a local authority. Amendment No. 517 moves in the opposite direction. Although the arrow of the hon. Member for Ceredigion is excellent, he aims at a target that I think he would dislike if he contemplated it further, as the amendment would further extend the scope of the Welsh Development Agency.
  Who would run what and who would pay for what in terms of sustainable development if, as the hon. Member for Ceredigion suggests, both the amendment and the new clause were agreed to, or if, as is more likely, only the new clause were accepted? Under clause 80, the
  "Secretary of State shall from time to time make payments to the Assembly … as he may determine."
  He will be the all-powerful paymaster of the assembly. Under the Welsh Development Agency Act 1975, the Secretary of State and the Treasury can grant unlimited borrowing powers to the WDA.
  What will happen if the WDA chooses to move in a direction, in terms of sustainable development, wholly opposite from that of the United Kingdom Government
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  and the Welsh assembly, regardless of whether the assembly is constrained by new clause 38? Which body will prevail in this hypothetical case? Manifestly, the United Kingdom Government will prevail, as the Secretary of State and the Treasury will be able to ensure that their favoured policy is pursued through the WDA; they will fund the agency through the borrowing power and deny funds to the assembly.
  Before we debated these measures, I had naively understood that the Government wanted to avoid creating a quangocracy. However, the Bill will allow a quango, based on the great powers retained by the Secretary of State and the Treasury, to fight against an ostensibly democratic institution, which, because it will be limited by the new clause as if it were a local authority, will be entirely subject to the fiscal powers of the Secretary of State and the Treasury.
  In those circumstances, the assembly will be the loser, which might not be a bad outcome for those of us who favour the integrity of the United Kingdom. However, if the democratically legitimate body opposes the quango, which is the servant of the UK Government, there will be a devil of a fight, and the matter may be referred to our old friend the Judicial Committee of the Privy Council as a devolution issue. Who, in such circumstances, will genuinely hold the power over sustainable development in Wales?
  The Secretary of State may shake his head but, given that the Minister spent little time on this question earlier, it would help the Committee if, instead of concentrating on the important matters of substance—which, in fact, will largely be for the assembly to debate at a later date—he said who will be in charge of this domain, regardless of whether new clause 38 is accepted.
  Mr. Paul Flynn: The hon. Member for West Dorset (Mr. Letwin) repeats the depressing cry that we have often heard from the Conservative Benches—that every situation that could arise when the Senedd is established will lead to conflict, and not, as we believe, to co-operation. People throughout Wales will be happy to see the new clause included in the Bill. By voting for the parties that currently represent it in the House of Commons, Wales has taken a great lead in understanding the need for sustainability.
  This weekend, there will be a conference in Merthyr to commemorate the 16th anniversary of a remarkable declaration by the people of Wales speaking with one voice. Every county council, representing the entire population, resolved to make Wales a nuclear-free zone. That was long before the decision was taken elsewhere. Democratic Wales had spoken, and if it had spoken on other issues at the time, it would have made a similar resolution about sustainability. The man who took the declaration to Strasbourg has now become immensely successful—and possibly prosperous—in organic farming in Ceredigion.
  When I heard what the Estonian Biggles, the hon. Member for Montgomeryshire (Mr. Öpik), said about sustainable air flights in mid-Wales from the Heathrow at Welshpool that is bound to be developed, I was fascinated by the prospect.
  Sustainability is understood in Wales. Labour Members share the fears about the future for farming, especially as we face a particularly difficult problem in Wales. If we

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  lose the small farmers, we lose the language, which is a terrible threat. Labour Members support the Government's policy, as we realise that, although many of the changes in farming are painful, they are inevitable—there is a shrinking market for many products. Nevertheless, we want small farms to be preserved, as they have a special cultural importance to Wales.
  I urge farmers to achieve sustainability by planting new crops and farming organically. The British Isles imports 60 per cent. of its organic products. Moreover, organic farming is highly labour intensive, and it works well in areas without especially promising land. Several farms in remote communities in Ceredigion have, despite a difficult start 20 years ago, defied all the critics and been prosperous and successful. Why cannot farmers realise that they can cultivate other harvests, which have a future? I am thinking, for example, of flax and hemp, which has unique properties other than those that prompt people's desire to smoke it—farmers could plant hemp with non-addictive qualities and low-quality THC.
  The new clause will muster great support. It will give the assembly a new impetus and role, and express what Wales has shown that it can do when, on those rare occasions, it speaks with a united voice. We want to ensure a sustainable future that will be in harmony with nature.
  Mr. Ron Davies: I hope that my hon. Friend the Member for Newport, West (Mr. Flynn) will forgive me if I do not follow him down the path of the prospect that he opened up. When he was describing the growing conditions in remote farms in Ceredigion, I suspected that he would suggest some novel crops—I was not disappointed. However, I would get into difficulty with my Cabinet colleagues if I suggested that the sole purpose of devolution, was to bring about a different policy in Wales on growing cannabis. Nevertheless, I welcome my hon. Friend's support.
  The term "historic" has been used several times this evening, and I must use it again. The debate has been historic. The policy advocated by the Government has been endorsed not only by the spokesperson for Plaid Cymru—or should we now call it Plaid Newydd?—and by the Liberal Democrats but, I was astonished to note, by four of our own Back Benchers. In our debates on devolution, that is a rare and welcome occurrence. Moreover, not only did four of our Back Benchers speak in support of Government policy, but not one spoke against it. This truly is a historic debate.
  I welcome the contribution by the hon. Member for Ribble Valley (Mr. Evans). In the absence of the right hon. Member for Devizes (Mr. Ancram), he found himself waxing eloquent in favour not only of the Government's policy in new clause 38 but of the assembly.
  Mr. Evans indicated dissent.
  Mr. Davies: The hon. Gentleman spent several entertaining moments telling us of all the great benefits that would come to Wales as a result of the assembly. Indeed, during the referendum campaign not even the Under-Secretary, my hon. Friend the Member for Neath (Mr. Hain), in his most enthusiastic of speeches, would
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  ever have dared suggest that if we voted yes on 18 September we would be able to bring back the Mumbles railway, yet it appears that that is the conclusion of the hon. Member for Ribble Valley. We welcome support from whichever quarter it comes. The hon. Gentleman is a late convert to the cause of devolution, but he is an enthusiastic one, and he is welcomed as such.
  The debate was opened by the hon. Member for Ceredigion (Mr. Dafis). I am grateful for the way in which he spoke. Of course he has a great and deep conviction on such matters and he has argued his case consistently, as he did this evening. Later, I shall answer some of his specific questions.
  My hon. Friend the Member for Vale of Clwyd (Mr. Ruane) was supportive and gave us some good examples of how the Welsh assembly, in pursuance of the duty placed on it, will be able to give expression to the principles of sustainable development. He made it clear that he regarded the principle of protecting the environment as an important, but not exclusive, part of sustainable development.
  I welcome the support of my hon. Friend the Member for Cardiff, North (Ms Morgan). She was right in her assertion that sustainability must now be at the heart of politics. What we can do, as we frame the legislation, is to place the duty on the assembly. However, as my hon. Friend the Member for Gower (Mr. Caton) said, it is those in charge of the political process who must develop the politics and policies to give expression to the duty that we shall lay on the assembly to have regard to the principle of sustainable development.
  My hon. Friend the Member for Cardiff, North asked three questions. She asked whether we would set targets and whether there would be a forum for the matter to be discussed by the assembly. The answers, of course, will be a matter for the assembly. What we shall do is to place a duty on the assembly. My hon. Friend's third question was what precisely that meant. I refer her to new clause 38(1), which makes it clear that the new clause will impose a duty on the assembly to have regard to sustainable development in the exercise of all its functions.
  The hon. Member for Montgomeryshire (Mr. Öpik) raised that point too, and I agree with what both he and the hon. Member for Ceredigion said about the branding of Wales. It is important that, at the heart of the new Wales that we want to create, we put the idea of respect for the environment and for the principles of sustainability. Both transport and agricultural systems should work with the grain of the environment and according to the principles of sustainability.
  Several hon. Members have gently teased me about the site of the assembly. I know that it will come as a great surprise and regret to the hon. Member for Ribble Valley when I say that I shall not tell him this evening the outcome of our consultation and discussion process.
  I can make one important announcement to the Committee. I know that everybody will be greatly interested to know that the assembly will not be on a green-field site. As colleagues who have followed our deliberations carefully will know, all the sites under consideration are brown-field sites, so that information will not come as a great surprise.
  I am afraid that the hon. Member for West Dorset (Mr. Letwin) rather spoiled the debate, which was well informed and considered until his intervention. I am sorry

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  about that. The substance of his contribution is something for the hon. Member for Ceredigion to take up, but he also returned to the idea of trying to raise conflict all the time.
  I genuinely suggest that the hon. Member for West Dorset has have chat with the converts who now sit on the Opposition Front Bench. They will be able to explain to him that the idea of eternal conflict being institutionalised into our constitution is fantasy. The new arrangements will not work like that.
  The hon. Gentleman asked the question about the Welsh Development Agency in our previous debate, and my hon. Friend the Under-Secretary, in reply to that debate, told him the position.
  7.15 pm
  Mr. Letwin: He did not.
  Mr. Davies: Of course he did. The position is clear. The responsibility for funding the Welsh Development Agency will pass to the assembly, as will the responsibility for laying down the strategy for the agency. The responsibility for monitoring the WDA will also pass to the assembly. There is no possibility whatever of a conflict developing between the wishes of the Secretary of State and those of the assembly, because the Secretary of State's responsibilities in respect of the WDA will have passed to the assembly.
  Mr. Letwin: Will the external financing limit powers under the 1975 Act pass to the assembly?
  Mr. Davies: The responsibility for funding the assembly now rests with the Secretary of State. The funding for the Welsh Development Agency comes out of the block grant. Under the new arrangements, it will be the responsibility of the Secretary of State to consider the expenditure that is necessary and appropriate for the Welsh assembly in the exercise of all its functions. It will then be a matter for the assembly itself to decide what proportion of the grant that it is given shall be allocated to the Welsh Development Agency.
  As for raising the WDA's external financing limits, the hon. Member for West Dorset will know that, about 12 months ago, the Conservative Government passed an amendment to the provisions, to allow an increase by means of secondary legislation. That power will pass to the assembly.
  Mr. Letwin: I am grateful to the Secretary of State; he may actually be helping me. Is he saying that, from now on, the agency's external financing limit will be a matter not for the Treasury but purely for the Welsh assembly?
  Mr. Davies: When the assembly is established, in more than 12 months' time, it will be for that body to decide how to use the powers that it has been given. The hon. Gentleman is now asking a particular question about the Treasury's residual role. My present understanding is that the ability to raise the financing limit of the Welsh Development Agency will pass to the assembly, but the hon. Gentleman is asking a specific question—[Interruption.] I am trying to deal with the hon. Gentleman on the basis of the information that I currently have.
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  My understanding is that the responsibility will pass to the assembly. If there is any requirement for the assembly to seek approval from the Treasury, I shall write to the hon. Gentleman and let him know. Without having had the opportunity to check, it is my understanding that such consent will not be required, but I shall write to the hon. Gentleman and let him know.
  Mr. Rowlands rose
  Mr. Davies: I shall give way to my hon. Friend, but I want to return to the substance of the debate now. I do not want to be sidetracked into the funding of the Welsh Development Agency, because we have already had a lengthy debate on that subject.
  Mr. Rowlands: As I recall, we recently changed the legislation. Originally any increase in the borrowing powers of the WDA required primary legislation, but now that can be done through an order-making power.
  Mr. Davies: That is precisely the point that I just made in answer to the hon. Member for West Dorset.
  If there are any questions that I have not answered—apart from those asked by the hon. Member for Ceredigion—I apologise. If there are hon. Members who feel that I have omitted to respond to their questions, perhaps they will let me know and I shall attempt to deal with them in correspondence.
  I shall talk about our new clause 38. It is appropriate that the hon. Member for Ceredigion who, as I said earlier, has a long record in such matters, has provided us with the opportunity to debate sustainable development as part of our proceedings on the Bill. I agree with the hon. Gentleman that sustainable development is about ensuring a better quality of life, both now and for generations to come. I also agree with his definition of sustainable development, which encompasses economic, social and environmental goals. It is concerned with achieving economic growth, while protecting and, where possible, enhancing the environment. It is about making sure that those economic and environmental benefits are available to everyone and not just to a privileged few. Sustainable development is about a new and integrated way of thinking that influences choices across government and throughout society.
  The Government have committed themselves to placing the environment at the heart of their policy making and are engaged in a wide-ranging consultation process which will lead to a revised strategy for sustainable development. The hon. Member for Ceredigion raised that point and I assure him that it is my desire that that development work should continue between now and May next year, so that when the assembly is established much of the preparatory work will have been done.
  Paragraph 1.24 of the devolution White Paper states:
  "The Government will … ensure that the Assembly … promotes sustainable development".
  On 8 December last year, I told the House that one of the Government's amendments would
  "most certainly place a duty on the assembly to have regard to the principle of sustainability."—[Official Report, 8 December 1997; Vol. 302, c. 752.]
  The new clause gives expression to that intent and I am genuinely grateful for the wide support that it has received from all parties represented in the Chamber.

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  New clause 38 meets the commitments that we have given. It places the assembly under a duty to publish
  "a scheme setting out its proposals for securing that its functions are exercised with due regard to the principle that sustainable development should be promoted."
  The hon. Member for Ceredigion was quite right when he said that here was a case of Wales breaking new ground. No such duty applies to the UK Government in exercising their executive functions or to the UK Parliament in framing legislation.
  Mr. Dafis: New clause 38(1) is somewhat convoluted and there appear to be several stages between the words "scheme" and "sustainable development" where the whole process might fall down. Are we talking about the assembly drawing up a sustainable development strategy for Wales?
  Mr. Davies: The hon. Gentleman has to accept that the wording of new clause 38 makes it clear that the assembly will have to draw up a scheme, just as the Welsh Language Board requires public authorities in Wales to draw up schemes. The question of strategy is a wider matter and it will be for the assembly to decide that for itself through the development of its policies. It will want to develop separate strategies for sustainable development in the countryside, for sustainable development of transport policy and for sustainable economic development generally, and those strategies will inform all aspects of assembly policy.
  What we are talking about here is a statutory duty to be placed on the assembly to produce a scheme to give expression to the desire that it should promote sustainability across all of its functions. That is the scheme; the strategy will be the way in which the assembly develops all of its policies, and that is a matter for the assembly and the elected representatives who sit in it.
  Mr. Dafis: Will the Secretary of State confirm that, in reality, the scheme will amount to nothing if it does not generate, or oblige the assembly to generate, a strategy? He spoke of several strategies, but surely those would have to be encompassed within an overall strategy, which the UK Government already have and which Governments all over the world were obliged to draw up after the Rio agreements?
  Mr. Davies: No, I do not accept that interpretation. It is clear that there will be a requirement on the assembly to produce a scheme. That scheme will have to be published, subjected to the normal processes of accountability and reviewed regularly, so it cannot be set aside, as the hon. Gentleman suggests would be possible. The assembly will have had that duty placed on it. However, I acknowledge that what counts will be the enthusiasm with which the political parties that contest seats in the assembly embrace the principles of sustainability. It will be their policies, for which they will seek the electorate's approval, that will determine how successful and meaningful the scheme becomes.
  I agree with the hon. Gentleman that this is a case of Wales breaking new ground. No such duty applies to the UK Government in exercising their executive functions or
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  to this Parliament in framing legislation. The scheme that the assembly must prepare will extend across all its functions, although—this is the point raised by my hon. Friend the Member for Cardiff, North—obviously the "due regard" to be given to the principle of promoting sustainable development may vary from function to function. As the hon. Member for Montgomeryshire said, there will be a need to develop strategies for transport, for agriculture, for economic development in the countryside, and so on. The assembly will also be under a duty to keep its scheme under review and to publish an annual report setting out how its proposals in the scheme were implemented in each financial year.
  The other amendments in the group express Plaid Cymru's concerns for the environment in Wales and the wish to ensure that all economic development is sustainable. Naturally, the Government prefer their own provision, new clause 38, to new clause 18, although there are similarities between the two.
  New clause 18 raises the additional point that the assembly should review annually
  "the implications for Wales of any relevant quantitative targets for the United Kingdom set by Parliament or by Ministers of the Crown."
  That recognises that there are policies that affect sustainable development in Wales over which the assembly will have no control, because they will continue to be dealt with by the UK Government—for example, taxation issues, such as the level of duty on petrol and value added tax on domestic fuel. When he opened the debate, the hon. Member for Ceredigion asked whether schedule 4 should be extended to include Opraf. I shall consider that question and, when I have taken advice, I shall get in touch with him.
  In exercising its functions, the assembly will need to have regard to the international obligations into which the UK has entered, for example, after the Rio and Kyoto summits. However, it is unnecessary for the Bill to refer explicitly to such matters, as the assembly could take account of them in framing its scheme under new clause 38.
  The Welsh Development Agency is required under existing legislation to further the improvement of the environment in Wales. The overarching requirement on the assembly to have due regard to sustainable development will inform the strategic guidance and targets that it sets for the agency. That and the agency's own governing legislation are sufficiently robust to ensure that environmental concerns are taken into consideration by the agency in the exercise of its functions. Given those two additional provisions, the Government's view is that amendments Nos. 517, 518 and 522 are unnecessary.
  New clause 37 provides for a board member of the agency to be assigned specific responsibility for environmental sustainability. I can say only that that has to be an organisational matter for the agency. The hon. Gentleman asked whether I had received any representations from the agency in respect of that matter and the answer is, no, I have received no such representations. I have recently announced to the House of Commons that I shall appoint members to the agency on the basis of fair and open competition. I shall not make any predecisions, but I hope to be selecting from a pool of candidates with a wide range of skills and experience, so I hope that someone on the board will have a measure of experience and competence in this area. It will then be for the agency itself to assign particular responsibilities to individual members.

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  On the basis of the reassurances that I have provided in respect of the assembly and the Welsh Development Agency, I hope that the hon. Member for Ceredigion will ask leave to withdraw his amendment.
  Mr. Dafis: I am grateful to the Secretary of State for his response and I have enjoyed the debate. The amendments have served their primary purpose, which was to give us an opportunity to debate sustainable development. It is good to know that there is widespread support for the principle and that the idea that the assembly should take sustainable development as an informing theme and that Wales will do so has been widely accepted here. I certainly acknowledge that the Government's new clause will ensure that the issue is high on the assembly's agenda when it meets, which is very important.
  The debate has been useful, although not all of it has been well informed. The debate about energy illustrated the need for people to become much more well informed about the options that we face on energy supply. No development is without its impact. If we talk about dispersed development—which sustainable development is, by definition—the visual impact will be real, although much less than the visual impact that exists in our environment. I had better leave it there. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  7.30 pm
  Mr. Llwyd: I beg to move amendment No. 520, in page 56, line 13, at end insert—
  '(2A) After subsection (2) there shall be inserted—
  "(2A) The Agency shall establish a department with the responsibility of drawing up and ensuring the implementation of, policies in furtherance of the purposes set out in subsection (2) appropriate to rural areas.".'.
  The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): With this, it will be convenient to discuss the following amendments: No. 524, in clause 121, page 56, line 40, leave out from beginning of line to end of line 2 on page 41 and insert
  'be transferred to the Welsh Development Agency.'.
  No. 525, in clause 122, page 57, line 6, leave out 'cease to exist' and insert 'are transferred.'.
  No. 526, in clause 123, page 57, line 19, leave out 'or Schedule 11.'.
  No. 527, in page 57, line 21, leave out 'cease to exist' and insert 'are transferred.'.
  No. 528, in page 57, line 28, leave out 'cease to exist' and insert 'are transferred.'.
  No. 529, in page 57, line 33, leave out 'cease to exist' and insert 'are transferred.'.
  No. 530, in page 57, line 41, leave out 'cease to exist' and insert 'are transferred.'.
  No. 531, in clause 124, page 58, line 2, leave out 'and Schedule 11.'.
  No. 532, in page 58, line 11, leave out 'cease to exist' and insert 'are transferred.'.
  No. 533, in page 58, line 13, leave out 'cease to exist' and insert 'are transferred.'.
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  No. 534, in page 58, line 16, leave out 'cease to exist' and insert 'are transferred.'.
  No. 535, in page 58, line 22, leave out 'cease to exist' and insert 'are transferred.'.
  No. 536, in page 58, line 25, leave out 'cease to exist' and insert 'are transferred.'.
  No. 537, in page 58, line 35, leave out 'cease to exist' and insert 'are transferred.'.
  No. 538, in page 58, line 40, leave out 'cease to exist' and insert 'are transferred.'.
  No. 539, in clause 125, page 59, line 11, leave out `ceasing to exist' and insert 'being transferred.'.
  Mr. Llwyd: Amendment No. 520 is straightforward, saying, in other words, that there should be a Department charged with formulating policies of relevance to the rural economy.
  I wish to draw attention to amendment No. 524. Clause 121 currently reads:
  "The functions of the Development Board for Rural Wales shall cease to exist."
  The amendment is a probing amendment. I believe that the functions do exist, but I accept that, if it is meant in terms of functus officio, that it is a right and proper use of the word. I would prefer the Bill to refer to the transfer of those functions to the new body, which would secure the position. The Minister, being a Latin scholar, will no doubt deal with this point in due course—or perhaps not.
  I ask the Government to consider my proposal that the word "transfer" is preferable to the phrase "cease to exist". Surely the functions are still very much in existence—perhaps more than ever in view of the agriculture crisis. The Minister should give thought to that matter in his response.
  Many people in rural areas in Wales are worried because of the changes occurring in the agencies charged with ensuring the economic development and well-being of rural areas. I speak as a Member representing a constituency which was very well served by the Development Board for Rural Wales. Other hon. Members in the Chamber were equally well served by that board, and they have shown in the past, and will show in the future, their concern about this matter.
  People who live in mid-Wales have for some time enjoyed great assistance from the Development Board for Rural Wales, a body specifically set up to tackle the problems of rural Wales. Over the years, the board amassed considerable expertise and experience. The task of economic regeneration in rural areas is far more difficult, and requires more application and creativity than in an urban area, where at a stroke of a pen—frequently on a cheque—many hundreds of jobs can be created.
  Many of us look with envy at the recent developments in north-east and south-east Wales. Who would not accept 6,000 new jobs at a plant such as LG at Newport? That underlines the dichotomy. In that instance, 6,000 jobs were created, thus having a dramatic effect on the unemployment figures and the economy of that area—which is to the good. To create 6,000 jobs in rural areas is, by comparison, a mammoth task. A more sympathetic approach is required, together with an intimate knowledge of the needs and requirements of rural areas.

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  One grave concern is the fact that WDA and the Development Board for Rural Wales moneys have been used to bring in such plants as Sony and LG, but, without being niggardly—I do welcome their arrival—I must question what price has been paid for their success. There is no doubt that, proportionately, far higher spending has occurred in the eastern areas of south Wales and in the industrial eastern area of north Wales than in the rest of Wales. By and large, the rural areas of Wales are and have been let down.
  I am not saying that that was in any way intentional, but the budget was finite, and a great deal of money was taken out of the overall cake and went into some of those schemes.
  Mr. Gareth Thomas: Does the hon. Gentleman believe that the lack of democratic accountability and transparency in the development of economic policy in Wales may have had a bearing on the fact that there has been an imbalance not only between east and west, but between rural and urban, and between small businesses and large projects?
  Mr. Llwyd: The hon. Gentleman makes a good point, and he may be correct. I am hopeful, as he will be, that the new set-up under the assembly will put paid to that aspect, and will introduce a more equitable distribution of funding for inward investment throughout Wales.
  I know that political influences can come in to play, as I almost lost a plant in my constituency. I prefer not to give all the details, but I was called at the eleventh hour to try to save the plant. The persons running the plant were told that, if they relocated to Breconshire, everything would be fine and they would have all the money they needed. In Bala, they could not have it. It was only by sheer good fortune that I intervened. A local councillor in Bala rang me that evening, and, the following morning, that was reversed. There was an admission that some skulduggery was afoot, and I hope and pray that the assembly will ensure that that kind of nonsense will not recur.
  Several of us campaigned for a change of direction in terms of funding of the agencies in Wales as there was an acknowledged imbalance between east and west. For example, the hon. Member for Swansea, East (Mr. Anderson) said last week that, for every £1 spent on job creation and inward investment in the Swansea area, £5.25 was spent in Cardiff. We now know that the WDA agreed to expend a moiety of its inward investment budget in the western areas of Wales. That was agreed last year, and sanctioned by the Welsh Office. That was announced and it was most welcome, especially to those of us who had campaigned for it.
  However, it shows that different parts of Wales were dealt with differently. Following the LG announcement, the Welsh Development Agency and the Development Board for Rural Wales received savage cuts to their budget. To put it simply, some money had to be obtained to honour the cheque that was paid to bring in those new plants. There is great anxiety throughout Wales that such inward investment is brought in at too high a price—certainly at a very high price to rural Wales. In my view, that imbalance must be addressed, and I am sure that many hon. Members share my unease. We must all ensure that every part of Wales receives its fair share.
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  I always use the word "inclusiveness" in these debates. I always feel obliged to do so, as Ministers always do. If it is to mean anything, we must ensure that it means an equitable distribution of all moneys throughout Wales; I am sure that that will be a guiding principle of the national assembly.
  However, rural Wales has extra problems, for the reasons that I have given, and because it is a far more difficult task to create growth in the small and medium sector than in large enterprises. We have the problems of remoteness. Infrastructure is inadequate. The sparsity factor is of great importance, and that translates into a higher cost of delivery of services, especially in remoter areas.
  The Bill provides for the creation of a powerhouse—a new body which will be an amalgam of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales. That is acceptable, but the loss or dilution of the expertise that was possessed by the Development Board for Rural Wales should never be acceptable. Some of the worries in that sphere have been identified by many Welsh bodies in the past few months.
  For example, the Country Landowners Association in Wales briefed various hon. Members a few months ago. I shall quote briefly from a letter that it wrote. The association questions whether the assembly's
  "procedure for determining and managing its spending priorities"
  will recognise and protect the special needs of rural Wales. It questions whether there will be sufficient
  "provisions to ensure that the advice of the regional committees will be heard in the Assembly".
  It seeks an assurance that the enlarged new authority, having taken over the functions of the Development Board for Rural Wales,
  "will address the particular needs of rural areas".
  The association also sought assurances that the subject and executive Committees of the assembly and the board of the WDA would have rural representatives. That is very important.
  Mr. Tam Dalyell: Pardon an intrusion from a Scot. Much of this is familiar, but what can a Welsh assembly do to overcome the very real problem that the hon. Gentleman outlines that enlightened Ministers in the Welsh Office cannot?
  Mr. Llwyd: I believe that the basic problem has been the tug of war between the Department of Trade and Industry, the WDA and the Welsh Office. We all know that it has been going on behind closed doors, and we know that there is a finite budget, even in a Welsh context, but equally in a United Kingdom context. There has been far too much toing and froing, and far too much of that tug of war between Departments.
  At least when we have a national assembly, there will be no tug of war within that body. I hope that, within the assembly, there will be an overall view of the needs of the whole of Wales, and I trust that the assembly will be guided by expert committees on the needs of rural areas and so on. Does the hon. Member for Linlithgow (Mr. Dalyell) wish to raise another point?
  Mr. Dalyell: Is not the proposed Welsh assembly stretching the goodness of human nature rather far?
  Mr. Llwyd: That is not an unusual comment from the hon. Gentleman. He has been saying that for 25 or

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  30 years. I say that with respect, because I have a great deal of respect for him. I have heard it said that the assembly might well be a cure for flu, and I have heard other people say that, if we had had an assembly, we should not have had the miners' strike.
  Surely, with respect to the hon. Gentleman, it is not beyond the ken of any type of national assembly to address the real economic needs of rural and urban areas. I realise that finance will be needed, but at least we shall not have this tug of war, which has taken much time and energy.
  I remember, with my right hon. Friend the Member for Caernarfon (Mr. Wigley), arguing with the late great right hon. Member for Wokingham (Mr. Redwood), who at one time walked the streets of Cardiff very occasionally. The first thing we discussed with him after he became Secretary of State for Wales was the idea of giving a new development status to the southern part of my right hon. Friend's constituency and the northerly part of mine, following the closure of a large plant. Everyone, including the Welsh Office, seemed to support that proposal, but it was stopped at the last minute by the Department of Trade and Industry. I hope that that type of thing will not happen when we have the national assembly. It is inconceivable to me that it will happen.
  I realise that there is a finite budget, and that there will be a certain amount of creative tension regarding that budget, as there is in the setting of priorities, but at least we shall do away with that time-wasting exercise.
  Mr. Wigley: My hon. Friend mentioned one example of difficulties with the DTI. He will remember that, as recently as last year, Steven Spielberg wanted to make a film in Wales. The Welsh Office supported the idea, but unfortunately it could not carry other Government Departments with it, and the film was made in Ireland. Surely, in a similar situation, we should have much more clout with our own assembly.
  On rural or urban matters, a consensus can be achieved in the Welsh Grand Committee on what is needed in Wales—a consensus that cannot be achieved on the Floor of the House. I believe that, in our own national assembly, there will be an opportunity for a consensus in a Welsh context that, unfortunately, we cannot get within the existing structures.
  7.45 pm
  Mr. Llwyd: I am grateful to my right hon. Friend. Needless to say, I agree with what he said.
  To return briefly to what I said earlier, I believe that it is highly desirable that the national assembly has an explicit duty to promote and sustain the interests of rural Wales. Rural Wales amounts to more than 85 per cent. of the land mass of the country, and Wales has a very strong rural character.
  I shall not repeat an argument made some weeks ago, but the Environment Act 1995 sets a clear precedent. Under the 1995 Act, national park authorities have a duty to foster the economic and social well-being of local communities, and to co-operate with public agencies whose functions include the promotion of economic and social development in their areas.
  Surely we cannot leave the situation as it is. It is a very, very important—indeed, all-important—remit, and if we merely leave it to the area committee structure, we shall
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  fail the people who voted in favour of the national assembly. I believe that there must be a thorough appraisal of current thinking and current policy in creating sustainable economic and social development in rural areas.
  The Government have responded positively to many of the far-sighted suggestions of my hon. Friend the Member for Ceredigion (Mr. Dafis) about sustainable growth. Surely what I am now suggesting is part and parcel of the same important debate.
  We are in the teeth of a fierce storm in agriculture. We know that there will be a change in the very near future, because common agricultural policy reform is imminent and the industry will have to change; of that we can be sure. However, our rural communities and rural economies will also have to change. It is vital that the national assembly is able, and is speedily given the right and the responsibility, to input policy suggestions into that discussion. I hope that there will be a subject Committee dealing with agriculture and rural development, as that would seem to be a sensible vehicle to assure sympathetic and effective development.
  Recently, via the European Commission, the European Union issued a plan for agri-environmental policies and those dealing with the development of the rural economy to be brought within a single framework. The National Assembly for Wales would do well to emulate that move.
  I hope that I have established that there is a vital need for forward thinking in terms of the rural economy. Agriculture is a central consideration, but so is transport infrastructure, the creation of sympathetic light industry, telematics, electronic infrastructure and agricultural diversification. There are numerous other important facets. I trust that the Government will look favourably upon the amendment, which would introduce into Wales the same sort of forward thinking exercised by the Countryside Commission in England.
  I am not too proud to say that I would seek to borrow some of the commission's ideas—I would also like to borrow some ideas from the English rugby team—because they tackle a breadth of subjects regarding rural life and the economy. The commission deals with those issues very effectively under the one roof. Huge challenges will face rural Wales in the coming months and years, and they must be met. If we begin by giving the agency responsibility for addressing those issues, it will be a valuable step towards meeting that all-important challenge.
  Mr. Gareth Thomas: In speaking in opposition to amendment No. 520, I acknowledge that it raises the converse of the issue explored so well by my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). They asked whether, under the enhanced WDA, there would be a lack of focus in terms not only of the industrial economy of Wales but of rural areas. I resist the amendment because I do not believe that it is simply a question of structure: it is more a matter of educating Members of the Assembly and Welsh citizens about the need to strike a balance between the treatment of rural and urban areas in Wales.
  Establishing a regional affairs department, which is the subject of this amendment, will not of itself guarantee adequate funding or attention to rural areas. We must

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  accept that there is a risk with devolution that the role of the Secretary of State as an honest broker or umpire will be lost. However, hon. Members—including my legalistic friends on Labour Benches—and I support devolution because issues must be exposed to the light of day and debated openly.
  One of the strengths of the Government's proposals is that they will allow genuine, open, democratic debate about issues that have arisen under the quangocracy fostered by the Conservative party for 18 years. The imbalance between north and south Wales in terms of economic development might be defined more precisely as an imbalance between west and east, as there is substantial inward investment in north-east Wales—especially along the A55 corridor. We must address that matter.
  I welcome the establishment of the National Assembly for Wales as an opportunity to consider that issue openly and democratically. We must also address the imbalance of investment between urban and rural areas in Wales. If there is genuine, open debate, I feel confident that the quality of decision making will improve and that both rural and urban areas will feel well served by the new institution.
  How does the Minister view the role of rural policy within the enhanced WDA? It seems that the Government are not minded to pursue a policy of ring-fencing funds for rural development. None the less, there must be some focus on rural areas. I would be interested to hear the Minister's comments in that regard. I would also be interested to hear his views about the issues raised by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd).
  Do the Government intend to require the WDA to comprise persons who have experience in agriculture and rural affairs? I am sure that the Minister is aware that that matter has caused great concern. I appreciate that the Government have adopted the legitimate position that they cannot be too prescriptive and tie the assembly's hands—after all, it is a democratic institution that will be capable of making its own rules and decisions. However, in view of the difficulties facing Welsh agriculture at present, some clarification or an idea of the policy would be appreciated.
  I also seek clarification of whether the Government, through Standing Orders or some other means, will require the WDA to have regard to the requirements not only of agriculture and efficient land management—I refer to section 1(4) of the Welsh Development Agency Act 1975—but of the economic and social well-being of rural areas. I should be grateful if the Minister would clarify those issues.
  Mr. Evans: I wish to make a short contribution in the guise of a few questions to the Minister. He will be delighted to learn that normal hostilities have resumed after new clause 38. I apologise for my raw voice, but I was at Twickenham on Saturday: never has so much energy been expended for no good purpose.
  I asked earlier about the vital European Union regional aid that is channelled to rural Wales. What has happened in the discussions about revising the way in which that aid is calculated? The calculation is to be based only on unemployment, which will disadvantage whole swathes of
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  Wales in favour of other areas, including some parts of Spain, that are thriving. It could put a £1 billion hole in expenditure for Wales.
  The Development Board for Rural Wales was established in 1977, and has successfully examined specific problems, such as depopulation in rural areas, and vital issues such as public transport, social housing and industrial investment in rural areas. It serves 40 per cent. of Wales. When the board is meshed into the super-quango, how will the Government ensure that its remit extends sufficiently to rural areas? A favourable reply would render these amendments unnecessary.
  We must not lose sight of the reason why the Development Board for Rural Wales was invented. Rural areas must not be disadvantaged or forgotten because of extra demands on the WDA. Much has been said about LG coming to Newport and creating 6,100 jobs. That employment is vital—as is the spin-off of between 9,000 and 15,000 extra jobs—and the whole of Wales will benefit from it. Do the Government have any plans to bring the Wales tourist board within the remit of the Welsh Development Agency? Tourism is vital for rural Wales.
  Another remit of the DBRW was its support for farming. Will that remit be taken on by the Welsh Development Agency? That question is particularly important in the crisis currently facing Welsh farming.
  In an earlier debate, it was mentioned that the DBRW had a remit to steer a certain percentage of development away from the M4 and A55 corridors. That is extremely important, as there are parts of south-west Wales into which it is difficult to attract inward investment, whereas it is much easier to attract it into areas such as Newport and along the M4 and A55 corridors.
  Can the Minister tell us what is to be the steer for the new super-quango? Will it be to ensure that a specific percentage of the inward investment that comes into Wales finds its way into rural areas, away from the main corridors? As new clause 38 deals with sustainable development, I assume that it is intended to allay fears for rural areas.
  Having kept my contribution brief, I hope that that will leave a little more time for the Minister to cover those points.
  Mr. Denzil Davies: I have considerable sympathy with the amendment which, as my hon. Friend the Member for Clwyd, West (Mr. Thomas) said, seeks to ring-fence rural affairs within the DBRW. For economic, cultural and social reasons, it would be a tragedy if the new quango neglected rural affairs. It may be unrealistic, as my hon. Friend suggested, to expect that the agency would ring-fence rural affairs.
  I shall put two questions to my hon. Friend the Under-Secretary. First, what about the money? We are discussing not just a merger of three bodies—quangos—but an extension of powers. With regard to social development, there will be an extension of powers wider than the present Meirionnydd, Powys and Cardiganshire. Social development will go to all the rural areas outside that area covered by the development board, and to urban areas.
  The new super-quango will have increased powers over those areas in that sphere. Will it have to make do with the same amount of money, plus annual increments, as is

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  now geared to its existing powers, or will it have more money to enable it to perform its new functions, as set out in the amendment? Those new functions will need money. If new money is not forthcoming, money will be taken from existing functions. People will put pressure on the new quango for social development money, if I may so describe it, in areas outside the present development board areas.
  My second question, which was also raised by the hon. Member for Ribble Valley (Mr. Evans), is: what about farming? Farming was not thought of as industrial, and so was probably not considered to be within the original remit of the WDA. Now that the reference is to business, which can be industrial, commercial or professional, it must obviously cover farming, especially when it is said that the business does not need to make a profit—we all know that farmers do not make any profit.
  On a legalistic reading of this legalistic document, farming would be included under economic or social development. There are clear social ramifications to farming in rural Wales. I should have thought that farming would fall within the remit of the new social and economic powerhouse, unless the European Community claims that it is the only body allowed to spend money on farmers. If that is not the case, there should be a glimmer of hope for farmers under the new, more powerful super-quango. Will more money be provided for that purpose?
  Mr. Livsey: I commend the remarks of the right hon. Member for Llanelli (Mr. Davies). One of the huge problems of the DBRW was that it could not support farming because it did not have the powers under the legislation that set it up. There were many frustrating moments when we were unable to support the agricultural industry with co-operatives for the marketing of lamb and so on during the 1980s. It would be a great advantage if farming as a business could be incorporated into the remit of the agency.
  I strongly support the amendment and congratulate the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) on tabling it. There must be redress in the rural areas, through the creation of a rural affairs department. I have long advocated an additional Welsh Office Minister responsible solely for the rural areas. The Under-Secretary is responsible for other matters, such as education under the previous Administration, and health under the present Government. Such is the importance of the rural areas that they deserve a strong focus.
  I agree with the hon. Member for Clwyd, West (Mr. Thomas), who said that the resources should be ring-fenced. As a consequence of amalgamating the bodies, resources may find their way to the centre. I hope that I am wrong. We have heard an analogy with rugby. It is significant that one of the reasons why the English rugby team is so successful is that a certain proprietor of The Sun has enabled an £85 million deal to be done. It is ironic that the Government gave an £85 million support package to agriculture recently, but that was across the United Kingdom. Only £12 million of that came to Wales, so we are losing out again.
  We must demonstrate the needs of rural Wales. Agriculture is vital. In some parts of Wales, 25 per cent. of the population is engaged directly in agriculture or in support industries. Family farms are in crisis. The farm
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  management survey figures for the year 1997–98 suggest that farmers in Wales will earn only £2.50 an hour on a 40-hour week, and in 1998–99 are unlikely to make anything at all. We have heard reference to sustainability—we need sustainable incomes as well.
  I know of many instances where rural businesses have collapsed in mid-Wales.
  Mr. Öpik: Does my hon. Friend share my view that there has never been a more important time to get support right? The closure of DC Evans in Newtown and Welshpool has cost 35 jobs, and the closure of the former Laura Ashley factory—now called Merchant Design Manufacturing—in Machynlleth cost 60 jobs. People are looking to the Bill to provide real support, so that a rural crisis is not allowed to turn into a deep and lasting recession.
  Mr. Livsey: I know that my hon. Friend has had many problems in his constituency as a result of the crisis to which I have referred.
  Social development, which has already been debated, is extremely important. In the context of rural affairs, national parks are similarly important. One of the purposes of a rural affairs department must surely be to hammer out a rural strategy in conjunction with the assembly. That will create something coherent for the rural areas of Wales.
  Amendments Nos. 524 to 539 relate to the transfer of powers from the Development Board for Rural Wales to the Welsh Development Agency. The use of the word "transfer" is extremely important as it identifies what will and should happen. As I have said, we have already debated the transfer of powers for social development.
  Business Connect for Wales has given an excellent service throughout the DBRW area and it has been a great success, but it requires staff to service it with expertise. A report yesterday referred to the possibility of 60 jobs being lost in the DBRW. If that happens, it will not be possible to service a business connect network throughout rural Wales. That is serious. We must demand answers.
  I have two questions for the Minister. How does he intend to maintain the rural premium in funding the new agency to ensure that the Government's stated aim, which is to see effective business development delivered throughout Wales through business connect, is achieved? Secondly, how is the Minister using the funding mechanism of the new agency to ensure that its new divisional structure delivers the quality and extent of service that he says he wants to see, given that there is the possibility of staff reductions? I should say that that possibility was denied yesterday, but I hope that the Minister will refer to it.
  The rural premium, because of sparsity, has been £100 per person in the DBRW area. It used to be £605 per person in the WDA area, but that premium has been subsumed. It has found its way into local authorities and has been lost. Will that happen to the rural premium, which has been made available with success, in the DBRW area? Perhaps that puts the question of the ring-fencing of resources back into the park.
  The Government should accept the amendments as a form of insurance for rural Wales, for agriculture, for rural businesses and for people living in the rural areas. Present powers must not be lost. Instead, they must be

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  transferred. If the hon. Member for Meirionnydd Nant Conwy puts the amendment to the vote, we shall support him.
  Mr. Caton: I shall speak in favour of the policy for rural areas as set out in the Bill and, therefore, against the amendments. In doing so, I have much sympathy for the fears and concerns of Members who represent constituencies which come within the area of the Development Board for Rural Wales, which is to be merged into the Welsh Development Agency.
  I used to live just outside Aberystwyth. That being so, I am aware of the high-quality work that the DBRW has done, including the use of its social powers. Its special expertise in taking up economic problems in our country towns and villages has proved valuable. The Mid-Wales Export Association, which was established and funded by the DBRW, has undertaken superb work recently.
  I represent and live in a rural constituency that is not included within the DBRW boundary. Like many of my colleagues in rural south Wales, west Wales and parts of north Wales, I am concerned that the current situation is not sustainable, to borrow a word that was used in a previous debate. We do not have access to the expertise and experience that was once available to us. In the perception of the DBRW, we have in the past been overshadowed, often understandably, perhaps, by the acute problems faced by neighbouring urban and industrial areas.
  8.15 pm
  The new WDA must make rural development policy one of its key functions, using best practice from both the DBRW and the WDA. We must use the experience and the expertise of both. It must serve the whole of rural Wales, not a particular geographical segment. If we do that, I am sure that the whole will produce rather more than just a sum of the parts.
  The agency must have a dedicated rural section, call it a rural affairs department, a rural policy unit or whatever.
  Mr. Llwyd: That is precisely what the amendment seeks to achieve.
  Mr. Caton: The hon. Gentleman interrupted me just as I was about to say that I do not believe that this is a matter for legislation in the way that is set out in the Bill.
  The assembly and the agency should give serious and sympathetic consideration to the proposals of Professor Peter Midmore and Joan Asby of the Welsh Institute of Rural Studies in Aberystwyth, which are that an integrated rural development fund should be established to foster co-operation and indigenous growth, which realistically will be the main source of new jobs and economic activity in most of rural Wales in the coming years.
  I can understand that subsumation into an all-Wales Development Agency for some people in mid-Wales represents a threat. I believe that for them, as for the rest of the people of rural Wales, it provides a tremendous opportunity. I hope that we grasp it.
  Mr. Ieuan Wyn Jones (Ynys Môon): I am grateful for the opportunity to say a few words in support of my
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  hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd), who made an excellent speech in support of the amendment. Having listened to the debate, I think that there is general agreement that there is a need for the Welsh Development Agency to have a rural remit, although there is disagreement about the way in which that is best achieved.
  I cannot support any move towards the ring-fencing of cash within an organisation such as the WDA. Although I have supported ring-fencing in the past, I now believe that it can be an extremely rigid way of allocating money. It does not allow flexibility for any agency in any particular way, and that flexibility is important.
  I make a particular plea—this has been touched upon by the right hon. Member for Llanelli (Mr. Davies)—for agriculture. He was right to say that it is a vital industry in rural Wales. It is now the biggest employer of any productive industry throughout Wales. In Wales, 53,000 people are employed directly in agriculture. The Development Board for Rural Wales has estimated that, over the next 10 years, 5,000 of those jobs will be clearly under threat.
  We are facing a crisis in the rural economy, which is a crisis in rural Wales. Rather than approaching those matters in the disparate way that we have done historically, with some money coming from the common agricultural policy, some through structural funds, some from the Welsh Office and some from local authorities, we should adopt an integrated rural approach. I believe that the new powerhouse agency will have an opportunity to integrate within Wales all of the money that should be coming through into the rural economy. We should consider agriculture as the basis upon which we drive up the rural economy while ensuring that we consider the ancillary industries.
  I hope that the Minister will acknowledge the strength of feeling about the need for particular concern to be paid to rural Wales and to drive forward the agenda for an integrated rural policy.
  Mr. Hain: I begin by thanking everyone who has contributed to an excellent debate. I acknowledge that there is a real crisis in agriculture and in rural economies generally. I hope that some of my remarks will provide some reassurance. However, there is no point in denying that a crisis exists. The Government are doing their best to tackle it.
  I thank the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for the way in which he moved the amendment. In doing so, he made some extremely pointed and inclusive remarks. In asking him and his hon. Friends not to press this group of amendments, I do not for a moment wish in any way to underplay the valuable and much-praised work of the Development Board for Rural Wales over the past two decades. However, much of the rationale for its establishment was a reflection of the need to develop new towns in mid-Wales. That work was completed some time ago, and the board's activities now very much overlap, and, in some cases, duplicate, those of the WDA.
  That overlapping and duplication is, in the Government's view, inefficient and is a waste of public money: such waste is one of our key motivations in attempting to reduce the number of non-departmental public bodies in Wales. The legislation as it stands

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  provides for those functions of the DBRW and the Land Authority for Wales that are not at present enjoyed by the WDA—I stress that point—to transfer to the agency on merger. I am convinced that the skills and experience of the DBRW's staff will provide an invaluable addition to those of the agency, in particular in rural affairs. The transfer of all the board's functions rather than just those not currently enjoyed by the agency would not enhance the agency's powers or functions in any way. That is an important point.
  I shall pick up on a point that the hon. Gentleman raised—whether or not I am a Latin scholar—about the issue of "cease to exist". I understand his concerns in that respect, which were echoed by hon. Friends behind me. I shall clarify what the Bill means. In saying that the functions cease to exist, all it is saying is that the DBRW ceases to exist. That is how the Bill achieves that objective. There is, however, a selective transfer of functions that the DBRW exclusively has at present, which the WDA does not have, to the new agency under clauses 121 to 125. That achieves the objective that the hon. Gentleman is seeking.
  Mr. Llwyd: The Minister used the word "selective". Does he mean that some powers currently enjoyed by the DBRW will not transfer? Or does he mean that all the powers over and above those that the WDA has, which the DBRW has, will transfer? To what does selective refer?
  Mr. Hain: There is an overlap of powers and functions at present, so there is no need to transfer all of them; only those that are not enjoyed by the WDA at present will be transferred.
  I now take up the issues raised, quite rightly, by my hon. Friend the Member for Clwyd, West (Mr. Thomas), who made several valid points. I hope that Members of the Assembly will have expertise in agriculture and rural affairs. That is essential. I cannot guarantee it by legislation, but I hope that all the parties will ensure that that is secured.
  My hon. Friend also raised a point about the importance of agriculture in the assembly's objectives, and, indeed, those of the WDA. The assembly will be obliged to set out a clear strategy to safeguard—indeed, defend and improve—conditions in rural communities. Section 1(4) of the Welsh Development Agency Act already says:
  "In exercising their functions the Agency shall have regard to the requirements of agriculture and efficient land management."
  That will remain. I think that that answers the point, which was also made by my right hon. Friend the Member for Llanelli (Mr. Davies).
  The point was well made by many hon. Members, but in particular by the hon. Member for Brecon and Radnorshire (Mr. Livsey), that rural areas have been facing a crisis. That is why the Government announced today that they will fund the entire start-up costs and first-year running costs of the new British cattle movement service. In addition, the Government have decided that the charges for implementing new specified risk material controls on cattle, sheep and goats will not be recovered from the industry from 1 April. That amounts to the Government giving £70 million to
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  agriculture. I can assure all hon. Members that a substantial portion of that money will go straight into Wales because of its needs.
  Mr. Denzil Davies: As my hon. Friend said, the agency shall now have regard to agriculture, but that is not the same as making it one of its main purposes. Section 1(2)(b) of the Act talks about promoting industrial efficiency. If "industrial" is replaced with "business", which has been defined, surely agriculture must mean promoting agricultural efficiency.
  Mr. Hain: I expect that it does. It is valuable that my right hon. Friend has put that on the record. He made the point powerfully.
  Mr. Livsey: May I thank the Minister for his announcement about SRM materials and expenditure? It was a helpful statement.
  Mr. Hain: I am grateful for that kindly intervention.
  Amendment No. 520 relates to the functions of the WDA and its organisational structure. Although I appreciate the concern of the hon. Member for Meirionnydd Nant Conwy, and that of his hon. Friends, I cannot agree that the level of detail is a matter for legislation.
  I understand and share the view that the needs of rural areas throughout Wales should be very much part of the focus of the exercise of enlarging the agency's functions that we are undertaking. My right hon. Friend the Secretary of State has already spoken of his wish to see a rural policy unit established within the agency, possibly to be located within one of the regional directorates. It is inconceivable that the rural policy unit—this may be of particular interest to the hon. Member for Montgomeryshire (Mr. Öpik)—could be located in Cardiff. It is a matter for the agency, which is currently reviewing all those issues.
  My hon. Friend the Member for Clwyd, West was concerned that there might be a lack of focus for the new agency, and that agriculture may lose out as a result. I can assure him that that should not happen. I hope that all that I have said so far will go towards ensuring that it does not.
  There is a problem with ring-fencing. Although my hon. Friend raised the matter, the hon. Member for Ynys Mon (Mr. Jones) replied adequately to it.
  It is important that we do not compartmentalise rural policy. One of the advantages of the proposals, as my hon. Friend the Member for Gower (Mr. Caton) said, is that rural policy will assume centre stage in the economic powerhouse. Instead of being confined to one particular but important part of Wales dominated by agriculture, it will be part of the major strategic objectives of the agency as it drives forward its economic strategy, as set by the assembly.
  The hon. Member for Ribble Valley (Mr. Evans) asked constructive questions—I must stop praising him, as it will get him pushed off the Front Bench—about regional aid and the definition. Those important points are relevant to Wales's needs, where gross domestic product is, of course, the key factor, and where there is much hidden joblessness. We are pursuing this vigorously with the European Union.

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  The hon. Gentleman also asked whether the WDA's remit sufficiently covered rural areas. I think that it does, but it will be for the assembly to hold the new agency to account and ensure that it does. I am confident that, with huge representation from rural areas, that will occur. He asked why the Wales tourist board is not coming under the powerhouse agency. I am not sure that that is a matter for this debate. We decided that the tourist board has enormous responsibilities in the coming two years with the summit, the World cup and other initiatives. It will, of course, be for the assembly to decide whether some reorganisation is necessary or desirable in future. We have set clear new targets for investment to spread not just westward but up the valleys and into much of the neglected rural areas.
  My right hon. Friend the Member for Llanelli raised important points about money. There will be a budget of £200 million for the new powerhouse agency, bringing together the existing budgets. He raised important points about extending powers and social development functions to all areas. That will have to be taken into account by the assembly. His points will be carefully examined.
  All the points raised by the hon. Member for Brecon and Radnorshire will be addressed in the assembly's economic powers. In the light of those comments, I hope that the hon. Member for Meirionnydd Nant Conwy will withdraw the amendment.
  Mr. Llwyd: We have had a good and useful debate, although I believe that the Minister is wrong about agriculture. However, his response has been positive and I therefore beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  It being half-past Eight o'clock, THE CHAIRMAN, pursuant to the Order [15 January] and the Resolution [this day], put forthwith the Question necessary for the disposal of the business to be concluded at that hour.
  Clause 118 ordered to stand part of the Bill.
  Clause 119 ordered to stand part of the Bill.
  Schedule 9 agreed to.
  Clause 120 ordered to stand part of the Bill.

  Schedule 10

    WELSH DEVELOPMENT AGENCY: OTHER AMENDMENTS
    Question proposed, That this schedule be the Tenth schedule to the Bill.
    Mr. Denzil Davies: We have already debated schedule 10 in relation to the definition of the word "business". My hon. Friend the Minister was asked why it was necessary to include
    "the activities of any government department or any local or other public authority"
    in the schedule. The Committee will recall that "business" is now defined not only as
    "activities (whether or not with a view to profit)"
    but as the
    "activities of any government department or any local or other public authority".
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    I do not criticise my hon. Friend for not dealing with the matter, because time ran out. However, I, the hon. Member for Ribble Valley (Mr. Evans) and others asked why on earth a Government Department, perhaps Her Majesty's Treasury—who knows, the public sector borrowing requirement may flip over again; we do not know—should stand outside the WDA with a tin can looking for money. This is a drafting matter. Why is it necessary to include a Government Department? I can understand the need to include a local authority a little better than a Government Department, but why is it necessary to include a public authority?
    According to the definition, everyone in the world will now be able to rattle a tin can to obtain money from the WDA. The difficulty is that it has only £200 million. We were told that if it is to satisfy all the requirements built into the legislation, the money will have to come from somewhere else.
    I hope that my hon. Friend will be able to say why it is necessary for
    "any government department or any local or other public authority"
    to be included in the definition as recipients of money. It may well be that this is a back-door way of legitimatising the joint venture agreements that the WDA had with local authorities. They were clearly illegal right from the beginning. It was not necessary to pay the large sums that some councils did to silks in Wales to tell them that they were illegal.
    The WDA then moved to some kind of partnership agreement, although I was never quite clear what the difference between a joint venture and a partnership was. Those agreements are probably illegal as well. I do not know whether this is an attempt to cure that illegality—probably not—but will my hon. Friend explain why it is necessary to have the
    "activities of any government department or any local or other public authority"
    included in the definition of "business"?
    Mr. Rowlands: I have listened to my hon. Friend the Minister's replies to a succession of amendments and watched the extension of the WDA's role, and I want to enter a caveat. I understand that the economy and the world are changing, but one of the qualities of the WDA was its industrial focus. I can remember the old-fashioned standard industrial classifications. Do I now understand that all that has been swept aside?
    Mr. Hain: My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asks a relevant question. We have defined business in a broad way—as we saw in the previous debate, agriculture is included in a certain context—precisely to recognise that, with the development of modern economies, there is a great deal of overlapping between the different areas, which previously may have been segmented off into traditional categories. We wanted to ensure that the new powerhouse drove forward the Welsh economy and that it had sufficient functions and powers to deal coherently with all the different sectors of the Welsh economy.
    I reassure my right hon. Friend the Member for Llanelli (Mr. Davies) that there is certainly no intention to introduce any back-door method of legitimising illegal agreements. He is right to suspect that that is not the case. I am sorry that I did not respond to the question earlier,

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    but I did run out of time. The specific reason why Government Departments or any local or other public authority are included is that it may be necessary, as happens in the case of local authorities, for them to enter into an agreement with a private operator or a joint consortium. I think, for example, of waste management companies. They may then receive WDA support or advice or business services. The same is true for a Government Department. We wanted to ensure that we allowed the new powerhouse to engage in such activity and not be prevented from doing so. That is the purpose of including the reference in the schedule.
    Question put and agreed to.
    Schedule 10 agreed to.
    Clause 121 ordered to stand part of the Bill.

Schedule 11

  DEVELOPMENT BOARD FOR RURAL WALES
  Mr. Hain: I beg to move amendment No. 490, in page 104, leave out lines 42 to 44.
  The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): With this, it will be convenient to discuss Government amendments Nos. 491 and 492.
  Mr. Hain: The Government have tabled the amendments in order to keep alive certain references to the DBRW in the Housing Act 1985 and the Landlord and Tenant Act 1985. I have been advised that to repeal the references might have undesirable knock-on effects on former tenants of the board, or on bodies to which the board may have assigned leases.
  For example, without the changes it is possible that former tenants of the DBRW would effectively lose their time as such tenants in calculating their right-to-buy discount. It might also be the case that certain terms of existing tenancies would change simply because the DBRW's functions had been taken over by the WDA.
  I hope that hon. Members will agree that those consequences would be undesirable and unfair, and I therefore urge the Committee to accept the amendments.
  Amendment agreed to.
  Schedule 11, as amended, agreed to.
  Clauses 122 to 124 ordered to stand part of the Bill.

Clause 125

  ABOLITION ETC.
  Mr. Wigley: I beg to move amendment No. 274, in page 59, leave out lines 18 to 20.
  The First Deputy Chairman: With this, it will be convenient to discuss the following amendments: No. 275, in clause 131, page 62, leave out lines 8 and 9.
  No. 276, in clause 135, page 64, leave out lines 27 to 29.
  No. 512, in clause 141, page 66, leave out line 30.
  Mr. Wigley: I am grateful for the opportunity, in the brief time that I have available before the witching hour
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  at 9 o'clock, to deal with this group of amendments. Amendment No. 512 does not belong to us, so I shall leave that to those who claim paternity to it—[Interruption.]—if anyone wants to claim paternity to it. Ours are the type of probing amendments that would be relevant for the Committee stage of any Bill. Had the proceedings been taken in Standing Committee, we would have gone into such detail much more.
  Amendment No. 274 seeks to delete lines 18 to 20 to ascertain the exact intention of clause 125, particularly the interplay between subsections (3) and (4). I suspect that that amendment, which deals with the Development Board for Rural Wales, and amendments Nos. 275 and 276, which deal respectively with the Land Authority for Wales and Housing for Wales, are the type of provisions that were heralded in the White Paper. Paragraph 3.23 of the White Paper says:
  "Where necessary the Bill will give the Assembly limited powers to amend existing primary legislation."
  That is what is happening by virtue of those clauses.
  I want to ensure that we know the extent of that power to amend. As we heard in a number of our debates this evening, the DBRW has important functions for the parts of Wales for which it is responsible. Those responsibilities might well have been applied in other parts of Wales, as was suggested earlier. The question of amending other legislation because of the effect of the repeal of the Development of Rural Wales Act 1976 is fairly significant. If it is felt that, because of the absence of that Act, there is a need to amend other legislation that impinges on a range of economic and social powers—social powers are within the purview of the 1976 Act—these provisions enable such primary legislation to be amended by order introduced by the Secretary of State to this House.
  Subsections (3) and (4) must be taken together in order to understand what we are discussing. I shall select just one part of the wording so that the provision makes sense, because the way in which the draftsmen have attacked this part of the Bill has not resulted in the most attractive English. Subsection (3) says:
  "The Secretary of State may by order make any consequential … provisions … in connection with … the repeal by this Act of any provision of the Development of Rural Wales Act 1976."
  It goes on:
  "An order under subsection (3) may include provisions … of amendments … of any … other enactment."
  Any other enactment could be amended by order if it was deemed to be dealing with any matter that was incidental to or consequential on the abolition of the Development Board for Rural Wales. That is fairly far-reaching, but it is necessary because many aspects will come to light that should have been covered by the legislation. This provision allows a fast route for changes to primary legislation.
  Mr. Öpik: Is the right hon. Gentleman trying to ensure that we do not drop the ball when powers are transferred from the Development Board for Rural Wales to the new organisation? Is that correct?
  8.45 pm
  Mr. Wigley: Yes, that is correct, but I am going beyond that. These are probing amendments. I want to know what the effect of leaving out those lines would be,

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  but first I want to establish what they facilitate. They seem to facilitate the far-reaching changes that may be necessary.
  Amendment No. 275 deals with the Land Authority for Wales. Clause 131(3) and (4) give the Secretary of State the power to amend any enactment relating to land that it is felt appropriate to amend according to the wishes and policies of the National Assembly for Wales. Amendment No. 276 deals with Housing for Wales. Clause 135(3) and (4) enable the Secretary of State by order to make any incidental provisions that he deems appropriate.
  Those three clauses could have substantial significance, because they allow the Secretary of State to make orders that change whole sections of housing, land or rural affairs legislation. I welcome that. The White Paper included that proposal: the Government said that they would enable primary legislation to be amended by order. The House will not lose its veto over changes to primary legislation, because an order will have to be approved by the House. An order is the vehicle for enabling provisions that would otherwise have to be included in primary legislation to be taken quickly through Parliament, to meet the requirements of the National Assembly for Wales to change the law in those three areas. The proposed mechanism is fast and effective.
  Mr. Letwin: Does the right hon. Gentleman agree that the Secretary of State could make the process even faster if, by a transfer of functions order or subsequent such order, he were to transfer the order-making power in those clauses to the assembly?
  Mr. Wigley: Yes, that would be a mechanism whereby the assembly could change primary legislation of its own volition without reference to the House of Commons, but the Government are not proposing that. Under the Government's proposals, the House of Commons will ultimately have a veto over such changes to primary legislation. Scotland is allowed to change primary legislation, and we want our assembly to be able to do likewise, but the clauses do not allow that.
  Mr. Letwin: Does the right hon. Gentleman agree that the structure is in place to permit that change? Under the Bill, the Secretary of State could, by order, transfer those powers to the assembly so that it could thereafter by order change primary legislation.
  Mr. Wigley: Yes, but only for such matters as are covered by the Bill. There is no provision for a general facility along those lines.
  Mr. Letwin indicated dissent.
  Mr. Wigley: The hon. Gentleman is shaking his head, but the clauses and amendments that we are discussing deal with the activities of the Development Board for Rural Wales, Housing for Wales and the Land Authority for Wales.
  Mr. Letwin: Will the right hon. Gentleman give way?
  Mr. Wigley: By all means.
  Mr. Letwin: I apologise for intervening again, but the matter that I wish to raise is of some constitutional significance. Clause 22(1) makes it explicit that
  "Her Majesty may by Order in Council … provide for the transfer to the Assembly of any function so far as exercisable by a Minister of the Crown in relation to Wales".
  Clearly, the provisions to which the right hon. Gentleman draws attention are "in relation to Wales". They concern the power
  "exercisable by a Minister of the Crown".
  Therefore, under clause 22, the powers involved could presumably be transferred by a transfer of functions order to the assembly, which would then have the power, by order, to overturn an Act of Parliament.
  Mr. Wigley: At the risk of trespassing on our earlier debates—I remember that the subject was touched on, although I think that we got into time trouble—let me say that there are restraints on clause 22.
  I was not aware that primary legislation, in its generality, could be amended by order, but if that is the case, and if the arrangement is open-ended, the hon. Gentleman is clearly right. The amendment may be redundant, having already been dealt with by that mechanism. In the case of three of the four areas specified in part VI, however, there are mechanisms to allow changes in primary legislation.
  I think that right and proper, and I believe that it should apply to other areas, too. I will not pursue the argument, because I would be trespassing on the Committee's time; but, if responsibilities that lie firmly with the assembly need to be modified, it would be nonsensical not to modify them. The modifications would relate only to Wales, and there is a long stop on the order in this part of the Bill. There are other long stops in other parts with regard to the financial implications. If we do not allow such a development, we shall create a structure that could lead to tensions between the assembly and the House of Commons.
  If we want a devolved structure—I realise that Conservative Members may not—we must ensure that it takes on proper responsibility, carries that responsibility and does not merely lead to sniping between one Chamber and another. That is why I welcome the facility provided in the three subsections to which our three amendments relate. I hope, however, that the Minister will tell us how he envisages the working of those subsections, in the context of my comments. I hope that he will justify the need for them, given that—as the hon. Member for West Dorset (Mr. Letwin) pointed out—clause 22 may provide an overarching mechanism that makes those requirements redundant. Some clarification is needed.
  Mr. Michael Ancram: I am grateful to my hon. Friend the Member for West Dorset (Mr. Letwin) for succinctly raising one of the major points at issue in the amendments. In our view, it is clearly the beginning of a slippery constitutional slope, which is why the right hon. Member for Caernarfon (Mr. Wigley) was so keen to support the principle behind them. What my hon. Friend warned against, however, is even more evident in clause 141, which our amendment No. 512 addresses.
  Clause 141 states:
  "The Secretary of State may by order make in any enactment contained in … an Act passed before or in the same session as this Act, or … subordinate legislation … such amendments or repeals as appear to him to be appropriate in consequence of this Act."

  449
  If my hon. Friend is right, that is also a power that can then be transferred to the assembly under clause 22. In effect, that would allow the assembly—or, indeed, the Secretary of State, which is bad enough—to change primary legislation not on the ground that it was necessary to do so, but on the ground that it appeared to the Secretary of State
  "to be appropriate in consequence of this Act."
  We have discussed Henry VIII clauses before, but this is a Henry VIII clause of which not only Henry VIII but Cardinal Wolsey would have been proud. According to the Delegated Powers and Deregulation Committee's report of 1992–93, a Henry VIII clause is
  "a provision which enables primary legislation to be amended or repealed by subordinate legislation with or without further Parliamentary scrutiny."
  All the authoritative statements on such clauses make it clear that they were not intended to be used in this rather loose and informal way. They are intended to be used restrictively. The report of the Delegated Powers and Deregulation Committee in the other place summed up the definition. It stated:
  "the case for using Henry VIII clauses for updating lists, or uprating for inflation and for making consequential and transitional provisions was recognised. In any event the Government should be expected to justify the use of such clauses as being necessary: they should not be used simply for convenience."
  I think that the Committee will agree that if such a mechanism is to be used, those criteria might apply, but they are not contained in clause 141. The clause states:
  "such amendments or repeals as appear to him to be appropriate in consequence of this Act."
  That is a judgment by the Secretary of State, and there are no criteria by which to judge it. The clause could allow him, by order, to change primary legislation through a one-and-a-half-hour debate without amendment. As my hon. Friend the Member for West Dorset said, if that power were transferred to the Welsh assembly, that body could change primary legislation, whether by amendment or repeal, and Parliament would not have a chance to consider the matter.
  That is a dangerous precedent, and I do not think that the Committee should lightly allow it to pass. I hope that even if the Minister cannot accept the amendment, he will bear in mind the seriousness of my statement and will at least agree to look at the issue again.
  Mr. Hain: I can reassure the right hon. Members for Devizes (Mr. Ancram) and for Caernarfon (Mr. Wigley) that their concerns are misplaced. The amendments relate to residual order-making provisions in the Bill that allow the Secretary of State, by order, to amend primary legislation as a consequence of the quango reform provisions in part VI or the enactment of the Bill generally. All major Bills have an impact on existing statutes and require repeals and amendments. Although we have tried to provide for those in the Bill as, for example, in schedules 8 and 14, it is possible that some detailed matters have not yet been identified. That is why the safety net powers are necessary.
  I understand the concerns of hon. Members who have tabled the amendments and I reassure them that the powers are intended to be used and, I stress, could be used only as a means of tidying up the statute book where other provisions in the Bill make that necessary. The alternative
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  would be to return with fresh primary legislation to cover minor and technical matters. I hope that all hon. Members will agree that that would not be a fruitful use of parliamentary time.
  Amendment No. 512 was tabled in the name of the right hon. Member for Devizes and some of his hon. Friends. I have heard the phrase "slippery slope" so often during the Bill's passage that by now the slope is well oiled. It is pure fantasy. The amendment would remove from clause 141 the Secretary of State's power to amend primary legislation by order when the Bill's other provisions made that necessary or desirable. The power represents a far better approach than burdening Parliament with fresh primary legislation to effect technical amendments.
  Mr. Ancram: Will the Minister give way?
  Mr. Hain: No, because I do not have much time.
  I recognise the right hon. Gentleman's concern, but there is no scope for such a power to be misused. As I have said, it may be used only as a consequence of the Bill's provisions. Clause 144 provides that any orders made under clause 141, which amend primary legislation, would be subject to affirmative resolution here and in the other place.
  Mr. Ancram: Will the Minister give way?
  Mr. Hain: No, and I regret that I cannot give way. I have not been left much time.
  The same arguments apply to the clauses that the right hon. Member for Caernarfon seeks to amend. A Secretary of State who, for whatever reason, sought to use the power unreasonably, could be checked by Parliament, which could also reject a draft order if it considered that the matter would be more properly dealt with by fresh primary legislation.
  The amendments tabled by the right hon. Member for Caernarfon would remove the Secretary of State's order-making powers in the merger of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales and in the abolition of Tai Cymru, which would seriously impede the smooth implementation of those proposals. If further technical matters were uncovered during the merger process, we should then have to introduce new primary legislation to deal with them. I am sure that the right hon. Gentleman would not wish that to happen, and therefore invite him to withdraw his amendment.
  Mr. Wigley: I am very grateful for the Minister's response, and I have taken note of the points made by the right hon. Member for Devizes (Mr. Ancram). The point is that—although different arguments may apply to clause 22—the clause would provide a safeguard for the House and avoid the need for primary legislation each time there was a need for consequential changes arising from the Bill.
  It being Nine o'clock, THE CHAIRMAN, pursuant to the Order [15 January] and the Resolution [this day], put forthwith the Question already proposed from the Chair.
  Amendment negatived.
  THE CHAIRMAN then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.
  Clause 125 ordered to stand part of the Bill.
  Clauses 126 to 131 ordered to stand part of the Bill.
  Clause 132 ordered to stand part of the Bill.
  Schedule 12 agreed to.
  Clause 133 ordered to stand part of the Bill.
  Mr. Letwin: On a point of order, Mr. Martin. I wonder whether you will give some guidance to a new Member on a genuine point of order. Earlier in the Committee's proceedings, the Secretary of State wrote to me—he deposited the letter in the Library—stating that there neither were nor would be powers other than those that I had mentioned for the assembly to overturn primary legislation passed by the House. The Minister—in failing to respond to what was said, and by what he has or has not said—has virtually implied that that letter was false or was inadvertently misleading. I wonder whether you can give us some idea of how one should deal with such a situation in the Committee's proceedings.
  The First Deputy Chairman: Perhaps the hon. Gentleman can table questions to the Minister to get some elucidation on what he meant. The hon. Gentleman will understand that we have now passed that matter because of an instruction of the House.
  Clauses 134 to 136 ordered to stand part of the Bill.

Schedule 13

  AUDIT ETC. OF WELSH PUBLIC BODIES
  Mr. Tim Collins: I beg to move amendment No. 510, in page 118, line 20, at end insert—
  '12. The Arts Council for Wales.
  13. The Sports Council for Wales.'.
  The First Deputy Chairman: With this, it will be convenient to discuss amendment No. 511, in page 118, leave out lines 28 to 31.
  Mr. Collins: This group of amendments would correct a seemingly rather serious anomaly in schedule 13: the Arts Council of Wales and the Sports Council for Wales are exempted from the provisions of clause 136 on accountability.
  Under clause 136, for those bodies which are specified in parts I or II of schedule 13, which do not include the Arts Council of Wales or the Sports Council for Wales, the Secretary of State may by order make provision about the accounts of any such body,
  "the audit of any such body's accounts, or … reports by any such body on its exercise of its functions."
  The clause goes on to specify that this could include the making of provisions relating to
  "the giving of directions by the Assembly"
  and
  "the publication and public inspection of documents."
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  Given that in his introduction to the White Paper, the Secretary of State said that one of the primary purposes of the Bill—the creation of a national assembly—was to bring
  "the quangos under control and into the open",
  it seems curious that these two particular bodies should be exempted. It is especially curious because annexe B of the White Paper lists all 19 executive bodies reporting solely to the Secretary of State for Wales, but, if one excludes bodies such as the Development Board for Rural Wales which are to be wound up or merged with other bodies, every one of those 19 is to be subject to the full provisions of clause 136, with the exception of the Sports Council for Wales and the Arts Council of Wales.
  The Minister is an amiable soul and a likeable fellow, and no doubt has a good reason for the special status of those two bodies, so we shall probe a little to find out what that may be. Does he regard these bodies as autonomous, executive bodies which should not be subject to clause 136? In one of its customarily excellent papers, the House of Commons Library quotes the constitution unit which has, appropriately, classed the Arts Council of Wales and the Sports Council for Wales alongside the Higher Education Funding Council and the Further Education Funding Council as autonomous bodies. However, the funding councils are fully subject to clause 136, so that cannot be the reason.
  Is it because heritage and cultural matters should be given special status? That does not quite work either. Under schedule 13, the National Library of Wales and the National Museum of Wales are properly subject to clause 136. Is it because the two bodies have some advisory functions? That does not work either, because the Ancient Monuments Board for Wales and the Historic Buildings Council for Wales are subject to clause 136 and they have advisory functions.
  Could the reason be that the Government regard the Arts Council of Wales and the Sports Council for Wales as unimportant? That is a little difficult to reconcile with the figures in the White Paper which show that, in the current financial year, the Arts Council of Wales is to spend something like £14.7 million and the Sports Council for Wales something like £9.1 million. Those figures exclude lottery awards which the two bodies make in Wales. The Arts Council of Wales reports that, in the last full financial year, it made a total of 228 awards, worth more than £14 million of lottery money. The Sports Council for Wales distributed similarly large sums.
  I am sure that the Government would not argue that the two bodies were unimportant because I have in my possession a copy of a speech made 12 months ago by the Prime Minister when he was Leader of the Opposition. It was a speech made at the Mansion house to the British Screen Advisory Council. He said:
  "Art is important for the standing of the nation. When Britain is culturally successful it matters to the rest of the world. It is part of our national pride."
  I am sure that the Minister agrees that, if that is true of Britain, it must be true of Wales, so the two bodies are important and must be properly subject to the provisions of clause 136.
  Is the reason for the exclusion that the Government believe that cultural matters should be kept out of the political sphere? There are some who hold the view that such things should be kept out of the hands of grubby

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  politicians of any party. Sadly, if that were the contention now, the Prime Minister demolished it in his speech 12 months ago when he said:
  "New Labour wants to put the arts on the political agenda",
  so there is no question of the arts being kept out of the political sphere. One is left to wonder exactly what has led the Government to give special treatment to the two bodies.
  The Minister, who on the whole has conducted himself amiably in these debates, will forgive me if I venture the somewhat partisan thought that the explanation may lie in the fact that the Government are embarrassed about their record on the arts and sport. That is why they do not want these bodies to have to produce reports or allow their documents to be inspected under clause 136. The Government have every reason not to want such reports to be published. Before taking office, the Prime Minister said in that speech of 12 months ago:
  "Arts organisations have had a huge boon from the Lottery—now we need to build on what has been achieved."
  We found out a few months later what "building on" that meant: it meant taking £50 million away from the arts and £50 million away from sport in order to put it in the Government's coffers.
  On the other hand, perhaps the Government do not want reports from these bodies because they are rightly embarrassed by their announcement last December of a further reduction in the grant made to them. The Minister may argue that we should not criticise the Government for that, as Labour is only carrying on with the previous Government's spending targets. He will forgive me for reminding him, however, that it was his party, not ours, which inflicted on the airwaves and ears of the nation for several weeks last year that dreadful pop song "Things can only get better". For the arts and sport, things are getting worse, not better.
  Another possibility is that the Government may be embarrassed by what these bodies may have to say about January's announcement by the Secretary of State for Education and Employment to the effect that music, art and physical education are to be struck out of the national curriculum. The Times described that as striking
  "a blow at the heart of British culture",
  and closing
  "the book on culture for millions of children".
  The Government have every reason to be worried about what would happen if the Arts Council of Wales and the Sports Council for Wales were encouraged to produce open publications and to be subject to clause 136. That is no reason why we should accept the status quo that the Bill would maintain.
  I believe that the amendments will enable the Government to come clean about their pledges to the Welsh and UK arts and sport communities. They will also enable them to deliver their pledges in the White Paper; they were quite clear in that document that they wanted all quangos to be open and accountable. Just in case the Government are worried that the Arts Council might oppose this idea, I want to end by quoting an extract from the Arts Council's website which appeared this very day. It said that the Arts Council believes
  "that all the Arts Councils"—
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  in England, Northern Ireland, Scotland and Wales—
  "are expected to account for their decisions and to explain them to Government, the arts community and the general public."
  If the Arts Council is happy, I cannot see why the Government are not. That is why I commend the amendments to the Committee.
  Mr. Rowlands: For the life of me, I cannot understand why sports and arts council issues cannot be subjected to the full rigour of democratic accountability. I have been puzzled by that ever since it was decided to exclude these two bodies. I understand that they have special status—charters and so on—but there is surely a powerful case for making these respectable quangos democratically accountable and responsible. They make operational and budgetary decisions of considerable interest to, and consequence for, large numbers of people. Why, then, are they to be excluded?
  I do not want to embarrass Ministers by reminding them that before the election, we used very strong language about quangos and the quango state. The arts and sports councils were often invoked as examples of just such bodies. Like all other sensible, right-thinking people, I assumed at the time that they would be made fully accountable to the democratic assembly. Now it appears that they, more than any other organisations, are to be excluded from supervision.
  I accept the problems caused by the special way in which those two bodies were set up—they were established by warrant, or whatever—but I believe that those two functions could have become the direct responsibility of the assembly. I did not think that we needed a sports council and an arts council whose budget would need accounting for. I think that they could have become an integral part of the Committee structure of the assembly. Those bodies make interesting, fascinating decisions on priorities in all sorts of ways.
  Mr. John Smith: Can my hon. Friend envisage, especially in the light of recent events, a situation in which a Committee of the Welsh assembly selected future national rugby teams?
  9.15 pm
  Mr. Rowlands: My hon. Friend tempts me to say that things could not be worse. Things must get better. What was that lovely song we had for the election—"Things can only get better"? Certainly, after last Saturday, that must be true of Welsh rugby.
  May I remind my hon. Friend that there has been lively public debate of all sorts in the Welsh media about arts expenditure. There was a debate, or argument, between the Valley arts association and the arts council. It is a curious belief that democracy will be philistine by nature. I do not believe that that is so.
  Mr. Desmond Swayne: Does the hon. Gentleman accept that the amendments will not restrict the ability of the arts council or the sports council to undertake their current activities, but simply make them accountable?
  Mr. Rowlands: I am suggesting that the amendments are not radical enough, and that given the nature and character of the organisations concerned and the interest

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  in the way in which they spend their money and their priorities, there is a case for more direct democratic accountability and responsibility for their actions.
  We made that case over and over again in the run-up to the election. I said that if one had to choose two quangos that should be subject to full democratic accountability and responsibility, it would be those two. There were arguments; there were, rightly, lively debates about the various priorities of the Arts Council of Wales.
  There is not one of us who is not interested in the way in which the Sports Council for Wales spends and allocates its money. There is interest not only in its grand strategies for young people—many of which are most admirable, according to all the documents that I have read—but in the nitty-gritty decision-making processes by which grants and resources are allocated to various organisations and communities. I would have thought that that was the meat and drink of democratic accountability and of devolution in its real sense. Then we find in schedule 13, after reading through the names of all the other bodies, that right at the bottom, the quangos most exclusively excluded from any form of democratic accountability are the arts council and the sports council.
  Mr. Gareth Thomas: Is it not the case that the Government have inherited an anomaly and that they have to live with it? Would it not require a separate regime to put it right?
  Mr. Swayne: Change it.
  Mr. Thomas: It will be interesting to hear what the Minister says.
  Mr. Rowlands: I wish that I had brought some letters with me, because I had something of a correspondence with my right hon. Friend the Secretary of State about the special status of those two bodies. I thought that Parliament was supreme, and that whatever the problems with the status of the two organisations and the methods by which they were established, Parliament could simply unwind the process. Although that would require various consents and various elaborations, surely it would be within the power of Parliament.
  I cannot believe that it is beyond the power of Parliament to bring the Sports Council for Wales and the Arts Council of Wales within the jurisdiction, accountability and responsibility of the Welsh assembly. We fight over whole areas of parliamentary sovereignty, but apparently those two bodies are beyond the scope of that sovereignty.
  I must confess that I do not understand that, and have never understood it, throughout all the discussions that we have had. We said that we would light a bonfire of the quangos and, although I do not want to burn down either the Sports Council for Wales or the Arts Council of Wales, I certainly want them to become totally democratically responsible to a Welsh assembly.
  Mr. Wigley: I am grateful for the opportunity to speak in the debate and grateful to the Conservative
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  Front-Bench team for having moved the amendment. Tonight, in several debates, we have heard a different tenor of debate from Conservative Members.
  Mr. Swayne: That is because of the speech yesterday.
  Mr. Wigley: It might well have something to do with that, but, be that as it may, we should welcome the repentance of sinners on the road to Damascus. I congratulate the hon. Member for Westmorland and Lonsdale (Mr. Collins), who spoke lucidly and concisely when moving the amendment. As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said, the amendments is perfectly reasonable.
  I have to be careful in what I say, as my wife is on the Arts Council of Wales, although it may well be that that gives me an added incentive to ensure proper scrutiny of that body.
  Mr. Rowlands: Abolish your wife.
  Mr. Wigley: The hon. Gentleman should not tempt me—his wife has been on the S4C authority and we have already debated the question of whether that body should be answerable.
  The Arts Council of Wales and the Sports Council for Wales are important bodies which have a strong Welsh identity—in fact, no quango has a stronger identity than those two. At times, both bodies have decisions to make that should be open to scrutiny. There has been some controversy in recent weeks about certain matters.
  The status of those bodies is something with which we could deal in this Parliament, to which point I shall return; but their status has not been such as to prevent Parliament from casting its eye over them in the past. I am sure that the hon. Member for Merthyr Tydfil and Rhymney and the right hon. Member for Llanelli (Mr. Davies) will recall a meeting of the Welsh Grand Committee where we debated the annual report of the Arts Council of Wales. I remember Lord Hooson—Emlyn Hooson as he then was—being involved in that. If the Welsh Grand Committee can exercise some degree of scrutiny over that body and, by implication, over the Sports Council for Wales, why on earth can the assembly not do the same thing?
  If the Government have come up against some technical changes which will take a prolonged period to get through, would it not be sensible to provide in this part of the Bill an order-making mechanism that could transfer responsibility for the two bodies fairly quickly, once that procedure has been exhausted? Our debate has demonstrated a meeting of minds across the Committee, and unless there is a very good reason for refusing the amendments, this may be an issue on which the Minister should choose to give way and incorporate the suggestion in the Bill.
  Mr. John Hayes: I wish to speak on the amendments, but, before doing so, I should like to thank the right hon. Member for Caernarfon (Mr. Wigley) for his acknowledgement of Conservative pragmatism. It is that mixture of pragmatism and principle which has illuminated the Conservative mind throughout the centuries, and hearing that tribute

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  from the right hon. Gentleman merely confirms what most of us already knew about the Conservatives' ability to adapt to change.
  It is in that spirit that I approach the amendments, because, if we are going to do this, we must do it properly. The message that the exclusion of the arts and sports in Wales will broadcast to those communities and to the whole of Wales is that they are not important. How particularly and peculiarly unfortunate that is, given that we are talking about Wales, which is the land of Dylan Thomas, of Gareth Edwards and of Barry John—I was at the match on Saturday, but we shall not go into that. As my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said—
  Mr. David Hanson: Will the hon. Gentleman give way?
  Mr. Hayes: I am happy to do so, if the hon. Gentleman wants to talk about rugby.
  Mr. Hanson: Is the hon. Gentleman aware that both the bodies named in the amendments were established by royal charter and that the only reason why they are not being brought under the control of the democratic assembly in the Bill is that the arrangements can be changed by invitation via the royal charter procedure? That is the only reason—it is a simple technical matter. We do not disagree with Opposition Members or with my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) on the principles of the Bill. This is a simple technical matter which can be dealt with outside legislation.
  Mr. Hayes: The problem with that thesis, as my hon. Friend the Member for Westmorland and Lonsdale has pointed out, is that the two bodies are no different in that respect from several others which are treated entirely differently in the Bill.
  Mr. Hanson: Will the hon. Gentleman give way?
  Mr. Hayes: No, I will not give way again because I wish to be brief and I have been generous to the hon. Gentleman once. The message being broadcast to these communities is that they have been deliberately excluded, and that must be unhealthy. I could go on at length about the Government's cuts to the arts, but I have been moderate, sensible and reasonable. Let us make this work properly by bringing the bodies within the compass of proper procedure. Let us make them accountable and, therefore, in the eyes of the public, respectable.
  Mr. Laurence Robertson: I am not sure that I can follow the comments of my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes)—certainly not about rugby. I must endorse what my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) has said. I find the drafting of schedule 13 odd for a number of reasons, not least because I have looked at similar legislation dealing with audit.
  My understanding is that the Government are looking to extend the scope of auditing. It seems odd to me that the Arts Council of Wales and the Sports Council for
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  Wales should not be included, given the nature of those august bodies. It would be helpful to those bodies if they were subject to full audit, because their awards are the subject of controversy—not from an audit point of view, but from the point of view of those who do not receive awards. I am sure that many hon. Members are aware of the controversy surrounding the awards. It would be in the interests of those bodies if they fell within the schedule. For that reason, the Minister should look at the schedule from the point of view of those bodies.
  Mr. Swayne: I have essentially only one point to make—it is to distance support for the amendments from the case made by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). The amendments are purely about financial accountability, and I reject entirely the case made by the hon. Gentleman that this is meat and drink for the democratic process.
  It would have been no more appropriate to go further and take those bodies into the heart of the assembly, with Committees dishing out the funds for the arts and sport, than for a Committee of this House to undertake such a function. It is outrageous. [Interruption.] If the hon. Member for West Carmarthen and South Pembrokeshire (Mr. Ainger) wants me to give way, I shall happily do so, but he must not continue mumbling from a sedentary position. I cannot hear what he is saying.
  Putting such powers in the hands of politicians would be most dangerous. It is outrageous to suggest that the task could be properly done by politicians, who do not have the expertise for it. As for the suggestion by the hon. Member for Clwyd, West (Mr. Thomas) that this was merely an anomaly that the Government had inherited and with which they had to live, that is extraordinary. For a Government who are turning the constitution on its head to say that this is an anomaly is rather weak. They will have to do better than that.
  Mr. Hain: This is starting to be quite fun. What I expected to be an extremely technical debate has opened up into a wide-ranging one.
  I congratulate the hon. Member for Westmorland and Lonsdale (Mr. Collins) on a very effective contribution from the Front Bench. If he keeps that up, he will soon be challenging his hon. Friends for positions on the Front Bench. I seem to recall that, in a previous incarnation, he was a chief spin doctor for the Conservative party—indeed, that he might even have operated from Conservative central office. I congratulate him on bringing his talents to the Dispatch Box tonight. I also congratulate him on regarding me as likable and amiable, but I assure him that flattery will get him nowhere in this debate.
  I respond directly to the Conservative Members who intervened with great eloquence in the past few minutes—I am sure at very short notice—to make some arguments about the amendments. Obviously, the short notice has encouraged them to overlook a central fact about the debate, about which I am sure that, in retrospect, they will be very embarrassed.
  I wonder whether Conservative Members realised, as they went to great lengths to attack the Arts Council of Wales, question its credentials and wonder why the assembly was not abolishing it or taking control of it, that the chief executive of the Arts Council of Wales is

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  Mr. Emyr Jenkins, the father of Mrs. Hague, the wife of the leader of the Conservative party. In all humility, I think that the hon. Members for South Holland and The Deepings (Mr. Hayes), for Tewkesbury (Mr. Robertson) and for New Forest, West (Mr. Swayne) should have recognised that and perhaps taken his advice.
  9.30 pm
  Mr. Laurence Robertson rose
  Mr. Ancram rose
  Mr. Hain: I shall let the hon. Member for Tewkesbury intervene in a moment.
  The chief executive of the Arts Council of Wales would have been able to instruct the hon. Gentlemen on the details of its royal charter and on why the amendments are unnecessary.
  Mr. Ancram rose
  Mr. Hain: I know that the right hon. Gentleman is extremely sore about the fact that I ran out of time to give way to him last time, so I shall generously let him in this time.
  Mr. Ancram: I am grateful to the Minister for his unusual generosity in giving way in one of his winding-up speeches. His remarks about the father of the wife of the leader of the Conservative party came rather strangely from the Labour party, because I had understood that the Labour party did not believe in nepotism. We do not; does he?
  Mr. Hain: I am still trying to follow the relevance of that point, but I encourage the right hon. Gentleman to keep up that type of spirited intervention. I thought that nepotism was the product of the Conservative party over the years. While we are getting rid of the Conservative quango state, any trace of nepotism will be got rid of in this context as well.
  Mr. Owen Paterson rose
  Mr. Hain: I think I was due to give way to the hon. Member for Tewkesbury.
  Mr. Laurence Robertson: I remind the Minister that I described the arts council as an august body. I was suggesting that the measures contained in the amendments would add weight to those bodies and take nothing from them.
  Mr. Hain: I understand the point. I was merely suggesting to the hon. Gentleman that, had he had time to obtain detailed guidance during the few days in which I am sure that he has been preparing his speech, he would have had the chance to consult Mrs. Ffion Hague, who I suspect is an expert, not just on the Arts Council of Wales, but on all of Wales. Given that she occupied a very senior position in the private office of the Welsh Office and, as I understand it, did extremely well and landed up marrying the former Secretary of State, she could have
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  given the hon. Member for Tewkesbury a great deal of advice, after which he might have concluded that his intervention tonight was a little over-enthusiastic.
  I appreciate that these may have been probing amendments; perhaps they were probing speeches as well. [Interruption.] Ah, we are going to get a Division at last, are we? I relish the prospect of a Division. We have been champing at the bit for a Division all evening. It is a measure of the fact that the Conservative party has adopted such a low-key approach to the Bill. Indeed, at times tonight the hon. Member for Ribble Valley (Mr. Evans)—Ribble-on-Wales—actually seemed to praise elements of the Bill. I welcome his conversion. I assure the hon. Gentleman that the Welsh Office—and, I am sure, the Welsh assembly—will carefully consider resurrecting the Mumbles railway.
  These probing amendments seek to establish why the Arts Council of Wales and the Sports Council for Wales will apparently be subject only to examinations by the Auditor General for Wales of their use of resources. Some legitimate questions have been raised, and I shall attempt to answer them. The royal charters of the Arts Council of Wales and the Sports Council for Wales make no reference—far be it from me to suggest that this is an anomaly—to audit arrangements. The current position is that, by agreement as set out in their management statements, the Comptroller and Auditor General audits the councils' grant in aid accounts. In other words, there are no auditing provisions in the charters of those two councils. Perhaps the matter was overlooked. That is why, by agreement, those special auditing arrangements are set in train by the Comptroller and Auditor General.
  Under section 7 of the National Audit Act 1983, the Comptroller and Auditor General has powers to carry out examinations of the economy, efficiency and effectiveness of the councils' use of resources. Far from ducking the issue, we believe that we should be firmer in the context of this Bill about the auditing arrangements that govern those two important quangos. The Government intend to invite the two councils to propose amendments to their royal charters that would confer on the Auditor General for Wales the function of auditing their grant in aid accounts. Therefore, although the Government agree with the purpose of the amendments, we believe that it is unnecessary to change schedule 13 to achieve the desired outcome. The Government intend that the charters, rather than an order under clause 136, should provide for the audit arrangements.
  Mr. Rowlands: I am following the Minister as closely as I can. What if the two bodies concerned refuse to comply?
  Mr. Hain: I am sure that Her Majesty would not want to be put in that position. My hon. Friend made some very good points—I suspect at short notice, but he was no less eloquent for that. The Arts Council of Wales and the Sports Council for Wales are bodies created by charter or royal warrant. Therefore, the assembly would not have the power simply to amend their auditing arrangements and it would not be appropriate to do so in the Bill.
  Mr. Rowlands: If I may pursue that point, the assembly would not have the power to amend those arrangements, but Parliament does. I drew attention to that fact in correspondence and through interventions in much

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  earlier debates. I took advice from the Library, and it is clear that Parliament can overrule and change the arrangements. Is it a lack of political will, rather than a complicated technical exercise, that has led us to this impasse?
  Mr. Hain: We decided—I am sure that my hon. Friend would have done the same in our position—that this was the best way to approach the issue. It was not a question of a lack of political will; it was a question of convention and the right and proper way to proceed.
  Mr. Hanson: I have listened very carefully to the Minister's comments. Does he mean that the Conservatives in opposition have proposed an amendment that transfers powers from Her Majesty the Queen to the Welsh assembly?
  Mr. Hain: My hon. Friend raises a very interesting question. I am not sure that that is the Opposition's intention—perhaps it is one consequence of their amendments. We are behaving with extreme decorum and responsibility in this matter, and it is interesting to note that Conservative Members are not doing the same.
  Mr. Ancram: This is new Labour. This is modernisation.
  Mr. Hain: The right hon. Gentleman chides me for adopting new Labour practices. Apparently the Conservative party is considering changing not only its whole structure but possibly even its name. Plaid Cymru may do the same thing. Perhaps that is a consequence of the new inclusive politics that has been sparked off in the Welsh context.
  Mr. Paterson: Can the Minister explain where the decorum and responsibility are in the clause? It is in breach of the statement made by the Secretary of State to the House when he introduced the White Paper. He said:
  "The Assembly will be given sweeping powers to democratise and if necessary further restructure the quango state."—[Official Report, 25 July 1997; Vol. 298, c. 1124]
  He also said:
  "No longer will our key public services lie in the hands of political appointees operating in secret and accountable to no one in Wales."—[Official Report, 22 July 1997; Vol. 298, c. 755.]
  Can the Minister explain the anomaly?
  Mr. Hain: There is no anomaly. The Bill is full of decorum and responsibility. As the hon. Gentleman refers to the bonfire of the quangos, I shall try to answer him fully in the time available. You will tell me, Mr. Martin, whether I am in order.
  The five bodies that will be abolished spend £164 million. That is almost one fifth of the total sum spent by the bodies. If the assembly abolished all the bodies possible, there would be only 16 bodies left, compared to the 45 that exist now.
  Mr. Dominic Grieve: On a point of order, Mr. Martin. What has that to do with the Arts Council of Wales and the Sports Council for Wales?
  The First Deputy Chairman: The Minister is in order. If he were out of order, I would have told him so.
  Mr. Hain: I am grateful, Mr. Martin, and I will stay in order as best I can. I am sure that you will keep me in order if I stray. With all due humility, I was answering a question that had been put to me.
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  The assembly has the ability to leave only 16 quangos in existence, if it so chooses. That amounts to a bonfire of the quangos, which we lit with the Bill, and we have complied with our commitments in the White Paper.
  Why did we not abolish all the bodies? That brings me directly to the Arts Council of Wales and the Sports Council for Wales. They, together with three other bodies—the National Library of Wales, the National Museum of Wales and the Royal Commission on Ancient and Historical Monuments of Wales—are all bodies created by charter or royal warrant.
  Unless the Conservative Opposition have suddenly become a republican Opposition, surely they would agree with me that it is for Her Majesty to agree changes to those bodies. It is not appropriate to amend them by means of a Bill. I am surprised at the blatant irresponsibility of the Conservative Opposition in suggesting that.
  Mr. Wigley: If, as the Minister suggests, a voluntary change may be introduced by those bodies and taken through the appropriate channels with the palace, would it be the intention of the Secretary of State to use the provision under subsection (6) to amend schedule 13 to bring the two bodies into the schedule's purview?
  Mr. Hain: I do not think that that would be necessary. It will be possible to accomplish the necessary changes as set out in the provisions of the Bill for auditing arrangements and other matters.
  Mr. Letwin: May I intrude briefly on this amusing spectacle by asking for genuine clarification? Now that the Minister has admitted that the National Library of Wales, the National Museum of Wales and the Royal Commission on Ancient and Historical Monuments of Wales are also established by warrant or charter, can he explain why they fall not in part RI, but in part I of the schedule? Is it because they already have in their warrants or charters provisions for audit that are different from those relating to other bodies?
  Mr. Hain: I am grateful to the hon. Gentleman for raising that sensible and not excessively legalistic point. It is a straightforward and common-sense question. [Interruption.] The Whip says, "For a change." That is uncharitable.
  Why does the Bill provide for the other charter bodies—the national library, the national museum—to be audited by the Auditor General for Wales? The answer is that grant is paid to the national library and the national museum under section 9 of the Museums and Galleries Act 1992, which also provides for them to prepare accounts and for those accounts to be audited by the Comptroller and Auditor General. It is therefore possible for an order under clause 138 to transfer those functions to the Auditor General for Wales. They are thus in a different position.
  Mr. Rowlands: I am not a republican, but I am a parliamentarian. Will my hon. Friend confirm that Parliament can abolish such a charter?
  Mr. Hain: As I understand it—from my point of view, I am straying into uncharted territory constitutionally—

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  Parliament is sovereign in this country. Therefore, presumably, it could do what my hon. Friend suggests. However, by convention that has not happened to royal charters.
  Mr. Letwin rose
  Mr. Hain: Does the hon. Gentleman want to have a go at me again?
  Mr. Letwin: First, I thank the Minister for his lucid explanation. I congratulate him on having found an instance—I think uniquely in the Committee's examination of such, and I quote, "legalistic points"—in which the Government and their draftsmen have not made an error that they subsequently need to write to somebody about to correct.
  9.45 pm
  Mr. Hain: Touché. The hon. Gentleman makes his point with his customary elegance and legalistic wit.
  As for examinations of the use of resources by the councils are concerned—the Arts Council of Wales and the Sports Council for Wales—the Government propose that the Auditor General for Wales should have equivalent powers to those that are set out in the National Audit Act 1983. Clause 137 and schedule 13 provide for that.
  The national lottery accounts of the councils are audited by the Comptroller and Auditor General under section 35 of the National Lottery etc. Act 1993. The Government have no plans to change that. To make the most effective use of auditor resources, the Auditor General for Wales will be able to use staff of the National Audit Office under clause 92, so that, as now, one team of auditors could order both sets of accounts. In the light of that explanation, I invite the hon. Member for Westmorland and Lonsdale to withdraw the amendment.
  I wish to respond to some specific points which were raised by the hon. Member for Westmorland and Lonsdale. He said that the Government were somehow embarrassed about sport and the arts. I confess, as a Minister, to being embarrassed about the performance of Wales at Twickenham last Saturday. It was the first time that I had been to Twickenham since I was carried off the pitch in January 1970, in the context of an anti-apartheid demonstration against the all-white South African team. Judging by the performance of Wales, it might not be a good idea if I were to go back too soon to watch them play.
  The Government are not embarrassed about their commitment to sport, whether it be rugby, football or anything else. As a new Labour Government, through lottery and other provision we have committed ourselves to ensuring that we make Britain, and in our own context Wales, one of the best sporting nations in the world.
  I move on to the arts and the responsibilities of the Arts Council of Wales, and the need to ensure, as the Bill does in the provisions that we are applying, that the accounts are properly audited. It is interesting, given the development of arts in Wales, which the Government are encouraging, that we are seeing a new arts movement emerging in a new Wales. We value our past in terms of opera and other arts as we value present achievements in
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  opera, orchestra, choral music and male voice choirs, for example. I am the president of half a dozen male voice choirs in my constituency.
  The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths): Give us a song.
  Mr. Hain: I think that that would be even more horrific than my speeches in the Chamber.
  Mr. Evans: Impossible.
  Mr. Hain: We are seeing a new wave of pop music in Wales. It is partly because of the activities of the Arts Council of Wales in recent years that a new wave of popular music has come through such excellent institutions as the Pontardawe international music festival, which takes place in my constituency. It is supported by the Arts Council of Wales. We have seen that new wave of culture coming through Wales, and we are determined to encourage it. Given the Bill's provisions and much better auditing arrangements, that momentum can continue.
  Mr. Rowlands: Does my hon. Friend believe that an elected Welsh assembly would do anything less—indeed, it could possibly do a great deal more—to promote just such festivals as he describes? Is that not a case for greater democratic accountability?
  Mr. Hain: Indeed. I am grateful to my hon. Friend for making that point, because, in the context of arts provision and policy, one of the central objectives is that the assembly will enable us to involve all of Wales in influencing the overall policy for the arts and sport rather than having a limited group—under the Conservatives, some might have said an elite in Wales—influence its direction. We will have people from all over the country.
  I hope that we shall see in the assembly young people who will support some of the excellent new Welsh pop bands, such as Catatonia, the Manic Street Preachers, Super Furry Animals, and the Stereophonics. Indeed, I was delighted to congratulate the Stereophonics on receiving an award at the Brit awards the other week. I did not have a bucket of water poured over me; they were delighted to see me. They are part of the new wave of music that is putting Wales right at the top of the pop agenda and on the international stage. As my hon. Friend said, the Welsh assembly will give greater strength and recognition to the new wave of pop music, with Wales leading the world not just in a democratic transformation but in the transformation of our popular culture. I am sure that the Bill's provisions will encourage that process. The amendments that the Opposition are tabling so destructively will undermine the whole popular movement for music in Wales.
  The hon. Member for Westmorland and Lonsdale made a wide-ranging point, but I need to respond to it. He said that the Government were striking music, arts and sport—all of which are covered by the Sports Council for Wales and the Arts Council of Wales—from the national curriculum.
  Mr. Win Griffiths: Never.
  Mr. Hain: As my hon. Friend reminds us, that would never be possible under this Government. We are

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  reviewing the way in which the national curriculum is delivered in the classroom. We are saying that arts, sport and music must continue to be taught in primary and secondary schools. We have always valued the curriculum Cymraeg, the broader provision of education, and that is especially true of music, sport and the arts, where Wales prides itself on being ahead of England in the ability of our schoolchildren to perform in those areas.
  Mr. Öpik: I apologise for being absent briefly from the debate.
  Is the Minister seeking to help Wales to hit above its weight in the arts and sport, in the same way that Barnsley has scored an historic victory over Manchester United in the FA cup tonight?
  Mr. Hain: I am interested in that information, because, as well as being vice-president of Neath rugby club, I am a Chelsea fan. It is nice to hear that result, if the information is correct.
  In respect of arts policy and sports policy—in regulating the Sports Council for Wales and the Arts Council of Wales, overseeing their objectives and holding them to account—the assembly will ensure that Wales is put on the international stage. It will allow our sportsmen and women, our artists, pop musicians, male voice choirs, opera stars and the rest to have the backing of a national assembly for the first time, ensuring that their voices are heard across Europe and, indeed, the world.
  Mr. Livsey: Does the Minister agree that it is nothing short of a tragedy that, particularly in sport in Wales, we no longer have teachers who are thoroughly involved in getting on with the business of teaching youngsters sport? One of the consequences of that is, perhaps, less than good performances by some of our national teams.
  Mr. Hain: I very much agree with the hon. Gentleman. It is important to their development. Proper rugby coaching in schools for those children who want it, boys and girls, would help Welsh rugby. I should like to see much better provision for sport in schools. I am discussing with the Sports Council for Wales and the Cricket Council for Wales how we might take that forward, possibly in co-operation with the private sector, but I hasten to say that that is not a matter for debate this evening.
  We seek to lighten the burden on teachers of the over-restrictive and over-centrally directed imposition of the national curriculum, which makes it impossible for teachers to deliver on the core skills of numeracy and literacy in which Wales, as the rest of Britain, has fallen behind in recent years.
  We are seeking advice from the Curriculum and Assessment Authority for Wales on how to introduce a new curriculum which will protect traditional subjects, such as the arts, music and sport, but allow an iron focus on the essential core skills of literacy in English and Welsh, and numeracy, without which our children cannot achieve their full potential in school.
  Mr. Llew Smith: Does my hon. Friend accept that one of the best things that can happen to schools is for them to be able to build on the kind of services that are provided by peripatetic teachers? The fewer peripatetic teachers there are, the poorer the
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  standard of music will be. Does my hon. Friend accept that some schools now face difficult decisions because of the lack of cash for peripatetic teachers to ensure that we in Wales can build on what we are best at? Our schools have some of the best youth brass bands and orchestras in the United Kingdom, but they require cash.
  Mr. Hain: Peripatetic teachers are vital, whether in respect of brass bands or music generally, or of the arts, but particularly in respect of music. The same principle could be applied to sport and I agree that that needs cash. That is one of the many reasons why the Government have introduced an extra £50 million funding for education to go straight into schools budgets in local education authorities throughout Wales, including in my hon. Friend's constituency.
  I have in part responded to a point made by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), but I should just like to add to that before I conclude my remarks—much, I am sure, to the relief of the Committee. My hon. Friend asked why we were not subjecting the Arts Council of Wales and the Sports Council for Wales to the full rigours of accountability. We are doing that. They will be accountable to the National Assembly for Wales under the Bill. That will subject them to accountability by elected representatives from all over Britain.
  Under clause 29, we have made it clear that royal charter bodies can only gain functions; they cannot be taken away. For those reasons and all the others which I mentioned this evening, I urge the hon. Member for Westmorland and Lonsdale to withdraw the amendment. I am sure that the arts and sports policies in Wales will be all the better if that is done.
  Mr. Collins: We have had an extremely enjoyable debate. I particularly enjoyed the reference from the Minister, who will probably go down in history as the first Minister to have filibustered his own Bill, to the idea that the Conservative amendments would undermine the popular music movement across Wales. I know that the Conservative party is on the verge of once again becoming influential, but the idea that, throughout the Principality, electric guitars are being unplugged and drums thrown down as word of the amendments spreads across the land stretches credulity a little, even as far as the Minister is concerned.
  We heard speeches by Labour Back Benchers and from Plaid Cymru, and excellent speeches by my hon. Friends, all of which made the argument. I am delighted that the Minister said that the Government agree with the purpose of the amendments. As he has said that he intends to look at ways of implementing the purpose of the amendments, and despite his evident enthusiasm for a vote, which extended almost to the point of goading, we shall deny him the opportunity of a vote. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Schedule 13 agreed to.
  It being Ten o'clock, THE CHAIRMAN, pursuant to the Order [15 January] and the Resolution [this day], put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.
  Clauses 137 to 147 ordered to stand part of the Bill.
  It being after Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.
  To report progress and ask leave to sit again.—[Mr. Jamieson.]
  Committee report progress; to sit again tomorrow.

Postal Services (Liverpool)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]
10.1 pm
Maria Eagle: I am pleased to be able to deal with the issue of postal services in Liverpool at such a timely moment, as the decisions that will affect the quality of that service must shortly be made by the Post Office board under the overall policy direction of the Government.
I pay tribute to the men and women who work for the Post Office. May I narrow down my tribute and pay particular tribute to those who work for the Post Office in Liverpool and in the precincts of this House? I know from personal experience in both places how effectively they work, and that they often work under extreme pressure.
The Royal Mail prides itself on its ability to collect a letter anywhere in Britain and deliver it as quickly as possible anywhere else at a fixed price. If one purchases a first-class stamp, the letter is often delivered by the following day. That outstanding quality of service may be threatened in Liverpool by the Royal Mail's plans to remove the sorting of mail away from the city to Warrington.
That is part of the Royal Mail's £64 million investment programme to enable it to meet global and European challenges to its domestic markets. The investment is a welcome indication of the Government's commitment to ensuring that the Royal Mail in the public sector can compete with the best and face the challenges of the new millennium with cutting-edge technology, and with confidence that it can provide a top-quality service to its customers.
I am no Luddite, but I have a quarrel with one aspect of the strategy announced by the Royal Mail in June 1997, and that is what I wish to highlight in this debate. To do so, I must first outline the plan as it affects Liverpool.
In so far as it relates to the Royal Mail's north-west and north Wales region, the plan involves transferring processing from three mail centres, five outward vouching offices and three centres for bulk mail handling to new mail centres and a new regional distribution centre. The Royal Mail envisages a new Warrington mail centre replacing Crewe and Liverpool mail centres, a new Chester mail centre replacing the current Chester mail centre, five outward vouching offices in the Wirral and north Wales, and a new Crewe regional distribution centre replacing Brunswick Dock, Westhoughton and Lostock bulk handling centres.
However, ever since the announcement of those proposals, there has been a strong feeling in Liverpool that the Royal Mail is wrong to move more than 900 jobs to Warrington if they can be retained in Liverpool. I remind the House that Liverpool has an unemployment claimant count of 9.4 per cent., with male unemployment at 13.7 per cent.—one of the highest rates in the country.
The Government and the European Union recognise the relative deprivation. Liverpool is a European objective 1 area, which is a recognition of the fact that it is one of the poorest regions in Europe. The Government have also acknowledged the economic and social disadvantage that is clear for all to see in the city, and have granted Liverpool the status of an employment zone.

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My constituency benefits from Government funding for regeneration through two single regeneration budget partnerships at Speke-Garston and Netherley valley. Many other regeneration initiatives throughout Liverpool are backed with Government money. Only last week, the Government approved an estates renewal challenge fund application for £43.78 million to assist in the regeneration of the public sector housing stock in Speke-Garston.
Mr. Eddie O'Hara: Does my hon. Friend recall that, only two weeks ago, she and I were at Ford's factory in Halewood congratulating the workers on being awarded the contract for Jaguar car production, which carries with it £43 million-worth of Government investment? The factory is located between our constituencies. It is a tragedy that such a good news story for Merseyside has been cancelled out by the Post Office's plans for the sorting office.
Maria Eagle: My hon. Friend must be psychic, because I was just about to make that very point.
The Pinehurst estate in the north of Liverpool has also benefited from the estates renewal challenge funding that was announced last week. As my hon. Friend said, Ford's Halewood plant has received £43 million of assistance from the Department of Trade and Industry, and I should like to commend the Minister on his role in that. Many of my constituents work at Halewood, although the plant is in my hon. Friend's constituency. That assistance will enable Ford's decision to build the baby Jaguar on Merseyside to be realised. The Department has also been actively involved in promoting business on Merseyside in other areas. It puts its money where its mouth is, to the tune of millions of pounds.
The Government have also given £13 million of extra money to repair rundown schools in Liverpool. I could use the whole of my speech to give examples of similar Government initiatives. Liverpudlians applaud the Government's concentrated effort to tackle the legacy of unemployment and poverty that long-term decline and 18 years of Tory destruction have left us.
Why should a major publicly owned concern such as Royal Mail, which should be expected to take its social responsibilities seriously, so blithely counteract the Government's good work and threaten to remove 900 jobs at a stroke? It should not, but I accept that operational decisions such as where to site new mail centres should be made by the Royal Mail and the Post Office board and not by the Minister. His role is to set overall policy guidelines, and I know that he would not be swayed to intervene by the facts that I have mentioned alone, although I have no doubt that he is sympathetic to my point of view. However, it should interest him to know that the business planning, evaluation and comparisons of alternative options on which Royal Mail based its decisions were fundamentally and seriously flawed. He should want to put the matter right.
While the work force and local Members of Parliament have campaigned on this issue, it has emerged that there is indeed a site in Liverpool that is better than the Warrington site chosen by Royal Mail for the new mail centre. It is at Speke-Garston, on the old Northern airfield site, soon to be launched as the Estuary business park in my constituency.
Mrs. Louise Ellman: Does my hon. Friend agree that, as the independent consultants'
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report—which has now been published—shows that it is more cost-effective for Royal Mail to stay in Liverpool, it would be extremely serious if it took action that would result in the loss of 900 jobs in the most deprived city in the United Kingdom? That would mean a loss of £16 million a year from the local economy, which would affect the whole community.
Maria Eagle: I could not agree more with that.
As my hon. Friend has said, it is not a matter of conjecture that the decision is strange. Like many of my hon. Friends, I have had the benefit of seeing an analysis by the business consultants PA, carried out on a like-for-like basis and using the same evaluation and modelling techniques as Royal Mail to appraise options. PA has not sought to add factors that would make Speke look better than Warrington; its role has been purely to check the rigour of Royal Mail's own option appraisal. Had Royal Mail done a rigorous job itself, one would have expected PA's analysis to result in the same conclusions as those of Royal Mail.
PA, using the same modelling techniques as Royal Mail, produced a very different result when it analysed the various sites. It disagreed with some of Royal Mail's assumptions about travel times to the rail hub for outward mail, and I must say that I agree with its worries. It does not take 40 minutes to travel from Speke to the rail hub at Warrington, as Royal Mail assumed in its analysis. Moreover, although we are often told that the Warrington site is adjacent to the rail hub, it is actually three miles down a road that is unsuitable for heavy goods vehicles, and is often congested. "Adjacent" is therefore a somewhat misleading description, and certainly a relative term.
Furthermore, PA could not fathom Royal Mail's rationale for sending all the mail to Warrington to be sorted, and then sending it back to Liverpool to be delivered. That clearly would adversely affect transport costs and distribution time targets.
It is no small matter, either: 60 per cent. of the mail to be handled at the new centre—whether it is built at Warrington or at Speke—originates from Liverpool, and half that mail is then returned to Liverpool to be delivered there. Meanwhile, only 27 per cent. of the overall volume originates in Warrington. Speke has 14 per cent. more volume returning to it than it originates. Surely it is important to sort the mail closer to where it is posted and to be delivered, if possible, than to transport it to a site by a rail hub that is not needed and then return it to its original point. I for one fail to see how that can be efficient.
I have referred to a few of the detailed points in the analysis, but, as my hon. Friend the Minister will know, there are many more. Let me summarise the full findings of the PA report.
The report shows that a mail centre in Speke is operationally as viable as a Warrington centre; it shows that land is cheaper in Speke, and that there is room for expansion; it shows that a Speke mail centre is cheaper to operate than a Warrington mail centre; it shows that 60 per cent. of the total mail to be processed at the new centre originates from Liverpool, so mail arrival times must be better in Speke than they are in Warrington; it shows that Speke has 14 per cent. more volume returning to it than

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it originates; and it shows that a Warrington mail centre will increase travel and subsistence costs for Royal Mail by £3.6 million over three years.
Using Royal Mail's own modelling techniques and data, PA has shown that the Speke site is £3.7 million less expensive to run—on a non-reoccurring account cost basis—than the Warrington site, and worth £4 million more in net present value terms. The report is a devastatingly effective document, and I commend it to the Minister. It raises serious questions—which I hope he will address tonight—about the quality of the Royal Mail analysis in respect of other decisions, and its use of public money in implementing them.
The PA report was commissioned by the Communication Workers Union nationally, in response to the CWU Merseyside amalgamated branch's request for back-up. I commend that local branch. Those who see Liverpool as a place bypassed by the modern world of industrial partnership and stuck in the past of industrial relations might have predicted that, faced with the threat of 900 job losses, the local branch would have responded by downing tools and walking out. Instead, the branch has conducted itself in a most exemplary manner, and has shown itself to be a fine example of a modern trade union. It has taken its campaign to the people of Liverpool, the Royal Mail, hon. Members and the Government, but it has ensured that its members kept working, and has constructively looked for a viable, alternative plan.
The union backed its judgment by producing a devastatingly effective piece of business planning which the national union commissioned on its behalf. That was done despite the worry about the future which I know that those working at Copperas hill have felt for the past eight months.
The union's forward-looking and positive approach has not stopped there. Until the introduction of new technology, preferably at Speke, the union has agreed to change working arrangements to bring in 30,000 items of mail in the early afternoon to ensure that it can be dispatched to the rail hub at Warrington in time for next-day delivery. However, the local management has not implemented the change, and one wonders why not. The local branch of the union is working closely with management to improve overall performance, and it is currently working with Royal Mail industrial engineers to see how staff can best be utilised. Those are hardly the actions of a militant or obstructive union branch.
The results of the PA analysis justify the union's approach. As the Minister knows, I have been pressing for some time for assurances that the constructive and positive way in which the campaign has been conducted will be rewarded with proper consideration for the Speke option.
The Minister for Welfare Reform (Mr. Frank Field): My hon. Friend may find it helpful if I draw attention to the fact that, although usually in an Adjournment debate only the hon. Member initiating it
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and the Minister who will reply are present, there are 10 of us here with an interest in this matter. Royal Mail might like to take that into account.
Maria Eagle: I thank my right hon. Friend for that intervention.
Mr. Field: I am told that I cannot count.
Maria Eagle: My hon. Friend certainly counts. I had not noticed how many of my hon. Friends were behind me, but I notice that not many Opposition Members are here.
I have some questions for the Minister. Is he happy that Royal Mail is assessing the Speke option fairly, fully, and against consistent and rigorous criteria? If necessary, will he intervene to ensure that the Royal Mail decision is soundly based? What does he make of the fact that Royal Mail has been unable properly to assess net present values, and, in view of PA's findings, is he sure that the rest of Royal Mail's analysis is robust enough to be implemented?
As Royal Mail is using public resources for major investment, is the Minister confident that its decisions are based on proper business planning and financial competence? I understand that Royal Mail originally ruled out the Speke site without even visiting it. When does he expect Royal Mail to make a decision in respect of the Speke-Garston option? Is he content that, on the day that the union presented the PA report to Royal Mail, it called for final bids from seven tenderers to build the mail centre at Warrington that it had originally planned? Does that show that Royal Mail has made up its mind, and has no intention of changing its plans?
Although I accept that Royal Mail will not enter into binding contractual arrangements in respect of Warrington before returning to the union, does the Minister think that it is sensible for Royal Mail to expect its tenderers to go to the expense of submitting final bids for a particular site before a decision has been made to build the mail centre there? On the basis of his knowledge and the PA report, does he think that option A, which is to build a mail centre at Speke-Garston, should be followed?
Finally, I invite the Minister to visit the Estuary business park in the near future when his parliamentary business is not quite as exhaustingly pressing as it was on the last occasion. Such a visit will enable him to see for himself the advantages of siting the mail centre there.
10.18 pm
The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I congratulate my hon. Friend the Member for Liverpool, Garston (Maria Eagle) on securing this debate on postal services in Liverpool. I should like to declare an interest. I am married to an Evertonian, and my wife's family all live and work in Liverpool. They are probably more interested in how I respond to the debate than are my hon. Friends. I shall pick carefully through the issues that have been raised, because I am keen to maintain a safe and enjoyable family weekend for the first time in many months.
When I have time to do so, I should be more than happy to visit the constituency of my hon. Friend the Member for Garston. I have already visited her constituency on at least two occasions since becoming a Minister, and I look

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forward to visiting it again. As my hon. Friend the Member for Knowsley, South (Mr. O'Hara) said, I was there on the day that the massive new investment at Halewood was announced. I hope that I have time in my reply to give the House details of other investments that have been made and to advise my hon. Friend the Member for Garston of other investments that will be made, with the Government's support, in Merseyside.
My hon. Friend the Member for Garston, the Minister for Welfare Reform, my right hon. Friend the Member for Birkenhead (Mr. Field), and my hon. Friends the Members for Liverpool, Riverside (Mrs. Ellman), for Liverpool, West Derby (Mr. Wareing) and for Liverpool, Wavertree (Jane Kennedy) have discussed those matters with me, and I acknowledge the close interest that they have had in the subject since last June. They have maintained—with the Under-Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), the Parliamentary Secretary, Office of Public Service, my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) and my hon. Friends the Members for Knowsley, South and for St. Helens, North (Mr. Watts), and with Liverpool city council and the Communication Workers Union—their involvement in the matter, and have assiduously raised their concerns with me and my Department.
Before responding to the issues of postal services in Liverpool that have been raised in this debate, it is important that the House should understand the matter's broader context. Postal services at both national and local level—in the form of letters delivered to the door or services provided through the nationwide network of post offices—are an important element, on either a personal or a business level, in everyone's daily life.
It is therefore only natural that plans for change might cause concern. When those plans centre on proposals for major investment in automation and introduction of new technology, there is understandable concern, as in Liverpool, about the loss of local employment, local identity and the quality of service that is so closely tied to local postmen or postwomen.
My Department has had discussions with the Post Office on Royal Mail's proposals because of such concerns. Last summer, I met the CWU and Liverpool Members, to hear their views and to discuss their concerns.
At my insistence, Royal Mail subsequently opened discussions on its strategic investment programme with the CWU, and offered to provide the CWU with data on its preferred north Wales and north-west scheme, and with data on other options that it had considered but had rejected on operational and financial grounds. Royal Mail agreed also not to make irrevocable purchase commitments for new sites, and to consider any alternative proposal made by the union within three months. At the union's request, the Post Office subsequently extended the time limit to four months.
Royal Mail's primary duty is to develop and maintain an efficient and competitive postal system on both a national and a regional level. Its overall investment programme is designed further to improve its standards of service, which are already among the highest in the world. That programme accords also with a policy advocated, for example, by the Communication Workers Union in a
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consultative document that it issued last autumn, which calls for a substantial increase in the Post Office's capital investment programme.
Royal Mail's planned £64 million investment in the north Wales and north-west region, which was announced last June, is part of its national programme of progressively developing a network of automated processing centres and distribution centres. Those are equipped with the new technology necessary to handle more speedily and accurately the increasing volumes of mail, to improve the quality of service for customers and to maintain its competitive position in the communications market.
An efficient and modern postal infrastructure is obviously very important in attracting new investment and jobs to the north-west and in maximising the potential of the major regeneration projects that are now under way in the region. Unfortunately, Royal Mail's proposals will lead to a net loss of 400 full-time equivalent jobs in the region—comprising 800 from Liverpool and 300 from the Bolton area—which is offset by about 700 jobs at new automated processing centre and regional distribution centre sites.
Royal Mail envisages that a substantial number of Liverpool staff would transfer jobs if a site were eventually agreed at Warrington.
Mrs. Ellman: Does my hon. Friend accept that, given the economic and social circumstances in Liverpool, it will be very difficult for Liverpool workers to travel to Warrington? This is because there is a far lower than average level of car ownership in Liverpool, many jobs are part-time, and the shift times, particularly for women, mean that it would be extremely difficult for the distances involved to be overcome.
Mr. McCartney: I recognise my hon. Friend's argument. Indeed, it has been put to me many times and was deployed as part of the socio-economic case for the site to be in Speke-Garston instead of Warrington. Over the next few days, many people will no doubt put it again to the Post Office to illustrate what impact the people of Liverpool believe a decision to locate the operation at Warrington will have. I have previously assured my hon. Friend the Member for Garston, and did so again today, that the points she has made in relation to the potential cost of relocation have been delivered with some force to the Post Office.
I said at the outset that there have been recent successes in attracting new jobs to Merseyside. In addition to the new Jaguar X400 line at Halewood, there will be 250 jobs at QVC at Knowsley, and a £40 million investment by Medeva is expected to create 100 new jobs in the important pharmaceutical and drugs industry, which has also received substantial additional investment from Glaxo and Eli Lilley.
The north-west as a whole is now the top UK region for attracting call centres, which is a rapidly growing sector. Of course, a few years ago, Merseyside won additional postal jobs, from my constituency and other parts of the north-west, in the restructuring of Parcelforce operations.
My hon. Friend the Member for Garston has highlighted the substantial level of Government funding being injected into Liverpool in recognition of its

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objective 1 and employment zone status. This is part of my work at the Department, and we have made substantial efforts to ensure that our strategy in relation to objective 1 status and the attraction of inward investment has been successful since we came into office. I believe that we will continue to be successful in attracting new investment and job opportunities to Merseyside, including Liverpool.
While the proposals clearly have negative features in employment terms for Liverpool, and also for the Lostock and Westhoughton areas of Bolton, it is important to recognise the scale of Royal Mail's long-term commitment to the north-west and north Wales region, whatever the final decision may be. What is clear is that, without any major investment in automation to maintain Royal Mail's competitive position, regionally and nationally, there would over time be a progressively much greater loss of postal jobs in the region than is currently envisaged.
In agreeing to defer any irrevocable commitments to a Warrington site, and to consider seriously any alternative options put forward, Royal Mail did, however, make it clear to the union that contingency planning for its own preferred option would continue while alternative options were being explored. My hon. Friend asked what was happening in relation to the Warrington site, and that is my response to her.
It was made absolutely clear from the outset to the union and others that while alternatives were being considered, there would be no decision to make binding commitments to the Warrington site, but, at the same time, contingency planning had to continue. That is precisely what has happened.
Maria Eagle: Will the Minister give way?
Mr. McCartney: Not at the moment, as I have only three minutes left to finish my remarks.
I know that Royal Mail has been studying carefully the alternative proposals set out in the report. I am arranging an early meeting with the chief executive of the Post Office to discuss the results of its analysis and studies of the alternative Speke-Garston proposal. Decisions relating to the operational arrangements for the postal businesses are and must remain a responsibility of the Post Office board and management.
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My locus in what is essentially a management issue is limited to satisfying myself that, in the case of the north-west and Liverpool operations, the alternative options have been fully and fairly considered and judged on consistent and rigorous criteria on a like-for-like basis. When I have done this, it will then be for the Post Office to reach its final commercial decision, which it will discuss with the CWU as soon as it is in a position to do so. Following that, it will meet Members of Parliament for the area to give them its decision on this potential new investment.
Maria Eagle: Does the Minister consider that inviting final tenders to build a plant is contingency planning?
Mr. McCartney: I cannot be any more specific or open with my hon. Friend than I have been. The Post Office gave the commitments in good faith; I intervened personally to ensure that an alternative proposal was made. Having exerted my influence in that manner, there was no way I would countenance any undermining of the professional viability of the proposal. What has happened is a matter of due process. It has nothing to do with irrevocable decisions that would render that process null and void.
That was not the reason I made the decision. If I had not felt that the process of having a potential alternative was right, I would have been open, frank and honest from the outset, last summer, in saying: "This is the site; go ahead with it." I hope that that assurance is of assistance to my colleagues.
Last summer, the people of Liverpool were worried that the Liverpool postmark was going to be lost. I took representations on that, and I can confirm that Liverpool's postmark will continue in use indefinitely. The Post Office has offered a commitment in that respect.
There has been unhelpful press speculation during the past few days to the effect that Girobank is to announce a complete withdrawal from its operations on Merseyside. That is completely speculative. It would be wrong at this stage to assume that the review will result in job losses. A refurbishing—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-nine minutes to Eleven o'clock.

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  A49
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  Kyoto Protocol
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  Millennium Dome
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  Derelict Land Grant
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  Channel Tunnel Rail Link
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  Code of Practice on Conservation, Access and Recreation
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  National Air Traffic Services
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  Japanese Cars
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  Conferences
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TREASURY
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HOME DEPARTMENT
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FOREIGN AND COMMONWEALTH AFFAIRS
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NORTHERN IRELAND
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TRADE AND INDUSTRY
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INTERNATIONAL DEVELOPMENT
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DEFENCE
  British Army of the Rhine
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HEALTH
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  Tinnitus
  Tinnitus
  Consultant Episode Costs
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  Trust and Authority Boards
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  Abortion
  Abortion
  Suicides
  Suicides
  Mental Health
  Mental Health
SCOTLAND
  Conferences
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  Fishing Vessels
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  Scottish Parliament
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  Funicular Railway, CairnGorm
  Unpasteurised Milk
  Unpasteurised Milk
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  Scheduled Offences
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  Digital Broadcasting
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  Parliamentary Answers
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  Higher Education
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AGRICULTURE, FISHERIES AND FOOD
  Milk Products
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  Food Standards Agency
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  Cattle Passport Centre
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  Conferences
  Conferences
  Absenteeism
  Absenteeism
WALES
  Conferences
  Conferences
  Ministerial Visits
  Ministerial Visits
  Hedges and Trees
  Hedges and Trees
  Development Board for Rural Wales
  Development Board for Rural Wales
CULTURE, MEDIA AND SPORT
  Overseas Visits
  Overseas Visits
  Ministerial Visits
  Ministerial Visits
  USA Visit
  USA Visit
  Ministerial Travel
  Ministerial Travel
  Conferences
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EDUCATION AND EMPLOYMENT
  Lifelong Learning
  Lifelong Learning
  Education Spending
  Education Spending
  Jobseekers
  Jobseekers
  Careers Service
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  Special Educational Needs
  Special Educational Needs
  New Deal
  New Deal
  Further Education
  Further Education
  Unemployment (Exeter)
  Unemployment (Exeter)
  University Applications
  University Applications
  Long-term Unemployed
  Long-term Unemployed
  Environmental Task Force
  Environmental Task Force
  PE (National Curriculum)
  PE (National Curriculum)
  Inspectors
  Inspectors
  Iraqi Students
  Iraqi Students
  British Sign Language
  British Sign Language
  Modern Apprenticeships
  Modern Apprenticeships
  Class Sizes
  Class Sizes
  Departmental Expenditure (Entertainment and Travel)
  Departmental Expenditure (Entertainment and Travel)
  Disruptive Pupils
  Disruptive Pupils
  Teacher Training
  Teacher Training
  Hairdressers (Training)
  Hairdressers (Training)
SOCIAL SECURITY
  Pensions
  Pensions
  Correspondence
  Correspondence
  Television Advertising
  Television Advertising
  Vaccine Damage Payment Scheme
  Vaccine Damage Payment Scheme
  Lone Parents
  Lone Parents
  Benefit Integrity Project
  Benefit Integrity Project
  Child Support
  Child Support

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

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 Paris on the 26th and 27th February 1998, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Museums and Arts Centres: Funding
2.37 p.m.
The Earl of Clancartyasked Her Majesty's Government:
What is their response to the announcements that the funding of the Buckinghamshire County Museum, Aylesbury, is to be reduced by about one-third, and that the community arts centres in Buckinghamshire are to be closed; and whether they will protect local authority museums and other cultural facilities from cuts in local authority funding.
Lord McIntosh of Haringey: My Lords, we would like to see the best possible museum services provided everywhere. However, local authorities are not required by statute to fund museum services. It is therefore not for government to tell elected local representatives how to take detailed local decisions. Buckinghamshire County Council's spending priorities are a matter for it. Government funding of local authorities under the system of standard spending assessments is based on what each authority needs to spend to be able to give a standard level of service. This is calculated using demographic, geographical and other factors which have a bearing on revenue expenditure, and these are applied equally to all authorities.
The Earl of Clancarty: My Lords, I thank the Minister for that reply. Does he not agree that it is absurd that a museum which yesterday was nominated for the 1998 European Museum of the Year award is being forced to introduce admission charges from 1st April and is losing six posts, including a dynamic director who, according to the Bucks Herald, is sacking himself? What are the Government going to do about it?
Lord McIntosh of Haringey: My Lords, it is clear from my first Answer that I agree with the noble Earl that this is very sad. I am happy to add tribute to the Buckinghamshire County Museum, which has not only been nominated for the 1998 European Museum of the
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Year award but actually won the 1996 Museum of the Year award. But it is, I am sorry to say, a matter for Buckinghamshire County Council.
Lord Waddington: My Lords, will the Minister advise local museums minded to lend works of art to the noble and learned Lord the Lord Chancellor that rumour has it that his apartments are already becoming over full and that the time is already too late to hang any more pictures on the new wallpaper?
Lord McIntosh of Haringey: My Lords, I think that is a deplorable question as well as an entirely irrelevant one.
Lord Jenkins of Putney: My Lords, will my noble friend draw the subject of this Question to the notice of our right honourable friend the Secretary of State for Culture, Media and Sport and ask him to investigate the cause of this regrettable development?
Lord McIntosh of Haringey: My Lords, I think my noble friend is coming back to the Question on the Order Paper, which concerns Buckinghamshire—at least I hope so. No, I do not think I will draw my right honourable friend's attention to it. It is a matter for Buckinghamshire County Council.
Baroness Brigstocke: My Lords, does the Minister agree that museums and galleries have a most valuable role to play in improving the educational standards of this country? I think particularly of the Aylesbury museum, which has a spectacular exhibition of Roald Dahl. I cannot think of a better way for young children to experience the excitement of reading Charlie and the Chocolate Factory and Matilda, not to mention The Giant Peach. This is an enormously important aspect of museums. I would love to hear what the Minister has to say about that.
Lord McIntosh of Haringey: My Lords, the Minister entirely agrees with what the noble Baroness said. I am a product of the Buckinghamshire state education system myself. I do not remember so much of the museums as I was educated in High Wycombe, but I certainly benefited from many of that authority's activities, notably in the visual and film arts. I also pay tribute to the Roald Dahl part of the museum, which I understand is a splendid success. But it is still a matter for Buckinghamshire County Council.
Lady Saltoun of Abernethy: My Lords, can there be any sensible objection to museums with spare works of art hidden away in the cellars because they have not room to exhibit them lending those works of art to other museums or places where they can be seen by the public?
Lord McIntosh of Haringey: My Lords, I think the noble Lady's question is wide of the Question on

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the Order Paper, as was the question of the noble Lord, Lord Waddington, although I sympathise very much with what she says.
Lord Strabolgi: My Lords, in view of what my noble friend said, could there not be still a statutory requirement for local authorities to have a cultural policy? Many years ago I seem to remember that there was something about a penny on the rate to be spent on the arts. What has happened to that?
Lord McIntosh of Haringey: My Lords, I believe that the analogy to the point my noble friend makes is the statutory requirement on local authorities to provide a library service. That certainly has considerable value even though it does not enable central government to interfere in the details of the way in which that service is provided. To widen it in the way that my noble friend suggests may be attractive, but it would increase central intervention in local government autonomy.
Lord Skidelsky: My Lords, does the Minister agree that the future of county museums and arts centres in Buckinghamshire and in other places would be much more secure if the Government were not determined to channel £1.2 billion of National Lottery money into their new good cause, large parts of which ought to be financed by taxes which they dare not raise?
Lord McIntosh of Haringey: No, my Lords, there is no connection between the division of lottery money and the expenditure of local authorities. As the noble Lord well knows, local authority expenditure in total is allowed to increase in advance of inflation next year. The amount of money from the Museums and Galleries Commission for local authority museums and for smaller museums generally has been maintained for next year.
Lord Monkswell: My Lords, is the Minister aware that the whole House will be very glad that the central government revenue support grant to local authorities will be based on equality and fairness in total contradiction to the way in which the previous government gave enormous support totally unfairly to local authorities such as Westminster and Wandsworth? What plans do the Government have to publicise the fact that they are fair and that the previous regime was totally unfair?
Lord McIntosh of Haringey: My Lords, I believe that I had better stick to my rule of not answering questions which are wide of the Question on the Order Paper.
Lord Stoddart of Swindon: My Lords, does my noble friend agree that the noble Lord, Lord Monskwell, is right to this extent: that the sooner local authorities are uncapped and allowed to spend and raise money locally so that local people can have their local services,
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including museums and art galleries, the better? Would not that be a good thing to do and do the Government have that in mind?
Lord McIntosh of Haringey: My Lords, no, I do not believe that that is the case. There is still capping which is being used with considerable discretion this year. Buckinghamshire County Council spent a very large part of its reserves last year—being the last Conservative county council in England—and is now having to pay the price of having reduced reserves.

MoD: Disposal of Redundant Sites
2.46 p.m.
Lord Steel of Aikwoodasked Her Majesty's Government:
Whether they will co-ordinate the policies of the Treasury, the Department of the Environment, Transport and the Regions and the Ministry of Defence to change the present policy whereby the Ministry of Defence in disposing of urban properties is required to seek the highest market price, thus enabling supermarkets, office blocks and hotel developments to outbid potential housing developments on brownfield sites.
Lord Hoyle: My Lords, we are all aware of the potential for the use of redundant MoD sites to provide housing. The MoD is closely involved in a research project with the Department of the Environment. Transport and the Regions, which includes consideration of the issues raised by the noble Lord. Ultimately, however, it is for the planning process to determine the alternative use to which such sites are put.
Lord Steel of Aikwood: My Lords, I thank the Minister for his reply. He will appreciate that this Question was tabled before the statement by the Deputy Prime Minister in the other place. which has been widely welcomed. Since it is now the determination of the Government to secure more housing on urban land and less in the countryside, surely it would make sense for the Treasury to review its policy requiring the highest possible price from the MoD regardless of other circumstances? Does the Minister agree that when land is already held by the state housing should he the priority for it?
Lord Hoyle: My Lords, there is co-operation between government departments. as I have said, at official and ministerial level. In disposing of surplus property the Ministry of Defence seeks to work closely with the local authorities and regional government offices to try to accommodate the local plan itself as far as possible. As regards the Treasury rules at the moment, they allow each case of disposal to be considered on its merits. However, the issue will be examined again by the DETR research project.
Lord Dean of Beswick: My Lords, is the Minister aware that there is a precedent for a government to give

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priority to local authorities to purchase some of the properties which have been government-owned? For example, under that policy Manchester purchased a large disused armaments factory and turned it into a very successful building components factory. Can the Minister give an undertaking that he will look into examples of that kind in order to try to carry out part of the policy enunciated by the noble Lord, Lord Steel?
Lord Hoyle: My Lords, I agree with my noble friend when he refers to what occurred in Manchester. I can assure him that part of the review that is being considered will look at the best way forward. As I say, in the meantime we try in the MoD to work very closely with local and regional authorities in order, wherever possible, to meet the demands of the local population.
Lord Marlesford: My Lords, is the Minister aware that there has been a number of instances where the Ministry of Defence has been remarkably inept at disposing of land? I give one example of RAF Bentwaters in Suffolk, where two false attempts were made to sell property, but in each case the person with whom the deal was agreed did not have the money? Is not the real answer to the point raised by the noble Lord, Lord Steel, for the Ministry of Defence, once it has decided that it does not need public property, to transfer it to the Department of the Environment, Transport and the Regions which, in disposing of it, could take into account the wider requirements of public policy, particularly that of the environment?
Lord Hoyle: My Lords, those matters will be considered in the review. We are well aware of the need to use brownfield sites wherever possible for housing development, as was discussed the other day in your Lordships' House. It is estimated that there are enough brownfield sites in MoD possession which may be disposed of to provide 26,000 houses. It is important that such points are borne in mind. As I have said, we are awaiting the results of the review.
Lord Burnham: My Lords, I understand that estate agents handling MoD redundant property are not allowed to give any indication of the price. Will the Government review that situation?
Lord Hoyle: My Lords, again I am sure that that point will be considered by the review. We want to see the best use being made of MoD land, taking into account the needs of the local authority and the content of the local plan.

London Underground: Investment Policy
2.50 p.m.
Lord Brabazon of Taraasked Her Majesty's Government:
What plans they have for investment in the London Underground.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, we are in the final phase of developing proposals for a public private partnership to provide the Underground with the funding it needs to increase investment and modernise the network. We shall shortly be in a position to make an announcement.
Lord Brabazon of Tara: My Lords, I am grateful to the Minister for that Answer, but is it not the case that the need for investment in the Underground is urgent and was stated as such by the Labour Party, both before and after the last election, yet 10 months since the Government took office we have still not heard anything? Is it not also the case that everyone in Whitehall is running round and round trying to find a new word for "privatisation" which will not offend either the Deputy Prime Minister or Mr. Jimmy Knapp? Can the Minister give me an assurance that any proposals coming forward will not result in an alteration of the definition of what is "public expenditure" or "public sector borrowing"?
Baroness Hayman: My Lords, the issue is urgent—and it is the more urgent and deeper-rooted because of the number of years of under-investment in London Underground and the horrendous scale of backlog that we inherited. This is a complex issue because we ruled out the crude and wholesale privatisation suggested by the party opposite. That means that we have to consider very carefully the options by which we can maintain the public accountability of the Underground while harnessing private finance and skills, and build on the Underground's public service record. That is what we are seeking to do. As I said earlier, we hope to make an announcement very soon.
Lord Marsh: My Lords, does the Minister agree that the history of public/private partnerships in organisations and undertakings as large and as complex as London Underground has not been totally happy, and that the weakness usually is that wherever the Government become involved in such an undertaking or joint venture, historically the continuity of the investment programme has been lost because all governments always change investment programmes? Is there any likelihood that the Government might rethink the possibility of privatisation?
Baroness Hayman: My Lords, the simple answer to the noble Lord's second question is "no". However, I take the noble Lord's point that some of the private finance deals that the House has discussed only recently have not been the happiest of examples. That is another reason why we are looking carefully, with our advisers,

681
Price Waterhouse, at the different ways in which such a partnership for London Underground could ensure continuity of investment.
Lord Gisborough: My Lords, can the Minister say why privatisation was ruled out, out of hand and without consideration, and why it could not be given equal consideration with other solutions?
Baroness Hayman: My Lords, it was ruled out because we did not believe that it would give the guarantees about service and safety that we considered essential to run an Underground system safely and well in our capital city. We thought that it reflected more a dogmatic commitment to privatisation rather than a rational analysis of the problems of the Underground and a flexible and pragmatic approach to meeting them.
Lord Ezra: My Lords, on the question of continuity, does the Minister recall that the previous government at one stage agreed to meet the reasonable requirement of the Underground for increased investment, but that within months and in a subsequent Budget that was withdrawn? Can the Minister give us an absolute assurance that such a situation will not arise again? If there is likely to be any further delay in devising a public/private strategy for raising the additional investment, could the Government not provide at least a bridging loan so that the work can start?
Baroness Hayman: My Lords, as I said earlier. I hope that we shall be able to make an announcement soon. I take the noble Lord's point both about the history of this matter and about the urgent need for investment. As part of our work to develop a PPP, we are considering ways of increasing investment in the Underground in the short term, as well as developing a solution which will quickly eliminate the Underground's investment backlog.
Lord Evans of Parkside: My Lords, if by any chance any members of Her Majesty's Government are still harbouring any thoughts of privatisation along the lines suggested by the Conservative Party, will my noble friend invite them to study what happened to British Rail and the absolute disaster that that privatisation has been for the nation?
Baroness Hayman: My Lords, I encourage all noble Lords to attend, and perhaps participate in, our debate later today on the state of the railways.
The Earl of Lauderdale: My Lords, has the noble Baroness any reason to say that there will be a decision "soon"? I understood that it would be "very soon". Which is it, "soon" or "very soon", and when is either of them?
Baroness Hayman: My Lords, I am afraid that I do not have my Civil Service lexicon with me which explains the difference between "soon" and "very soon",
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but I hope that noble Lords will not feel disappointed at the length of time that it takes to make an announcement.
Earl Russell: My Lords, can the Minister say what advice the Government have received from London Underground about water penetration into underground tunnels; what plans the Government have for investment to meet that danger, and what estimates they have formed of the likely cost should they discover, to their great surprise, that they have left the investment too late?
Baroness Hayman: My Lords, I do not have the detailed information that the noble Earl requests, but I shall reply to him by letter and would be pleased to answer such a Question if he were to put one on the Order Paper.

Ministerial Workloads
2.57 p.m.
Lord Geddesasked Her Majesty's Government:
When and how ministerial workloads allow Ministers time to consider the full implications of their decisions.
Lord McIntosh of Haringey: My Lords, the noble Lord draws attention to a problem that we all have, whether in business or in public life and some of us in our private lives. However, Ministers have the support of the Cabinet system, Cabinet committees, department ministerial teams, a highly professional Civil Service and political advisers in considering the decisions which they have to take. We are prepared to be judged on the outcome.
Lord Geddes: My Lords, I thank the noble Lord for that Answer. If I may, I shall leave the raising of specific examples to other noble Lords. More generally, will the Minister comment on the widely held view that because civil servants keep their Ministers' diaries so full, government decisions seem increasingly to be either in the hands of those same civil servants or to be put out to formal consultative reviews, of which I am advised that over 140 are extant?
Lord McIntosh of Haringey: My Lords, Ministers' diaries are, always have been, and always will be a matter of creative tension between Ministers and their private offices. I do not accept the thrust of the noble Lord's separate question. The reviews that we are undertaking, many of which have reached proper conclusions, are helpful to Ministers in taking a long-term view on the decisions that they have to take. Apart from anything else, they involve very many qualified outside people in that decision-making process.
Lord Stoddart of Swindon: My Lords, does not my noble friend feel that the noble Lord, Lord Geddes, and perhaps his colleagues, have a bit of a cheek in asking this Question, bearing in mind the spate—indeed, the

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huge flood—of ill-considered legislation (often having to be repealed) which came from the party opposite during its 18 years in government, and which was criticised in this House not only by myself, but by many other noble Lords, including many on the Conservative Benches? Can my noble friend give an assurance that there will be no repetition of such a flood of ill-considered legislation from this Government?
Lord McIntosh of Haringey: My Lords, I would love to be able to give that assurance but my noble friend is aware how difficult it is. The Government have been congratulated by the other Benches on the quality of some of the legislation that has been brought forward. I refer specifically to the noble Lord, Lord Lester, and his congratulations on the Human Rights Bill and the noble Lord, Lord Henderson of Brompton, and his congratulations on the drafting of the Crime and Disorder Bill. There are many other examples. I remind noble Lords that we set ourselves very much higher standards for legislation than most other countries. We try to do in legislation what many other democratic countries do through ministerial decree.
Lord Campbell of Croy: My Lords, should not Ministers have used the time available to them when in opposition fully to consider these implications, as they might then have been able to avoid some of the recent U-turns, including the one reported in today's press, released through an unattributable source, about the reimbursement of single mothers for the losses that they are likely to sustain under the Social Security Bill?
Lord McIntosh of Haringey: My Lords, all of us who have the good fortune to be members of the Labour Party and take part in this Government know that before the election a very considerable amount of valuable work was devoted to policy making. That is reflected in the speed with which we have been able to put together an effective legislative programme. I totally reject the suggestion of the noble Lord that there has been a significant number of U-turns, as he describes them.
Lord Bruce of Donington: My Lords, I agree with my noble friend that the results of the 133 reviews and task forces who are to report by 1998 will undoubtedly involve a great deal of ministerial attention, but does he agree that the spate of European legislation coming into this country, which in many cases goes on to the statute hook without even a senior civil servant seeing it, is itself an indication that Ministers, whatever their desires—I understand the pressures—simply have no time to read most of the important papers that come from the European Commission? In justification of that we need only look at the quality of the trash that comes before us to realise that the Government cannot possibly be associated with it.
Lord McIntosh of Haringey: My Lords, my noble friend pursues a familiar train of argument. There is a considerable amount of European legislation to be considered. In turn that places a burden on Ministers and
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the Civil Service. But many of the subjects on which the European Union finds it necessary to legislate are matters on which we would ourselves be obliged to legislate even if we were not members of the Union. My noble friend's question gives me the opportunity to pay tribute to the valuable work of the European Communities Committee and its sub-committees of your Lordships' House in drawing the attention of this House and Parliament to the more controversial matters.
Lord Callaghan of Cardiff: My Lords, is my noble friend aware of one reply given by the noble and learned Lord, Lord Hailsham, to the reproachful looks of a private secretary when he brought hack his ministerial box unopened and unexamined after a weekend? When the private secretary asked the noble and learned Lord what he had done during the weekend his reply was, "Better fresh than briefed, dear boy".
Baroness Blatch: My Lords, what can the noble Lord say about education Ministers who today found time to hold a ritzy and very glitzy presentation, with musical accompaniment, to launch three policy documents on lifelong learning, the response to the Dearing Report and the response to the Kennedy Report? The reports and the comprehensive pack were made available to the press. I await my copy. What happened to the promise that when those reports were ready they would be brought before Parliament?
Lord McIntosh of Haringey: My Lords, it sounds as if my right honourable and honourable friends in the Department for Education and Employment are doing a very proper job of presenting the results of their considerations, and those of their advisers, to the public generally.
Lord Geddes: My Lords, I am grateful to the Minister for the courtesy with which he replied to my original Question. I also thank him for his remarks about the work of the European Communities Committee. To what extent are the Government bound by the findings of formal reviews; or is my general perception correct that they are merely time exercises in order to give the Government an opportunity to think about the issues in hand?
Lord McIntosh of Haringey: My Lords, neither. It is very rare for the Government to be hound by the results of reviews. On the other hand, it is very rare for reviews to be simply time exercises. They form the proper degree of consultation that is a necessary part of open government and are a feature of any government, not just of this party.
The Countess of Mar: My Lords, is my understanding correct that every day Ministers have a huge number of pieces of paper to sign, either letters to the public or Answers to Written Questions? As to the latter, perhaps I bear some guilt. Does the Minister agree that Ministers do not have the time to read every single piece of paper that passes over their desks? If that is so, how can they be sure that the answers that are provided

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respond to the letters that they have received, particularly from members of the public, and that responses provide the correct information?
Lord McIntosh of Haringey: My Lords, no doubt my noble friends Lord Donoghue and Lord Gilbert will take note of what the noble Countess has just said about her own Questions. No one has more than 24 hours in the day. From my experience in a number of departments, although not as a Minister in those departments, I am convinced that Ministers pay a great deal of attention to letters, particularly from Members of Parliament and Members of this House. How they can read every single letter from members of the public beats me.

Business
Lord Carter: My Lords, between the two debates today my noble friend Lady Hayman will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the apparent leaking of the Access to the Open Countryside consultation paper.

Business of the House: Debates this Day
3.7 p.m.
The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, on behalf of my noble friend the Leader of the House I beg leave to move the Motion standing in his name on the Order Paper.
Moved, That the debates on the Motions in the names of the Baroness Hamwee and the Baroness Thomas of Walliswood set down for today shall each be limited to two-and-a-half hours.—(Baroness Jay of Paddington.)
On Question, Motion agreed to.

Proportional Representation in Local Government
3.8 p.m.
Baroness Hamwee roseto call attention to the case for the introduction of proportional representation for local government elections; and to move for Papers.
The noble Baroness said: My Lords, this debate concerns the case for proportional representation for local government. There is a quite notable move towards more co-operative and less confrontational politics, and we welcome that very warmly. That move means that there has been talk of and now plans for democratic renewal (to use the current buzzword). It is in that spirit, and because we believe that proportional representation tends to engender cooperation, that this debate is intended to put the case for proportional representation in local government. I hope that noble Lords will forgive me if in this debate I tend to use the acronym "PR"
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which is perhaps not very elegant. It is also in that spirit that in particular we seek assurances from the Government—I hope that they can be given today—that yet on their agenda, it is not although this topic is not off it.
I am not today arguing for a particular electoral system. Examples may well be given during the course of the debate to demonstrate that objections to the first-past-the-post system, or defences of it, can be met by the different systems. My objective is to keep the door open. PR for local government should be on the Government's agenda for a number of reasons, the very least of those being its fairness to politicians.
I asked the Electoral Reform Society for recent examples of the effects of the first-past-the-post system. Inevitably my own borough, the London Borough of Richmond-upon-Thames, figured in that list. In the last election the Liberal Democrats polled some 46 per cent. of the vote and won 83 per cent. of the seats. That follows eight years when, on less then 50 per cent. we won more than 90 per cent. of the seats. So we are either moving in the right or the wrong direction depending upon your criteria. In Newham the Labour Party polled 57 per cent. and won 99 per cent. In Westminster the Conservatives' 53 per cent. won 75 per cent.
Perhaps the most perverse of the results in the last London borough elections—which I am sure would have been endorsed by the noble Lord, Lord Bowness, were he able to take part in this debate—occurred in the London Borough of Croydon. There the Conservative Party polled 42.5 per cent. of the vote and won 30 seats; the Labour Party polled 39 per cent. and won 40 seats and took control of the council.
In the county elections in 1997 there were similarly odd—or wrong—outcomes in a number of counties. In Buckinghamshire the Conservatives polled 46 per cent. of the vote and won over 70 per cent. of the seats. In Devon the Liberal Democrats' 39 per cent. winning 57 per cent. of the seats; the Conservatives' 34 per cent. won only 24 per cent. These are very considerable discrepancies, and other counties produced similar results.
Since then the political context has changed. The elections to the European Parliament next year will be on the basis of regional lists. The Scottish Parliament and the Welsh Assembly will see elections using a form of additional member system. The word is that the Government will use a proportional system for the Greater London Authority. At the same time the commission under the chairmanship of my noble friend Lord Jenkins of Hillhead is considering proportional alternatives to first-past-the-post for Westminster.
This House, ironically, has been traditionally less anxious about keeping to the old ways than another place has often shown itself to be. In 1983 my noble friend Lord Harris of Greenwich presented a Bill dealing with proportional systems at local level. That failed to proceed by only eight votes. Two years later the noble Lord, Lord Blake, successfully piloted through this House a Bill dealing with the same subject which was blocked in another place.

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There are quite often discussions about the effects of first-past-the-post on elections to the House of Commons. I do not defend that system for that House but the effects there are not as bad as they can be at local level. The very numbers make a difference. In local government, where local authorities are much smaller than the total membership of another place, it can mean that the minority, the opposition, disappears.
Local government is part of the political scene. I do not subscribe to the view that local government should not he political, but it should not be driven by central proscription of whatever party. For example, competitive tendering may be the right approach in borough A; it may not be the right approach in district B.
Other noble Lords will mention low standards and even corruption, of which there are striking examples—certainly too many examples—and almost all of those are in authorities where one-party rule has been the norm.
Central government intervenes too much in local government. One of the benefits of a new electoral system which produces a more proportional outcome is that it would have less excuse and less reason to do so.
Those who have most knowledge of an involvement in local government affairs are rightly concerned about bringing government closer to the people. Sir Jeremy Beecham, the chairman of the Local Government Association, has said on a number of occasions, and recently in an article in The Municipal Journal, that ways need to be found of encouraging bringing government closer to the people. He said:
"We need to look at how councils are run in order to achieve this. It is unhealthy for a party with a significant share of the local vote to be unrepresented in the council chamber, as happens with all political parties."
The examples I have given have deliberately covered all three of the major parties. He continued:
"We need to look at adding a minority of councillors elected by proportional representation for the area as a whole to the majority of councillors elected for wards through the current system—this is one way to encourage better electoral turn-out."
The justification for local government is that it is a democratic, fair way of governing and delivering local services. It is widely said that democracy does not mean rule by the majority; it means rule by the majority with deference to the interests of the minority.
The noble and learned Lord, Lord Simon of Glaisdale, in a debate on the Bill presented by the noble Lord, Lord Blake, said:
"council decisions, local government decisions, are taken collectively. Therefore, unless there is a proper, fair system of representation which can ensure that the citizen can affect those decisions, even if they are about drains, highway cleansing, and that kind of thing, then he is denied his democratic rights; he is denied his liberty; he is denied his influence over decisions which affect him".—[Official Report, 4/3/85; col. 1176.]
That encapsulates the point perfectly for me. Fairness to the electors and confidence of electors in their local government, put another way, is about the reputation of government.
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The Deputy Prime Minister, in his preface to the recently published consultation paper Modernising Local Government, wrote:
"Our agenda is the renewal of local democratic government leading local communities and serving local people. We want councils to gain a new democratic legitimacy."
I agree with that and with much of what is in the paper, but the electoral system is a notable omission from it and the proposals for rejuvenating local government must be incomplete without it.
One of the aims of the paper is to increase local turn-out and that is very important. In December there was an example in Liverpool of a turn-out of less than 7 per cent. That hit a new low. Parties ought not to be able to take the outcome of elections for granted and make assumptions about turn-out. Michael Thrasher at Plymouth University has written that he believes that low turn-out levels would be improved by proportional representation. He writes:
"There is strong evidence that you increase turn-out immediately by at least 7 per cent. because people see that their votes are less likely to he wasted … people vote for candidates and not parties, which is particularly appropriate in local government."
Having turned out, would people be faced with difficult systems as is often suggested? I believe not. In Northern Ireland there are different systems for different elections. In England, Scotland and Wales we will soon have parallel systems for different elections. As is often said, electors, wearing different hats, may also be fillers-in of pool coupons and lottery tickets.
To those who say that proportional systems lead to contrived boundaries, that our system is good because it allows for the direct geographical community link, I would say that that depends on the system which is chosen. Perhaps I may take an example close to home. The ward which I represent as a councillor is hardly perfect. If it has a centre it is the south circular road and I suggest that that is more of a barrier than the centre of a community.
We must not let the debate pass without pointing to the better representation that is achieved by a proportional system. By "better" I mean more representation by women and by members of different minorities. In other countries, that has been shown to be an outcome of proportional systems.
I return to what I see to be the insidious effects of the first-past-the-post system creating what I may describe as false majorities. Even if that does not lead to corruption, it means that the administration has too easy a relationship with the officers of local authorities. Things become too easy; the critical edge is lost. Without realising it, the officers can become more relaxed in testing the practicality of political directions. Neither the officers nor the politicians will necessarily think through all the answers to the questions which would be asked if there were an adequate active opposition.
Of course, if electors do not like what is happening they can, through the ballot box, get rid of an administration, but probably more effectively so if there is a proportional system. It is often said that if there had

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been PR it would have been the voters and not the Prime Minister who would or could have responded to the GLC. That would have saved a great deal of trouble.
It is not just a matter of overturning majorities. One can have the same administration but with a bigger opposition. There probably will be a bigger opposition. An increased minority means better scrutiny, the load better spread among opposition councillors and the opposition reaching a critical mass, which can be more effective.
If it is not a question of overall control, if there is not a hung council or, as I would prefer to call it, a balanced council, is that a bad thing? I think not. It often means that there must be real discussion and real arguments which must be won. If that is inconvenient to the administration and to the officers, without wishing to minimise the effort involved, I would say, "Too bad".
It used to be said that PR for local government would he the thin end of the wedge; that if the wedge were jammed in further there would be all kinds of national horrors in our electoral system. We are seeing changes, not horrors, to the electoral systems nationally. It would be odd if the Government ruled out the prospect of change at local level. I hope that they will indicate that they will not do so.
John Stuart Mill argued for proportional representation of the minority as well as the majority. He said:
"Unless they are [fully represented as a minority] there is not equal government, but a government of inequality or privilege, contrary to all just government, but also, above all, contrary to the principle of democracy which professes equality as its very root and foundation".
I beg to move for Papers.
3.23 p.m.
Lord Watson of Invergowrie: My Lords, I congratulate the noble Baroness, Lady Hamwee, on introducing this debate. It is a timely and important subject. Proportional representation is on the agenda in many other fora. I agree that it is inappropriate that local government should be passed to one side and not considered when such changes to electoral systems are proposed.
Local government appears to be held in disdain by many electors who see that in many cases there is no purpose in voting either because one party has such an overwhelming majority that voting makes little difference; or because there is a belief that local government services are not being delivered in the most effective fashion and that many committees are staffed by councillors who have been elected—and I use the word advisedly—by local parties rather than by the electorate.
It is only a matter of time before local government comes firmly within the frame for a change to the electoral system. When the Scottish parliament and the Welsh assembly have been set up and the 1999 elections have taken place the electorate will have a greater understanding of what is involved in the different electoral systems. There has been a
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conservatism in voting systems within this country. We have been slow to move in the direction that many other countries have taken. As a result, we have not had such an effective form of government. That is particularly true at local government level where electors often feel alienated from the process and therefore from the services which the process provides.
It is important to consider not only the electoral system but the state of local government. It is largely in need of overhaul. Although it is true that a change in the electoral system would not be a panacea for the ills of local government, it would make an important contribution to bringing local government closer to local people, to making it more accountable and, most important, to be seen to be more accountable.
The noble Baroness, Lady Hamwee, quoted some frightening statistics and I should like to give a few more. It is unfortunate, at best, that the 1997 figures for local elections in the London boroughs show that in 14 of the 32 boroughs one party has 70 per cent. of the seats. People might say that that gives firm local government. Yes, it does, but in Scotland, where I come from, many local authorities have firm local government. The question is: what does that firmness produce? In what way is it channelled and in whose interest? I shall name no names, but in many local authorities where a party committee selects the candidate members know that they are effectively electing a councillor. The electors are shut out from the process; they have no say. Yes, they have the opportunity to go to the polling booth on election day and place their X on the ballot paper. However, realistically, they have no real say in the choice of candidate because the tradition in many local authorities is to vote for the party rather than the candidate. With few exceptions, that party is regularly returned to power.
That does not mean that the party in power in a local town hall or city chambers is responsive to the views of local people. However, people within that group tend to respond to the stresses and strains of the leadership. They follow certain personalities and give all their attention to which camp they should follow rather than to the best means of delivering local services. Of course, that is a generalisation; of course many dedicated councillors do a good job and do the best job they are permitted to do in the circumstances. But I say that that is not good enough in local government. We need a system which makes it less likely that one party will have an overwhelming number of seats and therefore have such a firm grip on power that the local electorate have virtually no say in what it does.
I was interested to read a quotation from the Minister without Portfolio printed in the Local Government Chronicle in December 1997. He stated that much of what government want to do can be delivered only through local authorities. He continued:
"But when they become out of touch with the communities which they represent—and certainly when they become victims of political infighting—they become worse than useless".
I wholeheartedly accord with those sentiments. The question then is: what do we do about changing that situation? Fundamentally, we address the system by which those representatives are elected.

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The noble Baroness, Lady Hamwee, also referred to voter turn-out. I believe that in local elections people vote with their feet. There is a low turn-out, it being unusual for more than 50 per cent. of voters to vote in elections for the whole council, and far less in by-elections. That seriously undermines the legitimacy with which local representatives claim to represent their local community. It is important that people from those communities should represent people whom they know, whose problems they know and among whom they live, if at all possible. But it seriously affects the legitimacy if there is such a poor turn-out, if people have very little interest in even going to the polls to record their vote.
We have a situation in which the greatest disinterest in local authorities tends to be shown in areas where there are safe Labour seats. Recent research from Plymouth University showed that where there are safe Labour seats in London, people are less likely to vote at all; where the Labour share of the vote exceeded 50 per cent, the average voter turn-out was just 40 per cent.; where Labour's share exceeded 70 per cent. the turn-out dropped to 36 per cent. That shows that people are aware of the necessity of voting. Where there is a real chance of influencing the outcome, people generally do exercise their right to vote, and understandably. But without that, we should not be surprised when people show less interest. That affects their view of local government and the services which are provided.
I am not at all convinced by the view that to change the electoral system would be unwelcome because it would be confusing. Apparently, it would be confusing on two levels. First, there could be different voting levels. For example, in my country of Scotland voting would take place at local government level, Scottish parliament level, at Westminster level and at European Parliament level. It is not necessary for all those systems to be identical. They deliver different services, involve different people and are elected at different times. It is quite possible for people to differentiate, understand what and who they are voting for and understand that there is an importance in those differences.
I am not persuaded by the second argument; that is, the patronising view that the electors will find the system too complex. Our European cousins do not find other systems too complex. They have managed to handle the issue quite effectively. The noble Baroness, Lady Hamwee, gave the example of lottery tickets. I refer anyone who says that we should not be introducing any means of involving the public which is too complicated to the recent Inland Revenue income tax forms. They have been distributed widely throughout the country and have not been withdrawn or even modified because they are too complex. It is insulting to people to say that we cannot change the system because it is beyond their ability to understand what they are voting for or how to vote. That is not the case.
There is a debate going on in Scotland at present because when the parliament is elected in 1999 it will have a system whereby people will be asked to vote for the candidate and also for the party. Incidentally, on the same day they will be asked to vote for local government candidates. Nobody suggests that that will be too confusing for people. The media in Scotland are
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already starting to explain what will be involved and how people should approach it. It is a new system. It is a new way of electing representatives; and I say that it is all the better for that. The sooner we embrace change in the electoral system, the sooner we shall begin to modernise our democracy and, I believe, bring it closer to people and connect with more of the people for whom local representatives should be providing services and active and proper representation.
I believe that the system of local government in this country—I mean the UK as a whole—needs an overhaul. The first step in that process could very usefully be the electoral system, because that is the main reason for the level of disrespect with which people view local government these days. When I was a Member in another place I used to pick up many complaints, most of which had nothing to do with the Member of Parliament because they referred to services delivered by local authorities. I would ask why the local councillor had not been approached and I would be told, "It is a waste of time. He is never there". In many cases, that was untrue. But the perception of the people was that the locally elected member was there for his personal gain. That is manifestly untrue in the vast majority of cases.
I represented a part of Glasgow and I do not mean to characterise in any way the individuals who represented that part of the city in Glasgow City Council. But people felt that it made very little difference who they voted for and that therefore the councillors, or the candidates who wanted to be councillors, had very little reason to go to the electorate to explain what they were doing, to connect with them regularly and to report to them on a regular basis. That applies in many cases throughout the country where there is overwhelming control by one political party or another. It is a system which really must end.
When the electors on the outside are looking in at in-fighting within a local authority, they feel that they have no control over that. They feel that they have elected their representatives but they have no control over what they do. There is little point in saying, "Well, when the election comes round, we can always vote for somebody else". In theory, that is the case but we all know that in practice it is extremely unlikely to take place.
I welcome the debate today which opens up the discussion on what kind of electoral system we should have in local government. For many people the door seems to be closed. I say that the door for most people is closed in terms of those people who are electors. Those doors must be opened. We do that by reviewing the system by which we represent our local representative. In so doing, not very far down the road, if we modernise our system we shall improve the effectiveness of local authorities and the services which we provide and we shall improve immeasurably the regard in which our local representatives are held.
3.35 p.m.
Baroness Maddock: My Lords, I am grateful to my noble friend Lady Hamwee for giving me the opportunity to take part in this debate this afternoon. We have heard already there is little disagreement about the problems facing local government and local democracy

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in Britain today. But agreeing about what we must do about those problems is quite another matter, particularly when looking at the merits or otherwise of different voting systems. However, I hope that as views are shifting in Britain today, after this debate a few more people will see the value of having a system of proportional representation for local government and the value of that playing a part in what my noble friend has already referred to; that is, the democratic renewal of local government in Britain today.
The Government's latest paper on that entitled Modernising local government: Local Democracy and Community Leadership highlights some of the issues and problems already raised today. Indeed, the Minister for the Environment, Transport and the Regions expresses his wish that councils should gain a new democratic legitimacy.
Two of the problems about which the Government have expressed a desire to do something are voter apathy—and that has been demonstrated clearly by low turn-outs in our local elections—and the problems of one party domination of local councils. As we have heard from the eloquent speech of the noble Lord, Lord Watson of Invergowrie, that can lead to complacency. We read in our newspapers that it can lead also to corruption.
What is disappointing about the document that the Government have published is that it misses out some important facts. It explains graphically about poor turn-outs and how they compare with turn-outs in other European countries. It explains graphically that we have no standard system of local government elections in this country. But it fails to tell us what are the systems in those European countries where they have a better turn-out. It fails to point out also that if one compares Britain with the rest of Europe, there is a huge difference in the ratio of elected representatives to voters.
Those matters are an essential part of any investigation into improving democratic accountability and representation at local level. I shall expand a little on those areas. For example, if we look at turn-out, the Government give us the average turn-out in sub-national elections in the European Union and we see Great Britain right at the bottom with an average turn-out of 40 per cent. If we look at Ireland, we see a turn-out of 62 per cent. and for Denmark it is 80 per cent. I do not give as examples places like Luxembourg which has a 93 per cent. turn-out because there is compulsory voting. I am trying to compare countries where there is no compulsory voting.
But the document does not explain that in all those countries which have a higher turn-out, they nearly all have a system of proportional representation. That is the common theme. I recommend that noble Lords read the table I am discussing which explains the complexity of the different kinds of council that we now have in Britain. Those councils hold elections at different times. Some of them comprise single member wards while others are three member wards. Sometimes the elections take place every year and sometimes it is every four years. We need to consider having a rather better
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uniform electoral system. As regards elected representatives and the number of people who elect them, in this country every elected person has been elected by, on average, 1,800 electors. The average ratio in Europe is between 1:250 and 1:450.
We may hear, particularly from the Liberal Democrat Benches this afternoon, that we do not believe that proportional representation is the total panacea to problems in local government. Nevertheless we believe that it forms an essential part of measures needed to improve the democratic accountability and the breadth of representation of local government. We make no bones about the fact that our preferred system is the single transferable vote. We believe this has been shown to ensure a much wider cross-section of elected people in local government. I hope that the Government will take that to heart because the local government Minister, Hilary Armstrong, stated at a local government conference that there was poor representation in local government. She said that 35 per cent. of councillors are now above retirement age; only a quarter of them are women and that there is little representation of ethnic minorities in local government. She believed this meant that local democracy is not as healthy as it should be.
We certainly agree with that. That is one of the reasons we believe that the single transferable vote would achieve better representation across all areas. It also gives the best choice to voters. It gives them a choice not only of party but also of person. We believe that is important. It also maintains the geographical connection between elected representatives and those who elect them. It does not often result in—this almost never happens—"one party states" that remain in power year after year.
European countries have shown that the system works. In the time that I have tried to promote proportional representation two main arguments have emerged against PR and the single transferable vote. We are told that it leads to weak government and that we want it only for our own political ends. One needs to consider the first-past-the-post system in this country and the way councils are run at the moment and who is running them. In nearly 40 councils three or more parties share the administration. In 29 councils the Liberal Democrats run a minority administration which involves support from others. There are 19 Labour minority administrations. There are only two Conservative minority administrations. There are five independent minority administrations and roughly 50 councils have joint administrations of every possible combination.
I do not believe it is those councils which give rise to the stories about poorly run councils and corruption. Studies have been undertaken to consider how hung councils are run. I believe that "hung" is a negative word; I prefer to call them balanced councils. It has been revealed that in the main they run efficiently and many local communities are satisfied with their councils. That is the case with the majority of local government in this country.
I was a local councillor on a balanced council—I shall use the more positive word. That was in the days of the Militant faction and the Labour Party. I believe that the

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Labour leader of that council at the time was extremely grateful that my group acted as a brake on the Militant people. Members of three parties on that council had to work together. The leader of that council was able to tell the Militants that they could not do such and such a thing because they had to work with others. That is a powerful consideration for seeking to impose a system which ensures that people must work together and extreme elements cannot take over.
We as a party have demonstrated that we can win in first-past-the-post elections in local government. Therefore it is not for that reason that we think proportional representation is a good idea. My noble friend Lady Hamwee has mentioned various councils in this respect. We have a huge majority on some councils but we did not gain the majority of the vote. We are now the second party of local government. We control outright about 50 councils. We have a minority administration in 29 councils. The Conservative Party now controls fewer than 21 councils outright. We are critical of a system which is unfair, whichever party is in control in local government if it has gained that control through having many seats but it has not gained the proportion of votes to match that situation. That has been clearly illustrated by figures. I am sure it will be illustrated again today.
Elections are the prime way that a community expresses its political will. Clearly in Britain today our people have been short-changed. I hope that the Government will not close their eyes and ears as regards introducing a new electoral system for local government. I believe that the debate today will demonstrate that there is evidence in support of adopting a new system. and that there are systems that will serve us better than the present one. We must adopt a new system if we are to have real democratic reform in local government in Britain as we go into the 21st century.
3.46 p.m.
Lord Tope: My Lords, I wish to speak a little longer than is customary as regards a declaration of interest, although in view of the comments that have been made by both my noble friends who have spoken so far it is probably more of a confession than a declaration of interest. I have been my party's leader on the council of the London Borough of Sutton for nearly 24 years. Virtually half of those years were spent in opposition, mostly as a small opposition, and nearly half have been spent in majority control.
Since 1994 my party has held 84 per cent. of the seats on Sutton Council. Unlike the case of my noble friend on the Front Bench, at least we gained a majority of the votes, but only 56 per cent. so we are substantially over-represented. I am grateful to be informed that we are over-represented by 16 seats. In my wilder moments of fantasy I have tried to determine which 16 seats those are. Perhaps other leaders do that from time to time.
I hope that we have not become a complacent council. Every two years we engage MORI to conduct a residents' attitude survey on a whole range of matters. However, the first question is always, "How satisfied are you with the way in which the council is running
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the borough?" The survey that was carried out last November indicated that 81 per cent. of our residents were either very or fairly satisfied, compared with only 7 per cent. who were dissatisfied. I hope, therefore, that we have not yet become one of the rotten boroughs that I read about which arise from huge majorities.
However, it has not always been like that. Back in 1982, at the time of the Falklands War, I remember vividly that we polled 35 per cent. of the vote in the borough as a whole and gained three seats; just 5 per cent. of the council. Some 21 of our candidates came within 150 votes of winning their seats. That is probably a record for the number of near misses on one evening. It was at that moment that I became convinced of the need for annual elections because for me it felt like a four year sentence even though ours was the only party able to claim a 50 per cent. increase in our representation on the council, from two to three.
My noble friend Lady Hamwee made reference to the borough next door to mine, the London Borough of Croydon. My friend—I say "friend" with a small "f"; I do not want to endanger his political career any more—the noble Lord, Lord Bowness, lost the leadership of Croydon council in the 1994 elections. It was a shame, because the Conservative Party actually polled 4 per cent. more votes in the borough than did the Labour Party, but ended up with 10 fewer seats. It is not the first time that has happened, although the other occasion is less well known or less well remembered. In 1986, in the London Borough of Wandsworth the Labour Party polled more votes than the Conservative Party. I leave noble Lords to ponder what might have happened to the politics of local government had there been a proportional system in place in Wandsworth at that time, and had Wandsworth been run by the Labour Party rather than the Conservative Party. Just how different things might have been. We should probably still have had the poll tax, but I suspect its effects in Wandsworth might have been rather different.
We have talked about a voting system that produces huge majorities for parties. That is bad enough. But a system that gives victory, and a clear majority, to a party that comes second in an election must be ludicrous and is not deserving of any respect, least of all from voters. Yet that is what has happened.
I share with a passion the Government's commitment to renewing local democracy, although I do not necessarily agree with all the ways in which they wish to do it. I believe passionately in local democracy and it has been much of my life's work. I am grateful to the Electoral Reform Society for sending me another copy of the Fabian Society publication of March 1997 (before the general election) on electoral systems. I wish to quote from the end of the introduction, which states:
"Democratic renewal is at the heart of Labour's programme for Britain. Renewing local democracy is a key element; and PR for local elections one vital means to that end".
I agree with that wholeheartedly. I look now to the Government's recent consultation paper on modernising

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local government and, as a true Liberal Democrat, turn first to the paragraphs on voting systems. Paragraph 3.46 states:
"However, in some parts of the country there is virtually one-party rule with few, if any, opposition members on a council".
I omitted to mention that on my council there are five Labour Members who now form the principal opposition, on the basis that they lost fewer seats than the Conservatives; and there are currently only three Conservatives. So perhaps the document refers to my own borough. The paragraph continues:
"Some argue that local democracy does not operate as effectively as it might in such situations, and that this can lead to councils becoming complacent and incompetent. Others say that the problem is not with the democratic system".
I turn the page to the following paragraph (3.47) to see what the Government are proposing to do about that. It states:
"Reforms to the electoral. political and consultation arrangements discussed elsewhere in this document are of greater importance and urgency".
Welcome though some of those reforms are, they will do nothing to address the democratic deficit that we have been discussing.
The Government's answer appears to be annual elections. I must say straight away that there are some in my party who favour annual elections. As I said, in the particular circumstances in which I found myself in 1982 I was then one of them. In the circumstances in which I find myself now, I am not. I want, however, to quote with more legitimacy again from the Fabian Society publication. It states:
"Annual elections are often advanced as a means of increasing local government's representativeness and accountability; our view is that reforming the electoral system would be a much more reliable way of achieving these goals".
I entirely agree with that.
Paragraph 3.4 of the Government's consultation paper refers to the question of annual elections. I wish particularly to draw this to the attention of the noble Baroness, Lady Farrington, who will reply to the debate. It states:
"The Government also believes that it is not always healthy for a single party to dominate a council, particularly where this position is not the result of an overwhelming advantage in votes cast. It may be that this situation is more likely under whole council elections every fourth year. than with more frequent elections".
The noble Baroness was for some years a very distinguished chairman of the Association of County Councils. During that time she dealt much, and closely, with the Association of Metropolitan Authorities, of which my council was a member.
County councils are elected once every four years. As I am sure the noble Baroness will recall from her chairmanship, most of those county councils did not have a majority. Very few had large majorities. She dealt with the metropolitan authorities, where all the worst effects of very large majorities were seen—and yet they elect by thirds. In replying, will the noble Baroness explain whether she agrees, and how she can justify the statement in the Government's consultation document from her own experience?
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There is no doubt that turn-out is the Achilles' heel of local government—although, incidentally, in London the turnout has risen steadily since the 1960s. In 1968, the turnout was only 36 per cent. By 1990 it had peaked at 48 per cent. —perhaps as a result of the poll tax and also because the election was held on a very sunny day—and it dropped back slightly to 46 per cent. in 1994. That is not good enough. I welcome the Government's proposals to review the electoral arrangements. I very much hope that we shall move from what is essentially a 19th century system of elections into a 21st century system.
We also need to address the question as to why local government elections have such a low turnout. It is due in part to a lack of interest on the part of the public and the media; it is due to the lack of esteem in which local government is held; it is because such elections are so often seen as a national referendum rather than about local issues; it is because local government is perceived, rightly in my view, as not having sufficient power; and it is also because votes are seen to be largely meaningless.
Many of those issues could be addressed with a proportional system. I do not for one moment argue that PR is the panacea for all that is wrong with local government; nor do I suggest that it is the whole answer. It most certainly is not. I do not wish today to argue for any particular system, although I share the views previously expressed that the single transferable vote system is probably the most suitable. However, I do argue strongly that, whatever system is in place, we should retain the link between councillor and voter. That is extremely important. I would strongly reject a system of party lists—even though they might be the purest form of proportionality.
I share the views already expressed on balanced councils. Some of us in this Chamber are party politicians and strive for a majority. That may be in our party's interests—though that is arguable—but it is not necessarily in the public interest. We cannot renew local democracy without examining the electoral system, which has produced so much of what is wrong with local government.
Without PR, the Government's reforms will be rather like a Polo mint—quite tasty round the edges, but with a whacking great hole in the middle. If the Government are not yet ready and able to rule PR in for local government, then I urge them not to rule it out.
3.58 p.m.
Earl Russell: My Lords, I must declare a non-pecuniary interest. I speak as the recently elected president of the Electoral Reform Society, by which I am in part advised. The society will not misunderstand me if I say that I regret that I am in that position, for I succeed Lady Seear whose shoes I shall never be able to fill, and which I wish she were still filling.
In 1986, on local election night, I remember listening to the results coming in from my own borough of Brent, where the Labour Party, with just over 40 per cent. of the vote, came in with an enormous majority. As those results came in, I forced open my second eye, and

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murmured, "That is a very had result for Neil Kinnock". So indeed it proved, for that was the council which was compared by Mr. Ken Livingstone—who used to be my representative in another place when I still needed one—to Pol Pot. To be dismissed as "loony Left" by Mr. Livingstone is a distinction of some standing.
In Lambeth in 1982, Mr. Ted Knight, the memorable "Red Knight", won control of the council with 33 per cent. of the vote, while the Conservatives, with almost 40 per cent. of the vote, lost control. Those two examples illustrate that first-past-the-post is capable of giving an advantage to, shall I say, somewhat unusual political outlooks. For if we take 40 per cent. of the majority and apply the principle of the majority within the governing party, then 21 per cent. may be taken as a majority of the whole. It is curious arithmetic and occasionally it leads to curious results.
The Prime Minister has objected in the past to PR on the grounds that it gives too much power to small parties. On 25th June, speaking at Westminster, I replied by saying that the disadvantage of first-past-the-post is that it gives power to even smaller parties.
That is also true in local government. In 1990, again in my own borough of Brent, there was for a brief while a balanced council, a brief stage of civilisation between loony Left and raving Right. The Conservatives then succeeded in securing a defection from a certain councillor Nkechi Amalu Johnson. When she joined the Conservative party she announced that she admired Margaret Thatcher for the same reasons for which she admired Winnie Mandela and Idi Amin. This was in the only borough in the country with a greater concentration of Uganda Asians than the city of Leicester. And she knew perfectly well what she was doing. Thus first-past-the-post can give the power to extremely small groups. To my mind, that is one of its disadvantages.
I am interested in a speech made by Mr. William Hague at the Centre for Policy Studies. I have here, I confess, only the press reports and the PA summary; I have not yet succeeded in getting a text. But it seems to me to show some slightly unexpected thinking. He says that one of his objections to PR is that it interferes with accountability to the voter. That might just be defensible if he believes that the closed list is the only possible form of proportional representation. If so, the Leader of the Opposition is guilty of believing the Minister without Portfolio. That would be a cardinal sin on the Government Benches. Of the Opposition Benches, words fail me when I contemplate what type of sin it might be. It marks a certain unevenness in the performance of the Leader of the Opposition. I noticed last summer when he was wearing his baseball cap he had "William Hague" on the front and "A Fresh Future" at the back, thereby earning the title of the youngest leader ever to have a fresh future behind him.
William Hague also said, at the Centre for Policy Studies, that:
""proportional representation is a profoundly undemocratic measure, masquerading under the banner of democracy and the Conservative Party I lead will have no truck with it".
I wonder exactly what the Leader of the Opposition means by "democratic". When I receive the full text of the speech, I shall endeavour to discover. I think I owe
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it to him to attempt some definitions of my own. First, it is a vital principle of democracy that we should be able to change the Government through the ballot box. In fact, arguably that is the most important thing democracy is all about. Secondly, it is a vital principle of democracy that there should be an opposition. Thirdly, it is a vital principle of democracy that all votes should count equal. It is my contention that first-past-the-post in local government does not meet any of those tests.
During the European elections of 1994, I was visiting a small town in Sussex where I was proudly assured by my host that my party in two elections had gone from having no seats on the parish council to having every single seat. I said to them: "You had better watch it. You'd better make sure at the next election that you lose at least one of those seats because you've got to have an opposition". They replied: "You are quite right, but we need some co-operation from our opponents. I am not sure we can get it".
In the London borough of Newham, the Labour Party has every single seat. In Castle Point. in 1983, the Conservatives won every single seat on 51.3 per cent. of the vote. That does not suggest that first-past-the-post guarantees an opposition in local government. All votes count equal. My noble friends who have already spoken addressed that point. Ever since the Conservative Party in 1867 abandoned Disraeli's proposed fancy franchises, they have accepted the proposition that all votes should count equal. Since they do, the Conservatives should accept that in some ways first-past-the-post is undemocratic.
What interests me most is the possibility of changing a government through the ballot box. As the noble Lord, Lord Watson of Invergowrie, pointed out in a powerful and extremely interesting speech, that sense that it is possible to change control is vital to turnout. I am sure that all of us here who belong to a political party, when we have taken part in election canvassing, have always met the response: "Oh, it's no use voting, they'll never lose here". That—
Lord Strathclyde: My Lords, this may be the wrong place to interrupt the noble Earl but perhaps he could help me. He talked about democracy. Is not one definition of democracy and the right to vote the ability to get rid of a government or a local council? Under first-past-the-post, this works extremely well. Indeed, it works brutally, as the Conservative Party discovered on 1st May. Does the noble Earl agree that under proportional representation, however it is defined, that can never happen? All we have is a minor shuffling of the seats which preserves the old order rather than bringing in something new.
Earl Russell: My Lords, I thank the noble Lord for that intervention which I was just about to answer. May I also remind him of the point made in the Companion that in timed debates interventions should, if possible, be brief?
There are large numbers of areas where under first-past-the-post there has practically never been a change of government. I do not have a complete list, but

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among the London boroughs I mention the boroughs of Barking, Bromley, Kensington and Chelsea and Newham. I cannot imagine the prospect of any change under first-past-the-post in Salford or Gateshead. I used not to be able to imagine change in many places in the south of England, though we are working on that. Where there is more than one party, as in my own borough of Brent, there is the possibility of a change of alliance.
In 1985–86 my own party in Brent worked with the Conservatives. In 1990 we worked with Labour. We are prepared to assess which is the less loony of the other two parties. From time to time we change our minds on that question.
Where there is only one party in power, you get factions. In 1994, Mr. Mike Bower, the Labour leader on Sheffield council, said:
"Liberal Democrats are like fascists. They exploit discontent".
I thought that that was called democracy. You get factions. But in another place where the ballot box has not produced an adequate process of change, the London Borough of Hackney, for example, you see it getting out of control. Because people always want to change things, you also get corruption. Not that people are more evil in those places, but they are led more into temptation. My noble friend Lord Tope has resisted temptation, but he should not have been led into it.
4.10 p.m.
Lord Bassam of Brighton: My Lords, I decided to join the debate on proportional representation this afternoon not because I have a great love for the system, but because it satisfies one important criteria by which we need to judge voting systems; that is, the simple test of fairness.
We have had ample examples quoted by our Liberal Democrat colleagues this afternoon indicating how unfair the system is in its present form in terms of delivering what the electorate want in relation to the form of their local government. The Liberal Democrats extended and expanded effusively on the subject and gave good cause for a change of electoral system locally. The Government, in their modernising document published a week or so ago, left the door open for us to consider these matters afresh and in the future.
It is somewhat churlish of some of the Liberal Democrats to discern that Labour is disinterested in electoral reform. That is not the case. The noble Baroness, Lady Hamwee, gave some good examples of where we are contemplating change in the electoral system—in Wales, in Scotland, and perhaps in relation to the Greater London assembly. We are not therefore a party fixed in our opposition to PR and we have a commission looking at the wider question of proportional representation for another place. We are therefore a party which is prepared to contemplate change in that direction.
Perhaps one of the failings in the arguments put by those opposite is that they seem to think that all the problems of local government will be solved by a new system of election. They fail to address the other issues in local government which are just as important: for
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instance, the need to have better political management; perhaps clearer lines of accountability; ways of ensuring that we get a broader community view; and a more responsive form of local government and local democracy. Those issues are all part of Labour's modernising agenda and those are the issues which interest me most.
However, I believe that we should revisit PR for local government because the current system, as my noble friends opposite argued, throws up ludicrous anomalies and extreme cases. How can it be right that Cheltenham should have 94 per cent. of Liberal Democrat councillors with around 49 per cent. of the vote? That cannot be right and produces a gross inequity. It cannot be right that in many of the boroughs which Labour runs throughout the country, we have almost a majority of seats based on less than 50 per cent. of the vote. That cannot be right either. In my borough, Labour secured 55 per cent. of the vote in the last set of local elections and we have around 77 per cent. of the seats on the council. That is another example of inequity.
However, if we are to change the system of first-past-the-post, we should not countenance changes in other important aspects of representation. It is important to have the community and ward link between the elected member and the town hall, county hall or city hall. If we are to contemplate a change, we should look for a system of proportional representation which produces clear outcomes. I am not one who favours hung councils—and "hung". they are, not "balanced".
We should look to retain the important, powerful community and ward link. If we can design a system that does that, we will match four or five important tests for local democracy. We must design a system that is simple; one that is fair; one that establishes the local people and councillor link; and one that is effective. Those tests need to be put into the PR debate and I hope that if we revisit PR in government, those tests will be applied.
The fifth test which is also important is transparency and accountability. PR can produce some strange anomalies which blur accountability and can obfuscate outcomes. It is there that we need to concentrate our attention. For example, if we were to opt for a single transfer of the voting system, we would end up with a form of local government where the tail wags the dog. That would not be right; nor would it be in the best interests of local government. We need to look further afield for systems of PR which produce clearer political outcomes and which reflect a better balance in the scale of representation on each local authority.
I might add one argument that has not been put this afternoon, but which is extremely valid in terms of proportional representation. It is this. The current system means that we can almost predict that many northern areas will always deliver a Labour council with a large majority. We might equally predict that many south-western councils will deliver large Liberal Democrat majorities. But in each of those areas there are electors who are effectively sidelined from the system because they have no representation in their town hall,

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county hall or city hall. That cannot be right or fair. Nor does it give a fair reflection of the state of the parties at the time either locally or nationally.
We therefore need to look at different forms of proportional representation—forms that are more reflective of a party in a locality; forms which retain the local ward and community link with the councillor; and forms which enable people to identify clearly who their councillors are. That is an important point. Some research recently conducted suggested that less than 10 per cent. of the local electorate will know who their local councillor is. I believe that to be wrong. It demeans the system and it means that the councillor will be valued less. We need to address that issue, perhaps through better publicity or by ensuring that local councillors are better local champions. Again, if we have proportional representation in local government, it will need to address that issue.
My noble friend Lady Gould tells me that PR is not one of four, five or six different systems; she says that recent research identified 757 varieties of proportional representation. I never believed that that could be the case, but my researches show that there are indeed many and we need to find one that works. For me, that may be the AV system which produces clear outcomes and in the last general election would probably have produced a House of Commons with a similar composition—certainly on the Labour Benches—to that which it currently has.
I therefore welcome the debate. It opens up the final chapter of the modernising agenda. It should be seen as part of a broader package of improving the quality of local government. I believe too that it may enable us to attack the unfairness that currently exists in the electoral system, create genuine oppositions in those local authorities that desperately need them and better reflect voters' wishes.
Some of the claims made for PR, such as the fact that it will attack corruption and enable better scrutiny, are poor arguments. I believe that corruption can occur in any local authority if that is the way in which members wish to operate, and the system can be exploited to that effect. I do not know that PR will attack corruption. I can predict that there will be systems of PR abroad internationally where corruption occurs in local government. So that is a poor argument.
However, if we are looking for fairness; if we are looking for a better balance; if we are looking for local authorities that give a fair reflection of their host communities in terms of age, gender and ethnicity, PR may be a way forward. On that basis I am happy to give my general support to the move to bring proportional representation to local government.
4.18 p.m.
The Earl of Carlisle: My Lords, it is with pleasure that I follow the noble Lord, Lord Bassam of Brighton. It enables me to clear up a misconception that he has on where we Liberal Democrats stand.
I listened to the noble Lord's speech with great interest. He stated that Liberal Democrats see proportional representation in local government as a
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way of solving all the problems. That is not our case. We say that without proportional representation we will not be able to solve together, with other parties, the problems that local governments face. We say that with proportional representation we may have a better chance of working with others from other parties and, indeed, with those from no party in solving the problems that face local governments.
I thank my noble friend Lady Hamwee for introducing this timely debate. She spoke of co-operation, not confrontation. I recall—as those noble Lords who were present at the time will also recall—in June last year that my noble friend Lord Rodgers of Quarry Bank introduced a Motion in this House in which around eight of my colleagues from these Benches spoke, urging the Government to introduce proportional representation in time for the next European elections. It was the noble Lord, Lord Williams of Mostyn, who, as Minister at the Home Office, answered. Although sympathetic, the noble Lord gave reasons why it was unlikely that proportional representation would be introduced before the 1999 European elections. A few weeks later we found out that the Government had found time. We are very grateful for that. We do not know yet how the noble Baroness will answer the debate. But if she says that it is unlikely to take place or that there will be no time to introduce legislation by the next European elections or the elections after that, perhaps we may take that as a sign that something will come out of Downing Street and that we will be faced with a situation in which we have proportional representation at local government elections. Therefore, I am optimistic. We look forward to her reply on that point.
I declare an interest. I have never taken part in local government, much to my regret. Even if I now lived in east Durham, where I lived for five years after leaving Her Majesty's ground forces, the Army, I would never, under the present system for local government elections, take part. That I regret, but I would not have been elected.
In 1989 there were both county council elections and European elections. I stood in both. The reason I stood as a Social and Liberal Democrat candidate in both the county council and European elections is as follows. The Labour Party in Durham controls politics at every level. It has done so since 1922. I congratulate those in this House who hail from Durham and who have represented Durham, on their splendid service to the people of Durham. I refer in particular to the noble Lord, Lord Dormand of Easington, who is not in his place. Perhaps I may tell the House what happened in Easington in 1989. The Labour Party had not been opposed at the county council elections for about four elections. A farmer who lived in Durham was a member of the Conservative Party but regarded himself in local politics as an independent. We met in the village pub by coincidence. He said, "I understand you are standing for election to the county council. If you do so, I will not canvass for you, but I will vote for you. and I will ask my friends to vote for you". I said to him, "I understand that you are standing against the Labour Party in the forthcoming election. If you stand, I will not only vote for you but I will canvass for you if you want my support". What a way to go about things! He then said,

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"I will stand but I am reluctant to". I asked him why he was reluctant. He said, "I have a wife and I have children. My wife can take the ostracism, but my children are victimised in the playground at school". I said, "I will then stand". I stood and I gained 30 per cent. of the vote. My opponent, whom I respect, gained 60 per cent. of the vote.
Three things happened. First, my opponent's leaflet came out first. It was not a well thought-through leaflet and it was rather ill-written. The electorate realised that my leaflet, which came out about two days later, was better thought through and rather better written and presented. Then an extraordinary thing happened. Throughout the campaign the Labour Party canvassed. It had about 50 people in the area. They were knocking on doors and cajoling and asking people to vote for the Labour Party candidate. Then came the count. A fellow member and officer of the Territorial Army told me that he had never attended an election count and asked whether he could come. I procured him a ticket. There were the Labour Party workers, myself and my friend. As the votes poured out of the boxes the number of ballot papers showed that I was leading in my ward. My friend turned to me and said, "George, if you win, will we get out of this place alive?" I said, "No". I think that illustrates the point that power corrupts and total power corrupts absolutely.
Let us look at proportional representation for local government. Local needs range from drains to dustbins, from education to the environment, from pavements to policemen, and from libraries to leisure centres. Let us have more people involved in local government, from all parties and from no party. Let us have more people voting at elections; not just 7 per cent. Let us not just aim, like the noble Lord, Lord Tope, for 54 per cent. Let us aim for 75 per cent. to 80 per cent.
We are one of the countries that first created local government. At the moment one would think that we had not created local government and that we did not have it. I ask the Minister to listen to the speeches made in the debate, to look at the problem with her advisers and to come back to the House and say that her government, to whom most of us offer good will, will bring in proportional representation for local government.
4.27 p.m.
Lord Newby: My Lords, my enthusiasm for supporting the introduction of PR in local government relates to the credibility of the political process as a whole. It will be common ground in the House, as it is across the country, that politicians are held in very low esteem. There are a number of reasons for that. There is a common view that politicians are in it only for what they can get out of it. That is often expressed in those terms rather than by suggesting that politicians might actually be corrupt. It is partly because, as has already been mentioned, there is a sense that many politicians are not seen or felt to be close to the people whom they represent. It seems to me that the electoral system in local government exacerbates these perceptions at lost local levels.
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I grew up in what was then a mining area of west Yorkshire. It was a one party state. Labour dominated politics, utterly and completely. I do not believe that the old Rothwell Urban District Council was a corrupt body but it was certainly a smug and unimaginative body. Largely because there was such a predominance of Labour councillors—in reality, councillors of a single party—its actions were never scrutinised and the politicians never had any need to fight anything approaching a real electoral campaign. The electoral system in those circumstances made it difficult for any other party to gain meaningful representation. So I am sure that a number of people who might otherwise have been prepared to play a part in public life were deterred from attempting to do so by the very high hurdle of actually being elected and winning a seat on the first-past-the-post system.
For the population of Rothwell at large there was rarely, if ever, any real sense of an election taking place because everyone knew that the only election that mattered was the selection process that went on in the wards of the local Labour Party. The dangers of the smugness and complacency we saw there become worse if we see that one party has an untrammelled rule over a long period. In parts of west and south Yorkshire huge Labour majorities have been notched up in local elections for decades. While the vast majority of those councillors remain extremely scrupulous and uncorrupt, there are a number of glaring and recent exceptions to this rule.
Doncaster is perhaps the most dramatic of these. Here there is a council in which Labour holds over 90 per cent. of the seats: 57 out of 63, with about two-thirds of the votes. This is a situation which has encouraged a serious and systematic abuse of expenses, overseas trips. gifts and hospitality. The district auditor has produced a damning report on the activities of the council and, on top of the costs of its previous extravagances, it is now faced with a bill of £275,000 to help pay for the inquiry and to set things right. Many of the excesses in Doncaster have been on a pretty low and petty scale rather than on a grandiose scale.
In one much publicised case, a councillor spent £110 on two nights in a three-star hotel in Bradford in order to attend a conference although he had undertaken that he was going to commute. This is hardly corruption beyond the dreams of avarice, but the cumulative effect of this kind of case, partly because it is so common place and partly because people can understand what is going on, brings politics into disrepute—not just the actual politicians involved but, by association, all politicians and the process. This is extremely bad for the system of democracy as a whole. It must be said that it is exacerbated when, as in the case of Doncaster, the councillors who have been specifically criticised by the audit commission steadfastly refuse to apologise for anything that they have done wrong.
If there had been PR in Doncaster based on reasoned votes in council elections, the opposition parties would have mustered over 20 seats instead of their paltry six. They could have then exercised a much more effective scrutiny of what was going on and jolted the ruling group out of the complacency which, in my view, has

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helped breed its excesses. It would also have been easier for voters effectively to have expressed their discontent over a longer period. Although the Liberal Democrats are now capitalising on the particular problem of Doncaster, and we won a by-election there a fortnight ago with a huge swing of well over 30 per cent., it is still difficult to make a real impression across the board in a place like that with such a tradition of one party politics and with the first-past-the-post system.
Incidentally, I do not agree with the noble Lord, Lord Bassam, that the electoral system is irrelevant to the issue of corruption. If one looks at where there has been corruption in British politics, certainly in recent years, in all the cases of which I am aware it has been in councils where there has been a large and continuing majority of one party or another. In the case of Westminster, I believe it was a fear of losing a long-standing majority that led councillors to contemplate all manner of things which the district auditor and public opinion believed were not in the best interests of the voters of Westminster.
If first-past-the-post can encourage corruption, it also encourages voter apathy. Turn-out in local elections is low, and we have heard many figures about that. As has already been said, in many inner city wards it is lower still. Leeds City Council has a unique social mapping database which records on a street-by-street basis levels of dependency on state benefits—in effect, levels of deprivation. The council has undertaken an exercise to compare deprivation levels with turn-out at local elections. There is an almost exact fit. There are many reasons for this. Education levels are relevant to turn-out as well, so is the daily grind of life if one lives on the poverty line, which makes participation in politics seem to very many people an unnecessary luxury.
Another contributing factor in my view is that in many of these wards there is no effective electoral contest. Labour has held them for decades, the Conservatives have disappeared from the cities; and the Liberal Democrats, despite our spectacular growth in Yorkshire and Sheffield, elsewhere in the county and in inner cities across the country, simply do not have the resources to campaign intensively in all inner city wards. Frankly, in many of these wards there has been no serious electoral activity within living memory. Therefore, even if there were to be an interest in politics among the people who live there, it is actually quite difficult to find an outlet for it.
As many people have said, nobody but a fool would claim that PR would transform the situation overnight. However, any system of PR which would require the parties to take the whole of a council area seriously, instead of being able to leave whole swathes of an area without any real activity, and any system which retained a link between the councillor and a geographical area—I believe that for local council elections the arguments for STV are particularly strong—would jolt many local councillors out of their complacency and require them to keep in close contact with their electorate.
I would have hoped that these were such strong arguments, if not self-evident propositions, that the other parties, both the Government and the Opposition, might
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find it possible to support them. Indeed, I was rather encouraged to hear the Leader of the Opposition express an enthusiasm for community politics. The Liberal Democrats have many achievements to their credit. To have the Leader of the Conservative Party speaking in favour of community politics must surely rank as one of the more significant ones.
Lord Howell: My Lords, I am grateful to the noble Lord. Having listened to him and his predecessors speaking on the evils that come from low turn-out and the importance of a high turn-out, I wonder whether he would care to address his mind for a moment to the possibility of compulsory voting, which happens in other parts of the world and which would achieve much greater results than would apparently be achieved under proportional representation.
Lord Newby: My Lords, at one stage when I was a civil servant, attempting to look at alternatives to the domestic rates in the days when Michael Heseltine was Secretary of State for the Environment, there was a discussion about whether the poll tax might be an appropriate alternative. Among the civil servants a laugh went around the room and somebody said, "Imagine collecting that in Brixton." Frankly, I believe that the same argument applies to compulsory voting. I do not believe that one can force people into democracy. It is up to the politicians and the system to persuade people that this is something in which they should participate.
I apologise for returning to the topic of the Conservative Party, but I had hoped that the noble Lord, Lord Strathclyde, might, in winding up, extend his movement onto Liberal Democrat ground by expressing support for PR, at least for local government elections, just as his leader had expressed support for community politics. I suspect, from his earlier intervention, that may not be the case. However, I believe that having moved half-way across the road with regard to the relevance of local government and the way in which it might be conducted, he should really give further thought to going the whole way.
Although I do not agree with the noble Lord, Lord Howell, about the desirability of compulsory voting, I believe that other changes will be needed to improve the standing of politicians. A range of other measures will be needed if the status of local government and interest in its elections and participation in them is to increase. I believe that PR is the key.
4.40 p.m.
Lord Alderdice: My Lords, I came yesterday to your Lordships' House from the talks in Belfast. I find it rather remarkable to be sitting in this debate. Your Lordships are struggling over the question whether or not proportional representation might be introduced into local government at some point on this side of the water. Whatever the contentious matters that we debate in Northern Ireland, it is quite clear in the talks that not a single party there is proposing that we should have anything except proportional representation in Northern Ireland. That is because we have had the experience of it over quite a number of years.

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Why should the people of Northern Ireland and their political representatives have become so persuaded that proportional representation is much the best way to approach representational politics? It is not because, in the sentiments expressed by the noble Lord, Lord Howell, they fear being made to vote. In Northern Ireland we escaped the notion of conscription because at a very early stage it was appreciated that to try to conscript Northern Ireland people as soldiers would only create trouble; but to give them the opportunity to fight voluntarily would ensure a massive surge of support, and so it was. I strongly suspect that if the largest fines imaginable were to be imposed for failure to vote, there would be a long queue of people blocking up the courts.
There has been no problem about ensuring high turn-outs. Indeed, if one takes into account some of the postal votes, there are areas of Northern Ireland where the vote verges above 100 per cent.! It is not proportional representation on its own which has created this situation, but because, whatever else, there is a sense of stridency, enthusiasm and a valuing of politics in that people believe their votes make a difference.
I have some personal experience of proportional representation in local government. On the two occasions when I stood for Belfast City Council in 1989 and 1993, I was elected under the system of proportional representation and the single transferable vote. It may seem a very complicated system, but it is not, particularly for the voters and the parties. If it is seriously being suggested that the people of Northern Ireland can quite happily understand the single transferable vote system, but that those in the rest of the United Kingdom are simply not up to understanding it, that would be a remarkable state of affairs. It is not a complicated system at all; it is quite simple. People put down, in order of preference, the candidates for whom they wish to vote as one, two, three, four, five and whatever.
Perhaps I may take your Lordships briefly through the kind of situation which has been our experience for more than a quarter of a century in Northern Ireland. As regards the selection of candidates within a party, because the STV system has multi-members—that is to say, in each of the areas there will be a number of representatives—most of the major parties, like my own, put forward a number of candidates for each of the electoral areas. They are not very large areas, but are large enough to sustain five or six councillors. At the selection meetings therefore it is not a question of the party élite deciding on the single standard bearer; on the contrary, there is the opportunity for the party to put forward two, three and sometimes even more candidates, which it is felt might have support in the local community. That means that the parties are not able simply to put their stamp of approval on one single individual; it means that the representation coming forward from the party expresses the breadth of view within it.
As regards campaigning and voting, the voters are able not just to look at the representative of the party and say, "Will I vote for him or her"; they are able to say, "There is one of those representatives whom I think is a particularly fine woman. She deserves my vote and
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I shall give her my first preference. But I do not think a great deal of the chap standing with her; I prefer the fellow from the other party. So when I come to my second preference, I shall not give it to the party hack who has been put forward to make up the list, even though I generally support that party. I shall give my second preference to the other party because it has had the good sense to put forward someone who is a local representative of some calibre. He deserves to be on the local council". That means that there are transfers not just from one representative of a party to another of the same party, but from a representative of one party to a representative of another because that person corrals support from across the political divisions.
That is not such a difficult concept for the voters as one might imagine. Indeed, within a matter of a year or two the voters of Northern Ireland became extremely sophisticated at deciding exactly whom they wanted; who would really represent their views and who would not. Transfers were sometimes quite remarkable. Representatives from one party found themselves being elected on transferred votes coming from one or more of the other parties.
It is not that this is difficult for the voters and the political aficionados to understand. The problem is that the party leaders and elites do not have full control of things. I accept that that is a problem, but is it one from which we should turn aside?
Some noble Lords have said that it is desperately important for there to be close links between the elected representative and the people of the area. That is entirely so. But if you happen to be a nationalist in the Northern Ireland context and the representative for your area is a unionist, you would not feel that there is a particularly close link between you and your political representative just because he happens to represent your area. Indeed, you would feel completely unrepresented. You would much rather be in a situation where there are four or five representatives for a slightly larger area. You could then go to the representative whom you believe actually represents your views and is in some way sensitive to you. That is exactly the situation that obtains on this side of the water.
If in a particular area there is almost no one but Liberal Democrat councillors, Conservative councillors or Labour councillors, anyone who is not susceptible to those political views will not feel particularly represented just because someone is elected for their geographical area. The voter will want someone who has some sensitivity towards his or her political viewpoint. The voter will want to know that his vote matters and makes a difference. It is not so difficult to create such a scenario.
The noble Lord, Lord Strathclyde, said. "Yes, but there will be stagnation. Change will not happen". I can understand that being a concern. If there is to be progress and development in politics, some people have to be in and others out (as the noble Lord well knows), at least for a period. However, I draw the noble Lord's attention to some of the local government elections in which my own party has had that experience in the past 12 months. Last May, before the local government

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election to Carrickfergus council, my own party, along with some other representatives such as independents, had had control of the council. Then there was a proportional representation and STV election. We were unfortunate enough not to be able to carry quite the same number of seats, so we went into opposition. Another controlling coalition took over. That was sad news for us, but it was balanced by the fact that we and some others effectively took control of Belfast City Council, which is much bigger. The result was that for the first time ever in the history of Belfast my party was able to collaborate with the SDLP and put forward a nationalist lord mayor. That has never happened before in the history of Belfast. Was not that a change? Was not that a development and something of significance under PR/STV? It was of enormous significance.
It is important to understand that in that context the unionists did not suddenly feel, "Now we are completely out in the cold and there is nothing for us for the next few years; we have lost control which means we have lost involvement; we are alienated from our own city". That was not so at all. The fact that we have a controlling interest on the council means that not only can we ensure that the SDLP provides the lord mayor for this year but that the Alliance Party will provide one for next year. The unionists, even though they lost votes, do not have to feel alienated from their own city because they will have their opportunity in the millennium year.
It is not necessary to create the conditions where those who are in power have control and keep it to themselves and those who are out feel alienated and have no part in the conduct of their own local government. There is a real possibility for change, development and evolution. Surely that is part of what this debate is about. It is about change, development and evolution for the better of our whole political system from bottom to top or, as in the case of proportional representation perhaps, from the top to the bottom.
4.49 p.m.
Lord Holme of Cheltenham: My Lords, it is always a great pleasure to follow my noble friend Lord Alderdice—and one that I often have. Apart from the eloquence and force of his contribution, we have learnt that the British constitutional system is conspicuously bad at finding actual experience, drawing conclusions from it and then applying it. We have such experiences in Northern Ireland—my noble friend outlined them—and perhaps we could all usefully learn from them.
We owe a debt of gratitude to my noble friend Lady Hamwee for introducing this subject—not, I emphasise, wholly or solely (as one or two noble Lords have implied) as a matter of Liberal Democrat interest only. This is genuinely a matter of public interest because it affects the quality of our government in this country.
I say at the start that I warmly welcome the Government's approach to modernising our democracy, putting our institutions back in touch with the people and generally producing a better quality of government. This is a time of constitutional renewal and this debate is about whether that constitutional renewal should
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apply also to local government. I think that it should because there is much to be done. As one of my noble friends has said, it was John Stuart Mill who pointed out that local government is the seedbed of democracy. It is where people—citizens and their representatives—learn the give and take of difficult decisions that deeply affect local people. Things can go wrong at the grass roots. We have had some terrible experience with local government in the past few decades in this country. Of course, some had nothing to do with the electoral system—the noble Lord, Lord Bassam, was right to remind us of that—but some relate to the voting system in local government.
As many noble Lords have said, one-party government can lead to complacency and corruption. It is not inevitable but, as my noble friend Lord Russell said, let us not lead people into temptation. Distance can grow between voters and their representatives and, as a result, turnout can decline and apathy and cynicism can grow. Unrepresentative minorities can gear themselves up (because they are part of the largest minority) to absolute control for extreme and unrepresentative policies. I hope that even now the memory of what Militant did in Liverpool is as fresh in the minds of the Government as it should be fresh in the mind of every citizen in this country. It was an example of what can be done by a small, unrepresentative minority taking over a ruling party which is itself based on a bare majority.
It was the problem of unrepresentative minorities taking over city councils, largely, that led the former Prime Minister, now the noble Baroness, Lady Thatcher, to introduce the poll tax. Let us be quite clear about it. That was the motivation for the introduction of the poll tax. This country had five years of convulsion, with the most unpopular policy of modern times. That led directly to her political demise as Prime Minister because she had not grasped the basic fact that you best get representative policies by having representative government. The party to my left could certainly have saved itself the agony and humiliation of the poll tax incident if it had simply set about democratising local government so that majorities were representative majorities, and not unrepresentative majorities.
I fear that that blindness in Conservative ranks continues because the most conspicuous feature of this afternoon has not been the eloquence of my noble friends—it is well known that Liberal Democrats know the arguments for proportional representation—and it has not been the extremely cogent speeches of the noble Lords, Lord Watson and Lord Bassam, from the Labour Benches; it has been the silence of the grave from the Conservative Benches. We have not heard one single speaker, yet I read this morning in the Financial Times, a reputable organ, that Mr. William Hague, now a reluctant convert to community politics and to partial constitutional reform, will nevertheless fight proportional representation tooth and nail. I am sorry that the weight of that responsibility falls solely on the broad shoulders of the Conservative Chief Whip. One would have thought that the Conservative Party could have found someone else also to fight tooth and nail this afternoon. Perhaps their colleagues at this end of the

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Corridor should be brought in to the new Conservative project and realise that this is something that they must fight—or perhaps they are ambivalent.
Indeed, Conservatives should be ambivalent because the Conservative Party's attitude on proportional representation is a very strange one. The first-past-the-post system from which the Conservatives have benefited for so long has now turned on them. The Conservative Party has now become the victim of the system to which it has been so slavishly devoted for so many years. In Scotland and in Wales, the Conservative Party has been eliminated as a parliamentary force—because of the voting system. As my noble friend Lady Maddock said, the Conservative Party is now the third party of local government—because of the voting system. The Conservative Party has very nearly been eliminated as a force in local government in many Northern and Midland cities—because of the voting system. In the London boroughs of Hounslow, Islington, Newham, Lewisham and others, the Conservative Party is hardly represented. It seems political masochism of the most extraordinary order for the Conservative Party to persist in its opposition to a reform which is not only in the public interest, but which would also so clearly benefit the Conservatives in their new minority status by ensuring that they are properly represented. I have a prediction for them: it will get worse.
I dare say that we shall hear from the noble Lord, Lord Strathclyde, about the defects of proportional representation. I have heard that argument from him before on such occasions. Most of the arguments boil down to the following: first, PR produces weak government. All that I would say to that is that in local government what we want above all is good government, based on consent, and good government that will persist over time, with policies that are in touch with local people. We do not want little Mussolinis in our town halls; we want good government. Strong government is not the British way of doing things. I repeat that we want good government.
The second argument is the one that the noble Lord, Lord Strathclyde, made when he intervened in the speech of my noble friend Lord Russell. It was the question of how, with PR, one can turn people out. As my noble friend Lord Alderdice said, that is a real discussion. My answer to the noble Lord, Lord Strathclyde, is this: if the Conservative Party were able nationally to muster 50 per cent. of the votes, it would have the majority in Parliament. What is there intrinsically to stop any party setting out with the leadership and the policies that will command the majority of its fellow citizens? That applies locally as well as nationally. If you cannot do it, you have to do what most people do in their personal, professional and business lives—and that is, to find some via media and some way of compromising so that good government can be carried on.
The other argument that is often used is to say that the system is complicated. My noble friends have dealt with that point very well. I am not sure that I would go as far as the noble Lord, Lord Watson, in saying that we should sell PR on the basis that it is just as easy as the
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Inland Revenue form. There is probably a slightly better way of putting across our case. However, PR is certainly just as easy as filling in a lottery form, which most people seem to have mastered pretty readily.
It is right that PR is no panacea. However, in local government PR could have some conspicuously virtuous effects. It could make election more important than selection. It could encourage higher participation and therefore a better turnout. It could produce greater responsiveness on the part of local government. It would produce a lower likelihood of complacency and, I believe, a lower possibility of corruption. It would produce better representation, and I believe that it would ultimately produce better government. The arguments for PR are extremely powerful.
In concluding, I should like to ask the noble Baroness, Lady Farrington of Ribbleton, who has great experience of local government, to answer two questions when she responds at the end of the debate. First, when shall we know the system by which London elections are to be conducted? Secondly, if, as is widely rumoured, they are to be based on proportional representation, why does the same logic that is to be applied to London not apply to local government in the rest of the country? I should like to hear quite specifically from the Minister that at this stage on this important issue the Government have an open mind. I believe from the sense of the debate this afternoon that that is what the House wants to hear.
5 p.m.
Lord Strathclyde: My Lords, I am grateful for the opportunity to take part in this interesting debate. I am sure that the House is grateful to the noble Baroness, Lady Hamwee, for having instigated it. Noble Lords may have noticed that I slipped into the Chamber a few minutes after the noble Baroness began her speech. I apologise for that discourtesy.
I am the only speaker so far who is to speak against proportional representation. I therefore look forward with particular interest to the speech to be made by the noble Baroness, Lady Farrington of Ribbleton, to see whether I am the sole voice in the debate this afternoon. There is nothing particularly surprising about the Liberal Democratic Party initiating a debate on proportional representation. It is rather like a convention of football club owners initiating a debate on the need for more televised football.
In all the best detective stories the first task is to look for the motive. The Liberal Democratic Party has a powerful motive. Proportional representation gives more power to the Liberal Democrats, more power to politicians and less uncertainty for those with political power; in other words, the political machine.
Who stand to be the great gainers from the introduction of proportional representation? It is the Liberal Democratic Party. "PR" should stand not for "proportional representation" but "permanent representation"—permanent representation for the Liberals in government and local government alike. It also stands for the preservation of governments, local councils and politicians. Earlier in the debate I asked the noble Earl, Lord Russell, a question. It was the noble

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Lord, Lord Alderdice, who replied, I am sure much to the gratitude of the noble Earl. The noble Lord, Lord Alderdice, made a very good point, but when answering he inadvertently made an even better point about proportional representation. It was not the voters who decided what the coalition in Belfast should be but the politicians who got together behind closed doors and produced a solution that they thought would work best for themselves. During this debate statistics have been hurled around the Chamber. They do not prove anything bar whatever one wants them to prove.
The Motion before us today is concerned with local government, but let us not delude ourselves. PR in local government would be a further step on the road to PR in general elections—a direction in which both the Labour and Liberal Parties are already pointing in policies for European elections and for Scotland. During the course of the debate I could not help but reflect on why, if PR was such a good idea, we had not got it already. Why did not the Labour party include PR in its manifesto? Why in the past 18 years did we not bring forward our own ideas? We have not done so because we believe PR to be profoundly undemocratic.
I ask the House to consider the words of the noble Baroness, Lady Hamwee, in describing the benefits of proportional representation: it will be fairer to the electors; it will increase the turnout at local elections; people will vote for candidates rather than parties; it will mean that more women will be elected and that other kinds of minorities will be represented. This is marvellous stuff, and the Labour Party should listen to it with care.
Lord Holme of Cheltenham: My Lords, I am grateful for the noble Lord allowing me to intervene. I do not want to interrupt the flow of his eloquent speech. Is the noble Lord saying that women in this country are a minority?
Lord Strathclyde: My Lords, I took a very careful note of the words of the noble Baroness, Lady Hamwee. She said that PR would mean that more women would be represented and that other minorities would be represented. I do not put a gloss on what she means. I say to the noble Lord, Lord Cheltenham, that I am perfectly well aware that women in this country do not make up a minority of the electorate. The noble Lord has made a good effort to diminish the effects of what I said. If all of this is so good why did we not do it a long time ago?
What would proportional representation mean in practice? It would mean that almost no national government or local council could be formed without the say-so of—guess who?—the Liberal Democratic Party. Having been the least popular of the three major parties, at a stroke they would be transformed into the most powerful. Power would be given to the least popular. I find it hard to see what that has to do with either representative democracy or effective local or national government.
What are the Liberal Democratic Party afraid of? At the start of this century the Liberal Party was the largest party in Britain. It dominated both national and local
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government and it won that dominance under the first-past-the-post system. Under the first-past-the-post system it lost that dominance. Why? The Liberal Party lost it because of what it now calls "unfair votes". That was not the reason: the party lost it because of lost votes. The people of Britain preferred Labour to Liberals—Social Democrats and Liberal Democrats alike. Odd though it may seem, they still do. There is nothing to prevent the Liberal Party from retaking its place at the head of the parties of Britain except that in election after election the public have shown that, whatever they think of Conservatives or Labour, they find Liberal Democrat ideas and policies the least attractive.
I believe that instead of seeking to tear up the first-past-the-post electoral system in their own narrow party interests the Liberal Democrats should seek to do to Labour what the Labour party did to them; namely, to use the existing system to win success as the leading party of the left. This is quite possible. I refer to the noble Baroness's own borough of Richmond, where I understand the Liberals have squeezed the Labour and Conservative parties such that they now dominate the council. I suspect that that is one reason why those who live in Richmond suffer the highest council tax cost in outer London. I am also told that it has lost to property developers the historic ice rink that was once so much loved by local people.
The Liberal Democrats should have the courage to present themselves to the public for what they are rather than seek to win power locally and nationally on the coat-tails of a Labour Prime Minister. As they cling to his coat-tails and sup tea in secret Cabinet committees they should be careful with whom they do business and to what it leads. One does not have to be too perspicacious to see that the Prime Minister's dream is to split their party, bring the Social Democrats under his wing and cast the grand old Liberal tradition, which has served this country well, out into the darker fringes of politics.
We have seen those dangers in the House only this week. I refer to the proceedings on Monday when at the very last minute the noble Lord, Lord Tope, failed to move a Motion on two vitally important matters to Britain's schools, students and universities. The noble Lord told the House that,
"any further delay with this Bill …"—
there had been no delay—
"could have a serious effect on other government legislation, some of which, it is true to say, my party supports, at least in principle."—[Official Report, 23/2/98; col. 407.]
I suggest that the words, "supports, at least in principle" are significant, for it was reported in yesterday's press that "senior Liberal Democrats" had discussed with the Government changes to the PR system proposed for European elections—supported by the Liberals significantly in principle, but not in detail—and had suddenly won movement in their direction. The juxtaposition of these two things is, I submit, no accident. The noble Lord, Lord Tope, was constrained by his Whips to abandon a defence of the universities, students and their families for a modest move by Mr. Straw on PR. Such is the power of PR to influence Liberal Democrat minds and to force low compromise

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at the expense of high principle. That is the fundamental argument against PR at any level, national or local. It puts a premium on private party bartering and fuzzes clarity of principle; it transfers choice away from the electors and gives it to machine politicians; and it offers the greatest power to the most unpopular party. It also creates extremist parties and a proliferation of parties.
I was impressed by what the noble Baroness, Lady Maddock, said, that the current system led to the amelioration of extremes within local government. I agree with her. Surely the opposite must be true: when you have a proliferation of small parties it gives political credibility to small, extremist movements.
For once I find myself in strong agreement with a Labour Party document, their consultation paper on local government, published in February. It says:
"The tradition in this country is for there to be a close link between constituency representatives and the citizens they represent. Our local government voting system delivers just this result with each councillor being elected by the citizens of the ward or district which they represent. We believe such links between councillors and people are vital to ensure councils engage effectively with their local communities."
I agree with that.
Yesterday the Leader of the Opposition, Mr. William Hague, made a speech on the constitution. He said:
"Of all the dangerous and destructive constitutional reforms currently on the table, perhaps the most dangerous and the most destructive is proportional representation."
At a time when a first-past-the-post system has recently found favour in Italy, a country wracked by generations of weak governments which were the fruit of PR, it would be extraordinary, simply to serve the narrow interests of the Liberal Party, to throw over the direct links between electors and elected and make councils less stable and council candidates even more the servants of party than people.
I have listened to the Liberal Democratic Party this afternoon with respect. With equal respect I have to say that this is an old, self-seeking Liberal canard which we on these Benches will not buy. Let the Government, and the noble Baroness in particular, be in no doubt that if they are in favour of proportional representation they are on their own. We will fight them every step of the way.
5.10 p.m.
Baroness Farrington of Ribbleton: My Lords, I quake to hear the authoritative and, I presume, final position of the Conservative Opposition Benches on a subject to do with the constitution, at least for today.
It is clear from the debate that there is a wide range of views both within the House and elsewhere on the merits of proportional representation and on the importance of considering them in the context of different types of elections to different bodies. There is currently no consensus about the best or most appropriate voting system for local government, although certain possibilities clearly command more support than others. There is certainly not a consensus that a change from the current first-past-the-post system is required, although there are many who argue this particular view, and we have heard some distinguished
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proponents. We have had demonstrated this afternoon a need for a mature and reasoned consideration of the issue.
The Labour Government have embarked upon a radical and wide-ranging programme of constitutional reform, including devolution in Wales and Scotland, PR in elections for the European Parliament, the Independent Commission on the Voting System for Westminster chaired by the noble Lord, Lord Jenkins of Hillhead, the creation of a mayor and assembly for London—which will be contested and supported by all parties represented in the debate today—open government and freedom of information. The Government have a radical programme which will touch all levels of the state, and local government is crucial within that.
In his recent speech at Scarborough the Prime Minister set out four key areas of change in our agenda for local government: new legitimacy, new ways of working, new disciplines and new powers. We have made a start in all of these areas and our aim is to ensure that councils can fulfil their potential. They have a vital role to play in giving their communities the quality of life which people rightly expect and deserve.
We have published a consultation paper on local democracy and community leadership which sets out ideas for achieving this. This is the first paper in a series, with more to come, on best value, finance issues and a new ethical framework in response to Lord Nolan's report on standards in local government.
The change of culture equally affects the disciplines under which modern councils must operate, including the move away from discredited compulsory competitive tendering towards a regime of best value. Your Lordships will be aware that there are now 37 full best value pilots in place across the country. It is an issue which is extremely important in terms of righting the balance between local government and central government.
More generally—not least because of the writing of my noble friend Lord Bassam—people in local government are becoming seized of the cultural change that best value, fully implemented with local performance plans negotiated with the community, will engender.
We intend that this programme should lead to massive change in the culture of local government, with greater accountability and openness, better, more streamlined decision-taking, greater efficiency, greater public involvement in decision-taking and better and more visible leadership. Overall we are working in partnership with local government to enhance its ability to meet the needs and aspirations of the communities it serves.
Our first consultation paper, which has been referred to by many speakers in the debate, deals with options for moving to annual elections and options for possible changes to other electoral arrangements: for example, voting on Sundays, electronic voting, and other experiments which would be made possible by the Private Member's Bill, if enacted, of the noble Lord,

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Lord Hunt of Tamworth. Let me place on record again my gratitude that all sides of the House were able to come together to agree improvements to that measure.
This first consultation paper seeks views on 30 different fundamental questions. The Government will listen to and consider carefully all views expressed on this paper and those to follow before setting out their proposals in a White Paper. We shall legislate, where necessary, at the first opportunity.
The programme set out in the consultation paper includes some major changes, such as the move to annual elections. This manifesto commitment will ensure that authorities will be subject to more regular electoral accountability for their performance. As a minimum, it could mean a change in electoral practice for a large number of authorities.
The noble Lord, Lord Tope, asked me for the arguments that would support annual elections. From my experience in local government, the strongest support arises from the argument that you can have a fluke set of circumstances and an unusual result in one year. That can lead to a lack of continuity because there are marked swings every four years instead of a gradual responsiveness to the changing mood of the community.
The issue of complacency and low standards in local authorities which have been controlled by a single party for a long time is widely acknowledged across the political spectrum. Our consultation paper contains a range of measures—a number of them radical—to address this issue. There are measures to encourage higher turn-out, greater public involvement between elections and innovative ways of taking decisions.
Our programme will bring the one-party state system up to the mark and make the absence of opposition less likely. For example, under the Bill brought forward by the noble Lord, Lord Hunt, there may be experiments separating the executive role from the representative and scrutiny role in the local authority. This would occur where the authority experimented with a directly-elected mayor or a cabinet model, for example. Wherever there was a separate executive arm established there would be a requirement for the authority to have one or more scrutiny committees. These committees would have full access to information, members of the executive and the officers of the authority, and their membership would be in line with the overall political balance of the authority. That point was supported across your Lordships' House when the issue was raised by the noble Baroness, Lady Hamwee.
The power of scrutiny of a majority political party on an authority is an alternative and supplementary means of tackling corruption. The difficulty is the language which is used in connection with local government. It has been interesting to hear today the different language used in connection with control, no overall control and whether there would always be a lack of scrutiny when one party has a large majority on the local authority.
If through enabling legislation we had enhanced scrutiny, it is possible that the small number of senior officers and members of an authority which may have remained under one party control for several years will find that some of the fiercest scrutiny comes not from
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the opposition parties but from their own back bench members. Councillors on a scrutiny committee would have a number of incentives to be rigorous in their oversight of the executive, including the normal process of exercising political opposition and representing the interests of their constituents. Therefore, our package builds on the traditional strengths of local government. A major element is to enhance the degree to which councillors are able to represent fully and actively those who elect them in order to make them closer to the people.
As was recognised by the noble Lord, Lord Holme of Cheltenham, the programme for local government is a major undertaking. It will involve legislation and could involve authorities in managing a number of significant changes simultaneously. The Government have decided that on local democracy the highest priority must be given to the broad package set out in the recent consultation paper and to the complementary introduction of best value and the new ethical framework. We are committed to fostering innovation and change in partnership with local government.
The noble Lord, Lord Tope, spoke of the judgment being made by government about priority within a programme of identified issues. Local and central government must work together to develop a radical and realistic programme for change. Delivery must not he impeded by trying to do too much at once. The noble Baroness, Lady Maddock, asked for more change. There is a rate of change which would he a rate too far in keeping the partnership approach between central and local government.
However, the Government recognise that any consideration of democratic arrangements, central or local, must necessarily include looking at voting systems. Clearly, we will have to address the issue in due course. The Government will look carefully at the issues and listen carefully to what people say. Nothing would be served by me seeking to respond to comments about the different electoral systems or their appropriateness to local government today. Claims have been made for proportional representation. The noble Earl, Lord Russell, and other noble Lords spoke about the voting patterns in, for example, the boroughs of Kensington and Chelsea and Sheffield. However, I suspect that in most years there would be a majority from one party and no overall control. Therefore, our approach to the system of scrutiny is extremely important.
The acceptability of the decisions taken by our local authorities depends on their democratic legitimacy. I have attempted to explain today that this is not merely a product of the voting system used. There is a range of views on the voting systems and many will argue for first-past-the-post, as did the noble Lord, Lord Strathclyde. The Government take the view that it is necessary to ensure that we have the most suitable electoral system for the body that is to be elected.
Certain issues relate to the size and nature of the body that is to be elected. I was asked specific questions about London and what the Government are likely to do. The Government will publish a White Paper next month on

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the new strategic authority and mayor for London. It will set out the proposed electoral arrangements for the mayor and assembly. The new authority will cover more than 5 million voters and will have strategic powers and functions. The primary function of the assembly will be to hold to account the mayor for London, and the details will be published. However, in considering the proposals in the White Paper and making comparisons with local government, it must be remembered that the authority will comprise a comparatively small number of members and will have a highly strategic function. It is not necessarily comparable with other levels of authority.
As many noble Lords have said, the link between locality and councillors is important. I intend to look further at the points raised by the noble Lord, Lord Alderdice, with regard to the number of councillors in the areas of the country which do not have PR. From my experience as a councillor, I know that it is important to have a good relationship with the local community. At present, it will not be popular to turn to a system—for example, the STV system—which will lead to an increase in councillors of 500 per cent. As a councillor on a county council, I represented almost 14,000 people and I know that a multi-member seat would cover a large area.
We intend to ensure that we retain a local system and wish to avoid large wards or remote systems which cut people off from the local community. The Government wish to place all their weight behind the programme of democratic reform for local government. Never have a government working with local government supported such a range of exciting initiatives and opportunities to experiment. Evaluation of the radical changes which result from that programme may lead us to consider changes to voting systems. The Government are not, therefore, drawing any conclusions on the issue at the moment.
Today's debate has been helpful in teasing out some of the issues which will need to be addressed. I was particularly interested in the contribution of the noble Lord, Lord Alderdice, based on his particular experience. I am sure that we shall benefit from that in future debates.
My noble friend Lord Watson of Invergowrie raised many important issues and much has been made of the low turn-out in local elections. As a government, we are committed to increasing that turn-out. There are many factors. One issue is a new partnership which allows local authorities greater freedom to work with their communities after years of centralisation. Over the past 18 years, there have been many examples of tension and mistrust between levels of government.
We intend to be open and honest with local government and work through the radical programme. The noble Baroness, Lady Hamwee, has given us an opportunity this afternoon to give consideration to an important aspect and subject. On many future occasions I look forward to hearing contributions from noble Lords on that subject.
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I was slightly surprised by the experience of the noble Earl, Lord Carlisle, in Durham. My experience of Durham county councillors was that they were a very lively lot. Perhaps the most lively was the leader with whom it was my pleasure to work alongside in the Association of County Councils. At the age of 84, having nursed his wife until her death from Alzheimer's disease, he took up parachute jumping to raise funds. When he was asked whether it was not very stupid to parachute jump for the first time at the age of 84, he said to the young reporter, "Certainly not. If I kill myself, I lose two years. If you do, you lose 62 years". Those people were not all perhaps of the type experienced by the noble Earl.
5.31 p.m.
Baroness Hamwee: My Lords, I welcome very much the enthusiasm for democracy which has been expressed from almost all sides of the House and for the inclusiveness for which we are striving and which we are increasingly attaining in government in this country.
It appears that the noble Lord, Lord Strathclyde, rejects that inclusiveness even of his own party in what I can only describe as "yesterday's speech". He may have missed my explanation that PR would affect the Liberal Democrats as much as it would the other parties, although that was a point made by other noble Lords. I said also that of the various arguments for PR. any benefit to the politicians was the very least.
To put the point firmly on the record, I must say that I did not talk of women as minorities. I most carefully did not use the word "minorities". Indulging myself just a little, I should say also that it is reassuring to know that the Conservatives have absolutely no new arguments against the Liberal Democrats in my own borough of Richmond-upon-Thames. Despite the relatively high council tax there which the noble Lord well knows is because of the extraordinarily low level of central government grant, the electors have continued to return Liberal Democrats with huge majorities.
Perhaps the Conservatives are comfortable only with extremes and the noble Lord does not recognise that, as my noble friend Lady Maddock said, co-operative politics hold back the extremes. He may not know either that Italy has moved to a form of AMS rather than first-past-the-post.
The general point is that it has been said around this Chamber that proportional representation will not be a panacea, nor indeed, I believe, has any noble Lord argued that no overall control—hung or balanced councils, whatever one wants to call them—is the right model and the only model. That is not the case. But proportional representation is a vital ingredient in rejuvenating local democracy. I believe that has been demonstrated today.
The noble Baroness, Lady Farrington, said that PR for local government would be considered in due course. The noble Baroness, Lady Hayman, said earlier this afternoon that she did not have a Civil Service lexicon with her. I am not sure where "in due course" comes in the hierarchy of short, very short or other courses.

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I believe that I am right to welcome the confirmation—to read between the lines—of not only PR in London but also the open mind of the Government on this issue.
My noble friend Lord Tope referred to the outcome of the borough elections in Wandsworth in 1986 and the fantasies that we might have had had the votes been reflected in the number of councillors elected. At that point, I was watching the noble Lord, Lord Ponsonby of Shuibrede, who was a councillor in Wandsworth until four years ago. For him, the fantasy went on a little longer than for some other noble Lords.
In the 1890s Lord Salisbury said:
"By democracy, I do not mean a system in which seven men tell nine men what to do".
It is that basic issue of fairness which has been central to this debate. I thank all noble Lords who have contributed to it. I do not need Papers to persuade myself of the case for PR in local government. I hope that no other noble Lords do. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Access to the Open Countryside
5.35 p.m.
Baroness Hayman: My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend Michael Meacher MP in another place. The Statement is as follows:
"The House will be aware that we have published today our consultation document Access to the Open Countryside in England and Wales. I held meetings with four national organisations yesterday in order to outline the Government's thinking in broad terms. In view of the complexity and detail of the issues, I allowed each organisation to have a copy of the document to examine overnight.
"I emphasised that it was for personal use only and that the contents were not to be disclosed to anyone else. The organisations concerned were the Country Landowners' Association, the Moorland Association, the National Farmers Union and the Ramblers' Association, all of which have been involved in extensive discussions with my department on this issue.
"I completely understand the honourable Member's concern that non-governmental organisations should have seen the document before it was available to the House.
"I have discussed this matter with the Deputy Prime Minister and apologised to him. He made clear that he regarded this as unacceptable, and I share that view. He accepted my wish to make a full and unreserved apology to the House, and that I now do".
My Lords, that concludes the Statement.
5.37 p.m.
Lord Inglewood: My Lords, before making a few substantive remarks, I should tell your Lordships that I have some land in Cumbria and some of it is above 600 metres.
The noble Baroness, in her charming way that we all respect, has repeated to us one of the oldest stories in the world: "I told him a secret and then he talked". I hope the Government will not mind me offering a piece of advice which I believe is a dictum of the noble and learned Lord, Lord Bridge, in one of his law cases which was that the trouble with gentlemen's agreements is that there are not enough gentlemen to go round.
What has occurred is regrettable. There are too many occasions when Parliament has not been told when it should have been told. But of course, on behalf of these Benches, I accept the apology.
The document which is at the centre of this little storm is called Access to the Open Countryside in England and Wales, a consultation paper. The problem is that it is not a consultation paper at all. I knew that even before I read it because as I was getting up this morning and listening to the "Today" programme, I heard the right honourable Member, Mr. Meacher, explain to me and much of the rest of the nation what it was all about. He said:
"If we cannot achieve our full objectives by voluntary means we will resort to other means and that certainly means legislation. We are absolutely clear about that. I repeat again we arc going to achieve the increase in access we set down in the consultation paper. If we can achieve it by voluntary means that is far and away the best way to proceed in this as in other areas. But if we can't, then we will bring in legislation".
That is not consultation; it is an ultimatum. It is no more a consultation document than the recent agreement made between Kofi Annan and Tariq Aziz was a voluntary grant from Saddam Hussein to UNSCOM to have the right to roam over Iraq.
This is Hobson's choice. The document is effectively the briefing pack for the Second Reading speech that the noble Baroness will use if she introduces this legislation; that is, unless the Government's aspirations are achieved voluntarily in double quick time. The Government here are threatening landowners with legislation before proposals have either been placed before Parliament or considered by it. I always understood that it was Parliament that made the laws in this country, but perhaps I am out of date. I am just an old Tory and not a new Labour man.
In short, I believe this document represents poor governance. The Government should first have told Parliament of their legislative intentions. That is what this document sets out. It threatens citizens with legislation as if it and not Parliament made the laws. Given the substance and the content of this document, we believe that it should have been given to Parliament first and not just issued after an interview on the "Today" programme and, I assume, a press conference at the department.
5.40 p.m.
Lord Mackie of Benshie: My Lords, the breach is one that often occurs, apparently, and something should be done to stop that. I was a little perturbed at the inference that one of the four bodies leaked this to the press. From past experience I should think it is just as likely to be someone from within the government department than from these respectable bodies. I agree that what has happened is regrettable. I agree with most of what the noble Lord on the Conservative Benches has said. I have read an article in the Evening Standard, although I did not hear the programme this morning.
However, the proposal we are discussing seems quite sensible in that the Ramblers' Association and other interested bodies will be in a far better position if landowners enter into voluntary agreements. I do not know many bad landlords but I know that many good landowners already allow the public access to see the beauties of the countryside. I have found that where a bargain is drawn up as regards the shooting season for deer or grouse in Scotland, people keep to their promise to stay off the land and not spoil the income for the estates which is necessary to maintain those estates. That appears to me to be quite a sensible approach. I do not think that legislation is such a great threat; I believe that might be quite sensible. The noble Lord referred to the United Nations negotiations with the dreadful Hussein. I think that the Government have been a little incompetent but their intentions are good. However, I would not like to agree with the saying that the road to hell is paved with good intentions.
5.43 p.m.
Baroness Hayman: My Lords, I am grateful for the courtesy with which the Statement was received by both Front Benches. It comprises a full apology from the Minister. Sometimes it is right not only to make an apology but also graciously to accept it. I am grateful to the noble Lord, Lord Inglewood, for doing that. A judgment was made by Mr. Meacher. He has made it clear that that judgment was not correct and has apologised for it. The relevant document is now in the Libraries of both Houses. I have compiled a Written Answer on this matter in your Lordships' House this afternoon.
I should make it clear that, as I understand the Companion, I should give details and elucidation on the Statement in response to the PNQ rather than engage in a substantive debate on the issues contained in the consultation document. However, I shall comment on the status of the consultation because I believe the accusation has been made that it is not genuine because there is the possibility of legislation. I refute that accusation. We made it quite clear in our manifesto that our policies included greater freedom for people to explore our open countryside. We intend to keep to that commitment. In a sense that commitment is not open to consultation. What we are prepared openly to examine in all its forms is the means by which we achieve that aim. The document makes it quite clear that it would, to say the least, be quicker and more effective to achieve that aim by voluntary means rather than to adopt the legislative route. We are open-minded about the means
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we adopt to fulfil that obligation. That is what the consultation document is concerned with. I am sure that many noble Lords will want to participate in that debate at the appropriate time.
5.45 p.m.
Lord Gisborough: My Lords, I first heard about this matter last night when I attended a meeting with the chairman of the ramblers who had a copy of the document. I have only just received it and therefore I have not read much of it. The thrust of it seems to be that if landowners allow public access to their moorland there will be no legislation. I must declare an interest in this area. However, I do not think landowners will allow open access to their moorland as no one wants to see his land ruined, and that is what I think will happen in many cases.
If the Government were prepared to consider increasing the number of footpaths, rather than increasing open access, on the basis that 90 per cent. of walkers use footpaths and few stray from them, they could expect and demand complete co-operation. Many moorland owners have already offered such a facility. If the Government were to demand, for example, a mile of footpath per 1,000 acres, they could expect full co-operation. However, if open access is allowed, vandals will take advantage of that, not just walkers. That would be terrible. I also hope the noble Baroness will note how many people demonstrate on Sundays not just against hunting but also for the right to roam and in favour of many other countryside activities.
Baroness Hayman: My Lords, I note the comments made by the noble Lord opposite. Given the nature of the Private Notice Question to which this Statement refers, I think it would be inappropriate if I responded in detail to all the points the noble Lord has made. We are discussing the nub of the consultation and the debate that is now taking place. I am sure there will be opportunities in your Lordships' House for us to discuss these matters.
Lord Lofthouse of Pontefract: My Lords, I understood that we were discussing the Statement made by Mr. Michael Meacher in another place which is purely and simply an apology. While such mistakes are regrettable, they happen; they are not uncommon. This afternoon Mr. Dennis Skinner has pointed out that on 41 occasions—at the last count—the previous government made similar errors during their years in office.
Baroness Hayman: My Lords, I thank my noble friend for his comments. I am sure he is right to say that this is not the first government to have sinned in this way. However, I repeated the apology because it arose from behaviour that was not appropriate, as my right honourable friend made clear.
Earl Peel: My Lords, I apologise to the Minister that I was not present when she repeated the Statement as yesterday I was told there would be no government Statement on the Floor of either House. However, that

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is as may be. I agree entirely with what my noble friend Lord Gisborough has said. I declare an interest not only as a landowner, but as someone who will be—
Lord Burnham: My Lords, I thank my noble friend for giving way. I believe I am right in saying, with respect, that this is a debate to discuss the Government Statement. We should he wrong to involve ourselves in any way in what might be considered to be a Second Reading debate. My apologies to my noble friend.
Earl Peel: My Lords, perhaps I may simply ask the Minister a question which I believe is fundamental to the way in which these discussions go forward. Will she tell the House who is to facilitate the negotiations? When there are two sides, on the one hand the Ramblers' Association, it would be helpful to those of us who will be involved if there were clear guidance as to how the negotiations are to take place. If there is not, it will lead to all sorts of difficulties.
Baroness Hayman: My Lords, we are in the realm of consultation rather than negotiation, and the consultation document makes clear the areas on which the Government are seeking the views of all those with an interest, from either side, indeed from the many sides in the debate, as to how we square the circle of extending the rights of people to explore the open countryside with the responsibilities which clearly go with that extension.
So far as making a statement is concerned, perhaps it might help for clarification. The document is not being launched by an oral Statement in either House but, as such documents often are, in response to a Written Parliamentary Question. The Statement that I have repeated today is in response to a Private Notice Question referring to the availability of the document to non-governmental organisations before it was available to Members of either House.
Lord Harris of Greenwich: My Lords, is the noble Baroness aware that she has frankly admitted on behalf of the Government that an error of judgment was made on this occasion? We welcome the fact that an apology was made. In my view, and I suspect that of others, one should welcome that and leave the issue altogether. It contrasts extremely favourably with the record of the previous government. Mr. Michael Howard lost case after case in the courts and never expressed a single word of regret.

The Railways
5.52 p.m.
Baroness Thomas of Walliswoodrose to call attention to the state of the railways; and to move for Papers.
The noble Baroness said: My Lords, before beginning my remarks, I should like to thank the large number of Members who have decided to speak in the debate. In particular, I extend a welcome to the noble Earl, Lord Leicester, who will make his maiden speech. I am
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also delighted with the support that I am receiving from my noble friends. We can look forward to some expert contributions.
This debate is certainly very topical. We daily await the response of the Government to the failure of London and Continental Railways to fulfil its contract to build the Channel Tunnel Rail Link. At some time in the not so distant future (are we entering into the Civil Service lexicon again?) we shall have an announcement from the Government as to their plans for an integrated transport system. The inquiry into the Southall disaster last year has been postponed because the matter is sub judice pending a possible criminal prosecution; but until that postponement it filled a lot of media space in the past few days. This week's "Panorama" was devoted to the problems of two TOCs and there has been a plethora of reports from OPRAF, the rail regulator and many private organisations and pressure groups about the aftermath of privatisation, the present levels of service and investment, or containing advice about what should happen next. Hardly a day passes without a news story, usually a damaging story, about the railways.
In introducing this debate, I do not wish to enter into an argument over privatisation as such. Yet the current state of the railways is greatly affected by the results of privatisation, and I and my noble friends are bound to refer to those. My main theme is the need to expand the use and infrastructure of our railways in the context of an integrated transport policy. I shall also discuss the difficulties which the fragmentation of the network and the services put in the path of ensuring that the public interest is reflected in what actually happens in terms of service provision and network enhancement.
The environmental case for rail taking an increased share of passenger and freight movements is widely accepted. People understand and desire the benefits of reduced congestion, reduced air pollution and reduced wear and tear on our road system. At the same time, the safety case for rail is very high indeed. In theory, if all passenger journeys were transferred from road to rail, deaths would be reduced from 3,500 to 100 per annum. The greater use of the railways can also play its part in developing and redeveloping town and city centres, which chimes well with the Government's planning approach laid out in their recent Green Paper.
All in all, there is a strong public interest in maintaining and expanding rail services. But the current structure inhibits those objectives. For example, if we examine the infrastructure, the responsibility for maintaining, improving and presumably extending the track rests with Railtrack; but residual railway lands which might be needed for that are still in the ownership of the British Railways Property Board. Again, with passenger services divided among 25 different franchises it is possible for overall performance apparently to improve while important pockets of sub-standard service remain.
A recent report from the Association of Train Operating Companies (ATOC) highlights some of those improvements, including better standards of performance in the National Rail Enquiry Service, ATOC's development of a code of practice for the

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safety aspects of stations, car parks and trains, increased levels of satisfaction and a required investment in 2,052 railway coaches, of which half are to be in service by the year 2000. All of those are welcome. However, it is noticeable that most of the service and infrastructure projects are outside the south east, and in particular outside the Surrey, Sussex and Kent areas, where levels of satisfaction among commuters are extremely low. Equally, it might be hard to persuade commuters on the "misery" lines from the north into the City that their services are really improving. Delays, cancellation and overcrowding are a normal part of life, together with elderly rolling stock which is dirty within and without.
No wonder the national press, most of whose journalists live within the London commuter zone, finds bad news stories easier to come by than good news stories. I was alarmed to learn while doing the research for this debate that, of Connex South Central's 600 slam door trains, not one is due to be replaced during the period of its contract and that Connex South Central is the only train operating company which does not expect to reduce its fleet of slam door trains. So while one may admire the initiative of TOCs, which are increasing cross-country services in the Midlands or improving the stations which they lease, one cannot ignore the current under-performance of commuter services into London and the very large numbers of people who are affected by those poor services. Moreover, because of the separation of contract compliance and regulating functions and the curious way in which standards are built into the contract process, it is difficult to compare the levels of performance between different train operating companies. That is vividly illustrated by the most recent publication from OPRAF on customer satisfaction, which indicates different levels of benchmark for each company and different methods of measuring satisfaction, with different criteria as between one company and one element of service and another. Common criteria, benchmarks and assessment processes are urgently needed.
The financing of rail services and improvements in the infrastructure currently depend on high levels of public subsidy. It is the high track rents made possible by these subsidies which enable Railtrack to commit itself to historically high levels of overall investment; for example, the modernisation of the west coast main line signalling system. But what will happen to investment as subsidies begin to be phased out? Stop-go investment was a curse under the nationalised system. Does the new privatised system remove that curse? Certainly, the failure of London and Continental Railways to fulfil its contract in respect of the Channel Tunnel rail link is not reassuring. It is, in our view, essential that the Government ensure the full completion of that project. Not only would the completed CTRL make a contribution to environmental objectives, but the commercial benefit of the new line is not to be realised unless it is carried through Stratford and on to King's Cross-St. Pancras.
There are other areas in which an expanded or restored network would enable the operating companies to fulfil public needs and expectations. For example,
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Heathrow Airport is the largest single generator of traffic in the United Kingdom and one of the largest single generators of traffic in the whole of Europe. Most of that traffic comes in by road. Yet with a relatively minimal reinstatement of existing tracks and chords, together with some new build, it would be possible to link most of south and south-west London, and the outer southern suburbs, to Heathrow by rail with enormous benefits to congestion on the M.25. But obviously if existing but unused rail land were to be lost, that option would also be lost.
So far I have spoken largely of passenger services, but there is also great public interest and commercial benefit in expanding the role of the railways in freight movements. Yesterday I attended a meeting of the all-party Rail Freight Group at which the importance of completing the CTRL and thereby releasing pathways on the existing tracks for freight was once again emphasised.
Equally, documentation I have received from other freight organisations indicates their interest in investment in modernising the loading gauge so that the network can accept trains carrying 9 foot 6 inch containers and improving the possibility of carrying piggy-back road trailers by rail. One major company concludes that where the network capacity is concerned:
"There is at present no clear strategic planning approach which can look beyond relatively short-term commercial horizons".
So if there are problems and if the public interest, possibly supported by public funds, needs to be injected into the equation, how might one achieve those objectives?
One thing that needs to be done is to create an even playing field between the railways and their chief competitors—private motor cars. Interestingly, some of the methods by which this could be done would also generate funds for investment in public transport, including the railways. We believe that the motor licence fee should be reduced, possibly in a way that rewards owners of more economical cars, while motorists should be asked to pay the full costs of using their cars via increased taxation of petrol. In places where congestion is particularly damaging, road pricing might be introduced. Local highways authorities could be enabled to monitor and recuperate the fines for illegal parking.
All three of those measures would generate funds which could be hypothecated for use to support public transport. They would have the additional benefit of doing so at the level of both national and local government. I think it is generally agreed that co-operation between the public and the private sector is necessary to achieve the best results. No doubt others will have good ideas for creating what we believe to be the desirable outcome of partnership between the public and the private sector.
In responding to today's Question about London Transport, the Minister suggested that the Government were seeking such a partnership in that context. I hope we may take it that that is a good augury for future decisions.

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Another element of our approach is the creation of a single rail authority to take over the role of both the rail regulator and OPRAF, as they have recently been modified by the Government. We think this would help to bring public interest into the system of franchise negotiation, standard and target setting and increase the "fit" between that and the regulatory machine.
Equally, we also hope to see an element of strategic planning of rail capacity and the establishment of clear priorities for improved services so that, for example, hard pressed London commuters could benefit as well as the inter-city passengers.
Many Members of this House have told stories during debates about railways and some may do so today. In The Times yesterday, a letter appeared in which a woman told how she went to Chester station to meet a train arriving at 1935. She queried the meaning of the message on the TV screen: "Expected 1951 on time". She was told that the train was currently running late but might arrive on time. After the train arrived 35 minutes late, at 2010 the screen still showed the same message. This time she was told: "Sorry love, the man who does the TV goes home at seven o'clock". She concluded: "Come back British Rail, all is forgiven".
Liberal Democrats do not want to return to the past. We recognise that our preferred option for privatisation which would have involved retaining Railtrack in public ownership is no longer a possibility. But we still insist that railways have a key and expanding role to play in an integrated transport system that is safe, user friendly, accessible and environmentally sustainable and which reflects the public as well as the private interest.
We acknowledge that the Government have begun the process of improved regulation and planning, but we would prefer the creation of a single rail authority which would replace both. We think that a partnership between the private and the public sector is necessary to ensure investment that satisfies the public interest as well as making economic sense.
We suggest that only a transparent fiscal regime can both ensure that the real costs of all modes of transport are appreciated by users and that the higher costs levied on the use of motor vehicles are seen to be devoted to the improvement and upgrading of public transport.
It is up to the Government to convince us in the next days, months and years that they have the determination to take the decisions that can make our railways work for us. I beg to move for Papers.
6.5 p.m.
Lord Berkeley: My Lords, I congratulate the noble Baroness, Lady Thomas, on instituting the debate and on what I thought was an expert and thoughtful speech about the problems facing the railways. Perhaps I may first declare an interest as chairman of the Rail Freight Group and an adviser of Adtranz. I welcome the opportunity to have this informed debate which is much needed. I wish to concentrate on the strategy for growth in the railways. I would like to ask and, I hope, answer the question: does the present arrangement require some modification to deal with a growing railway, to deal
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with investment and priorities rather than the static and declining one which was the basis of setting up the structure five or six years ago?
We have growth in the railways now. Passenger traffic is up 7 per cent. I believe that Connex South Eastern was up 17 per cent. Rail freight increased 15 per cent. if we exclude coal. As all noble Lords know, passengers and freight share the same tracks. There is every indication that this growth will continue. On the passenger side, the noble Baroness, Lady Thomas, and many noble Lords have mentioned the serious overcrowding on passenger services. On freight, it is a different problem with the temporary lack of equipment for rail freight because of the growth. But that is being made good by new investment, we hope.
So the challenge for the railways now is how they deal with growth. The first necessity for passengers is usually longer trains. That seems to be constrained by the charging regime and the inability or unwillingness of ROSCOs to invest in new trains. It is the easiest solution. Another alternative is new construction, of which the Channel Tunnel rail link is the most pressing. As the noble Baroness, Lady Thomas, said, it is necessary.
The third alternative is to increase capacity on existing lines. That usually means signalling, which is seen as the great white hope for the future for cost effective increasing of capacity and on which most upgrades of capacity are now based. I wish to pose the question whether the signalling industry, as it is at the moment, has the capability, with the client—which is usually Railtrack—to deliver on time and on budget. I see signalling as very much the Achilles heel of the railways industry at the moment. There is such a shortage of signalling engineers that some design is being done in Australia, presumably on the Internet, although I do not know. There is a real shortage of signalling engineers at the moment. That is because the present signalling is old, its life has expired, there is a lack of previous investment and so on. It is the cause of the capacity problems and it is the solution. Is the railway industry equipped to deliver? In this House we have talked about the Jubilee Line, this new moving block system which will not work for several years and the west coast main line which is an even more exciting example of a moving block system on four tracks simultaneously which will happen some time in the future. It needs to happen.
My question is: has the industry given up testing and trialling the new systems on little used branch lines before going into such high profile financially and in the public eye with lines such as the Jubilee Line and the west coast main line? It concerns me greatly that they are going into this without any testing. It is the first time in the world that such systems have been used—and on the west coast main line—and we have spoken of that enough in this House.
I move on to the question of passenger, freight and investment. If we look at Railtrack's revenue in round numbers, the company receives around £2 billion a year from passenger revenue and £200 million from freight. Of that passenger revenue, all but around £400 million

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is subsidy from the Government. It is not surprising that the passenger railway needs subsidy; it is the same the world over. It may be called a social charge on the Government. But freight is not subsidised.
If one ignores the subsidy and looks at the way in which the money goes into Railtrack, it amounts to £400 million of non-government money for passengers and £200 million for freight. That is the way that I look at the balance of priority between passenger and freight in terms of how Railtrack should look at its investment. I do not recommend any change in the structure, but it concerns me that the passenger TOCs are able to reserve their capacity 10 or 15 years ahead, whereas freight generally reserves it only a few months ahead, when it knows where the traffic will come from. When one has a system where demand is growing as it is at the moment, he who applies for capacity last appears to have to pay the bill for any upgrade. It is unfair that the last person happens to be freight—my interest—just because passengers have long-term contracts and freight does not. I believe that a new mechanism is urgently required for sorting out the problem.
The rail regulator has a major part to play in ensuring that Railtrack invests and invests wisely for both passenger and freight. But, as the noble Baroness, Lady Thomas, mentioned, is that enough? Is it reasonable to expect Railtrack to look 20 or 30 years ahead to growth, to new markets, speeds and frequency of trains? They may do—I do not believe they do at the moment—because they have a commercial interest. But the regulator has a growing role in making sure that the investment is targeted correctly and that the Government's proposal for a strategic rail authority should include some means of investment in strategic signalling, land and so forth for the future. There is an argument for investing in a way where some of the revenue could be returned to the industry after a time when the investment starts giving a return in operation. For instance, a lump sum, to start with, could go round the system and it would help to get things going.
In conclusion, the railways are growing. Industry should not be subject to major upheaval. I welcome the Government's policy. I suggested a few small changes, but the biggest change that I welcome is the change in the attitude of the Government who are committed to expanding the use of the railways for passengers and freight. I await the White Paper with great interest.
6.13 p.m.
The Lord Bishop of Blackburn: My Lords, I too thank the noble Baroness, Lady Thomas of Walliswood, for introducing this debate. Unlike the noble Lord, Lord Berkeley, I come to the debate as an amateur, being one of those people, not least clergy, with a lifelong fascination for railways.
When I was a child that greatest of all railway bishops, Eric Tracy, wrote in my autograph book, "Good spotting. Stick to your Sunday school". On the whole people want to like railways. They spend millions of pounds supporting preserved lines and we need to create the conditions so that they are moved from seeing
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the railway as an exceptional leisure time activity to being that normal means of transport it is in many parts of Europe.
Intelligent people accept that the railways as a system of transport which can move people in large numbers and freight in large quantities, make both economical and environmental sense. It has to be done and the Government must help to make it happen. The quality of life in our land is literally being destroyed by the daily choking experience on our roads. According to the British Lung Federation, air pollution from road traffic affects over one-third of the population, killing as many people each year as road traffic accidents and costing £11 billion. Increasingly, road rage is a sad by-product of overcrowded roads. Time and money is being lost and the quality of life impaired; physical and mental health is being adversely affected by frustration.
So we want our railways to work. It makes sense. But it seems that when it comes to railways we give full range to the British disease of pointing up and even embellishing the problems and the failures of the system and rarely celebrating its achievements. As a frequent traveller on the west coast main line, which badly needs new track, new signals, new rolling stock—you name it, we need it—we await the promises of Virgin Trains and Railtrack to be delivered. We have the bright red carriages now before us as hope for things to come.
I could regale your Lordships for many hours with stories of missed meetings and being late home through delayed trains. But how often do I speak of when the train is early into Euston or Preston as it was both ways last week and seven minutes early at lunchtime today; or on my recent journey from Blackpool to Cambridge, three companies and every connection on time? How often do I compare the relative comfort of sitting in a delayed train with refreshments available and the cheery announcements becoming ever more interesting as to why we are held up, with the utter frustration of sitting for hours in a traffic jam in isolation on the M6 with no idea of what is wrong or when we may move?
We want more people to travel; more companies to send their freight by rail. That needs important investment from both the public and private sectors. It needs an integrated transport policy by which the Government promote rail travel. But if that is to happen, it also needs more good news stories about the rail services to overcome the built-in resistance of switching from the car to rail where that is possible. There is a fine balance to achieve between genuine criticism to bring improvement to our rail system and that endless criticism which in itself creates a self-fulfilling prophesy.
There is good news, as we have already heard this evening. Freight companies like English, Welsh and Scottish, in imaginative ways are clearly increasing the amount of freight carried. Proposals for the so-called "piggy back" system for heavier lorries should be backed to the hilt so that those lorries can be taken off our roads. We need to encourage that developing partnership at local level between local authorities, the rail companies and keen local people which has led to increased passenger services, sometimes with

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exceptional results in terms of the numbers using them—for example, on rural lines as in the Ribble Valley where I live, or on the Huddersfield to Sheffield line where I lived previously. However, I sometimes think that companies seem to go out of their way to kill that local enthusiasm. Promotional efforts are wrecked by the wrong carriages, the train not turning up or whatever.
As a vice-president of the Railway Development Society I urge support for the suggested moratorium on the sale of the track bed of former lines, that which remains. They have a potential for being re-opened in a new age and not least as freight lines which would take traffic off our rural highways. For example, in the Peak District immense profits would come in all directions if the 20 miles of track between Buxton and Matlock were relaid.
As a countryside commissioner for England I am well aware that that is a challenge as the pressure mounts for more sites for housing in the coming years. Let us not underestimate the huge problems which years of under investment in the railways and perhaps the lack of political will to face the issue have created. But there is great potential, not because people want to move from the door-to-door convenience of the car, but because slowly but surely we are realising that health, the quality of life, and the beauty of the countryside is being destroyed before our eyes by over-dependence on road transport. I hope that this debate will increase that awareness and that the Government, as they promised, will give more attention to this subject and, indeed, risk perhaps some short-time unpopularity to shift resources from road to rail transport.
6 19 p.m.
The Earl of Leicester: My Lords, I read in one of the obituaries of the late Enoch Powell that he was always nervous before a speech. If he was nervous! It is a great honour to speak in your Lordships' House and I very much appreciate that privilege.
I, too, am indebted to the noble Baroness, Lady Thomas, for initiating the debate and for her very kind words of welcome. I confess that I am in awe of her detailed knowledge and I shall therefore speak in rather more general terms. My knowledge of the railways is limited to travelling on them a lot and to having led in the early 1980s a couple of deputations from my local authority to lobby various transport Ministers for better road and rail improvements in my part of Norfolk. But I am enthusiastic about the railways. That enthusiasm, I readily admit, is probably because I travel frequently on what I believe are two of the most competently-run lines in the country—the East Coast line to Scotland and my own local one from King's Lynn, via Cambridge to London. I admit that I would perhaps not enjoy travelling on the line on which I know the noble Baroness, Lady Thomas, is forced to travel. I understand that the level of service is appalling and is getting worse.
I can remember the so-called levels of service that we endured 20 to 25 years ago. I remember the old gateway to the east, Liverpool Street Station, with all its exotic sights, sounds and smells, where there were generally at
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least three ticket inspectors at the barrier. Their job was to check your ticket but they did not think that was their job. They much preferred to talk and joke among themselves; and if after waiting meekly for a while you decided that you had had enough of that and walked through the barrier, there was a very loud yell after you, something rather rude was said and they hauled you back. Now there are not three ticket inspectors at the barrier. There is not one. But there is one on the train who is generally charm personified. He or she now says, "Good morning" or "Good evening", "Please" and "Thank you", thus making life so much more pleasant all round. I can remember dinners on the train to Scotland which should never have been dignified by that title. There is nothing particularly difficult about producing edible food on trains, but they just did not care. Now, what a change! I really almost do not mind paying for my dinner now.
I know there is a lot wrong with the railways, stemming no doubt in part from the rush to privatisation and perhaps especially in the way Railtrack is constituted. I believe that it can almost hold the train operating companies to ransom with its track access charges. A very good example is Virgin CrossCountry. In the last year of British Rail ownership passenger receipts for that sector of the line were £102 million. Virgin now has to pay Railtrack access charges of £100 million and it has to pay another £50 million for train leasing, train maintenance and station maintenance. So it is small wonder that it needs a subsidy of £120 million in the first year of operation. In fact, as we all know, of the £2 billion paid in public subsidy to the train operating companies, half of that goes to Railtrack.
But there is good news as well. Railtrack tells us that it will have spent £10 billion—an enormous sum of money—by the year 2001. One of the reasons it is spending that amount of money is that there is a new spirit of optimism in the railways. For instance, the Chiltern Line is doing so well that it has persuaded Railtrack to re-lay 18 miles of double track between Princes Risborough and Bicester North, 20 years after it was singled, thus enabling Chiltern to double the frequency of its trains on that line. There are orders for brand new stock: 44 four-car units for London, Tilbury and Southend, the old misery line—it probably still is—and eight new eight-car trains for Gatwick Express. Those are only two of the new orders. Great North Eastern Railways is increasing passenger traffic to such an extent that, if it continues at this rate, in two years' time it will run out of not only trains but track as well.
Lastly, I turn to the Cinderella of the railways. We have heard from the noble Lord, Lord Berkeley, some interesting facts and figures. What he did not tell us was that between 1945 and 1995 the amount of freight carried on the railways fell in every single year except 1984. This year it has gone up for the first time. The noble Lord mentioned a figure. That has been almost entirely due to the vigorous pursuit of business shown by English, Welsh and Scottish Railways. It has even persuaded those high priests of super-efficiency, the supermarkets, to move some of their gods—I should say

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goods—by rail. Mind you, my Lords, the supermarkets have made so much money that I would not be at all surprised if they had their own gods.
Since October Safeway has been moving 10,000 cases of soft drinks a week by rail—not much, only 40 lorry-loads off the roads every week, and still a long way to go to fulfil EWS's aim to increase freight by rail from the miserly 6 per cent. that it is at the moment to 15 per cent. of total freight traffic. What an enormous environmental benefit that will be!
I believe that the railways have an exciting future. I agree, as I am sure everyone here does, that the activities of the operating companies need to be regulated. But it is a question of degree. Too heavy a hand, and we will strangle them. Let us instead get the regulatory mechanisms right and allow them to flourish and the consumer to benefit.
6.27 p.m.
Lord Alderdice: My Lords, I regard it as a particular honour and privilege on behalf of the House to congratulate the noble Earl, Lord Leicester, on an extremely fine maiden speech. It was positive, articulate, well-informed and entertaining. It was very welcome indeed. It might even have been welcome at an earlier stage, for the noble Earl succeeded to his father in 1994. I notice that his family motto is "He is prudent who is patient". He has been very patient indeed and his speech was full of prudence—nothing that one would not have expected from someone who in various forms has represented his community for something in the region of 20 years. I very much hope—I am sure I am speaking for other noble Lords too—that we will have the benefit of his wisdom and prudence, and his patience with some of the rest of us, much more frequently in coming years. We all convey our congratulations to the noble Earl.
Like him, I wish to thank my noble friend Lady Thomas for the opportunity to speak on this important matter. It is a topical one. It is a matter of great concern and not just from a negative point of view. Stories of difficulties on the railways are legion and possibly always have been. But I should like to raise one specific issue in the realm of public transport and the railways. I refer to the importance of the integration of rail and other forms of transport.
There are those who are partisan for the railways. There is nothing wrong with that. There are all kinds of attachments, emotional, environmental and economic, in support of the railways, and there is much to be said for them, particularly when one thinks of the transport of people and goods over longer distances. However, it seems to me that one does not need to be partisan only for the railways to see their great value. If they are integrated with other forms of public transport they can together provide positive opportunities for us in creating an economically successful and environmentally sustainable future transport system.
Integration involves not only railways but buses. I refer not only to the large buses of the double-decker variety that we see outside your Lordships' House, but also to smaller buses, flexi-buses and indeed to the
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guided bus routes which are completely devoted to the buses, ensuring that they are able to be much more rapid in their conveyance of passengers and therefore much more attractive for people to take than resorting to private cars, as so many of us often do. Those forms of transport are much more useful in the confined town and city atmosphere than railways sometimes are. What is important is that they are linked to the railways so that people can move easily and readily from one form of public transport, convenient in a more confined space, to another form of public transport, one particularly adapted to the longer stretches. It is that opportunity to pull things together which has been a little lost in the frenzy for privatisation.
In my own part of the world, where the railways have stayed within public ownership, transport in the form of the railways and the buses—the rural bus as well as the urban bus—has been concentrated in one holding company called Translink. Therefore it has been much easier to exploit that kind of co-operative venture than would have been the case had it been split between disparate companies. If not all the companies have goods for gods, certainly a lot of them have the financial recompense for a bit of a god, rather than one that is necessarily best for the community as a whole.
I would make a plea that we give some attention to rail transport. I believe there is a powerful appreciation within the community as a whole and I sense it tonight in your Lordships' House, that the railways deserve attention and resources and have a real contribution to make. I would also make a plea that this should not be done in isolation from other important parts of public transport. They must all work together, with interfaces and linkages with each other, so that it is possible for our citizens to pass smoothly and without difficulty or hiccup from one form of public transport to another. They should be sufficiently well integrated so that that can be a thoroughly successful and appealing alternative to the private car, which is otherwise, for most of us, the most integrated and convenient form of transport. A viable alternative in integrated public transport would require co-operation among the various forms of transport, with the railways being upgraded, together with other forms of transport.
I am grateful to my noble friend for this opportunity for a debate and hope that this notion of integration may gather as much momentum as the notion of the railways coming back to their former glory.
6.32 p.m.
Lord Cadman: My Lords, I, too, congratulate the noble Baroness on introducing this subject today. The state of the railways is indeed a topical subject, what with the financial problems of the CTRL, the impending modernisation of the west coast main line, plus the ThamesLink 2000 proposals, all of which are in some way linked together.
A couple of years into privatisation has resulted in much potential improvement, with some £500 million to be invested in around 450 new train sets comprising over 2,000 carriages. In addition, some £2.5 billion is to be spent on infrastructure improvements. Unfortunately,

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it seems to be proving difficult for some of the train operating companies to aspire to their customers' expectations. We should remember that for the past 50 years the railways have been run under public control, with all that that entails, accountable to the government of the day and subject to the Treasury and PSBR requirements.
Suddenly, all is changed. The railways are released, almost, into the world of being accountable to shareholders and their customers. The Government are not really involved, except in a degree of regulation and some considerable financial assistance which—and this is an important point—is finite. It is controlled and reducing over the length of the train operating companies' franchises.
Some train operating companies who have inherited modernised infrastructure have found it easy to attract new business, so much so that they have run up against capacity problems. One can cite here Great North Eastern and Chiltern Rail. Both are constrained by the length of their franchises, which are for seven years, and by physical constraints. It seems to take three or four years to acquire new trains. Thus, in a seven-year franchise, to sign a lease agreement on trains that have a life of 30 years is not good business practice. Should they not regain the franchise after seven years, what happens to their investment? Perhaps they just will not make it. They will carry on with what they have, and simply price off demand. This is what went on before. It does not work and it will make nonsense of any future integration.
Let us try listening to what these operating companies have to say instead of threatening them with greater regulation. Some had mistakes have been made, but remember that all these firms are having to learn as they go on. Perhaps too many people have been let go. Let us get some of them back to provide some customer service. Let us be positive and say that there will be improvements. Let us be positive about increasing the length of some franchises. It will make better financial sense.
What about freight? This is one of the success stories of privatisation. Remember that the competition is with road, not with other freight companies. It is therefore no surprise that one company has taken most of the operation. So successful have they been in attracting new business, simply by being positive, that they have almost run out of capacity. There are plans to triple their business in 10 years.
The capacity of the whole railway system is going to be a problem. There may well be a necessity to regulate but, of course, that was not envisaged at the time of privatisation. British Rail had given up on freight. Freight was not really in the music of privatisation at all. However, the potential was realised and we have GWS and Freightliner providing most of the services. Remember that they do not receive any public subsidy, so the risk is theirs alone. They are having to start almost from scratch.
The motive power is so unreliable that they have had to acquire some 250 new units. It is interesting to note that American builders can produce a loco within about
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one year of receiving the order. The first of these locos is due here at the end of next month. They are investing in some 2,500 new wagons of various types. To achieve this the railway works at York has been acquired, again by an American company. It may sadden some of your Lordships that UK builders are not more involved. Actually, they are pretty well full up with other business. American diesel loco technology is just about the best there is, and these locos are going to be much quieter in operation than those we have been used to.
There are two other points I should quickly like to reinforce. The first is the CTRL. It is vitally important that this project is completed in its entirety, as approved by Parliament, and as quickly as possible. Despite what your Lordships may have heard in some sections of the media, this project is not all about saving half an hour on a trip to Paris. It is all about increasing capacity for other traffic, especially freight in the south coast area and south east generally, properly connecting the rest of the UK with the Channel Tunnel and achieving much regeneration of east London and north east Kent in the process. It should not be reduced to the status of an SNCF branch line by curtailment.
The other point is so-called surplus railway land. I propose to revisit this subject on another occasion. I should like to stress that the apparent rapid disposal of this asset is causing considerable concern. The rail freight market is expanding rapidly and there is going to be a real need for rail-accessible land to be made available for depots and loading facilities.
It is vital that local authorities and the Government are made aware that once these sites are lost it will be almost impossible, given planning problems, to replace them. All those involved in the railway freight market are agreed that something needs to be done quickly. They are all working together to identify sites and present their case. I hope that the Government will listen, because otherwise their much vaunted integrated transport initiative, to which I look forward, will be more or less useless.
6.38 p.m.
The Earl of Mar and Kellie: My Lords, I believe that the new age of the train is standing in the station. The environmental case for railway operation is better than ever. The question is: will we get on that train and enjoy the benefits, or will the train be cancelled because the system is in too much of a muddle? I do not blame the Government for the fragmented and unstable structure of the UK rail network—at least, I do not at present. I will allow the Government some time to come up with a rescue plan for an industry which should not be ailing. Mr. John Prescott's review towards an integrated transport system will have to bite on some tough bullets, but it will be worth it.
I would like to speak about Scottish and Irish railways. Scotland enjoys passenger train services provided by four TOCs: National Express, Scotrail, Sea Containers GNER, Virgin West Coast and Virgin Cross-Country. Freightwise, Scotland is also served by Wisconsin Central's EW & S, and any other private

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company that chooses to run its own freight trains. The infrastructure is owned by Railtrack who operate it as a Scottish division.
It has to be regretted that the earlier contractions of the network leave the Scottish network with only two points of contact with the rest of the GB network, at Carlisle and Berwick. The loss of the Edinburgh to Carlisle line (the Waverley route) will show up increasingly in the future. However, all is not doom and gloom. Scotrail has announced several improvements. These range from bicycles going free—again; new stations at Dalgety Bay and at Drumfrochar; 47 new three-car train sets have been ordered; promotional fares are offered on the Dumfriesshire line; a new morning commuter service from Dingwall to Inverness has been announced; increased services between Bathgate and Edinburgh and in May 2000 there will be the start of a quarter-hourly Edinburgh to Glasgow service.
This mix of rural and urban commuter, shopper and tourist sector improvements reminds us of the very varied nature of providing a better service within the diversity that is Scotland. The range is from tackling urban and inter-urban road congestion and its associated environmental pollution to the provision of services in the remoter areas.
Finally, Scotrail has a lot to live up to, following its award as the best train operating company and the £5 million prize for doing so from the franchising director. Perhaps I may sum up the Scottish experience of the other companies thus: I live in Clackmannan, which is admirably placed 35 miles from Edinburgh and Glasgow. There is competition for my business on the Anglo-Scottish routes. At present GNER wins hands down. But, after looking at the Virgin-Railtrack plans for the upgrading of the west coast main line, as encapsulated in PUG 1 and PUG II, I believe that there will be a serious choice. Equally, I applaud the decision to increase the loading gauge on the west coast to accommodate piggyback freight trains. Like the reservation of the noble Lord, Lord Berkeley, mine has to be the introduction of transmission-based signalling to a major main line without it having been tested and developed on a minor line beforehand.
I would now like to cross the North Channel. In Northern Ireland we have a publicly-owned railway. As the noble Lord, Lord Alderdice, has said, not only has NIR been integrated with the bus network to form Translink, it has also upgraded the international service in conjunction with Iarnrod Eireann. A quick view of the rail network of Ireland cannot help but notice the decimation in the border areas. Fortunately, progress in inter-governmental relations has paved the way for improvements. Had that arrived earlier, then the old Ulster transport authority would not have earned the soubriquet, "Ulster's Track Abandoners". The new Enterprise service is a symbol of the better relationship on the railway and also a symbol of European investment. The two systems now run a modern two-hour service between the two capitals, albeit using French train sets powered by Canadian diesels.
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Much of the rolling stock on the Irish network is second-hand, usually ex-British Rail. There has been some admirable recycling, which underlies historic under-investment in NIR. For example, the Class 80 or Castle Class multiple units, were built on the salvaged underframes of scrapped BR Mark 1 carriages. How the managers of NIR must envy Iarnrod Eireann's new Japanese Sprinters, which now ply on the Dublin Western suburban routes, not to mention the Dart electric services on the coast. I wonder whether Railtrack has considered the adoption of CAWS (continuous automatic warning system) which is an in-cab computer signalling warning system used in the Dublin area. Might that system be compared with the transmission-based signalling system proposed for the west coast main line.
My final remarks have to be about the need for a sustained investment in the infrastructure and rolling stock. I see no reason why public funds should not be used. The benefits of a better railway network can be divided between users and non-users. Nothing will be achieved if the network is allowed to decline. The challenge for the UK government is to untangle the muddle in the network and allow it to thrive, as it cries out to do.
6.45 p.m.
Lord Hunt of Kings Heath: My Lords. I am most grateful to the noble Baroness, Lady Thomas of Walliswood, for initiating this debate. It seems clear that there is general agreement that the railways have an enormous contribution to make to this country, both in terms of our economic prosperity, the environment and the fast and effective journeys it ought to be able to offer to millions of passengers. The problem is that, as yet, we do not have a completely efficient and effective system in order to do that.
As the noble Earl, Lord Leicester, so eloquently said, over the past 20 to 30 years there have been improvements, and I would be the first to acknowledge that. But we also have to face the effect of privatisation and say that one of its adverse effects has been to undermine the national integrity of the railway system. There are many examples of that. They are the connections not now being held because they are operated by different companies; the accuracy of train information across the whole network is pretty poor; the complex fare structures that now exist make it sometimes very difficult for passengers seeking to make different return journeys across different company operators; the regulatory regime is often confused and patchy; and the sanctions available for poor performance are often inadequate. Finally, and most importantly, it seems that there is no focus for taking a strategic look at the development of the railways, not over the next two to three years, but over the next 20 to 30 years. The whole problem is summed up for me by the fast disappearance of cheap, walk-on fares in relation to many of the operating companies.
There was a very interesting report in yesterday's Independent which looked at the figures for fares between June 1995 and January 1998. In that period inflation rose by just over 9 per cent., but when one

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looks at the cheap fares, the Thameslink cheap day fare rose by 15 per cent.; the cost of the Midland mainline super-saver fare rose by 16 per cent. and the Virgin super-saver fare rose by 21 per cent.
I suggest that the price for privatisation has been paid for not by the people who drove that through nor by the railway companies or their shareholders, but by the travelling public. All these problems have been reflected in my own experience, living and travelling from Birmingham on many occasions and using the railway system. The noble Lord, Lord Berkeley, referred to previous debates in your Lordships' House about the situation concerning the west coast main line. I make no apology for returning to that subject.
The railway system is very important to the city of Birmingham. It was partly responsible for its development as a great industrial city. In its days as the engineering window on the world the railways played a very important role. It also plays an important role now in the current regeneration of the economic prosperity of Birmingham and the West Midlands. Thousands upon thousands of visitors go to the National Exhibition Centre, the Convention Centre and the National Indoor Arena. The London to Birmingham line is particularly important to them and to our economic prosperity and also in attracting further investment into the city. So having an effective, efficient, fast railway is vital to our economic prosperity.
However, the experience over the past 12 months has been anything but that. The charter standard for punctuality is 90 per cent. of trains reaching their destination on time. As many of your Lordships will know, the railways' definition of "arriving punctually" is rather different from that of most people. If a train arrives up to nine minutes and 59 seconds late, it is still counted as being "punctual". Even on that lax definition and standard, Virgin's west coast main line signally fails to reach it.
I took note of the right reverend Prelate's point about searching for good news. The good news that I found in last year's performance is that out of 13 four-week periods, Virgin managed to reach that 90 per cent. target on five occasions. The bad news is that it did not do so on eight occasions and that in the four weeks to 8th November last year, punctuality was just under 83 per cent. That has caused frustration, misery and discomfort to many people.
Again, I take the right reverend Prelate's point that the line has been starved of investment for 30 years, but if one looks at the causes of the problems and at many of the defects and delays, one sees that they involve engine failures, points failures and signalling failures. I would put that down as much to poor management and poor attention to detail as to investment problems.
The other issue to which I draw your Lordships' attention is speed. The Birmingham to London line is 113 miles long and the journey takes on average 100 minutes. However, the journey from Doncaster on the east coast main line, which is 156 miles from London, takes the same 100 minutes. I know that Doncaster, being bottom of the Third Division, needs all
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the help that it can get at the moment, but those comparisons show the striking difference in railway services in different parts of the system.
I welcome the intention of Railtrack and Virgin to upgrade the system. That is much needed. However, I am concerned that the intensity of investment will be in relation to the journeys from Euston to Manchester and Glasgow and that the spur coming off at Rugby for the journey to Birmingham is to have restricted investment. There is also concern that local railway services will suffer. I urge my noble friend the Minister to put as much pressure as she can on Virgin and Railtrack to ensure that the Birmingham line receives as much investment as other parts of the railway system.
I very much welcome the Government's intention to review and strengthen the regulatory process and to establish a railway authority which can ensure that we get the strategic direction that we require. I hope that we shall see the results coming through very quickly.
6.52 p.m.
Lord Palmer: My Lords, I too am grateful to the noble Baroness, Lady Thomas of Walliswood, for initiating this very important debate. I think that this is the first time that I have participated in a debate with the noble Baroness since I had the honour of congratulating her on her maiden speech back in November 1994. I would also like to add my congratulations to my noble friend Lord Leicester on his excellent maiden speech. Dare I say it, but had Peers by succession been barred from taking part in this debate, there would have been just four speakers.
Railways are very much in my blood on both sides of my family and indeed the first Lord Palmer was a director of the Great Western Railway for 47 years, 42 of which he served as vice-chairman. I must declare an interest as a frequent traveller on the Great North Eastern Railway Line. The chief executive happens to be a distant cousin of mine. As a child, I had much pleasure driving our steam engines, shunting our biscuits from our factory in Reading onto the main line.
As my voting record showed when we were debating the Railways Bill, I was dead against privatisation. The railways have played an incredibly important part in the success of our nation and it is amazing to think that in 1921, 735,000 people were employed on the railways, which represented 3.8 per cent. of the country's workforce. Today there are almost 67,000 people employed on the railways, which is just 0.3 per cent. of our total workforce.
In the main, it appears that GNER and GWR are performing well but the situation is still far from perfect. I believe passionately that the Government must do everything they can to encourage the rail companies to woo freight and passengers off the roads.
In 1923, 349 million tonnes of freight were carried on the railways and today this figure is just 101 million tonnes. I also believe that the large grocery chains should be further encouraged to transport more of their goods by rail rather than blocking the arteries of our road network. It is exciting that EWS has just started trading with Tesco, Sainsburys and Safeway. When

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travelling to Edinburgh from home by road, I can often pass six Asda trunkers in the space of 20 minutes. Today freight transported by rail accounts for a paltry 4.7 per cent. of total freight movement. However, things are improving and 15 months ago there were 18,000 freight trains running every four weeks. Today that figure has risen to 27,000—a great improvement, but there is still a long way to go. It is tragic and sad to think that the total national rail route today is almost exactly half what it was at its peak in 1933.
Before coming to the main point of my speech, I would like to air four small points. First, I urge the Government to get the rail companies to allow a greater degree of flexibility on tickets. I put my daughter on the 7.35 train to Exeter last week and was appalled at the overcrowding and yet people dare to complain about live exports of animals. I also would ask Her Majesty's Government to persuade the rail companies that return tickets should be valid for periods longer than one month. In addition, when new rolling stock is commissioned, there should be better provision for luggage.
Finally on these small points, I would like to reiterate the words of the noble Lord, Lord Ewing, at col. 167 of Hansard of 8th May 1996 when he deplored the fact that there is no station at Edinburgh airport. Bearing in mind that the people of Scotland have voted for a devolved parliament, a station at the airport must become a No. 1 priority.
It is encouraging that there has been a great improvement in rail infrastructure, particularly on the Great Western line. To give one small example, car park vandalism is down by 40 per cent. and in my native Reading by as much as 70 per cent. Industrial relations have greatly improved, and I believe the rail companies and the unions deserve much credit for this.
I believe passionately that our railway network has a buoyant future but that future is dependent on one thing, as other noble Lords have mentioned, and that is investment. One of the reasons that GNER is performing so well is that there has been a massive financial investment on the east coast line over the past 10 years prior to privatisation. Another reason for GNER's great success is the high calibre of its staff at all levels who have received excellent training. I think it is also worth mentioning the enormous change in the quality of food served on board and I reckon now that the food served on GNER can challenge any restaurant in the land. The main reason why the west coast line is so under-performing is that, as other noble Lords have said, there has been virtually no investment over the past 30 years.
One of the problems about financial investment in the railways, whether it be rolling stock or infrastructure, is that it has to be on a massive scale. To give one small example, a new nine-coach 225 set costs £15 million and has the capacity to carry 555 passengers. While some updating may be necessary along the way, the assets must be fundamentally sound for at least 25 years to give any realistic chance of a commercial payback. It must also be appreciated that the gestation period to bring forward a project on this scale would probably be
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two years, with a further three years to build. In that context, as the noble Lord, Lord Cadman, said, a seven-year franchise does little to encourage investment, and even one of 15 years could hardly be regarded as generous.
I have one final plea. The new regime must be allowed and encouraged to flourish, and be kept free of as many regulations as possible. Where there is regulation, it must be there to encourage competition, not to stifle it.
7 p.m.
Lord Methuen: My Lords, I too welcome this debate introduced by my noble friend Lady Thomas of Walliswood. I declare an interest in so far as I am a companion member of the Institution of Railway Signal Engineers, which is the professional body that is responsible for that subject.
The United Kingdom railway system forms a vital part of our transport system which is now in a critical state, as many other noble Lords have said. Our railways are essential to us from an economic and environmental viewpoint for the carriage of both passengers and freight. The critical state of railways is not just a UK problem; it is a Europe-wide problem. We debated this issue on 12th June of last year when the House considered the report of Sub-Committee B of the European Communities Committee on the Community's railway strategy. It is essential that the UK has an integrated transport policy which maximises its use of public transport. I make a plea to the Government via the Minister that greater consideration be given to urban light rail systems in places like Birmingham and the Manchester extension. That has not been mentioned before.
In this country we have a different set of problems to those elsewhere in Europe characterised by the recent privatisation of the system, the very dense commuter traffic in the south-east and the comparatively short distances over which most freight is conveyed. All of this was made worse by the starvation of investment in infrastructure and rolling stock in the run up to privatisation. This shows up particularly in the state of the west coast main line. This was the subject of very substantial investment involving electrification and resignalling during the 1960s. I was one of the engineers involved in that. We now have to make a new and even more substantial investment to bring it up to date. This is particularly so for matters such as the structure gauge, which means altering bridges and tunnels in order to put piggyback trains through them.
This lack of investment demonstrates the dilemma that faces engineers. We have a new generation of tilting trains that are needed to cope with the Victorian engineering of the west coast main line with its sharp curves and steep gradients and the new concept of moving block signalling, already mentioned by a number of speakers, which will safely allow greater track occupancy and directly communicate with the driver in his cab, giving him information about the speed that he is permitted to go. The system has digital displays. These systems are beginning to come in. This

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signalling will conform to new European standards and will enable trains and locomotives to travel in due course anywhere on the European network. This system is in its infancy, and specifications are beginning to emerge from Brussels. The new trains and signalling will require considerable development work, and that means that the time to bring both into service approaches the contract duration for the train operating companies. I hope that the re-engineering of the west coast main line will also ensure that it is practical to run piggyback trains throughout its length, and that the line to Holyhead will not be ignored.
Noble Lords may be interested to learn that when we were installing the Victoria Line we ran no fewer than three prototype systems. First, we ran it on extra capacity up beyond Acton where there is a four-track main line. When the start button was pressed to set the first automatic train in operation it went backwards because the circuit diagrams were incorrect. We then tried it at Turnham Green in-service carrying passengers between two stations. Finally, we installed it on the Woodford-Hainault line as a full scale prototype. It was then installed on the Victoria Line proper when the Tubes were commissioned. We were remarkably successful in experiencing very few problems in getting the whole system to work.
My previous remarks referred to investment in existing lines. But surely we should be looking for investment in new lines such as Cross-Rail and the reinstatement of lines removed in the Dr. Beeching era. Only by making that investment will we persuade people not to use their cars for all journeys or manage to take heavy freight off the roads. That is the direction in which we should be moving; but, unfortunately, we have a scenario in which the British Rail Property Board is disposing of critical chords, trackbeds and other land where freight operations might in the future be reinstated. One particular line that might be reinstated is the Dumfries-Stranraer line which would avoid an enormous detour almost up to Glasgow and back again. I am pleased to hear that Derbyshire County Council is considering an investigation into the feasibility of restoring the line between Matlock and Buxton, referred to by the right reverend Prelate, in order to reduce the number of cars entering the Peak District. It might be possible to encourage some mineral traffic back onto that line. The problem is that many of the currently used quarries are a considerable distance from the track and most of the quarries that are on it have been abandoned. Surely, this is the kind of initiative that the Government should encourage in their integrated transport policy.
As a member of the Select Committee of this House on the Channel Tunnel Rail Link Bill, I particularly hope that the Minister can enlighten the House as to the state of negotiations on the future of this link following the demise of London and Continental Railways. It is essential that that link is built in toto in order to maximise the benefits particularly to the north of the country by the provision of links to both the west coast main line and east coast main line at St. Pancras to encourage regeneration of the east coast corridor and provide relief for the North Kent commuter lines. That in turn will release capacity for freight on the Kent lines.
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To cut the link short at Ebbsfleet or Stratford in order to save substantial investment costs will not solve these problems. The Channel Tunnel forms the UK's link into the European Community's rail freight freeway concept. It is essential that that has adequate links into the freight networks of this country.
Rail still has an enormous amount to offer its customers and the country from an environmental point of view. However, Railtrack and the train operating companies must get their act together to offer a reliable, quality service at the right price and with adequate investment for both passengers and freight.
7.6 p.m.
Lord Harding of Petherton: My Lords, I have listened to some very well researched and technically knowledgeable speeches this evening, not least that of the noble Lord, Lord Methuen, who has just spoken. I have no technical knowledge of railways but I should like to make some general remarks from my experience.
I travel regularly by train to London from the west country and have done so for the past six-and-a-half years. I noticed a marked improvement in punctuality and standards of service in the year or so running up to privatisation. This continued after the private companies were set up. However, in my experience in the past year standards have slipped, which is very disappointing. Recently punctuality has been uneven. For a period it is very good and then for a few days, or perhaps one day a week, the train on which I travel is late, sometimes by up to half an hour. The regulator has quite rightly pointed this out and warned the railway companies that their standards must improve.
However, to say, as some do, that performance in both punctuality and service is now worse than under British Rail is not my experience. Matters are definitely much better than they were under nationalisation on the Great Western line on which I travel and on South West Trains which my wife and I use occasionally. It will take time for the private railway companies to turn the railways in this country into an efficient, comfortable and agreeable way to travel. It is essential that that should happen. If we want people to use their cars less, as I am sure we all do—although by "people" we usually mean anyone but ourselves—the" railways must improve.
It has been said by some that the contracts for the railway companies' franchises are not long enough for significant investment in new rolling stock to be made. Can the Minister comment on that? It has also been said by critics of rail privatisation and the way it was designed and implemented by the previous Government that insufficient guarantees on improved performance were written into the contracts. The same critics say that some railway companies merely cram as many passengers onto their trains to make as much money as possible during the time of their franchise without making the significant investments that are clearly necessary. I also ask the noble Baroness to comment on that matter. I hope that the criticisms I have outlined are not true.

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I watched the recent Panorama programme on BBC1 about railway privatisation and how it was working. The negative comments on the current state and future prospects of the railways in Britain reinforced these critical views. Apart from some hype by Richard Branson about what he will be able to do—I hope it is true—as one would suspect of a Panorama programme a gloomy presentation was made which showed little hope for the future. I was very pleased to hear the right reverend Prelate the Bishop of Blackburn give hope to the railways. His contribution was very positive in that direction.
It will not help future investment in the railways to hear a large part of the media making such criticisms, encouraged by the Save Our Railways organisation. I do not know what that organisation's agenda is, but it does not seem to have any positive contribution to make.
Punctuality is absolutely essential if more people are to travel by rail. There is nothing more annoying than to arrive half an hour late for a meeting, an appointment, or for work in the morning. Next time the person affected will go by car so that he or she can ensure that they arrive on time. If they are late, they can blame themselves for not starting earlier.
Punctuality is not the only aspect which affects travel by rail. Overcrowding is also a great disincentive. I have not experienced it myself but I understand that many commuter trains into London are grossly overcrowded.
The politeness and helpfulness of staff is also important, as is the speedy relaying of information the travelling public. These services have definitely improved since the days of British Rail. However there is still some way to go. Perhaps because I am deaf, I find it very irritating that the loudspeaker systems are not correctly adjusted or are too old, and I find it impossible to hear the details of the announcements. It is not because the announcements are too soft but because they are indistinct. That is a sign of bad management. I wonder whether some of the managers spend too much time sitting in their offices and not enough finding out what is happening on the ground. That was impressed on me by my commanding officer when I was doing a certain job.
All enterprises and businesses should be run by private companies. Governments and public corporations do not run things well. Railways by their very nature are, to some extent, monopoly providers and must be regulated. There must be stringent safety rules which are strictly adhered to.
I hope that the Government will give the railway companies the encouragement to invest and improve rail services. It will take time to improve things. Railways all over the world are making a come-back and the new technology on fast trains, particularly in Japan, will make a big difference to the attractiveness of rail travel.
7.12 p.m.
Viscount Thurso: My Lords, I am clearly not alone in your Lordships' House when I confess that as a young boy I wanted to be a train driver. However, I was probably luckier than most—with the notable exception
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of the noble Lord, Lord Palmer—in that I had an opportunity to drive a train when the last steam train went down the line from Thurso to Inverness. This last locomotive stopped for water at Altnabreac and my father and I were given a ride up and down the line. Since then I have had a huge affection for the railways and use them as often as I can.
In common with many other people, I have been very sad to see the remorseless decline of the rail system. I am therefore particularly grateful to my noble friend for having introduced this debate, and at a particularly appropriate time.
It is appropriate for three reasons. First, the decline in real use has been reversed, and that is good news. Secondly, the concern for the future and for the future direction of transport policy in relation to railways has never been more acute, and that is bad news. Thirdly, it looks as though the Government will do something about it, and that is an opportunity.
Whilst the decline to which I refer has in part been caused by the increasing comfort and convenience of the motor car, coupled with the massive extension of the road network, and in part by an equally considerable increase in the variety and efficiency of regional air transport, there is a third and very important reason: that is the hostile political climate under which the railways have operated, stretching back decades, perhaps even beyond the infamous Dr. Beeching.
It is very telling that when governments in the past have referred to expenditure on roads it has been called "investment in infrastructure", but whenever they have referred to similar expenditure on the railway it is described as "a subsidy". Until such time as we are prepared to regard expenditure on rail infrastructure as an investment—and perhaps even to consider road expenditure as a subsidy—then we will not have the political will to do anything to improve its current dilapidated state.
As my noble friend pointed out, it is vital when considering the future of the railways that one makes a correct comparison—what one might term "an apples for apples comparison"—with other forms of transport. The cancellation of the motor rail service is an example. In common with other noble Lords, I was a regular user of the motor rail service, making two or three return journeys a year. The service was well used, as I often witnessed, and yet in the run-up to privatisation the service was closed. The reason given at the time was that it was simply too costly to run.
A few weeks ago I discovered from a friend, who is travelling to Scotland for the first time, that an enterprising road haulage contractor is now running a regular service transporting cars by road from the home counties to Inverness. Your car is picked up and transported overnight to Inverness whilst you make your way by air or rail as you see fit. From April, the cost of this service is £390 including VAT, which is considerably cheaper than the old motor rail used to be. That this service now exists not only demonstrates that the strong demand is still there but, more importantly, it underlines just how prejudicial policies have been against the rail network and in favour of road transport.

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This example demonstrates how important it is that we develop in our future transport policy as a sine qua non a consistent approach to road and rail. Nowhere is this more required than in how we look at the cost of provision of these services.
For example, the only reason why de-regulated buses have proliferated and can offer a cheaper service is because they bear virtually no infrastructure costs. The same is true for road freight. It is difficult to get accurate figures and I am grateful to Mr. Simon Miller of Railtrack for providing me with some. Rail freight users pay 100 per cent. of the cost of service provision; rail passengers pay on average 60 per cent. of the full cost of service, which will rise to 80 per cent. on current franchise commitments. This compares with road users paying on average about 30 per cent. of the full internal cost of motoring at point of use. These are the hard costs and take no account of external collateral or social costs of these choices.
Again according to Railtrack, road activity is variously estimated to have external costs ranging from anything between £10.9 billion a year up to £52.9 billion a year. The comparable external costs of rail transport are negligible. The plain fact is that road users are not paying for the full cost of their transport decisions.
The same discrimination appears when it comes to investment. Something in the order of £9 billion was spent on roads last year, whereas Railtrack are rightly proud of the fact that their increased expenditure will only total £1.5 billion a year.
There is one area where the Government can have an impact without increasing public expenditure or amending the terms of the franchises, and that is the area of fiscal policy. We are one of the very few countries in the world which has taken the cult of the company car to the extreme. Like many others I benefit from a company car, but under the present system there is no incentive for me or my company to change. If the benefit of a company car were to be fully taxed, and particularly if scale charges for petrol were to be fully abolished and replaced by genuine business mileage to be claimed from the company, I foresee two effects. The first is a reduction in the number of cars given as perks. The second is companies paying people in cash which would then be taxed in the normal way.
On the other side of the equation, I should like to see, at least for a limited period, some or all of the cost of rail season tickets being tax allowable. That would encourage more use of the railways by creating greater revenue streams and better cashflow.
Finally, I cannot take part in a debate in your Lordships' House without mentioning tourism. Recently at a lunch, I spoke to the chief executive of the BHA. We were talking generally about tourism and I asked him what, if he had one wish, he would wish for to improve tourism in this country. He thought for a moment and said, "Transport, and particularly the railways". We must not underestimate the value to all businesses, particularly tourism, of having an integrated and efficient transport system, in particular an efficient rail system.
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The key to achieving the shift in emphasis which we all desire and to achieving the levels of investment necessary to make railways the first choice for passengers and freight alike is a change in the political language and climate in relation to the railway system. In that regard, I am glad that the Government are committed and I am sure that their heart is in the right place. But we need to see some real commitment if these good wishes are to be turned into reality.
7.20 p.m.
Lord Milverton: My Lords, I am pleased to be able to join in the debate because my family and I are rail users and we enjoy it. As regards late trains, often it is not the fault of Great Western Trains, Thames Trains, Connex South Eastern or Virgin—the lines on which my family and I often travel—but as a result of signalling and points failure. The noble Lord, Lord Berkeley, was right in saying that there must be more research and more money invested so that signals and points do not so often fail, causing late running trains. Furthermore, as often happens on the Great Western Trains, for example, a truck manages to damage a bridge, which also results in late running trains. We must not automatically blame the company. Perhaps the Government will give the House encouragement by stating that Railtrack will be helped to make such improvements. I also suggest greater liaison between companies and the consumers. The various companies should provide more reliable and understandable information about connections.
It can be seen that the rolling stock of Great Western Trains is good and is improving. Perhaps it is not as good as it could be, but on the whole it is very good. Its staff are helpful, pleasant and courteous.
Overcrowding has been mentioned. Sometimes trains are so overcrowded that one cannot walk down the corridors. Would not there be an uproar if such a train were involved in a crash? Would not the question he asked, "Why was that allowed?"? The issue of overcrowding on trains must be investigated. It is not allowed in buses and cars and it should not be allowed on trains.
Connex South Eastern and Thames Trains are the poorest companies. They are not impressive and are dirty. I travel from Great Bedwyn, where the line begins, and often an inspector has not appeared by the time the train reaches London. There is no ticket office at Great Bedwyn station so one purchases a ticket from the inspector when he comes through the train. That has happened to my family and I on several occasions.
I think Virgin Trains need a great deal of improvement. They are poor and untidy and often the staff are unhelpful. With all due respect to Richard Branson, perhaps he needs to stop floating about around the world. Perhaps he needs to take a little more time taking note of his Virgin railways in order to see what they are doing. Someone told me that he used to travel on his trains and take note, but perhaps he is tired of that. Perhaps the Government could suggest to Mr. Branson that he takes more note of what is happening on his railways.

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My family and I have sometimes travelled on the north east line. I am sure that people are right in saying it is the best. Great Western Trains is slowly catching up, but during all our journeys on the north east line its coaches and service have been superb and excellent.
How nice it would be to see the continuation of the improvement of the freight service. How nice it would be to see the busy freight yards which one used to see. How sad it is to see freight yards disappearing leaving untidy tracks. We can all remember the busy freight yards and it would be lovely to see them again. One now sees monster lorries and it is good that they are being put on rails.
It would also be nice to see the re-opening of old lines, as has been mentioned. In Marlborough, where I live, there used to be two stations and one could travel to Swindon or to Cardiff. What terrible journeys they were. Perhaps at the time, closing so many lines was considered the right thing to do economically, but many people took pleasure in travelling on those minor lines. If Her Majesty's Government want more people to use their cars less, public transport must be improved. There must be more co-ordination between the railway and bus companies. I am sure that it could be improved.
I hope that the Government can encourage us by stating that the railways will continue to improve, the north east line being the example to follow. I hope that they will encourage bus companies to work with the railways. That should be possible because National Express has bought some railways. My family and I have never used its lines, so I can speak only of Great Western Trains, the north east line, Thames Trains, Connex South Eastern and Virgin Trains. Of those, Great Western Trains certainly is the best. I believe that today the railways are better than in the days of the London, north east, southern, midland and Scottish lines. Indeed, I heard that by comparison those companies were not financially better off.
7.28 p.m.
Lord Razzall: My Lords, it falls to me to wind up the debate on behalf of the Liberal Democrats. I suspect that my noble friend Lord Rodgers of Quarry Bank is somewhat surprised to discover that I do so as the member of the new "gang of only four"; that is, the four non-hereditary Peers participating in today's debate. Perhaps when the Government saw the Motion tabled by my noble friend Lady Thomas they wondered why we had not waited because a White Paper is promised in the Spring. It may well be that a number of points made in today's debate could have been made in response to that White Paper. However, the speeches of so many noble Lords this evening have indicated why the state of the railways is an important issue for us to debate today.
I have listened to the speeches of noble Lords and two fundamental reasons have emerged. First, it is quite apparent that in the aftermath of the Kyoto summit the environmental significance of the railways cannot be over-estimated. We are facing forecasts that indicate that car use will increase by one-third to one-half by 2016,
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and that at a time when our roads and many of our motorways are already at full capacity. Quite clearly, if we are to meet any of the targets that we set ourselves at Kyoto the railway system is at the heart of the solution.
The second reason that the debate is so germane today is that this House can no longer ignore the fact that for many members of the public privatisation has so far proved to be a failure. Many noble Lords this evening have given anecdotal evidence of their own experiences as to why it is a failure. As the noble Lord, Lord Milverton, indicated, any process that has resulted in the reputation for sanctity to which Richard Branson has become accustomed being ruined as a result of the performance of Virgin Trains is anecdotal evidence enough.
However, we also have statistical evidence from the Office of Passenger Rail Franchising. From the 1997 figures we learn that punctuality deteriorated during 1997 on nearly half the reported route groups. The reliability indicators deteriorated on nearly half the reported route groups. Eighteen service groups failed to reach their passenger targets. Train cancellations were significantly worse.
As the noble Lord, Lord Hunt of Kings Heath, said, a major cause of that has been the exacerbation of the problem by a lack of national co-ordination. Many noble Lords have indicated what that lack of co-ordination means in practice. We have a hit and miss record on any national timetable inquiry. Indeed, many people have said that they always phone twice to check that the second result is the same as the first.
Lord Harding of Petherton: My Lords, I should be grateful if the noble Lord would let me intervene. I have telephoned the national number on several occasions. I got straight through and received very courteous answers. I received accurate and up-to-date information on how late the train was.
Lord Razzall: My Lords, that may be the noble Lord's experience but it is not the experience of everybody.
There is the issue of missed connections, to which reference has been made. The idea of holding up a train to meet a connection has long gone out of the window. There are different ticketing policies on a number of routes. There are different policies as to whether you should buy a ticket before you get on the train. That struck me when I travelled on two consecutive days. In one case I travelled on the Gatwick Express where I was encouraged to buy my ticket on the train. On another occasion I travelled to Newbury, which is about the same distance as to Gatwick, and had I not bought my ticket before I boarded the train I should have suffered a serious penalty. There seems to be no logic as to why those two positions should apply.
Dare I say that privatisation has not even been a financial success. We are now well into it—in the third or fourth year—but the doubling of the state subsidy in 1997 to £2 billion per annum is double the subsidy that was being paid prior to privatisation.

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In addition, with some exceptions, we have not seen a dramatic improvement in the replacement of old rolling stock. Investment in rolling stock and the infrastructure of the railways has, over the past few years, suffered what Mr. Patten used to refer to as a "double whammy". Prior to privatisation there was a significant starvation of investment by the government. Indeed, in 1993–94, which was the year pre-privatisation, investment in the railway system was down to only £817 million. I should say as an aside that that had a significant impact on BREL, the then recently privatised rolling stock manufacturing company, which had more than 100 years experience in the manufacture of rolling stock in its three plants in Crewe, Derby and York. Indeed, as a result of that starvation of orders, significant and permanent damage was done to the capability and capacity of BREL which was, by then, owned by the Swedish company ABB.
The other part of the "double whammy" is that since privatisation, with some notable exceptions, there has still been under-investment in rolling stock. We know why that is and various noble Lords have indicated that it is because of the inter-relationship between the length of the franchise and the need to invest significant sums in rolling stock which has tempted many operating companies to opt for short-term profits at the expense of longer-term investment. Moreover, there is the scandalous case of under-investment by Railtrack, which has already been criticised by the regulator.
Noble Lords may well ask what we should do about that. Although in the run-up to the last election both the Liberal Democrats and the Labour Party were, I suspect, briefly tempted to suggest renationalisation, that particularly horse has now bolted and there is no practical possibility of choosing that option.
However, we certainly want the Government to honour their manifesto commitment to establish a national rail authority. That was in the manifesto. We are now nearly a year after the election and that national rail authority needs to be established very quickly.
We need to remove the confusion between the franchising director and the rail regulator. There is clearly confusion between the powers and the duties of the two. We need to end the regulatory confusion caused by the current failure to regulate the rolling stock leasing companies.
More particularly, and more vitally, we need immediate action to ensure investment in the infrastructure of the railway system and rolling stock. I believe it is the case that as regards stations, which throughout the country require significant investment, both the train operating companies and Railtrack are prepared to invest in station improvements, but there must be a mechanism to ensure that the facility is paid for by subsequent franchisees. Otherwise, they will not make that investment.
Similarly with regard to rolling stock, we must empower Opraf to underwrite residual use of rolling stock and recompense franchisees for that residual value so that when new franchisees come in there is a mechanism in place to ensure that the existing franchisees which have invested can have the residual value and he recompensed. It may well be, as has
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already been done with Midland Main Line, that the way to do that is by extending franchise lengths under the existing franchise agreement. In Midland Main Line's case, that has been done for a period from seven to 10 years against its commitment to invest in new trains.
It is quite clear that railways are at the heart of the integrated transport strategy that we all require. That requires urgent implementation if we are to meet the environmental challenges of the 21st century. I hope that the Government will rise to that challenge.
7.38 p.m.
Lord Brabazon of Tara: My Lords, I join noble Lords in thanking the noble Baroness, Lady Thomas, with whom I share a birthday, for introducing the debate this evening. There has been a good deal in the debate about the merits and demerits of privatisation. But as the noble Lord, Lord Razzall, said, I do not believe that either the Government or the Liberal Democrats believe that renationalisation is any longer a serious proposition. Therefore, it is up to all of us to help the privatised railways to work, even if the Government, in their heart of hearts, do not really approve of them.
After all, the railways are one of Britain's great national assets. I shall certainly not say that everything is perfect but I shall attempt to demonstrate—and I believe that it has been demonstrated in today's debate—that there are good prospects for the railways.
First, as regards investment, it should come as no surprise that John Welsby, Chairman of the British Railways Board, said a few weeks ago in the Sir Robert Reid lecture:
"The privatisation regime has swept aside the debilitating uncertainty of the annual public expenditure round; investment programmes can be planned over several years forward with much greater confidence; and there is greater freedom for the participants to make use of financing mechanisms such as leasing which arc standard practice in the private sector but which were denied to the public sector corporations".
He continued,
"If, as a public corporation, BR had been granted the scale of Government funding which is now committed, the promises of continuity that have been made, and the flexibility that now exists to make use of the array of commercial financing mechanisms, we would have thought that the millennium had not only arrived early but had also brought with it the sort of glorious benefaction that is the stuff of dreams".
John Welsby is, I believe, also the Deputy Prime Minister's special adviser on the railways. Let us look at the facts. Under the franchising agreements the train operating companies are to spend some £1.8 billion on new trains and rolling stock refurbishment. There are orders for some 2,175 new coaches in process, and more are planned. Hardly a week goes by without some new announcement, such as that on the much criticised west coast main line. I was glad to hear that the right reverend Prelate had some words of praise for that line, although the noble Lord, Lord Hunt of Kings Heath, did not have very many. I say only that I believe the west coast main line is technically much more difficult than the east coast line. If one were starting from scratch, I think one would build it straighter. New tilting trains are being ordered, which together with improvements to the line by Railtrack, will dramatically cut journey times from

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London to Glasgow from the present five hours 20 minutes, first to four hours 20 minutes and eventually to three hours 50 minutes. All this should help the Government in their laudable aim to get more traffic on to the railways and off the roads. Growth in passenger numbers is already happening, up 7.5 per cent. last year; with some companies the figure is as high as 15 per cent.
I am told that the current timetable contains a total of 29.000 more trains than the winter 1996/97 one. For example, the Midland Main Line will double the frequency between London, Leicester and Nottingham. Great Western Trains is committed to a half-hourly service to Bristol and Cardiff, and Anglia to a similar frequency on the Norwich line.
Much has been made of the level of subsidy the train operating companies receive, but that is falling rapidly: from £2.1 billion last year to £1.9 billion this year, to £926 million in 2002–2003, when six of the 25 operators will actually pay money to the franchising director rather than draw subsidy. So, taken with the privatisation proceeds of some £4.7 billion, it really cannot be argued that the taxpayer has received bad value for money. One can contrast this with an article that I read in the Economist this week about what is happening in some other European countries. The French Government have just had to write off 20.5 billion dollars' worth of railway debts. The Italian railway is currently losing 4 trillion lira a year, which apparently equates to 2.2 billion dollars. In the years from 1990 to 1994 Europe's railways swallowed 31 billion dollars of subsidy a year. Therefore I do not think the situation in this country can be described as bad.
I said earlier that all was not perfect. The noble Baroness, Lady Thomas of Walliswood, referred in particular to the situation in the south east of England. But even where justifiable criticisms have been made action is in hand to alleviate the situation. For example, South West Trains has increased passenger journeys by nearly 15 per cent., increased passenger miles by 16.5 per cent. and increased the number of peak time seats available by more than 7,000 extra a day. It has also ordered some £90 million worth of new trains.
Reference has been made in the debate to through ticketing and bus links. The noble Lord, Lord Alderdice, mentioned the situation in Northern Ireland. Here, too, I believe, welcome progress is being made. In Oxford some bus routes have been diverted to serve the station, and through fares introduced by Thames Trains. A ticket, sold on the bus, covers the trip to the station, the rail journey to London and the Underground when you get there. As far as I am aware such innovation was not happening pre-privatisation, and again I believe will help the Government with their ambitions for an integrated transport system. Let us hope that these examples are replicated across the country. Park-and-ride is also being promoted, with major schemes being planned for an East Midlands Parkway station to link buses, coaches, cars, the Midland Main Line and the East Midlands Airport. In addition, there
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are many local schemes being introduced. I hope that the noble Lord, Lord Palmer, gets his station at Edinburgh Airport as part of that process.
For some companies success and growth in traffic is proving a problem, as a number of noble Lords have mentioned. I refer in particular to GNER where passenger numbers have increased three times faster than predicted. By all accounts the company is offering a much improved service. The noble Earl, Lord Leicester, in his excellent maiden speech gave a flavour of that. The company holds the franchise for the shortest period, seven years, of all the former inter-city routes. Because of this faster than expected growth, which the Government must surely welcome, passengers face severe overcrowding in the near future, if not already, on some services, with capacity being reached sooner rather than later. The company wishes to invest in new trains, but such investment is not practicable unless the franchise can be extended, as new trains ordered now would not be delivered until late 2000, with less than three years of the franchise to run. I know that GNER has discussed this with the Secretary of State and hopes for an early decision from him. If he gives the go-ahead, the company will be in a position to order a substantial number of trains to give an increase in capacity. That is not to say that GNER has not already invested £12 million more than was committed in its franchise agreement. I hope that the noble Baroness will be able to give us some indication about that matter, although of course I do not expect her to make an announcement on the subject in this evening's debate.
It has been suggested to me, and I think there is something in this—I think the noble Lord, Lord Berkeley, touched on this—that one of the problems of the franchising regime is that it was based, perhaps for historical reasons, on the possibility of failure, either financial or otherwise, of the franchisee and what would happen in the event of such a failure. Not enough, if any, attention was paid to the possibility of success, or rather being too successful. I turn briefly to freight. Many noble Lords have referred to the carriage of freight and the investment proposals of EWS which has ordered 280 new locomotives and some 3,000 new wagons. As an aside to this, as has been mentioned, it has had to reopen the factory at York which is, of course, good news for employment in that area.
The previous government allowed the use of 44 tonne trucks for journeys to and from the railhead. Can the Minister say how this has worked? Has it been a success and how many operators have taken advantage of this arrangement? I believe that EWS is pressing at an open door as regards wishing to see an increase in the carriage of freight. As the current president of the British International Freight Association I know that our members are keen to give rail a try, particularly if a freight service can be operated to Heathrow, which I believe is being discussed. However, there are problems, including problems of access. I have heard that even on the new west coast line EWS may only get half the train paths it forecast it would need. No doubt the Minister will tell us something of the role of the proposed strategic rail authority. I wonder whether she can say if this is the sort of issue that will concern the

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authority, and indeed, the issue of British Rail land and keeping it available for railway purposes. That issue has been mentioned by many speakers.
I am rapidly running out of time. I conclude by saying that I believe the industry is keen to play its part in meeting the Government's objective of reducing road traffic and is actively working to encourage new business. What it needs now is the support of the Government in meeting these aims and not the continued sniping that is so often evident in the media, but which, I am glad to say, has been largely absent from today's debate.
7.50 p.m.
Baroness Hayman: My Lords, I should like to add my congratulations to the noble Baroness, Lady Thomas, on initiating the debate and on her contribution to it. I have to say that participating in it reminds me of the perils of being a Minister in your Lordships' House. I always say to colleagues in another place that one never comes to this House without there being someone who knows more about the subject than one does oneself when replying to a Question or a debate. That was very well illustrated today, not only by those noble Lords who contributed from strong personal experience—technical, engineering or other—but also those who have had experience of actually driving the trains. I had not realised that was going to happen. I must add that I feel slightly exposed, replying to this particular debate as Minister for Roads. The road lobby has been, if I may put it this way, very much not in the ascendency. The benefits of improved rail services have been the key theme.
I also wish to add my congratulations to the noble Earl, Lord Leicester, on his very impressive maiden speech. He said at the start that he was nervous. It was not apparent in either the content or his delivery. I am afraid he will find that he is encouraged to participate a great deal in this House in the future.
As the noble Lord, Lord Razzall, pointed out, we have heard from many Members of their experiences of the privatised railway network. I think anyone would agree that those experiences are, to say the least, mixed. Listening to the right reverend Prelate, I nearly said that the performance that we heard about was a "curate's egg". We saw from the exchanges between the noble Lords, Lord Harding and Lord Razzall, that there are different views and different experiences post-privatisation.
But one thing has been clearly demonstrated. Privatisation has not of itself produced the cure-all that was promised, and a great deal now needs to be done. The railway now has a mish-mash of regulatory responsibilities, and there is no one body responsible for balancing the needs of both passengers and freight and the overall development of the network. Most importantly, passengers are not getting the service that they have a legitimate right to expect, nor the service that will make the railways a more attractive alternative to the private car, to make it the normal means of transport to which the right reverend Prelate alluded. These are fundamental problems that we have to address
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if we are to meet the concern expressed throughout the House today that we should take advantage of the benefits, not only to travellers but to the wider public, and industries such as tourism—to which reference was made by the noble Viscount, Lord Thurso—of improving rail services and attracting more passengers and more freight onto the railways.
That is why the Government are committed to creating a new rail authority which will act firmly in the public interest. As part of the wider development of an integrated transport policy—as the noble Lord, Lord Alderdice, rightly reminded us it should be—we have been conducting a fundamental review of railway regulation in order to identify areas where action needs to be taken. Our review has revealed a number of shortcomings in the present arrangements, some of which were also identified during the course of our debate. The Government have inherited a system which has no focus for long-term strategic planning or investment; no clear split of responsibilities between the rail regulator and the franchising director, and no one body accountable to passengers when things go wrong. It is a system where key players such as Railtrack are only lightly regulated, and where some organisations—the rolling stock leasing companies, for example—are not regulated at all. It is a system which apparently tolerates months of delays for passengers, while leaving the franchising director with insufficient powers to penalise the offending train operator.
These are serious problems. We acknowledge that the reforms needed to remedy these failings are not ones that can be made overnight. We will need to establish a new rail authority to implement the proposals that in the spring we plan to set out in our White Paper on integrated transport.
But we have already taken action within the constraints imposed by the current complex regulatory structures. On 6th November my right honourable friend the Minister for Transport announced three new measures to boost investment, protect passengers' rights and make sure private operators provide high-quality services.
We have issued the franchising director with new objectives which deal with the real issues that matter most to passengers—investment in decent rolling stock and stations, high standards of punctuality and reliability and the protection of passengers' rights.
We also approved a set of planning criteria which will provide an effective framework for developing and implementing worthwhile rail investment—investment of the type called for in tonight's debate—which will improve the range and quality of the services available to rail users.
The third element in our interim package is a voluntary concordat between Ministers and the rail regulator. Firm, fair and accountable regulation is essential for passengers and for the industry on which they depend. We inherited a regulatory structure which did not give the regulator any formal indication of what the Government wanted for the railways. The concordat bridges that gap.

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As one would predict, tonight's debate has given us insights into concerns about poor performance by train operators. The noble Baroness, Lady Thomas, raised the issue at the beginning of the debate. We are not willing to accept poor performance by train operators. Passengers have the right to expect high levels of punctuality and reliability. We expect those who perform badly to take immediate steps to improve their services to satisfactory levels. But also, the good performers should not think that they can simply sit back and rest on their laurels. That performance needs to be sustained throughout the year—the point was made about the differences that can occur at different periods.
Taking the strictures of the right reverend Prelate to heart, I should acknowledge that, despite those mixed levels of performance, some private train companies have made improvements in their areas. They have been mentioned during the debate. It is right to give credit where credit is due. The Government welcome, for example, the initiatives introduced by a number of train operating companies in respect of joint ticketing for bus and rail services. That is precisely the sort of innovation that we are keen to encourage and which will contribute to obtaining a truly integrated transport system—a theme that recurred throughout the debate. But the picture across the country is decidedly patchy. We cannot expect individual operators to act in isolation without the clear, effective and coherent regulatory framework which the new rail authority will provide.
The noble Lord, Lord Brabazon of Tara, asked about the functions of that new authority. No firm decisions have yet been made. We said in our manifesto that the authority would combine the functions of the Office of Passenger Rail Franchising and some functions of the department. We do not necessarily regard those functions as the limitation of the new rail authority's remit. The likely areas of responsibility for the new authority will include: managing and enforcing existing franchise contracts; developing a strategic vision for investment in the network; promoting integration between rail and other modes of transport; promoting voluntary action by train operators to win passengers; protecting the needs of disabled passengers; and balancing the needs of passengers and freight users.
My noble friend Lord Berkeley suggested that the new rail authority might have a role to play in making money available for investment in the network. We have as yet reached no final conclusions in this area, but if, as we propose, the new authority assumes OPRAF's current responsibilities and some of the department's, then OPRAF's budget would transfer to the new authority, as would the relevant parts of the DETR's budget. We shall be considering what other funding might be available, subject of course to the normal public expenditure constraints.
The issue of freight recurred throughout the debate. It was mentioned by many noble Lords, including the noble Earl, Lord Leicester, my noble friend Lord Berkeley, and the noble Lord, Lord Cadman. On taking office we found no national strategy for giving rail freight a sufficient priority on the network. We have made it clear that we want more freight to go by rail.
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We are glad to see that new freight companies are attracting new traffic to rail in an effort to reverse rail freight's long-term decline. They have adopted a positive attitude and ambitious targets. EWS aims to triple traffic in 10 years. Freightliner aims to increase the volume of containers carried by 50 per cent. in five years. We were urged, during the course of the debate, to facilitate increased use of the railway for freight traffic. We have already taken steps to help railfreight operators win more freight to rail.
We have taken positive action to publicise and streamline the grants scheme. We have set targets for the department's freight grants unit and have published new user-friendly guidance for applicants.
Under the previous administration, the freight grants budget was badly underspent. This financial year, the £30 million budget will be substantially taken up. My right honourable friend the Minister for Transport will very shortly be announcing the award of seven new freight grants worth a total of almost £5 million. These grants will spare residents of many areas of England over half a million lorry journeys through their localities. That is precisely the kind of issue that many noble Lords raised today. To reinforce the success of the freight grant scheme, next year's budget has been increased to £40 million, of which £20 million is already committed.
As well as revitalising the freight grants scheme, we have also secured commitments from the French Government and Eurotunnel designed to get a better deal for railfreight through the Channel Tunnel and beyond, not only by EWS but also by new entrants to the market.
In the last nine months, three new railfreight terminals have been developed to serve the international railfreight market: Tilbury, Hams Hall and Daventry. As regards the 44 tonne lorries going to the freight terminals, perhaps I may write to the noble Lord, Lord Brabazon of Tara, with the exact figure.
The Highways Agency, through its "Toolkit" initiative, is seeking to identify pilot projects which encourage both travellers and freight to switch from road to rail. That is the kind of joined up thinking, if I may put it that way, that different bits of the transport infrastructure can bring to an integrated system.
In the context of the development of an integrated transport policy, we are considering what other measures might be introduced to encourage rail freight. We are examining whether planning guidance might be strengthened to protect land for future rail use, and we are considering whether further improvements can be made to the grants regime.
As was predictable, several noble Lords commented today on the need for upgrading of the West Coast Main Line. I am also aware of the concerns expressed by my noble friend Lord Berkeley that the proposed upgrade will not cater sufficiently for freight traffic. The Government have repeatedly made it clear that we want to see Railtrack and Virgin trains move this project forward as quickly as possible. We are keeping a very close eye on it; and I note the remarks from the noble

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Lord, Lord Milverton, that perhaps Mr. Branson could keep a close eye on it as well. We have asked Railtrack for regular progress reports.
It is my understanding that one of the prime objectives of the proposed upgrade is to provide much needed additional capacity in order to meet the needs and aspirations of train operators. This is one of the issues the rail regulator will wish to consider in examining the proposed arrangements between Railtrack and Virgin which are with him for approval.
I note the comments made by my noble friend Lord Hunt about concern in the Birmingham area over the possible adverse effects that additional fast services on west coast main line may have on local Birmingham rail services. I am aware from reports in the press that his concern is shared by Birmingham business, council and train operators running local services. I can well understand the anxiety to safeguard local services. In the first instance, the allocation of capacity on a line is a matter that Railtrack should discuss with train operators and any differences should be referred to the rail regulator as part of his consideration of the proposed access arrangements between Railtrack and the Virgin Rail Group. In reaching his decision, the regulator will take account of the interests of all those affected by the proposals.
My noble friend Lord Berkeley and the noble Earl, Lord Mar and Kellie, drew attention to the technical problems involved in the upgrading of the signalling systems on the west coast main line. I am conscious that the line has not been improved since the 1970s and the train operators who use it and their customers want to have more services, reduced journey times and better reliability—the issue of journey times compared with the comparable eastern line were mentioned today. We shall look to Railtrack and its contractors to address the technical issues which are associated with the upgrade—and I accept that they are very real issues—that have been raised today.
Several contributors to the debate, such as the noble Baroness, Lady Thomas, the right reverend Prelate the Bishop of Blackburn, the noble Lord, Lord Cadman, and others referred to sales of railway land and we are aware of the concerns expressed on the subject. But we do not think it would be useful to stop all sales of former railway land. The British Railways Board no longer owns any operational railway land. Our policy is for British Rail to continue selling surplus land at market value. The sales are part of the expenditure programme of the previous administration to which the present Government have committed themselves. Railway businesses are routinely kept informed and it is open to them to bid for BR sites which are being sold.
As for operational land, when Railtrack was formed it took all those closed lines and closed freight sites which it thought would have potential for future rail use. Railtrack may dispose of certain areas of land that it no longer requires, in the same way as many other private companies do. If land has not been used for over five years and is not required for the future enhancement of the network, its disposal is a commercial judgment for Railtrack to consider. If land has been operational in
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that period, it would be subject to the normal closure procedures. I can say to the House that in addition to the safeguards I have just described, we are examining, in the context of an integrated transport policy, whether the planning guidance might be strengthened to protect suitable land for future railway use.
The noble Lords, Lord Razzall and Lord Cadman, with others, spoke of the need for long-term sustained investment in the rail industry. As your Lordships know, substantial sums of public money are going into the industry. The need is to ensure that the best value is obtained for that investment. An important responsibility of the new rail authority will be to give strategic direction to the industry. The noble Lords, Lord Brabazon of Tara, Lord Harding, and others raised the specific issue of requests for franchise extensions such as that received from GNER. These will be considered on their merits but I have to say to the House, as I have said before, that there will need to be very convincing arguments of public interest and value for money to justify renegotiation of contracts which were freely entered into following the competitive process.
I noted the territorial comments, if I may put it that way, made by the noble Earl, Lord Mar and Kellie, about services in Northern Ireland and the Republic of Ireland. I welcomed his remarks about the improving cross-border service and about integration of public transport. I know that my right honourable friend the Secretary of State for Northern Ireland is committed to producing a transport policy statement later this year, to be read alongside our own White Paper on integrated transport policy. I thought his remarks about services within and to Scotland vividly illustrated the point about the patchy performance of train operating companies. Like other noble Lords, he also mentioned the freight operator EWS. I know that a key part of EWS's strategy for increasing rail freight is to get more long-distance freight onto rail, including traffic between the south of England and Scotland. Perhaps they may consider the possibility of carrying cars as freight, as Motorail did in the past. I am busking on that point, I am not sure about it.
While we are on issues Scottish, the noble Lord, Lord Palmer, commented on the need for a station at Edinburgh airport. He made wider points about proposals for devolution. We have made it clear that the new rail authority will be a body with overall responsibility for long-term strategic development of the rail network across Great Britain. That is why the new authority will be ultimately responsible to this Parliament. But we want to ensure that the devolved institutions in Scotland and Wales play their part in this.
The noble Lord also drew attention to ticketing arrangements under the privatised rail system and urged train operators to extend the validity of some period returns.
My noble friend Lord Hunt of Kings Heath referred to the availability of cheap walk-on fares. We have inherited a system where operators have discretion to price some tickets according to market demand, but without any other controls by the franchising director.

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I urge train operators to take full account of the needs of their passengers in settling the terms and conditions of fares.
I am conscious of the time, but the noble Lord, Lord Methuen, asked a specific question relating to the Channel Tunnel rail link. As I said in response to a Question last week, London and Continental Railways said that it will require a further £2 billion of taxpayers money over the next two years to complete its contract. The Deputy Prime Minister said that that is not acceptable and under the contract LCR has 30 days to come forward with revised proposals. That 30-day period ends on Friday of this week. We will inform Parliament as soon as possible of the outcome of the discussions over the past month. But, given the sensitivity of those discussions, I hope that the House will understand that there is not a great deal that I can add this evening.
The noble Viscount, Lord Thurso, took us down the interesting avenue of the comparisons between rail and road cost—not a road down which I can follow him this evening. However, it was a well drawn point to make; we must look at the attractiveness of rail both in terms of the quality of the service and the cost.
This debate has served very well to draw attention to the state of the railways. When we came to power we found the system broken into literally one hundred pieces, with no strategic vision for the development of the network. We found a regulatory structure which even the industry regulators acknowledge can be confusing. We found a privatised railway that had made fortunes for the few, but in many cases had left passengers short-changed. And we found a railway crying out for some leadership and direction.
We are determined to address those issues—to do some of the untangling mentioned tonight—and deliver the coherent, clear and effective regulation which is needed to put the railways at the heart of our integrated transport strategy. We have demonstrated our intentions by taking action within the existing regulatory constraints and by conducting a fundamental review of rail regulation. We have taken action to encourage more freight on to the railway. And we have made clear our commitment to a new rail authority which will provide a much-needed strategic overview. We believe that we can—and must—get more out of our railway, and that we must do that not only in the context of an integrated transport policy, but also in the context of our commitment on climate change post-Kyoto.
8.12 p.m.
Baroness Thomas of Walliswood: My Lords, at this time of the evening I shall resist the temptation to re-enter the argument, for which I am sure everyone will be grateful. However, before bringing the debate to a close it is appropriate for me to say "thank you", particularly to the Minister for as usual coping with a vast mass of different queries and bits of data with her usual charm and efficiency.
I also thank those who introduced a note of humour into the debate. The idea of balloonists above our heads as we speak was delightful and those of us who have
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had the opportunity to drive a steam engine are greatly to be envied. I lived over the Euston goods yard as a child and the remarks of two noble Lords brought to my mind vividly the noises, the sights and the smells of that situation.
Finally, I congratulate the noble Earl. Lord Leicester, on his wonderful reminiscence about all that was peculiar and not entirely efficient in British Rail. I thank also my team of supporters on these Benches and all noble Lords who, as I expected, made excellent and illuminating personal contributions to the debate. We are to receive papers soon—one day, in the Spring. They are eagerly awaited and until then, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Asylum Seekers
8.14 p.m.
Lord Hyltonrose to ask Her Majesty's Government what progress they are making in reviewing arrangements for asylum seekers, including the backlog of applications; and what improvements they have in mind.
The noble Lord said: My Lords, I start by welcoming and thanking Her Majesty's Government for some small but helpful action that they have taken for people seeking refugee status in this country. They have declared the Congo, Zaire and Sierra Leone to be "countries of upheaval" to which asylum seekers will not be returned. However, will they also include Algeria in that category?
The Government increased the support limit to £165 per week for applicants who would otherwise be destitute. They have allowed local authorities to use their own housing stock for asylum seekers rather than hotels and boarding houses, which are often more expensive and of poor quality. Those are common-sense measures and I welcome them warmly. In the words of Shakespeare: "For this relief, much thanks."
I turn now to four issues hoping that constructive dialogue will lead to real improvements. I have in mind welfare, the use of detention, the backlog of applicants and, lastly, the Government's review and the shape of future arrangements. I look forward to later speakers adding detail to that outline.
As regards welfare, local authorities have recently been providing essential food to some 5,000 single people who might otherwise starve; they have been assisting 2,500 families with children under the Children Act; thus some 12,000 to 15,000 people are receiving help in kind while their applications are considered. The British Refugee Council estimates that to provide income support and housing benefit would cost around £110 per person per week instead of the current £165, which is the allowable cost of benefits in kind. There is thus a huge saving to be made—one which will allow individuals greater choice in managing their own lives.
I understand that the Secretary of State already has discretion to change the regulations so that it would no longer be obligatory to provide benefits in kind. Will the

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Government grasp this opportunity? Will they also—I hope they will—reduce the six-month period during which new applicants are not allowed to accept employment, even if they are lucky enough to find it? Surely a one-month waiting period would be sufficient.
Do the Government accept that the national assistance and Children Acts do not provide suitable vehicles for sustaining applicants while their cases are decided? The use of those Acts lays unfair burdens on a small number of local authorities and also harms race relations.
The number of people in detention who claim asylum varies from around 700 to 850 at any one moment in time. Some of those people are in prison, others in detention centres. The number has quadrupled since 1990. Detention causes intense suffering, anxiety and uncertainty. There have been attempted suicides and, I am sorry to say, three self-inflicted deaths in recent years. Detention also makes access difficult for legal and other advisers. At the end of last October only 58 out of 740 detainees were held subject to deportation. The remainder were cases awaiting decision or appeal; 316 had applied at a port of entry and 366 were classed as illegal immigrants. That definition includes those arriving unofficially who may nevertheless have genuine cases for asylum and others who may have initially declared themselves as visitors.
The Minister will, I dare say, tell me that detention is only used sparingly and as a last resort. What ideas do the Government have for reducing the use of detention to the pre-1990 level? Bail, we all know, has proved not to be an effective remedy. Will the Government introduce case-by-case reviews by independent reviewers, starting within a week or two of arrest and continuing at regular intervals? Will they ensure that detainees are always informed in writing, in a language they understand, of the reason for their detention and its probable duration?
I come now to the backlog. The noble Lord, Lord Williams of Mostyn, has told the House that on 31st December last 51,795 cases were awaiting initial decision. He did not say at that time that there were also well over 22,000 cases awaiting appeal. The total is formidable. I can perhaps encourage the noble Lord who will reply by pointing out that last year the new French Government issued between 20,000 and 40,000 residence permits, many of them to asylum seekers who would have been in danger if returned to their countries of origin. Urgent action is certainly needed in this country as well.
Fast-track procedures have been tried here. They produced some 5,700 decisions in 1996–97, but from these, only three persons were accepted as refugees, an almost unbelievably low figure. I therefore ask to what extent this is likely to be mitigated by exceptional leave to remain and to what extent it is likely to be altered by successful appeals. It does not help very much to give quick decisions if these are later to be overturned on appeal. In dealing with the backlog, what weight is given to the cost of appeals and also to the cost of removing people to distant countries? One thing is quite clear: faster procedures must have built-in safeguards.
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After the Act of 1993 it is clear that the proportion of refusals jumped up dramatically. At the same time exceptional leave to remain, which had been a safety valve for genuine humanitarian cases, fell from 64 per cent. of applications to between 14 and 21 per cent. Will the Government reverse this policy? Will they make ELR much more transparent? In dealing with a huge backlog, will the Government take into account that 20 per cent. of the initial applications pre-date 1994? Ten thousand people have been waiting for four years or more. The situation among appellants is probably similar. During the waiting time, families produce children, children become established in school and jobs, and houses are obtained. Are these factors being fully considered? Will the Government look favourably on family reunion as a reason for admitting applicants? Amnesty International has underlined that it is both impractical and unfair to remove people who have been here a long time since their initial applications. I am sure your Lordships appreciate the force of that.
Do the Government believe that computerisation will help to reduce the backlog; and if so, how soon? There is talk of staff cuts in the immigration and nationality departments. How will these influence the situation? Will staff be retained at least until the computers are fully functioning? Legal aid also has a bearing on the backlog. At present none is available for appeals. The Refugee Legal Centre and the Immigration Advisory Service provide free advice for both first applications and appeals. They cannot cope with all current cases. Can the noble Lord assure us that their government funding will not be cut, and will indeed be increased, until such time as the backlog is cleared?
Turning to the future, can the noble Lord in his reply give the House any outline of the new thinking that is emerging from the interdepartmental review? Will there be an interim report? When is the full report expected? I wish to mention two particular points that the review should consider. At the time of the 1996 Act, it was announced that asylum seekers need only register their application on entering the country. They could justify their case after receiving proper advice. I understand that this has not always happened and that port interviews are still being conducted on arrival and before applicants have had access to legal and community advice. This must be counterproductive. Applicants are entitled to know what the 1951 convention states. It would also be helpful if Home Office assessments of individual countries of origin could be regularly published. Will the noble Lord comment on these and on any other steps that would help to build up confidence in the processing of applications?
I have mentioned the Government's small improvements and also welfare, detention, the backlog and the review. I conclude with Europe and the British presidency. Will the Government use this opportunity to resist the concept of "fortress Europe"? Will they seek to have the 1951 convention properly applied throughout the European Union until such time as it is revised or amended? Will they amend or repeal the Immigration (Carriers' Liability) Act and resist the

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extension to additional countries of fines on carriers? Europe has a small proportion of all the world's refugees and because of its wealth, it should bear its proper share. Because many refugees are young, adaptable and dynamic, they have much to contribute. I thank all noble Lords who are taking part in the debate and I look forward to a sympathetic response from the Government.
8.26 p.m.
Lord Renfrew of Kaimsthorn: My Lords, I thank the noble Lord, Lord Hylton, for putting down his Question and for introducing the debate in such a comprehensive and useful way. This evening I should like to express my concern for one particular group of people who do, I think, have a particularly hard time under the present situation. These are asylum seekers who make application in the proper way when they enter this country, but who have to wait a very long time—sometimes several years—before their case is considered in any way, and before they are called to interview.
Of course one should say at once that they are fortunate indeed to be admitted to this country, saving them from what is often an appalling situation in their own country, where they have usually had to endure deeply disturbing experiences. They are fortunate also to be accorded income support—if they are unable to find work, which is often the case—and often housing benefit also. Their good fortune in these respects has to be recognised.
Secondly, one should value the very great care with which the officials of the immigration section of the Home Office deal with such cases—many of them, of course, legitimate cases—against the enormous pressure of numbers from would-be immigrants who sometimes apply for asylum when their motivation is not in fact to escape from suffering under a tyrannical regime in their own country. It may simply be motivated by a desire for economic betterment. One must recognise the difficult task which the Home Office has in dealing with these large numbers—quite apart from illegal immigrants, and those who enter legally but disappear, as I am afraid they sometimes do, when they are asked to leave.
That being said, however, when an applicant has been in this country for two, three, four or five years, there may be perhaps some presumption that he may hope to be granted exceptional leave to remain, which may, after a further period of time, lead to British citizenship. The situation is not an easy one. They may be left for years in a kind of limbo in this position. When I raised this point during a Starred Question debate initiated by my noble friend Lord Renton on 27th January, the noble Lord, Lord Williams of Mostyn, replied in a very sympathetic way. He said:
"I entirely agree with the noble Lord. It is utterly demoralising … No human being should have to be left in doubt and limbo for that period of time.—[Official Report, 27/1/98; col. 104.]
I very much agree with him.
He kindly agreed to write to me to say how many applicants there are in this country who have been applicants for more than five years without having a
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decision in their case or an interview. To my surprise, however, it has not yet been possible to provide this information. I had a very courteous letter from the noble Lord making clear that records are not maintained on this basis. I have to express considerable surprise that we have no way of knowing—I hope some statistical computations will be made—how many people have not had their cases considered who are applicants of five, six or seven years' standing. I would be very interested to hear from the noble Lord, Lord Hoyle, how many cases of applicants there are in this country who have heard nothing at all after seven or eight years, because there are indications that some people are in that very unfortunate position.
The noble Lord was kind enough to write to me to say that 10,000 applications are still outstanding from before the passage of the Asylum and Immigration Appeals Act 1993 in July of that year. Is it not strange that we are making large numbers of applicants, some of them clearly legitimate applicants, wait in this extraordinary and nerve-racking situation where they hear literally nothing for year upon year?
There are also financial implications here, quite apart from issues of justice. I wonder whether the noble Lord would care to indicate the annual total cost—that is to say, aggregating money from central government and from local authorities—of benefits to those seeking asylum. It would be interesting to have an overall figure, which was not given in the brief debate earlier this week on the Starred Question of the noble Earl, Lord Russell. I imagine that the average cost of an asylum seeker must be approaching £5,000 a year, although no doubt we shall learn more if we are given the necessary figures.
Secondly, how many cases on average—that is, cases for initial decision—does an immigration case worker determine per year? A diligent and experienced case worker might feel able to determine one case a week. I have no idea what the answer is. It may take longer than that. But if it were one case a week, and the case worker could therefore adjudicate on 50 cases for initial decision a year, it would seem that of the order of £250,000 per year could be deducted, as it were, from the asylum budget. I have no idea how much it costs to support an immigration official but, taking a figure of £50,000, including pension rights and so on. it would seem that if one drafted in a number of new immigration officers—if one had a task force, with people on one or two-year contracts—one might be in a position to save the Exchequer or, at any rate, the asylum bill of the order of £200,000 per officer.
I have based those calculations on hypothetical figures and I stand to be corrected, but I imagine that my point has some validity. The present system is extremely expensive. It is not only unjust and inefficient to have a backlog of cases of five to eight years' standing; it is extremely expensive on the Exchequer to be maintaining applicants without giving their cases any consideration whatever for five years. It is perfectly clear that some of those cases will receive a negative reply and that those involved will have to leave this country. It would have been much less expensive had they been invited to do so rather more rapidly.

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In conclusion, perhaps I may make a suggestion. Surely, in cases where an asylum seeker has made application in the proper way and waited for an answer for four or five years, unless there are other special factors militating against that person—for instance, demonstrably untrue statements made in the application—there should be some presumption that he or she might well be granted exceptional leave to remain. After four or five years, surely we must recognise that there has been some deficiency in our own administrative system that goes beyond what is reasonable.
This is not the Prague of Kafka. This is not some Comintern bureaucracy of the 1950s. It is certainly true that these people, these applicants, are seeking a great privilege: namely, British citizenship. But that does not mean that we should treat them as if they are of no account, mere manila folders locked in a forgotten filing cabinet.
I hope that the Minister can give some undertaking that something will soon be done to tackle this appalling and rather Kafka-esque situation.
8.35 p.m.
The Lord Bishop of Ripon: My Lords, I also wish to offer my thanks to the noble Lord, Lord Hylton, for putting down this Unstarred Question and for the very able way in which he introduced it in your Lordships' House.
The General Synod of the Church of England debated the issue of asylum seekers in November of last year and, during that debate, they welcomed the Government's commitment to a fairer, firmer and faster system for considering requests for asylum. We are looking forward with great anticipation to the results of the review which we all trust will deliver such a system. The Synod also expressed its continuing concern about the effects of British asylum immigration and nationality law upon those who seek asylum here.
The noble Lord, Lord Hylton, referred to the matter of a backlog and to the fact that the total number of pending applications has in fact fallen from almost 70,000 at the beginning of 1996 to just under 52,000 at the beginning of this year. Although the number of pending applications has fallen, the number of appeals has in fact risen from 1st January 1996, when it was just under 12,000, to 1st January 1998, when my figures give just over 24,000. Surely one of the reasons for this increase in the number of appeals is that the quality of the initial decision was not good enough. Good initial decisions will surely lead to a smaller number of appeals. I have heard a number of lawyers make that specific point.
I have read a number of initial determinations over the years and I have to say that I am astonished at the reasons which are on occasion given during the writing up of initial decisions for rejecting an application. I remember one application which was made where the grounds for refusing it, amongst others, were that the applicant had spoken about his work. He had owned a shop in Nigeria and in one of his interviews he had referred to this shop as a corner store. In another
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interview he had referred to it as a supermarket. I now walk past corner stores and I try to determine in my mind whether I would refer to it as a corner store or as a supermarket. I am tolerably familiar with the English language, but I do not always find it easy to know exactly which term I would use. For somebody arriving from another country, unfamiliar with our culture, to be expected to have familiarity with that degree of sophistication about our use of language does seem to be extraordinary.
I feel that one of the issues in the making of initial decisions is the giving of time to applicants before they are interviewed. During the passage of the 1996 Act, when the whole matter of people arriving in this country seeking asylum was raised, the then Secretary of State said that it had been suggested that someone arriving in this country seeking asylum is required to give details at the port of entry, giving the reasons why they are seeking asylum. He said:
"All we ask is that, when such people arc asked why they have come to this country, they should say that it is to seek asylum … There is no question of their being required to give details then and there".
There is some evidence that that is not the case, that asylum applicants are being interviewed very shortly after their arrival in this country when they are tired, confused and, on occasions, traumatised. It is very difficult for refugees to give a full and coherent account of why they need protection at this stage. Furthermore, the interview is not delayed in order to allow them to get advice either from community organisations or lawyers. In those circumstances it is not surprising that the quality of the initial decision should be poor and that therefore the number of appeals is rising. I suggest that we need to pay great attention to the quality of those initial decisions.
The noble Lord, Lord Hylton, referred to benefits and clearly that is causing continuing concern. There are figures suggesting that local authorities are now caring for some 20,000 asylum seekers, mostly in areas where there is already great pressure on services. Churches, particularly around London, and also Jewish and Moslem communities are still providing many basic commodities to asylum seekers. These include hot meals, toiletries and clothing. There are eight day centres, of which six are in churches, which have recently extended their opening hours to three and four days a week in order to cope with the demand from asylum seekers.
It seems to be widely accepted—I believe that this was brought out in the Question which the noble Earl, Lord Russell, tabled earlier this week—that it is cheaper to return to the benefits system. It is fairer to local authorities and, as the noble Lord, Lord Hylton, said, it is less likely to cause community feeling.
One of the small points which needs to be made about the National Assistance Act is that I believe I am right in saying that it does not provide cash in hand. How then are asylum seekers expected, shall we say, to telephone in order to ask for help or to travel by the Underground to meet a lawyer? These practicalities need to be taken into account when looking at the kind of needs that asylum seekers have.

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It continues to be an anomaly that benefits are provided to those who claim at the port, but not in-country. That does not seem to be a reasonable way of distinguishing between the genuine and the unfounded claim. It continues to be the case that in-country applicants have a higher probability of being granted refugee status than those who apply at the port of entry. That surely must continue to cause concern for the way in which benefits are allocated.
I should like to say a brief word about attitudes. I believe it is clear that attitudes generally towards asylum seekers leave something to be desired. The Churches were concerned at the issues surrounding attitudes towards people from Slovakia and the Czech Republic who belong to the Roma community. There are others here from Romania and Poland. Quite clearly, there is some violent persecution of Roma people in eastern and central Europe. A day seminar was held on this issue at the European Ecumenical Assembly in Austria last year. Many Roma have died in the past few years; some have been burnt out of their homes and others denied jobs or schooling. It may be that these asylum seekers do not qualify under the Geneva Convention, but nevertheless it remains the fact that their fears are real, that they are persecuted, that each one of them is a human story and that we need attitudes towards them which do not term them as bogus simply because they do not necessarily qualify under the Geneva Convention.
I was recently at a gathering at Westminster Central Hall at which one or two refugees were telling their stories. There was a huge protest march concerned with hunting going on outside your Lordships' House at the time. An Algerian commented that if he were in this country he would rather be a fox because he would have 30 million people seeking his protection. It did not seem clear to him that he had that number seeking his own protection as an asylum seeker.
Perhaps I may also comment briefly on detention. It is by no means clear that those who are detained are kept in custody on any agreed or understandable basis. Such analyses that have been made seem to indicate that there is no particular reason why those who are held in detention should be so. I underline the points that the noble Lord, Lord Hylton, has already made, that there needs to be protection for those held in detention. There needs to be a proper review of their case. They need to be given written reasons why they are there. It must be made clear that they are not simply put there on some arbitrary basis. We look forward to the results of the review with great anticipation. I hope that the review will indeed deliver that fairer, firmer and faster system for which we all hope.
8.46 p.m.
The Earl of Sandwich: My Lords, in one sense we are all on the same side, all looking forward to fairer and faster, if not necessarily firmer, arrangements for asylum seekers. I also thank the noble Lord, Lord Hylton, for his longstanding interest in this subject as well as for providing this new opportunity. Those of us
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who took part in the asylum and immigration debates should have great sympathy with the Government as they approach this long-awaited review. We trust that the refugee agencies and the refugees themselves, are now pushing against at least a half-open door before it swings back in their face, as is the nature of things. I hope that the Home Secretary, who is not the radical student leader that he once was, will continue to demonstrate that he is on the side of the asylum seekers.
In these few comments I shall assume that the Government's review will be positive in particular as regards detention and entry procedure and that they will reverse at least some of the last government's restrictive policies. For example, I expect the Government to take very seriously the forthcoming report of the Inspector of Prisons on Campsfield. This promises to be a highly critical report. The riot last August was only one indicator of the extreme tension generated by the innate cruelty of a system which locks up in a no-man's land, mainly innocent, disillusioned people who are already victims of appalling persecution, without charge and with limited opportunities for bail.
These asylum seekers are treated in some sense worse than common criminals in that in spite of their own particular form of distress, they are denied a proper hearing or even the regular health and education services available to prisoners, let alone the specialised help that they often need. Can the noble Lord, Lord Hoyle, anticipate the review by giving some assurance that asylum seekers are going to be guaranteed an automatic and independent review of their detention, and given reasons for it in writing? Can he also give an assurance that no one will in future be held without a formal charge? Will there be some improvements in bail procedure where the presumption is still weighted against the applicant? Can he also explain why detention—at a weekly cost of about £550 per person—is even necessary in the case of those awaiting an initial decision, as opposed to those who have exhausted the procedure and would be more likely to abscond? On a given day last October, nearly half of the 740 detainees were still awaiting an initial decision. Roughly the same number were detained at the port of entry, which would have entitled them to benefit.
Unlike the previous government, I am sure that the Minister will accept that more genuine refugees have emerged after entry than were immediately identified at the port, and yet these applicants are deprived of benefit. Can the noble Lord say whether the Government intend to relax the rules which insist on port of entry applications and which take no account of the confusion and incomprehension of refugees when they first arrive, as the right reverend Prelate has already mentioned? It seems unnecessary to present all over again the arguments that were well made by the noble Lord, Lord McIntosh of Haringey, and others when in opposition. An important amendment was carried in this House on that issue two years ago, with Labour support. It would be comforting to hear that the Government will be making at least the changes which they supported on that occasion.

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We should be aware that unaccompanied minors, under the age of 18, have continued to be detained by this Government in spite of frequent denials. The noble Lord, Lord Williams of Mostyn, confirmed in a Written Answer on 27th November last year that four out of 11 were released from Campsfield last year; but I understand that in spite of representations, there are still two 15 year-olds there from Angola and Afghanistan. Another 15 year-old was among those taken at random after the riot and charged, apparently without much evidence, and he has since attempted suicide.
There was another case of three small children about to be sent back to Nigeria, unaccompanied. There was even a case of an 11 year-old who went as far as the adjudicator before his age was recognised. Where age is in dispute, the IND has, I believe, been apt to take the ages given in forged identity papers for granted; and officers are, perhaps understandably, not always ready to refer cases via the Refugee Council's children's panel, then to a solicitor, and so on to a paediatrician, a procedure kindly explained in the Home Office Minister's subsequent Written Answer last week. Can the noble Lord confirm that at least that referral procedure can be accelerated or improved because it discriminates against unaccompanied minors?
Others have mentioned the position of individual nationalities. I should like to comment only briefly on some of the more recent arrivals from the world's worst trouble-spots. I should like confirmation that the dreaded "white list" which is still in use for some nationals will soon be abandoned—although I of course welcome any countries which come off the list in the meantime. Others have mentioned the extended leave to remain procedure. Will the Government, as the noble Lord, Lord Hylton, argued, use that procedure more generously to assist Algerians and Sierra Leoneans, as was done successfully, to the great credit of the last government, with Somalis, Iraqis, and Afghans, as well as new arrivals from the former Yugoslavia?
Out of 1,880 decisions on Algerians in 1996, only 30 were given asylum, and only 15 were given ELR. The figures for 1997 were that out of 765 decisions, 105 were given asylum—that is, 14 per cent.—and five were given ELR, representing 1 per cent. Perhaps we thought that it was a French responsibility or perhaps we simply underrated the urgency of those cases. Given what we now know of the causes of persecution and the nature of torture in Algeria, it looks as though we may have deported large numbers of legitimate asylum-seekers, to what suffering we cannot tell.
Figures like that do no credit to us as a nation, and there can be no pride in preserving asylum and immigration laws which were principally designed by the last government as a deterrent, effectively to keep people away rather than welcome them in. Perhaps the noble Lord will confirm that the original UNHCR guidelines for admitting Algerians have been revised and now include all those who have a legitimate fear of persecution, including sympathisers or associates of the FIS.
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Here, I should like to quote from a letter dated 4th February this year from the London office of UNHCR to the Minister responsible for immigration. The letter states:
"UNHCR would strongly support the Government in not removing rejected Algerian asylum seekers under United Kingdom Immigration procedures, except where it is established, beyond doubt, that the presence of a particular asylum seeker is a danger to the national security of the United Kingdom. In such circumstances, the responsibility on a Government not to return persons to a country where they may be subject to torture or other inhuman or degrading treatment will also have to be weighed".
I understand that Germany is reconsidering its position on the deportation of Algerians and that Bremen and Nordrhein-Westfalen have recently suspended deportations.
As we are talking about people, I shall also briefly provide three case studies, not of torture victims which certainly exist, but of ordinary Algerians who seek our protection. The first two come from the Karibu centre in Vauxhall. The first is from an unnamed refugee who said:
"I left Algeria … because of the dangerous situation there … Because I worked with the government I was threatened by the Islamics, but … I was also at risk from the government. For this reason I was forced to leave … as quickly as possible. There are many other people … in a very dangerous situation … I am a young man and I am innocent. I am on nobody's side—neither the government's nor the Islamics … I only want to find … law, democracy, freedom of expression, and above all peace. In my opinion England was the best place to find these things".
Rashid said:
"My brother is in jail … I haven't seen him for ten years … My application for asylum has been refused and when I go back to my country I will be faced with danger. My brother is against the government and for this reason he was put in jail, When the police come to your house and take a relative away, we don't know if they will ever return".
The third quotation comes from a report published by the Refugee Council, and written by a social worker about a 28 year-old army deserter called Ismail. It states:
"Accommodation: sleeping rough … Daily life: does not talk about life here. Reported assault … when trying to use soup kitchen intended for 'UK homeless' … was beaten, a dog was set on him, and his ear was cut with a knife … he is obviously very disturbed … but refuses to see doctor … He moves around constantly. He is still very obviously in need of specialist support … Note … Ismail was found accommodation by the local authority. However, he then received a negative decision on his asylum claim".
Finally, as other noble Lords have said, we are looking forward to a drastic revision of the backlog "shambles" as the Economist graphically described it last week. It is widely accepted that delay has become an incentive for new asylum-seekers, which cannot be part of government policy. There have been various suggestions for reducing the backlog, of which ELR is one, and I am confident that the Government will respond to growing public pressure.
However, if the Government intend to enter a new round of heavy primary legislation, it will be many more months before they can meet all those obligations. I am sure that we all agree that there are some immediate measures which can be taken this year to bring comfort to the important numbers of genuine refugees whom we are all trying to identify.

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I would add, in conclusion, that if benefits can be restored as soon as possible to relieve the local authorities, as was hinted at during Questions on Monday, instead of increasing the National Assistance Act payments which, as has been said, end up more expensive, surely the Treasury too will be happy.
8.58 p.m.
Earl Russell: My Lords, I too thank the noble Lord, Lord Hylton, for tabling this Unstarred Question. At this time last night I was having dinner with the officers of Hampstead Liberal Democrats, to whom I had just been speaking on welfare reform. As your Lordships may imagine, there were a considerable number of people around the table who had originally come to this country as refugees and who are now among its most distinguished and successful citizens. It reminded me once again how much this country owes, and has owed over many centuries, to those who have been former refugees. I once had the privilege when I was in the United States of belonging to a very high quality academic department, 25 per cent. of whose members had started off as refugees from Hitler. We should not forget that positive attitude.
When I look at present policy, I see in it three general areas of error to which I should like to call attention. First, I believe that recently policy has been based on a mistaken objective. As the noble Earl, Lord Sandwich, has said, the objective is to deter potential asylum seekers. I believe that it was first stated by the noble Lord, Lord Mackay of Ardbrecknish, on the behalf of the then Government. It was stated from the Opposition Front Bench by the noble Lord, Lord Henley, on 27th January. It appeared to me to be restated by the noble Lord, Lord Williams of Mostyn, on 30th October when he said that it was a mark of the success of the Home Secretary's treatment of the Dover incident that numbers of applications had over a few days dropped from 28 to nine. The noble Lord, Lord Williams of Mostyn, strenuously resisted that interpretation of what he said. For the time being, I shall give him the benefit of the doubt, but it is a point to which I may return.
The trouble with deterrence is that it is in the nature of the case that one cannot distinguish between a genuine and a bogus asylum seeker before a hearing. We do not now have any Witchfinders General. The noble Baroness, Lady Gould of Potternewton, from everything I have seen of her, has shown no sign whatever of deserving so ungenerous a title. She is one of the most courteous people I know. Without the aid of a Witchfinder General we simply cannot possibly tell. Therefore, deterrence, like the biblical rain, must fall equally on the just and the unjust and until there is a hearing that must remain the case.
Under the UN convention of 1951 we are bound to receive applications from people who claim to be refugees and to treat them as such up to the time of the hearing. That is incorporated by Section 2 of the Asylum and Immigration Appeals Act 1993, which was passed by the previous Government. That Act provides that nothing in the immigration rules may contain anything
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that is contrary to the 1951 convention, which means that nothing in the immigration rules may be intended to deter applicants. I am not a lawyer but I should like the courts to determine whether the objective of deterring applicants for asylum regardless of their genuineness is an illegal objective.
My next complaint is that the present system is an expensive and time-wasting method of determining applications. On 27th January the noble Lord, Lord Williams of Mostyn, told me that there was no such thing as a culture of disbelief within the Home Office. I am sorry that the noble Lord is not here to answer the point. I should have enjoyed the exchange. I am sure that he will find a way of doing so shortly, and I look forward to it. The suggestion that there is no culture of disbelief within the Home Office appears to come within the very limited category of self-refuting statements.
In Canada, approximately 70 per cent. of applications for asylum are found to be genuine. In this country the last figure that I had, including exceptional leave to remain, was about 19 to 20 per cent. I see no reason to believe that applicants for asylum in Canada are that much more honest than applicants for asylum in the United Kingdom. That difference must in large measure be a difference in the way that those applications are treated.
I was very interested in the example given by the right reverend Prelate of the man who referred to a supermarket and a cornershop. There are at least two shops within a few hundred yards of where I live to which either description can perfectly well be applied. I believe they say that the correct title is "mini-market", but I can quite understand that that title may not be familiar in Nigeria. It is a pretty good example of the culture of disbelief.
During the year of the murder of Ken Saro-Wiwa I believe that there were 1,494 applications for asylum from Nigeria. It was certainly in the high fourteen hundreds. Of that number, five were found to be genuine. That appears to me to offend against the law of averages. In 1992, 95 per cent. of applications from Sri Lanka were found to be genuine. In 1996, the figure was 1 per cent. I do not believe that there has been a sudden outbreak of dishonesty in Sri Lanka on quite that scale. Those figures must indicate a spread of the culture of disbelief.
Disbelief takes a good deal of time. It leads to lengthy hearings, extensive checks of points that may be quite clear and a high rate of refusals followed by a high rate of appeals. It also demands considerable manpower. At the same time, during the past year the Immigration and Nationality Department has shed 271 posts. I say again what I have said many times: efficiency is not efficient. As the noble Lord, Lord Renfrew, argued very persuasively, this is an area in which the pursuit of saving is likely to lead to considerable additional expense, not to mention inhumanity.
The same arguments apply to the question of detention. I know that we are frequently assured that no one is detained without good reason but, since no written reasons for detention are given, that proposition is entirely unverifiable. Dr. Christina Pourgourides, who

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did research on detainees in Birmingham, identified 16 cases of individuals—I quote from memory and I cannot answer for the accuracy of the figure—who appeared to be suffering considerable mental stress as a result of detention. She asked the Home Office for what reasons they had been detained. The investigation led to the majority of those people being released on the grounds that their detention was found to be unjustified. Not every asylum seeker can enjoy the attentions of Dr. Pourgourides. Until reasons are given for detention we cannot know how many such cases there are.
In 1628 this House and another place resolved that in English law nobody should be detained without cause shown. I believe that we see here quite how right they were. We should not treat asylum seekers as lesser breeds without the law but recognise that they are entitled to the same rule of law as everybody else. We should have written reasons for detention and every detention should be reviewed by a judge. That would not only involve more humanity but a good deal more saving.
I wish we could have here what the noble Baroness, Lady Hollis of Heigham, describes as "joined-up policy". On the case of the Roman, to which the right reverend Prelate referred, my noble friend Lady Williams of Crosby—who regrets her inability to take part in the debate—had the shrewd idea of putting down a question to the Foreign Office instead of to the Home Office. As non-discrimination is a condition of entry to the EU, the Foreign Office were seized of the question and gave answers which more closely resembled the views of the right reverend Prelate than the views of the Home Office.
One of the countries with the biggest backlog of applications which have not been accepted is Iraq. We all know what the Prime Minister and others have had to say in recent days about the Government of Iraq. It creates a presumption that a high proportion of the applications from Iraq might be genuine. That is another case where I would like to see joined-up policies.
We talk about a global market. We have complete free movement of capital: we do not have any equivalent free movement of labour. That inevitably tilts the global market in favour of capital rather than labour. That inevitably leads to a pressure for lower wages, which may increase the burdens on the social security system quite as much as other measures which are addressed when it is reviewed.
Nobody is suggesting complete freedom of movement of labour, but in a global world the amount of restriction we now have on mobility is coming to look uncomfortably like the 1601 Poor Law, in which the poor and unemployed were whipped back to their home parishes, which were then responsible for relieving them. If people are to be sent back to their own countries and not allowed out, something must be done to make it tolerable for them to live there. Otherwise it is like locking the door of a burning building with a number of people inside. One sometimes wonders whether that is what the world is conspiring to do to the Kurds. In the case of Algeria, I am extremely glad that the Foreign Secretary has recognised the need to review conditions
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there. If a restrictive approach is to be taken, then a human rights foreign policy must be a necessary concomitant of it. We need this reviewed over a wider canvas than the Home Office alone can provide. We badly need some joined up policies.
9.10 p.m.
Lord Henley: My Lords, I thank the noble Lord, Lord Hylton, for introducing this debate. It is a pleasure for me, as always, to follow my noble kinsman Lord Russell. I ought to warn him against advertising some of the more Draconian policies put forth by different governments in the 16th and 17th centuries. He sometimes suggested such things when we were in office—I suspect to frighten us to take up the suggestions he put forward. One sometimes suspects that new Labour might not have the same fears, might take his advice and might follow the policies suggested by my noble kinsman.
I offer my felicitations to the noble Lord, Lord Hoyle, for having to respond to this debate. I congratulate him on the versatility of what he will have to cope with today. He started today replying to a Question on defence land sales. The noble Lord will remember that we first met when he came to see me as a Member of another place about his concerns about Ministry of Defence land disposals in his constituency.
My noble kinsman Lord Russell stressed that we have a proud record in this country of giving refuge to those fleeing genuine persecution. I underline the word "genuine". Like him, I pay tribute to all those who have arrived in this country over the years, fleeing from genuine persecution, for the terrific part that they have played in the development of this country. I suspect that the forbears of my noble kinsman were not fleeing persecution when they came here but were probably arriving as invaders at one time or another. My history of the Russell family does not go back far enough to remember how and why they did arrive.
It is right that we should provide refuge to those fleeing genuine persecution, but we feel that our asylum procedures have been abused in the past, are still being abused, and are being so to an increasing extent. The Home Office is conducting a review of its procedures and it is important that in doing so it looks carefully at the changing world situation and the increasing growth of oppression throughout the world. It might be that often there is a case for tightening up our procedures so that we do not have to submit to increasing numbers of refugees, genuine or not, coming to this country. I refer in particular to the rapid rise in the numbers coming to this country, whereas throughout western Europe the growth has been less. Perhaps the Minister can confirm the figures.
I am advised that of those claiming asylum in this country in the past year only some 6 per cent. were deemed to be genuine refugees and that 3 per cent. of appeals were upheld by the independent adjudicators.

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I appreciate that my noble kinsman Lord Russell has given different figures. He quoted a figure of 19 per cent. and it would be useful—
Earl Russell: My Lords, perhaps I may clarify the situation. One figure includes exceptional leave to remain and the other does not.
Lord Henley: My Lords, I accept that point. I should be grateful if in response the Minister, with the authority of the Government, could give a figure which would satisfy us all so that we are able to quote a valid figure.
In answer to the Question asked by my noble kinsman on 27th October last year, the noble Lord, Lord Williams of Mostyn, made it clear that the length of time taken to process a claim could make it more attractive to make that claim. I believe that we would all agree with that assertion. We continue to believe that it is vitally important that we do all we can to reduce the number of bogus claims. That is why, despite opposition from the then Opposition and the Liberal Democrats, we made the necessary changes to the benefit rules. We believe that it is also right to do everything possible to speed up the process by which the claims are dealt with. My noble friend Lord Renfrew dealt with that matter in some detail.
In October, the noble Lord, Lord Williams, informed the House that there was then a backlog of some 50,000 cases with the Home Office. I should be grateful if tonight the Minister could update those figures, giving either year ending or current figures. It is four months since the Home Office announcement. Has the figure declined? The figures I have are 70,000 applications for 1995 and 57,000 for 1996. Can the Minister confirm that those figures are correct and that there was a rapid decline in the number of people seeking to have their cases dealt with by the Home Office? In other words, can he confirm that the changes announced in 1996 by my right honourable friend Mr. Michael Howard reduced the figures and that the reduction to 50,000 is part of a continuing trend which started in 1995? I refer not only to the benefit changes but also to the extra money which he provided to the Immigration Directorate within the Home Office.
Reference has been made to the inter-departmental review mentioned by the noble Lord, Lord Williams of Mostyn, in response to a Question asked on 30th January. I appreciate that there is still some time to go before the review makes its pronouncements. However, it would be useful if the Minister could comment on its progress and say what the Government hope to receive from it. Perhaps he could also comment on the consultation with immigration advisers, announced by the Home Office, which began in January and is due to conclude in March. We should be grateful for that.
I appreciate that we have given the noble Lord a great deal to respond to, but I am sure that with his usual tact and skill, he will be able to respond to most of the points that have been put before the House. If the Government
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Continue—and I sincerely hope they will—the policies which we were pursuing, they will have the wholehearted support of noble Lords on these Benches.
9.20 p.m.
Lord Hoyle: My Lords, I thank the noble Lord, Lord Hylton, for initiating this debate. The breadth of opinions expressed has served to underline the great interest of the House in asylum-related issues. I am grateful to the noble Lord for giving me the opportunity to re-state the Government's commitment to an open and collaborative approach on asylum matters. I thank the noble Lord also for the kind remarks which he made about what the Government have already done.
As was said by the noble Lord, Lord Henley, my difficulty is in replying in the time available to me to all the questions which have been raised. First, I should like to deal with the present situation because in some ways, while we have all enjoyed the debate in relation to the review that is taking place, I am in some difficulty in replying to the questions raised because that review is still under way.
That study is part of the Government's comprehensive spending review. It is looking at the whole problem of delays, backlogs, costs, procedures at determination and appeal, the state of welfare provision and the problems of enforcement. I should say to the noble Earl, Lord Russell, the study is being done not just by the Home Office but by several of the government departments concerned with asylum seekers and refugees. The study team has been taking a wide range of views from both within and outside government, including from the Refugee Council and other asylum interest groups. The breadth and depth of the asylum study team's task has reflected our recognition at the outset of government that the asylum system we inherited was in need of radical overhaul, and I believe that is agreed by all noble Lords who have spoken.
I should say to the noble Lord, Lord Henley, that the Government have been all too aware of the consequences that resulted from hasty, impulsive and half-baked attempts to solve the problems of asylum and immigration control which were employed by our predecessors. The sensible way forward had to be a measured careful and comprehensive study of the asylum process. That is what we are doing. The study which is one of several Home Office spending reviews has yet to finalise its work but hopes to do so in the near future. We shall then consider its findings very carefully.
I am sure that noble Lords will understand my difficulty in relation to that review because it covers many of the issues raised by noble Lords. I am afraid that I am not in a position to comment on the detail of a study which has yet to be finalised and considered.
However, I can say what the aims of the study are: first, the creation of a strategy for dealing with asylum and immigration which is responsible, properly thought out, comprehensive and enduring; secondly, the need to show a real commitment to protection issues, linking our asylum policy to a broad and active human rights agenda—and that is what has been called for this

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evening; thirdly, the development of our strategy in an open, listening and consultative way on both policy and service issues, driving up standards and injecting a new responsiveness into the culture of decision-taking. In other words, what I am saying is that I hope there will be a sympathetic approach to this matter. I know that often there will he a demand for such an approach. There has been such a demand from the House tonight. All I can say is that the Government are giving it a high priority. Our response will be governed by the fundamental need to give protection to those who need it while dealing quickly and firmly with those who have no valid asylum claim.
As regards some of the improvements that are sought, and have been asked for tonight, we need quicker decisions, both initially and on appeal, and we need to be open in our consideration. Delays are bad enough in themselves but are worse when they leave the justified claimant in a limbo of anxiety and fear, as has been mentioned tonight. But quicker decisions on claims which have no validity are also important, not least because they clog up the system and hold up progress on the more deserving cases. That point was made eloquently by the noble Lord, Lord Renfrew. The noble Lord asked me what number of cases are determined each year by each asylum case worker. I am afraid that depends on the individual circumstances of each case that is dealt with, not least because cases vary, although most of them are complex. I shall write to the noble Lord on that point.
Other speakers have asked about benefits. We have inherited much of the present position with regard to benefits. We need an effective strategy which provides support for those who really need it, but yet at the same time does not encourage abuse and which makes sense in relation to the wider provision of accommodation. We have to find the right solution, but I am afraid that will take some time. This, again, is a key priority for the study team and for the Government.
Before I respond to individual points that have been made, I shall refer to progress that we have made on other issues. We have abolished the primary purpose rule which had been the cause of so much suffering. We have also introduced an unmarried partners concession which will benefit those in longstanding relationships. Following the Chahal case we set up a proper review structure for deportation cases. We have also introduced a Bill which will give further effect to the rights and freedoms guaranteed in the European Convention on Human Rights. These are early days but we are considering other matters in relation to the comprehensive review.
I have already referred to the matters that were raised by the noble Lord, Lord Renfrew. As far as I am able in the time available to me, I shall also respond to other points made by other speakers. The right reverend Prelate the Bishop of Ripon asked about attitudes in relation to asylum seekers. We are bound by, and apply, the United Nations convention in relation to this. All asylum seekers are carefully considered against the criteria set by the convention relating to the status of refugees. When an asylum applicant does not meet the
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convention criteria for recognition as a refugee, consideration is given to any humanitarian factors which may justify the grant of leave to remain in the UK.
The right reverend Prelate also asked about the port of entry. No port asylum seeker will he interviewed in connection with an asylum claim unless he has signed a declaration to confirm that he is feeling well; that he is ready to answer questions; that he is happy to be interviewed in a specific language; and that he understands the interviewing officer or the interpreter. We are trying to ensure that that is carried out at the port of entry. As the right reverend Prelate said, many of the refugees are in a state of shock at that time. We are trying to ensure that people are not interviewed unless they agree to take part in an interview.
The right reverend Prelate also asked about the Romanys. We have taken the view that the Czech and Slovak republics—I agree with the point he made—in common with other countries in eastern Europe do encounter discrimination and harassment from some elements of the community. However, we consider that, where there is no evidence that that attitude is generally endemic or condoned by the authorities of the country concerned, the applicant should seek the protection of those authorities rather than international protection.
I turn now to the points made by the noble Earl, Lord Russell. As usual, he made an extremely witty speech. He dealt sympathetically with the position of refugees and called for many of the provisions which I hope will be covered in the review being undertaken. As I said earlier, the matter will not be considered merely by the Home Office but by quite a number of departments.
As I am sure the noble Earl will agree, this country has a long and honourable tradition of accepting refugees. But it also has a responsibility to protect the integrity of its immigration control against those who would seek to abuse it. We need to achieve that balance. I am hopeful that, when we have considered the review, we shall have the "joined up" policy for which the noble Earl asked in relation to it.
The noble Earl, Lord Sandwich, asked me a number of questions. In regard to the abuse of Campsfield House, the report and recommendations are awaited. Full consideration will be given to all the points made once we have received the review and once it has been published.
The noble Earl also asked about detention. The initial decision to detain is always taken at a level no lower than chief immigration officer. It is subsequently reviewed regularly and at an increasingly senior level within the Immigration Service. As I said, the reasons are explained orally to detainees in a language that they understand, with an interpreter present if necessary. The desirability of an independent review of the decision to detain was referred to, as was the provision of written reasons for initial detention. Ministers are currently considering the recommendations drawn up following wide consultation. So again, I hope the noble Earl will accept that the matter is being examined under the terms of the full review.

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In relation to the issue of bail, we have to re-examine the advantages that occur. But it is true that in many cases in which bail is granted it does not work very well. Again, that matter is being examined in relation to the review.
The noble Earl asked how many children are detained and pointed out the undesirability of detaining children. My information is that at 12th February no persons were detained under Immigration Service powers who were accepted by immigration as accompanied minors. There is always a difficulty in ascertaining a person's exact age, but that is the information I have received. In relation to Algeria and Iraq, all asylum applications are carefully considered against the criteria set out in the United Nations convention. The "white list" and other provisions under the Asylum and Immigration Act 1996 are all being reviewed as part of the examination of asylum procedures.
I now turn to the noble Lord, Lord Henley. I wish to belatedly thank him for the help that he gave to me in relation to land disposal, and I was grateful to him at the time. Today he asked me several questions on statistics. Those I have are that in 1997 only 11 per cent. of initial decisions were to recognise the applicant as a refugee and grant asylum; 9 per cent. were refused asylum but granted exceptional leave, while 80 per cent. were refused outright. The noble Lord also asked me about the rate of appeals. In 1997 special adjudicators determined 21,090 appeals. Provisional information indicates that only 5 per cent. were allowed and
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approximately 85 per cent. were dismissed. The rest were either withdrawn or referred back to the Home Office.
Finally, the noble Lord asked about the applications outstanding. As at 31st December 1997, 51,795 applications were outstanding, which compared with 57,405 a year earlier.
I thank everyone who has taken part. I wish we had known the full results of the review and studies that have taken place and that I could say a little more in relation to all the points raised. If I have not replied to any Peers, I shall of course write with the necessary information, so far as I can. I stress again that at the end of the review we look to provide a service which is open. That is a significant part of the initiative to make the Government, in relation to this as to many other issues, more responsive and accountable.

Audit Commission Bill [H.L.]
Reported from the Joint Committee with an amendment and recommitted to a Committee of the Whole House; Bill ordered to be printed as amended.

Tyne Tunnels Bill
Brought from the Commons, read a first time and referred to the Examiners.
House adjourned at twenty-four minutes before ten o'clock.

Official Report of the Grand Committee on the Data Protection Bill [H.L.]
Wednesday, 25th February 1998.
The Committee met at four of the clock.
[The Deputy Chairman of Committees (The Viscount of Oxfuird) in the Chair.]
Clause 28 [Crime and taxation]:
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 76:
Page 16, line 39, after ("of") insert ("serious").
The noble Baroness said: The clause before us as we start our debate this afternoon is one that has already aroused a great deal of debate. I am pleased to begin the debate by noting that I already have the support of some Members of your Lordships' Committee for the most important amendment, which comes a little later.
Clause 28 is powerful in its effect. It will absolve law enforcement agencies from having to comply with the first data protection principle, that data should be processed fairly and lawfully. It will also prevent an individual from obtaining access to his files and provides an exemption from the non-disclosure provisions. While those exemptions are not absolute, many people have found that under the Data Protection Act 1984 the police almost invariably claim an exemption. In such cases, when the individual requests his subject access report, the answer is that there is no information that the chief constable or the officer in charge is required to supply under the provisions of the Act. That means either that no data are held or that the police do in fact have the data in respect of which they claim exemption from the subject access provisions.
This first handful of amendments therefore tackle points within that justification. The justification for the first amendment, Amendment No. 76, is that the exemptions would apply only to serious crime in relation to personal data processed for the purpose of prevention or detection of crime. I suggest that that is such a wide category that it would include virtually all information held by the police relating to crime. In other words, the Bill does not make a distinction between categories of crime. The amendment would do that: it would distinguish between less serious and more serious crime.
The consequential amendments take the argument further to ensure that the exemptions contained in Clause 28 cannot also be applied to the assessment and collection of taxes and duties. I find it difficult to see why those bodies which assess and collect taxes or duties should be entitled to claim those wide and sweeping Clause 28 exemptions. Obviously, where data subjects are suspected of having committed criminal offences in respect of taxes or duties, subsections
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(1)(a) and (b) might apply in any case. But this is a very wide-ranging provision and I wonder whether we could consider it also.
I turn now to Amendment No. 85, which would delete "likely" and insert "reasonably considered materially". The objective there is to ensure that two safeguards apply: that the exemption could be claimed only where it was reasonably considered that there would be prejudice; and that there would be material prejudice to the specified purposes and not just any degree of prejudice, however small. I believe that it should be made clear on the face of the Bill that an exemption could be claimed only if there were likely to be prejudice on an objective basis. Requiring material prejudice would also restrict unwarranted claims for exemptions.
This group of amendments also contains the relevant new clause which would ensure that data subjects are informed when an exemption is claimed under Clause 28 and of the reasons. In that context the clause is, I believe, self-explanatory. I beg to move.
The Solicitor-General (Lord Falconer of Thoroton): The noble Baroness has spoken to five amendments with great clarity, and I shall go through each one in turn.
The first amendment the noble Baroness proposes is in relation to the exemption contained in Clause 21(1)(a) which presently relates to the prevention or detection of crime. If her amendment is allowed, the noble Baroness proposes that it should now refer to,
"the prevention or detection of serious crime".
I invite the Committee to think of the consequences of that proposed change. I do not know how the noble Baroness, in her own mind, would define serious crime, but I imagine that what she has in mind is quite a high test. The amendment would mean that any criminal activity which fell short of that test, namely the test of serious crime, would be outside the scope of the clause. It would no longer be possible, within the excluded categories of criminal activity, for a controller to refuse a request for subject access, even though granting the request would facilitate the commission of an offence or frustrate crime prevention activity. I fear that that is the consequence of the noble Baroness's proposal. The Committee will not be surprised to know that, speaking as I do on behalf of the Home Office, I find that outcome unacceptable, as would quite a number of people. We oppose that amendment.
The second amendment the noble Baroness proposes is, in effect, to delete the exemption as defined in Clause 28(1)(c), namely relating to personal data processed for the purpose of,
"the assessment or collection of any tax or duty or of any imposition of a similar nature".
None of us likes paying taxes but most of us recognise that it is necessary to do so. Most of us also want the Inland Revenue to be able to ensure that all those who are liable to pay taxes do so in the interests of equity and fairness. The amendment would make it more difficult, if not impossible, for the Inland Revenue and the other tax collecting bodies to achieve this. It would

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stop the Inland Revenue refusing subject access even though it knew that the individual concerned would use the information he obtained to avoid his tax liability. I do not believe, and nor do the Government, that this is an acceptable approach. So again, I invite the noble Baroness to withdraw the amendment.
The next amendment the noble Baroness proposes relates to the words after paragraphs (a), (b) and (c) which presently state that where personal data are processed for any of the reasons mentioned in paragraphs (a), (b) and (c), they shall be exempt from certain provisions,
"in any case in which the application of those provisions to the data would be likely to prejudice any of the matters mentioned in this subsection".
The noble Baroness's amendment leaves out the words,
"would be likely",
and inserts the words,
"reasonably considered materially to prejudice any of the matters mentioned in this subsection".
It is the Government's view that the present test, which is based on the likelihood of prejudice to law enforcement or tax assessment or collection, is right. That test is not free-standing. There is another important safeguard already in the Bill, and the exemptions are only available on a case-by-case basis. That is the effect of the words "in any case" which are to be found in the first line after paragraph (c). This means that blanket exemptions are ruled out. But where, in a particular case, it is likely that there may be prejudice to the matters in question, the exemption is available.
This is already a fairly tightly drawn provision. It follows very closely the model of the corresponding provision, Section 28 of the Data Protection Act 1984. As far as I am aware, that provision has not shown itself to be capable of abuse. If anything, the complaints I have heard about Section 28 of the 1984 Act are to the effect that it is too tightly drawn. We believe that it is clear; we believe that it is tight. With the greatest respect to the noble Baroness's amendment, we do not think the amendments are tight. We do not believe they will lead to anything other than difficulty and confusion. We believe that we have struck the right balance in the likelihood test, in particular having regard to the reference to "in any case". Again I invite the noble Baroness to withdraw the amendment.
The final amendment in this batch of five is to insert at the end of Clause 28 a provision that in effect says, "If you are a data controller and you do not provide the information, give a reason as to why you are not providing the reason". I understand the reason for the amendment. Where it is necessary to deny a person their subject access rights for the Clause 28 reasons, we should give them as much information as we can in the circumstances. However, we must look at the purposes of Clause 28 to guide us. If subject access data has to be withheld for the reasons given in Clause 28(1)(a) to (c), revealing the fact that data are being processed may itself be sensitive information which could prejudice the purpose in question. The exemption applies not only to Clause 7 but also—through their connection with the
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first data protection principle—to the Schedule 1 requirements for information to go to data subjects when or soon after data are obtained. Together, these are known as the "subject information provisions".
It is necessary to look with some care at Clause 7 itself. Clause 7(1)(a) is an entitlement to be told whether a data controller is processing your information. If a Clause 28 exemption has to be claimed from that provision, it would be self-defeating to insist on an explanation of the reasons for it. It could seriously damage investigation or prosecution. Clearly, there may be some situations in which the fact of an investigation or prosecution is known already to the data subject. However, I think that the judgment on this matter should essentially be a matter for the controller. It would not be possible to establish a general requirement for the data subject to be told without there being substantial prejudice to the purposes of the exemption.
I remind the Committee that this exemption can only be applied in any case where it is likely to prejudice the purposes in question. It will very often be the case that the reasons which make it necessary to invoke the exemption will also make it necessary to be reticent about those very reasons.
I make one final point. There is not a total absence of protection. It must be borne in mind that in Clause 40 we have provided a specific protection for data subjects who are refused subject access, for whatever reason. They can ask the commissioner to investigate. Clause 40(3)(c) points the commissioner in the particular direction of subject access refusals. Clause 40(4)(b) provides a specific mechanism for giving the subject reasons for refusal, where it is appropriate. That formula takes account of the points I have made. It is the mechanism indicated by the directive, and I think that it is the best way to deal with the point made by the noble Baroness. I believe that I have dealt with all five amendments. I invite the noble Baroness to withdraw them.
Baroness Nicholson of Winterbourne: I am grateful to the noble and learned Lord for his exposition of the reasons for his rejection of my amendments in this clause. I make two points before withdrawing my amendments. I remind him—if he needs it, and I am sure he does not—that recent legislation such as the Police Act 1997 has distinguished between serious and other crime. I refer to Amendment No. 76. When the noble and learned Lord considers again the amendments that have been rejected, possibly that point could be taken into account. In other words, there is already a distinction in modern legislation. Perhaps it is worth looking at the issue again.
With regard to Amendment No. 78, I accept his reasoning that requesting information and obtaining it where there was criminal intent circumvents the objective of the work of the Inland Revenue. Nonetheless I remind him that by making that assumption across the board it tars everybody with the same brush. All requests for access to Inland Revenue subject data would therefore be deemed to be of criminal intent, which does not seem to me to be the attitude that the Solicitor-General would wish that

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department to adopt. With those points upon which I am sure he will reflect, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 77:
Page 16, line 39, at end insert—
("() the prevention of anti-social behaviour or crime and disorder for the purposes of the Crime and Disorder Act 1998;").
The noble Baroness said: I beg to move the amendment standing in my name on the Marshalled List. I would say at the outset that I was approached by the Local Government Association in connection with the amendment which is before us this afternoon. The purpose of the amendment is to clarify that the definition of,
"the prevention or detection of crime",
for the purposes of exemptions under the Bill will include information relating to the community safety work done by local authorities.
The Local Government Association is concerned about restrictions on data exchange between local authorities and the police for the purposes of preventing crime, disorder and anti-social behaviour. The Crime and Disorder Bill currently before Parliament imposes a new duty on authorities to work with the police to develop local crime and disorder reduction strategies. The Bill also confers a new power to apply to a magistrates' court for an anti-social behaviour order.
The exchange of relevant information between local authorities and the police is essential to the carrying out of these functions. I believe it is true that the Government are willing to introduce a new clause to the Crime and Disorder Bill to ensure that information exchange by local authorities and the police is not ruled out of order, but the exercise of that power in specific cases will depend on a relevant exemption existing in the Data Protection Act.
Clause 28 of the Data Protection Bill, as we know, allows for an exemption for,
"personal data processed for … the prevention or detection of crime".
However, I understand that the Data Protection Registrar has made it clear that she interprets this as referring only to information that relates to specific criminal proceedings or police detection of criminal offences. Her interpretation of Clause 28 does not include information relating to "crime and disorder", "anti-social behaviour" or civil proceedings (for example, the anti-social behaviour order procedure in Clause 1 of the Crime and Disorder Bill).
I understand that local government feels strongly that this formulation does not provide sufficient statutory support for the exchange of information relating to crime and disorder audits or the casework necessary for serving an anti-social behaviour order. Furthermore, there is great concern that the Bill will make matters worse because it will extend this restrictive regime to information held in card files.
I would be grateful to have the response of the Government to these representations which have been made, which seem to me to be quite legitimate in the context of the crime and disorder legislation.
Viscount Chelmsford: In rising to support the noble Baroness I would like to make one or two points. I would also like to bring in my own amendment which is grouped with this, Amendment No. 80.
I had not heard, until the noble Baroness mentioned it just now, about the Data Protection Registrar's interpretation. I would have thought that that interpretation is much less wide than we have heard from the noble and learned Lord both on Monday and this afternoon. It was my intention before he spoke, and it still is my intention, to say that everything that he has told us seems to me to give great comfort to those who are involved in the prevention and detection of crime.
I would like to go beyond that. I am afraid I do not agree with the noble Baroness, Lady Nicholson, in her views on this clause. I would like to find out how the Government intend to treat those who are involved in collecting information for purposes other than criminal ones, particularly for civil purposes. I am not sure how one should go about this, but it seems that one possible way to draw a response would be to put down, as I have done, "evidence required by solicitor". That at least brings it into an expected court proceeding. Obviously, those who are involved, for example, in divorce proceedings, need to be able to collect information. It will clearly be prejudicial to their client's case if such information must be given to the data subject who is on the other side of the case.
My amendment is a probing amendment. I shall be interested to hear how the Government intend to handle this side of the Data Protection Bill.
Lord Falconer of Thoroton: There are three amendments in this group: Amendment No. 77, which is the amendment moved by the noble Baroness, Lady Turner; Amendment No. 80, put down by the noble Viscount, Lord Chelmsford; and a third one—not even mentioned by anybody!—which would have been moved by the noble Baroness, Lady Young. I shall deal with all three, although the third one has not been moved.
The first one, moved by the noble Baroness, Lady Turner, wishes, in effect, to extend the exemption to not merely the prevention and detection of crime but also,
"the prevention of anti-social behaviour or crime and disorder for the purposes of the Crime and Disorder Act 1998".
The second one wishes, in effect, to extend the exemption to,
"the preparation of evidence required by a solicitor in respect of expected civil proceedings".
The third one wishes to extend Clause 28(2) to cover not just personal data processed for the purpose of discharging statutory functions but also personal data processed,
"to assist statutory authorities in the discharge of their legal duties".
As these changes would all extend the exemption, it is important to give careful consideration to the justification for them. The provisions to which the

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exemptions relate are key elements of the data protection regime. Subject access is arguably the most important right for individuals created by the Bill; and the restrictions on disclosure are essential to the safeguarding of information. If we are to remove either of these two key safeguards, we need to be absolutely sure that we have sound reasons for doing so and that the exemptions are strictly necessary. We must also not forget that our Bill is implementing an EC directive which lays down restrictions on the scope of exemptions. We must be sure, therefore, that the exemptions are permitted by the directive.
I must admit that I have reservations about all three of the new proposed exemptions. Having had a part to play in taking the Crime and Disorder Bill through this House, I certainly wish to ensure that its objectives are not undermined by the Data Protection Bill. I have listened carefully to what the noble Baroness, Lady Turner, said in moving her amendment. I agree that partnership and inter-agency co-operation are crucial to the success of measures in the Crime and Disorder Bill. The Government are keen to ensure that measures in the Crime and Disorder Bill which require inter-agency co-operation are effective and workable.
However, with my data protection hat on I am not convinced that the amendment of the noble Baroness, Lady Turner, is strictly necessary. Other things apart, to the extent that the amendment applies to crime, the exemption provided by Clause 28 is already available. To the extent that the intention is to make the exemption for activities which are not criminal, we would need to look carefully at what the directive permits. Having said that, I fully understand the point that she is making on behalf of the Local Government Association. The proper action is to take her point and investigate whether there is a gap which needs to be filled, because I quite understand the basic point being made.
I should like to make clear that I am aware of the concerns that have been expressed by the Local Government Association about its ability—quite apart from the data protection law—to exchange personal data relating to behaviour which is not criminal but is anti-social. Examples are information relating to crime and disorder audits or the case work necessary for serving an anti-social behaviour order.
This is something we are looking at closely in the context of the Crime and Disorder Bill. That, rather than this, is, I suggest, the right context for determining what information should be exchanged. Equally, there is still a potential gap that we need to consider in the Data Protection Bill before we finally respond to the amendment that the noble Baroness has proposed.
The second amendment relates to civil proceedings. The point was raised by the noble Viscount, Lord Chelmsford. I listened carefully to his comments. The Bill already makes provision in paragraph 9 of Schedule 7 for a subject information exemption for legal professional privilege. Thus if a solicitor is preparing a case and getting information which would itself attract legal professional privilege, that would be exempt. It is not clear to me why this exemption does not meet the noble Viscount's concerns.
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The third amendment, which has neither been moved nor spoken to, takes a different tack. It not having been moved or spoken to, all I shall say at this stage is that I am not persuaded of the need for it.
Baroness Turner of Camden: I thank the noble and learned Lord for what he said—that there is a gap and that this will be looked at. In the light of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (The Viscount of Oxfuird): Perhaps I may point out that under the assembly of these amendments it is the first amendment that is moved, and the remaining amendments along that assemblage line are spoken to. They are not moved at the same time as the first amendment. Every amendment is dealt with seriatim.
[Amendments Nos. 78 to 80 not moved.]
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 81:
Page 16, line 43, leave out ("the first data protection principle and").
The noble Baroness said: With this amendment I seek to delete,
"the first data protection principle and",
from the bottom of page 16 of the Bill. The purpose is clear: that the police and the law enforcement agencies should remain under the obligation to process personal data in accordance with the first data protection principle.
I find it odd that I should have to argue for this with particular reference to what we have called in the Bill—I believe correctly—sensitive personal data which refer to ethnic origin, gender, religious beliefs and political opinions. Those are basic human rights that we take seriously in our civil liberties-oriented society.
I am seriously concerned that for no apparent reason law enforcement agencies in particular should be excluded from the simple duty of having to process that data fairly and lawfully. I find that extraordinary, and difficult to accept. Surely in our society all the law enforcement agencies are bound by the rule of law; and a fundamental law is that material that is held, particularly by a government department, should be processed fairly and lawfully. Those two words seem to me to be a basic need if personal data are to be processed at all.
I beg the noble and learned Lord to take this matter very seriously and to see whether a way could not be found to water down this broad provision that has been allowed, which the amendment seeks to alter. I beg to move.
The Deputy Chairman of Committees: I must advise the Committee that if the amendment is agreed to I cannot call Amendments Nos. 82 and 83 due to pre-emption.
The Earl of Northesk: I note that Amendment No. 88 is also in this grouping. In essence, my purpose with Amendment No. 88 was contingent upon Amendment

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No. 32 which we addressed on Monday. I do not propose to say very much about it. Apart from that, I suspect that my purpose in the amendment is much more likely to be achieved under Amendment No. 89, and so I will leave my deliberations about it until that amendment is moved.
Lord Norton: In the light of Amendment No. 83, I do not propose to speak on Amendment No. 82.
4.30 p.m.
Viscount Astor: Perhaps I could just say a word of general support for the principle of the amendment moved by the noble Baroness, Lady Nicholson of Winterbourne. Clause 28 is causing the Committee some concern and we have more amendments on it. There is a problem here and I look forward to hearing the Minister's reasoning behind some of the rather draconian provisions that are in the clause.
Lord Falconer of Thoroton: On Monday, in talking to Amendment No. 32 in the name of the noble Earl, Lord Northesk, my noble friend Lord Williams of Mostyn said that he thought the subject matter of his amendment was germane to this batch of amendments. If I may, in my response later on I will deal with that amendment as well.
There are two amendments that I will deal with. The first is Amendment No. 81 moved by the noble Baroness, Lady Nicholson of Winterbourne. I will also, if I may, deal with the government amendment, No. 83, which has led the noble Lord, Lord Norton, to withdraw his Amendment No. 82.
Amendment No. 81 would remove the exemption from the fair and lawful processing requirement for those controllers whose purpose is dealing with crime, offenders and collecting taxes. As the noble Baroness, Lady Nicholson of Winterbourne, says, on the face of it it seems a perfectly reasonable proposition that any controller should be subject to the requirement to be fair and lawful. For most organisations these are basic principles of our present data protection law and of the regime the Bill introduces. However, the reason for the exemption is to be found in the particular purposes identified by Clause 28(1).
Law enforcement and tax collection necessarily involve a battle of wits against people who are working hard to cover their tracks and establish whether, and, if so, how far, investigations against them have progressed. Moreover, under the Bill the term "processing" goes very wide indeed. Under Clause 1(1) of the Bill it embraces, for example, obtaining, recording and holding, as well as manipulation, consultation, disclosure and destruction. Depending on the circumstances, the term "fairness", applied to both obtaining and processing, for example, can require considerable information to be given to data subjects—information of a kind whose release would frustrate the inquiries they are making. A requirement for lawful processing may also in practice lead to challenges to important investigative work.
I remind the Committee that the exemption applies only to individual cases where compliance with the principle would frustrate the law and order and taxation
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purposes. That is embodied already in the terms of the clause. I should also explain that its practical effect is the same as the present law. The Data Protection Act 1984 prevents the registrar from taking enforcement action in respect of the first principle where crime, offenders and taxation are concerned; and, more generally, it gives individual data subjects no enforcement powers in respect of that principle.
I should also make clear the limited nature of the exemption from the requirement to process lawfully. All this means is that the unlawfulness is not actionable as a matter of data protection law. It does not make the unlawful act otherwise lawful, and it does not prevent any other form of enforcement or redress in respect of the unlawful act.
Against that background I would invite the noble Baroness, Lady Nicholson of Winterbourne, to withdraw her amendment.
But before the noble Baroness makes any decision about this, I would like to turn to the government amendment, Amendment No. 83. On the face of it, this is more technical in nature, although what I have to say should help to give reassurance to the Committee. As we have heard, Clause 28(1) creates an exemption in limited circumstances from the first data protection principle, but the first data protection principle itself has to be read alongside the provisions of Schedule 2 and Schedule 3. The first principle cannot be satisfied unless at least one of the conditions in Schedule 2 has been met and also, in the case of sensitive personal, one of the further conditions in Schedule 3 has been met.
In allowing for an exemption from the first principle in Clause 28(1), it is not our intention to remove the requirements for compliance with those threshold requirements. In other words, that means that the effect of the government amendment is that people claiming exemption under Clause 28(1) are not exempt from having to show that they have a legitimate purpose for the processing, such as the administration of justice or fulfilling a legal obligation. That is the point which Amendment No. 32, with which we dealt on Monday, was concerned with, and with respect to the noble Earl, Lord Northesk, it deals with precisely the point he raised in Monday's debate on his Amendment No. 32.
I come back to what I believe to be a key point. These exemptions are required to assist in the prevention or detection of crime, the apprehension or prosecution of offenders and the assessment or collection of tax. They are limited to a case-by-case basis, and they apply only in respect of where it would be likely to prejudice any of the matters concerned. If the position is that the Data Protection Bill would lead to prejudicing the prevention or detection of crime, for example, it seems only right and proper to the Government that there should be an exemption to it. A balance has to be struck, and we have struck the balance in the right place. In those circumstances, I would invite the noble Baroness and the noble Earl to withdraw their amendments.
Lord Skelmersdale: Before the noble Baroness withdraws her amendment, I wonder whether I can probe the noble and learned Lord a little further on what he said about the government amendment, No. 83,

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"except to the extent that it requires compliance with the conditions in Schedules 2 and 3".
By very definition, the data subject cannot possibly give their consent under Clause 28(1), and surely to goodness this is one of the things which ought to be removed from the exceptions to which the government amendment refers—that is to say, Schedule 2, paragraph 1.
Lord Falconer of Thoroton: I cannot think of a circumstance, although there may be one, where consent could be given, but the first data protection principle provides that personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless at least one of the conditions in Schedule 2 is met. Consent is not the only condition in relation to Schedule 2. Obviously there is a large number of other conditions which could be fulfilled which would satisfy the requirement of the first data protection principle in paragraph 1. That is how it works.
Viscount Astor: Before the noble Baroness replies, perhaps I could ask the noble and learned Lord a question. I follow the logic of his answers, but for these data to be exempted for these purposes under this clause, does that purely relate to data that are held by either a government department or a government agency, or can it be wider than that? My concern is whether this could be a quango or some totally outside third party. If that is the case, that would certainly cause me some concern, as opposed to data specifically held by some government department.
Lord Falconer of Thoroton: It is not restricted to government departments and I can see no reason why it should be. If there are bodies holding data for the purpose of the prevention or detection of crime—there may be bodies that hold information, for example on child abuse, which are not government departments—why should their purchasing of that material, and therefore their activities in the prevention or detection of crime, be restricted? It seems to me as a matter of principle wrong that it should only be government departments that have that protection.
Viscount Astor: The noble and learned Lord uses rather an extreme case, but in my experience there are organisations such as quangos which are reluctant to reveal material to people involved. They all too easily use excuses. It would be far too easy to say "There might be a case". It is difficult to drag information out of them. Often this is information which belongs to the public. But the organisations have an aversion to revealing information. That information may not be correct; it may be entirely fallacious. Therefore I am worried that there are organisations that are not directly connected to government departments or government agencies holding information which is entirely wrong. It either has been included by mistake, or it may have been included for some malicious reason. How can this ever be corrected?
Lord Falconer of Thoroton: I know I am repeating myself to some extent, but there is no harm in that. First, it is dealt with on a case-by-case basis. I take the first
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example. In order for the exemption to apply it has to be for the prevention or detection of crime. The exemption will apply only in relation to where it would be likely to prejudice any of the matters mentioned in the subsection. It has to prejudice the prevention or detection of crime. Moreover, the exemption is only from the first data protection principle, subject to the change made by the amendment. Therefore there is no exemption from the fourth data protection principle, which is that the personal data shall be accurate and. where necessary, kept up-to-date. That meets the noble Viscount's point.
If a quango—which is the noble Viscount's concern—wrongly uses this exemption to keep back information, it is not through this exemption but it is misconduct, in effect, on the part of the quango. If, on the other hand, this mythical quango that he has in mind is holding the information back in order to assist itself in the prevention or detection of crime, then in the Government's view that is a fair operation of the exemption.
Viscount Astor: I am grateful to the noble and learned Lord. I can assure him that there will be cases in the future where people write to agencies enclosing a copy of the Hansard statement that he has made today.
Lord Falconer of Thoroton: I am very glad to hear it.
Baroness Nicholson of Winterbourne: I am grateful to the Minister for his explanations. I beg leave to withdraw the amendment. We are about to discuss a more wide-ranging amendment in which we can return to the same topic.
Amendment, by leave, withdrawn.
[Amendment No. 82 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 83:
Page 16, line 43, after ("principle") insert ("(except to the extent to which it requires compliance with the conditions in Schedules 2 and 3)").
The noble and learned Lord said: I formally move the amendment. I have just spoken to it.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 84:
Page 16, line 43, leave out ("in which") and insert ("to the extent to which").
The noble and learned Lord said: I formally move this amendment. It was spoken to by my noble friend Lord Williams of Mostyn on Monday.
On Question, amendment agreed to.
[Amendments No. 85 to 88 not moved.]
4.45 p.m.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 89:
Page 17, line 15, leave out subsection (4).
The noble Baroness said: I am particularly delighted that the teatime crumpets, or maybe the 6 p.m. whisky that the noble Viscount. Lord Astor, found on Friday

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evening encouraged him to support this amendment. It is a very important one and I was glad on Monday morning to find that he had noticed it; indeed, we should look at this very seriously. The Select Committee on Delegated Powers and Deregulation of the House of Lords in its session 1997 to 1998, which published a report on 4 February 1998, turns our attention to it immediately.
On page 3, the committee reported that, when examining the Data Protection Bill, it looked to see whether or not the grant of secondary power was appropriate, and states:
"With the potential exception of clause 28(4), to which we return later, in each instance we concluded that it was".
That of course undermines my earlier amendment which referred to Clause 28(1) but it puts it in the context of the Select Committee's concerns on Clause 28(4).
In paragraph 6 of the report the Select Committee states:
''The order-making power in clause 28(4) is one of the most controversial elements of the bill. It gives the Secretary of State an apparently unlimited power to exempt personal data of a specified description from the data subject's right of access to personal data (section 7) and from the requirement to process personal data fairly and lawfully (set out in paragraph I of Schedule I to the Bill)".
It goes on to say in paragraph 7:
"As the Minister acknowledged during the Second Reading debate on this bill, there is a particularly difficult balance to be struck with this power, about which the Data Protection Registrar has expressed her concern".
The committee goes on to say:
"The need for the power in section 28(4) to create additional exemptions"—
on top of the extension in Clause 28(1) which the Minister has begged us to support—
"is not immediately apparent, and indeed the Minister told the House that the Government had 'made no firm decisions about its use'. It is not easy to see what clause 28(4) adds which is not covered by clause 28(1)".
In other words, if the Minister wishes us to accept Clause 28(1), would he not reconsider Clause 28(4)? Indeed, the Select Committee concludes that this is:
"a power which in the Committee's view it would be impossible to justify. The House will no doubt wish to consider these issues with the greatest care during the Bill's subsequent passage and may wish to amend the Bill to remove the general power to grant exemptions from the first data protection principle."
The Select Committee referred to the concerns of the Data Protection Registrar and, in a note circulated to noble Lords in this Committee on Monday of this week, she drew attention to her briefing note which expresses her considerable disquiet at Clause 28(4). She welcomes the tenor of those amendments, which would in a proportionate way exempt from the powers of the commissioner and the courts rather than giving blanket exemption from the principles, and also provide an opportunity to carry out assessments when the exemptions are relied upon. That refers to her own release on the Data Protection Bill of 2nd February, when she claims in paragraph 6:
"A blanket exemption is disproportionate".
She goes on to say:
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"It is difficult to see how it is consistent with the limited power to provide exemptions in Article 13 of Directive 95/46/EC which permits exemptions which are 'necessary' to safeguard, among other things, law enforcement and 'an important economic or financial interest of a Member State …including…taxation matters'".
She also points out that there,
"must also be a risk of a breach of Article 8 of the European Convention on Human Rights which is currently the subject of a Bill before Parliament which would incorporate it into UK law".
She, herself, makes the proposal that if the Inland Revenue requires more powers, they should be placed in a financial piece of legislation.
Of course there are many other bodies which have expressed their concern such as Justice, which has subsequently sent a brief, and the organisation Liberty. But I believe that our concern is fully warranted as Members of this Committee. With the digestion of Clause 28(1) will the Minister not save us an additional course to give us indigestion with Clause 28(4)?
The Deputy Chairman of Committees: I have to advise the Committee that should this amendment be agreed to, I cannot call Amendments Nos. 90 and 91 due to pre-emption.
Viscount Astor: I was happy to add my name to this amendment put forward by the noble Baroness, and she has explained the reasons extremely fully. I do not need to add anything, therefore, except that I note that we are also speaking to Amendment No. 90 tabled in the name of the noble Lord, Lord Williams of Mostyn, to which the noble and learned Lord will no doubt speak momentarily. I looked carefully to see whether that gave any help to the concerns that we have on the clause, and I am not sure that it really does. However, I shall listen with care to the noble and learned Lord.
Lord Skelmersdale: I, too, looked at subsection (4) and, as is my wont, being occasionally somewhat dyslexic, I read it backwards. I discovered very quickly that the whole of subsection (4) hangs on subsection (1). The only difference I observed from subsection (1) was the fact that the orders may be made for producing an exception for the non-disclosure provisions. Apart from that, no orders need to be made, as I understand it, because they are already there in the exemption given by subsection (1). In that case, what do we want all this for at all? Would it not be far better to put the non-disclosure provisions in paragraph(c) into subsection (1) and do away with this subsection altogether?
The Earl of Northesk: I rise to support the noble Baroness, Lady Nicholson, and my noble friend Lord Astor in the amendment. I have nothing to add to their argument except one small thought. It struck me that it may be intended to accommodate a number of "what if?" scenarios; in other words, attempts to pre-empt technological advances before they have taken place. I would contend that there are more appropriate and better ways of achieving this object on the face of the Bill rather than by the subsection as currently drafted.
Lord Falconer of Thoroton: If I may say so, a formidable case would appear to have been put up in relation to Clause 28(4). However, with respect to all the excellent speeches that have been made, it appears to some extent to be based upon a slight misunderstanding of the inter-relation between Clause 28(1) on the one hand and Clause 28(4) on the other. If I may, I shall deal with the whole clause to try to explain what we are trying to achieve with Clause 28(4).
With differences of detail between subsections (1) and (3), their basic approach is that where in the individual cases the purposes referred to—prevention and detection of crime, and so on—would be prejudiced, there are exemptions from the requirement to apply the first principle—fair and lawful processing—and other particular principles or provisions of the legislation referred to in Clause 28(1). The one that is important in this context is the Schedule 1, Part II, paragraph 2 requirement for information about processing to be given to data subjects when data about them are obtained from them or from third parties. You can have an exemption under Clause 28(1) in relation to that sort of data.
The common feature of subsections (1) to (3), and indeed the theme which runs through the equivalent provisions in the present data protection law, is that the exemptions shall apply where the crime, offender and taxation purposes would otherwise be likely to be prejudiced in the particular case. There are no general exemptions, for example, on the basis that some of the data are of a type which might prove to be relevant to crime, offenders and taxation. It meets the point that was made a few moments ago to the effect that, "Why don't you just bung the non-disclosure provisions referred to in Clause 28(4) into Clause 28(1), and that meets the point?". The answer is that they are dealing with different things. Clause 28(1)deals with an individual case where, for example, the prevention or detection of crime would be prejudiced, or would likely to be prejudiced, by complying with, for example, Section 7. Clause 24(1) gives the Secretary of State power to exempt information in a general area, not on a case-by-case basis.
Lord Skelmersdale: Is the noble and learned Lord leaving that point and moving on to a slightly different one?
Lord Falconer of Thoroton: I was going to go on, but please interrupt me if I have not explained it adequately. Subsection (4), as proposed in the Bill, deliberately widens the approach of Clause 28(1) to bring in cases where a category of information may prove to be relevant to crime, offenders and taxation but it is not known at the time whether or how much of it will be relevant.
I stress that any exemptions under subsection (4) would not extend beyond crime, offenders and taxation and that they would have to be set out in an order subject to affirmative resolution. Ministers would have to bring forward a particular proposition and justify it to Parliament. It is not, therefore, an open gateway for the Executive to pass through as it likes. Nothing could be done without explicit parliamentary approval.
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As Committee Members will know, the Government have tabled an amendment to remove one part of subsection (4). I will turn to that later, and deal first with the fundamental question raised by the amendment of the noble Baroness, Lady Nicholson of Winterbourne—why have we included the provision at all—having explained how it relates to Clause 28(1). Essentially it is to protect important functions, carried out on behalf of the public and which benefit us all, which need to be balanced against the protections in the Bill for individuals in the Bill—
Baroness Nicholson of Winterbourne: Might I ask the noble and learned Lord whether he can explain why in that case this has not been necessary since 1984 with the initial Data Protection Act?
5 p.m.
Lord Falconer of Thoroton: The immediate reasons for bringing forward the proposal relate to the collection of taxes. Without the protection afforded by subsection (4), key areas of the Inland Revenue's business, which are central to the fight against tax evasion and fraud, would be put at risk. This is particularly so under the new tax self-assessment system which is now being introduced. Given the extent to which data controllers nowadays hold information on computer or in structured manual collections, these problems may not have been so apparent in 1984 as they are now.
The key issues are that it is likely that the Revenue would have to tell people about whom it has received information from third parties, for example, from banks, through the use of its statutory powers, what that information was and what the Revenue intended to do with it. It may not be able to receive information provided voluntarily by third parties which is necessary to identify "ghosts" and "moonlighters" and help in identifying tax dodgers. It will not be able to maintain the confidentiality of systems designed to identify falsely completed tax returns.
Disclosure of some of the information the Revenue holds and indications of how it identified false tax returns would enable rogues to arrange their tax affairs in such a way as to avoid inquiry and therefore detection. It would be tantamount to giving burglars a wiring diagram of the alarm system. In other words, if you do not have a general exemption in relation to certain specified sorts of information, people who wish to dodge their taxes would simply ask for particular categories of information and then use that as a blueprint for how to dodge their taxes.
Your Lordships may well ask whether these concerns about tax evasion and fraud are sufficiently serious to justify this clause. I believe they are. Tax evasion and fraud harm those honest citizens who pay their proper share of taxes: the tax burden evaded by the few falls on the many, so that every honest taxpayer subsidises the tax-evader's lifestyle. Furthermore, the infrastructure of a civilised society, transport and roads, schools, health and social services that we all rely on, the policing, the social housing, the system of law and order which protect our peace of mind, our families and our property, are all funded by tax. Tax evasion means less revenue to fund these services.

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A couple of examples may help your Lordships appreciate the amounts of revenue at risk here. In a recent Inland Revenue project, information obtained informally from a trade body led to investigations which yielded nearly £70 million in additional tax. In two Revenue initiatives in the retail sector, tax-relevant information provided voluntarily by third parties suggested a potential loss of tax of about £100 million. Important sums of money could well be lost if there is not at least this power.
While it is not possible to provide precise figures for the amount of tax at risk if the exemptions were not available, it is fair to assume that these will be substantial and that those who have something to hide would soon find out how to gain access to Revenue information.
Honest members of the public need have nothing to fear from the power and I believe they would welcome this measure to safeguard initiatives to act against the small minority who cause significant loss to the public purse through tax evasion and fraud.
Your Lordships have also asked why we seek a general power to exempt by order. The reason is that the needs of the Inland Revenue to operate in the public interest are the most immediate and obvious example, but practices do and will change elsewhere in government and we may come across similar situations elsewhere. As indicated earlier, both the Inland Revenue case and any other would have to be justified individually to Parliament, and the exemption could not be made unless Parliament agreed through affirmative resolution.
I therefore invite the Committee to reflect on the reasons why we included this provision. There is nothing sinister about it at all; we have to reconcile the interests of individuals with the wider public interest. This discussion is not really about the power of Inland Revenue officials but about the interest we all have as individuals in crime being tackled effectively and in the tax collection system working fairly and in the interests of the law-abiding majority. On that basis, and in recognition of the Government's more targeted amendment, to which I will come in a moment, I invite the noble Baroness to withdraw her amendment.
Just to repeat, the important distinction between Clause 28(1) and Clause 28(4), which gives the reason for Clause 28(4), is the need to deal with categories of information rather than on a case-by-case basis, which is all that Clause 28(1) is concerned with. With the analysis I have given about what the prospective risks are of people obtaining information from the Inland Revenue as to the information it has, it seems to me that an extremely strong case can be made for the existence of the exemption power. Used responsibly, and subject as it is to parliamentary scrutiny, it is an appropriate safeguard in relation to the abuse of the tax system through the data protection principle which will occur if there is not such an exemption power.
Let me now move to the Government Amendment No. 90. I hope it will be clear from the remarks I have made on the noble Baroness's amendments that the
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Government are trying through this Bill to achieve a fair balance where interests conflict. The government amendment is an earnest of that approach.
It would delete the reference in paragraph (a) to the first data protection principle and replace paragraph (b)'s reference to Clause 7 with a reference to,
"(he subject information provisions".
These are defined in Clause 26(2) to mean Clause 7—subject access—together with the very limited aspect of the first principle, which requires data controllers to give data subjects certain information when they collect data about them. That aspect is set out in Schedule 1, Part II, paragraph 2. Taken together with Clause 7, it comes under the broad heading of the subject information provisions.
Essentially, the amendment reduces the Clause 28(4) exemptions to those mechanisms in the Bill which, as the case may be, could lead to undesirable disclosures to the data subject or could impede reasonable disclosures by data controllers. It takes the fair and lawfulness principle out of the equation. We readily accept that, as one of the core principles of data protection, fairness and lawfulness should not be amendable through the Clause 28(4) process.
With respect to what was said by the noble Viscount, Lord Astor, it meets head on the point made by the Select Committee on Delegated Powers and Deregulation; namely, that Clause 28(4) would, on the face of it, permit the Secretary of State by exemption to cut the heart out of the provisions of the Bill by giving exemption in respect of the first data principle. Our amendment effectively prevents that, and meets the criticisms that have been made. I very much hope that that indicates an earnest of the Government's genuine intentions in this respect. In those circumstances, I shall move the government amendment in due course.
Baroness Nicholson of Winterbourne: I thank the noble and learned Lord for his long and very helpful explanation, which will need careful studying when we see it in Hansard, combined with the Government's own amendment which is most welcome. The point I raised, however, regarding the Data Protection Act 1984 and the lack of need for the current Clause 28(4) was met by the Minister, who pointed out that the Inland Revenue was not computerised at that time. I myself wonder if the—admittedly less sophisticated—computerisation of the Inland Revenue does make a relationship with this particular piece of legislation, whereby we are also talking about records that are not electronically stored or digitally created.
Lord Falconer of Thoroton: I did not explain myself adequately. The 1984 Act does not apply to manual records whereas the 1998 legislation—that is, the Bill—does and, therefore, you need to deal with that point as well. You did not need an exemption when there were no manual records.
Baroness Nicholson of Winterbourne: I do know that, but I also know that the computerisation of the Inland Revenue was well advanced in the middle of the 1980s, and therefore those records which were digitally

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created fell under the 1984 Act. I wonder therefore if the Minister has yet made a convincing enough case for Clause 28(4), with the argument that I have perhaps slightly nullified.
The Minister also made the point that there was greater security because of self-assessment. It is inherent in self- assessment that the data subject knows a great deal more about the data than ever before, because the self-assessment form has been created. Nonetheless, that may be nit-picking. I am looking forward to seeing in Hansard the results of the way in which the Government's own amendment, which I believe will be accepted, will affect the first and, implicitly, the fourth subsection. I do, however, dislike these wide-ranging seven powers that the Government have given themselves, with affirmative or negative resolution, in this Bill. It is clear that the substance of the problem in Clause 28(4) is the Inland Revenue, and whether a financial piece of regulation would not be the better way forward. I accept that the difficulty of data protection legislation of any sort is that it impacts upon all government departments. I myself raised the question of medical records on Monday; indeed, there is an impact on the Department of Health. I am grateful to the Minister and look forward to reading his arguments in Hansard. I hope not to have to refer to this matter again, but may well do so.
Viscount Astor: Before the noble Baroness, Lady Nicholson, withdraws her amendment, may I ask a question? From our debate it has become clear, as the noble Baroness said, that this is driven by the Inland Revenue and tax collection. The Committee would feel happier in the circumstances if Clause 28 could be more specific, for that reason. I am still concerned that it is too wide-reaching. As the noble Lord agreed, Clause 1 affects data which can be held by almost anybody. While we agree with their laudable intentions and this point about tax raising, would the Government consider between now and Report stage the fact that the powers go beyond mere tax raising?
Lord Falconer of Thoroton: The point made by the noble Baroness, Lady Nicholson, should be dealt with in the Finance Bill, rather than in the Data Protection Bill. If it is a data protection problem, it should rightly be faced here, rather than in a Finance Bill. But we should not, as it were, change the principle from some other Bill.
As far as the point made by the noble Viscount, Lord Astor, is concerned, we have included a general exemption power rather than one specific to the Inland Revenue because we believe it may well be that practices will change in other areas which cannot be foreseen and which make it appropriate to have a general power. If it can be dealt with in this way in relation to the Inland Revenue, then so could it in
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relation to other offences, for example. That is why it is appropriate to have a general power, rather than a specific one.
Lord Skelmersdale: Presumably the general power the noble and learned Lord has been referring to would include national insurance charges, for example?
Lord Falconer of Thoroton: The general power is limited to the exemptions required for any of the purposes mentioned in subsection (1), which are:
"(a) the prevention or detection of crime,
(b) the apprehension or prosecution of offenders, or
(c) the assessment or collection of any tax or duty of any imposition of a similar nature".
Lord Skelmersdale: I misunderstood. The noble and learned Lord spent so much time in his very explicit speech defending Clause 28(1) rather than Clause 28(4) that I became somewhat confused. My question was directed to Clause 28(1)(c):
"the assessment or collection of any tax or duty or of any imposition of a similar nature",
and I was asking whether national insurance charges would be of a similar nature.
Lord Falconer of Thoroton: They would be.
Baroness Nicholson of Winterbourne: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 90 and 91:
Page 17, line 17, leave out from ("from") to ("the") in line 20 and insert ("the subject information provisions and").
Page 17, line 21, after ("if") insert ("and to the extent that he considers that").
On Question, amendments agreed to.
Lord Norton Lord Norton moved Amendment No. 92:
Page 17, line 22, at end insert—
("() The Commissioner may, with the consent of the Secretary of State, assess any processing of personal data exempted from any provision of this Act by virtue of this section.").
The noble Lord said: Clause 28, as the Committee already realises, is the atomic bomb clause of the Bill. It gives data controllers, which include the police as well as commercial concerns, huge rights in three defined purposes: exemption from the first principle—now much modified by the Minister; the refusal to grant subject access; and the exemption from non-disclosure provisions in cases where the disclosure would be likely to prejudice any of the three purposes. These include the prevention and detection of crime and the prosecution of offenders.
The term "likely to prejudice" has been held by the tribunal as the real likelihood of prejudice in a particular case, rather than a mere risk of prejudice. It is therefore quite a strong test.
The exemptions are considered case by case but are frequently used on a constant basis in anti-fraud departments in commerce. Among police uses are the exchange of photographs of known or suspect

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shoplifters with shopping centres, under-age drinkers or photographs of football hooligans with football stadiums. I understand that the photographs are not restricted to wanted criminals but to those whom the police consider to be relevant targets. I wonder how much analysis, on a case-by-case basis, goes on considering the limited resources of the police. Given their limited resources, there must be a temptation to release more and more information, thereby increasing the effectiveness of policing, irrespective of any involvement of likely criminal activity. There is now the digital technology to recognise faces, not just number plates, by computer, so it is a very fine line that we could he treading before entering the dreaded Orwellian world.
The clause is essential but because of the concerns of possible abuse in commerce and other authorities, including the police, I believe it has to have the safeguard of allowing the commissioner automatic access to data controllers to verify the bona fide operation of any data controller relying on Clause 28, which is what my amendment proposes. I believe this would strengthen the clause's effectiveness by applying a discipline to the working of the clause as well as safeguarding the data subject.
It is not as if the commissioner will not have access to sensitive information, because it is expected under the innocuous Clause 51(4) that the commissioner will be granted audit powers by the Secretary of State to audit Europol, NCIS and the Customs information system. These databases will hold highly sensitive information and thus access by the commissioner to activity under Clause 28 should present no problem. I beg to move.
5.15 p.m.
The Earl of Northesk: I note that Amendment No. 140 is in this grouping, so, if I may, I will speak to it. Its effect would be to give the data protection commissioner specific authority to conduct a systematic data protection audit of an organisation, whether public or private, in addition to any good practice assessment.
Article 23(3) of the directive requires each national data protection authority to have:
"investigative powers, such as powers of access to data forming the subject-matter of processing operations and powers to collect all the information necessary for the performance of its supervisory duties".
In this context, Clause 49(1) of the Bill follows Section 36 of the 1984 Act in requiring the commissioner to:
"promote the following of good practice by data controllers and…promote the observance of the requirements of this Act by data controllers".
But, as a generality, the commissioner will be unable to monitor compliance, nor, more crucially, to detect future problems before they become serious.
Noble Lords will recall that at Second Reading I made the point that the Bill does little to acknowledge the inexorable march of computer technology. The capacity of the law to stay abreast, let alone get ahead,
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of IT development is inevitably restricted. As mentioned in the Delegated Powers and Deregulation Committee's report:
"automated processing is increasing rapidly, and is likely to continue to do so as developments in computer technology continue to push areas of the law into hitherto uncharted territory".
By affording the commissioner audit powers of the kind envisaged in the amendment, the potential is created for the commission to monitor and keep pace with technological developments as they occur.
It is worth noting that elsewhere in the world, albeit that the precise way in which monitoring is achieved varies widely from country to country, such audits are the norm. Some commissioners rely almost entirely upon informal visits and inspections, while others devote resources to a smaller number of detailed audits. The important point is that all data controllers are made more aware of the possibility of sanctions and, in the case of public authorities—and this is a particularly important point—of the public exposure of failure with embarrassing consequences.
As an aside—I am mindful that we will be debating data matching later in Committee—such audits could be used to monitor data matching activity more effectively. It is also worth making the point that with regard to the general category of information attempted to be picked up by Clause 28(4), in some respects that might be more usefully dealt with by the audit powers of the commission that the amendment proposes.
I have no doubt that the Minister will in response highlight the issue of financial cost. This need not be excessive, dependent upon the mechanisms adopted to exercise the powers granted. Moreover, I believe that the UK Government seem to be very much in a minority in their insistence that data protection supervision should aim to be self-financing from the collection of fees. Other governments treat data protection as an essential public service.
Baroness Nicholson of Winterbourne: I should like to add to that point by reference to Amendment No. 139, which is also welcomed by the Data Protection Registrar because it would allow her to develop her powers to encourage good practice. There are significant limitations on her supervisory powers in the Bill, and many organisations have deliberately flouted the current Data Protection Act 1984. Indeed, some analyses have suggested that as many as 40 per cent. of companies have flouted the current legislation. I personally believe, therefore, that these supervisory powers for the data protection commissioner, the former registrar, in the new Bill are very important indeed, and that if she or her successor is inhibited by the data controller, who may be evading the legislation completely, her powers are very few. I am confident that the Government do not wish to be in the position of the previous government, who put through a great deal of legislation that has not been honoured. I believe that they will wish their

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legislation to be treated seriously and fairly by all concerned. I suggest that this very modest amendment would be a helpful move.
Lord Falconer of Thoroton: With the permission of the Committee, I shall deal with the three amendments as they are grouped together.
Amendment No. 92 was proposed by the noble Lord, Lord Norton. It would give the Commissioner power, subject to the consent of the Secretary of State, to assess any processing to which the Clause 28 exemptions apply. It is not clear from the amendment how the mechanism for securing the Secretary of State's consent would operate. Nor is it clear what the purpose of the assessment would be. However, those are shameful points to make when I understand the purpose of the amendment, which is in effect to give the commissioner power to investigate whether an exemption is being properly claimed.
We believe that that is not an addition that needs to be made to the Bill. We believe that the commissioner already has adequate powers in the Bill to seek the information she needs to enforce the law. I draw your Lordships' attention in particular to Clause 41, which sets out the information notice procedure where the commissioner has received a complaint or otherwise suspects that there might be an infringement. She also has the power, with the consent of the data controller, to make an assessment of good practice. We believe that that is enough to allow her to discover whether any abuse is taking place in relation to a particular data controller.
Lord Norton: The commissioner has already indicated that Clause 41, to which I shall speak later, is totally useless and she would not use it. I wonder whether the Minister has another point?
Lord Falconer of Thoroton: I understand that the Home Office is in discussion with the commissioner about that. The clause gives her the ability to ask questions of people. The alternative is that she simply be given a general power to find out what is going on. A balance must be struck between, on the one hand, people being legitimately entitled to carry on their business without inappropriate intervention from the state, but, on the other, the state—by which I mean the commissioner—having powers to make such investigations as are appropriate.
If and in so far as the commissioner believes that Clause 41 does not give her sufficient powers, that seems to be a matter that should be discussed with her. One hopes that agreement could be reached with her as to the appropriate course to take.
Lord Norton: Section 28 is used on a constant, day-to-day, basis by banks, insurance companies and police who exchange information with a variety of commercial operations, and I do not feel that the necessary discipline is set out in the Bill. It would act as a comfort for the person exchanging the information to know that that other person had an outside accountability. The police may draw comfort knowing
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that the information that they were giving to a data controller was capable of being audited on a spot-check basis.
Lord Falconer of Thoroton: The position is that if there is a belief that the exemption is being improperly claimed, or that is what the commissioner believes, she will believe, or have reasonable grounds for suspecting, that a data controller is contravening one of the data protection principles, and she can serve an information notice.
Lord Norton: Is the Minister saying that a belief is "reasonable grounds"?
Lord Falconer of Thoroton: The words of Clause 41 are that,
"If the Commissioner … has reasonable grounds for suspecting that a data controller has contravened or is contravening any of the data protection principles".
Lord Norton: That is my point. Reasonable grounds have to be established in order for the commissioner to go in. I want there to be no grounds at all. The commissioner can knock at the door and say, "We understand you are using Section 28", and this applies to loss adjusters and insurance companies; I have seen a great deal of it on a day-to-day basis. It would act as a discipline. The "reasonable grounds" are too strong a test in my view.
Lord Falconer of Thoroton: I have understated my case because the commissioner can also make a request where she has received a request from a member of the public under Clause 40 in respect of any processing of personal data. Surely a balance has to be struck. Why is it that in all areas of endeavour, the one area where the state can simply march in and say "I want to see what you are doing" is here? What you have here is a perfectly responsible official who is given particular powers either upon complaints—that may be the wrong word—from a member of the public or where he or she has reasonable grounds for suspecting that some sort of infringement is going on. Then and only then can the enforcement officer, if I may call the commissioner that, compel the subject to answer questions. Surely a balance has to be struck somewhere.
Lord Norton: I agree that a balance has to be struck. We all know that the current registrar is a very reasonable and sensible operator and very popular in the commercial world for her balanced consideration in allowing clauses such as Clause 28(2) to operate. In my view, however, that would strengthen the case because she is not going to charge around interfering. Restrictions can be drafted to enable that. The data subject does not even necessarily know that he is under investigation. Records could be held by individuals who have absolutely no idea that they are on a file, and the commercial bodies have no rights to have those things. There has to be the discipline of telling people that they cannot maintain these files on these subjects on the excuse of Clause 28.
Lord Falconer of Thoroton: We can go round and round. In my and the Government's view this is plainly

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correct. There must be some safeguards even for the data controller. It seems to me that Clause 41 gives the commissioner appropriate powers, though we are discussing with her whether they can be improved one way or another. A balance has to be struck and with the greatest of respect to the noble Lord, Lord Norton, what he appears to be suggesting is that in certain circumstances there should be no safeguards and no controls on what the data protection commissioner can do in relation to making investigations of what data controllers are doing. That is going too far.
I shall move to the other amendments. I will deal with them in reverse order. The noble Baroness, Lady Nicholson of Winterbourne, proposes that, where an audit of good practice is going on, that should not have to depend on the consent of the data controller. Again, this seems to be a question of balance, and it is essentially a matter of judgment as to where the balance has to be struck. We believe that the consent safeguard is very important. Removing it, as with the amendment, would entirely change the nature of the provision—it would no longer be related solely to the development of good practice as now, but it would become a very powerful means of enforcement. The commissioner would be able to make spot checks on data controllers, uninvited, and with no good reason whatsoever for suspecting any infringement of the data protection laws.
The Government believe that this goes much too far. At present we believe the Bill achieves just about the right balance. It provides a means for the commissioner to seek the information she needs to enforce the law under Clauses 41 and 42 where she has received a complaint or otherwise suspects that there might be an infringement. Separately, under Clause 49(5), she is able to conduct an audit of good practice, but with the consent of the data controller.
It is a question of judgment as to where one pitches the balance. I understand the point, sincerely made, but it is my very strong view that we should be giving much too strong a power to intervene without good reason in controller activity if either the noble Baroness's amendment were made or even if the noble Earl's amendments were made. All the same points I made in relation to the other two amendments apply to his.
I therefore respectfully invite the noble Baroness and the noble Lord to withdraw their amendments.
5.30 p.m.
Lord Norton: I have heard the Solicitor-General's comments. I shall study them in Hansard, and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28, as amended, agreed to.
[Amendment No. 93 not moved.]
Clause 29 agreed to.
Clause 30 [Regulatory activity]:
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn) moved Amendment No. 94:
Page 17, line 45, leave out ("in which") and insert ("to the extent to which").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 30, as amended, agreed to.
Clause 31 [Journalism, literature and art]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 95:
Page 18, line 29, leave out ("the provisions") and insert ("any provision").
The noble Lord said: I beg to move.
On Question, amendment agreed to.
The Earl of Northesk The Earl of Northesk moved Amendment No. 95A:
Page 18, line 30, after ("publication") insert ("or broadcast").
The noble Earl said: There is a series of amendments here which are very much probing in character. I admit that on the surface the inclusion of the word "broadcast" in Clause 31 adds nothing to its sense. In particular, the current drafting of subsection (6),
"For the purposes of this Act "publish", in relation to journalistic, literary or artistic material, means make available to the public or any section of the public",
makes it clear that the exemption is as much intended to apply to TV and radio as it is to text-based forms of publication, and I have no difficulty with that. However, it did strike me that it is somewhat less clear as to whether the definition is intended to apply to the Internet, and that is the simple point on which I seek clarity from the Minister. I beg to move.
Lord Williams of Mostyn: There are a number of amendments grouped here, and perhaps it will be useful if I specify them. They are Nos. 95A, 97A, 103A, 103C, 106A, 106B, 106C and 100 to 103 inclusive.
I will deal shortly with the question of publishing. We believe that publishing is adequately defined. As the noble Earl indicated, and I am happy to say, publishing as defined by,
"make available to the public or any section of the public",
includes any means of making available, including broadcasting, Internet and so forth. We believe that the value of using the general term "publishing" is that it is apt to accommodate in the future any further developments. I hope I am therefore able to give the assurance that the noble Earl looks for. The general use of "publication" in its wider sense, of which I spoke as being apt for our present purposes, is very well known in the law of defamation which periodically over the years has had to consider, for instance, whether a film was libel or slander—such as the well-known case known to every schoolboy of Yusopov and Metro-Goldwyn Meyer, which is now 50 years ago. I hope that that assurance is of assistance.
The Earl of Northesk: I am most grateful to the Minister, and am entirely happy with his reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Astor Viscount Astor moved Amendment No. 95B:
Page 18, line 32, leave out from ("having") to first ("of") in line 33 and insert ("balanced the individual's right to privacy against the principle").
The noble Viscount said: In moving this amendment I wish also to speak to Amendments Nos. 97B, 103B and 106. This is a large group which also includes other amendments from the noble Baronesses, Lady Nicholson and Lady Turner.
Lord Williams of Mostyn: Amendment No. 95B is in the next grouping.
Viscount Astor: I believe that I am moving Amendment No. 95B.
Lord Williams of Mostyn: Amendment No. 95B is in the next grouping. We have not finished the grouping which started with Amendment No. 95A.
Viscount Astor: I apologise to noble Lords. We have just finished Amendment No. 95A and I believe that we came to Amendment No. 95B. With respect I think I was right; but I stand to be corrected on the groupings.
However, my amendment is rather a scatter-gun approach to Clause 51. It should not necessarily be taken together. The attitude may be, "If one does not work, we will try another". Perhaps I may speak to the amendments in order.
On Amendment No. 95B, the provision attaches little importance to privacy, and emphasises the "special importance" of "freedom of expression". I was therefore concerned that as drafted it was somewhat lacking in balance. Perhaps the Minister will comment on that.
With regard to my Amendment No. 97B, as the clause stands, where the data controller reasonably believes that compliance with the processing safeguards mentioned is "incompatible" with the purposes of the press, arts or literature he can override those safeguards. It seems inappropriate that the safeguards should be automatically subordinated to the interests of the press or other media. I was concerned that the provision amounts to a carte blanche. Again perhaps the noble Lord will comment on it. These are both probing amendments.
My final amendment, Amendment No. 103B, ensures that data controllers have proper regard for the approved codes of conduct.
Amendment No. 106 is grouped with Amendment No. 95B. It concerns the broadcasting industry, the ITV companies, satellite, cable, and the BBC. As it stands the clause requires the data controller—in these instances they are the broadcasters—to take account of designated codes of practice for the purposes of subsection (1)(b): that is, exempting data processing for journalistic purposes when publication would be in the public interest.
It is important to ensure that codes which are designated for the purposes of this section are the existing industry regulatory codes under which broadcasters operate—for example the BBC guidelines, the BSC Code on Fairness and Privacy which applies both to commercial broadcasters and to the BBC, and
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the ITC Programme Code of Practice for commercial broadcasters, which has real regulatory force in terms not only of fines but also in the removal of the licence to broadcast.
Under the Bill as drafted, the commissioner could formulate her own code under powers in Clause 49(3), which covers the same areas that the broadcasters already observe under the ITC code and BBC guidelines. Therefore, there is a risk that there could be a multiplication of regulation, which is certainly not helpful in terms of practice.
I understand that the Government have given this some thought and are prepared to give an assurance that, in practice, the Secretary of State would not designate a commissioner code under Clause 31(3) unless it had been agreed with the industry. That goes some of the way. However, it is not as clear as saying that they would designate a code that was not one of the existing codes which regulate the industry, and that is really the purpose of my amendment. I beg to move.
The Deputy Chairman of Committees (Lord Brougham and Vaux): It might be helpful to the Committee if the noble Baroness spoke now to her amendments which are grouped with this one. The ones which were grouped to Amendment No. 95A, which was withdrawn, will be dealt with as we come to them.
Baroness Nicholson of Winterbourne: I am most grateful. I understand that Amendment No. 100 can be referred to later.
I am happy to have an opportunity to speak on this important group of amendments. My amendment, Amendment No. 97, is one that I hope may be considered. I am concerned about the infringement of privacy of individuals. I do not concern myself about public individuals; I am concerned about private individuals. I have been aided in that concept by the reference of the Public Bill Office to the, "privacy of individuals who are neither elected nor appointed to public office". That is the key.
Given that the print media are not subject to the same codes as television and radio, which have a duty of accuracy, impartiality and of ensuring that the viewer and listener understand the difference between fact and opinion, the question of public information in print media has no restraints of any sort in law. This amendment, therefore, tasks the data controller, which in this case would be the editor of the newspaper or the journal, to take into account when considering public interests,
"the need to avoid unnecessary infringement of the privacy of [private] individuals".
It is a simple amendment and clear in its meaning.
In terms of Amendment No. 105, this would ensure that the Press Complaints Commission code of practice would be on the face of the Bill, or would at least be placed in front of Parliament. The reason for that is the same as the purpose of the previous amendment—namely, to bring in line the print media with radio and television, whereby we have a legislative framework which ensures the excellence of our radio and television output. I believe it is the best in the world and its

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practices are enshrined in the contract with Parliament from which are derived the guidelines which the producers have to follow at the BBC, IBA and in local radio. All the television and radio networks have to follow a like code of practice which has been agreed by Parliament.
I find it difficult to see why the print media could not have the same kind of code of practice. There is the Press Complaints Commission, which has as governors some eminent Members of this Chamber but is largely composed of peer-group leading journalists. They are judging their own work in many instances because the number of owners is so small and the number of editors is relatively small. I put forward in Amendment No. 105 the proposal, which is fully aligned with television and radio legislation. that the PCC code of practice should also be laid in front of the House.
Baroness Turner of Camden: My Amendment No. 104 is in this grouping. I have listened to what the noble Baroness, Lady Nicholson, said on Amendment No. 97. I do not agree. I do not believe that because one has accepted perhaps quite minor public office, it renders one immediately "open season" as regards the press. The effect of the amendment might well be precisely that. I am simply not in favour of it.
I turn to Amendment No. 104. At Second Reading we had a discussion on Clause 31. I expressed my concern about the exemption in regard to journalists in relation to public interest. We have seen in the recent past that the media tend to define public interest very widely indeed. It often seems sufficient that there should be some curiosity about particular individuals who may not even be known to a wide public until a story is unearthed and duly written up.
Article 17 of the UN International Covenant on Civil and Political Rights states this. It is so important that I make no apology for repeating it.
"No one shall he subjected to arbitrary or unlawful interference with his privacy, family, home and correspondence nor to unlawful attacks on his honour and reputation".
I know, of course, that we have to balance against that Article 10 of the European Convention on Human Rights, which upholds the right to freedom of expression, subject to certain considerations which are spelled out in various places.
It seems to me that Clause 31 provides a let-out where public interest is involved. Individuals are entitled to a form of redress where their rights are violated, and it is redress that concerns me. We have the PCC, and reference has already been made to codes of practice. It seems to me that they are often breached. It is difficult to see how there can be an adequate form of redress if individuals are damaged—and they often are—if there is no means of compensating them except through the libel courts. As we know very well, those are often not available to people of moderate means.
I am not here concerned about the well off. They can look after themselves and are quite capable of taking action in the courts, and very often do so. I am concerned about people who do not have access to those resources, and who, perhaps only by accident, stray into
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the media searchlight from time to time. I am anxious to write into the Bill a means of redress that carries with it some form of compensation.
I raised the point at Second Reading. I believe that there is a certain amount of support for the amendment publicly because there has been a good deal of concern recently about damaged individuals. I beg to move.
5.45 p.m.
Lord Williams of Mostyn: I am responding to Amendments Nos. 95B, 97B, 103B, 97, 106, 105 and 104. A number of different amendments focus on Clause 31. I hope not to be repetitious.
Viscount Astor: I apologise for interrupting the Minister. I hope that he is addressing Amendment No. 97B; I think that he said Amendment No. 97.
Lord Williams of Mostyn: Yes, I am responding to Amendment No. 97B. Perhaps it is useful to set out the Government's stance in principle on the media generally. I do not limit it to print media but include broadcast media.
The directive speaks in quite wide terms about various activities. They are journalistic, literary and artistic. It is therefore an unwise, over-narrow focus to confine ourselves simply to newspapers or, more widely, even to the broadcast media.
Our stance is quite plain. Whatever the occasional inconveniences, and whatever sometimes the blemishes, we believe adamantly in the necessity for as free a press in the widest sense as can possibly be achieved.
There are occasions when those in public life, or those whose life is of genuine public interest, may suffer slings and arrows. We believe that in a civilized free community the press ought to have as abundant a range of freedoms—and I include journalistic, artistic and literary activity—as is possibly achievable. That relates to every remark I make about any amendment or any debate on clause stand part which relates to Clause 31. That is our general stance. Throughout the summer and autumn months we have been in close co-operative consultation with various representatives, not simply of the press, certainly the noble Lord, Lord Wakeham, from the PCC, but also representatives of the BBC, Channel 4, the independent television companies and, not to be forgotten at all because they are of great importance in our national life, regional newspapers.
The Act of 1984 offers no exemption to the media. Our new Bill offers the opportunity to provide one. I deal with them in the order, if I may, in which the amendments were spoken to, and my note indicates that the first was No. 95B, followed by No. 97B, followed by No. 103B, which were the first three the noble Viscount moved.
We see Amendments Nos. 95B, 97B and 103B going in different directions to each other, and we believe they upset what we have tried to achieve, namely a careful reconciliation in Clause 31 with the privacy protections elsewhere in the Bill. We see as the key starting point that the Bill as a whole establishes a regime to protect the privacy of personal information, quite independently

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of Clause 31. Clause 31 exists to achieve a reconciliation between the general regime and the special freedom of expression needs which apply where media processing is at stake. We wish to temper the general regime to the extent necessary, no more and no less.
Amendments Nos. 95B and 103B would in effect weaken the media exemptions in ways which we believe to be inappropriate. Amendment No. 95B would introduce an unnecessary reference to privacy into the heart of a clause, which is intended, as I said earlier, to counterbalance the ample and detailed privacy protections elsewhere in the Bill. The basic regime is there without Clause 31. Amendment No. 103B would replace a provision which allows compliance with media codes to be introduced into the equation where it is relevant, with the requirement every time to run a standard test of compliance or otherwise; in other words the simple difference between "may" and "shall". We believe that would place excessive weight on codes which are intended to be a factor in the general balancing equation.
Amendment No. 97B goes in the opposite direction. If it removes Clause 31(1)(c), it would leave only two tests which would have to be met for a media data processor to qualify for the exemption. It would omit, therefore, the perfectly reasonable test of apparent incompatibility with the special purposes of compliance with a data protection mechanism. If the media controller can perfectly well do his job in conformity with the data protection regime, we intend that he should do so. He only needs to be protected in departing from the normal data protection law requirements where he reasonably believes he has no real option, and that is why Clause 31(1)(c) is there. That is what it is intended to provide.
We want to establish proper gateways for freedom of expression, and we believe that Clause 31 would become rather too wide for comfort in one sense and too narrow in another sense, and we suggest that Amendment No. 97B ought not to be accepted. Of course, this is quite a difficult and delicate balance. We are always open to suggestions, but we believe that these suggestions are not appropriate.
I revert to a general point which the noble Baroness, Lady Turner of Camden, made, which is that people vary in resource and indeed in resourcefulness. Without specifying any particular recent cases, it is notorious that some public figures—let us only think of the past five to 10 years—have used their financial ability to silence, to stifle at birth almost, legitimate media inquiries into their malpractice. The examples are too notorious for me to mention. Here, we are deliberately avoiding the opportunity for those whose activities are being legitimately scrutinised from stifling any proper journalistic investigative activity. Not every investigative story is perfect. Not all journalists are perfect, in my experience. But I believe that there is a strong principle for which we contend, namely that a free press—warts and all—is necessary to us.
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I turn now to Amendment No. 97 in the name of the noble Baroness, Lady Nicholson of Winterbourne. This relates to the question of individuals who are neither elected nor appointed to public office. Already, in the serried throngs against us on Clause 31, there is a divergence of view. The noble Baroness, Lady Turner of Camden, robustly, as always, made plain her disagreement with the approach adopted by the noble Baroness, Lady Nicholson of Winterbourne.
I am paraphrasing fairly brutally, but we believe that defining the right to privacy with reference to election or appointment to public office simply does not work. If someone puts themselves forward for election to public office, does that make them a public figure for the purposes of the considerations of the noble Baroness, Lady Nicholson? Answer came there yes, sotto voce, but I picked it up—and that is not covered by her amendment, of course. The noble Baroness's amendment refers to individuals neither elected—and there must be many in the Liberal Party who are not elected, although they have stood for election—nor appointed to public office.
The definitions are extremely difficult. One asks the question whether, for instance, a particular police officer, who undoubtedly, in our view, is a public servant worthy of scrutiny, has been appointed to public office? Has a doctor, for instance, or a school teacher? I would suggest that the difficulties here are very great and they cannot be dealt with by what I suggest at the moment is a blunderbuss, because it does not even cover what the noble Baroness wishes to cover. However, I quite accept that she is raising the principle for the discussion to be developed.
We do not believe this amendment is right. We believe that considerations about the need to avoid unnecessary infringement of privacy should apply, whatever the public status of the subject.
I entirely accept the proposition from the noble Baroness, Lady Turner of Camden, that simply because the public is interested does not necessarily qualify a story, an article or a comment piece as being in the public interest. There are difficult lines to be drawn. and this is why we have given particular thought to the protections we believe the individual is entitled to—the general scheme of the Bill—and the protections that journalistic, artistic and literary activity must have (Clause 31).
Clause 31 requires a balanced judgment to be made between the importance of freedom of expression and whether the public interest is served by publication of personal data. The jurisprudence in Strasbourg is very well known indeed in putting a very high weight on freedom of expression, and this Government endorse that view.
Subsection (3) of the clause provides that, when considering whether the data controller's belief that the public interest was served was a reasonable one, regard may be had to the data controller's compliance with any relevant code of practice designated by the Secretary of State. Such a code of practice would itself need to provide guidance on the factors to be taken into account when determining how the public interest is served by

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publication. The most recent edition of the PCC code, which was published as recently as 26th November last year, deals with questions of public interest. In the code of practice—which no-one pretends is perfect but which is certainly a decided improvement on its predecessors—there are questions relating to the public interest. I give one or two examples only: detecting or exposing crime, or serious misdemeanour; protecting public health and safety. Those are the general propositions which are set down in the code. Again, I understand, those are more easily set down in general terms than defined in particular cases. However, that is their virtue, not their disadvantage.
Therefore, we would not be minded to accept Amendment No. 97.
Next in chronological order is Amendment No. 106, which relates to the designation of codes of practice. I say respectfully that the noble Viscount is quite right in pointing out that Clause 49 allows the data protection commissioner to produce her own code of practice on any aspect of the data protection regime. Such codes do not replace the law, but they will undoubtedly help in its practical interpretation. The commissioner would, I confirm, be free to produce a media data protection code, among others. The Government would not intend to designate it for Clause 31(3) purposes unless it was one that the industry themselves had collectively agreed; in other words, that they were joint owners of it. That would preserve our basic purpose of giving media defendants themselves the opportunity to run an additional freedom of expression argument where Clause 31(1)(b) was at stake.
We have designed Clause 31(3) to provide designation of any codes which have been prepared. In that we include such bodies as the Independent Television Commission, the Broadcasting Standards Commission, which are, of course, statutory bodies, and the Press Complaints Commission, a non-statutory regulatory body.
In respect of the PCC, the noble Lord, Lord Wakeham, made it plain in the late summer and autumn months that he thought that the existing code was not sufficient, and he certainly laboured manfully to produce an improved version. However, he has never said that the present version is entirely an immaculate conception, and he is perfectly open to reasoned propositions about how it might be improved.
6 p.m.
Viscount Astor: I am sorry to interrupt the Minister but, just before he leaves that subject, I wonder whether I could ask him one brief question. I quite understand what he said about codes of conduct, but in relation to statutory codes as opposed to non-statutory codes he said that there would not be a code with which the industry did not agree. Would it not be better to put something in this clause stating that the commissioner could not produce her own new code or any other code that was in any way in conflict with another statutory code?
Lord Williams of Mostyn: I do not think so. We do not want to hobble the commissioner in respect of her
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discretion. Clause 49 provides for her to produce a code should she wish. However, I respectfully doubt that she would wish to do so, if, for instance, a press code had already been, or was in the process of being, designated by the Secretary of State, because there would be no purpose in that. It is the Secretary of State's designation that is important in the context of Clause 31. It seems to me that it would be an idle exercise for the data protection commissioner to produce another code which plainly would not be designated if it differed substantially from that already designated. I am most grateful for the further intervention of the noble Viscount, Lord Astor.
I turn to Amendment No. 105. These are matters of great importance, which is why I am spending a little time on each distinct aspect. This is the amendment of the noble Baroness, Lady Nicholson of Winterbourne, relating to the order made by the Secretary of State designating the code of practice being obliged to contain the full text. I have set out the general regime of exemption in Clause 31 and therefore do not repeat my observations.
The amendment requires that the order designating would have to publish the full text. We do not believe it is necessary because a code of practice may be quite a detailed and lengthy document. Any code of practice designated as suitable will be a public document, open to scrutiny by interested parties. I do not see any benefit in requiring the designating order to contain on its face the full terms of the code.
Baroness Nicholson of Winterbourne: Will the noble Lord not agree that there is a difference between the other two branches of the media, radio and television, which have a contract with Parliament, and the code of practice to which the Minister refers now, which concerns the print media? The latter is merely a code of practice between the print media and the Secretary of State himself. There is no contract between the print media and Parliament at all. That is quite different from radio and television.
Lord Williams of Mostyn: I do not believe that to be a correct construction of the legal position. As has been indicated, the broadcast media are subject to statutory controls and they are subject to that for perfectly good historic and, indeed, technical reasons. One is not looking at contract or not contract; one is looking at designation or not designation. Even were the position contractual, it would not assist to have all the details of a code on the face of a designation order. It is a public document, it is freely available to everyone who wants to look at it and there is no virtue in it. I do not see these matters as contractual; they are matters of designation, yes or no.
Baroness Nicholson of Winterbourne: While I fully accept the point the Minister makes, that this a public document—it is fairly recent but readily available in any library—nonetheless it is not accountable to Parliament in the way that the broadcast media are to Acts of Parliament. Unless I am wrong, there is no similar legislation which refers to the print media, and it is the print media that I wish the Minister to look at in terms

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of my amendment. I accept that my amendment may be a "bad value" one, but I wonder whether I could ask him very seriously indeed to consider the point I am making about the difference between the broadcast media, which come under Parliament, and the print, which do not.
Lord Williams of Mostyn: There is a difference between the print and the broadcast media, but that is a structural difference, because the broadcast media have a statutory basis for their existence, with the sanction as originally specified ultimately of removal of licence, and newspapers do not. They are all susceptible to be designated by order.
The basis of designation will be the Secretary of State saying, rather more elegantly than I, "This is the order which I propose to designate", but that will require parliamentary approval, and there is no suggestion that anything can be shuffled through under the carpet because these are public documents. The PCC code of November last year is not the only code there has ever been. There are other codes as well. There are the NUJ codes, for instance, which might or might not become relevant if application were made.
I take the point made by the noble Baroness, Lady Nicholson of Winterbourne, that there is a difference between the way the broadcast media are established and continue to be regulated (largely historical and technical) and the way that the press operates on a self-regulatory basis. The Government's policy is quite plain: we prefer self-regulation in this delicate area of press freedom, and the better the press regulates itself, as the Lord Chancellor has said on many occasions recently, the happier the Government would be.
Ultimately the sanction is here. The Secretary of State can designate or not designate. If the Secretary of State does not designate, the press would not, of course, have the protections that have been deliberately written, after a good deal of thought and consultation, into Clause 31.
Baroness Turner of Camden: Before the Minister sits down, I wonder whether he would accept that, as far as my amendment is concerned, it does not seek in any way to interfere with the freedom of the press. I am in the amendment simply seeking redress for individuals who in the course of the exercise of that freedom can claim that they have been damaged. This is a somewhat different issue from attempting to hamper the freedom of the press in any way.
Lord Williams of Mostyn: It is. This is why I have been careful—I was not going to sit down, I merely paused for breath! —in dealing with the amendments sequentially, and that of the noble Baroness, Lady Turner, is the last on the list. I shall say a word or two about that, if I may.
I understand that this is quite a different point—and I summarise again—because it is the requirement for a code to provide redress, including compensation for an individual claiming and establishing personal damage. I shall review briefly once more: in the present PCC code there is no provision for compensation. It should be
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made quite plain that there has never been a suggestion that the PCC should fine newspapers. We would be adamantly against that. The discussion, as the amendment of the noble Baroness, Lady Turner, quite rightly points out, is compensation.
Should the Press Complaints Commission wish to include a compensatory scheme on a voluntary basis, that would be a matter for that body. Clause 11 provides an entitlement to compensation for any individual who suffers as a result of any contravention by a data controller of any of the Bill's requirements. The statutory regime provided in Clause 11 is what should be done. I repeat: should the PCC wish to go further, it would be a matter for the PCC and in appropriate circumstances it might well be welcomed by the Government.
Within this group also, I am reminded, lies Government Amendment No. 96, which it might be convenient for me to deal with. This is to delete the words "as seen" and to insert further words. Clause 31, as I have now stated a number of times, provides the exemptions which we have deliberately considered. This amendment, suggested by the broadcast media, emphasises that the protection of freedom of expression is itself a matter of public interest. We believe that fundamentally to be so. It does not alter the intended effect of the Bill, but we have thought it appropriate to propose this amendment in response to particular concerns by the broadcast media.
That concludes my remarks upon the amendments presently being discussed.
Viscount Astor: I thank the Minister for dealing with a large and rather complex group of amendments. It was, however, an agreed grouping, with which we knew the Minister could cope.
Briefly, I should like to thank him for what he said on codes and broadcasters, which has explained the issues and deals ably with the concerns that some broadcasters have put to me on the subject. Again, on my two amendments, Nos. 97B and 103B, I accept what he has said: they had rather a scatter-gun approach and probably did not all link together.
There is one particular thing with which I shall come away from this brief debate. That is when the Minister said that Clause 11 could apply to an individual who suffers damage. Reading Clause 11, I see that it could apply to data controllers, which therefore includes broadcasters and journalists. We shall need to look at the issue quite closely. I must admit that I had not focused on how Clause 11 would apply to data controllers who might work in some part of the media.
With regard to the amendment that I moved, Amendment No. 95B, I accept what the noble Lord said. However, elsewhere in the Bill there is much mention of privacy and the rights of the individual. The problem is that journalists and the media have only read Clause 31; that is what they believe the Bill is all about. They have never got round to reading the rest of the Bill. They regard the rest of the Bill as verbiage for data controllers, insurance companies and such things. They look at Clause 31 and say, "Ah, this is what the media

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have to do!". I do not believe they have noticed Clause I I and I do not believe they have noticed anything else. That is why I wanted to put something in Clause 31, because so many editors and journalists to whom I have talked think that that is the only part that affects them. I shall have to consider carefully what the Minister said and I may. perhaps, return to the matter.
We seem to be having a debate merely on the merits of a privacy law, and I personally have always been somewhat in favour of one. However, the Government of whom I was a Member did not come forward with any proposals, and did not even accept the Calcutt recommendations: and the Government of whom the noble Lord is a Member do not seem to be very keen on it either.
I am delighted with what the noble Lord said about the freedom of the press. If I take his words literally, I find it impossible to understand why he and his Front Bench team did not support my amendment on predatory pricing during the recent proceedings on the Competition Bill. However, that is as may be. I am grateful for the Minister's comprehensive reply. There are serious issues that have been discussed today and no doubt we shall have to discuss them further on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 96:
Page 18, line 33, after first ("or) insert ("the public interest in");
On Question, amendment agreed to.
[Amendments Nos. 97 to 97B not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 98 and 99:
Page 18, line 36, leave out ("the provision in question") and insert ("that provision").
Page 18, leave out line 38 and insert ("Subsection (1) relates to the provisions of").
On Question, amendments agreed to.
6.15 p.m.
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 100:
Page 18, line 40, at end insert ("and, in relation to data processed for the purposes of journalism, the fourth data protection principle").
The noble Baroness said: I am grateful for the opportunity to speak to this amendment, although I missed my place in the original grouping. This is a simple amendment which seeks to bring accuracy back into journalism in terms of the Bill. Perhaps I may point to the Press Complaints Commission code of practice because it is inherent in that code; indeed, it is its first principle, if I may so describe it. That is natural, it is the first principle in the BBC Charter. The agreement specifies "accuracy and impartiality". That is the BBC.
I have here the PCC code which says much the same thing. In Item 1, which is "accuracy"—the very first one—it talks about the need to apologise for publishing if data are inaccurate. I accept that that will be a great
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surprise to many people, but it is in the PCC code of practice, albeit many times more in the breach than in the observance.
I therefore ask why, for the purposes of journalism, people's data protection principle should be ignored. It seems to be in conflict with the PCC code of conduct on which the present Government are placing so much reliance in terms of self-regulation. Would it not be practical and apposite, therefore, to respect that duty of accuracy that journalism has given itself through the PCC code of practice and bring it hack with regard only to the purpose of the Bill, which is to protect personal data? It is a narrow and small amendment which seems to be in line with the Minister's own arguments. I beg to move.
Lord Williams of Mostyn: I believe that the noble Baroness was speaking to Amendments Nos. 100. 101, 102 and 103, and I shall respond, if I may.
The reason that we retained the media's exemption from the fourth data protection principle is quite plain. The media codes make it clear that material which is to be published must be accurate. The noble Baroness rightly pointed to the injunctions in the PCC code about accuracy. I am told by the noble Lord, Lord Wakeham, that a significant majority of complaints to the PCC is to do with accuracy. The virtue that the noble Lord sees in his procedure is that inaccuracies can be put right. It is true, contrary to ignoble popular belief, that many people want accurate accounts about themselves rather than attempting to win the bingo, or the lottery, by going to the libel courts. One understands that.
The reason for the exemption here is that the media codes are speaking of material when published, and of course following publication. But data protection principles apply well before the publication of the story or a programme for the broadcast media. When journalists are pursuing a story—which, I repeat. I believe is a notable public duty even if uncomfortable for those set in authority above us—and making their investigations, they simply cannot know in many instances whether or not the personal data are accurate. Application of the fourth principle (and this is very important) would prevent them collecting the data in the first place. It would prevent any journalist doing his or her job. It would prevent the collection of information with a view to publication because processing includes collection. It would stop them holding the data. It would stop them continuing the investigation of the story in order to find out, ironically, whether the original material collected was in fact accurate. Therefore, to go along the route which is so enticingly and attractively set out by the noble Baroness would have this consequence. It would make investigative journalism infinitely more difficult; and we set our face against that.
Baroness Nicholson of Winterbourne: The Minister therefore puts forward a Morton's Fork approach. The duty of accuracy in the fourth data protection principle with regard to citizens and journalism cannot be applied. The PCC code of practice is a private matter in terms of the matter not being before Parliament. Therefore the citizen does not have the opportunity to have his

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legislators discuss it. It is a Morton's Fork principle. It impales the citizen in terms of accurate data protection. I remind the Minister that all too frequently press cuttings are merely recycled, and inaccuracies are extrapolated and continued almost ad infinitum. It is galling, as he has so properly said, for people to be inaccurately described, particularly on the most sensitive personal matters. We have already defined what sensitive data are—ethnic origin, and so on. These things matter deeply to people. There must be a way whereby the Minister can offer me some reassurance that accuracy on personal data can be taken into account with print journalism. I believe that it is already well established as a principle in the broadcast media. Indeed, they have few complaints on accuracy because of their high value legislation before the House.
Lord Williams of Mostyn: I have to respond to that. I have said that there is a distinction between pre-publication activity and what happens when the inaccuracy is published to the world. If the amendment of the noble Baroness were accepted, investigative journalism would become if not impossibly impeded, seriously and significantly impeded. There is the mechanism at the moment in the scheme of the noble Lord, Lord Wakeham, whereby inaccuracies can be put right. Most people, I repeat respectfully, wish the inaccuracy to be put right, corrected appropriately, and not necessarily to have compensation.
I take the noble Baroness's point: the BBC has a code which requires inaccuracies to be put right, and she says that works. The press has a code which requires inaccuracies to be put right and, by and large, that works. It is wrong to suggest that the PCC code will not be capable of being discussed, scrutinised or debated in Parliament. One is simply coming back to the structural difference between the broadcast media and the print media, but that structural difference has no effect in practice in relation to inaccuracy and the need for investigative journalism. I am bound to say that there was no difference of approach between the broadcast media and the print media when they stressed, separately and together, to us in the Home Office their very real concerns which I believed to be properly justified concerns that investigative journalism would be hobbled if not wholly stifled.
Baroness Nicholson of Winterbourne: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 101 to 106C not moved.]
Clause 31, as amended, agreed to.
Clause 32 [Research, history and statistics]:
Lord Teviot Lord Teviot moved Amendment No. 107:
Page 20, line 7, after ("behalf) insert—
("() to a person not the data subject where paragraph 3(a) of Schedule 3 applies,").
The noble Lord said: I am speaking from personal experience. I am concerned that the definition of research purposes in Clause 31(1) would not allow a searcher who is not the data subject to have access to
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records to support measures or decisions with respect to particular individuals. While most genealogical research relates to individuals who are no longer living and is thus outside the scope of this Bill, there are occasions when a third party is acting in the interests of a data subject but is unable to gain the prior consent of that subject—for example, a solicitor or his agent trying to trace the beneficiary of a will. To quote another example, the Salvation Army might be trying to contact missing persons. This amendment attempts to ensure that such research may continue. I hope I am worrying unnecessarily and that the Minister will immediately put me at ease. I beg to move.
Lord Falconer of Thoroton: I hope I will put the noble Lord at ease, but not in the way he expects. I think! I have listened carefully to what he said and I have some sympathy for the case he makes. I am not in a position to reach a firm view this afternoon because we have to check whether the points he makes can be dealt with in a way which is consistent with the data protection directive to which we are trying to give effect. We do not necessarily see all of the examples he gave in his effective speech moving the amendment, but there may be cases where one would want to do something along the lines he suggested. I give him absolutely no assurances whatsoever, but there seems to be some validity in the points he makes. I hope we can return to this at a later stage. In the light of that assurance, I would ask the noble Lord to withdraw his amendment.
Lord Teviot: I am slightly reassured, and I hope I shall be reassured even further at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 agreed to.
Clause 33 agreed to.
Clause 34 [Disclosures required by law or made in connection with legal proceedings etc.]:
6.30 p.m.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 108:
Page 20, line 19, leave out from beginning to ("is") in line 20 and insert ("Personal data are exempt from the non-disclosure provisions where the disclosure").
The noble and learned Lord said: This is a technical amendment. It improves the expression of the exemption provided in Clause 34 for disclosures of data which are required by law. As it stands at present the exemption states that,
"The data protection principles shall not be regarded as restricting or preventing any disclosure",
that the law otherwise requires. We do not intend that reference to be understood as permitting exemption from the seventh data protection principle which requires technical and organisational security measures. The amendment that we propose removes that doubt and in the interests of consistency brings this exemption into line with other provisions of the Bill by reference to the

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idea of the non-disclosure provisions as defined in Clause 26(3). In those circumstances, I beg to move this amendment.
On Question, amendment agreed to.
Clause 34, as amended, agreed to.
Clauses 35 and 36 agreed to.
Schedule 7 [Miscellaneous exemptions]:
Viscount Astor Viscount Astor moved Amendment No. 109:
Page 49, line 19, after ("by") insert ("or to").
The noble Viscount said: I beg to move Amendment No. 109 and speak to a whole raft of other amendments that, although not necessarily on the same subject, all relate to Schedule 7. The first one, No. 109, is a simple amendment which I hope that the Government will look at because it locates the point in the right place and avoids the rather tortuous reliances that are placed on Clauses 7(5) and (6), as the references it deals with would normally be held by the recipient and not the provider of the reference. Therefore this is a simple amendment that makes this clear.
Amendment No. 110A is again a simple one that I hope will improve the transparency of decision-making. Amendment No. 110B—for the life of me I cannot remember why I put it down so I will just say "better drafting"! Amendment No. 110C was designed to improve the definition of such data to prevent avoidance of the subject information provisions. Those are the simple ones.
Slightly more complicated is Amendment No. 112. This is about the definition of intentions. The personal data held in relation to negotiations are likely to be wider in scope than simply the intentions of the data controller and may include opinions and other data. The real example of this is a company which is, for example, negotiating with an employee. It must be right that that employee should not during those negotiations be able to demand the right to see perhaps informal opinions on his or her merits which then could affect the outcome of the negotiations if it is in regard to employment, a pay rise or something like that. It seems to me that should be narrowed somewhat.
In the same way with my Amendment No. 113, there may be situations where negotiations concerning the data subject are conducted with third parties, and this amendment covers those situations. I am thinking, for example, of conversations with head hunters or with other companies because there is a merger, or indeed a disinvestment, in the offing.
The final amendment that I am speaking to is No. 119. This is of a slightly different nature, but I believe is an important issue. Industry is concerned that the definition of processing will catch any automated processing of personal data whether or not by reference to the data subject. Making an obligation to inform and to provide subject access could be unnecessarily onerous.
I am thinking about a specific example where there is processing of orders or invoices in bulk between corporate bodies which contain contact names. Although it is not really relevant to the invoice, it would be printed on the piece of paper and that would automatically bring
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it in. I have tried to produce an amendment that could ease the burden on the data controllers without arousing the concern of the data subjects involved. Of course, if you are a company dealing with another company, you might write or print on the invoice who you are dealing with but you do not necessarily tell them. They might be rather alarmed if suddenly they have to be notified of the facts.
This is trying to reduce a burden without in any way affecting anybody's rights or anything like that. It is purely looking at the mechanical process of the way industry operates. I beg to move.
Viscount Chelmsford: I should like briefly to talk to the last amendment discussed by my noble friend Lord Astor. I am part of the parliamentary organisation which is concerned about whether it will in the future be able to publish telephone directories globally containing contact names. Presumably employees joined our organisation in order to have such information published. Indeed, I cannot see that an employee who has joined the company which my noble friend Lord Astor was talking about could possibly object to having his name put on the invoice as a contact name. Indeed, it should help rather than hinder him.
What worries me about the amendment is that it says,
"for a purpose or purposes which do not include processing by reference to the data subject",
whereas the point I would like to make is that the member of my association holds data, and therefore it includes processing as defined here. The amendment would have been far stronger if it did not have the exclusion at the end of it.
Baroness Turner of Camden: I have two amendments, Nos. 117 and 118, which are included in this group which deal with a slightly different point. Schedule 7 deals with "Miscellaneous exemptions" and paragraph 9 would appear to give special exemption in respect of personal data if they,
"consist of information in respect of which a claim to legal professional privilege or, in Scotland, to confidentiality as between client and professional legal adviser, could he maintained in legal proceedings".
My very simple amendments take out the word "legal" in both those lines. As your Lordships will know, on Second Reading I and several other Lords raised issues that had been mentioned to us by the Chartered Institute of Loss Adjusters, which is concerned about its own professional status in respect of the Bill. The amendments seek to give cover to professional advisers who are not necessarily lawyers. I know it is a bit difficult, but this amendment is one way of flagging up the concerns of professional people who may very well be involved in claims of one sort or another but cannot claim the kind of privilege which appears to be conferred by particular provision because they are not lawyers. I wonder whether the Minister would be good enough to respond to that quite small point.
The Earl of Northesk: I wish to make a brief contribution on Amendment No. 119 moved by my noble friend Lord Astor. It seems to me that this highlights some of the problems that I attempted to tease

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out on Monday in respect to my Amendment No. 12. One of the problems we have is that much of the Data Protection Bill is concerned with the outward face of processing rather than the mechanics of it.
Lord Falconer of Thoroton: Let me deal, I hope quite briefly, with all these somewhat disparate points. The first point raised by the first amendment of the noble Viscount, Lord Astor, is in effect to say that references given not only by the data controller but also to the data controller should be the subject of some sort of exemption. He suggests it should be done by including them in paragraph I of Schedule 7 to the Bill. We are broadly in agreement with the approach he takes, but feel that it is already adequately dealt with by Clause 7(4) of the Bill:
"Where a data controller cannot comply with the request without disclosing information relating to another individual who can be identified from that information, he is not obliged to comply with the request unless",
and then various exceptions are given, including primarily, consent, or where,
"it is reasonable in all the circumstances to comply with the request without the consent of the other individual".
In considering whether it is reasonable, regard under Clause 7(6) has to be had to any duty of confidentiality owed to the other individual. We believe that normally, unless there is a special situation, that would mean that references from another person to the data controller would not have to be disclosed, which would seem to be adequate protection under the circumstances.
The noble Viscount, Lord Astor, did not speak to Amendment No. 110A about judicial appointments, for some reason.
Viscount Astor: I thought I did. I think I said that this amendment was designed to improve the transparency of decision-making—
6.45 p.m.
Lord Falconer of Thoroton: I see. I missed that. It was so quick. Many congratulations for that! The amendment relates to judicial appointments. In the case of judicial appointments, the exemption is necessary to safeguard the integrity of the arrangements for appointing, and, where necessary, removing from office, judges and senior members of the legal profession. The integrity of the judiciary is an essential pillar of our democracy. It could too readily be undermined where individuals who might either be considered for appointment or be serving as judges or Queen's Counsel might be able to gain access to the confidential information about their suitability held by the Lord Chancellor's Department.
The same argument applies to the system of Crown honours: systems of this kind need to be capable of being operated on a basis of full confidence and discretion. That is the reason for it and, speaking as a Queen's Counsel myself, I can quite see the overwhelming, but inappropriate, curiosity one would have.
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The next amendments of the noble Viscount are Nos. 110B and 110C. He wanted to restrict the exemption in relation to business planning. We understand the spirit in which they were offered, but, in effect, they rather ruin the exemptions that are there.
The first one is to insert the word "solely" before "processed". The point of the exemption is to allow businesses to plan certain of their future management activities such as staff allocation, where necessary, on a fully confidential and discretionary basis. In such planning exercises data processed for other purposes will necessarily and inevitably be used—typically, for example, personnel data. The amendment of the noble Viscount would effectively prevent this; it seems to be running wholly counter to the purpose of the exemption. This exemption can only be relied on, as the paragraph he has amended says, in any case, to the extent,
"in which the application of those provisions would be likely to prejudice the conduct of that business or other activity".
That is to say, on a case-by-case basis only to the required extent and subject to a harm test. That seems to us to be the appropriate limitation of the use of this exemption. Restriction on the type of data is not appropriate.
The next point relates, in effect, to negotiations—Amendments Nos. 112 and 113. I have listened carefully to the explanation of the need for these amendments and have some sympathy. As I said before, in considering exemptions from the subject information provisions we need to have regard for the restrictions which the directive imposes. It permits exemptions to be made only in a limited range of circumstances and where they are "necessary". It must also be remembered that subject access is an important right for data subjects and we must not remove or dilute that right, except where there is a clear need to do so. Therefore subject to those caveats, and with no absolute commitment of any sort to make the changes that the noble Viscount seeks, I am willing to consider whether we can find a way of meeting his concerns.
I now come to the point raised by the noble Baroness, Lady Turner of Camden. The proposal she makes to take out the word "legal" for legal reasons gets us nowhere. If you take out the word "legal", all you are left with is an exemption for "professional privilege", and it only the lawyers who have managed to establish for themselves this particular privilege. So, as a matter of law, it would not get us anywhere.
Beyond the points that were referred to when we were talking about Clause 28, I am not quite sure what the noble Baroness's concerns are in relation to that and whether she feels that they have been adequately met by what we said in relation to that clause of the Bill. I am not sure that I can give much more help than we have given before, save the rather negative indication that the amendment, as proposed, does not achieve anything and is, therefore, not worth pursuing. I am sorry not to be more helpful in that respect.
The noble Earl, Lord Northesk, spoke to the final amendment. As I understand it, underlying this there is a genuine and considerable concern among the business community about the application of the Bill in particular

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to such things as contact names. It is suggested that, in this respect, the Bill will have a broader application than the Data Protection Act 1984, as that Act applies to processing by reference, "to the data subject".
If it is correct that the processing of contact names is not done by reference to the data subject, which it will not be on many occasions, then I agree that the Bill will have the wider effect about which both noble Lords have expressed concern. In that respect, the position is that we have no choice: the directive does not allow us to limit our new law to processing done by reference to the data subject, which is what would meet the concern about contact lists. Nor, I am afraid, does the directive allow us to follow the creative approach proposed by the noble Viscount and provide an exemption from the subject information provisions for contact names, which is what in effect this amendment proposes.
The exemptions provided for in the Bill must be permitted by the directive. Article 13 of the directive provides for exemptions from what the Bill calls the "subject information provisions" in a limited set of circumstances. I have looked carefully at the scope of Article 13, and I cannot find a provision which would justify our providing for this exemption—although, if anyone could indicate one to me, then we would think again. I am sure that the Committee will understand that the Government cannot agree to this Bill making provisions which would put us in breach of the directive. In the light of all the remarks I have made, I would ask noble Lords to withdraw their amendments.
Viscount Astor: I am extremely grateful to the Minister for what he said with regard to my amendments. I am grateful that he is prepared to look again to see whether there is a possibility of dealing with the points concerning negotiations under Amendments Nos. 112 and 113.
I move on to the last amendment that the Minister mentioned. Amendment No. 119, about which there is concern in the industry. I understand his point about the directive. The answer is that we must have discussions with industry in the light of the directive and see whether there is some way in which we can jointly come up with a solution that might deal with the problem. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 110:
Page 49, line 24, leave out ("in which") and insert ("to the extent to which").
On Question, amendment agreed to.
[Amendments Nos. 110A to 110C not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 111:
Page 49, line 36, leave out ("in which") and insert ("to the extent to which").
On Question, amendment agreed to.
[Amendments Nos. 112 and 113 not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 114:
Page 49, line 42, leave out ("in which") and insert ("to the extent to which").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 115:
Page 50, line 27, at end insert—
(""the prescribed period" means forty clays or such other period as is for the time being prescribed under section 7 in relation to the personal data in question;").
The noble and learned Lord said: With the Committee's leave, I shall speak not only to Amendment No. 115 but also to Amendment No. 116. This is a highly technical amendment, the principal effect of which is to remove any doubt there may be about the meaning of the words "prescribed period" in paragraph 6 of Schedule 7. This paragraph provides for an extension of the time within which a data controller is obliged to comply with a subject access request where the data in question consists of examination marks. The purpose of this extension is to avoid the obvious mischief of people using their subject access rights to obtain exam results before those results have been published.
The computation of the time limits involved relies on the concept of the "prescribed period". This concept is first encountered in Clause 7 where it is defined as meaning 40 days, or such other period as may be prescribed by the Secretary of State in regulations. The intention is that the "prescribed period" in Schedule 7 should be a period of the same length as that in Clause 7—that is to say 40 days, or whatever is currently prescribed for the purposes of Clause 7 in the regulations. It is not intended that there should be any scope for a different period to be separately prescribed for the purposes of Schedule 7. That would amount to the taking of a separate power. That is not what is intended. These amendments remove any doubt about the matter. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 116:
Page 50, line 28, leave out ("and "prescribed period" have") and insert ("has").
The noble and learned Lord said: I have just spoken to the amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 117 to 119 not moved.]
Schedule 7, as amended, agreed to.
Clause 37 [Powers to make further exemptions by order]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 120:
Page 20, line 37, after ("if') insert ("and to the extent that").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 37, as amended, agreed to.
Clause 38 [Enforcement notices]:
Viscount Astor Viscount Astor moved Amendment No. 120A:
Page 21, line 20, at end insert ("or, in Scotland, personal injury").
The noble Viscount said: This is a simple drafting amendment. I am more than nervous about saying to two such distinguished practitioners of the craft that this is better legal wording. However, the reason I put this amendment before the Committee is that I am advised by the Scottish Law Society that it is better wording. I beg to move.
Lord Williams of Mostyn: These are not dissimilar amendments to those which were moved by the noble Viscount, Lord Astor—Amendments Nos. 51 and 55—on Monday. I had to plead guilty to ignorance of the law of Scotland, but that was Monday and this is Wednesday.
Our officials have been in touch with their opposite numbers in Scotland and are informed that, as to Amendment No. 128, the word "damage" covers personal injury and therefore, that research having been done and that assurance having been given, I ask the noble Viscount, Lord Astor, to withdraw his amendment.
Viscount Astor: I am grateful to the Minister for his explanation and I am sure that the Scottish Law Society will read his words carefully. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 121:
Page 21, line 34, at beginning insert ("Where—
(a)")
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 122:
Page 21, line 35, leave out ("which").
The noble and learned Lord said: This was spoken to on the previous Committee day. I formally beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 123:
Page 21, line 36, leave out ("(3)") and insert ("(3)(a)").
The noble and learned Lord said: This amendment was spoken to previously, but not moved.
Lord Williams of Mostyn: It was grouped but it was not spoken to. I can say that this is a purely technical amendment. The reference at present in the Bill is wrong. It should be to subsection (3)(a), not to subsection (3), and the amendment makes the necessary correction. I beg to move.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 124:
Page 21, line 36, leave out ("may also") and insert ("or
(b) the Commissioner is satisfied that personal data which have been rectified, blocked, erased or destroyed were inaccurate,
an enforcement notice may").
The noble Lord said: This has already been spoken to. I beg to move.
On Question, amendment agreed to.
Clause 38, as amended, agreed to.
Clause 39 agreed to.
Clause 40 [Request for assessment]:
Viscount Astor Viscount Astor moved Amendment No. 124A:
Page 23, line 4, at beginning insert ("if not, of his reasons, and if so,").
The noble Viscount said: This is a simple amendment on request for assessment in Clause 40. The amendment simply seeks to encourage openness in decision making. The effect of the amendment will require the commissioner to explain to an applicant for an assessment the reasons for refusal where an assessment is refused. I beg to move.
Lord Williams of Mostyn: I understand the effect of the amendment but we do not believe that it is necessary. The effect of Clause 40(4)(b) requires the commissioner to tell a person who has made a request for an assessment of "any view formed or action taken as a result of the request". We believe that means that the commissioner must tell the person concerned of any view formed on the merits of the request in respect of which the commissioner has decided not to make an assessment.
I accept that the requirement applies only to the extent that the commissioner considers appropriate, but we believe that one needs flexibility here to allow the commissioner to manage her business efficiently. It will not always be appropriate to explain her views and actions, particularly when issues of confidentiality may be involved. If it is appropriate the duty is there.
I hope that that explanation finds approval with the noble Viscount.
Viscount Astor: I am grateful to the Minister for his explanation. I am not 100 per cent. convinced. I am a little concerned that there is an element of doubt. Because the commissioner has the flexibility, she cannot accede to the request. However, I shall read closely what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 40 agreed to.
Clause 41 [Information notices]:
7 p.m.
Viscount Astor Viscount Astor moved Amendment No. 125:
Page 23, line 10, after ("data") insert ("and has first made an informal approach which has failed to resolve the issue,").
The noble Viscount said: The current system of informal approaches from the commissioner has worked well under the existing Act. My amendment seeks to strengthen that system, because from my reading of Clause 41 it looks as though the commissioner may have too speedy a recourse to the rather onerous information notices. We believe that the commissioner should be obliged to make an informal approach before issuing such a notice, and it is that obligation, as it were, that is the purpose of my amendment. That happens now and is the working practice. Informal approaches work well, and I am told that when that happens, in the vast majority of cases, there is no need to go any further. It seemed to me that it was important that the Committee should consider whether that should be included in the Bill, because for the commissioner's sake, and indeed for everyone else's sake, we do not want it automatically going to information notices. I beg to move.
The Earl of Northesk: The three amendments in my name in the grouping attempt to deal with the problem that my noble friend Lord Astor has spoken of, although maybe in a slightly different way. Their purpose is to require the commissioner to have received a request for assessment and to have reasonable grounds for suspicion of contravention of any of the data protection principles before an information notice may be served. The reason for the amendment is that there is concern from business that the commissioner may think it appropriate to publish, inter alia, a specimen letter of request for assessment, which may then form the sole basis for the issue of an information notice without the commissioner having made any determination on the request for assessment or having reasonable grounds for suspecting contravention of any of the data protection principles.
Lord Williams of Mostyn: I shall respond to all these amendments if I may. This power given to the commissioner to serve an information notice is a new power, so the effect of the first amendment in this grouping would be to require the commissioner, when seeking information on the basis of having received a request for assessment as to compliance with the provisions of the Act, to seek first to resolve the issue informally with the controller, as the noble Viscount, Lord Astor, indicated. Only where the informal approach failed would the commissioner then be able to serve the information notice.
We do not see the necessity for this amendment. The information notice itself is in the nature of a preliminary step. We have listened with care to the representations of the registrar, but to weigh this down with mandatory formalities would deprive it of much of its utility. It is for the commissioner to exercise her powers reasonably and for the purposes provided, and it is gratifying indeed to hear the complimentary remarks addressed to the registrar and her staff on various occasions, and certainly this afternoon, about the way in which she has approached her difficult duties.
The registrar's present procedure for dealing with complaints is that in the great majority of cases—I echo what was said a moment or two ago—complaints are resolved through negotiation. When formal action is subsequently taken by the registrar it is normally only
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as a last resort, and we expect that approach to continue. I have to say specifically that the commissioner would not be at liberty to use information notice powers oppressively or unnecessarily, because that would not be a reasonable exercise of her discretion. I hope that assurance meets the concern that was mentioned by the noble Earl. Lord Northesk. If there were an unreasonable exercise of discretion that would be open to challenge.
The remaining amendments address the same point generally, because they would link the requirement for the commissioner having received a request for an assessment to her also having reasonable suspicion of breach. We believe that would limit her powers substantially and unnecessarily. The two limbs are important; each is important in its own right. A request for an assessment under Clause 40 could extend beyond considering compliance with the principles, and indeed potential breaches of the principles may well he brought to the commissioner's attention other than by a request for an assessment. We believe that the independently based grounds of suspicion of the commissioner and the entitlement of individuals to engage her investigative powers in their own cause are important, separate, free-standing bases for investigation. We believe that that is what the directive suggests, as one sees in the detailed provisions of Article 28. I hope that my remarks have proved of assistance.
Viscount Astor: I am grateful for the assurance that the Minister has given today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 126 to 128 not moved.]
On Question, Whether Clause 41 shall stand part of the Bill?
Lord Norton: The Bill deserves a better inquiry clause than this. The clause is purporting to give the commissioner powers to serve an information notice to a data controller, requiring the data controller, within the time as may be specified, to provide such information as may be required in order to establish whether or not a data principle has been contravened.
The information notice can be issued on two grounds: if the commissioner has had a complaint from a data subject, or if the commissioner has reasonable grounds for suspecting that a data controller has contravened a data principle; and I emphasise "reasonable grounds".
So far, so good. However, there are two major weaknesses to this clause. The first is that the information notice can be appealed. Under Clause 46(1) the information notice can be appealed on any ground. Appeals to the tribunal at present take months. So here is an inquiry clause that can be frustrated on any ground by an unscrupulous data controller for months, despite the concerns of the noble Viscount, Lord Astor. A data controller with something to hide will probably want to frustrate the inquiry for months, perhaps, so that data can be lost or otherwise rearranged.
An unscrupulous data processor will certainly wish to appeal in order to establish a privilege—the second weakness of this clause. The privilege that the

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unscrupulous processor will get will be the fact that, when an information notice is issued under Clause 41(5), a warrant under paragraph 1 of Schedule 8 cannot be issued. Thus the searching, seizing or testing of any of the unscrupulous data processor's equipment is not allowed. The issuing of the information notice will effectively ring-fence the premises from any further inquiry.
As drafted, this clause is of very little value and I have been advised that it is very unlikely that it would be used by the commissioner. The notice can be easily appealed and, if there is any likelihood of the commissioner wishing to obtain a warrant to enter the premises of a rogue data controller, the issue of an information notice would be the last course of action because, by issuing the notice, the commissioner would in effect, as I have said, be ring-fencing the unscrupulous processor from the powers of entry of the commissioner. But in order to obtain a warrant, the commissioner must have reasonable grounds. So an information notice is of vital importance and must be defined and operate in the correct manner. That is a very important part of the enforcement regime.
There are plenty of precedents in legislation drafted by the DTI or the DoE that could provide the correct mechanism. One such clause is Clause 93 of the Control of Pollution Act 1974. That clause allows the obtaining of reasonable information and would also control the commissioner from overstepping the mark by virtue of powers conferred to the Secretary of State.
Lord Williams of Mostyn: I am grateful to the noble Lord, Lord Norton, for raising his concerns. Perhaps it is worth revisiting Clause 41 in a little detail for a moment or two.
Clause 41 introduces a power, which is not contained in the 1984 Act, for the commissioner to serve a notice requiring information from a data controller in two circumstances which have already been identified. The notices must specify the grounds on which they are made and the rights of appeal they attract, pending which they need not take effect.
There are two matters here which ought reasonably to attend to the noble Lord's concerns. First, by virtue of Clause 41(6), if there are special circumstances which require urgency, the commissioner can herself include a statement to that effect—a statement of reasons—and in that event subsection (4) does not apply: therefore, the long drawn-out appeal process would not be available. The notice takes effect within seven days.
I take the noble Lord's point that someone who wants to play the appeal system in this context, or indeed any other, is quite likely to be able to be properly advised and properly funded to do that. That is why in paragraph 7(2)(g) of Schedule 6 we have provided for the possibility for appeals to be heard by the tribunal chairman or deputy chairman sitting alone. One intended consequence of that will be to speed up things. We are very conscious that it would be an absurdity for us to have produced this Bill to meet our directive obligations and yet let people manipulate the system.
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Those two aspects may be of assistance to the noble Lord. I hope they are. I have not met the Data Protection Registrar on this matter, but have said that we are perfectly willing to look at any appropriate ways of narrowing the grounds of appeal. I am happy to be able to give those assurances.
Clause 41 agreed to.
Clause 42 [Special information notices]:
[Amendment No. 128A to 129A not moved.]
Clause 42 agreed to.
Clause 43 [Determination by Commissioner as to the special purposes]:
[Amendment No. 129B not moved.]
Clause 43 agreed to.
Clauses 44 and 45 agreed to.
Clause 46 [Rights of appeal]:
Viscount Chelmsford Viscount Chelmsford moved Amendment No. 130:
Page 26, line 41, at end insert—
("() In any dispute concerning the fairness of processing personal data, as required by Schedule 1(1), subject to the appeal procedures in Schedule 6, the decision of the Commissioner shall he final.").
The noble Viscount said: It seems to me that many more people will be affected by the new Bill than by the 1984 Act by virtue of the change in the exemption of manual processing. I was concerned as to whether there would be increased numbers of arguments over what is fair.
Clearly we cannot define fairness; it is a matter of judgment. It did not therefore seem appropriate to try to introduce this provision earlier. I am not sure that the suggested amendment is necessarily in the right place now, but it seemed better than including it under the definitions.
It would reduce time and effort if there were some sort of procedure for dealing with arguments about fairness. That is why I have simply suggested that, subject to the standard appeal procedures that exist in the Bill, the data protection commissioner's decision should be final.
I was interested when earlier, in another context, the noble and learned Lord, Lord Falconer, said that the term "fairness" can lead to a considerable amount of information being released. It may be that we have here another part of the processing which might be reduced if there were some sort of process along the lines that I have suggested. I beg to move.
7.15 p.m.
Lord Falconer of Thoroton: I fully understand the reasoning behind the amendment of the noble Viscount, Lord Chelmsford. However, I believe that it is unnecessary because it describes what will happen under the Bill in any case where the commissioner takes enforcement action against a data controller for breach of one of the principles in Schedule 1. That enforcement action will be final, with failure to comply being a criminal offence, unless the data controller appeals to the Data Protection Tribunal. The tribunal's decision to support, modify or quash the commissioner's action is

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also final, unless either party appeals to a higher court on a point of law, which is obviously different from the prime factor question of fairness.
The only other forum for considering infringements of the first data protection principle is a court hearing an action under the provisions of Clause 11, which is where someone has suffered damage as the result of an infringement. We cannot make the commissioner's decision final on that point because that would be to oust the jurisdiction of the court to consider actions for a remedy. The directive does not allow us to do so. In principle, however, what the noble Lord says reflects what we hope will be the position in any event, and we believe that we have achieved that end. With that reassurance, I hope that the noble Viscount will consider withdrawing his amendment.
Viscount Chelmsford: I am grateful to the noble and learned Lord, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
Schedule 6 [Appeal proceedings]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 131:
Page 48, line 40, at end insert—
("(ff) for enabling an appeal under section 46(1) against an information notice to be determined by the chairman or a deputy chairman,").
The noble and learned Lord said: This is a technical amendment. If one looks at Schedule 6, paragraph 7(2)(g), which was referred to in my noble friend, Lord Williams of Mostyn's response to Clause 41, one will see that there is power in the Secretary of State to make rules for enabling certain matters to be dealt with by the chairman or deputy chairman. The aim of the amendment is to make it clear that, when it says "to be dealt with", it means not just to make particular rulings but to be determined as a whole. We would like that to be included between (f) and (g) of paragraph 7(2). It is a purely technical amendment which will give effect to what we had already intended. In those circumstances, I beg to move.
On Question, amendment agreed to.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 132:
Page 48, leave out line 42.
On Question, amendment agreed to.
Schedule 6, as amended, agreed to.
Clause 47 [Determination of Appeals]:
Viscount Astor Viscount Astor moved Amendment No. 133:
Page 27, line 25, leave out ("address") and insert ("residence").
The noble Viscount said: Clause 47 deals with the determination of appeals. Subsection (6) says:
"Any party to an appeal to the Tribunal under section 46 may appeal from the decision of the Tribunal on a point of law to the appropriate court: and that court shall be—
(a) the High Court of Justice in England if the address of the person who was the appellant before the Tribunal is in England or Wales".
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It seems to me that "address" is not a good word here. You can certainly have two addresses: one in England and one in Wales; and, indeed, one in Scotland as well. It seems to me that the test of residence would be rather better to determine that fact. I would be interested to hear what the noble and learned Lord has to say as to whether "residence" is a clearer and better term to use. I beg to move.
Lord Falconer of Thoroton: There is no doubt about what your address is. You can see it on the printed page. We are talking about appellants. They choose what their address is. As the noble Viscount must be aware, the word "residence" can give rise to enormous arguments. The word "address" was used in the 1984 Act. It has proved perfectly workable. His suggestion simply leads to confusion and doubt. I respectfully suggest that we stick with "address".
Viscount Astor: I certainly would not wish to extend legal arguments in courts. With that explanation I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments No. 134 and 135 not moved.]
Clause 47 agreed to.
Clause 48 agreed to.
Schedule 8 agreed to.
Clause 49 [General duties of Commissioner]:
Viscount Astor Viscount Astor moved Amendment No. 136:
Page 27, line 34, leave out subsection (1) and insert—
("() It shall be the duty of the Commissioner—

(a) so to perform his functions under this Act as to promote the observance of the requirements of this Act by data controllers, and

(b) after consultation with the parties affected, to promote good practice by data controllers.").

The noble Viscount said: I was concerned about the drafting of Clause 49 on the general duties of the commissioner. There is no clear distinction between the commissioner's two-fold duty. My amendment attempts to make this distinction clear, and to give primacy to promoting the observance of the requirements of the Bill. At the moment as far as I read it, it is the wrong way round. It seems to me that you cannot promote good practice if it is not within the legislation.
My second amendment relates to the development and promotion of good practice beyond the specific requirements of the Bill. Prior consultation should be considered in the case of good practice which goes beyond the legislation. That is why I have put forward the amendment. I beg to move.
Lord Craig of Radley: I speak to Amendment No. 138, which is also in the names of my noble friends Lord Flowers and Lord Phillips.
The purpose of this probing amendment is to establish whether there is an intention to tighten the existing voluntary codes of practice for the way in which data, captured by CCTV or other surveillance systems, are handled, stored and disposed of. I am not sure whether this is the right place in the Bill to address this topic. However, Clause 49(3) lays on the commissioner the

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task, where he deems it appropriate, to prepare and disseminate codes of practice for guidance as to good practice. It seemed therefore an opportune point to raise the need or otherwise for more than voluntary codes.
Perhaps I may refer again to the Science and Technology Select Committee Inquiry into the Use of Digital images as Evidence, which I chaired. We gave particular consideration to the current voluntary code which the Local Government Information Unit (LGIU) issued for CCTV. It was called 'A Watching Brief. I have a copy with me here.
It was in general regarded as an excellent document, which had been widely discussed and well researched. It seems to command wide acceptance. But it is without teeth; it is voluntary. It is, I understand, Home Office policy to require that those bodies which are given grants or other help with public space surveillance systems should adopt the LGIU Code of Practice. In our inquiry we found that there was a tendency, by no means necessarily with evil intent, for surveillance operators and owners to pick and choose within the details of the code. In other words, the code, without teeth, was not invariably followed, and there was no way to enforce the requirements of this or any other similar code.
The LGIU in the introduction to its code foresees the possible need in future for a statutory form of control for CCTV. The Select Committee itself concluded, after a very careful discussion of the subject and in the light of the evidence we received, that to maintain public confidence in the use of CCTV and similar surveillance technology for the prevention of crime and public disorder greater control of its use was needed.
We recommended that the Government give urgent consideration to introducing tighter control over any system, either publicly or privately owned, covering sites to which the public had free access. To meet the requirement for continued public support, we would expect this to cover the need for some form of licensing; for statutory or other enforceable codes of practice; and for powers to inspect and audit the use and handling of surveillance systems, including the images, their storage and disposal—tasks which would seem to lie within the remit of this Bill's commissioner.
We recognise that this is not as simple or straightforward as just stating it; and further complications may arise because of overlap with other regulatory codes, for example the broadcasting one, which were mentioned earlier by the noble Viscount, Lord Astor, and the noble Baroness, Lady Nicholson of Winterbourne, when speaking to Clause 31.
However, we were encouraged by the Home Office evidence we received which told us that the Government recognised that there were concerns about accountability and control, particularly of CCTV schemes, both public and private. Individually developed codes of practice may lead to lack of consistency and not all schemes are obliged to adopt them. Mrs France (DPR) in her oral evidence referred to the possibility of introducing (through the Bill) codes of conduct which can be used as a baseline for using the powers of enforcement that Parliament then gave.
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The Home Office evidence also said that the Government had stated that they would consider the principle and practicability of underpinning the existing codes with legislation. I was further heartened to hear the Home Office Minister, Mr. Alun Michael, say on radio last Sunday that the Government were now intent on introducing enforceable codes of practice for CCTV.
While I recognise that there must be considerable difficulty in drafting the appropriate legislation to give statutory life to these intentions, I look forward to the Minister's comments on my remarks. Whether here is the appropriate clause in the Bill I am quite unsure. I am no lawyer, but I know that the Minister is supremely better qualified than I am to provide the right answers. I ask him and the Committee to bear in mind that the essential purpose of all this is to act in ways which will sustain and enhance the public's confidence in surveillance systems.
Lord Falconer of Thoroton: Let me deal first with Amendments Nos. 136 and 137, and then Amendment No. 138 to which the noble and gallant Lord, Lord Craig of Radley, has just spoken.
First, the amendment of the noble Viscount, Lord Astor: Amendment No. 136 seeks to reverse Clause 49, which places a duty upon the commissioner to promote good practice and to procure compliance with the law. The noble Viscount would like to reverse the order, but with the greatest respect to him we feel that that is wrong. The clause places good practice first; it is the broader concept encompassing compliance with the relevant legislation, a more specific requirement. As presently drafted, the clause quite clearly focuses attention on that aspect of good practice which consists in observing the requirements of the Act. That is unmistakably emphasised. I am not convinced that the amendment of the noble Viscount, Lord Astor, is an improvement at all. It is right that the general principle of good practice is stated first and that the most important aspect of that principle—compliance with the law—is properly emphasised. I believe that the clause as drafted gets that right.
The second element of the noble Viscount's amendment would place the commissioner under a new duty to consult with the parties affected before seeking to promote good practice. I wonder whether a statutory requirement of this kind on the commissioner is necessary. It raises the question with whom the commissioner is to consult. That would be difficult to prescribe. I believe that that is something that should be left to the commissioner's discretion. In exercising that discretion, the commissioner will always be under a duty to take into account all relevant considerations and it would seem to be a matter for her as to whom she wishes to consult in relation to good practice.
The second amendment of the noble Viscount, Lord Astor, Amendment No. 137, would carry forward this requirement to consult those parties affected to subsection (3)(a) of the clause, which empowers the commissioner to prepare and disseminate codes of practice for guidance as to good practice. Again, and for the same reasons, I wonder whether this is necessary. There might be some advantage in requiring the

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commissioner to consult before issuing definitive codes of practice, and I shall certainly have another look at this. However, in the light of the other comments I have made, I hope the noble Viscount, Lord Astor, will consider withdrawing his amendment.
Amendment No. 138, moved by the noble and gallant Lord, Lord Craig of Radley, appears to seek to create stronger regulatory powers for the commissioner. It requires that, where she considers it appropriate to issue a good practice code of conduct, that code should be legally enforceable. The commissioner already has the necessary regulatory powers and this amendment will, in fact, give him or her less flexibility. Under the Bill, if the commissioner considers it appropriate to issue a code, it will be enforceable to the extent that it is based on the Bill's regime.
In particular, the first principle in Schedule 1, requires that,
"Personal data shall be processed fairly and lawfully",
so that if any code of practice that she may choose to issue reflects that obligation, it will be enforceable. This principle also has detailed interpretation in the first three schedules. The Bill also gives the commissioner the option of including guidance in a code which, although not enforceable, is recognised good practice.
The effect of the amendment will be to prevent her from doing this because in any code of practice that she issues she will have to stick to matters that can be enforced. There is a clear role to be played by enforcement and a clear role to be played by general, non-regulatory guidance. We need both. The effect of this amendment is to restrict the codes of practice that she would issue to enforceable matters. This is not appropriate; the balance struck in the legislation as presently drafted is about right.
I hope, in those circumstances, that the noble and gallant Lord, Lord Craig of Radley, will feel able to withdraw his amendment.
7.30 p.m.
Viscount Astor: I do not know whether the noble and gallant Lord wishes to respond, before I withdraw the amendment?
Lord Craig of Radley: No. I much appreciate what the noble and learned Lord, Lord Falconer of Thoroton, has just said. What is important is the knowledge that closed circuit television is in a regime which ensures and maintains public confidence. I shall obviously read with great care what has been said, but I have nothing further to add to what I have said at this stage.
Viscount Astor: I am grateful to the noble and learned Lord for his response. I am sorry that he does not consider my drafting to be an improvement, but I have to say that it is not the first time and those who draft bills do not often like improvements. I accept that mine may well not be an improvement, but I shall certainly study his comments carefully and I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 137 to 140 not moved.]
Clause 49 agreed to.
Clause 50 [Assistance by Commissioner in cases involving processing for the special purposes]:
Viscount Astor Viscount Astor moved Amendment No. 141:
Page 29, line 2, leave out ("the case involves a matter of substantial public importance") and insert ("there is an arguable case").
The noble Viscount said: At Second Reading I brought forward the issue about legal aid. In effect it is created in relation to this area for the first time under the Bill. I am grateful to the Minister for writing to me about the costs to the commissioner of helping individuals in cases involving the media. He said that costs will be met from the normal funding arrangements, principally the commission's grant in aid, and that costs in such cases are to be a first charge on any costs awarded by a court, or sums received in an out of court settlement by those the commissioner assists.
The amendment inserts the words "there is an arguable case". As I understand it—I have probably the least expertise on legal aid here—in order to obtain legal aid someone has to take the decision that there is an arguable case. My intention in moving the amendment is to elucidate from the Minister exactly how this will work. Who will advise the commissioner that it is a case which should be granted legal aid? What factors will be taken into account? Will there be guidelines for the commissioner? How will it work? Also what happens if the costs suddenly become greater than her grant in aid? This is a new area in relation to this subject. It is important for all noble Lords to be aware how the Government intend the provision to work. I beg to move.
Lord Williams of Mostyn: As the noble Viscount pointed out, Clause 50 provides a power for the commissioner to assist individuals to bring court proceedings to protect their rights in respect of processing for journalistic, artistic and literary purposes. However, it is not every individual's claim that will fall within the category of a case involving a matter of substantial public importance, because there may be cases of significant individual importance and consequence which would not be within the phrase which I specified. That is why we have made it plain that the commissioner may not grant assistance unless, in her opinion, the case indeed involves a matter of substantial public importance.
The formula, "there is an arguable case", embodied in the amendment, is similar to that which sets out one of the conditions for the grant of civil legal aid in the legal aid legislation.
The amendment may have the always laudable purpose of ensuring that public money is not spent on cases with little chance of success. But we have not given this power to the commissioner as a legal aid provision to help those who simply cannot afford to bring their cases to court. What we have wanted to do is to entrust someone, who after all has enormous experience and expertise and is held in high regard, with the power to ensure that important matters of principle are brought before the courts and considered by them. We do not expect the power to be used freely or without

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sensible consideration of the likelihood of success; and in the normal course of events within her discretion the commissioner might well wish to take legal advice as and when appropriate. Sometimes it will be appropriate. Sometimes on the basis of her experience and expertise the commissioner, exercising her mind reasonably, may well not wish to have outside legal advice. That is the purpose of this scheme. It is limited deliberately to those cases of substantial public importance.
Viscount Astor: I am most grateful to the Minister for his explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 50 agreed to.
Schedule 9 [Further provisions relating to assistance under section 50]:
7.45 p.m.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendments Nos. 142 and 143:
Page 54, line 21, leave out from ("bring") to end of line 22 and insert ("to an end any proceedings").
Page 54, line 30, leave out from ("bring") to end of line 31 and insert ("to an end any proceedings").
The noble Lord said: I am speaking to and moving en bloc Amendments Nos. 142 and 143. These are small technical amendments. They have two virtues: they make the grammar better and they make it clearer. I beg to move.
On Question, amendments agreed to.
Schedule 9, as amended, agreed to.
Clause 51 [International co-operation]
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 144:
Page 30, line 5, at end insert—
("() Before granting—

(a) an approval for the purposes of paragraph 8 of Schedule 4, or

(b) an authorisation for the purposes of paragraph 9 of that Schedule,

the Commissioner shall satisfy himself as to the legal protection provided in the country to which a transfer of data is proposed.").
The noble Baroness said: It is with some trepidation that I move this amendment because we went over this ground in the previous Committee sitting; but, on the other hand, I would like to give it a bit of a run this evening because I am not entirely satisfied that the point has been covered. As I said at Second Reading, information in the investigation of a fraudulent claim cannot under the Bill be sent from any European member state to a country which does not have a data protection Act or something similar. As a result, it is feared that reports will not be able to be sent to a number of countries, including, most importantly, the USA.
It has been difficult to come up with a form of wording which will deal with the problem, and I am indebted to the Minister for the statement in his letter to
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me that it will be for data controllers to take the initial view on the adequacy of protection in the third country to which they wish to make a particular transfer.
"If they take the view that protection is inadequate in a particular case, they may be able to rely on one of the exemptions in Schedule 4".
That is a quotation from the letter he very kindly sent me. I am seeking to spell this out in the Bill. Of course I may very well be told that the provision is unnecessary because it exists anyway.
It would be unreasonable, it seems to me, for a transfer not to be permitted to, say, the USA, since much insurance and other business also is global and there are considerable links with the United States. I cannot imagine that a data controller would rule that a transfer to the USA was prevented by the Bill, but my amendment is designed to put a clear obligation upon the commissioner. There may well be countries where there is some form of protection available which may not necessarily be a formal data protection Act.
This is a bit of a problem, and I am not quite certain that we entirely ventilated it when we discussed it at the first Committee day on Monday. I would be grateful for the Minister's response. He knows quite well what we are talking about. I beg to move.
Lord Williams of Mostyn: My noble friend's amendment, as she said, relates to Schedule 4, setting out the grounds on which transfers can be made to countries where adequacy of protection is not assured. Paragraphs 8 and 9 of the schedule allow those transfers where adequate safeguards are provided in the context of the actual transfer itself, so in terms of mechanical working, as it were, that offers a benefit to the sort of organisational users to which the noble Baroness referred.
Paragraph 8 allows transfers on terms of a kind approved by the commissioner to ensure safeguards. That is what one could call the model contract-type of approach—again something which could easily be used by business organisations, which do have legitimate questions, I readily recognise, of the sort outlined by my noble friend.
Paragraph 9 permits transfers to be made in a manner authorised by the commissioner. Those allow the commissioner flexibility so that there might be one-off authorisations or there might be authorisations of categories of transfer. It is unnecessary, of course, for any controller to seek to rely on either of those provisions if the receiving country indeed provides adequate protection.
If there is no adequate level of protection in third countries, a number of exemptions are offered. I am not sure whether my noble friend's purpose is to ensure that there is an adequate level of protection in the third countries in question before the commissioner exercises her powers under paragraphs 8 and 9; that would be rather circular because the exemptions would not be needed. I hope I have identified correctly the noble

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Baroness's concerns and I hope I have been able to address them sensibly in those brief remarks about the way that paragraphs 8 and 9 can be made to work.
Baroness Turner of Camden: I thank the Minister for his explanation, which is very useful. I agree with him. When I drafted the amendment I wondered whether I had achieved the purpose I was after. The Minister has put his finger on that in referring to the last sentence in the amendment. However, I am grateful to him that I now have on record his view about what the commissioner may do and the way in which the concerns that have already been voiced could adequately be dealt with. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 agreed to.
Clauses 52 and 53 agreed to.
Clause 54 [Confidentiality of information]
Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 145:
Leave out Clause 54 and insert the following new clause—

Official Report of the Grand Committee on the Data Protection Bill [H.L.]

  CONFIDENTIALITY OF INFORMATION
  (".—(1) Subject to subsection (2), the Commissioner or his current or former servant or agent shall not disclose any information about any person—

  (a) which has come into his possession in the course of carrying out his functions;

  (b) which is not generally available; and

  the disclosure of which would he potentially damaging to any person.
  (2) Subsection (1) shall not apply where, and to the extent that—

  (a) disclosure is necessary for the discharge of the functions of the Commissioner or his current or former servants or agents;

  (b) there is an overriding public interest in disclosure; or

  the person who is the subject of the information consents to disclosure.").
  The noble Baroness said: This is a simple amendment. It merely changes the wording in Clause 54. I believe it offers a clearer and a shorter version of what is down already. I beg to move.
  Lord Falconer of Thoroton: This is a difficult area. Article 28.7 of the directive, to which we are obliged to give effect, requires member states to put the national data protection supervisory authority, which in our case means the commissioner and her staff, under a duty of what the directive calls "professional secrecy". This duty is to apply even after the employment has ended.
  We have thought carefully about how we can achieve this. The only thing that we have been able to come up with is the effect of creating a criminal offence which applies to the commissioner and her staff. I am aware—because I have been told this—that the Data Protection Registrar does not like the approach that the Bill follows. I am told that she believes that it is too heavy handed to put the commissioner's staff—she is less concerned about herself than she is about her staff—under threat of criminal sanction for breach of confidentiality. Speaking for myself, I can entirely understand that and I sympathise with her in relation to that.
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  My noble friend Lord Williams has discussed the matter with her and he has told her that he is very ready to consider an alternative, workable approach if one can be found. So we are not at all adverse, if some solution can be brought to our attention, to put it into effect.
  Unfortunately, I do not think that the noble Baroness's suggested formulation will work because it has no means of enforcement. That appears to be the problem, and I think the commission would look askance at it. If the noble Baroness herself or any other member of the Committee is able to think of a way to give effect to the directive's requirement without what the commissioner has described as the heavy handed approach of a criminal offence, we will readily consider it. If it works in the sense of compliance with obligation under Article 28.7, we will put it into the Bill. I can say no more than that.
  Baroness Nicholson of Winterbourne: I thank the Minister for his kind reply. I believe this wording does in fact sit comfortably with the commissioner's own views, but if it is unenforceable, that is another matter. We shall have to try again. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 54 agreed to.
  Clauses 55 to 57 agreed to.
  Baroness Nicholson of Winterbourne Baroness Nicholson of Winterbourne moved Amendment No. 146:
  After Clause 57, insert the following new clause—

  DATA MATCHING
  (".—(1) In this section—
  "data matching" means the matching of personal data held in different relevant filing systems, whether by different or the same data controller, for the purpose of obtaining information that cannot be obtained other than by such matching
  "government department" includes any executive agency for which the department is responsible.
  (2) Every government department shall prepare, within six months of the date on which this Act is passed, a code of practice relating to data matching.
  (3) A code of practice prepared under subsection (2) above—
  (a) shall contain a commitment not to undertake data matching, whether involving data held within the department or in cooperation with other departments, except in circumstances where it is necessary—

  (I) to fulfil any statutory obligation, or

  (ii) to prevent fraud or other unlawful activity; and

  (b) shall he laid before Parliament.").
  The noble Baroness said: I seek the noble and learned Lord's permission to concentrate on inserting this new clause on data matching. Data matching is the automatic exchange of data held by different official bodies. I refer particularly to official bodies in this new clause, and therefore to Government.
  I am already aware that the detailed drafting is not all that it might have been. It does not cover all relevant data, as has already been pointed out to me by the Data Protection Registrar, and it needs to be tidied up. However, that is not the point. This evening I wish to put the problem before the Committee. It is a large and

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  important problem, and I have offered a solution in the form of codes of conduct for each department, which could be dealt with on the basis of a negative or positive resolution laid before Parliament.
  Geoff Hoon, MP, was a Member of the European Parliament and introduced the legislation in February 1992 to the European Parliament, when he was the rapporteur to the Committee on Legal Affairs and Citizens Rights. He pointed out, correctly, that it is no exaggeration to say that today, in the European Community, it should be possible to write a detailed personal history of every man, woman and child by taking information contained in a variety of files. That is exactly what the Data Protection Bill is all about.
  Data matching, however, is a particular aspect of that, which, even at this stage of the Committee's work, I must talk about, because once again this relates to the right to privacy. I quote again from the European Parliament debate on the legislation. At the convention in June 1995, Medina Ortega commented that the citizen's right to privacy is so large that it prevails over the right to communication, except in special circumstances when people in the public eye are involved. Sierra Gonzalez stated that, bearing in mind the trend for administrations to transfer many kinds of information to other public bodies—which is the key issue we are looking at in data matching—controlling the transfer of data becomes one of the fundamental issues of legislation aiming to regulate data protection. He talked particularly about data liable to manipulation, such as that pertaining to race and ethnic origin and so on.
  Non-statutory codes of conduct covering data matching have already been put into practice in member states such as France and Germany, where data protection authorities have a role. Australia has an Act devoted entirely to data matching, and in New Zealand also, as in Australia, the privacy commissioners have powers to regulate and audit data matching exercises by public bodies.
  Here in the United Kingdom, however, data matching has developed in a rather ad hoc manner. The Audit Commission, for example, has developed powers to require information from local authorities for efficiency studies and so on. Despite the exceptionally wide criticism of the 1997 Social Security Administration (Fraud) Bill—which, as the Ministers know, allows data matching between a very wide range of government departments and local authorities—as lacking any specific measures of data protection against abuse or error, only a non-statutory code of practice was promised. This has still not emerged as far as I know. I remind the Committee that the third data protection principle in the Data Protection Act 1984 is that,
  "personal data held for any purpose should not he used or disclosed in any manner incompatible with that purpose".
  The Social Security Administration (Fraud) Bill changed those rules and has not yet given us any safety valve which would enable us to feel more comfortable with it.
  The data matching by the Audit Commission with the National Fraud Initiative is undertaken by participant authorities, but it does not give the citizen the right to object, or the knowledge that this might happen, despite the right in the convention to be informed of data processing operations involving oneself, of the right to object and of the application of the other principle, that personal data should be used as little as possible. There is also the purpose principle in European Union directives which covers who wishes to use what data, and why. Those principles on data matching are not being significantly enough addressed by the British Government.
  Local authorities are far advanced in information technology mechanisms. They are so far advanced that, although they do not necessarily have data matching processes in practice, they have the capability to do that very easily indeed. I have considerable detail on that following my concern on the poll tax, which brought together for the first time significant amounts of tax and benefit material on individual citizens locally. It was pooled together and put on to computerised records.
  Finally, let me remind the Committee that we are in a seismic explosion of information technology. The capacity for information storage, for example, which I have researched, continues to increase at the rate of 20 to 40 per cent. annually. Many new innovations are coming and there are significant developments of systems which are not influenced by human behaviour outside those systems. In other words, one starts the data-matching exercises and those systems are not human-dependent, they just continue.
  There is also a new concept which should be considered with this which is called "data-mining". It is specifically aimed at probing files and discovering like characteristics of individuals. That has become an industry already in some parts of the world, with,
  "automated techniques used to extract buried or previously unknown pieces of related information from large databases".
  Of course, it is extremely difficult in the modern world to stop these things happening. One place where there is an opportunity is in government, both local and central, because government have ownership of the information that they have collected on citizens and can control how it is used. My proposal suggests that for government purposes codes of practice should be developed by every single department and they should be placed in front of Parliament. I beg to move.
  8 p.m.
  The Earl of Northesk: If I may, I shall speak to Amendment No. 147 which is in this grouping. I do not have a great deal to add to the arguments of the noble Baroness, Lady Nicholson of Winterbourne, on data matching, except possibly to say that I suspect that the practice is very much more prevalent than we are prepared either to imagine or admit.
  Certainly there is a strong argument in favour of some form of statutory control of data matching, bearing in mind its power as an analytical tool and how open it is to potential misinterpretation. My thinking on this

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  matter has been guided in very great part by the observation in the report from the Delegated Powers and Deregulation Committee—I have already cited it—that,
  "developments in computer technology continue to push areas of the law into hitherto uncharted territory".
  Data matching is but one such example, as is video surveillance by CCTV with its associated operations of digital enhancement and manipulation of images, referred to by the noble and gallant Lord, Lord Craig, in his Amendment No. 138.
  To my mind, the difficulty here is how to draft the Bill in such a way that it can take account of technological developments which have data protection ramifications, at the same time as ensuring that appropriate checks and balances are in place to afford proper parliamentary scrutiny of the hitherto uncharted territory, as and when it occurs. Perhaps there is a reference hack to Clause 28(4) here. The new clause I am proposing in this amendment seeks to address this problem.
  In effect, it would supplement the duties relating to codes of practice given to the commissioner by virtue of Clause 49(3). In normal circumstances, these would be non-statutory as with trade associations cited in sub-paragraph (b). With respect to codes drawn up under the proposed new clause, that is to say those that entered uncharted territory, these would have statutory authority and as such would be open to wide consultation and parliamentary debate.
  Obviously techniques such as data matching and CCTV, where under Clause 21 the processing would be particularly likely,
  "(a) to cause significant damage or distress to data subjects, or "(b) otherwise significantly prejudice the rights and freedoms of data subjects",
  would fall within the remit of my proposed amendment.
  Lord Williams of Mostyn: I have considerable sympathy with the underlying concerns which have been expressed so fully by the noble Baroness, not only on this occasion but on earlier occasions. I recognise the rightness of what she says in that government departments, not only central but local, have a vast amount of information on people's private activities.
  If one has the possibility of data matching, one looks at that with a degree of anxiety which was reflected, rightly I believe, by the noble Earl. Equally, the other side of that particular penny, everyone recognises that data matching may well have a proper part to play, not least in fighting crime, in particular fraud.
  The amendment of the noble Baroness would require, as she indicated, every government department and agency to prepare a data matching code of practice within six months of the passage of the Bill. That would apply whether or not the department or agency had any plans or any prospects of undertaking data matching. She specified the nature of the code and I do not trouble the Committee with it. There are one or two technical deficiencies. I mention them not to chide but to be of assistance, in case the noble Baroness wants to return to this matter in due time. I am simply seeking to be helpful.
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  She refers to "relevant filing systems" and that would refer to manual records, and therefore that would miss the particular bull's eye at which she was looking. I stress that I simply seek to be helpful and am therefore likely to be the subject of instant dismissal! If the noble Baroness is going to return to this, I do not want to be in the position of saying, "By the way, there is a technical deficiency", which I regard as the last refuge of the inadequate!
  The next technical deficiency is the definition of "government department", and, again, perhaps we may discuss that privately. There is a deficiency there but it is not of such pulsating interest that I need to develop it further.
  The real question is how do we deal with these matters? The noble Earl had an important point, if I may say so, in that drafting is difficult because one is going to set in stone, if one is not extremely careful, drafting requirements which will not then be competent or have the ability to deal with changed circumstances. We believe that that is an indicator towards a certain degree of flexibility rather than the degree of rigidity which might be consequent on the amendments of the noble Baroness.
  At the moment, the Bill is in general terms. It requires that personal data shall be processed fairly and lawfully on the first data protection principle. That means it could only be done lawfully by government departments and their agencies if it were under the authority of statute, common law or by virtue of royal prerogative. We think that that is a degree of stringency in itself.
  What we are looking to, essentially, is Clause 49(3) of the Bill. That enables the commissioner to prepare and disseminate codes of practice, to encourage the preparation and dissemination of such codes by trade associations (which includes bodies representing data controllers) and to advise on the adequacy of any such codes submitted for her consideration. They would not, I readily concede, need to be laid before Parliament, but they would be expected to have a detailed statement of the application of the enforceable data protection principles.
  That, I hope, would meet the purpose upon which we are all generally agreed, together with the warning, which I have accepted, about the desirability to have a degree of flexibility to meet quite rapidly-changing technological conditions. We believe that that process, which will be under the remit and informed control of the commissioner, gives us a preferable solution because it offers flexibility and informed input rather than something which is a statutory code.
  We ought perhaps to pause for a moment on Clause 21 because that allows preliminary assessment or prior checking. It relates in particular to processing that is likely to cause significant damage or distress, or significantly otherwise to prejudice the rights and freedoms of data subjects.
  The commissioner can prohibit processing. If during the prohibited period processing occurs it will be an offence. If the commissioner concludes that the processing is unlikely to comply with the Bill's requirements, the processing may still go ahead, but at the data controller's risk of enforcement action.

  CWH 131
  The particular processing to which the clause applies is to be specified in an order that will be subject to the affirmative resolution procedure. No decisions have been made as to which categories of processing operation should be subject to preliminary assessment—prior checking—but Members of the Committee will be aware from the proposals that we published last July that data-matching operations are primary candidates. I undertake to pay particular regard to the concerns that were so admirably deployed and explained by the noble Baroness.
  On the second amendment, the general points I have made apply and I do not repeat them. The noble Lord's amendment would bring about a situation whereby, where processing was subject to preliminary assessment, it could only be done in accordance with a code of practice issued by the Secretary of State, subject to affirmative resolution. We do not ourselves see the necessity for that because processing is already able to be the subject of scrutiny of preliminary assessment. What we are looking for at the moment is the development of codes of practice under the remit—I cannot stress this too highly—of an admirable commissioner and a first-rate department. We believe that that is likely to be a productive way ahead.
  I hope that I have gone at least some significant way—if not to the final winning post—in meeting the concerns, which I fully recognise are legitimate and widely held by a large number of people.
  Baroness Nicholson of Winterbourne: I thank the Minister very much for his clear explanation and for the knowledge that he has given us. I believe it is very important in the Data Protection Bill for this subject to be properly addressed. As has already been seen from the social security fraud legislation, it will flow in to other legislation now more and more. I want both Houses of Parliament to have the opportunity on a constant basis to examine the infringement of citizens' privacy, which is so large when data matching happens without their knowledge and consent.
  I welcome the Minster's acceptance of my concern and his sharing of it. I will look carefully, as I know the noble Earl will, at what he has said, and then see whether maybe he could be persuaded to go a little bit further later on; but it is a most welcome statement that he has made.
  Amendment, by leave, withdrawn.
  [Amendment No.147 not moved.]
  Clauses 58 and 59 agreed to.
  Clause 60 [Orders, regulations and rules]:
  Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 148:
  Page 34, line 6, leave out (" 64(2)") and insert (" 64(3)").
  The noble Lord said: The drafting is incorrect. There is a reference to "Section 64(2)" and it should be "Section 64(3)". I beg to move.
  On Question, amendment agreed to.
  Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 149:
  Page 34, line 12, at end insert—
  ("section 13(5)").
  The noble Lord said: I shall speak to Amendments No. 149 and 152, if I may. These amendments provide that an order to prescribe circumstances other than those specified in Clause 13 in which automated decision-making may be permitted shall be subject to the affirmative, not the negative, resolution procedure. Because an order under this clause could affect the rights of data subjects, we have thought about it and we accept that it should be subject to the fuller parliamentary scrutiny of the affirmative process. This change was recommended by the Select Committee on Delegated Powers and Deregulation. We thought about its recommendation and believed that the proper thing to do was to accept it. That is the purpose of these amendments. I beg to move.
  On Question, amendment agreed to.
  [Amendments Nos. 150 and 151 not moved.]
  Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 152:
  Page 34, leave out line 23.
  The noble Lord said: I have already spoken to this. I beg to move.
  On Question, amendment agreed to.
  [Amendments Nos. 153 and 154 not moved.]
  Clause 60, as amended, agreed to.
  Clauses 61 to 63 agreed to.
  Schedule 10 agreed to.
  Schedule 11 [Repeals and revocations]:
  Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 155:
  Page 57, line 36, column 3, leave out ("paragraph 15") and insert ("paragraphs 15 and 40").
  The noble Lord said: I wonder whether I might speak to Amendments Nos. 155 and 156, and for a purpose which will appear later, inquire of the noble Viscount as to whether he intends to move his objection to Clause 64 stand part.
  Viscount Astor: Before the noble Lord arrived I did say that this was purely a way to say something about the Government's proposals on transition.
  Lord Williams of Mostyn: These are both technical amendments which delete references to the 1984 Act in subordinate legislation which are no longer needed. I beg to move.
  Viscount Astor: The Motion on Clause 64 is grouped with this amendment. As I said earlier, I did notify the Ministers earlier that it was to ask the Government what are their proposals with regard to transition periods. I understand that the Government will come forward with amendments at some stage.
  There will be very little time between Royal Assent and the implementation of the directive on 24th October this year for businesses to ensure that their systems will

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  be able to comply. Industry faces quite a few hurdles at the moment. Not only are there major issues relating to data protection, but there is the year 2000 and the millennium. For some, there are changes required for dealing with the forthcoming euro currency. For some of us who are involved in the financial services industry, there are major changes in the regulatory structure under the Financial Services Authority. All this amounts to a great deal of work.
  In the White Paper, the Government state that they will use the full extent of the three years within which existing processing must be brought into full compliance. What have the Government considered? I hope the Government will stand by their assurance to take full advantage of the transition period which is allowed under the directive in Article 32.
  Lord Williams of Mostyn: I am grateful for that. As is well known now, the directive comes into force by 24th October, which I readily concede is much closer than one is prepared to anticipate. There is the three-year window which allows processing already under way on that date to be brought fully into compliance in respect of automated processing. Then there are six years beyond that to bring structured manual filing systems into conforniity.
  Dealing specifically with the noble Viscount's question, we are preparing transitional provisions which will take advantage of those discretions. They will be tabled as soon as possible. I cannot give the noble Viscount or the Committee a precise date, but I will say that we shall try, if at all possible, to have them ready by Report stage.
  The reason I asked whether the noble Viscount was going to say anything on clause stand part in respect of Clause 64 was, first of all, to say that the Solicitor-General and I have had every assistance in this
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  Committee in the Moses Room. That demonstrates that this procedure for a Bill of this sort is apt and productive.
  I also ought to say that the Bill team has been absolutely first-rate. There were late amendments on Friday, for which I chide and criticise no one, but that meant the whole weekend was occupied. There were late amendments last night, which meant a great deal of work. To be able to turn to the Bill team and ask when they will have the transitional provisions of the noble Viscount, Lord Astor, ready, and have the willing and cheerful answer that, "We will do our best by Report", is a strong tribute to public servants, who are too often overlooked.
  Viscount Astor: I am grateful for the Minister's remarks. I certainly echo his comments about all the officials in the department.
  On Question, amendment agreed to.
  Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 156:
  Page 58, line 3, at end insert—

  (" S.I. 19962827.

  The Open-Ended Investment Companies (Investment Companies with Variable Capital) Regulations 1996.

  In Schedule 8, paragraph 3 and 26.")

  The noble Lord said: I have already spoken to this amendment. I beg to move.
  On Question, amendment agreed to.
  Remaining schedule and clause agreed to.
  Title agreed to.
  Bill reported with amendments.
  The Deputy Chairman of Committees (Lord Elton): This concludes the Committee's proceedings on the Bill.
  The Committee adjourned at twenty minutes past eight o'clock.

  Iraq: UK Aid Programme
  The Earl of Sandwich
  asked Her Majesty's Government:

  Whether they will ensure that any increase in the oil-for-food programme in Iraq is not at the expense of the United Kingdom bilateral programme through British non-governmental organisations. [HL706]

  Lord Whitty
  The UK co-sponsored the new Security Council Resolution 1153 to implement the UN Secretary-General's recent recommendation to improve and expand the oil-for-food scheme. However, the UK does not finance the oil-for-food programme in Iraq, it is funded entirely from Government of Iraq oil revenues. We are supporting Non-Governmental Organisations (NGOs) which target the most needy people or carry out de-mining operations. We will be discussing future plans with NGO partners in the light of the proposed increases in the oil-for-food scheme.

  Higher Education: Response to Scottish Committee of Inquiry Report
  Lord Carmichael of Kelvingrove
  asked Her Majesty's Government:

  When it will publish its response to the Report of the Scottish Committee of the National Committee of Inquiry into Higher Education.

  The Parliamentary Under-Secretary of State Scottish Office (Lord Sewel)
  The Minister of State with responsibility for Education at the Scottish Office has today placed in the Libraries of both Houses copies of Her Majesty's Government's response to the report of the Scottish (Garrick) Committee of the National (Dearing) Committee of Inquiry into Higher Education.

  My honourable Friend the Minister of State and I would like to commend Sir Ron Garrick and his committee for their work in producing such a comprehensive report in a comparatively short time. Her Majesty's Government looks forward to working with the higher and further education sectors in implementing the agreed recommendations and the main Dearing report, to which it relates.

  Nurses, Midwives and Health Visitors: Self-Regulation
  Lord Judd
  asked Her Majesty's Government:

  How far the purpose and terms of reference of the current review of the working of the Nurses, Midwives and Health Visitors Acts are consistent with the health policy priorities set out in their recent White Paper, The New NHS (Cm 3807). [HL619]
  WA 96
  The Minister of State, Department of Health (Baroness Jay of Paddington)
  The recent White Paper,The New NHS, includes a commitment to building on and strengthening the existing systems of professional self-regulation to ensure that they are open, responsive and publicly accountable, and recognises the key role of the regulatory bodies. The current independent review of the Nurses, Midwives and Health Visitors Act presents an important opportunity to stimulate debate on providing the nursing, midwifery and health visiting professions with an appropriate framework for professional self-regulation which provides protection to the public.

  Late Abortions: Protection of Live Infants
  Lord Braine of Wheatley
  asked Her Majesty's Government:

  Further to the Written Answer by Baroness Jay of Paddington on 10 February (WA 165), whether, in cases of infants born alive as a result of late abortions, the Secretary of State requires that arrangements must be made with a neonatal unit or at a nearby hospital; what checks, if any, are made to ensure that all such infants are transferred from the clinic/hospital; and whether they will publish in the Official Report or place in the Library of the House any figures showing the number of infants given this treatment, with the numbers of those who survived and those who did not. [HL609]

  Baroness Jay of Paddington
  All private sector clinics and hospitals approved by the Secretary of State for Health to carry out termination of pregnancy between 20 and 24 weeks' gestation must agree to comply with certain requirements of approval. One requirement is that arrangements must be made with a neonatal unit on site or at a nearby hospital for the immediate transfer of any infant born alive. The clinic/hospital is required to provide all the necessary emergency treatment for any infant born alive, pending transfer to the neonatal unit. This requirement is contained in the Compendium of Guidance, key extracts of which were sent to all health authorities and National Health Service trusts in 1995.

  Clinics approved by the Secretary of State are inspected by departmental officials. Arrangements for late terminations are checked as part of the inspection. Information on any live births is not collected.

  Abortions: Reduction
  Lord Braine of Wheatley
  asked Her Majesty's Government:

  Whether they are taking steps to reduce the number of abortions in Great Britain. [HL620]

  Baroness Jay of Paddington
  The decision to seek a termination is a difficult and often agonising one for any woman. The Government are keen to find ways of reducing the number of unintended and unwanted conceptions which may, in some cases, lead to abortion.
  WA 97
  The National Health Service provides a wide range of family planning services through general practitioner services and family planning clinics. This includes advice and counselling on family planning as well as the provision of contraceptives. All methods of contraception available under the NHS are obtainable free of charge.

  Through Section 64 of the Health Services and Public Health Act 1968 the Government fund voluntary organisations working in the field of family planning and contraceptive services, including the Family Planning Association (FPA), Brook Advisory Centres, the Sex Education Forum and Marriage Care. They also fund the Contraceptive Education Service (CES), which aims to raise awareness and understanding among the general public and professionals about contraceptive methods and services.

  In November 1997 the Government announced a national programme to tackle the high rate of teenage conceptions in England. The principal aim of this programme is to reduce the number of teenage conceptions by supporting young people in deferring sexual activity and improving access to advice and counselling services, including contraception for those who are sexually active.

  Abortions on Girls under 16
  Lord Braine of Wheatley
  asked Her Majesty's Government:

  How many of the abortions performed on girls under 16 years in each of the last five years were performed without the knowledge or permission of a parent or guardian. [HL621]

  Baroness Jay of Paddington
  This information is not collected centrally.

  An abortion should only be performed on a girl under 16 without the permission of a parent or guardian if, in the clinical judgment of the doctor concerned, it is in the patient's best medical interest and she has sufficient maturity and understanding to appreciate what is involved.

  Abortion Methods
  Lord Braine of Wheatley
  asked Her Majesty's Government:

  When and how each of the current methods of abortion used in British abortion clinics were developed; and by whom; and [HL646]

  Whether any abortion techniques developed in Nazi concentration camps have been, or are currently being, used in British abortion clinics and hospitals; and [HL647]

  Whether they will seek to obtain from Yad Vashem in Jerusalem documentation concerning abortion techniques developed in Nazi concentration camps using Jewish and gypsy prisoners; and [HL648]
  WA 98
  Whether they will seek to obtain from the United States Holocaust Memorial Council and Museum documentation concerning abortion techniques developed in Nazi concentration camps using Jewish and gypsy prisoners. [HL649]

  Baroness Jay of Paddington
  Precise information on when and how each of the current methods of abortion used in British hospitals and clinics was developed, and by whom, is not available. We have no information on whether any abortion techniques developed in Nazi concentration camps have been, or are currently being, used in British hospitals and clinics.

  Clinicians are concerned to ensure that their practice is safe and acceptable, as judged by an authoritative and responsible body of professional opinion. The development and adoption of methods of treatment, including treatment for abortion, is informed and guided by continuing critical appraisal of the findings of research reported in authoritative journals.

  Burford Community Hospital
  Lord Walton of Detchant
  asked Her Majesty's Government:

  Whether they support the proposal of the Oxfordshire Health Authority to close the Burford Community Hospital, which serves both in-patients and out-patients in West Oxfordshire and where a major capital building programme to provide a day unit, costing £210,000, was completed and opened in April 1997. [HL669]

  Baroness Jay of Paddington
  Oxfordshire Health Authority and Oxfordshire Community Health National Health Service Trust are currently reviewing community hospitals with the aim of providing a fairer distribution of resources across the county while achieving essential savings of £1.5 million over four years.

  The proposals will be considered at a joint board meeting on 25 February and the suggested options will then be subject to a three-month period of public consultation, when everyone will be able to make their views known.

  Fluoridation of Water
  Earl Baldwin of Bewdley
  asked Her Majesty's Government:

  Further to the Written Answer by the Baroness Jay of Paddington on 12 November 1997 (WA 34), whether the announcement about water fluoridation is now reflected in Chapter 3.33 of the Green Paper, Our Healthier Nation. [HL672]

  Baroness Jay of Paddington
  We will not now he finalising our policy on water fluoridation until we have considered responses to the Green Paper.

  Diabetic Pen Injection Devices: Payment for Needles
  Lord Morris of Manchester
  asked Her Majesty's Government:

  What is the current state of their consideration of whether diabetics using pen injection devices should be required to pay for needles; and what further consideration is needed before they can announce a decision. [HL667]

  Baroness Jay of Paddington
  Department of Health officials are in discussion with the major suppliers on issues relating to cost. We should be able to make decisions when those discussions have been concluded.

  British Council of Organisations of Disabled People
  Lord Morris of Manchester
  asked Her Majesty's Government:

  What has been the level of government funding of the British Council of Organisations of Disabled People in each year since such funding began; what has been the real terms increase or decrease (expressed on a year-by-year basis); and whether they have any plans to increase government funding in the next financial year. [HL591]

  Baroness Jay of Paddington
  The Department of Health has funded the British Council of Organisations of Disabled People since 1985–86. Total funding from the department for each year, together with the real terms increase/decrease year-on-year, is shown in the table. Funding for 1998–99 has yet to be decided.

  Year

  Amount (£)

  Real Terms Increase/Decrease +/-

  1985–86

  9,000

  —

  1986–87

  10,000

  +7.85%

  1987–88

  6,500

  -38.29%

  1988–89

  15,000

  +116.30%

  1989–90

  32,000

  +99.41%

  1990–91

  33,000

  -4.51%

  1991–92

  37,000

  +5.39%

  1992–93

  53,000

  +37.47%

  1993–94

  88,000

  +61.35%

  1994–95

  77,000

  -13.80%

  1995–96

  53,000

  -33.01%

  1996–97

  128,000

  +134.99%

  1997–98

  123,000

  -6.43%

  Iraq: Protection of Ground Forces
  Lord Kennet
  asked Her Majesty's Government:

  Whether they have undertaken to provide ground troops for a United States or United States-United Kingdom attack on Iraq or as part of a follow-up to a United States-United Kingdom bombing attack on that country; and if so what immunisations are being provided for British troops who may be sent to Iraq, in case the United States uses its new burrowing
  WA 100
  nuclear-armed weapon to destroy possible caches of biological weapons or their precursors in Iraq. [HL587]

  The Minister of State, Ministry of Defence (Lord Gilbert)
  We have no plans to provide ground forces for an attack on Iraq. We recognise, however, that Saddam Hussein has in the past made use of chemical weapons. A range of defensive measures are available to protect UK forces in the region against chemical and biological warfare agents. These include physical and medical countermeasures, the use of which is kept under constant review in the light of available advice.

  Gulf War: Morbidity Reports
  The Countess of Mar
  asked Her Majesty's Government:

  To what establishment the daily morbidity reports compiled during Operation Granby were despatched, whether they are retained and, if they are, whether they would be made available to researchers investigating illness in members of Her Majesty's Armed Forces who served in the Gulf. [HL230]

  Lord Gilbert
  During Operation Granby, daily morbidity reports were sent from British units in the Gulf to the Chemical Defence Establishment at Porton Down, now known as the Chemical and Biological Defence (CBD) Sector of the Defence Evaluation and Research Agency. The intention was to collect data which would alert MoD in the event that a CBW attack occurred which was not detected by other means. The raw data from these reports were analysed at CBD and reported to MoD at regular intervals. CBD's reports and some of the raw data are held at CBD Porton Down. CBD found no evidence that any undetected CBW attack had occurred; copies of their reports will be made available to the study teams carrying out epidemiological research on behalf of the MoD into Gulf veterans' illnesses and can be provided to other bona fide research teams on request.

  A separate morbidity reporting system, designed to detect outbreaks of infectious disease within the Army was also implemented. Reports were analysed by HQ 1 Armd Div in-theatre. Collated information relating to some Army units is still held by the MoD in hard copy. This information will also be made available to bona fide research teams.

  Gulf War Medical Assessment Programme: Clinical Audit
  The Countess of Mar
  asked Her Majesty's Government:

  Whether it is their intention to commission a clinical audit of the Medical Assessment Programme (MAP) for those suffering Gulf War illnesses in view of the adverse reports from several veterans who have attended the MAP; if so, when; and, if not, whether they will do so as a matter of urgency. [HL569]
  WA 101
  Lord Gilbert
  The Ministry of Defence announced plans to conduct a thorough audit of the Medical Assessment Programme (MAP) during the course of this year in the detailed policy statement Gulf Veterans' Illnesses: A New Beginning, which was published last July. It remains our intention to commission an external body to carry out such an audit during 1998. The audit will focus on all aspects of patient care and the service provided and will address the range of tests and examinations currently undertaken at the MAP and the issue of whether treatments currently recommended are appropriate and benefit patients' health. The audit will form the basis of further work which we intend to have done in conjunction with the Department of Health concerning the general patient care of Gulf veterans.

  Strategic Defence Review: Military Training Requirements
  Viscount Addison
  asked Her Majesty's Government:

  Whether they will establish an independent review of military training requirements to assess the implications of the Strategic Defence Review for training in the United Kingdom, making particular reference to the effect on the National Parks of England and Wales. [HL584]

  Lord Gilbert
  Military training requirements are being taken into account in the Strategic Defence Review. We have also sought the opinions of environmental and countryside groups, which will help to inform our conclusions. At present we have no plans to hold an independent review.

  Lifelong Learning
  Lord Graham of Edmonton
  asked Her Majesty's Government:

  When they will publish the consultation paper on lifelong learning. [HL745]

  The Minister of State, Department for Education and Employment (Baroness Blackstone)
  My right honourable friend the Secretary of State is today laying before Parliament a Green Paper on lifelong learning,The Learning Age (Cm 3790). He is also placing in the Library copies of the Government's response to the report of the National Committee of Inquiry into Higher Education under the chairmanship of Sir Ron Dearing and the response of my right honourable friend the Secretary of State for Education and Employment to the report of the Further Education Funding Council's Widening Participation Committee under the chairmanship of Helena Kennedy QC, now Baroness Kennedy, all of which are being published today.

  Lifelong learning is at the heart of the Government's education and training policies. Higher education and further education play key roles in lifelong learning. The Learning Age sets out the Government's vision for a learning society in which learning is easily available, valued and enjoyed—an everyday feature of life for
  WA 102
  all people of all ages—and we have the skilled and qualified workforce that will be essential in the 21st century.

  The Learning Age aims to engage employers, trades unions, individual men and women and those who deliver and plan education and training to work with us to develop a "learning society". I hope our proposals and the questions we pose will stimulate a large response.

  Over-quota Fish Catches
  Lord Stoddart of Swindon
  asked Her Majesty's Government:

  Further to the Written Answer by the Lord Donoughue on 12 January (WA 187), what procedure should be followed by fishermen if their catch includes over-quota fish as a mixture of species. [HL678]

  The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue)
  Under the conditions set out in UK fishing vessel licences, over-quota fish must not be retained on board, transhipped or landed. Such fish should be returned to the sea. Where the discarding of fish is prohibited in the waters of third countries, any over-quota fish should be discarded immediately on return to Community waters.

  Angling: Fish Suffering
  Lord Patten
  asked Her Majesty's Government:

  Whether they regard the hooking, release and subsequent re-hooking of fish as a practice in coarse fishing on rivers and canals to be cruel. [HL688]

  Lord Donoughue
  Research has shown that great care must be taken in attributing to fish sensations similar to those experienced by humans or other mammals. Nevertheless, we are keen to ensure that those involved in angling are aware of the need to avoid unnecessary harm and minimise any stress caused to fish. Guidance and advice on a wide range of aspects, such as how best to handle and hold fish is readily available from angling organisations and the Environment Agency.

  SEAC Review Recommendations: Implementation
  Lord Bassam of Brighton
  asked Her Majesty's Government:

  What action they have taken to implement the recommendations in the SEAC (Spongiform Encephalopathy Advisory Committee) Review. [HL750]

  Lord Donoughue
  The review recommended a number of additional appointments to the Committee, including an expert from the Institute for Animal Health and a representative of the public interest. My right honourable friends the Minister of Agriculture, Fisheries
  WA 103
  and Food, and the Secretaries of State for Health, Scotland, Wales and Northern Ireland have made the following appointments to the Committee:

  Professor Adriano Aguzzi;

  Professor Roy Anderson FRS;

  Professor Anne Ferguson;

  Dr. Peter Goodfellow FRS;

  Mrs. Harriet Kimbell, Representative of the public interest;

  Dr. Christopher Bostock, Representative of the Institute for Animal Health.

  The review recommended that members not on fixed term appointments who had served less than three or six years should be formally appointed up to the end of the third and sixth year respectively; and that those who had served more than six years should be put on a fixed appointment for one year, all with the possibility of extension in individual cases. The following additional terms on the Committee commencing on 1 January 1998 have been offered to, and accepted by, members:

  Professor Sir John Pattison (Chairman) and Dr. Robert Will, Director of the CJD Surveillance Unit, (Deputy Chairman), a further three years;

  Professor Fred Brown FRS, Dr. Richard Kimberlin, Mr. David Pepper and Dr. William Watson, who have served on SEAC for more than six years, a further one year;

  Professor William Hueston, who has served on SEAC for more than four years, a further two years.

  The review also recommended that SEAC meetings should be attended by:

  a technical adviser from the Central Veterinary Laboratory of MAFF's Veterinary Laboratory Agency;

  an observer from the Health and Safety Executive; and

  an observer from the Transmissible Spongiform Encephalopathy (TSE) Research and Development Funders' Co-ordination Group, which represents the major funders of TSE research.

  All other recommendations of the review have been implemented. An annual report will be published later this year and we will announce proposals for the participation of the Food Standards Agency in the secretariat in due course.

  Wales: Mental Health Provision Review
  Lord Moran
  asked Her Majesty's Government:

  Whether the review of the policy of care in the community is to be extended to Wales as well as England or whether there is to be a separate review in Wales. [HL691]

  The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)
  Wales has its own individual approach to mental health provision based on Mental Illness—A Strategy for Wales, issued
  WA 104
  in 1989. We are currently consulting with people who use mental health services, carers, service planners and providers in the statutory and voluntary sector to see whether our approach meets their needs. Any decisions for future new policies will take their views into account. We will, of course, keep in close touch with the Department of Health in their work.

  EU Common Visa List
  Lord Stoddart of Swindon
  asked Her Majesty's Government:

  Whether they will list those Commonwealth countries whose citizens require entry visas to the United Kingdom as part of the common visa regulations of the European Union. [HL708]

  Lord Williams of Mostyn
  The following Commonwealth countries are included on the common visa list of the European Union:

  Bangladesh

  Cameroon

  Fiji*

  Gambia

  Ghana

  Guyana

  India

  The Maldives

  Mauritius

  Mozambique

  Nigeria

  Pakistan

  Papua New Guinea

  Sierra Leone

  Sri Lanka

  Tanzania

  Uganda

  Zambia

  *Although Fiji is no longer a member of the Commonwealth, its nationals are treated as Commonwealth nationals for immigration purposes.

  Canterbury Prison
  Lord Harris of Greenwich
  asked Her Majesty's Government:

  What response they propose to make to the report of Her Majesty's Chief Inspector of Prisons on HM Prison, Canterbury, in which he expresses his concern about the number of managers holding acting rank without being promoted, some for as long as four years. [HL641]

  Lord Williams of Mostyn
  The Government welcome the Chief Inspector's report on his inspection of Canterbury prison. While the Chief Inspector did not make any specific recommendations in his report about
  WA 105
  the number of staff on temporary promotion to managerial grades, the Prison Service has taken immediate action. A series of competitive promotion boards and assessment centres, which will run until August 1998, have been scheduled to fill these posts on substantive promotion.

  Access to the Open Countryside
  Baroness Nicol
  asked Her Majesty's Government:

  When they will publish the consultation paper on Access to the Open Countryside. [HL804]

  The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman)
  The Government have issued today their consultation paper setting out proposals for giving people greater access to the open countryside in England and Wales. Copies have been placed in the Library of both Houses.

  The consultation paper reflects the Government's determination to fulfil their manifesto commitment to give greater freedom for people to explore our open countryside.

  Our proposals have the potential to benefit the millions of people who already enjoy, or who will in future enjoy, walking in the countryside. Current arrangements for access to areas of open countryside, rather than rights of way, have not been used extensively and are not generally well understood. In many cases, people are understandably confused about the areas of land on which they are entitled to walk or the circumstances under which they may do so. We need to secure more and better quality access with greater clarity and certainty for all concerned.

  Our proposals are about giving greater access to open countryside, not to developed or cultivated land. Our first priority is to increase access to mountain, moor, heath, down and registered common land. In total these cover no more than 12 per cent. of the land in England and Wales. We also wish to see more access to other areas of open country such as woodland, cliffs and foreshore, and will introduce measures to encourage this if necessary.

  In developing our proposals, we intend to ensure that a proper balance is struck between the rights and responsibilities of those who will benefit from greater access and of others affected by it. We are determined that those who will enjoy greater access should be responsible: the countryside and people's property and livelihoods must continue to be respected and properly protected. The Government recognise the need for sensible restrictions on the freedom of access to take account of the genuine needs of owners and other users of the land. Similarly, we recognise that access to some areas or at some times needs to be limited for reasons of health or safety, nature conservation, or archaeology.

  We are prepared to consider all options, including voluntary arrangements, for achieving our objective of substantially greater access, and will consider carefully
  WA 106
  all responses to the consultation paper before reaching a decision on the best way forward. Assessment of the costs and benefits of different options will be a key part of our consideration. Costs to government (central and local), to owners and occupiers, and to the relevant statutory agencies will certainly be taken into account in considering how best to proceed. We do not expect that management of greater access will have major financial implications as, in most places, no changes will need to be made to accommodate walkers. We shall be making an environmental assessment and regulatory appraisal of our proposals, as necessary.

  We are keen to ensure that the consultation process provides a genuine opportunity for all those interested to put forward their own ideas and views. We shall be allowing three months for consultation, ending on Friday 5 June. As well as considering written responses to the paper, we plan to hold meetings with organisations representing walkers, farmers and other owners and occupiers, and others with an interest. We shall also be drawing on the experience and expertise of the relevant statutory agencies and local authorities in firming up our ideas, and may need to consult further on some issues before announcing our conclusions, which we hope to do later this year.

  Disabled Tax Class Vehicles Registration
  Lord Morris of Manchester
  asked Her Majesty's Government:

  What they estimate the annual yield will be to the Exchequer from imposing the fee for first registration on disabled people registering new vehicles. [HL665]

  Baroness Hayman
  Vehicles first registering in the disabled tax class will be exempt from the fee.

  Lord Morris of Manchester
  asked Her Majesty's Government:

  What is the estimated annual cost to the government-funded Drivers Fund and Mobility Equipment Fund administered by Motability of introducing a fee for first registration of vehicles; and [HL663]

  How many disabled people who will have to pay the fee for first registration of vehicles had to seek help from the Drivers Fund and Mobility Equipment Fund to meet part of the cost of acquiring and adapting a vehicle in 1996–97. [HL664]

  Baroness Hayman
  Access to the Drivers Fund and the Mobility Equipment Fund is open only to recipients of the higher rate mobility component of Disability Living Allowance (DLA).

  It is our intention to exempt from the fee any vehicle registered in the "disabled exempt" tax class, entry to which is open to disabled drivers (or appointed nominees) in receipt of DLA at the higher rate and in possession of a VED certificate of entitlement. Therefore, there will be no cost to the Drivers Fund and Mobility Equipment Fund.