Sitting of 22 January 1998

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD
  The Minister was asked—
  AGRICULTURE, FISHERIES AND FOOD

    Common Agricultural Policy
    Mr. Paterson: What percentage reduction in the EU agriculture budget he will be seeking in discussions in the Council of Ministers on CAP reform. [22301]
    The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham): I shall be seeking CAP reforms that deliver lower prices to consumers in the short term and savings to taxpayers in due course.
    Mr. Paterson: Ten days ago I addressed 4,000 angry, upset farmers in Oswestry. Numerous farmers from the crowd said that they wanted not subsidies or regulation, but to sell their quality product in fair and free conditions. If CAP reform is a priority of the Government, why did the Prime Minister not mention it in his speech of welcome to the President of the Commission on 8 January?
    Dr. Cunningham: The briefing material associated with the meeting with the Commission on that date certainly reiterated the Government's commitment to CAP reform, as has my right hon. Friend the Foreign Secretary both in his speeches in Europe and in a recent interview published in Le Monde. I reiterated the Government's commitment in my first address to the Agriculture Council in Brussels on Tuesday.
    Mr. Godman: Does my right hon. Friend agree that what is badly and urgently needed is the comprehensive reform of both the common agricultural policy and the common fisheries policy, and that without such reform there can be no enlargement of the Union?
    Dr. Cunningham: I agree that we need to look for both those reforms. It is pleasing and encouraging that CAP reform is now very much on the agenda and I expect to see detailed proposals from Commissioner Fischler some time in March. We are scheduled to have reform of the common fisheries policy by 2002.
    Sir Michael Spicer: The Minister did not answer the original question at all, but if one assumes that implicit in what he said was the idea of lower subsidies, does he
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    agree with the National Farmers Union that with that should go a closer comparison between world prices and the prices charged for our agricultural products?
    Dr. Cunningham: Yes. I am pleased to say that I agree with that important point. The whole thrust of reform of the CAP should be to dismantle production controls, which inhibit many of our farmers, to move towards world market prices and to decouple from production the transitional support for that change.
    Mr. Andrew George: What approach does the Minister take in the debate about modulation in the reform of the common agricultural policy? That will be crucial for the future, especially for small farms, and it is essential that he retain an open mind on the subject.
    Dr. Cunningham: I have made my position on modulation abundantly clear. I am opposed to it or to any proposal managed and controlled from Brussels that would be detrimental to efficient farming interests in this country.

    Farm Incomes
    Mr. Yeo: When he last met the president of the National Farmers Union to discuss the recent fall in farm incomes. [22303]
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker): My right hon. Friend last met the president of the NFU to discuss incomes in December last. Along with many right hon. and hon. Members, I also had discussions with farmers on Tuesday.
    Mr. Yeo: Is the Minister aware that farmers in South Suffolk are experiencing a drop in their incomes partly as a result of Government policy, including the high level of sterling that has been caused by five interest rate increases during the past nine months? What discussions has he had with the Treasury about using the underspend on agricultural schemes that we will receive as part of our European Union budget rebate to help farmers cope with the effects of declining incomes?
    Mr. Rooker: Other industries are also affected by the increase in the price of sterling. Agriculture is not alone, although in special recognition of that problem my right hon. Friend announced in the House on 22 December substantial extra help to the farming industry.
    Dr. Ladyman: At the farm income lobby on Tuesday, one of the points made to me was that our pig farmers are forbidden from feeding meat and bone meal to pigs, yet meat raised in that way is freely available on our supermarket shelves. What plans does the Minister have to restrict imports of meat produced in that way?
    Mr. Rooker: We have no plans to restrict such imports. We are subject to the restrictions of the ban imposed on meat, bone meal and other products because of the mismanagement of the bovine spongiform encephalopathy crisis by the previous Government. The

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    consequences of that are being felt by farmers and the whole of the food production industry today and that will remain the case for some time to come.
    Mr. Paice: The Minister knows that on Tuesday the president of the National Farmers Union and others presented a petition with 650,000 signatures from people who want to keep Britain farming. He knows full well that it is not merely a question of sterling and that in fact the Government have taken £129 million away from farmers and given back only £85 million. Why will he not now answer the question my hon. Friend the Member for South Suffolk (Mr. Yeo) asked? Will he undertake to the House that any underspend in the sheep premium, in set-aside, or in any other European programme will be used as part of our refund to access more money to help Britain's farmers?
    Mr. Rooker: First, let us get the record right. The figures that the hon. Member quoted are correct, but they are for two different years. The increases he mentioned are for the next financial year and the assistance to farmers will be paid in this financial year. We do not make a move on those finances without the agreement of our colleagues in the Treasury. On the so-called underspends, what he suggests has never happened in the past and I do not see it happening in the future.
    Mr. Blizzard: The main problem facing farmers is the large variation in the exchange rate of our currency and its effect on the green pound. Does my hon. Friend agree that if Conservative Members were really concerned about the countryside and were really the farmer's friend, they would take a far more positive attitude to the single European currency—which is favoured by the NFU—instead of their ridiculous policy of not going anywhere near it for 10 years and leaving farmers to suffer from sharp variations in exchange rates?
    Mr. Rooker: The answer to that excellent question is yes.
    Sir Peter Tapsell: Does the Minister recognise that, as sterling is likely to remain strong against the European currencies until the single European currency has been seen to fail and is abandoned, we are not dealing with a short-term problem? For the foreseeable future—for some years to come—British agriculture will be unfairly and exceptionally adversely affected by the present green pound arrangements. Are the Government seriously considering some way to help farmers over that period? If the green pound is left as it is at present, it will destroy British agriculture in the next three years.
    Mr. Rooker: I bow to the hon. Gentleman's superior knowledge of the banking system. His confidence that the European monetary system will fail will not be shared by many people. He may be able to look into the future with such certainty, but we cannot. The issue will be with us for some time, as he said. Not only the farming and agriculture industry, but the whole of British industry, will be affected.

    Beef Industry
    Mr. Edwards: If he will make a statement about the problems facing beef farmers. [22305]
    Mr. Hanson: If he will make a statement on his Department's current support for the British beef industry. [22309]
    Dr. John Cunningham: I am well aware of the problems of the British beef industry and I set out proposals to the House on 22 December for a special aid package, worth £85 million, for livestock producers. I have no current plans to make further aid available.
    Mr. Edwards: I am grateful to my right hon. Friend for the measures that he has already announced. Does he agree that the farmers from Monmouthshire who came to the House on Tuesday made a strong case for clear and honest labelling of meat and meat products in British supermarkets, stringent controls on the import of substandard beef and a review of the tendering process so that public bodies can be encouraged to buy British beef?
    Dr. Cunningham: Yes. All those measures are under consideration.
    Mr. Hanson: What progress has been made on lifting the ban in Europe, given the welcome news about the potential for allowing Northern Ireland to export beef? I re-emphasise the point made by my hon. Friend the Member for Monmouth (Mr. Edwards), that many purchases are made by public bodies such as hospitals and schools and, indeed, Government Departments. What steps can my right hon. Friend take to encourage them to purchase British beef?
    Dr. Cunningham: It was excellent news when the Commission in Brussels gave an emphatic yes to the export certified herds scheme last week. Yesterday, the Standing Veterinary Committee acted swiftly to follow that up by setting up a working party that I understand will meet again in Brussels next week. I hope that it will reach a positive decision.
    Public bodies are bound by rules and guidelines that require them to get the best possible value for money when purchasing food. I have already had informal discussions with my right hon. Friend the Secretary of State for Defence about purchases by the Ministry of Defence.
    Mr. Hayes: Will the Minister acknowledge that his decision to charge a flat-rate licence fee to fund the Food Standards Agency is attracting widespread criticism, including from Chris Haskins, the head of the Government task force? He also criticised Ministers for a tendency to overreact; the ban for being unscientific; and the whole regulatory framework, saying that people misjudged the matter if they thought that increased regulation would increase food safety.
    Dr. Cunningham: I am not sure what the hon. Gentleman's question was, but I have read some of the reports. The hon. Gentleman's first point was completely misplaced, because we have made no decision to have a

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    flat-rate licence fee for retail outlets or anyone else. We simply gave an illustrative example when we published the White Paper.
    Regarding the comments of my good friend Christopher Haskins, I can understand that, since he was appointed by the Government to ensure that we have better regulation, he should be concerned about the abysmal regulations that we inherited from the previous Administration.
    Mr. Kirkwood: Does the Minister agree that one of the most urgent and difficult cost increases that beef producers face immediately is the cost of disposal of fallen stock? Will he consider a small transitional fund so that the industry can get itself sorted out in the immediate aftermath of the withdrawal of the subsidy scheme and so that we can guarantee that high-risk and fallen stock material does not illegally find its way back into the human food chain? Can it possibly be in anyone's interest for the Minister to knacker the knackers' yards?
    Dr. Cunningham: Temporary provision—transitional support—was made for the rendering industry. No further provision is available for it. The object of the support for the rendering industry, which was decided by the previous Administration, was to avoid problems in the meat chain in the immediate aftermath of the BSE crisis. We have no proposals for any temporary fund for the industry. The conditions of last year that gave rise to the problems no longer exist.
    If people were to dispose of fallen stock in the way the hon. Gentleman suggests, they would be committing a very serious offence.
    Mr. McGrady: The Minister is aware of the enormous, disproportionate impact of the BSE crisis on beef farming in Northern Ireland. In those circumstances, why has there been undue delay in the release of the agricultural monetary compensation fund? Will he look into the matter and take action to release that fund so that farming incomes may be properly upwardly adjusted?
    Dr. Cunningham: I am somewhat surprised by that question. Farmers in Northern Ireland, just like those elsewhere in the United Kingdom, will qualify for their share of the £85 million package that I announced on 22 December.
    Mrs. Spelman: A group of beef farmers from my constituency who attended the rally on Tuesday were bitterly disappointed and surprised to find that, when the audience was asked whether a Labour Member of Parliament was present in Westminster Hall, no one put up their hand. Is that indicative of the Government's position on the beef industry?
    Dr. Cunningham: That of course depends on who the farmers invited—does it not?
    Mr. Jack: Even the right hon. Gentleman could have gone.
    Dr. Cunningham: The right hon. Gentleman is a little behind the news. I spent Monday and Tuesday in the
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    Agriculture Council in Brussels. I chaired my first Agriculture Council meeting on Tuesday and returned to London at 8 pm on Tuesday.
    Mr. Sheerman: Is my right hon. Friend aware that I was at the meeting at which, supposedly, no Labour Member was present? May I inform him that the beef farmers and other farmers who came to see me that day wanted most to talk about the way in which the previous Government, for 18 years, failed to come through with policies that helped small and medium farming enterprises? The policy that this Government will institute will create a healthy living for such farmers.
    Dr. Cunningham: I am pleased to say that I agree with my hon. Friend's comments.
    Mr. Jack: I can understand, after that exchange, why the hon. Member for Huddersfield (Mr. Sheerman) did not put his hand up in Westminster Hall.
    The Minister will be aware that consumers and farmers have put much faith in his assurances that proper checks are being made on beef that is coming into the United Kingdom. Pursuant to the Minister of State's written answer on 20 January, how does the right hon. Gentleman know that all the checks are effective? The Minister of State told the hon. Member for North Tayside (Mr. Swinney) that his Ministry was unable to say how many checks are carried out. Will the right hon. Gentleman undertake to answer from the Dispatch Box the question that I tabled yesterday, in which I requested a complete breakdown of just what has been found as a result of the surveillance exercise?
    Dr. Cunningham: I shall answer all the right hon. Gentleman's questions in due course. We have the right to inspect each consignment of imports from third countries if we think it necessary. On EU imports, the right hon. Gentleman should know—whether he does is another matter—that, due to requirements and obligations under the single market, we can make only sample checks. That is done, and we check all the paperwork available to us.

    Animal Welfare
    Mr. Canavan: What steps his Department is taking to improve animal welfare. [22306]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): We have taken a number of steps to improve animal welfare. Shortly after the general election we put in place new rules on transport and achieved European Union agreement to a legally binding protocol that recognises that animals are sentient beings. This last will provide an important basis from which to seek further improvements to EU welfare standards both during our presidency and beyond.
    Mr. Canavan: I congratulate my hon. Friend on securing the protocol to the treaty of Rome. What progress is being made on delivering our pre-election commitment to ban fur farming? Will he confirm that there is no valid agricultural argument against a ban on hunting with hounds? Will he convey his support to his colleagues in

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    the Home Office for the allocation of sufficient time to enable the Wild Mammals (Hunting with Dogs) Bill to become law?
    Mr. Morley: The Government remain committed to ending fur farming as soon as practicable. We have had a public consultation exercise and we are currently considering the best way forward. As a mark of our intention, we have recently reduced the period of application of Mink Keeping Orders from five years to three and introduced new charges for inspections. It is the view of the Ministry that hunting with hounds makes an insignificant contribution to fox control. As for Government time, that is not a matter on which I can answer.
    Mr. Alan Clark: Does the Minister accept that very high hopes were raised in animal welfare bodies—and in a large body of people who care deeply about animal welfare—by his party's manifesto at the general election and that at meetings of the all-party animal welfare group that I attended immediately after the election he continued to nurture those hopes? In fact, nothing has happened save a few measures that were already put in the pipeline by the previous Government. When will he start to deliver on the undertakings that he gave in his manifesto?
    Mr. Morley: I am surprised at the right hon. Gentleman's comments. The report that I gave to the all-party animal welfare group was not on intentions but on progress that the Labour Government had achieved. I recall that one of the members who offered their congratulations on that progress was the right hon. Gentleman himself.

    Genetically Modified Food
    Mr. Gordon Prentice: What estimates he has made of the likely future consumer demand for genetically modified food. [22308]
    Mr. Rooker: My Ministry is responsible for ensuring that such foods are safe and clearly labelled. It is for food manufacturers and producers to assess likely consumer demand for their products.
    Mr. Prentice: While I acknowledge that my hon. Friend's commitment to proper food labelling is unparalleled, does he share my anxiety about developments in the European Union? Proposals emerged from Brussels last month that would ensure that the "genetically modified" label will apply to only 20 per cent. of products derived from GM soya beans and maize and that some products such as flavourings and food additives will be excluded. What steps can the Government take to ensure that the EU takes a more robust line on this matter, which excites tremendous consumer concern?
    Mr. Rooker: We are taking a robust line, but my hon. Friend must not jump to conclusions about the results of the negotiations in Brussels. No decision has been made even after last week's meeting. We are still progressing the negotiations on labelling. We want labelling that is informative, practical and meaningful. That means that where GM bits and pieces have been used in the
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    manufacture, but refined out of the final product, the label will probably not include a reference to genetic modification. We are still negotiating on the issue in Brussels and we hope to come to a conclusion in the very near future.
    Mrs. Browning: If labelling is to be meaningful, it must be enforceable. What investigation has the Minister made into the role of enforcement agencies in respect of labelling? Where the genetically modified gene exactly mimics, without any tracer or marker, the unmodified gene, enforcement is extremely difficult. It is my understanding that science has not yet provided the tests that enable enforcement officers to determine whether a product contains genetically modified genes. What progress has there been in that respect?
    Mr. Rooker: The hon. Lady is perfectly right. There are going to be some products that it is impossible to test to establish whether genetically modified substances have been used in their manufacture and processing.
    MAFF has a large research budget which was left by our predecessors. It is a strongly science-based Ministry, as the hon. Lady and the hon. Member for Daventry (Mr. Boswell), who is sitting next to her, will know. In collaboration with our European partners, we are using all possible avenues to explore the use of that money and the research programme to come up with testing procedures that enable us to give comfort to manufacturers, in that we would be able to test and check positively the accuracy of labelling, and to give consumers what they demand, which is information and the comfort of safety and knowledge of how products were made.

    Flooding (South-east)
    Mr. Mackinlay: What measures he proposes to avoid flooding and the impact of rising sea levels in and around the Thames estuary and River Medway. [22310]
    Mr. Morley: The Department is responsible for flood and coastal defence policy in England, provides guidance to operating authorities and contributes significantly to the funding of capital defence measures. Local operating authorities—the Environment Agency or local councils—identify the need for defence measures and promote, design, construct and maintain them.
    Mr. Mackinlay: Will my hon. Friend consider, as a matter of some urgency, initiating studies into the impact of rising sea levels, which threaten the Thames estuary and the Medway estuary? Deep in the memory of the people of Tilbury and elsewhere on those estuaries are the floods of the early 1950s. Since then, the Thames barrier has been erected, which has caused anxiety. If there is a North sea surge and the Thames barrier is used, where will the water go? That is a question the Government should address with some urgency.
    Mr. Morley: Rising sea levels is a serious issue, especially for those who live in low-lying constituencies such as those on the Thames and Medway estuaries. The Environment Agency is carrying out surveys relating to projected sea level rises. It makes recommendations to the Ministry and we issue guidance on priority scores for taking action to ensure that people, land and property are adequately protected.

    Farm Incomes
    Mr. Bercow: If he will make a statement on recent trends in farm incomes. [22311]
    Mr. Rooker: Farm incomes rose as a result of devaluations of the green pound and improved productivity in the mid-1990s. They peaked in 1995–96, when average net farm income in the United Kingdom was about £31,500. Since then, incomes have fallen, mainly as a result of the strength of sterling.
    Mr. Bercow: Further to the response to my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), how can the Minister justify taking away £129 million from farmers in cuts to the over-30-months scheme and extra charges resulting from the need to meet new meat hygiene regulations and the cattle passport scheme?
    Mr. Rooker: There is no justification whatsoever for the taxpayer fully funding all the controls necessary to check specified risk materials. Those extra charges will not come into force until 1 April this year. As we made clear before the election, we are working within the overall public expenditure limits of the previous Government and we make no apology for that. It is simply not possible to pour more and more taxpayers' subsidies into the industry. We wish to support the industry, but it will not benefit from further subsidies.
    Mr. Pike: Does my hon. Friend accept that the incomes of hill farmers, who farm land that is difficult in terms both of the weather and what they can do on it, have been eroded for many years? What does he think the future holds for them? Does he believe that farming in those areas will continue to be viable?
    Mr. Rooker: I certainly hope so. That is one of the reasons why we are redirecting funds to ensure that the majority of the money announced by my right hon. Friend the Minister of Agriculture, Fisheries and Food on 22 December goes to hill farmers and those in less-favoured areas.
    Mr. Swinney: Is the Minister aware of the Scottish agricultural survey conducted by the Trustee Savings bank, which came out this week? It revealed that 94 per cent. of the respondents from the farming sector of Scotland believed that they were less prosperous this year than they were last year. How much evidence must be produced before the Government truly respond to the crisis affecting the rural industries of Scotland?
    Mr. Rooker: I am not aware of the survey that the hon. Gentleman has mentioned. Farmers in Scotland will benefit from their share of the money announced by my right hon. Friend the Minister of Agriculture, Fisheries and Food on 22 December. I freely admit that the hon. Gentleman is quite right to say that net farm incomes in Scotland have dropped—in 1995–96, they were £22,000, and in 1996–97, a little over £19,000.
    Mr. Skinner: Has my hon. Friend seen the latest figures out this week which showed that nine farmers had received £1 million in subsidies and that another one had received a £250,000 subsidy under the set-aside scheme?
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    Does he agree that those sums distort the figures relating to the many thousands of farmers who have a job to make ends meet, while there are some people at the top who are making a small fortune out of the common agricultural policy?
    When my hon. Friend decides to reform the CAP, will he remember to make sure that the ones at the top, who are raking in the money, are the ones who will have their incomes cut in order to ensure that hill farmers and others get a fair crack of the whip? He should bear it in mind that when he introduces that new policy, every single Tory Member and all the Liberal Democrats, with all their farming interests, will refuse to support any change to the CAP.
    Mr. Rooker: My hon. Friend is quite right. The figures that I have quoted in the two previous answers are averages, which can be extremely misleading. They are, of course, distorted by the state handouts given under the equivalent of a social security system for part of the farming industry. Some individuals get an absolute fortune and I would like nothing more than to be able to publish the detailed information, but under the terms of the law of confidentiality between the Government and the recipient of such state handouts, I am unable to do so.
    Mr. Steen: Does the Minister agree that if the south Devon countryside were covered by a lot of dead sheep, lying on their backs with their legs in the air, it would not help the tourism industry? Farmers in my area are finding it more and more costly to remove dead sheep, while the income that they receive is falling. I am not asking for more state subsidies, but I know that those carcases are offending all the urban dwellers who come down to my area to enjoy the countryside. May I suggest that the Ministry conduct an inquiry into how we can reduce the costs of removing dead sheep carcases from the green and pleasant land of Devon?
    Mr. Rooker: I admit that that sight is not a good advertisement for tourism in the hon. Gentleman's constituency.
    Mr. Todd: On Tuesday, I spent two hours in talks with farmers from Derbyshire, having taken the precaution of booking a Committee Room for the meeting rather than leaving them in Westminster Hall. They are concerned more about the future of farm incomes than about analysing the past. They are most concerned about what progress can be made with the European Union to help to restructure their industries so that they have a healthy future. What progress can my hon. Friend report?
    Mr. Rooker: My hon. Friend is perfectly right to say that it is the future that counts, not the past. I openly admit that, this year, the prospects for farm incomes are not good. We must look to the future to give hope to the industry and the thousands who work in it, love it and depend on it. That means that decisions must be taken Europewide; we are not sole masters of our future. During our presidency of the EU, we will do everything that we can to take reform of the CAP forward. Without such reform, which is opposed by many of our European economic partners and competitors, there will not be much hope for a positive future. Nothing less than reform of the CAP is required.
    Mr. Jack: The Minister and the Minister of State have both made much this afternoon of the aid package

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    announced just before Christmas, but so far, farmers have not received a penny of it, so may I ask the Minister of State some straight questions?
    Farmers facing £44 extra charges per livestock animal as a result of the Government's policy want to know when they will receive the money under the package. Has the Minister of State yet obtained Commission approval for the hill livestock compensatory allowance package? Is it possible for the Commission, in determining its agreement to that package, to change its contents, namely, the division of moneys between sheep and livestock, between the hills—[Interruption.] The Minister knows that there is a difference between the payments for cattle and for sheep and he would do well to listen to the questions that I am asking, because farmers want to know whether those in the highlands and lowlands will receive the same payments.
    Will the Minister of State tell us when those matters will be resolved? Finally, will he tell us why the enhanced suckler cow payments have not been made, when the Ministry of Agriculture, Fisheries and Food already has enough information to do so?
    Mr. Rooker: I will answer the question that the farmers really want to know of those on the list that the right hon. Gentleman asked—the answer is, before Easter.

    Rural Development Commission
    Mr. Colvin: What discussions he had with the Deputy Prime Minister about the impact on farming of the abolition of the Rural Development Commission. [22312]
    Dr. John Cunningham: The Rural Development Commission has not been abolished. The Regional Development Agencies Bill recently laid before the House, which provides for setting up regional development agencies, would transfer the RDC's rural regeneration functions to those bodies. I am confident that the needs of rural areas will be properly addressed under the arrangements proposed.
    Mr. Colvin: I thank the right hon. Gentleman for that reply. However, will he take the opportunity to applaud the valuable work done by the Rural Development Commission, under the excellent leadership of the noble Lord Shuttleworth, in helping the diversification of farming enterprises and the rural economy generally? In the current crisis in farming, such help is required as never before, so can the right hon. Gentleman give the House a guarantee that the proposed urban-based regional development agencies will be able to fulfil those functions as well as the RDC has done?
    Dr. Cunningham: I join the hon. Gentleman in paying tribute to the work of the Rural Development Commission and to Charles Shuttleworth, with whom I and my constituents have had a long and productive relationship. The Rural Development Commission did excellent work in west Cumbria in general and in my constituency in particular, and I am happy to pay tribute to it for that work and commitment.
    The regional development agencies will have a true regional remit—for rural communities as well as urban areas—and at least one member of the board will be appointed specifically to address the problems of rural areas, especially rural communities.
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    I disagree with the hon. Gentleman's final point. Most of the work of the Rural Development Commission was not to do with agriculture per se; it was to do with economic development in rural communities.
    Mr. Beith: Does the right hon. Gentleman acknowledge that farmers' families and farm workers' families cannot continue to live in remote rural areas such as those that he and I represent unless there are rural services? Does he acknowledge that, in the most remote rural areas, the Rural Development Commission concentrated much of its effort on rural services, village shops, village workshops, transport and postal services, and that that work must continue? There is genuine concern that, given the major urban problems in regions such as his and mine, it will take a very considerable effort to ensure that that work continues.
    Dr. Cunningham: I agree with what the right hon. Gentleman says. He and especially his constituents have experienced, as I have, the real benefits of the successful programmes of the Rural Development Commission. The commission remains the Government's rural development agency, with a statutory duty to continue to advise the Government, and I am determined that we should continue to have not only expert advice, but expertise in the micro-economies of rural communities and rural areas, for the reasons that the right hon. Gentleman has given.

    Beef Imports
    Mr. Walter: If he will make a statement on beef imports from the European Union. [22313]
    Mr. Rooker: Imports of beef from other member states will continue to be permitted provided that the beef has been produced in accordance with harmonised European Community rules on the production and marketing of fresh meat and complies with United Kingdom rules that require that specified risk materials be removed before import.
    Mr. Walter: In answer to an earlier question from my right hon. Friend the Member for Fylde (Mr. Jack), the Minister pointed out that we could make only spot checks on beef imports from the European Union. He did not quantify those checks. How many Ministry officials are involved in that procedure, how many spot checks have been made and how much material has been rejected?
    Mr. Rooker: I cannot give precise answers to those detailed questions, but I shall ensure that I write to the hon. Gentleman—I hope before close of play today. We have taken measures within the Department, in advance of the Europewide ban on specified risk materials that will come into effect from 1 April, to ensure that we can—if you like—beef up our checks at the ports of entry. In that way, we shall have better surveillance of the paperwork involved and more random checks on incoming loads.
    Mrs. Dunwoody: Is the Minister aware that, if there is no country-of-origin marking and no efficient enforcement, checking on the paperwork will not ensure anything as the European Union has a long and hallowed tradition of cheating in its paperwork first, last and always? Will the

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    Minister please ask for the immediate return of country-of-origin marking to the statute book so that people may know what they are buying?
    Mr. Rooker: My hon. Friend is partly right. The beef labelling scheme will be introduced in this country from spring this year on a voluntary basis. It will become compulsory from 2000. In answer to the first part of my hon. Friend's question, random checks on beef supplies as well as on the paperwork will take place.

  The Attorney-General was asked—
  ATTORNEY-GENERAL

    Fraud (Further Education and Training Funds)
    Mr. Skinner: What discussions he has had with the Crown Prosecution Service regarding fraud in respect of Further Education Funding Council funds and training programmes. [22331]
    The Attorney-General (Mr. John Morris): I meet the Director of Public Prosecutions frequently to discuss matters of mutual interest. It is not my practice to disclose the subject matter of our discussions.
    Mr. Skinner: At their next meeting, will my right hon. and learned Friend urge the Director of Public Prosecutions to investigate training programmes in Britain, especially with regard to 1995 and 1996 and a programme conducted by a firm called Link, which was subsequently taken over by CRT? CRT is an arm of a subsidiary controlled by Michael Milken, the American junk bond dealer. CRT is claiming the outstanding sum of £3.2 million in taxpayers' money for bogus tutoring; one tutor supposedly worked for 94 hours in 14 different locations on a single day. There are thousands of other similar claims. Milken and his company have had the cheek to tell the people of north Derbyshire that they are not allowed to speak about the matter and have served them with an injunction while claiming £3.2 million from the taxpayer. It is one of the biggest scams that occurred in the last few months of the previous Tory Government and it is time to investigate the matter properly.
    The Attorney-General: I have noted my hon. Friend's remarks. It is for the police to investigate allegations of possible criminal conduct. If such evidence is found, it will be passed to the Crown Prosecution Service for consideration of a prosecution. The CPS will bring a prosecution if there is sufficient evidence to sustain the realistic prospect of a conviction and if it is in the public interest. The more serious the offence, the more likely it is that prosecution will be necessary in the public interest.

    Crown Prosecution Service
    Mr. Bayley: What plans the Government have to reform the Crown Prosecution Service. [22332]
    The Attorney-General: The Government remain committed to restructuring the CPS into 42 areas, but the interim advice that we have received from the Glidewell
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    review team is that that cannot take effect until 1 December 1998 at the earliest. I now expect to receive the full report in March.
    Mr. Bayley: Will my right hon. and learned Friend tell the House what steps the Crown Prosecution Service is taking to prepare for the implementation of the Narey proposals to ensure that offenders appear in court to face the consequences of their wrongdoing more quickly?
    The Attorney-General: There are a number of fast-tracking initiatives around the country involving young offenders, in which the CPS plays a key role. The White Paper on reforming the youth justice system gives examples of two schemes in Middlesbrough and north Hampshire. The north Hampshire scheme has reduced the average time between charge and first appearance from 69 to 44 days, and the average time between charge and sentence has been brought down from 133 to 89 days. That is an encouraging development, which shows what can be achieved by co-operation between agencies. I am sure that my hon. Friend will agree with that.
    Sir Nicholas Lyell: We look forward to Sir Iain Glidewell's report. When the right hon. and learned Gentleman asked him to carry out his study into the Crown Prosecution Service, including the important matter of relations between the CPS and the police, he found it necessary to use some rather strangulated wording to ask Sir Iain to
    "consider the manner in which the CPS influences its relationship with the police".
    Can the Attorney-General assure the House that Sir Iain will be able to look at the picture in the round and see what is happening in the police, which I am sure they would welcome, as well as in the CPS? We could then be sure that the CPS and the police work closely together, so that what is done in the CPS is known right back to the constable on the beat or the officer on the case, and vice versa.
    The Attorney-General: The right hon. and learned Gentleman is right. We want to ensure the maximum co-operation between the CPS and the police. He and I will recall that, at the start of the CPS, there were always differences of view on who was responsible for this failure or that failure. We have moved to create 42 areas of the CPS which are coterminous with the police areas. A former inspector of constabulary is a member of the Glidewell team, and will be deeply aware of the need to ensure maximum co-operation between the two agencies.

    Lenient Sentences
    Mr. Hawkins: How many appeals against over-lenient sentences have been made since 2 May. [22333]
    The Attorney-General: The Law Officers between them have referred 52 sentences to the Court of Appeal.
    Mr. Hawkins: Does the Attorney-General agree that the introduction of appeals against over-lenient sentences was a popular and successful measure introduced by the previous Government? Does he agree that both the victims of the crimes that led to those over-lenient

    1141
    sentences and the public in general feel that that is a worthwhile power? Will he look carefully at extending the consultation between prosecution authorities and the police, and the victims of the crimes concerned, when an appeal against over-lenient sentences is considered in future?
    The Attorney-General: I have observed what has been happening over the years, and I am sure that the change has turned out to be worth while, although I concede that, at the beginning, many of us had doubts. Those were not confined to one party and went much wider than politicians—to the judiciary as well—because there was concern about the dangers of double jeopardy. That is taken into account by the courts, although it is not in the legislation. I, like my predecessors, receive the views of the prosecutor and independent Treasury counsel. We must have regard to current sentencing practices. When the judge delivers his initial sentence, he has regard to all the circumstances, including the victim.
    Mr. Lock: Can my right hon. and learned Friend tell us what the Court of Appeal has made of sentences referred to it by him? I accept that every case that comes before him must be judged on its merits, but can he give us some guidance on whether his view that there are over-lenient sentences is, by and large, supported by the decisions of the court?
    The Attorney-General: Of the 52 sentences that I and the Solicitor-General have referred since 1 May last year, 19 have been reviewed by the Court of Appeal, of which 13 have resulted in increased sentences. In six of those 19 cases, the Court of Appeal held that the sentences were unduly lenient, but exercised the court's discretion not to increase the sentence. The remaining 33 sentences are yet to be heard. The figures for the last few years are of roughly the same order.
    Mr. Swinney: I have expressed to the Attorney-General the concern of one of my constituents, Mr. Brian Pithie, about what he considers to be an over-lenient sentence in the case of Philip Dale at Winchester Crown court. Will the Attorney-General give an assurance that he will look at the case and consider referring the sentence to the Court of Appeal for its leniency to be tested?
    The Attorney-General: All cases referred to my office are considered personally by me or by the Solicitor-General, whoever is available. The law lays down that that has to be done within a period of 28 days from sentence. That is the limitation and that means that sometimes there are few days left, as I am sure my predecessor will be the first to agree, before reference is made. The cases, however, are personally considered—they have to be and always have been.

    Discontinued Prosecutions
    Mr. Gordon Prentice: What considerations are taken into account when determining not to proceed with a prosecution on the grounds that it is against the public interest. [22334]
    The Attorney-General: The code for Crown prosecutors sets out factors in favour of and factors
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    against a prosecution. Factors against a prosecution include the youth or old age or infirmity of the defendant. In cases of any seriousness, however, a prosecution will usually take place unless any factors against a prosecution clearly outweigh those tending in favour.
    Mr. Prentice: The reasons also include possible embarrassment to the country and its international relations but, notwithstanding that and the other factors that the Attorney-General cited, when a prosecution does not proceed and the person who has been investigated is rich and powerful, has been in authority and may even have been a Member of the House, is there not a powerful case for saying that the public interest requires that the reasons should be given?
    The Attorney-General: The reasons that are taken into account are set out fully in the code for Crown prosecutors. As regards ex-Members of the House, my hon. Friend has gone over the ground on more than one occasion and I have nothing to add, save that the police are investigating the matter.
    Mr. Burnett: Do the same considerations apply in respect of prosecutions for tax evasion and why are there so few such prosecutions? Would the Attorney-General ever be assisted if a Department of State prepared a case against a Minister in that same Department?
    The Attorney-General: Prosecutions in Inland Revenue matters or decisions on whether to compound matters alleged to be due are matters for my right hon. Friend the Chancellor of the Exchequer. He is responsible for that side.
    Mr. Ian Bruce: Would the Attorney-General be consulted if there were an investigation of a Minister of the Crown, particularly if it reflected on something that he did outside the House rather than on his duties within the House? If so, at what point would that come about and would he be consulted about any prosecution?
    The Attorney-General: As I said previously with regard to a former Member of the House, generally there would be no reason for me to intervene, it would be extremely unlikely and I hope that I would not. That has been the tradition where there has been political involvement.

    Mr. Owen Oyston
    Mr. Campbell-Savours: If officials in his Department saw papers in relation to the prosecution of Mr. Owen Oyston. [22335]
    The Attorney-General: No.
    Mr. Campbell-Savours: This is a very difficult case to raise because we are talking about a rape trial where the victim and the witness for the defence were teenage girls, and the prosecution hinged on their evidence.
    Can my right hon. and learned Friend tell me whether he thinks it fair that, under the Sexual Offences (Amendment) Act 1976, a victim should have total anonymity and be protected from cross-questioning as to

    1143
    her character when the witness in the defence, as happened in this particular case, is subject to very close questioning as to her character? Indeed, her whole previous life is laid bare as part of the prosecution's case. Are we seeing natural justice when cases are conducted in that way?
    The Attorney-General: My hon. Friend has put very carefully the matters that I know are of concern to him. He is right to refer to the Sexual Offences (Amendment) Act 1976. It is a matter for the judge whether he gives anyone leave to ask questions regarding the victim. The test will be that he will grant leave only if he is satisfied that it would be unfair to the defendant to refuse to allow such evidence. As regards a witness and whether
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    questions about previous sexual experience should be allowed, that is also a matter for the judge. As regards the 1976 Act, it was brought up to date in 1994.
    I am also concerned about anonymity. The anonymity of complainants in cases of rape and other specified sexual offences is protected from the time of the complaint, whereas the current legal position does not prevent media identification of juvenile offenders before the point of charge. However, the effectiveness of these provisions, when set against the increasing use of global information technology and publications outside the jurisdiction of the courts, is a matter of proper concern, and I am giving very careful consideration to it.
    Returning to the gist of my hon. Friend's questions, if he has any new matters arising from the case to which he referred, these can be looked at by the Criminal Cases Review Commission.

Business of the House
3.32 pm
Mrs. Gillian Shephard: May I ask the Leader of the House to tell us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): The business for next week is as follows.
MONDAY 26 JANUARY—Consideration in Committee of the Government of Wales Bill (Third Day).
TUESDAY 27 JANUARY—Opposition Day [6th Allotted Day].
Until about 7 pm, there will be a debate on development in the countryside and the green belt, followed by a debate on the London underground. Both debates will arise on Opposition motions.
WEDNESDAY 28 JANUARY—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Consideration in Committee of the Scotland Bill (First Day).
THURSDAY 29 JANUARY—Consideration in Committee of the Scotland Bill (Second Day).
FRIDAY 30 JANUARY—Private Members' Bills.
The provisional business for the following week is as follows.
MONDAY 2 FEBRUARY—Consideration in Committee of the Government of Wales Bill (Fourth Day).
TUESDAY 3 FEBRUARY—Consideration in Committee of the Government of Wales Bill (Fifth Day).
WEDNESDAY 4 FEBRUARY—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Remaining stages of the Public Processions (Northern Ireland) Bill [Lords].
Motion on the Police Grant Report (England And Wales).
THURSDAY 5 FEBRUARY—Motions on the English revenue support grant reports.
FRIDAY 6 FEBRUARY—Private Members' Bills.
Mrs. Shephard: I thank the Leader of the House for her statement and for continuing, so far as she can, to give the House the business for two weeks at a time. It continues to be helpful to the House and I know that it is as a result of her enthusiasm that the House is given as much advance notice as possible of the business that it can expect.
May I ask the right hon. Lady when we may expect a debate on the national health service? She will know that we have not had such a debate since before the summer recess and that, when we did, it was the Opposition who called one. We have now had a number of statements and a White Paper on health matters, and it is time that the Government provided the House with an opportunity to debate them.
I should be grateful if the right hon. Lady would convey to the Prime Minister the concern felt in many parts of the House at his increasingly arrogant disregard for Parliament. He continues to refuse to answer the simplest of questions at Prime Minister's Question Time. It is one
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thing to halve at a stroke the number of times a week that the Prime Minister consents to appear in the House. [Interruption.] It is quite another to make a habit of bluster, waffle and obfuscation in answer to questions to which the people have a right to hear a straight response.
Can the right hon. Lady arrange for an early debate on women's issues so that the House may hear from the Minister for Women why, since her appointment, she has answered only one question in the House, initiated no debates, made no statement and not commented on cuts in benefit for single mothers? After all the Government's electoral promises, is not her appointment a big disappointment to women and to the many newly elected women on the Labour Back Benches? Is it not a waste of money to taxpayers, who are funding her office to the tune of £119,000 a year—rather a lot for rather little?
May we have an early debate on planning issues so that the Deputy Prime Minister can expand his recent statement to the effect that the green belt is a Labour achievement and he intends to build on it?
Will the right hon. Lady arrange for the appropriate Minister to come to the House to clarify, for the enlightenment of taxpayers funding ministerial trips abroad, whether the term "partner" appears in the ministerial code of conduct or whether the term "spouse" is used throughout? Are any changes planned, or have changes already been made, to the code, and have those been reported to the House? What is the definition for those purposes of "partner", and for how long must a relationship have lasted for a partner to qualify for a free trip abroad at taxpayers' expense? Who makes that judgment? I hope it is not the Prime Minister's press secretary.
Mrs. Taylor: The right hon. Lady asked several questions. First, she asked about a debate on the national health service. Important statements have been made to the House, and a Green Paper will be published shortly. I shall consider what she said, but, as she knows, the programme up to Easter is extremely crowded so I cannot guarantee to find time for that debate, much though we should like to be able to boast about our achievements and the money that the Government are putting into health.
I reject the right hon. Lady's comments about the Prime Minister's answers at Question Time. As one of my hon. Friends said, there is no diminution in the total time available. Indeed, the figures show that more questions get asked and more answers are given. [Interruption.] I accept that Conservative Members may not like the answers they are given; that is because the answers do not accord with their views of the ways of the world. They should be grown up enough to know that they will not always like the answers they are given.
In respect of the right hon. Lady's questions about a debate on women's issues, the Minister for Women has requested time for a debate on the Floor of the House on those specific matters. So far, it has not been possible to provide time for that. I notice that when the Opposition selected the topic for discussion on their Opposition day next week, they did not choose to discuss women's issues—perhaps because there are so few women Conservative Members.
It is well known that my right hon. Friend the Deputy Prime Minister intends to make a statement on planning issues soon. The Government are committed to protecting

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the countryside and to regenerating towns and cities. Meanwhile, we are sticking to the previous Adminis-tration's target of 50 per cent. of new houses to be built on previously developed land.
There have been no changes to the code in respect of ministerial trips and those who accompany Ministers on such trips.
Mr. John Cryer: My right hon. Friend will be aware that pensioners have traditionally looked forward to their winter fuel bills with fear and trepidation. Will she join me in congratulating the Government on their prompt action? Will she arrange for a statement to be made explaining the actions that the Government have taken to alleviate the problem? Their response contrasts with the record of the Conservative party, which treated pensioners with more vindictiveness and disdain than any Government since pensions were founded in 1911.
Mrs. Taylor: I agree with my hon. Friend. The Government took prompt action so that pensioners would not have to face another winter fearful of whether they could turn up the heating and afford the coming fuel bill. The Government have allocated extra help of more than £400 million for this winter and the next. Payments to those who need that help most will be made later this month. We have reduced VAT on fuel, whereas the previous Government introduced it and intended to double it, and we have reduced the gas levy. We have shown that helping pensioners with their winter fuel bills is a priority of the Government.
Mr. Paul Tyler: Will the Leader of the House give us an early debate on the role and responsibility of local education authorities? Will she confirm that a meeting took place last week between the Prime Minister, the Minister for School Standards and the chief inspector of schools, Mr. Christopher Woodhead, at which the future of LEAs was discussed in some detail? Will she confirm that the Government have specific plans significantly to amend and alter the roles and responsibilities of local education authorities? That is an important issue for hon. Members and for members of those authorities. Will she ensure that the Secretary of State for Education and Employment makes an early statement on the matter?
Mrs. Taylor: I cannot confirm any specific meeting. The hon. Gentleman did not warn me that he intended to ask that question, and I do not know what meetings every Minister has had. The Government believe that local education authorities have a very important role to play, and he will realise that if he examines the School Standards and Framework Bill, which is being considered in Committee.
Ms Sally Keeble: In recognition of the progress that the Government have made on the scandal of pensions mis-selling, will my right hon. Friend find time for a debate on the issue? Pensions mis-selling was a direct result of the policies of the Conservative party when in government. Does she agree with me that, given the demographic profile, the progress that the Government have made in that area has been of particular help to women?
Mrs. Taylor: I agree with my hon. Friend. The Economic Secretary to the Treasury, who has taken a
1148
particular interest in the matter, has made serious progress in trying to ensure that the problem is resolved. She has established clear deadlines for all firms, large and small, and has made it absolutely clear that they must be observed. It is important that we tackle this problem, which was created and then ignored by the Conservative party. The Ministers involved will continue to pursue the matter, but I cannot find time for a specific debate on it in the very near future.
Mr. Nicholas Soames: In thanking the right hon. Lady again for her great courtesy in doing her best to keep us informed of business two weeks ahead, may I ask her to arrange for the Prime Minister to give a clear answer next week to the question whether it is tolerable and tenable for the Paymaster General, who is the chief tax gatherer in the land, to be subject to an investigation by the Inland Revenue and retain his position at the Treasury? Is it not an affront to the House and the people of this country that the hon. Gentleman retains his position at the Treasury at the same time as he is allegedly the subject of a special investigation? To clear the matter up, will the right hon. Lady give us a answer, yes or no, to the question whether he is subject to such an investigation?
Mrs. Taylor: I think that the hon. Gentleman protests too much. He knows that, as the Prime Minister explained yesterday, neither the Inland Revenue nor any other regulatory board can comment on investigations or, indeed, on whether or not an investigation is taking place. I believe that the hon. Gentleman was told that yesterday, and I think that he should remember it.
Mr. Tam Dalyell: Has my right hon. Friend seen early-day motion 666?
[That this House calls for the immediate opening of serious negotiations with the Iraqi Government with a view to ending sanctions and seeking a solution to outstanding problems; and would deplore any military action by the United States which is opposed by three permanent members of the Security Council.]
The motion, tabled by my right hon. Friend the Member for Chesterfield (Mr. Benn) and me, expresses a minority view on relations with Iraq.
May we have a statement next week making clear the precise objectives of any Anglo-American military action, in the absence of massive ground forces, with a view to the use of chemical or biological weapons? Before British service men are committed to military action, should not the House at least have an opportunity to express an opinion?
Mrs. Taylor: My hon. Friend knows that his views on our problems in respect of Saddam Hussein do not coincide with those of the Government. Although he has drawn my attention to early-day motion 666, I must tell him that I do not accept his analysis. As for his question about a statement being made to the House before the deployment of troops, I can confirm that, operational circumstances permitting, we would made a statement to the House before committing any troops.
Miss Anne McIntosh: Does the Leader of the House agree that the Minister for Women should

1149
make an early statement to the House? I remind hon. Members that, in a written answer given on 20 November 1997, the Minister said that the Government were taking steps to "ensure that women's interests"—
Madam Speaker: Order. The hon. Lady should not quote, because this is part of Question Time. I am sure that she can paraphrase.
Miss McIntosh: Would the Minister for Women care to comment to the House on the Government's views on this week's Equal Opportunities Commission document on proposed changes to the Equal Pay Act 1970 and the Sex Discrimination Act 1975?
Mrs. Taylor: I said that my hon. Friend the Minister had asked for a debate on these issues, although it has not been possible to find time for such a debate yet. The hon. Lady can raise those issues with my hon. Friend, either at Question Time or in a written question.
Ms Beverley Hughes: Is my right hon. Friend aware that, in Committee earlier this week, the shadow Secretary of State for Education and Employment turned on its head Conservative party policy on class sizes when he recognised the link between educational attainment and smaller class sizes for young children—and, furthermore, said that he recognised that class sizes were relevant to them? Will my right hon. Friend arrange an early debate, so that we can welcome this blinding conversion of a party which for so long denied any link between class sizes and educational attainment?
Mrs. Taylor: My hon. Friend makes a fair point. Over the years, I have heard the arguments advanced both by the present shadow Leader of the House, the right hon. Member for South-West Norfolk (Mrs. Shephard), and by her right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), who may still hold the old rather than the new Conservative view. Nevertheless, I welcome the transformation. I hope that every hon. Member will read the Committee Hansard, and see how clear it is that the Opposition have been converted to the view that class sizes make a difference. I also hope that the Opposition will help us to implement one of the key pledges in our election manifesto.
Mr. John Wilkinson: In view of the salutary passage of an amendment in the other place requiring publication by the Government of a Bill on proposals for a Greater London authority before the people of London are called upon to vote on that subject in a referendum, will the Leader of the House clearly explain the Government's exact proposals for that legislation? Are the people of London now to have the opportunity of judging clear, definitive legislative proposals before they are called on to vote; or are they still to be asked, on 7 May, to take a great leap in the dark, on the basis of a White Paper published only a few weeks before the referendum which could, of course, subsequently be changed?
Mrs. Taylor: The amendment passed in the other place was significant, not least because it was passed by
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hereditary peers. Although the legislation issue is not yet resolved, we have made it clear that the White Paper will be published in good time.
Ms Ruth Kelly: May I welcome the Government's welfare-to-work programme, which will give new hope and opportunity to the unemployed, who were neglected for so long under the Tories? As one in five households has no one in work, the measure is essential to tackle the human waste and poverty that result from unemployment. Will my right hon. Friend agree to arrange a debate on such an important issue?
Mrs. Taylor: My hon. Friend is correct to say that welfare to work—which the Conservative party has opposed on every occasion—is a very important issue. The Government are committed to providing new opportunities for the unemployed and to helping people back into work. The matter has been debated on some occasions, and, important as it is, I do not think that we will be able to find time in the very near future for another debate on it.
Mr. Eric Forth: May I press the right hon. Lady to have a debate urgently on the matter of ministerial accommodation—so that we may know who is living where and at what expense, and how much taxpayers' money has been spent on the refurbishment of those premises, if only so that people being denied benefit might know where their money is going? While we are at it, will she help her fellow Ministers by clarifying the position on the code of ministerial conduct; on whether spouses remain spouses, or partners become spouses, or spouses become partners; on who is travelling with whom, and on what basis; and on when all that started, anyway?
Mrs. Taylor: The right hon. Gentleman raises the issue of accommodation. As with the issue of travel, there has been no change in practice.
Dr. Stephen Ladyman: Further to my right hon. Friend's answer to the question asked by my hon. Friend the Member for Linlithgow (Mr. Dalyell) on the situation in Iraq, I believe—and I believe that the Government may agree—that Saddam Hussein is a monster by any civilised measure, that he possesses a stockpile of nerve gas, that he probably can construct an atomic weapon, that the inspection process that the United Nations is trying to impose is already proving to be effective, and that we have stepped down a road that leads inexorably to war. While there are still some options for diplomacy, will she please give further thought to how the House may debate that important issue, before it is too late?
Mrs. Taylor: There are still important options for diplomacy, and it will always be the Government's priority to follow that course. My hon. Friend is quite right in his analysis of the difficulties that Saddam Hussein has created. The United Nations Special Commission has reported that Iraq could be producing enough anthrax each week to fill two warheads. The situation and dangers are therefore evident. I have said that if there is a question of British troops being used,

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the House will of course be given the opportunity to express an opinion. However, we all hope that the situation will not come to that.
Rev. Martin Smyth: The Leader of the House will be aware that early-day motion has been signed by about 355 hon. Members.
[That this House is concerned that increases in road traffic will cause more atmospheric pollution and emissions of greenhouse gases, hampering the achievement of the Government's 20 per cent. carbon dioxide reduction target and damaging communities and the countryside; notes the similar concerns expressed in recent reports by the Royal Commission on Environmental Pollution and the Transport Committee; notes, too, that the CBI has estimated that traffic congestion is costing industry £19 billion per year; notes the words in the Government's election manifesto that 'a sustainable environment requires above all an effective and integrated transport policy at national, regional and local level' and the acceptance in Consensus for Change 'that the current state of affairs is unsustainable'; believes therefore that road traffic reduction is a vital part of a sustainable transport policy, and accordingly welcomes the passing of the Road Traffic Reduction Act 1997 but regrets that this only applied to local authorities and local roads, believing that this anomaly, whereby traffic reduction targets are required for local roads, but not for national roads, cannot fully enable the establishment of 'an effective and integrated transport policy at national, regional and local level'; and therefore welcomes the proposals for road traffic reduction measures promoted by a cross-party group of honourable Members which sets out a requirement for the Government to consult widely, draw up and implement national transport policies to achieve, in a spirit of partnership a reduction of road traffic miles of 5 per cent. by 2005 and 10 per cent. by 2010.]
Representing a constituency in a city that has been described as the most polluted city in the kingdom and which has several of the most congested roads, may I ask whether the Government will not only give a fair wind to the Road Traffic Reduction (United Kingdom Targets) Bill next Friday but help to improve the health and quality of living of many of our people?
Mrs. Taylor: I can confirm that we share many of the concerns about the problems that the hon. Gentleman mentioned. However, it is not my practice to say in advance what the Government's attitude will be to any private Member's Bill.
Charlotte Atkins: In recognition of the vital role of local magistrates courts, can the Leader of the House find time for a debate on their future? I am especially concerned about that issue, because my constituency faces the closure of its last magistrates court in Leek, and local people will therefore be deprived of local justice administered by local people.
Mrs. Taylor: I do not think that it will be possible to provide a debate in Government time in the near future. The relevant Minister was answering questions on such matters in the House earlier this week. Perhaps my hon. Friend will want to apply for an Adjournment debate to pursue that constituency case.
Mrs. Cheryl Gillan: May I ask the Leader of the House for an urgent debate on issues of national importance—the millennium bug and the year 2000 problem? Is she aware that at an Action 2000 press conference this morning the Prime Minister issued a statement saying that there were 100 working weeks left
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until the millennium, and that that was only just enough time to deal with the problems connected with the year 2000?
I should have thought that a statement on the issue was urgently required in the House, not least because I was refused access to the press conference and received the papers from it three quarters of an hour after members of the press. Does the right hon. Lady not think it disgraceful that, yet again, the media were informed before Members of the House? May we have an urgent debate to sort out the mess that the Government are making of the millennium bug?
Mrs. Taylor: The hon. Lady was a member of a Government who did very little to prepare for the event, which is why my right hon. Friend the Chancellor of the Duchy of Lancaster made a statement on the matter shortly before Christmas. The Government are aware of the threat and, unlike our predecessors, we are far from complacent.
Every business, every Department and every organisation must take responsibility for tackling its own systems. None the less, the Government are spending more than the previous Government did in preparation for the event, and my right hon. Friend the President of the Board of Trade is chairing a ministerial group to bring together work in the public and the private sector. Unlike the previous Government, we take the problem extremely seriously.
Mr. Paddy Tipping: Given the widespread public support for greater access to open countryside, will the Leader of the House find time for a debate soon, so that the Government can explain what steps they are taking to implement their manifesto commitment in that regard?
Mrs. Taylor: I know that my hon. Friend has taken a keen interest in that issue over many years, and he is right to remind me of the manifesto commitment. The Government are firmly committed to greater freedom to explore open countryside. We intend to issue a consultation paper shortly to outline our proposals for achieving greater access, and I hope that when that is published my hon. Friend will be pleased with the progress that has been made. Whether we can find time for an early debate on the subject is another matter, and I cannot promise him the time that he might want.
Mrs. Jacqui Lait: Would it be helpful to suggest to the Leader of the House that we have a debate on women's issues, so that the Minister for Women can have a rare starring role at the Dispatch Box, close to International Women's Day? We would have the opportunity to find out how many married women Members are looking forward to their husbands taking responsibility for, and signing, their tax forms, and how many male Members are looking forward to taking on that responsibility.
Mrs. Taylor: The hon. Lady asked whether that would be a helpful question, and I have to tell her that it would not. I doubt whether she will think my answer very helpful either. I have already said that my hon. Friend the Minister is looking for a debate on those issues. When we

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were in opposition we often used an Opposition day so that such a debate could take place, and the hon. Lady may wish to explore that possibility with her hon. Friends.
Mr. Andrew Mackinlay: May we have an early statement from the Prime Minister or the Foreign Secretary detailing the foreign policy baseline against which the strategic defence review must be judged? My right hon. Friend, I and others were proud to support the manifesto, which promised that new Labour would maintain Britain's capacity for peacekeeping, humanitarian effort and power projection in the world. It is important that we have a clear statement that Labour intends to maintain that capacity in advance of the strategic defence review.
Mrs. Taylor: I do not think that we can have an early debate on those matters. My right hon. Friend the Secretary of State for Defence has made it clear that the review that has taken place is foreign policy-led and not Treasury-driven. I hope that that will reassure my hon. Friend in the absence of an early debate.
Mr. Owen Paterson: I welcome the announcement of a day's debate on the revenue support grant, but must inform the Leader of the House that the proposed local government settlement for Shropshire will have catastrophic consequences. There will be not only a 17 per cent. increase in council tax, but £10 million in cuts, 450 teachers may lose their jobs and class sizes may go over 40. I addressed 4,000 people in Shrewsbury on Saturday and the Government's election slogan, "Education, Education, Education" was openly mocked by two highly respected local headmasters. May we please have a further day's debate on the local government settlement?
Mrs. Taylor: I do not accept the hon. Gentleman's analysis of the situation, but he has put in his bid to speak in that debate, if he thinks that it is still necessary for him to do so.
Mr. Martin Salter: Is my right hon. Friend aware of the recent reports that more than half of
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the £1 million of the Chinese heroin dealer's money donated to the Conservative party was spent on a printing press for Conservative central office in Reading? Does she agree that it is high time that the leader of the Conservative party came clean on the sources of party funding? What opportunity does she plan to give Parliament to discuss party funding?
Mrs; Taylor: I was not aware, until it was brought to my attention by my hon. Friend, that that money might have been spent in that way. Many facts about the situation are still extremely unclear. Until we can make further progress to ensure that we have new, appropriate rules for accepting donations, we should have clarification of what has happened in the past. However, that is a matter not for me, but for the Conservative party. If there were a prospect of discovering the facts, I would be tempted to provide time to do so.
Mr. Andrew Stunell: Will the Leader of the House arrange for the Home Secretary to explain to the House why 300 police officers have been cut from police forces since 1 May and what he intends to do about it?
Mrs. Taylor: I cannot arrange for a debate on that matter. I have announced a debate on the police grant.
Mr. Adrian Sanders: May we have a debate covering the Government's policy towards tourism, particularly in relation to United Kingdom seaside resorts? Three key issues seem to confront that industry. The first is competing with overseas hoteliers, who have a more beneficial value added tax rate on accommodation. Secondly, there is a problem with the six-bed rule, which is not being implemented consistently throughout the country. The third issue is the threat from a non-regionalised national minimum wage.
Mrs. Taylor: I am afraid that there is little prospect of such a debate in the next couple of weeks, unless the hon. Gentleman is successful in a request for an Adjournment debate or something of that sort. Some of those questions were raised with the relevant Ministers at Question Time on Tuesday.

Orders of the Day
  Bank of England Bill
  As amended (in the Standing Committee), considered.
  Bank of England Bill
    New clause 1

      ROLE OF TREASURY COMMITTEE IN APPOINTMENTS UNDER SECTION 13(2)(c)
      '—The Chancellor of the Exchequer shall not make any appointment under section 13(2)(c) until the Treasury Select Committee of the House of Commons has—

      (a) been consulted on the establishment of a procedure of open competition in relation to such appointments,

      (b) held a confirmatory hearing or hearings on the suitability of any person nominated following the procedure mentioned in sub—paragraph (a), and

      (c) reported to the House of Commons its approval of that person's appointment.'.—[Mr. Heathcoat-Amory.]

      Brought up, and read the First time.
      4.3 pm
      Mr. David Heathcoat-Amory: I beg to move, That the clause be read a Second time.
      Madam Speaker: With this, it will be convenient to discuss the following: New clause 3—Confirmation hearings for Bank appointments—
      '—(1) The Treasury Committee of the House of Commons may, within thirty calendar days of a nomination being made in relation to an appointment under sections 1(2) or 13 of this Act, make a report to the House of Commons—

      (a) stating its conclusion that a nominee for the post of Governor or Deputy Governor meets the criteria of competence and personal independence or that a nominee for membership of the Monetary Policy Committee meets the criteria specified in'section 13(4), or

      (b) giving its reasons for considering that a nominee for the post of Governor or Deputy Governor does not meet the criteria of competence and personal independence or that a nominee for membership of the Monetary Policy Committee does not meet the criteria specified in section 13(4), and inviting the Chancellor of the Exchequer to reconsider the nomination.

      (2) A nomination of which the Committee signifies its approval or on which it decides not to make a report to the House of Commons shall be confirmed by the Chancellor of the Exchequer on receipt of the Committee's report or after thirty days, whichever is the sooner.
      (3) A nomination which the Committee invites the Chancellor to reconsider shall not be confirmed until seven days after the Chancellor has written to the Treasury Committee giving his reasons for continuing with the nomination.
      (4) The provisions of subsections (1) (2) and (3) above shall apply only when the Treasury Committee has been formally constituted.
      (5) If at any time after the passing of this Act—

      (a) the name of the Treasury Committee is changed; or

      (b) the functions discharged by that Committee at the passing of this Act, or functions substantially corresponding thereto, are discharged by a different Committee,

      the reference to the Treasury Committee shall be construed as a reference to that Committee by its new name or to the Committee then discharging those functions.
      (6) Any question arising under subsections (4) and (5) shall be determined by the Speaker of the House of Commons.'.
      Amendment No. 34, in clause 1, page 1, line 10, at end insert—
      '(2A) The directors of the Bank shall be representative of the different regions of the United Kingdom.'.
      Amendment No. 29, in clause 13, page 5, line 27, at end insert—
      '(2A) No person shall be appointed under subsection (2)(b) or (c) unless he is a British subject.'.
      Amendment No. 31, in page 5, line 35, after `experience,', insert
      ',including knowledge or experience of manufacturing industry,'.
      Amendment No. 28, in page 5, line 35, at end insert
      'and that his views on monetary policy have been made known to Parliament.'.
      Amendment No. 3, in page 5, line 35, at end insert—
      (4A) No person shall be appointed under subsection 2(c) if he has within the preceding five years been an employee of the Bank.'.
      Amendment No. 18, in schedule 3, page 21, line 31, leave out 'or (c)'.
      Amendment No. 20, in page 21, line 32, leave out '3' and insert '4'
      Amendment No. 19, in page 21, line 34, at end insert—
      '1A Appointment as a member of the Committee under section 13(2)(c) shall be for a period of four years.'.
      Mr. Heathcoat-Amory: The House will recall that at the centre of the Bill is the proposal to set up a Monetary Policy Committee to take all decisions relating to short-term interest rates. Indeed, it is already operating, and the Bill gives it statutory force. That is a major departure from previous practice, under which interest rates were set by the Chancellor of the Exchequer after consulting and receiving advice from the Bank of England.
      The new clause would give the House some influence over appointments to the Bank, and specifically to the Monetary Policy Committee, through the Treasury Select Committee. As the Bill stands, the Chancellor has truly awesome powers of patronage. He will directly appoint most of the members of the Monetary Policy Committee. The Governor and the deputies will be appointed separately, but on the recommendation of the Prime Minister, so those appointments are also effectively in the hands of the Executive.
      The Chancellor will be consulted on the appointment of two of the bank representatives on the Monetary Policy Committee, so he effectively has a veto on those appointments as well. The four other outside appointments to the Monetary Policy Committee are entirely in the Chancellor's gift. It is obvious that this very important new body is effectively, and in practice, a creature of the Executive, and specifically of the Chancellor.
      Committee members will be appointed for only three years, so they will have little time to build up any independent authority before facing re-election and coming again under the Chancellor's discretion. That contrasts sharply with practice overseas. The Bundesbank, for instance, makes its equivalent appointments for a term of eight years, giving the members real authority and independence that stretches beyond, for instance, any one Parliament. The three-year term proposed in our case means that people will face reappointment within a single Parliament.

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      Members of the relevant committees of the Federal Reserve bank in the United States are appointed for 14 years, so they are not only much more independent in the method by which they are appointed but have a long period of service, which gives them real authority and standing, and the ability, when necessary, to stand up to the Executive and assert their own judgment against political interference. That is not what we will have here.
      That is why some of our amendments attempt to establish a longer term of office for the appointees, and I urge the House to support them; but I speak chiefly in support of the new clause, which picks up an idea first floated by the Treasury Select Committee. The Select Committee's members are drawn from all parties, it has a distinguished Labour Chairman, the hon. Member for North Durham (Mr. Radice), and its report was unanimous, so I advance these ideas in the spirit of the House of Commons trying to improve legislation and achieve some influence on the proposed procedure. Otherwise, we are faced with a quango. The Government are in danger of being seen to set up a quango, which they will appoint and on which no restraint is placed.
      Hon. Members will remember that, before the election, we heard a lot of windy rhetoric from the then Opposition about how they wished to democratise quangos and make them more accountable. Of course, they have not done that. Indeed, they are creating many more quangos. We are debating just such an advance. Moreover, not only will the Monetary Policy Committee be a quango itself, but it will report to another quango, the court of directors of the Bank. Members of that court are also appointed by the Chancellor of the Exchequer, and their term of office is being reduced from four years to three. We face the rather alarming prospect of one quango reporting to another.
      The reason why that is wrong, even according to the Government's own logic, is that it undermines the credibility of what the Government are trying to do: set up an anti-inflation strategy free from political interference. That is not achieved by setting up a body which is so obviously not free from political interference. For the reasons that I have described, the Monetary Policy Committee will be an offshoot of the Treasury.
      The other reason why the proposal is wrong is that there are disturbing examples of how the Government respond to pressure. We all remember the episode of formula one and tobacco sponsorship. In that case, the Government changed their policy. Indeed, they broke an election promise because they came under pressure from a very rich donor to the Labour party. It is therefore not good for the Government to be trusted to make impartial appointments to the new, important body that will set interest rates, given that their record is already so unfortunate. It is vital that the appointments are made on merit in an unbiased and impartial way.
      Ms Ruth Kelly: Does the right hon. Gentleman think that the credibility of Government policy fell on the announcement of independence for the Bank of England? From the facts, it is absolutely clear that the markets thought that the credibility of Government policy had been enhanced because long bond yields fell.
      Mr. Heathcoat-Amory: The hon. Lady ought not to be quite so sanguine about the inflation record. She will
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      know that her Government have missed their own inflation target in every month since the election. So the jury is out. The Government have wisely continued appointments made under the previous Government, but I am debating future appointments that the Government will make as a result of the Bill.
      That is why—the hon. Lady should agree—it is very important that the Government are seen to be entirely disinterested. She will correct me if I am wrong, but I think that she was a member of the Select Committee that produced the report to which I referred. I think that I noticed her name on it. She will therefore definitely want to support the new clause.
      The new clause is modest. First, it would simply ensure that the appointees are selected after a process of open competition. That is a very modest requirement. Indeed, Ministers suggested in Committee that they had no particular problems with it. Secondly, it ensures that the appointments are subject to confirmatory hearings by the Treasury Select Committee. That does not mean that the House of Commons will make the appointments or suggest candidates: it simply means that the candidates suggested by the Government should be confirmed to ensure that they measure up to the full standards of expertise and impartiality that the House expects.
      I shall quote just one paragraph from the Select Committee report. I see now that the hon. Member for Bolton, West (Ms Kelly) was a member of the Committee, and therefore will fully support this sentiment. It said:
      "We believe very strongly in the importance of ensuring that the appointment process is carried out with openness and independence from political influence. We therefore intend, even in the absence of statutory provision, to instigate hearings and make reports to Parliament."
      I therefore move the new clause in the knowledge that it has the support of Labour and other members of the Treasury Select Committee, including some who are in the Chamber this afternoon. It will ensure that appointments are impartial, and will give added credibility to what the Government are trying to do in setting up the committee in the first place.
      4.15 pm
      Mr. Charles Clarke: I do not support new clause 1. It gives an inappropriate role to the Treasury Select Committee in the formation of Government legislation. I support new clause 3 which, as the right hon. Member for Wells (Mr. Heathcoat-Amory) said, was supported by the Treasury Select Committee, although not unanimously. The right hon. Member for Fareham (Sir P. Lloyd) did not agree with that proposal, so it would be wrong to give the impression that a proposal unanimously supported by the Select Committee was lying before the House.
      We do not think that confirmation is a precondition for the effectiveness and independence of the Bank, but we believe that it would enhance it, and we support the way in which the Government are going about these things. The Select Committee will hold hearings in any event, as we make clear in paragraph 49 of the report, but we believe that establishment of the role of the Select Committee in statute would enhance the Bill.
      There are several reasons for that. First, it would make it clear that the appointment of the key people who determined monetary policy was made not only with

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      reference to the Government of the day, but on the basis of a broad-based discussion about the issues at stake, in which everything was brought out into the open. Secondly, it would strengthen the relationship between the Bank and Parliament. A new feature of the Bill is the establishment of precisely such a relationship. The confirmation hearings would make it clear at the time of the appointment of key people that the role of Parliament was important. Thirdly, it would enhance public confidence in the people in the Monetary Policy Committee who took key decisions.
      There was a time when decisions were all taken behind closed doors in a dark and secret way, and it is to the credit of the Government that they have introduced the Bill and brought many decisions into the open. Already, not long since the new Government came to office, the publication of the minutes of the committee has enhanced public understanding of the considerations taken into account when interest rate policy is established.
      New clause 3 would therefore increase accountability and openness. The Treasury Select Committee is giving great attention to the way in which the reform would operate. It would be done extremely carefully, in the way set out in paragraph 47 of the report. We do not believe in a type of open house on the American Congress select committee model, in which people's private lives and conduct can be brought into the public arena. Discussions must be on key issues of professional competence and personal independence.
      That is why we propose that the questioning of candidates should be circumscribed and limited to professional competence and personal independence, not ideologically based. It would be a speedy process of decision making; it would not be time-consuming; it would not be a veto; and it would allow the Government and the House to consider the candidates and come to a view. I submit that that is a powerful case for the reforms set out in new clause 3.
      My right hon. Friend the Chief Secretary to the Treasury came to the Select Committee and, in a distinguished, open and candid performance, identified three main arguments against the proposal, although he said throughout that he had an open mind on the matter. He said, first, that their having to come before a Select Committee of the House before being appointed might deter candidates.
      Secondly, there were certain political circumstances—for example, a hung Parliament—in which the process might increase instability, rather than promote stability.
      Thirdly, the issue of confirmation was of such importance that it should run across a whole range of appointments in public life and would need to be considered by the House; therefore, a decision should not be taken on the Monetary Policy Committee or the Bank until that wider consideration had taken place. I shall deal with each of those points—all of them powerful—in turn.
      On the question of a deterrent effect, my right hon. Friend cited the example of John Maynard Keynes and suggested that that distinguished economist might have not wished to serve in public life if he had felt that his personal life might come under scrutiny in a process of this sort. All I shall say on that point is that I believe that we live in different era in terms of the public scrutiny of those who serve the public in a variety of ways, not only Members of Parliament, but public servants more generally.
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      Most public servants would prefer to have the chance to answer charges directly, rather than to have those charges circulated by nudge and wink or media leak. They would prefer to address the issue straight up, and I believe that, had he been alive today, John Maynard Keynes would have been of that mind. Many potential candidates for the MPC and the Bank—we have discussed this question informally with them—would prefer a state of affairs where there was an open process, open discussion and open accountability, rather than a process that took place behind closed doors. Provided—it is an important proviso—that the Select Committee dealt with the matter in a sensitive and rapid way, rather than following the example of congressional committees, potential appointees, those appointed and the body politic as a whole would all gain from the open process.
      The Chief Secretary's second argument was that, in a hung Parliament, a party political ball game would be played in the Select Committee, which would make it difficult for the Government to govern and make those key appointments. I take that point, but, if we are concerned with the independence of the central bank from those party political ball games and the uncertainties surrounding a hung Parliament, it would be better and more effective to use the open hearing process; in addition, there would be no risk of the Prime Minister or Chancellor appointing cronies with no chance for public scrutiny. Therefore, the second argument does not stand up.
      The third argument has more substance. It relates to the issue of the wider reform of the relationship between Parliament and the Executive in the matter of key appointments, and contends that it would be better to wait before taking the process forward.
      After the Chief Secretary had given his evidence, I tabled a question to my right hon. Friend the Leader of the House to ask what assessment she was making of that issue. She replied that the Government were reviewing the situation, but that they had "no immediate plans" to propose a process of Select Committee scrutiny. If we accept the Chief Secretary's argument, there is a real danger that we will make the best the enemy of the good by saying that we cannot carry out this reform until we have achieved wholesale reform across the board.
      In addition, the Bill deals with important issues relating to the Select Committee and the Governor of the Bank which differ from many of the other areas of public scrutiny, so there is a particular case to address.
      Mr. Robert Sheldon: My hon. Friend may be aware that the Liaison Select Committee has discussed in general terms the use of this sort of hearing, and in general—I cannot speak for every Committee—supports the view expressed by my hon. Friend the Member for North Durham (Mr. Radice). As this would be the first use made of a particular instrument, it will be important that we have in my hon. Friend a Chairman who not only is distinguished, but would be strong in ensuring that no personal references were made or personal questions asked. We would regard it as the initiation of what could be a useful procedure. I welcome what my hon. Friend has said.
      Mr. Clarke: I am grateful to my right hon. Friend for saying that there is general support across Parliament for many of the changes about which we are talking.

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      I should add that, this morning, the Treasury Select Committee had a discussion on the types of procedure that would be applied. The personal qualities of the Chairman of the Committee, to which my right hon. Friend has just referred, were part of our discussion, because we recognised the need to have a process according to which inappropriate questions would be ruled out, so that we kept to the twin issues of professional competence and personal independence. I agree with my right hon. Friend's expression of confidence in the Chairman of the Treasury Select Committee.
      I know that there is a case for wider reform, but I hope that the consideration of such general issues will not lead to us to say that we will not introduce a reform of the type that I have described simply on the ground that those general issues should be considered more thoroughly. I genuinely believe that the reform would enhance the independence of the Bank, as well as the policies set out in the Bill—and, most important, the accountability of key institutions of state to the House.
      Mr. Quentin Davies: Before I discuss new clause 1, I should like to respond to the observations of the hon. Member for Norwich South (Mr. Clarke), with whom I have the honour to serve on the Treasury Select Committee. As he rightly said, this morning the Committee discussed the matter in considerable detail.
      I listened with some surprise to the hon. Gentleman's statement that, although he supported new clause 3—we are both signatories to that second new clause in the group of amendments under consideration—he could not support new clause 1. Apart from obvious considerations of political tactics, I cannot see how anyone who supports new clause 3 could fail to support new clause 1. As far as I can see, there is only one difference of substance between the two new clauses—new clause 1 provides for an open advertisement selection procedure.
      The hon. Gentleman notably failed to address that issue. He did not suggest that he disagreed with it or that there is anything wrong with it, so, logically, I cannot see why he cannot support new clause 1. I would be sorry if he decided he could not do so simply because of the dog-in-the-manger principle that it had been brought forward by the Opposition. That is contrary to the spirit in which the matter has been considered in the Treasury Select Committee. I regret that.
      As for the hon. Gentleman's other remarks, I thoroughly agree with him. I would like to think that the issue of the Treasury Select Committee asking utterly irrelevant, prurient questions was a red herring. I would never have raised it, but I am a little sanguine, and there is a genuine concern that the procedures might be abused in that particular way. I have the greatest confidence that Parliament would undertake its responsibilities with great care. Certainly it would do so with as great responsibility as that shown by the Executive branch—or greater—and certainly greater responsibility than the current Executive branch has so far manifested in its conduct of the nation's affairs.
      I have no doubt about that, but, since others appear to think that there might be some lingering concern on the matter, there is absolute agreement on the Treasury Select
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      Committee that, in order to address that possible source of concern, we should, by resolution or otherwise, make it explicitly clear that the questions asked on such occasions would be pertinent ones relating to the competence and independence of candidates. There would be no question of going into people's private lives, sexual behaviour or anything of that kind.
      If Maynard Keynes had come before our Committee, I can think of lot of questions that I would have wanted to ask him about his General Theory, but I should not have asked him any interesting questions about his private life.
      It is a great pleasure to second the new clause tabled by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), which makes an important contribution to the debate. The confirmatory hearings are important for two reasons.
      First, such hearings would be in the interest of transparency, and in the interest of gaining public support for, understanding of and confidence in what was being done. They would help to exclude explicitly all types of theoretical dangers—which, with the present Government, might not be so theoretical—that cronies of Ministers, the Chancellor or the Prime Minister might be appointed to the Monetary Policy Committee. Such a position might be considered a nice appointment for someone to whom political favours were due.
      It would be a nightmare if we had Mr. Bernie Ecclestone on the Monetary Policy Committee. It would be an even greater nightmare—if such a thing is possible—if we had someone who was simply a nominee of Mr. Rupert Murdoch, of whom the Prime Minister, in his conduct of monetary policy, has already shown that he is terrified.
      4.30 pm
      Sadly, these possibilities are real, not hypothetical, and it is not a bad idea to use explicit provisions to protect the public and our institutions from them. Confirmatory hearings represent a check and a balance—an additional assurance to the country that such decisions are made objectively, as dispassionately as is possible in human affairs. That is the purpose of checks and balances, which are the basis of public confidence in a democratic constitution.
      There is a second, more pragmatic and, indeed, monetary reason why it would be sensible for the Government to accept new clause 1—but the Government do not often do very sensible things, so I do not expect that they will do this now.
      The new clause will make it easier for the Government to achieve what they say was their prime purpose in making the Bank of England operationally independent. The main purpose of doing so was to give the markets confidence that monetary policy is being conducted in accordance with monetary criteria, to achieve the monetary purpose of price stability—the permanent removal of inflation in our national affairs—and is not subject to political, personal or electoral pressures according to the day-to-day convenience and self-interest of Ministers.
      The world is changing. As a result of one of the salient changes, almost every civilised country now has an independent central bank. It would be an enormous

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      liability for our country if, of the major currencies of the world, only sterling was managed in such a way that it was seen to be subject to extraneous party political or electoral pressures. In those circumstances, all holders of assets in sterling would demand what would probably be a very significant premium: a risk premium for holding such assets, given the uncertainties created, the hostages to fortune represented, by the existence of those pressures on the conduct of monetary policy.
      We are already paying such risk premia. The taxpayer is paying 1 per cent. more to service British Government debt, gilts, than the German taxpayer is paying to service German Government debt. That has nothing to do with the inherent creditworthiness of the British or German Governments; it results from the monetary uncertainties associated with holding sterling—the risk of devaluation, the risk of inflation, which are perceived to be greater here.
      A lot of money is involved. Public debt in this country is about £350 billion. One need not be a mathematical genius to know that 1 per cent. of that is about £3.5 billion, or roughly 2p on the standard rate of income tax. I believe that that is the price of the Government having been extremely indecisive about, for example, what we are doing about monetary union.
      It is very important that the independence of the Bank of England should, as far as possible, achieve some certainty that monetary policy is not subject to party political and electoral pressures. As the hon. Member for Bolton, West (Ms Kelly) said, the announcement of the operational independence of the Bank of England has had some positive effect in terms of the premia we pay in the money markets and in the Government bond markets at present. We still have a long way to go, and it is important that operational independence is regarded as credible, domestically and internationally.
      An announcement by the Labour Government that the Bank of England has been given operational independence, that monetary policy is henceforth in the hands of the Monetary Policy Committee and that that committee will be answerable for monetary policy not to the Chancellor but to Parliament through the Treasury Committee sounds wonderful. It appears that that arrangement will go quite a long way towards achieving the declared purposes of the move.
      However, a slightly closer reading of what is occurring reveals that the members of the Monetary Policy Committee are appointed by the Chancellor. Furthermore, there are no checks and balances upon his decisions. No one is in a position to second-guess or query any appointment: the Chancellor's appointment decisions are entirely arbitrary.
      Thirdly, as my right hon. Friend pointed out so ably, members of the Monetary Policy Committee are appointed for only three years. Therefore, members will be up for reappointment within the term of this Government and, if they want to stay on the committee, they had better be nice to the man who appoints them. It does not take a great deal of human intelligence to lead one to discount to a considerable degree the independence of a central bank whose Monetary Policy Committee is appointed on that basis.
      In order to achieve independence, to reap the benefits of monetary credibility, achieve a positive impact on inflation expectations in this country—that is vital in
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      terms of savings behaviour, wage negotiation, general price determination behaviour and so on—and to ensure that the cost of capital in this country is no higher than we need and that we do not have to pay excessive risk premia in the markets, we should welcome any measure that is designed to strengthen the credibility of that independence. The Government have been presented with a wonderful opportunity to do just that.
      It will be no skin off the Government's nose if they accept the proposal. The idea was conceived and developed by a Committee of the House upon which the Labour party has a considerable majority. If the Government do not accept the proposal, we can draw only one of two conclusions—I leave it to you, Madam Speaker, to the House and to the public to decide which is more damaging to the Government.
      The first is that the Government are playing this—and one assumes, by extension, other equally important affairs of state—on a purely party political basis. It is a matter of party political ego and face. The Government are not interested in acting in the interests of the country, and they are not being open-minded in their consideration of the national interest: they are concerned merely with gaining party political points. They refuse to accept any proposal that has the Leader of the Opposition's name upon it.
      The second alternative—I invite the Chief Secretary to confirm whether there is a third, fourth or fifth logical possibility, but I do not think there is—would realise my worst fears: the Government intend to abuse the power of appointment. They secretly think that it represents a wonderful additional power of patronage, and might be a way of rewarding Mr. Bernie Ecclestone, of conciliating Mr. Rupert Murdoch or of allowing other squalid people to get their hands on the levers of monetary policy in this country for their own purposes.
      I do not necessarily claim to be correct, but I can perceive only two logical explanations if the Government act as I hope they will not, and refuse to accept the new clause that contributes positively to the declared purpose of their legislation. If I am wrong, I challenge the Minister to explain why that is so, and to persuade the House in that regard.
      Mr. Giles Radice: I apologise to the right hon. Member for Wells (Mr. Heathcoat-Amory) and to the House for not being present at the beginning of the debate. I have just returned from the funeral of a close family friend.
      The Chancellor wrote to me, as Chairman of the Treasury Committee, after announcing the operational independence of the Bank of England in the area of monetary policy. In that letter, he suggested an enhanced role for the Committee in examining the performance of the Bank, and wrote:
      "I see this as an important step in ensuring that the Bank is fully accountable."
      The Committee has already taken several steps to develop our role in making the Bank accountable for its decisions. We produced a report on accountability, the Government's reply to which was published today and placed in the Library. We also conducted hearings following the November inflation report and recently decided to hold another hearing after the February inflation report. We shall keep the Bank under constant vigilance.

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      Our report concluded that it would help to strengthen accountability—it would be the final brick—if we had a part in endorsing appointments and reappointments to the Monetary Policy Committee. It is essential that the members of the committee should be seen to be competent when they are appointed; effective when they are reappointed; and independent of the Government. They must be independent people who have the necessary competence to carry credibility as members of the committee.
      My hon. Friend the Member for Norwich, South (Mr. Clarke) may have covered the matter in his speech, but at the risk of repetition I shall say that our model in new clause 3, to which Opposition Members have signed up, is rather different from that in new clause 1. In essence it states that, within 30 days of a nomination, we should be able to report to the House. Either we would approve the competence and independence of the members of the Monetary Policy Committee, or we would give reasons for considering that members of the Monetary Policy Committee do not meet the criteria, and we would ask the Chancellor of the Exchequer to reconsider their nomination.
      I emphasise that we are not seeking a veto. That is all very well in the United States—in a democratic system with the separation of powers—but it is not appropriate in a parliamentary system. Following a request by the Treasury Committee for reconsideration, the Chancellor would have to give reasons for continuing with the nomination of the person whom he wanted to have appointed or reappointed to the Monetary Policy Committee. That is a good model and should receive the Government's support.
      My right hon. Friend the Chief Secretary to the Treasury, whose abilities I greatly admire—[Interruption.] If my right hon. Friend listened, he would hear that I was complimenting him before refuting his arguments. He has said that he has an open mind, but he has raised counter-arguments, with which my hon. Friend the Member for Norwich, South was dealing when I came into the Chamber.
      My right hon. Friend claimed, first, that our proposal would put people off, but all the members of the Monetary Policy Committee to whom I have spoken believe that it would be helpful for them, for two reasons: first, it would establish their independence; and, secondly, it would establish their profile as members, so that they could explain why they thought they were the right people and what kind of job they expected to do. That would be good for the Monetary Policy Committee and would strengthen it.
      My right hon. Friend's second argument is more substantial—that we should take a broader look at the issue because if the Treasury Committee is given a special place in legislation, every other Select Committee will want to have a place in legislation for appointments to the Department that it oversees. I understand that, but I would argue that the Bank of England is an exceptionally powerful body with an exceptional position, and for that reason, exception should be made.
      I hope that the Government will accept our new clause tonight, but, whatever happens, I want to make it clear that the Select Committee has decided to go ahead with
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      the confirmation procedure. We shall present a report to the House on the procedure that we shall follow. If the procedure is to be effective, it must be consistent. The procedure must be laid down, and we must always go through it. We must be fair to the candidates who come before us, and we must stick to the issues of competence and independence.
      It is no secret that we were discussing this morning the possibility of allowing the Chairman to rule out any extraneous issues—for example, the sex life of John Maynard Keynes would not be relevant in deciding whether Maynard Keynes was competent or independent. We must satisfy the House of Commons and the general public that we can do the job properly, as I believe we can. We shall report to Parliament on the procedure that we shall adopt, and we shall go ahead with confirmation hearings throughout this year.
      Whatever happens tonight, the confirmation process will go ahead and will become the norm, at least for Bank of England appointments. That will be good for the Government, because we will see that they are not trying to appoint people to the Monetary Policy Committee of the Bank who are not competent or who are creatures of the Government. It will be good for the Bank, as it will underline its independence, credibility and competence. It will be extremely good for Parliament, as it will bring Parliament into the equation, and it will therefore be good for our democracy.
      4.45 pm
      Mr. Nick Gibb: The new clauses go to the root of the reason for my opposition to the Bill. They go to the root of the accountability of the new Bank of England.
      Monetary policy is not an exact science. The Chancellor of the Exchequer, who is accountable to the House, will determine the inflation target, but the translation of the inflation target into monetary policy is incumbent on the Monetary Policy Committee. The Government seem to believe that they simply need to set an inflation target and throw a bunch of experts into a committee, and that, as if by magic, those experts will come up with the correct interest rate policy to translate that inflation target into reality.
      The report of the Treasury Committee, a learned tome, provides ample evidence to support the view that that is not the case. Sir Samuel Brittan stated:
      "Both the Chancellor and the Governor greatly overestimate the role of technical expertise."
      He continued:
      "Monetary economics is not a hard science. An attempt to confine the Monetary Policy Committee mainly to so-called experts will simply enthrone the conventional wisdom of the moment."
      In his evidence to the Select Committee, Tim Congdon wrote:
      "Two main schools of thought on the monetary situation can be identified,
      —economists (the National Institute, narrow-money monetarists such as Sir Alan Walters and Professor Patrick Minford) who believe that the rapid growth of the money supply since early 1995 is of no relevance to the economic situation, and that the over-valued pound and the recent rise in interest rates…may cause a recession in late 1998 and 1999".

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      That school of thought must be contrasted with the views of another group:
      "—economists who believe that the rapid growth of the money supply, on the broad definitions"—
      rather than the narrow definitions—
      "since early 1995 is not only the main reason for the current buoyancy of demand, but will cause continued above-trend growth in late 1997 and early 1998, with inflation rising thereafter."
      Lord Eatwell told the Treasury Committee:
      "Moreover, there is a tendency in monetary policy matters to regard certain propositions as 'obvious' and anyone who questions such propositions to be at best a nit-picking academic and at worst a crank. Yet the notion that the theory of monetary policy is 'obvious' and 'pragmatic' is belied by the fact that the theory and practice of monetary policy has undergone quite radical revisions over the past 20 years."
      He went on to ask:
      "If views held 10 years or 15 years ago were so obviously right then, why are they so obviously wrong now?"
      That is the very essence of why we need to consider further and crucially the appointments to the Monetary Policy Committee.
      There are all kinds of views. There are broad and narrow monetary policy views, Keynesian economics and the economics of those who wish to stick to the gold standard. The views of the members of the Monetary Policy Committee are pivotal in determining Britain's monetary policy. I was surprised by the remarks of the hon. Members for Norwich, South (Mr. Clarke) and for North Durham (Mr. Radice) that, when the Treasury Committee comes to question members of the Monetary Policy Committee in its confirmatory hearings, they will not want to discuss their ideological or economic views, but will solely consider competence and independence. Unless the Government set down beforehand a set of criteria for determining the economic views that are to be represented on the Monetary Policy Committee, it is important to know the views of its members.
      If the Treasury Committee considers merely economic competence and independence, the monetary views of the members of that committee will be determined by lottery. If one happens to pick four economists with narrow monetary views, that will be the committee's make-up.
      I put that point to the Paymaster General in Committee and he said:
      "The hon. Gentleman asked me to list a set of criteria for prospective members of the Monetary Policy Committee. We cannot do better than the qualities for which current members have been chosen. However, the two most important qualifications are outstanding intelligence, for which there is no substitute, and a demonstrable economic knowledge. Those are the essential criteria, but all sorts of other matters must be considered. However, it would be inappropriate to delay our proceedings with them."
      I think that it is important to delay our proceedings with them, which is why I intend to do so today.
      If the criteria are not provided, how will the Monetary Policy Committee be made up? What criteria will determine its prevailing point of view? In Committee, the Paymaster General, speaking of me, said:
      "He wants to ensure that the good balance that currently exists in the Monetary Policy Committee is maintained. He is anxious to exclude serendipity and random choice from our selection process. I assure him that such elements will play no part in it."—[Official Report, Standing Committee D, 27 November 1997; c. 166.]
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      But the Government have given us no idea of how serendipity and lottery will be prevented from determining the prevailing point of view of the Monetary Policy Committee.
      The Treasury Committee is determined that the committee's membership will be scrutinised. The Government, in their vast exchanges of correspondence with the Governor and the Chairman of the Select Committee, which seems at the moment to be determining Government policy, said that accountability is of the essence. The Chancellor of the Exchequer, in his letter of 6 May, says:
      "The Bank of England will make reports to and give evidence to the House of Commons, through the Treasury Select Committee on an enhanced basis, and I will write to the Chairman of the Committee."
      When that letter to the Chairman came, it said:
      "Given its responsibilities, I believe that it is important that the Bank should be subject to enhanced Parliamentary scrutiny, in particular through your Committee. I am writing to suggest … an enhanced role for that Committee."
      The Government see a role for the Treasury Committee. The Treasury Committee has an enormously important role in determining the ideological make-up of Britain's future monetary policy. Given that the Government see the Treasury Committee as paramount in ensuring accountability of the Bank of England—the Government accept that the Treasury Committee will be the only method of parliamentary accountability for the Bank of England—and given that the Treasury Committee wants to undertake confirmatory hearings, is it not beholden on the Government, under their own criteria, to give the Treasury Committee statutory responsibility to conduct confirmatory hearings?
      Mrs. Fiona Jones: I am grateful for the opportunity to make my maiden speech today in a debate on the Bank of England Bill. The Bill paves the way for a framework of stability, vital to economic growth, which we need to provide opportunity. I shall comment on the new clause in due course.
      I take some pleasure—I am sure that hon. Members will sympathise with my desire—in relinquishing the somewhat unlikely title of virgin. As someone who has reached the age when life apparently begins and has accumulated two children along the way, it seems remarkably ill-suited. I had expected during the course of a career in politics to be called many things and have experienced more than the odd colourful insult. However, taking into account the over-zealousness of some journalists, and the occasional lapse in attention to fact on the part of most newspapers, I still had not expected the accusation in question.
      Having endured through gritted teeth being dubbed a "Blair's babe", I am grateful at least to have the opportunity to relinquish for ever the title of being the last virgin in the House. However, a right hon. or hon. Member who has hitherto remained secretive may now wish to claim the title. No doubt confessions to the press will be eagerly awaited.
      I am proud to make this contribution today at the beginning of the first full year of a Labour Government for almost two decades. We have the important task of laying solid foundations both economically and in terms of the way in which we shape society. What we do in this

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      year and in the coming years will shape our future in the new millennium. The Government are setting policy to ensure long-term prosperity. We must ensure stability in monetary and fiscal policy as a precondition of high and stable levels of employment and growth.
      My constituency has suffered many economic blows in recent years. It is vital for the people of Newark that we achieve the conditions necessary for industrial expansion. The constituency of Newark is in Nottinghamshire. As well as the town of Newark, which was besieged by parliamentary forces several times during the civil war, the constituency includes the smaller but equally pleasant market town of Retford. At the constituency's western extremity is the historic Southwell dominated by its imposing minster. In addition, there are a number of hamlets and villages between the main centres, stretching from the Lincolnshire border to Robin Hood country to the west.
      My constituency has suffered for many reasons in recent years. The rundown of the mining industry was a great blow to many local families who had, for generations, made their living in the pits. The area has also lost many jobs in engineering over the years and sadly now the agriculture industry is not without its problems and many farmers, particularly on family-sized farms, are in a desperate position.
      However, the area has good road and rail communications and, thanks to the enthusiasm and skills of local people, new businesses are growing up in the constituency, particularly in food processing and in the pine industry. That growth now requires a platform of long-term economic stability on which to build.
      It is customary at times such as this to thank one's predecessor, and I do so with genuine sincerity. Richard Alexander represented Newark for 18 years. He was well respected by his constituents, and by his local party, which in itself is quite an achievement. I well remember Richard Alexander's determination and courage when he took a stance against pit closures because he felt that they would do so much damage to the economies of constituencies such as Newark. Richard Alexander was committed to public service and I sincerely hope he finds some way of continuing that service in the future.
      Today, Newark boasts a hostelry called the Lord Ted. It was given its name in recognition of another of my predecessors, Ted Bishop, later Lord Bishopston. Sadly, Ted is no longer with us, but his family took great delight in my being returned as the Member for Newark, because he was a great campaigner for women's rights and equality, long before it became fashionable to be so. I understand from his family that he would have been greatly pleased to see a woman representing Newark, and to see so many women Members in the House—although whether he would have been inclined to call them "babes" is a different matter.
      Continuing on the theme of my predecessors, undoubtedly the most famous was William Gladstone, whose first seat was Newark. Hon. Members will be pleased to hear that I do not intend to speak for five hours, as Gladstone did during his Budget speech in 1853.
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      In addition to sharing the privilege of representing such a fine constituency, Gladstone and I share a common birthplace, for we were both born in Liverpool. I grew up in comfortable but humble surroundings on a typical Liverpool housing estate. My family were committed to the Labour movement. That was in many ways fortunate because it meant the poverty that I witnessed did not make me despondent but inspired me instead to contribute to finding a political solution, to put hope and opportunity in place of deprivation and misery.
      In poor families everyone suffers, but women—especially mothers, who face the day-to-day challenge of putting food on the table for a family—are particularly ground down by the pressures of life. They become old before their time and experience little pleasure in a stressful existence. Everyone has a right to more than that.
      As a youngster I learnt my politics from two people: my father, who, like many others, joined the movement in 1945 believing that we could indeed change everything, and his friend, our then local Member of Parliament, Eric Heffer. They were bound in friendship by their strong belief in compassion for others, Christianity and socialism. I am for ever grateful for their influence.
      The Labour Government elected in 1945 achieved much but left much unfinished business. Together with the job of modernising their accomplishments, that leaves the current Government with a formidable task. We need to achieve an environment that makes everyone—no matter how poor, disabled or down-trodden by their circumstances, by their life—feel that when they open their front door somewhere outside is an opportunity for them. We must reform and modernise the welfare state, but those reforms must empower those who are able to do so to attain the goals of which they are capable, while allowing those who are less able to live in comfort with respect. Socialists expect nothing less from a Labour Government.
      When asked about political issues, the President of a country some distance from here, anxious to exhibit the depth of his political knowledge, remarked, "It's the economy, stupid." Indeed, the economy is the cornerstone on which every nation must base its future aspirations. Without a successful and vibrant economy, we cannot provide hope, opportunity or, indeed, welfare. The Government have made it clear that we want a stable and competitive pound over the medium term. Economic stability is critical for business, and that encompasses low inflation, which has to be delivered. By charging the Bank of England with operational responsibility for setting interest rates to meet the Government's objective, a more credible framework for monetary union has been established.
      I now come to the clause that we are considering. I have a reservation about the relationship between Select Committees and the Government. Although I accept entirely that there is a consensus in the House that there must be accountability at all levels, I am very concerned that we should allow a Select Committee to take on this responsibility in isolation. If Select Committees are to go in that direction, it cannot be done in isolation.
      It is interesting that hon. Members mentioned John Maynard Keynes. Over the past decade we have heard much about why so-called fat cats should be paid so much money and have so many advantages in terms of cars and

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      houses. It makes me wonder whether we will be able to attract anybody to come before the Select Committee and be interrogated.
      It may be appropriate for me to thank hon. Members for their patience. It is certainly appropriate for me, on behalf of all the new Members who have made their maiden speeches in the past months, to thank the experienced Members of the House, who have sat through many speeches with much patience and good humour.
      Sir Peter Lloyd: I am delighted to follow the hon. Member for Newark (Mrs. Jones), and congratulate her on her maiden speech. I greatly enjoyed listening to her and, judging by the cheer that she has just had from the whole House, everybody in the Chamber did too. I agreed with much of what she said about new clause 1, but I particularly enjoyed listening to her obvious positive concern about her constituency.
      Newark is my wife's home town. She retains an enormous affection for it and, over the years, through many visits, I have come to share her affection, so the hon. Lady is extremely lucky—[Laughter.] Well, that is true as well, but the former came first. The hon. Lady is very fortunate in her constituency, and from the way in which she spoke, her constituency is lucky in her.
      I thank the hon. Lady for her kind and generous remarks about her predecessor, Richard Alexander. He was, indeed, an excellent constituency Member and he was a great friend of many of us on both sides of the House—a friendship that he built up in his quiet and effective way during his 18 years in the House. We miss him very much. Although it is nice to welcome the hon. Lady, we regret that he is not here, and we are glad that she has put those remarks on record so that we can all share them. We wish the hon. Lady a very successful and happy career in the House, and we certainly look forward to hearing her speak again.
      I shall make a few discordant remarks about new clauses 1 and 3. As a member of the Treasury Committee, I voted against the recommendation that is now encapsulated in the comparatively pussycattish new clause 3. For the same reasons, I do not support the rather more tigerish version that is new clause 1. I shall say briefly why. I fear that any vetting for professional competence will be superficial and will inevitably sound rather pompous. What will the Select Committee do to test competence? Will it count the number of degrees that the candidate has, assess his or her performance in previous jobs or evaluate the learned papers that he has published? The Select Committee is not well placed to do any of that and it should not try.
      How will the Select Committee vet independence? Will it look to see whether the candidate is an old friend of the Chancellor or shadow Chancellor? What is the difference between—to use words that were used earlier—an old friend and an old crony? I do not know. Will the Committee check for whom the candidate has worked? Will there be a character assessment? Would holding strong views pro or against economic and monetary union, or firm monetarist convictions, be seen as limiting the candidate's independence? Some might think so. I do not, but it is arguable, and from some of the things that have been said this afternoon, others think so, too. If the vetting procedure is to be just a formality, those questions do not matter, but then why bother with the process at all and take up everybody's time?
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      If the procedure is to be genuine and serious, the Select Committee will have bitten off a harder task than it suspects. I fear that candidates with good, conventional academic records, who do not know anyone and who have no strong opinions on the economy, will be better placed than others who do. Moreover, I suspect that some good candidates who value their privacy may not want to put themselves in the way of public procedure that can delve into their career and character.
      Candidates certainly should not be asked, as the hon. Member for North Durham (Mr. Radice), the distinguished Chairman of our Select Committee, suggested, to explain why they should be appointed to the Monetary Policy Committee. That is a matter for the person who appoints them—the Chancellor of the Exchequer.
      Mr. Radice: My colleague on the Treasury Committee must have misheard me. I said that there were two issues: competence and independence. I said that those were paramount and that any other issues were extraneous.
      Sir Peter Lloyd: I am sorry. I thought that the hon. Gentleman welcomed the chance for candidates to explain why they should be appointed. I accept his explanation and I am sorry that I did not follow his remarks accurately.
      Hon. Members and candidates may have nothing to worry about on that score, given the sensible and sensitive members of the Select Committee, particularly under its current chairmanship. What benefit is there, however, in opening the way for future Committees—and other Select Committees, if some hon. Members have their way and the provision is extended throughout the Select Committee system—to behave as some congressional committees are said to behave in the United States? The right way in which to proceed is to extend the public appointment rules drawn up for quangos to all public bodies. If an appointee is unsuitable for any reason, including lack of independence or competence, or is manifestly not up to the job, the Committee and the House have it in their power to call the Government to account and they should certainly do so. Vetting would not make the Monetary Policy Committee any more accountable; if anything, it would make the Chancellor more accountable.
      Even if, however, we could devise a system of vetting that avoided all the pitfalls, we should not institute the vetting system called for in the new clause. It is the job of Select Committees to get answers to their questions from the Government, and to throw light on Government policy so that Parliament and the public are better informed. Their job is to probe what has happened, to reveal shortcomings and to make recommendations for improvement. They will do that more single-mindedly if they eschew all direct involvement with Executive decisions, and appointments are one such.
      It may not be a very significant point, but why should the Select Committee approve appointments? It would then have an interest, however slight, in seeing its competence justified. It should hold its fire until the appointments—which are better made by the Executive with more information to go on—show cause for criticism or praise because of what the appointees do or fail to do.
      Mr. Austin Mitchell: I, too, congratulate my hon. Friend the Member for Newark

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      (Mrs. Jones). I do so for two reasons. First, after the 1983 election, I was the only Labour Member in a long line right down to London, so it is good to have socialist neighbours all around. Secondly, I congratulate my hon. Friend on her interesting and entertaining speech. She has no need to worry about her future in this House, given her ability to speak like that. Nor should she worry about being the last virgin. I remember Doris Day before she was a virgin. The endless reconstitution of virginity is part of the processes of this place.
      I shall speak briefly on this issue because I want to speak at greater length on the official old Labour amendments later. New clause 3 is very much a new Labour issue; indeed, it is so new Labour that it has support from the Opposition, including from the Liberal Democrats, which makes me think that it must have something to do with Europe. I support it because we should have the kind of hearings mentioned in it. I am surprised that the Government have not conceded that, and that a new clause was necessary.
      5.15 pm
      Such hearings, however, are not enough. As my hon. Friend the Member for North Durham (Mr. Radice) said, the Select Committee will be concerned with competence and independence, but it should also be concerned with a third factor—the appointees' views. I have taken that into account in amendment No. 28. We must accept the fact that appointees to the Monetary Policy Committee are appointed by the person who also appoints members of the Treasury Committee; Labour members of that Committee are, in effect, appointed by the Chancellor of the Exchequer. No man or woman cometh to the Committee except through him, and nobody that he does not want goes on the Committee; we need only witness the fate of my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott).
      One set of Chancellor's appointees will look at another set of Chancellor's appointees. The information that comes out of that process needs to be known more widely because monetary policy is not an exact science. It is no use pretending that there is a judicial body that can approach the issue with independence of mind and say, "Ah yes, we can agree on these matters." Monetary policy is not a science at all; it is a collection of prejudices dressed up in Savile row suits, and the prejudices are different for each member.
      I was surprised to read in The Observer that two members of the Monetary Policy Committee do not appear to be British. What central bank of any other European country would appoint foreigners to such a crucial committee? We need to know those appointees' views on monetary policy. I know the views of one of them, who is a Dutch professor, because he gave evidence to, and advised, the Treasury Committee, but I do not know the views of the other appointees. The House needs to know so that we can make our own judgment about them. That should be public information. There needs to be open government so that we know what is going on.
      I tabled amendment No. 34 because I want directors appointed on a regional basis. That does not mean that we should follow the example of health authorities, which can appoint people of a certain party political persuasion,
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      as the previous Government did on a considerable scale. We want people who come from the regions rather than from the central nexus of finance that dominates the City of London and the directors of the Bank of England.
      This country's wealth was first generated in the regions. The north and the midlands are the home of manufacturing industry, which has been badly dealt with by the financial world. In seeking to develop a raunchy economy, it placed a higher premium on investing overseas than on investing in this country; it placed a higher premium on investing in trade and commercial wealth than on manufacturing and industrial wealth. Even now, manufacturing industry is being badly dealt with as a result of the dominance of London. For instance, when measures are taken to increase interest rates, it is usually because of pressures in London.
      Inflation pressures are always higher in London because of the number of people and the cost of property there. Pressure on inflation is generated by finance—the high salaries paid in the City of London by financial bodies—and by the loose credit created by finance. That leads to asset and house price inflation, which is always higher in London than in the rest of the country. When that is damped down, it is for London reasons—because the pressures have become too strong in London. The north has not felt the same benefits from expansion, and has not had the same economic stimulus. It has been hit harder than London and the south-east, where the problem has been caused.
      Manufacturing is on the international front line and must compete with overseas companies. The rise in interest rates that has inevitably resulted from the London pressures has hit manufacturing harder than any other sector of the economy. It has been clobbered because of inflationary pressures generated by finance in London.
      Decisions on interest rates are taken or influenced by the directors of the Bank of England. That is why I want a regional representative who can speak for the regions. We now have a Government who can speak for the north—perhaps too far north for my liking—more effectively than the previous Government. We need a Bank of England that can speak for the regions on jobs, industry, manufacturing, competitiveness, growth and expansion. The problems in the north are more severe, and the Bank should provide the voice of the regions.
      Dr. Vincent Cable: The Liberal Democrats support new clause 3 and new clause 1 which, despite its authorship, is a constructive amendment designed to achieve the same thing as new clause 3, but in a slightly different way. We also support amendment No. 34, tabled by the hon. Member for Great Grimsby (Mr. Mitchell), which introduces a regional dimension; that has been overlooked in the debate, but it is important. I add my congratulations to the hon. Member for Newark (Mrs. Jones) on her excellent maiden speech. Our party requires us to study Mr. Gladstone's speeches as part of our political education. The five-hour speech to which she referred was probably one of his shorter ones. He was the gentleman who, more than a century ago, introduced income tax as a temporary measure. This measure is historically as important.

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      We support the legislation in principle. It was introduced as a result of a rush of blood to the Chancellor's head, but there is nothing wrong with that.
      Mr. Quentin Davies: The hon. Gentleman said that he and his colleagues were brought up to study Mr. Gladstone's speeches. Has he learnt anything from that study? Have the Liberal Democrats relearnt in the 1990s the virtue of financial responsibility, good housekeeping, balanced budgets and lowering taxes?
      Dr. Cable: If the hon. Gentleman had read our manifestos, he would realise that we have thoroughly imbibed the thoughts of Mr. Gladstone. Indeed, we hope that the Bill will be followed by a fiscal responsibility Act, of which Mr. Gladstone would have approved.
      The legislation was introduced after the Chancellor's sudden rush of blood to the head. The Government have now had eight months to think about it and to listen. We hope that they will now reflect on the detail. It is crucial that the legislation works. The independence of the Bank of England is a good concept, and we agree with it in principle. However, this measure is not guaranteed to work, and whether it does will depend on its design; its design depends critically on credibility. The two key elements of the legislation are designed with credibility in mind. Making the operational management of money supply independent of politics is one element of credibility, and the other is the separating of the regulatory functions from the control of money supply to prevent cross-contamination. Problems that arise from regulation, such as BCCI-type problems, affect the credibility of monetary authorities. It is difficult to legislate to provide credibility, but that is at the heart of the Bill.
      The new clauses are designed to address the problem of credibility through the system of appointment. It is fair to say that the Government have been highly responsible and balanced in their appointments; they were not political, and competent people have been chosen. This legislation must survive the test not of years, but of decades. We have no guarantee that future Governments will be as responsible in their selection, and will not choose cronies or incompetents.
      It is worth reflecting on the language of the clause that establishes the appointment process. It is couched in broad terms, and states:
      "The Chancellor of the Exchequer shall only appoint a person under subsection (2)(c) if he is satisfied that the person has knowledge or experience which is likely to be relevant to the Committee's functions."
      There must be several hundreds of thousands of people who could satisfy that clause. It is crucial to build in some control over how that process operates.
      The Select Committee process was ably debated by the hon. Member for Norwich, South (Mr. Clarke), and it is worth reflecting on some of the points he made. He dealt with the Chief Secretary's first objection, which was that competent people would be put off if they had to go through a scrutiny process and be exposed to the light of day. In the past few weeks, we have had a good example of that. One of the members of the monetary committee has been subject to an extremely scurrilous campaign in a national newspaper. It would have been much better for her and for the whole process if the issues had been discussed properly through an open, transparent process.
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      There is no reason why members of the monetary committee should be protected from public scrutiny; like us, they are well-paid, public figures. Nor should such a process be conducted secretly and covertly. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) has already dealt with the constitutional aspects. Many of the objections raised to new clause 3 and, by implication, to new clause 1, have already been dealt with effectively.
      The amendment to provide regional balance tabled by the hon. Member for Great Grimsby is important and has received very little attention. Most of the successful independent banks have relied heavily on regional independence. The directors of the Federal Reserve bank, as opposed to its members, are drawn from the states of the United States and, as a result, have independent constituencies. The Bundesbank council has greater strength owing to the fact that it is drawn from the Lander. There is an argument for a regional dimension in this country. I am surprised that the Government, whose Treasury Front-Bench team is 60 per cent. Scottish, have not spotted the fact that macro-economic policy has a distinct Scottish dimension. The Chief Secretary will know very well that the mechanisms in Scotland, which is an oil economy, are different from those in the rest of the United Kingdom. Interest rates affect Scotland differently from England because the balance of house tenure is different. That aspect should be built into the Bank's considerations, and the hon. Gentleman's proposal is one way in which to do that.
      The Liberal Democrats strongly support the basic principle of independence of the Bank of England. We support the concept that the Government have introduced, although we regret that they have not been more flexible over some of the amendments designed to improve the Bill. We shall support the new clause when it is put to a vote.
      Mr. Jim Cousins: I congratulate my hon. Friend the Member for Newark (Mrs. Jones) on her maiden speech. As a frequent user of the east coast main line, my knowledge of Newark and Retford is regular, frequent but rather fleeting. She filled in many of the gaps that I missed as I shot past. She emphasised the importance of roots and convictions, and we should all take that greatly to heart. She mentioned that Newark had had a bad time in the civil war. Newcastle had a worse time, because in 1644 it was besieged for several weeks, and was finally captured by the Scots. I mention that episode because it has a certain relevance to the debate. Any discourtesy to the Chief Secretary will be balanced by the fact that my hon. Friend the Member for Great Grimsby (Mr. Mitchell) can rest assured that some of us hold out against the Scots on occasions that are not always lost in history.
      We are discussing serious and important issues. The Bank of England Bill is as much a constitutional as an economic Bill. It exchanges secrecy for openness, and it exchanges the illusion of a control that was never really exercised for the reality of an important debate about how the economic management of the country is to be carried out. In a sense, that is the test of the new clauses and amendments.

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      I welcome the amendments tabled by my hon. Friend the Member for Great Grimsby. We should try to ensure fair representation of regional and industrial interests on the Monetary Policy Committee through proper scrutiny of its members. Although I doubt that a quota could be provided for sensibly in statute, the exercise of accountability among members will make it possible to keep such matters in mind.
      I am afraid that I disagreed with my colleagues on the Treasury Select Committee. I did not take their view that periods of service on the Monetary Policy Committee should be longer than those proposed by the Government. Any danger of cronyism will soon be exposed: it will not survive scrutiny. That is not the danger. In financial affairs, a much greater danger is that a club of good old boys—and, for that matter, girls—will be established, that those people will be able to hold office for far too long and that their habits will become altogether too cosy. I am therefore glad that the Government have decided on short terms of service.
      New clause 1 is at the centre of the debate, and I have listened carefully to what has been said about it. As a member of the Treasury Select Committee, I wanted the House to have an opportunity to discuss it: that is why I supported the proposal in that Committee. It is important for us to wrestle with constitutional innovations, and to consider ideas such as that of confirmatory hearings. I have also listened to what the Government have said, however, and they have by no means closed their mind to the possibility of statutory confirmatory hearings at a later date.
      I understand—this is expressed clearly in the Government's response to the Treasury Select Committee report—that the Government are looking to the Select Committee. I understand that they are encouraging the Committee, albeit cautiously, to experiment with confirmatory hearings with regard to members of the Monetary Policy Committee. Certain issues cannot be overlooked. The hon. Member for Grantham and Stamford (Mr. Davies) speculated that a member of that committee might have had connections with Rupert Murdoch. Rupert Murdoch is a business man with a substantial empire; it is entirely possible that a member of the MPC appointed in the future may, at some point in his or her career, have had a business connection with him. Would it be appropriate for a confirmatory hearing to explore that and make something of it? Not necessarily, surely. Good judgment is involved here.
      Mr. Quentin Davies: I am sure that the hon. Gentleman listened carefully to what I said, but what worries me is not that an individual might have worked for Mr. Murdoch at some time. As the hon. Gentleman pointed out, Mr. Murdoch's empire is so extensive that it might be difficult to complete a career in certain spheres—especially journalism—without working for part of that empire at some point.
      My fear is that a person of that kind might be able to influence a Government to appoint a certain person. A deal might be made, for instance, whereby a Murdoch nominee would be appointed and the Government would be given a better run in The Sun. That is the sort of
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      legitimate concern that Parliament should bear in mind if there is any suggestion of extraneous influence on the Government in the appointment of members of the MPC.
      Mr. Cousins: 1 might have known that that would be a long intervention.
      The rather po-faced way in which the hon. Gentleman made his intervention is entirely contradicted by the lip-smacking glee with which he introduced the subject of Rupert Murdoch in the first place. The Government are properly concerned about the issue. For a brief period in her career, a member of the MPC served with the American Central Intelligence Agency. We can all imagine what irresponsible people could make of that at a public hearing.
      The Chairman of the Treasury Select Committee, my hon. Friend the Member for North Durham (Mr. Radice), has made it clear that the Select Committee wants to experiment, and to demonstrate to both the House and the public that we, as a group of parliamentarians, are capable of engaging in these tasks properly and responsibly. I think that the Government are entirely right to leave it to us to demonstrate the worth of their proposal, and to enshrine it in statute only after we have done so.
      Mr. David Ruffley (Bury St. Edmunds): I support new clause 1. It is important, because it introduces a check on over-mighty Executives who could—as Opposition Members have pointed out—use their power to appoint members of the MPC to install cronies, and to use that body as a political instrument, or a political wing, of the Treasury. In other words, it would not in any sense be independent.
      In Committee, that argument was said to be wrong for two reasons. Labour Members said, "We are not going to appoint political cronies; we have not done so thus far." They pointed out that the MPC currently included individuals who were not in any way political, and that the City considered that its current composition was fine and above board. That, however, implies nothing about what the Chancellor of the Exchequer, or other Treasury Ministers, may wish to do in the future. Opposition Members think it perfectly possible that the wily and cunning Chancellor may indeed use all his skills of spin and underhandedness to manipulate all sorts of activities in the new MPC and the new Bank of England. We are worried about what may happen in the future without a measure such as new clause 1.
      The second reason for suggesting that there would be no political cronyism was given by the Chief Secretary, who said that the City would not put up with any political appointments. The City would make its displeasure known, and the Chancellor would not dare to install political allies or stooges. That argument was deconstructed convincingly and elegantly by my hon. Friend the Member for Grantham and Stamford (Mr. Davies), who made the entirely valid point that a premium would attach. Investors and traders outside this country, and even in the City, would say, "This is a dodgy committee. We are worried about what the macro-economic management of this currency and this country is all about." There would be a premium when it came to buying and selling. The Chief Secretary did not address that point in Committee, and I think that he should do so. It is not enough to say that the committee will be self-regulating.

      1179
      A huge power is being transferred to an unelected quango that is like no other quango. In Standing Committee, Labour Members wanted to know the difference between the new statutory body created by the Bill and the Prison Service agency or the Passport Agency. Labour Members must be living on a different planet if they do not understand the difference, which is clear, between those bodies and the one created by the Bill. The difference is that interest rate policy touches the lives and interests of so many people. It affects mortgage holders; it affects the levels at which exporters trade their products; and—because monetary policy affects inflation—it affects everyone's cost of living. Those are huge political issues that concern people's daily lives.
      It is nothing short of disgraceful for Ministers, with virtually no consultation, to introduce this Bill and to propose a statutory body comprising unelected placemen and appointees. We should carefully examine new clause 1, and assert the fact that Parliament must be able to hold the Executive to account on big political decisions, such as setting interest rate policy. That must be right.
      Opposition Members want to halt the dangerous trend of downgrading the importance of the House that the Government have set in train—by leaking stories to newspapers, by the manner in which they set policy on economic and monetary union, by their errant disregard for the House's practices and by not consulting the House, as they should, in determining their conduct as a responsible Executive. In that spirit, I support new clause 1.
      Mr. Michael Fallon: I should like to speak briefly to the final four amendments in the group. Before I do so, however, it is my very pleasant duty to congratulate the hon. Member for Newark (Mrs. Jones) on her maiden speech. As the successor to both Richard Alexander and William Gladstone, she has her work cut out. If she emulates the popularity of the former and longevity of the latter, she will be doing very well indeed. It was an extremely fluent speech. I have no idea why she chose to wait before delivering it, but we shall certainly be disappointed if it is as long again before we hear her next speech. The Opposition congratulate her on it.
      Mr. Ruffley: In my speech, I was negligent in not congratulating the hon. Member for Newark (Mrs. Jones) on her speech; I wish to do so fulsomely. It was an elegant, beautifully crafted and wonderfully delivered speech, and I should like to congratulate her. I apologise for not doing so earlier.
      Mr. Fallon: Before advising the Opposition on the course of action that we should take on new clauses 1 and 3, I should like to speak briefly to the final four amendments in the group: amendment Nos. 3, 18, 20 and 19.
      The object of amendment No. 3 is to ensure that the outside appointments to the Monetary Policy Committee really are outside appointments. Currently, five members of the Monetary Policy Committee are Bank of England employees. It should therefore be self-evident that the other four—the so-called external appointees—should not be Bank of England employees. That is certainly the understanding that the Select Committee expresses in its report, which—at paragraph 46, and again at paragraph 50—refers to those members being external.
      1180
      The Chancellor of the Exchequer, in his statement in May—which is helpfully included as appendix 1 in the Select Committee's report—makes it clear, at paragraph 20, that
      "the Government will also appoint four members of the Monetary Policy Committee from outside the Bank of England."
      However, it is not clear in the Bill whether that will happen.
      The purpose of amendment No. 3 is to make it very clear that those four external appointments must be external, and that they cannot have been employed recently by the Bank. The amendment seems to be so self-evidently useful that I look forward to the Chief Secretary accepting it.
      5.45 pm
      Amendment Nos. 18, 19 and 20 deal with the length of appointment of Monetary Policy Committee members. Some hon. Members who have spoken in this debate discussed the nature and length of the appointments, and the House should be a little clearer about them. In Standing Committee, it was fairly obvious that the Government have themselves not decided on them.
      I am sorry not to see the Paymaster General—who dealt with the Bill in Standing Committee—in the Chamber for this debate. Perhaps he has been—I must not say detained—occupied elsewhere. In Standing Committee, he said:
      "This is not an exact science".
      He even invited the Standing Committee members
      "to wait for us to introduce proposals."—[Official Report, Standing Committee D, 27 November 1997; c. 175.]
      The Bill is now in the later stages of its passage through the House, and I should have hoped that by now we had had more proposals from the Government on how the appointments will be made, how they will be phased and staggered, and whether Ministers really do think that three years is the right length for membership of the Monetary Policy Committee.
      It is precisely because the Government have not yet proposed firm ideas that the Opposition have. Amendment Nos. 18 and 19 distinguish between Monetary Policy Committee internal and external members. In the same sitting of the Standing Committee, the Paymaster General drew that distinction—which I think is important—between internal and external members. We would therefore allow the three-year period to apply to internal members, but suggest the longer period of four years for external members.
      I must confess that amendment No. 20 is very much a fall-back amendment. If the Chief Secretary is not prepared to accept our suggestion of differing lengths of appointment for different Monetary Policy Committee members, we still think that there is a case for a term longer than three years—which has been accepted by hon. Members on both sides of the House. The advantage of four years over three years is that such a length is more likely to allow some membership crossover between general elections—which is an important point to which I look forward to hearing the Chief Secretary's reply.

      1181
      I return to new clauses 1 and 3. This has been a very good debate, and a very House of Commons debate—because, ultimately, we are dealing with a House of Commons matter. In Committee, the Chief Secretary himself said:
      "the House should consider the merits of such hearings and decide".—[Official Report, Standing Committee D, 18 November 1997; c. 28.]
      That is exactly what has happened. The Treasury Select Committee has gone off and considered the merits of the hearings, and, in a very persuasive and well-argued report, it has produced its conclusions. Today, the House has debated those conclusions.
      Strong support has been shown on both sides of the House, and certainly among Conservative Members, for the principle that lies behind both the new clauses. The principle may be simply stated: to make the Bank—that quango bank—more accountable. If it is right for the Chancellor to delegate his responsibility for monetary policy to the Bank of England, it must be equally right for the House to ensure that its accountability is similarly transferred, and that the House continues to play a role by confirming some or all of the appointments to the Monetary Policy Committee.
      I do not think—I sense that it is also the House's view—that there is any reason to delay further a decision on the matter. Nor is there any case for simply relying on further warm words from the Chief Secretary. As its Chairman has told us, the Treasury Select Committee is now likely to proceed on that basis even informally, and that reinforces the case for putting those arrangements into statute.
      The only remaining question is which new clause we should put into the Bill, our new clause 1 or the Committee's new clause 3. They are slightly different. The Committee's new clause does not allow for open competition for the appointments, but it is a fuller new clause, and perhaps even better drafted than ours on the key principle.
      Most important of all is the principle that as this is a matter for the House, we should perhaps be guided as a House by the advice of our principal Committee in making our decision. Depending on what the Chief Secretary says in his reply, I shall therefore probably suggest to my right hon. and hon. Friends that we withdraw new clause 1, and invite them to support new clause 3.
      We have listened to what the House has said. Now we hope that Ministers will have listened, too.
      The Chief Secretary to the Treasury (Mr. Alistair Darling): I begin by welcoming my hon. Friend the Member for Newark (Mrs. Jones) and congratulating her on her maiden speech. I understand that she was a journalist before entering the House. She is now a journalist turned politician, so she will know what it is like to be a shark that discovers it has cut itself, and finds itself at the centre of a feeding frenzy, the victim of its former friends.
      My hon. Friend made a thoughtful speech and paid a handsome tribute to Richard Alexander who, as many of us remember, took an independent line when he felt that
      1182
      his constituents' interests were at risk. She also spoke in support of the Government's economic policy and of many of the measures in the Bill, which are central to achieving the objective to which she referred, economic stability.
      My hon. Friend need have no fear; I am sure that she will have many useful contributions to make in debates both on the Floor of the House and in Committee, and she deserves to be congratulated.
      Before I deal with the main debate, which is essentially about confirmation hearings, I shall speak briefly about what was said by the junior shadow Treasury spokesman, the hon. Member for Sevenoaks (Mr. Fallon). I suppose that I must congratulate him on his transfer from the shadow Department of Trade and Industry team, although perhaps the circumstances were not as he might have wished.
      The term of office of members of the Monetary Policy Committee was debated at some length in the Standing Committee. We believe that three years is the appropriate time, and it is entirely in line with the interim report of the Hempel committee, which says that three years is a reasonable time. There is an expectation that members will be reappointed from time to time, and we believe that three years is the right period.
      Mr. Andrew Tyrie: If the Chief Secretary is so sure that three years is the right time, will he explain why he feels that the United Kingdom should be out of step with the Bank of France, which has terms of six and nine years, with the Federal Reserve, which has terms of up to 14 years, and with the Bundesbank, which has terms of eight years?
      Mr. Darling: Simply because we are dealing with the Bank of England, not the Bank of France or of anywhere else.
      Mr. Tyrie: Answer the question.
      Mr. Darling: I happen to think that a term of office of 13 or 14 years is too long. It is for the United States to decide what is appropriate for its country, but I think that that is too long. There is an expectation that the Government will reappoint members from time to time, so three years can become six years or even nine years. Three years is therefore an appropriate period, and I am not inclined to accept the Opposition's advice on that point.
      Equally, although I understand what the Opposition say about former employees of the Bank, I am not sure that I would want to take such a hard and fast line and say that somebody could not be appointed, just because he or she had worked for the Bank in the past five years. That may be something which the Chancellor the Exchequer would want to consider in deciding whether an individual was an appropriate person, but there still may be circumstances in which a former Governor or Deputy Governor would be an appropriate person. I do not know; we shall have to see, but I am not inclined to accept the Opposition's suggestion.
      I shall now talk about new clauses 1 and 3, although new clause 1 is no longer with us because the Opposition, who presumably did not think that it would command a majority in the House, have withdrawn it. That new clause

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      raised two matters that the Treasury Select Committee new clause—if I may refer to new clause 3 in that way—does not raise. It required the Chancellor to consult the Treasury Select Committee on a procedure for a competition in relation to appointments to the Monetary Policy Committee—
      Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I must tell the Chief Secretary that no new clause has yet been withdrawn, because the House has not been asked to approve a withdrawal.
      Mr. Darling: I apologise, Mr. Deputy Speaker. I was anticipating what would happen if the shadow Treasury spokesman stuck to what he said and withdrew new clause 1. In case he does not, I shall continue to deal with what he said about it.
      Mr. Barry Sheerman: Can we get the record straight? I understand that the reason why the new clause may be withdrawn is that the Opposition cannot guarantee that even their own Members will support it.
      Mr. Darling: My hon. Friend may be right, but, in the spirit of what has been quite a useful debate, and one remarkably, although not entirely, unpartisan, I shall address the merits of the points raised. Many hon. Members have thought a great deal about the procedures, and I should like to give the Government's response.
      None the less, I shall start by making a slightly partisan point, in the light of what the shadow Chief Secretary said. I welcome the Opposition's conversion to open government. However, I am bound to say that in the 10 years that I spent on the Opposition Benches, I do not remember even one occasion when the Conservative Government ever offered to consult anyone about open procedures for appointing any person to any quango or body for which they had responsibility.
      I know that the Tories are changing, and that last September at their conference they said they were terribly sorry and wanted to be a softer and caring party—and now they even want open government. Clearly they are touching and feeling their way to a new Conservatism, and it is all most welcome.
      Sir Michael Spicer: Will the Minister give way?
      Mr. Darling: No, not at the moment, although I shall certainly give way later to the hon. Gentleman, who may not be fully at ease with that change of mood in the Conservative party. First, I should like to make some progress.
      My hon. Friend the Member for Great Grimsby (Mr. Mitchell) raised several points about the new clauses, one of which was about the balance of the court. I do not want to accept his amendment, because appointments to the court are Crown appointments, but I agree with everything that he said about the need to have a balance on the court, from the regions, from finance and from business, so that there is a broad representation.
      My hon. Friend will understand that I cannot say anything further tonight, other than that I hope that when he sees the appointments that will shortly be made to the court, he will not be disappointed. The Chancellor has
      1184
      made it abundantly clear that he intends to ensure that the restructured court has a far broader base than it has ever had in the past, and, as my hon. Friend will see, we shall make the first moves in that direction in the not too distant future.
      Let me set out the Government's approach in general, and then turn to the proposals by the Select Committee in particular. But first I shall make one important preliminary point that should not be overlooked. Tonight's debate has essentially been not about the principle or the constitution of the Monetary Policy Committee, but about whether there should be confirmatory hearings, which are ancillary to those—designed, as my hon. Friend the Member for Norwich, South (Mr. Clarke) said, to enhance the procedures.
      We should not lose sight of the fact that the test of the Monetary Policy Committee will be whether it achieves the Government's inflation target of 2½ per cent. That will be the test in which most people will be interested.
      I set out the Government's view when I appeared before the Treasury Select Committee last November. I repeat that the Government continue to have an open mind on whether the House should move towards instituting confirmatory hearings, but that we see some practical difficulties that need to be given much thought.
      Of course, it is necessary to approach the proposition from the point of view not only of making appointments to the Monetary Policy Committee but of making a whole range of important public appointments.
      I accept that the Monetary Policy Committee is clearly of great importance. Its job is to deliver the inflation target, so the calibre and quality of its members clearly matter. Indeed, clause 13(4) acknowledges that, because it provides that the Chancellor is bound to appoint only those people who have sufficient expertise and knowledge to discharge that duty.
      I must start with an important matter of principle, a House of Commons matter about which each and every one of us ought to be concerned. At the moment, the constitutional position is that Ministers are responsible to the House for what they do. The Chancellor is accountable for his conduct of the economy and for appointing members to the MPC. If Select Committees are to be given the power of confirmatory hearings and, almost by definition, to choose who might be on the MPC—a number of hon. Members have made it abundantly clear that they would want to exercise some degree of choice, depending on their views on Europe, monetarism or whatever—the MPC appointed might be the appointee not of the Chancellor but of the Select Committee or, perhaps, the House. That is not merely a nice debating point, as an issue of principle is involved.
      6 pm
      Mr. Charles Clarke: Does my right hon. Friend accept that some members of the Select Committee did not want to influence the appointment or the ideological position—pro or anti-European, anti-monetarist or whatever—but were concerned purely about professional competence and personal independence? Although there may be hon. Members, as he says, who think that the Treasury Select Committee should directly influence the appointments, that is not the view that informed new clause 3.
      Mr. Darling: I entirely accept what my hon. Friend says—that those members of the Select Committee who

      1185
      support the proposition want to confine their attentions to a very narrow range. However, it has been made abundantly clear in the debate and, bearing in mind the differing views and nature of the 650 Members of the House it is entirely possible—we have heard it tonight—that many hon. Members might want to go well beyond those two narrow steps and to look further.
      Mr. Gibb rose—
      Mr. Darling: I should like to make some progress; then I will give way.
      I was pointing out that we might have a situation in which an appointee to the MPC or, for example, the Director General of the Prison Service, was not the appointment of the Minister, who might say, "That's not my appointment. I'm not willing to take responsibility for what the appointee or the body does."
      Mr. Fallon: We cannot let the Chief Secretary get away with that. No one is suggesting that the Select Committee would choose who was to be appointed under the statute. Indeed, no one is proposing an amendment to that effect. Both new clauses simply deal with confirmation of appointments made by the Chancellor.
      Mr. Darling: The hon. Gentleman is right as far as new clause 3 is concerned. It makes it clear that, at the end of the day, the Chancellor can have his way.
      Mr. Fallon: He does so at the beginning of the day.
      Mr. Darling: The appointments would be subject to confirmatory hearing and, were the Select Committee to say that the person was not suitable, the new clause is phrased to allow the Chancellor to write explaining his reasons and go ahead with the appointment. The new clause would avoid the precise problems to which I referred, although it would still be the case that the individual might have been so crippled in the process of confirmation that he or she would be put in a difficult position. Were the House to decide to have confirmatory hearings in total—that is to decide that the relevant Select Committee could decide whether someone was to be confirmed—the appointee could become that of the House and not of the Minister.
      I raise that matter because we must consider the issues of principle raised by the new clause. That is why the Government's position is that it is a matter that the House as a whole must consider across the board, not simply as an amendment to the Bill.
      Sir Michael Spicer: The right hon. Gentleman bases his case, as I understand it, on the fact that the House is making excessive demands of the Government in this matter. The whole issue must be seen, must it not, in the context of the fact that the Government have stripped away the House's ability to render the Government accountable on the Floor of the House on monetary policy as a whole.
      Mr. Darling: As I said, the Chancellor of the Exchequer can be held to account by the House at any
      1186
      time for the conduct of the Government's economic policy. The Government have given the Monetary Policy Committee operational responsibility for fixing interest rates in such a way as to achieve the Government's inflation target.
      Mr. Quentin Davies: It is fatuous to raise as an objection to a new clause a danger that is explicitly excluded by the wording of that new clause. That is the position here, as the right hon. Gentleman has just acknowledged. Does he not realise that if he pursues an argument on that basis, he is sending the House a clear message that he does not have a case against the new clause at all?
      Mr. Darling: I shall develop that argument further. I repeat that there is an issue of principle as regards ministerial accountability—an issue about which hon. Members need to think long and hard.
      Mr. Gibb: Given that the Treasury Select Committee stated that it will go ahead with the confirmatory hearings regardless of whether the amendment is passed and given the Chief Secretary's firm opposition to those hearings, how will the Government cope if the Select Committee refuses to confirm one of the appointments?
      Mr. Darling: We are debating whether we should incorporate the new clause into the Bank of England Bill. That is an entirely different proposition from that advanced by the Treasury Select Committee, to which I shall return shortly.
      To conclude my initial point, ministerial accountability and who is responsible for what are matters about which the House needs to think. The whole question of ministerial accountability has fallen into disrepute in the past few years. If we are to reconsider that area, we must consider the implications long and hard. Neither that argument nor the other arguments that I will advance are fatal to the proposition of confirmatory hearings, but we do not believe that such a measure should simply be bolted on to the Bill; it is something that the House should consider.
      I shall deal with the other arguments. My hon. Friend the Member for Norwich, South helpfully set out some of the arguments that I put before the Treasury Select Committee, which I shall deal with briefly. First, I observed that there was a risk that the appointments process would be not about the merits of a particular candidate, but a way of getting at the Government of the day. I accept that no member of the present Treasury Select Committee would dream of doing such a thing, but it must be within our contemplation that a future Select Committee or other Select Committees might decide, depending on the composition of the House—within recent memory a Government did not have a majority—the Opposition, dissident members of the governing party or cross-party, to have a go at the Government by trying to get at an individual. It is not fatal, but it is something which we must consider. If that happened, it would bring the whole system into disrepute.
      I also said that I thought that confirmatory hearings of that type might discourage candidates from coming forward. I mentioned John Maynard Keynes, who has been referred to on many occasions. I have been in the

      1187
      House for only 10 years and my hon. Friend the Member for Norwich, South has been here for only nine months, but I am sure that he will have observed from time to time a tendency for hon. Members to use their privilege as Members to say things that they would never get away with outside the House. For whatever reason, they might decide to have a go at someone appearing before them.
      I mentioned Keynes because his economic credentials would have been without doubt. However, were he to appear before the Treasury Select Committee today, although the Gallery would be packed, while many of the journalists and others would be there to hear his General Theory, a number would be there in the hope that he would be asked about his private life, which, even by today's standards, might be thought by some to be rather unorthodox.
      Again, I am confident that in the majority of cases that sort of thing would not happen, but it must be within the contemplation of the House that, on occasion, the Opposition or others might have a go at the Government by trying to find out something about an individual appointee that would make it difficult for the Government.
      Mr. Radice: The fact is that we have had formal soundings with the members of the Monetary Policy Committee, and all of them have approved of the idea. I accept the dangers to which my right hon. Friend refers, and we must guard against them, but the members of the MPC believe that confirmatory hearings would enhance their position rather than weaken it.
      Mr. Darling: I agree. I have spoken to members of the Monetary Policy Committee in anticipation of a visit to the MPC, to which I certainly look forward. As part of the open process that the Government have instituted, the chance for members to advance their theories and approach on inflation would add to transparency. I have not the slightest doubt that my hon. Friend will ensure, when the Select Committee sets up the procedures, that they are fair and that the individuals have a chance to state their case and will be questioned only on matters that are germane to their appointment.
      We are discussing specific new clauses, but we are dealing with a general principle. I undertook to set out the Government's position, which is that the idea is worthy of consideration, but that we have a duty to consider not only the advantages but the downside. None of the matters that I have mentioned is fatal to the proposal, but it would be wrong to apply confirmatory hearings to these appointments and not to others that are equally important. Examples could include the utility regulators, the Governor of the Bank of England and his deputies—those are fairly important appointments, after all—and members of the Financial Services Authority. That is why we are not inclined to accept either of the new clauses.
      One important point concerning new clause 1 that has not been discussed to any great extent today is the need to ensure that the individuals maintain the high standards of public life that we would all expect.
      I remind the House that the Government made proposals last November that would mean adopting a code of practice involving various procedures designed to make the appointments process more open and auditable, because the job and the desired qualifications of the appointee would have to be publicly specified: candidates
      1188
      would have to be identified through advertising or appropriate consultation, and the sifting or selection of candidates would have to be undertaken and overseen by a panel with at least one independent member. If the proposals are acceptable, we will act right across the board to implement them.
      We must consider what the Treasury Select Committee would decide on. We have already had some discussion about that. Would the Select Committee discuss candidates' views or the number of papers that they had presented to the academic community, for example? We all know that economists cannot agree, and I doubt whether the Select Committee would always agree about who is best. The choice is bound to be subjective. We should not lose sight of the fact that the key test is whether the Monetary Policy Committee delivers the Government's objective of low inflation.
      The Treasury Select Committee has said that it wants to call members of the MPC before it, and I welcome that. The whole House has an opportunity to watch how the procedures develop and work in practice. It could be that many of my fears come to nothing, but they should not be ignored, because we must always guard against dangers. I hope that the Select Committee will bear it in mind that the whole House will be watching to see whether the confirmatory hearings are successful and whether, indeed, they add to the general openness and transparency that the Government want.
      The matters dealt with in the new clauses deserve further consideration. We are keeping the proposal under review, but we do not believe that it would be right to institute confirmatory hearings for one set of appointments in this Bill alone. It is the Monetary Policy Committee's job to achieve the Government's inflation target. That is where the main interest lies. The Chancellor remains accountable to the House for the conduct of economic policy.
      For those reasons, I urge the House to reject the new clauses. We will keep the matter under review, and perhaps at some stage the House can have a substantive debate on the merits of having confirmatory hearings right across the board.
      6.15 pm
      Mr. Heathcoat-Amory: We listened carefully to the Chief Secretary. He was highly sympathetic to the concept of confirmatory hearings—but not now, and not for this Bill. His reasons disintegrated before the House. He was afraid that the candidates would be questioned about their private life, and that people could be deterred from standing by the thought that they would be cross-examined by the nasty Treasury Select Committee.
      As the Chairman of the Select Committee, the hon. Member for North Durham (Mr. Radice), said in his excellent contribution, the questioning would centre only on the competence and independence of the candidates; that is written into new clause 3, so there is no danger, either in intention or in law, that the questioning could go as wide as the Chief Secretary fears. He gave no reasons why we should not accept the excellent all-party report. We will urge the House to vote for new clause 3.
      The Chief Secretary said that the proposal would open up a Pandora's box, and that not only Monetary Policy Committee members but even the Governor of the Bank of England might be subjected to such hearings. That is

      1189
      indeed the case. A glance at new clause 3 shows that it applies to the Governor himself. The right hon. Gentleman did not even read it before inviting the House to reject it.
      New clause 3, tabled by the hon. Member for North Durham and others, is well drafted, and we intend to support that, rather than new clause 1. I therefore beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New clause 3

      CONFIRMATION HEARINGS FOR BANK APPOINTMENTS
      '— The Treasury Committee of the House of Commons may, within thirty calendar days of a nomination being made in relation to an appointment under sections 1(2) or 13 of this Act, make a report to the House of Commons—

      stating its conclusion that a nominee for the post of Governor or Deputy Governor meets the criteria of competence and personal independence or that a nominee for membership of the Monetary Policy Committee meets the criteria specified in section 13(4), or

      giving its reasons for considering that a nominee for the post of Governor or Deputy Governor does not meet the criteria of competence and personal independence or that a nominee for membership of the Monetary Policy Committee does not meet the criteria specified in section 13(4), and inviting the Chancellor of the Exchequer to reconsider the nomination.

      (2) A nomination of which the Committee signifies its approval or on which it decides not to make a report to the House of Commons shall be confirmed by the Chancellor of the Exchequer on receipt of the Committee's report or after thirty days, whichever is the sooner.
      (3) A nomination which the Committee invites the Chancellor to reconsider shall not be confirmed until seven days after the Chancellor has written to the Treasury Committee giving his reasons for continuing with the nomination.
      (4) The provisions of subsections (1) (2) and (3) above shall apply only when the Treasury Committee has been formally constituted.
      If at any time after the passing of this Act—

      (a) the name of the Treasury Committee is changed; or

      (b) the functions discharged by that Committee at the passing of this Act, or functions substantially corresponding thereto, are discharged by a different Committee,

      the reference to the Treasury Committee shall be construed as a reference to that Committee by its new name or to the Committee then discharging those functions.
      (6) Any question arising under subsections (4) and (5) shall be determined by the Speaker of the House of Commons.'.—[Mr. Quentin Davies.]
      Brought up, and read the First time.
      Motion made, and Question put, That the clause be read a Second time:—
      The House divided: Ayes 143, Noes 252.

      Division No. 138]

      [6.17 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Beresford, Sir Paul

      Arbuthnot, James

      Body, Sir Richard

      Atkinson, David (Bour'mth E)

      Boswell, Tim

      Bottomley, Peter (Worthing W)

      Atkinson, Peter (Hexham)

      Bottomley, Rt Hon Mrs Virginia

      Bell, Martin (Tatton)

      Brady, Graham

      Bercow, John

      Brake, Tom

      1190

      Brazier, Julian

      MacGregor, Rt Hon John

      Breed, Colin

      McIntosh, Miss Anne

      Brooke, Rt Hon Peter

      Maclean, Rt Hon David

      Browning, Mrs Angela

      McLoughlin, Patrick

      Bruce, Ian (S Dorset)

      Madel, Sir David

      Bruce, Malcolm (Gordon)

      Major, Rt Hon John

      Burnett, John

      Malins, Humfrey

      Burns, Simon

      Maples, John

      Butterfill, John

      Mates, Michael

      Cable, Dr Vincent

      Maude, Rt Hon Francis

      Chapman, Sir Sydney (Chipping Barnet)

      Mawhinney, Rt Hon Sir Brian

      May, Mrs Theresa

      Clappison, James

      Moore, Michael

      Clark, Rt Hon Alan (Kensington)

      Moss, Malcolm

      Clark, Dr Michael (Rayleigh)

      Nicholls, Patrick

      Collins, Tim

      Norman, Archie

      Colvin, Michael

      Oaten, Mark

      Cotter, Brian

      Ottaway, Richard

      Cran, James

      Page, Richard

      Davey, Edward (Kingston)

      Paice, James

      Davies, Quentin (Grantham)

      Paterson, Owen

      Davis, Rt Hon David (Haltemprice)

      Prior, David

      Duncan Smith, Iain

      Randall, John

      Emery, Rt Hon Sir Peter

      Rendel, David

      Evans, Nigel

      Robathan, Andrew

      Faber, David

      Robertson, Laurence (Tewk'b'ry)

      Fallon, Michael

      Roe, Mrs Marion (Broxbourne)

      Flight, Howard

      Ross, William (E Lond'y)

      Forth, Rt Hon Eric

      Rowe, Andrew (Faversham)

      Fowler, Rt Hon Sir Norman

      Ruffley, David

      Fraser, Christopher

      Russell, Bob (Colchester)

      Gale, Roger

      St Aubyn, Nick

      Gibb, Nick

      Sanders, Adrian

      Gill, Christopher

      Shephard, Rt Hon Mrs Gillian

      Gillan, Mrs Cheryl

      Simpson, Keith (Mid-Norfolk)

      Goodlad, Rt Hon Sir Alastair

      Soames, Nicholas

      Gorman, Mrs Teresa

      Spelman, Mrs Caroline

      Gorrie, Donald

      Spicer, Sir Michael

      Green, Damian

      Spring, Richard

      Greenway, John

      Stanley, Rt Hon Sir John

      Hamilton, Rt Hon Sir Archie

      Steen, Anthony

      Hammond, Philip

      Stunell, Andrew

      Harvey, Nick

      Swayne, Desmond

      Hawkins, Nick

      Syms, Robert

      Hayes, John

      Tapsell, Sir Peter

      Heald, Oliver

      Taylor, Ian (Esher & Walton)

      Heath, David (Somerton & Frome)

      Taylor, John M (Solihull)

      Heathcoat-Amory, Rt Hon David

      Taylor, Sir Teddy

      Horam, John

      Thompson, William

      Howard, Rt Hon Michael

      Townend, John

      Howarth, Gerald (Aldershot)

      Trend, Michael

      Hunter, Andrew

      Tyrie, Andrew

      Jack, Rt Hon Michael

      Wallace, James

      Jackson, Robert (Wantage)

      Walter, Robert

      Jenkin, Bernard

      Wardle, Charles

      Johnson Smith, Rt Hon Sir Geoffrey

      Whittingdale, John

      Wilkinson, John

      Key, Robert

      Willetts, David

      Kirkbride, Miss Julie

      Willis, Phil

      Laing, Mrs Eleanor

      Wilshire, David

      Lait, Mrs Jacqui

      Winterton, Mrs Ann (Congleton)

      Lansley, Andrew

      Winterton, Nicholas (Macclesfield)

      Leigh, Edward

      Woodward, Shaun

      Letwin, Oliver

      Young, Rt Hon Sir George

      Lewis, Dr Julian (New Forest E)

      Lilley, Rt Hon Peter

      Tellers for the Ayes:

      Loughton, Tim

      Mr. Nigel Waterson and

      Luff, Peter

      Mr. Stephen Day.

      NOES

      Abbott, Ms Diane

      Ashton, Joe

      Ainger, Nick

      Atherton, Ms Candy

      Ainsworth, Robert (Cov'try NE)

      Atkins, Charlotte

      Alexander, Douglas

      Barnes, Harry

      Anderson, Donald (Swansea E)

      Barron, Kevin

      Anderson, Janet (Rossendale)

      Bayley, Hugh

      1191

      Beard, Nigel

      Godman, Norman A

      Beckett, Rt Hon Mrs Margaret

      Godsiff, Roger

      Begg, Miss Anne

      Golding, Mrs Llin

      Bennett, Andrew F

      Grant, Bernie

      Benton, Joe

      Griffiths, Win (Bridgend)

      Bermingham, Gerald

      Grocott, Bruce

      Berry, Roger

      Hain, Peter

      Best, Harold

      Hall, Mike (Weaver Vale)

      Betts, Clive

      Hall, Patrick (Bedford)

      Blears, Ms Hazel

      Hamilton, Fabian (Leeds NE)

      Blizzard, Bob

      Hanson, David

      Boateng, Paul

      Heal, Mrs Sylvia

      Borrow, David

      Henderson, Ivan (Harwich)

      Brown, Rt Hon Nick (Newcastle E)

      Heppell, John

      Browne, Desmond

      Hesford, Stephen

      Buck, Ms Karen

      Hewitt, Ms Patricia

      Burden, Richard

      Hill, Keith

      Butler, Mrs Christine

      Hinchliffe, David

      Byers, Stephen

      Hodge, Ms Margaret

      Campbell, Alan (Tynemouth)

      Hoey, Kate

      Campbell, Mrs Anne (C'bridge)

      Home Robertson, John

      Campbell, Ronnie (Blyth V)

      Hope, Phil

      Caplin, Ivor

      Hopkins, Kelvin

      Casale, Roger

      Howarth, Alan (Newport E)

      Caton, Martin

      Hughes, Ms Beverley (Stretford)

      Chapman, Ben (Wirral S)

      Hughes, Kevin (Doncaster N)

      Chaytor, David

      Humble, Mrs Joan

      Chisholm, Malcolm

      Hurst, Alan

      Clapham, Michael

      Hutton, John

      Clark, Rt Hon Dr David (S Shields)

      Iddon, Dr Brian

      Clarke, Tony (Northampton S)

      Ingram, Adam

      Clwyd, Ann

      Jackson, Ms Glenda (Hampstead)

      Coaker, Vernon

      Jackson, Helen (Hillsborough)

      Coleman, Iain

      Jamieson, David

      Cooper, Yvette

      Jenkins, Brian

      Corbett, Robin

      Johnson, Alan (Hull W & Hessle)

      Corston, Ms Jean

      Johnson, Miss Melanie (Welwyn Hatfield)

      Cousins, Jim

      Cox, Tom

      Jones, Barry (Alyn & Deeside)

      Cranston, Ross

      Jones, Mrs Fiona (Newark)

      Crausby, David

      Jones, Ms Jenny (Wolverh'ton SW)

      Cunningham, Rt Hon Dr John (Copeland)

      Jones, Jon Owen (Cardiff C)

      Dalyell, Tam

      Jones, Dr Lynne (Selly Oak)

      Darling, Rt Hon Alistair

      Jones, Martyn (Clwyd S)

      Davey, Valerie (Bristol W)

      Keeble, Ms Sally

      Davis, Terry (B'ham Hodge H)

      Keen, Alan (Feltham & Heston)

      Dean, Mrs Janet

      Keen, Ann (Brentford & Isleworth)

      Denham, John

      Kelly, Ms Ruth

      Dismore, Andrew

      Kemp, Fraser

      Dobbin, Jim

      Kennedy, Jane (Wavertree)

      Doran, Frank

      Khabra, Piara S

      Dowd, Jim

      Kidney, David

      Drew, David

      King, Andy (Rugby & Kenilworth)

      Eagle, Angela (Wallasey)

      King, Ms Oona (Bethnal Green)

      Eagle, Maria (L'pool Garston)

      Kumar, Dr Ashok

      Edwards, Huw

      Ladyman, Dr Stephen

      Efford, Clive

      Laxton, Bob

      Ellman, Mrs Louise

      Lepper, David

      Fatchett, Derek

      Leslie, Christopher

      Field, Rt Hon Frank

      Levitt, Tom

      Fitzpatrick, Jim

      Lewis, Ivan (Bury S)

      Fitzsimons, Lorna

      Liddell, Mrs Helen

      Flint, Caroline

      Linton, Martin

      Follett, Barbara

      Livingstone, Ken

      Foster, Rt Hon Derek

      Lock, David

      Foster, Michael Jabez (Hastings)

      McAvoy, Thomas

      Foster, Michael J (Worcester)

      McCafferty, Ms Chris

      Gapes, Mike

      McCartney, Ian (Makerfield)

      Gardiner, Barry

      McDonagh, Siobhain

      George, Bruce (Walsall S)

      Macdonald, Calum

      Gerrard, Neil

      McDonnell, John

      Gibson, Dr Ian

      McFall, John

      1192

      McGrady, Eddie

      Sheerman, Barry

      McGuire, Mrs Anne

      Sheldon, Rt Hon Robert

      McIsaac, Shona

      Skinner, Dennis

      Mackinlay, Andrew

      Smith, Rt Hon Andrew (Oxford E)

      McNulty, Tony

      Smith, Angela (Basildon)

      MacShane, Denis

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Mactaggart, Fiona

      McWalter, Tony

      Smith, John (Glamorgan)

      Mallaber, Judy

      Soley, Clive

      Marshall, Jim (Leicester S)

      Southworth, Ms Helen

      Meale, Alan

      Spellar, John

      Michie, Bill (Shef'ld Heeley)

      Squire, Ms Rachel

      Milburn, Alan

      Starkey, Dr Phyllis

      Miller, Andrew

      Stewart, David (Inverness E)

      Mitchell, Austin

      Stewart, Ian (Eccles)

      Moffatt, Laura

      Stinchcombe, Paul

      Moran, Ms Margaret

      Stoate, Dr Howard

      Morgan, Ms Julie (Cardiff N)

      Straw, Rt Hon Jack

      Morgan, Rhodri (Cardiff W)

      Stuart, Ms Gisela

      Morley, Elliot

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Morris, Ms Estelle (B'ham Yardley)

      Morris, Rt Hon John (Aberavon)

      Taylor, David (NW Leics)

      Mudie, George

      Temple-Morris, Peter

      Mullin, Chris

      Thomas, Gareth (Clwyd W)

      Naysmith, Dr Doug

      Timms, Stephen

      O'Brien, Mike (N Warks)

      Tipping, Paddy

      Olner, Bill

      Todd, Mark

      Pearson, Ian

      Touhig, Don

      Pendry, Tom

      Turner, Dennis (Wolverh'ton SE)

      Perham, Ms Linda

      Turner, Dr Desmond (Kemptown)

      Pickthall, Colin

      Turner, Dr George (NW Norfolk)

      Pike, Peter L

      Vaz, Keith

      Plaskitt, James

      Vis, Dr Rudi

      Pollard, Kerry

      Walley, Ms Joan

      Pond, Chris

      Ward, Ms Claire

      Pound, Stephen

      White, Brian

      Powell, Sir Raymond

      Wicks, Malcolm

      Prentice, Ms Bridget (Lewisham E)

      Williams, Rt Hon Alan (Swansea W)

      Prentice, Gordon (Pendle)

      Primarolo, Dawn

      Williams, Alan W (E Carmarthen)

      Prosser, Gwyn

      Winterton, Ms Rosie (Doncaster C)

      Purchase, Ken

      Wise, Audrey

      Quin, Ms Joyce

      Wood, Mike

      Rammell, Bill

      Woolas, Phil

      Reed, Andrew (Loughborough)

      Worthington, Tony

      Robinson, Geoffrey (Cov'try NW)

      Wright, Anthony D (Gt Yarmouth)

      Rooker, Jeff

      Wright, Dr Tony (Cannock)

      Salter, Martin

      Wyatt, Derek

      Savidge, Malcolm

      Sawford, Phil

      Tellers for the Noes:

      Sedgemore, Brian

      Mr. Graham Allen and

      Shaw, Jonathan

      Mr. Greg Pope.

      Question accordingly negatived.
      Mr. Heathcoat-Amory: On a point of order, Mr. Deputy Speaker. We have just had a Division on a new clause tabled by the Chairman of the Treasury Select Committee, a Labour Member, and signed by two of his hon. Friends. They spoke in favour of the new clause, but when it came to a Division, they failed to support it. Is that in order or is it an abuse of the procedures of the House to table an amendment, speak in its favour and fail to support it in a Division, presumably because one has been improperly leaned on by the Whips?
      Mr. Deputy Speaker: From experience, I suspect that this is not the first occasion on which that has happened. Hon. Members are responsible for their own actions. It is not a matter for the Chair.

    Clause 3

      FUNCTIONS TO BE CARRIED OUT BY NON-EXECUTIVE MEMBERS
      6.30 pm
      Mr. Darling: I beg to move amendment No. 41, in page 2, line 23, at end insert—
      '(2A) At a meeting of the sub-committee the quorum shall be 7.'
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: Government amendment No. 42.
      No. 14, in page 2, leave out lines 26 and 27.
      Mr. Darling: I said during the debates in Standing Committee on clause 3 that I accepted that the clause was deficient to the extent that it did not contain any specific standing orders. Amendment No. 41 will give the sub-committee a quorum of seven. Amendment No. 42 adapts the existing standing orders for the court.
      With amendment No. 41 is grouped amendment No. 14, which was tabled by the Opposition. Its effect would be to remove the power of the sub-committee to delegate its functions to two or more of its members. I believe that that power is important simply because its makes for good management.
      Anyone who has ever sat on any committee or has had anything to do with running a business will know that it is common for a board or committee to delegate its functions to perhaps two or three individuals, for them to report back to the parent committee or board, and for the board or committee to make a final decision. Even if the sub-committee delegates responsibility for certain functions to a sub-committee of two or more, it as a whole has statutory and collective responsibility for the duties set out in the Bill.
      The Opposition amendment would simply hamper the smooth operation of the sub-committee. Therefore, I urge the House to accept the two Government amendments and to reject the Opposition amendment.
      Mr. Fallon: It is in the nature of the grouping of the amendments that the Chief Secretary finds himself replying to an amendment that I have not yet explained, and trying to assume the arguments behind it. Be that as it may, let us begin with Government amendments Nos. 41 and 42.
      I hope that the House will not be deceived by the graceful note with which the Chief Secretary moved the amendments. That was not the tone that he adopted in Committee. [HON. MEMBERS: "You were not there."' I have read the proceedings of the Committee, and I am about to quote from them. When the matter was raised in Committee by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley), the Chief Secretary said of my hon. Friend:
      "The hon. Gentleman is talking nonsense."
      Now the Government have had to table amendments to meet precisely the point that my hon. Friend raised in Committee—the interaction between clause 3(4) and the rest of the Bill. I had hoped that, in moving the amendments, the Chief Secretary would begin with something of an apology to my hon. Friend.
      1194
      Perhaps I can remind the Chief Secretary that, when he told my hon. Friend that he was talking nonsense, he went on to say:
      "It is sufficient to specify in the Bill the quorum of the court."—[Official Report, Standing Committee D, 20 November 1997; c. 64.]
      We now learn that it is not sufficient simply to specify the quorum of the court. Ministers have been forced to reconsider and to make it clear that, even if its functions are delegated under subsection (4) to as few as two members, the quorum of the sub-committee must be seven. That is an improvement on the arrangements that the Chief Secretary put to the Standing Committee. I look forward to the expert opinion on that improvement which I know my hon. Friend the Member for Bury St. Edmunds will shortly give.
      Amendment No. 42—something else that the Government have had to reconsider—is certainly an improvement. The Opposition welcome the propriety introduced there. These are late changes to the Bill. I sometimes wonder whether Ministers who take great pride in claiming credit for legislation are also prepared to take credit for improving the drafting instructions sent to counsel, presumably some time last autumn, which have now had to be rapidly revised.
      We have tabled amendment No. 14. Even with the safeguard that amendment No. 41 provides, which we welcome, it is wrong to delegate to as few as two people the functions of the sub-committee. That happens in some companies, certainly very small companies. I have served on an audit committee and a remuneration committee. Indeed, I have chaired an audit committee of as few as two directors. But I have always felt uncomfortable about doing so. It has always been one of the arguments for strengthening the role of non-executive directors and improving corporate governance that one does not get into the position, especially on matters affecting remuneration, in which as few as two people can decide the large sums of shareholders' money paid.
      We are not talking here of some very small company. We are talking about the Bank of England and the most major functions that are now to be entrusted to it. We think that, as a minimum, the quorum ought to be three or four members, but we prefer to delete the subsection altogether. I am happy to give the Chief Secretary one last chance to persuade us that we should not.
      Mr. Ruffley: I shall keep my remarks brief, because my hon. Friend the Member for Sevenoaks (Mr. Fallon) has set out clearly the burden of our argument. I was surprised—astonished is probably a better word—that, in Committee, the Chief Secretary did not pick up the non-partisan point that, while schedule 1(13)(2) provides for a quorum of nine for the sub-committee of the court of directors, in practice, it would be possible to sub-sub-delegate to a quorum of two. It is not called a quorum of two, but the provision is for two of the directors to exercise powers on behalf of the whole of the sub-committee. The Chief Secretary denied that, and called it nonsense, but it is clearly the effect of the provision as drafted.
      With amendment No. 14, we are merely drawing attention to the unfortunate state of affairs where decisions relating to the important functions discharged by the court of directors could be taken by as few as two individuals. The Chief Secretary says that the whole of

      1195
      the court will be responsible: there will be collective and corporate responsibility for the actions of those two individuals—if, indeed, two individuals take the decision. He is right, but that is not an argument to prove that the amendment is of no effect.
      If everything done in the name of the committee is ultimately the responsibility of the committee, why bother having a quorum of any number? By that argument, there is no logical reason for having quorums at all—we might as well say that one individual can take a decision, and justify that by saying that, at the end of the day, the whole committee is responsible for what that individual does.
      It was surprising that the Chief Secretary did not acknowledge that what is effectively a sub-sub-delegation is a potentially dangerous state of affairs. My hon. Friend the Member for Sevenoaks rightly pointed out that we are not dealing with a small or medium-sized company; we are talking about the functions to be discharged by the court of the Bank of England. It is unfortunate that the Bill as it stands would allow as few as two people to take such important decisions. We tabled the amendment to ensure that those potential unfortunate consequences do not come to pass, and, in that spirit of non-political partisanship, I support amendment No. 14.
      Amendment agreed to.
      Amendment made: No. 42, in page 2, line 25, at end insert—
      '(3A) If a member of the sub-committee has any direct or indirect interest in any dealing or business with the Bank which falls to be considered by the sub-committee—

      he shall disclose his interest to the sub—committee when it considers the dealing or business, and

      he shall have no vote in proceedings of the sub-committee in relation to any question arising from its consideration of the dealing or business, unless the sub-committee has resolved that the interest does not give rise to a conflict of interest.

      (3B) In any proceedings of the sub-committee, a member shall have no vote in relation to any question arising which touches or concerns him but shall withdraw and be absent during the debate of any matter in which he is concerned.
      (3C) Subject to subsections (2A) to (3B), the sub-committee shall determine its own procedure.'—[Mr. Darling.]

    Clause 11

      OBJECTIVES
      Mr. Mitchell: I beg to move amendment No. 25, in page 5, line 2, after 'and', insert
      'the highest possible levels of employment, and'.
      Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss the following amendments: No. 26, in page 5, line 4, leave out 'employment' and insert
      'the level of the exchange rate.'.
      No. 1, in clause 12, page 5, line 9, at end insert,
      'or
      (c) in the event of a conflict between the objectives of economic policy, how that conflict is to be resolved.'.
      No. 27, in page 5, line 9, at end insert—
      '(1A) In sub-paragraph 1(a), "price" includes the price of houses and land.'.
      1196
      No. 2, in page 5, line 10, leave out 'both' and insert 'all'.
      No. 33, in clause 19, page 8, line 40, leave out 'extreme'.
      Mr. Mitchell: This is a Bill to bury Keynes, who was mentioned earlier in our debate. It would be better titled "The Coronation, Enthronement and Miscellaneous Provisions of Eddie George Bill". With my amendment, I want to provide a two-buttock throne—or two thrones, one for each buttock—so that he has objectives other than the single objective that the Government have given him.
      I can see why the Government have introduced the Bill: they see it as a measure that will, first, win the confidence of finance and international money markets; and, secondly, commit the Government and the country to stability. The hope is that, if we kneel before finance, show that we are in awe of it and do its bidding, it will be nice and kind to us, and we shall not have to face the problems that we have faced in the past.
      However, it is important that, rather than include only the objectives of bankers, we put in the Bill some of the objectives that are important to the people. Those objectives centre on full employment and economic growth, and it is those subjects I want to insert in the Bill as basic considerations for the Bank of England.
      I feel that the decision to hand over control of the enormously powerful management lever of interest rates is a mistake. Interest rates control everything in the economy, and are the basic tool of management. They damp down or boost the economy, and control the rate of growth and the exchange rate. Changes in interest rates can lead either to deflation or to expansion. They are the basic, most essential weapon, yet here we are—a democratically elected Government—handing control of them to an appointed Governor of the Bank of England.
      The Bank does not represent the interests of the mass of the people of this country—it represents the interests of finance, which have never been favourable to those of the people. I am suspicious of the priorities of finance, and those priorities are bound to be dominant in the Bank of England, which is located in the City and represents the City's views. Giving the Bank control of interest rates is a mistake, and it will not lead to stability, as is intended.
      Indeed, the decision to give the Governor the power to raise interest rates has already led to instability, in that rates have been raised four or five times, people are beginning to complain about the rise in their mortgage repayments, and the pound is now overvalued. A move intended to bring stability has actually been destabilising.
      6.45 pm
      That is implicit in the whole operation: if we are going to manage the economy by means of interest rates and we give the Bank of England control over interest rates, its highest priority in any situation will be to raise interest rates, and it will deal with any problem by raising interest rates. In turn, interest rates affect the exchange rate, and, in the present circumstances, the exchange rate has risen. That effect has been amplified by events in Europe,

      1197
      because the instability and uncertainty there about what will happen in respect of monetary union, which I hope falls apart as quickly as possible—
      Mr. Quentin Davies indicated dissent.
      Mr. Mitchell: The hon. Gentleman laughs, but it almost certainly will fall apart. That is my prediction, and I will take a side bet from him on that.
      Reaching monetary union has caused great instability in Europe—it is like the reign of virtue, in that it would be a nice thing to have, but is very difficult to get to. Those difficulties are bringing money out of Europe into sterling and forcing up the exchange rate. Sterling is a better bet when there are high interest rates.
      In Germany, there is a deliberate policy to reduce the exchange rate and depreciate the currency, because that is the only way to expand the economy after the rigours of Maastricht's deflation. The Germans are going in for what might be called competitive devaluation—if we did it, it would certainly be called that. The result is that the pound is now grossly out of kilter with other European currencies.
      Two nights ago, a major plastics manufacturer told the all-party group on manufacturing industry that his products were now 25 per cent. less competitive than they were a year ago. Last night, I discussed the employment situation in Grimsby with representatives of Birds Eye Foods Ltd., which is shedding 450 jobs in Grimsby. One of the reasons is the bovine spongiform encephalopathy crisis, but the other is that products produced in this country are now 25 per cent. less competitive in the Dutch and German markets than they were before the rise in the pound began.
      We have the insanity of the economy being managed simply by interest rates and that power being given to the Bank of England, which has led to a destabilising deflation in the economy. It is as if our only weapon with which to manage the economy is to bash the engine of growth with a large heavy hammer—that is essentially what we are doing in bashing manufacturing.
      That is why I want to put other objectives in the Bill. Amendment No. 26 would insert the effect on the level of the exchange rate as a factor to be taken into account when interest rate increases were being considered, because today's European uncertainties mean that such effects are disproportionate. I feel that we must introduce other objectives, because I do not trust the priorities or skills of financiers and those drawn from a financial background—the sort of people who sit on the Monetary Policy Committee of the Bank of England. I feel that distrust because bankers have never served the interests of the people, and I do not suppose that they will suddenly start to do so.
      I recall the famous New Zealand poem that was penned when Sir Otto Niemeyer, from the Bank of England, went out to New Zealand in 1931 to tell the authorities how to deal with the depression. He said that they should act according to a simple formula, "Put up interest rates, fire people." The New Zealand poet, Ard Fairburn, wrote:
      "The heart is gold,
      The name is Otto
      Women and children first, the motto".
      1198
      That is what always happens—interest rates are raised to pass the punishment on to the people.
      Amendment No. 27 calls for a proper measure of inflation, because, if the economy is run on the basis of the inflation rate, it must be properly calculated. The retail prices index is an inadequate, unsatisfactory measure of inflation. Harold Macmillan once said that managing the economy with the information available to him was like trying to catch a train with a 19th-century edition of Bradshaw. Managing the economy according to the RPI is rather like trying to navigate the M25 with a 1936 RAC map of the road system. It is not a relevant measure. I believe that it is entirely wrong to make it the dominant consideration for the Bank of England.
      One of the essential problems with inflation is that it is driven by assets as well as those factors that feature in the RPI. That is why amendment No. 27 would include house prices in any consideration of price stability. Inflation is usually caused by loose credit, such as the credit explosion that Nigel Lawson produced in the late 1980s when he was Chancellor. That leads to an enormous asset explosion, particularly in house prices. Such a factor should be included in the measurement of inflation that the Bank of England must take into account.
      I object to managing the economy according to keeping the rate of inflation down on the basis of interest rates. Any fool can defeat inflation. The previous Conservative Government managed that pretty well, and qualified for that description as well. All one has to do to reduce inflation is to put people out of work. Unemployment went from 1.4 million in 1979 to more than 3 million in the early 1980s, and reached that level again in the early 1990s. That is why the inflation rate was reduced. It was simply a question of producing a graveyard of workers. Once that happens, inflation falls. That is what the Conservatives duly did.
      There is no reason why an obsession with inflation should be the target for the Bank of England; nor should it dominate policy. One cannot have a decent rate of growth and keep inflation at 2.5 per cent. If one had growth at 5 per cent., inflation would inevitably rise above 2.5 per cent., because inflation is associated with growth. It is not true that a reduction in inflation leads to growth. There is no causal connection. Inflation is a characteristic of growth.
      For practical purposes, inflation is dead. If one seeks to question that claim, consider the impact of the financial crisis that has hit the far eastern economies. Most of those economies have already devalued their currencies, and the others will follow suit. Their manufactured goods will come pouring into our country at low prices. That will aid our struggle with inflation, because it is won by putting people out of work and making imports cheap, so that people do not buy domestic products. That is ruinous for the domestic economy.
      We have suffered from such problems in the past, and they are beginning to re-occur. Closures and unemployment in manufacturing are already being announced, and the situation will become worse in the coming year. We have already had warnings about that from British Steel. A delegation from the Inter-Parliamentary Union that visited Japan was also warned about the impact of the current financial crisis on Japanese and Korean investment in this country. Our manufacturers are already complaining about the problems that they are suffering.

      1199
      The emphasis throughout the economy is on the coming deflation, which will hit it soon. It is the consequence of one-club golfing, with interest rates as the only method of economic management, carried out on the basis of an inflation-defeating agenda. That policy is not carried out according to any scientific fashion; it is not as though the people in charge know what they are doing. All they are doing is hitting the economy with a heavy hammer.
      Other objectives need to be included in the management of the economy. The economic management requirements of the Bank of England should not be tied simply to the level of inflation, as measured by the faulty mechanism of the RPI. The Labour party's objectives must be, are and always will be jobs and growth, in order to maximise the living standards of our people. Those are essential parts of Labour policy. We can achieve nothing unless we achieve economic growth and full employment. That means that other considerations must guide the Bank of England.
      I concede reluctantly that, by force majeure, control of economic policy will be handed to the Bank of England. I am opposed to that, but it would be better if it was set a dual target relating not only to the level of inflation, but to the level of employment. Growth should also be included in the second part of the equation. For that reason, amendment No. 25 states that the objectives of the Bank of England in relation to monetary policy should be geared to the
      "highest possible levels of employment".
      I do not believe that that is a dangerously revolutionary or radical step. That consideration should be included. The Government have mentioned it in clause 11(b), but inflation is the dominant consideration. I want employment to be an equal consideration.
      Other central banks have made employment one of their objectives. It is only in New Zealand that inflation is the exclusive obsession, as it is in this country. According to the New Zealand experiment, a written agreement was drawn up between the Reserve bank of New Zealand and the Government to maintain a fixed inflation target, but that has proved disastrous. The experiment has been conducted according to the policy followed in Britain—interest rates have been put up, with the result that the value of the dollar has gone up. Unemployment is therefore rising, and the New Zealand economy is suffering. That will always be the case as long as we opt for such an automatic mechanism of interest rate increases.
      I therefore want to require the Bank of England to study other considerations, particularly the maximum level of employment, and to bear in mind the effects of its decisions on the exchange rate. The amendments would guarantee that. That would be a valuable experience for the Bank, because, instead of the easy automatic reflex of putting up interest rates to combat every possible problem, it would be forced to calculate the consequences. It would be forced to work out the effects on the real economy—that of jobs, growth and a competitive industry which can compete in an international market.
      That would be a valuable learning process for the Bank of England, but it can happen only if the Bill makes employment and growth, as well as the rate of inflation, matters which it must consider.
      Mr. Heathcoat-Amory: It is a pleasure to follow the hon. Member for Great Grimsby (Mr. Mitchell), because
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      he is becoming a rather distinctive voice on the Labour Benches. That used not to be the case. We used to hear a lot of concern expressed by Labour Members about manufacturing industry. I share many of those concerns, because I, too, have a manufacturing background and I represent a constituency with a surprising amount of manufacturing in it. I have always listened carefully to other hon. Members who have expressed similar worries, particularly about the exchange rate. I am afraid that the new Labour party has rather abandoned its roots, so I was particularly struck by the way in which the hon. Gentleman related his concerns about the Bill to worries about the future of the manufacturing industry. Those arguments must be taken seriously.
      On Second Reading, the hon. Gentleman spoke along similar lines. On that occasion some of his worries were also expressed by a number of his hon. Friends, most notably the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) and the right hon. Member for Llanelli (Mr. Davies). He summed up his worries about the Bill by saying that the Government had a professed aim of greater devolution of powers from bureaucracy to democracy whereas the Bill was designed to make the move in the opposite direction by transferring power from democracy to bureaucracy. I think that that sums up some more general worries about the Bill.
      Unfortunately, many of those voices were not represented in the Standing Committee. I believe that all such hon. Members were excluded from the Standing Committee deliberately and I am afraid that it was packed with many new Members who were most unwilling to speak out about any anxieties that they had; indeed, they hardly said anything, so legitimate worries about the Bill went more or less undebated in Committee, which was a pity.
      7 pm
      However, this is a new debate on Report, and we have before us an unanswered and unresolved question: how will the Government reconcile their various economic objectives if the going gets tough? Conflicts do arise in economic policy from time to time. The Government are lucky at the minute. They have inherited a golden legacy of steady growth, low inflation and falling unemployment. Things are extremely stable and, on the whole, are going well, although I am afraid inflation is starting to nudge up again and I would not be confident that unemployment will continue to fall throughout the year. Dangers lie ahead.
      The hon. Member for Great Grimsby was right in saying that driving the British economy is not an exact science. He gave several illustrations of how difficult it is. A permanent secretary once said to me that running the economy from the point of view of the Treasury was like driving a car with the windscreen blacked out and the rear-view mirrors broken: one certainly did not know where one was going; one had some idea of where one was, but little idea even about where one had just been. That is the difficulty about trying to apply exact science to the setting of interest rates.
      To start with, we must be clear in our minds about what the Bill does as it stands. It gives overriding priority to price stability and puts the maintenance of price stability into the hands of an unelected committee, which is given total discretion in setting short-term interest rates.

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      Conservative Members support a low-inflation strategy. We give way to no one in our belief that it is essential to break any inflationary tendencies in the economy and establish a permanent low-inflation culture. We were far advanced on the way to doing so—we met our inflation target of 2½ per cent. or less—by the date of the general election.
      However, we know that setting up an independent Bank of England is not necessarily—and certainly not sufficiently—the way to achieve low inflation, because plenty of independent central banks in the world have fairly poor inflation records. Historians will know that the Weimar republic had an independent central bank called the Reichsbank, which was not very successful. Similarly, as the previous Government's record shows, it is possible to establish low inflation and to achieve a low inflation target without an independent central bank, by using the full array of weapons at the disposal of any Chancellor—monetary weapons, taxation and expenditure. We do not agree that giving independence to a central bank is the only way to achieve low inflation.
      Moreover, there are dangers in making a mechanical change without having established a low-inflation credential and record. If the Bill as drafted becomes law, if we run into a recession in a few years' time, with unemployment starting to increase, and if inflation still stubbornly remains above—perhaps only just above—the target rate of 2½ per cent., the Bank of England will be obliged to give priority to reducing inflation. It may well continue to increase interest rates, even in the teeth of a recession.
      Let us suppose that, alternatively, the economy experiences a supply side shock. Commodity prices might start to rise. Oil prices, which have sometimes increased very fast, might do so again. That might feed through into an increased general index of prices and the retail prices index might increase. In those circumstances, the only weapon at the disposal of the Bank of England and the Monetary Policy Committee of the Bank will be to increase interest rates, and that could easily feed through into higher unemployment. Clause 19 contains emergency provision for all these arrangements to be abandoned and for the Bank to give way to the Treasury. However, if there were a milder shock and inflation drifted up owing to supply side influences, the Bank would be obliged to increase interest rates, not because it thought it necessary, but because it would be required by law to do so.
      One can contrast the Bank's lack of discretion concerning policy generally with the example of the Federal Reserve bank of the United States, which does not have an overriding commitment to low inflation. It has several equal objectives, including the maintenance of employment. That bank has been very successful in balancing all those objectives and achieving low inflation combined with low unemployment. Obviously, the overriding commitment to price stability is unnecessary.
      Therefore I believe that the hon. Member for Great Grimsby and other hon. Members who have spoken on the subject previously are right to be worried and to ask the Government what they would do in certain eventualities. The Government certainly did not understand that dilemma earlier in the Bill's passage.
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      I am glad that the Chief Secretary is to respond to the debate because he will recall that he got into a tremendous muddle on Second Reading, trying to explain how the Government did not have as an overriding priority the maintenance of price stability. He was asked about that by the right hon. Member for Caernarfon (Mr. Wigley), who pointed out that the Bill did give that priority, and the Chief Secretary said:
      "The right hon. Gentleman is mistaken."
      When the right hon. Member for Caernarfon persisted and said that the other Government objectives were subsidiary to the anti-inflation drive, the Chief Secretary said:
      "The right hon. Gentleman is reading it the-wrong way round."—[Official Report, 11 November 1997; Vol. 300, c. 712.]
      I believe that, on reflection, the Chief Secretary will realise that actually it was he who got that wrong. The beginning of wisdom is at least to agree about where we are at the minute, so I should be grateful if he would confirm the fact that the commitment to price stability is overriding, and will be by law. I ask him to confirm his understanding of that position, which is little more than asking him to refer to clause 11.
      However, we want to ask the Chief Secretary what will happen when there is a conflict between those two objectives, especially if we beget a split between fiscal policy and monetary policy. We all know that budget decisions, which are broadly fiscal, affect inflation, directly by influencing prices and indirectly through monetary factors or the influence of debt management. From now on—this is another change introduced by the Bill—debt management will be taken away from the Bank of England and given to another quango that is controlled by the Treasury.
      The way in which debt is managed has a big effect on monetary policy. Whether the Treasury sells debt to the banking sector or the non-banking sector has a great effect on the quantity of money in circulation, and therefore on eventual price levels. It is quite clear—this is a statement and not an opinion—that the Government will affect the dealings of the Bank of England. Therefore, the two could move in opposite directions.
      This is not mere speculation about what might happen in future in this country: there are plenty of examples of its happening elsewhere in the world. We discussed the matter at some length in Committee, but I shall refer only to the two best examples to which we alluded. The first concerns the United States in the 1980s under the presidency of Ronald Reagan, whose budgetary and fiscal policies were, by and large, expansionary and potentially inflationary. That situation was dealt with by the Federal Reserve bank under Paul Volcker, who had to put up interest rates very sharply. There was a split between the Executive, who were pulling in one direction, and the monetary authorities, which were pulling in the other.
      Another example closer to home is what happened during the period following German reunification. The West German Government failed to finance the cost of reunification by increasing taxes or cutting other expenditure, so they ran a loose fiscal policy and put all the strain of the German anti-inflation drive on to the Bundesbank, which increased interest rates sharply. We now know that that was a major factor in the destruction of the exchange rate mechanism.
      Even closer to home, the July Budget sowed the seeds of a potential divergence between monetary and fiscal policies. Instead of dealing with consumption—which the

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      Chancellor said was in danger of overheating—he taxed savings. Inflation is still above the Government's target. Therefore, the strain had to be taken by the Bank of England, which has increased interest rates four times in addition to the increase that the Chancellor introduced before he transferred monetary policy to the Bank. So there have been five interest rate increases since the Budget.
      Mr. Quentin Davies: I am grateful to my right hon. Friend, whose speech I am following with great care. He has made some extremely powerful points. Is he aware that, in answer to a question that I posed in the Treasury Committee, the Governor of the Bank of England acknowledged quite explicitly that, had the Chancellor done what he obviously should have done in the conjunction of last summer and borne down on consumption and incentivised savings—he did exactly the opposite, and taxed savings with the pensions tax and reduced consumption taxes—the burden on monetary policy would have been significantly less and we would now be enjoying lower interest rates and lower sterling parity?
      Mr. Heathcoat-Amory: I am very interested in my hon. Friend's comments. He provides powerful and authoritative backing for my point. I had not realised that the Governor had said that—although I am not altogether surprised. It is now generally accepted that the Government made a colossal miscalculation in targeting people who save. They failed to draw expenditure away from consumption—if that was their aim. If the Government are trying to provide an alternative to the welfare state, they should encourage rather than cut savings. The Government are making mistakes not only in each Budget but in each Treasury announcement. They compounded their attack on pension funds last year by announcing the destruction of personal equity plans and tax-exempt special savings accounts and by capping their successor at £50,000. The Government have made a series of mistakes that throw the strain of the anti-inflationary strategy on to the Bank of England.
      Amendment No. 1, and the consequential amendment No. 2, ask the Government to explain themselves rather than expecting other people to sort out the mess. It may have been a rather cunning move on the Chancellor's part to try to pass to others the unpleasant business of raising interest rates. In that way the Chancellor hopes to avoid the hostility that attaches to those who increase people's mortgage payments, which is a form of taxation, in complete contradiction to everything that he promised before the election. I do not think that the right hon. Gentleman's plan will succeed because he still has responsibility for such matters—even if he has handed operational matters to the Bank of England.
      Our amendment seeks to force the Government to explain how such matters will be resolved. The Government have an inflation target, which is currently 2½ per cent., and several other desirable objectives—two of which are mentioned in the Bill. However, if there is conflict between the various objectives, we want to know how that will be tackled and who will do it. Our amendment also seeks the Government's explanation of the monetary and inflationary consequences of their policies so that they do not set the Bank of England an impossible task.
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      7.15 pm
      As things stand, I seriously believe that, when the economy hits some rough patches, there will be much recrimination and misunderstanding. There is the danger of a direct confrontation between the Bank of England and the Government because the Bank will try to deliver on the inflation objectives but will be hampered in that aim—and possibly prevented from doing so—by the actions of the Chancellor of the Exchequer and the Government who will pull in a different direction. The Government must respond to that serious issue. Our amendments seek to force the Government to think carefully about the matter and to tell the House what they will do.
      Sir Michael Spicer: I agree with the hon. Member for Great Grimsby (Mr. Mitchell) on many matters, particularly on the subject of Europe—although we sometimes battle against each other on the "Target" programme. The hon. Gentleman has some interesting contributions to make on European issues. I agree with the amendments' general proposition that Government must make choices between conflicting objectives. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) made the same point from the Front Bench.
      I do not agree so much with the objectives that the hon. Gentleman is pursuing in some of his amendments. Like my right hon. Friend the Member for Wells, I think that balancing employment against inflation is a false choice. I agree with my right hon. Friend that, when it comes to conflicting objectives, the real choice might lie between fiscal policy and monetary policy. If the Bill is enacted, one part of economic policy will be handed over to a non-elected body, which will be told to get on with it. To that extent, all sorts of potential conflicts—to use my right hon. Friend's words—may emerge in terms of economic policy. As the Government threw out proposed new clause 1, Parliament will have no voice in decisions about conflicting objectives. One feels for Labour Members, who are getting increasingly restless. Suddenly they are becoming frightened. Members of the Treasury Committee, on which I serve, constantly try to probe witnesses in the hope that they will say that the effect of the Bill should be diluted. The hon. Member for Great Grimsby has the merit of trying to amend the Bill to build in different objectives, which is a legitimate aim, although the Government will presumably reject the amendments. As the Bill stands, all the other policy objectives are to be made subject to that of price stability.
      The hon. Gentleman argued that price stability was not an important component of employment policy. I do not agree; I entirely accept the position outlined by my right hon. Friend. The hon. Gentleman may find historical examples where growth has been accompanied by inflation, but he would have to concede that for growth in jobs to take place, there must be low inflation and high competitiveness. High savings go with low inflation, because if there is high inflation, there is no point in saving, so the resources from which to invest in jobs do not exist.
      It is possible to find historical precedents of inflation going hand in hand with growth, but over time countries that have suffered inflation and especially hyper-inflation

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      have not experienced growth—in many cases their employment and manufacturing have collapsed. I accept that price stability is a vital part of a healthy economy.
      Mr. Mitchell: Having argued well so far, the hon. Gentleman is moving towards a false conclusion. Growth is inevitably associated with increasing inflation. I can think of only two examples of perfect price stability this century: Salazar's Portugal, and the United States in the three years up to the great crash of 1929. Those are examples of almost perfect price stability, and what growth did that generate?
      Sir Michael Spicer: There are many examples in history, ranging from the Weimar republic forwards and backwards, and all over the world, in which, because a currency has collapsed, the real economy has collapsed with it. Historical precedents support the view that price stability is accompanied over time by a sound economy.
      I agree with the hon. Gentleman on amendment No. 26, which replaces "employment" with
      "the level of the exchange rate",
      if that arises from his worry about false exchange rates, which may occur if an independent central bank pushes us towards a single currency.
      We have only to look across the channel to see what has happened in France. It has been extraordinary over the past 24 hours. The socialist Government in France seem to believe their own claim that the massive unemployment there has nothing to do with the false exchange rate that they created against the deutschmark, and that they will adopt expenditure policies, the like of which the hon. Gentleman may want to have incorporated in the Bill under his amendment No. 26. I would not agree with that, but I agree with him when he implies that false exchange rates have a lot to do with unemployment.
      I do not approve of the idea of taking away a major slug of economic policy and handing it outside the control of Parliament, especially now that the Select Committee is to have no statutory say in the appointment of the board. I do not like that, for the reasons stated by my right hon. Friend. The grave distortions that can emerge between monetary and fiscal policy in that context are self-evident.
      Once that decision has been taken—I accept the Government's premise that price stability is an important feature—it is right that the Bill should explicitly restrict the Monetary Policy Committee to dealing with a specific policy objective. I cannot see any argument for handing the whole of economic policy, which is effectively the hon. Gentleman's aim, outside the sphere of Government and Parliament. That is the principle behind the amendments.
      The hon. Member for Great Grimsby does not like the price stability objective, and he probably does not like the fact that the Bank of England is to run it, so he proposes giving everything to the Bank of England: employment policy, as he defines it, exchange rate policy—everything should be given to an unelected body. That is the end of democracy. He argues strongly, as I do, against the move in Europe towards stripping our Parliament of its powers and handing them to Europe, yet his amendments would strip Parliament and our elected Government of the ability to make choices between economic policies. That is very serious indeed.
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      Although I sympathise with Labour Members who are suddenly waking up to the implications of the Bill, the way to put it right is to throw out the entire Bill, not to agree to the hon. Gentleman's amendments. He is effectively saying, "We have put all those powers outside our control, so let us give the Bank even more powers. Let it make the choices, so that Parliament and the Government do not have to do any work, because everything has been given to an unelected outside body."
      That cannot be the solution to the worries and dilemmas that many of us share with the hon. Gentleman. The answer is for him to vote against Third Reading and to get 300 or 400 of his colleagues to do the same, and to throw out the Bill. He has about two hours in which to go round the bars and collect all his hon. Friends. We will be with him in the Lobby, if he is prepared to do that.
      It is wrong to say, "We do not like giving the Bank of England powers, so let us give it even more powers and choices in the running of our economy." Although I share with the hon. Gentleman many of his initial premises, I could never agree to a group of amendments that gave the Bank of England not only the operational powers to carry out the policy that the Government have set for it in terms of price stability, but the choice between unemployment policy, fiscal policy and so on. The amendments are nonsense in the context of the hon. Gentleman's objectives. I hope that the House will vote against them.
      Mr. Gibb: I support amendment No. 1. Clauses 11 and 12 are key to the monetary objectives of the Bank of England, once it achieves independence. Clause 11 states:
      "In relation to monetary policy, the objectives of the Bank of England shall be—
      (a) to maintain price stability".
      Subsection (b) continues:
      "subject to that, to support the economic policy of Her Majesty's Government".
      It is interesting how the phrase "subject to" has crept into the drafting of the Bill, whereas in letters from the Chancellor to the Governor of the Bank of England and to the Chairman of the Treasury Select Committee, the phrase has always been "without prejudice to". I do not want to go into semantics to see how distinct is the difference between those two phrases, but "subject to" subjugates the pursuit of the Government's other economic objectives to the overriding objective of maintaining price stability.
      Clause 12(1)(a) enables the Treasury to write to the Bank of England to set out what the Government understand by the phrase "price stability". Subsection (1)(b) enables the Treasury to write to the Bank of England to set out its economic policy to enable the Bank of England to conduct its monetary policy in accordance with Government wishes.
      7.30 pm
      There is, however, no mention in clause 12 of what the Bank of England should do when there is a conflict between the Government's economic objectives and the Bank of England's overriding objective of maintaining price stability. That is why amendment No. 1 seeks to add a new paragraph (c), which states:
      "in the event of a conflict between the objectives of economic policy, how that conflict is to be resolved."

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      That enables the Government to write to the Bank of England to specify how that should be done.
      There are three principal areas where there could be an important conflict between monetary policy being conducted by the Bank of England and other economic measures being taken by the Treasury and the Government. The first relates to the exchange rate. The Bill gives the Treasury responsibility for conducting exchange rate policy. At the moment, we have a high level of sterling and the Government are also maintaining a tight monetary policy because they fear the re-emergence of inflationary pressures in the economy. Therefore, even today we have the possibility of such a conflict.
      The position could arise where the Government were concerned about the high level of sterling. Farmers throughout Britain have lobbied the House this week and they share that concern. As a consequence, the Treasury could conduct a foreign exchange policy of trying to bring down the level of sterling. It would do that by selling sterling into the market. The result of that would be an increase in the money supply in Britain.
      Meanwhile, the Bank of England would try to maintain price stability and would monitor the money supply. When it saw the increase in the money supply, the Monetary Policy Committee would want to trigger higher interest rates in order to counter that. It would not know that that increase in the money supply was the result of a deliberate action taken by the Treasury to bring sterling down by selling sterling into the market. It would look at the data and believe the increase to be a normal activity in the economy, along with the shocks and various other influences that affect it. The amendment enables the Treasury to tell the Bank of England what its exchange rate policy is because it sets out what it should do in the case of a conflict.
      In Committee, the Paymaster General and other Ministers were asked what the Government's exchange policy was, to which there was no response. Time after time, we asked the Paymaster General how such a conflict would be resolved. It is a genuine conflict. No Minister seems to be able to say how such a conflict should be tackled. At the moment, the Treasury is responsible for interest rate and exchange rate policy, but when the two are split and the knowledge of the two different entities is divorced, there is no way in which one hand will know what the other is doing and there will be conflict. We could end up with the dog chasing the tail. The Government could sell sterling to the market, thus increasing the money supply, leading to their raising interest rates further and pushing sterling up. The Treasury would sell more sterling into the market to bring the level of sterling down, and the vicious circle would continue. It is a recipe for chaos.
      The second area where potential conflict exists is in the management of Government debt, which is to be handed over to a quango of the Treasury. Again, there are different ways in which to manage debt. There is, for example, the fully funded method of managing debt. If the Treasury, which is handling debt management, decides to maintain a fully funded policy, and if debt is sold to the non-banking sector when there is a public sector borrowing requirement, the money supply will decrease.
      Meanwhile, the Bank of England could well be trying to ease monetary policy because it was concerned about deflationary pressures in the economy. Again, one hand
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      would not know what the other was doing. The activities of the debt management side of the Treasury could do precisely the opposite of what the Bank of England was doing.
      The final area of conflict is that between fiscal and monetary policies. Again, fiscal policy makers are divorced from those conducting monetary policy. The Treasury could be busy relaxing fiscal policy for various social reasons—to improve incentives in the economy or to increase spending in certain areas. Meanwhile, the Bank of England, fearful of inflationary pressures in the economy, could be raising interest rates, pursuing a tight monetary policy.
      As there is no symbiotic relationship between the two organisations, one could be pursuing a policy directly opposite to that of the other. There would be no incentive in the Treasury to pursue a sensible fiscal policy because it would know that it was not responsible for inflation. All inflationary problems would be dealt with by the Bank of England and, again, there would be a recipe for higher interest rates than would otherwise be necessary.
      In conclusion, the amendment seeks to enable that conflict to be sorted out, and to enable the Treasury to write to the Bank of England to put on the record how this inherent conflict, which arises from giving the Bank of England independence, should be resolved by those responsible for Britain's economic policy.
      Dr. Cable: This is the best opportunity to say something on the substantive economics of the issue rather than on the constitutional issues that we dealt with before. I intend to speak against the amendments.
      Clause 12, which relates to economic policy in general, has just been read out and it makes it clear that the Bill provides for multiple economic objectives. Clearly, if there is an emergency and large-scale unemployment, the Chancellor has powers under the Bill to give employment and growth priority. That flexibility is built into the legislation.
      My main comments relate primarily to the speech by the hon. Member for Great Grimsby (Mr. Mitchell). He spoke at some length about sterling and the problems of exchange rates. We have heard more and more about the problems of sterling in the House. Treasury questions are increasingly populated with questions on that subject.
      I am probably one of the relatively few people in the world who claim to have read the hon. Gentleman's book on the subject, which I think he wrote with a former Member who has now emigrated to New Zealand. It was an eloquent book, but it had throughout it a fallacy that he has perpetuated this evening, which is not distinguishing between the real and the nominal value of the exchange rate—an important distinction. It is perfectly possible to maintain the competitiveness of one's exchange rate while the value in the markets—the nominal value—is appreciating. That has happened in Germany where, during the past 30 years, the exchange rate has appreciated from DM11 to less than DM3 against sterling. For the most part, German exporters were more than able to maintain—or more than maintain—their competitiveness with the United Kingdom because we had an appallingly bad relative rate of inflation. If we think about real exchange rates rather than nominal rates, the problems raised by the hon. Gentleman are simply not applicable.

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      The hon. Gentleman is on sounder ground when he worries about the particular problem that we have now of an exchange rate that is overshooting in the markets. Overshooting in the markets occurs for one of two reasons. One we saw during the early days of Mrs. Thatcher and another in the early 1990s which directly arose from the lack of credibility of those who were carrying out monetary policy. We had a period of lax control of money, a very high rate of inflation and then, over-compensation through high interest rates. The whole purpose of the legislation and of an independent central bank is to prevent such a problem from arising again.
      Sterling is also very high because of the EMU premium. We have consistently argued with the Government that they should not procrastinate over EMU membership, but should get on with having a referendum and consider at least early entry, as that would shorten the transition to our having stable exchange rates in relation to European countries. As long as the delay persists there will be uncertainty and an exchange rate premium, because the ecu will trade at a relatively soft rate. In other words, it will be more competitive than sterling would be on its own. The Liberal Democrat argument to deal with that problem is that the sooner we proceed to EMU, the sooner we shall eliminate many of the problems of volatility and over-valuation that have been described.
      Mr. Nick St. Aubyn: We have heard for many years that the benefit of the euro is that we shall have a hard currency. Now we are hearing from the Liberal Democrats that the benefit will be that we shall have a soft currency. Does the hon. Gentleman understand why those who have doubts about the euro remain totally unconvinced by the arguments on this subject?
      Dr. Cable: The possible answer to the hon. Gentleman's question is that people use the words "hard" and "soft" in totally different ways. The argument for belonging to EMU is that the euro will be hard, in the sense that it will have a low rate of inflation, but it may well have a rate that is competitive—one that devalues against the dollar and the yen. Both of those characteristics are possible and desirable, and we would welcome them.
      Mr. St. Aubyn: Surely if there is to be a soft euro, it is because of the expectation that, with the participation of states such as Italy, the inflation rate will be higher. If one has a soft currency, there is a very high risk of inflation creeping into the system.
      Dr. Cable: I do not think that the hon. Gentleman has read the financial press for many months, if not years. If he had, he would know that the inflation rate in Italy is now very low and that the Italian economy is one of the better managed economies in western Europe.
      The other incompatibility that has been raised is the difference between fiscal and monetary policy. It is a genuine technical issue; it is also a political issue. It is perfectly possible for Governments—or, in this case, an independent central bank—to run a tight monetary policy and for it to be undermined by profligate fiscal policy. That is why the Liberal Democrats argue very strongly
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      that this measure should be followed by another, which we would call the Fiscal Responsibility Act, which would make a set of rules for fiscal policy to match those in the Bill. Were those complementary measures to be taken, many of the difficulties that have been described in this short debate would not exist.
      Mr. Darling: This has been an extremely long debate for what is a fairly short point. I will try to reply in short measure.
      My hon. Friend the Member for Great Grimsby (Mr. Mitchell) and I disagree on a central point. The Government believe that low inflation and price stability are an essential precondition for sustainable growth and high employment. One has only to look at the history of this country since the war—it had high inflation, which was into double figures in very recent memory, and the boom and bust, with swings between one extreme and another—to realise that instability was one of the main reasons why we have not had the long-term sustainable growth that competitor countries have had.
      If my hon. Friend were to ask any investor or business what it wanted more than anything else, it would say that it wanted certainty and stability. That is why we attach so much importance to price stability. I know that my hon. Friend disagrees with that. I do not claim to have read the books that he wrote with our former colleague, Bryan Gould, but I know that central to their belief was the argument that rising inflation was not necessarily a bad thing. I have to disagree with him.
      Where I do agree with my hon. Friend is that interest rate policy is not the only matter with which the Government need to concern themselves. We have made it clear that we intend to maintain fiscal as well as monetary stability. That is why we are ensuring that public spending will be maintained in a sustainable way and that is why we are taking steps to expand the capacity of the economy, so that it can grow in a sustainable way, as was not possible in the past.
      Central to monetary stability are confidence and certainty. The rationale behind our setting up the Monetary Policy Committee is that the markets and the general public will know that the Government are serious about their commitment to long-term price stability. We have already seen the benefits of that, because long-term rates fell almost immediately following the announcement by my right hon. Friend the Chancellor earlier this year.
      I shall now deal with a point that the Opposition made much of on Second Reading, and to which they returned in Committee. They should look at clause 11, which is written in plain terms. The key objectives of the Monetary Policy Committee are
      "to maintain price stability, and … subject to that, to support the economic policy of … Government, including"—
      my hon. Friend the Member for Great Grimsby will no doubt note—
      "objectives for growth and employment."
      It is precisely to encourage sustainable growth and employment that we want to ensure price stability. A plain reading of clause 11 makes it abundantly clear that the Bank, in achieving the Government's inflation target of 2.5 per cent., must have regard to the Government's other objectives—growth and employment. That means, among other things, that if there were some violent shock to the

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      economic system, the Monetary Policy Committee would have to take account of the Government's policy on growth and employment to decide the time frame in which it would reach the inflation target of 2.5 per cent.
      7.45 pm
      We have also made it clear that if the Bank does not believe that the inflation target will be met and that the rate will deviate by more than one percentage point from its target, it must write an open letter to the Chancellor explaining why the rate will not reach the target and the period within which the MPC expects to meet it. The point of all that is that the House and everybody else will be able to judge what the Bank is doing and be satisfied that it is acting in accordance with the strictures established by clause 11. It is as clear as day to anyone who wants to see it. The problem with the Opposition is that they are not concerned about clause 11. It is becoming increasingly clear that, after eight long months, they are edging towards outright opposition to the idea of giving the Bank operational independence. That is their real objection. They have no real interest in the wording or phraseology of particular clauses.
      The Government are responsible for exchange rate policy and for fixing the inflation target. There is no conflict. The Chancellor of the Exchequer is, as always, accountable to the House for the overall conduct of economic policy, so there is no dubiety about the framework that we have established. We are ensuring that we get something that this country has wanted for many years: price stability and economic stability, which, more than anything else, will benefit the long-term prospects for growth and employment.
      Mr. Mitchell: I am very disappointed at the Minister's reply, although I expected him to say what he did. The point that he made about the Government being responsible for exchange rate policy provokes me to ask: if they are responsible for exchange rate policy, why is the exchange rate so high? Given the manifest problems of industry and agriculture—the rise in imports, the difficulties with exports, the threat to close capacity and therefore lose jobs—why do not the Government act and exercise their responsibility for exchange rates by getting them down? The answer is, of course, that it is interest rates and the uncertainties in Europe that determine our current exchange rate and the current over-valuation, which will be disastrous. I do not agree with my right hon. Friend on that; nor do I agree with my right hon. Friend that low inflation is the precondition of economic growth.
      I do not defend high inflation—nobody is advocating high inflation—but some degree of inflation is an inevitable concomitant of growth. There cannot be growth without some degree of inflation. We are making low inflation more important as a priority than growth. Growth and jobs should be the Government's central priority. Inflation should be treated as a residual, not the determining aim of policy, as seems to be imposed on the Bank of England. Although my right hon. Friend said that the Government can introduce objectives of growth and employment, and the Bank of England has to support that, the paramount requirement—according to Maastricht—is to maintain price stability, and subject to that, because it is paramount, to support the economic policy in respect of growth and employment.
      1212
      I had hoped for some more concessions because we are embarking on a doomsday machine. We are locked into a target of 2.5 per cent. inflation, which risks doing severe damage to the economy. It is wrong of the Government to abdicate their democratic responsibility for economic growth and jobs to bankers, who will always act like bankers. However, there is no point in my going on because the new Government have decided their priorities and will pass this Bill tonight. They have a responsibility to be right in what they do and say, and I do not think that they are. We shall live to regret this day because of the inflexible requirements that the Bill imposes on us.
      I realise that my fellow Members of Parliament want to get away, as I do. I was told that I am building up extraordinary resentment among northern Members. I am a northern Member, and my fellow northern Members are gathering on these Benches solicitously to persuade me. It would have been better to have discussed this matter in Committee. Given their large majority, the Government should not be frightened of appointing people with dissenting opinions to Standing Committees. Had they done so, we could have had a longer discussion in proper and appropriate circumstances, rather than trying to discuss this matter now, late at night, with hon. Members pressing to go home. It is a question of the Government's confidence in their priorities, which they should allow to be thrashed out in the appropriate environment.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 14

      PUBLICATION OF STATEMENTS ABOUT DECISIONS
      Mr. Mitchell: I beg to move amendment No. 30, in page 5, line 41, at end insert
      'and an estimate of its effect on inflation, economic growth, employment and the exchange rate.'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 36, in page 6, line 2, after 'markets', insert
      ',act to restrict or control credit, or require deposits to be made with the Bank by lending institutions.'.
      No. 37, in page 6, line 9, after 'markets', insert
      'acting to restrict or control credit, or requiring deposits to be made with the Bank by lending institutions.'.
      No. 38, in clause 15, page 6, line 23, after 'meeting', insert
      'together with the economic analysis on which any decisions taken at the meeting were based.'.
      No. 39, in page 6, line 27, after 'markets', insert
      'act to restrict or control credit, or require deposits to be made with the Bank by lending institutions.'.
      No. 16, in page 6, line 41, after 'record', insert
      'the principal views expressed by individual members and'.
      No. 40, in page 6, line 42, after second 'of', insert
      ',and the case put forward by,'.
      No. 22, in schedule 3, page 23, line 2, at end insert
      'and, if he exercises his right to speak, his views shall he recorded in any minutes published under section 15'.
      Mr. Mitchell: I continue to build my campaign for the support and affection of northern Members.
      This group includes two categories of amendments. The first category comprises amendments Nos. 30, 38 and 40, which require the Monetary Policy Committee and the Bank to tell us their views, the basis of their decisions and dissent, and the prospectus that will arise from their decisions. We want them to justify those views in terms of their expectations so that they can be questioned and discussed.
      I do not believe in the wisdom of bankers and monetary experts. It seems to be a kind of Gadarene wisdom. One has only to watch City commentators on television; they appear on every channel whenever there is a change, or prospect of a change, in interest rates and all chant the same nonsense. They return unabashed the following week when their forecast has been proved wrong and say the opposite with equal confidence. That is not wisdom; it is a lemming-like philosophy.
      I want bankers to learn on the job and justify what they do. Amendment No. 30 would require them to tell us what they think will result from their decisions. Let us have it spelt out so that we can judge it and assess whether they were accurate or wrong. Amendment No. 38 would require bankers to give the economic analysis on which their decisions were based and say why those decisions were taken. Amendment No. 40 requires bankers to give their individual views.
      Those requirements are simple and straightforward. If the views are based on consideration and thought, those concerned will not be afraid to tell us what they are, so that we can judge them for ourselves. It is a process of popular education and of education for the Bank as well. After we set up Select Committees, it was noticeable how much more effective ministerial replies and defence of policy were. I hope to get the same from the Bank.
      The remaining amendments, Nos. 36, 37 and 39, deal with a major problem in our economy: how we control credit. Over the years, there has been a shift away from managing the economy by direct control. Labour's post-war triumph was based largely on direct control of capital, labour and investment. When the Conservatives came to power in 1951, they shifted the balance by using interest rates as a financial stimulus. In the 1950s, interest rates became more important in economic management and generally went up. In 1972, continuing the process of relaxation, the Conservative Government introduced measures which effectively abolished the regulator and led to the first huge credit bubble.
      In the 1980s, the process of removing controls continued. The corset was swept away until we were left managing the economy only by interest rates, which led to even bigger fluctuations than before. It was boom-and-bust fluctuation; credit bubbles were allowed to form and asset prices increased. Because house prices were increasing, people could borrow more. Asset prices increased further because more money was in circulation, until suddenly the Government had to act. They did so in 1990 by joining the exchange rate mechanism. The economy was deflated and the bubble was pricked.
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      It is ridiculous to manage the economy in a boom and bust way. However, it is implicit in our inability to manage credit rather than just use interest rates to squeeze credit and check credit booms. I want other requirements to be introduced. The Monetary Policy Committee could suggest other methods of controlling credit. For instance, it could limit the percentage of house value that would be lent in a mortgage. The Bank of England could require any lending institution to ask for deposits. Interest rates could be charged on those deposits and the deposits required could be varied according to the nature of the loan granted by an institution. It would be possible to overfund or underfund the public sector borrowing requirement.
      I do not necessarily have the perfect means of controlling credit, but the simple measure of rationing credit through interest rates is not the only means. We should look at other ways of controlling credit, not just wash our hands and say that we cannot control it. If we abdicate the responsibility of looking for new methods of managing credit, we inevitably accept that boom and bust will continue. If the Government accept the amendments so that, as well as proposing changes in interest rates and market dealings, the Monetary Policy Committee looks at ways of managing, restricting and controlling credit, we shall have another weapon to deal with the problem. It will be more than one-club golfing.
      Other means of dealing with the issue may be more effective and direct, or may be necessary to supplement interest rates. They may also lead to a smaller increase in interest rates than we have had in the past. I want the Monetary Policy Committee to be able to consider those options and recommend them if necessary.
      Mr. Heathcoat-Amory: I, too, want the Government to provide and publish more information about their economic policy, particularly their monetary policy, which is why we tabled amendments Nos. 16 and 22. Amendment No. 16 relates to clause 15, which deals with the publication of minutes. The House will recall that my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) established the procedure for the routine publication of the minutes of the meetings at which interest rates were set. That was a revolutionary advance, because for the first time outside commentators and the markets could see exactly how monetary policy was being set, and how interest rate decisions were being taken.
      8 pm
      At that time, the minutes described in some detail the views of the main participants. The interest rate was set by the Chancellor of the Exchequer: it was his decision alone, after consulting others and after taking the advice of, in particular, the Governor of the Bank of England. The views of the two main participants, the Chancellor and the Governor, dominated the subsequent minutes.
      Our amendment seeks to extend that to include all the main participants, so that the views of every member of the Monetary Policy Committee are minuted. No longer will an individual or institution make the decision: it will be made by all the individuals on the Monetary Policy Committee, by vote if necessary. The views of all members will be just as important as the views of the Chancellor and the Governor were previously.
      The Government came into office with a great commitment to openness and transparency, and supported the public's right to know. They followed that up recently

      1215
      by publishing a White Paper called "Your Right to Know", in which they described a presumption in favour of openness. We all accept that a good deal of financial and Government information must be confidential. Market-sensitive information can be kept secret, as proposed in the White Paper. However, there is no case whatsoever for keeping secret the views of the members of the Monetary Policy Committee when the minutes are published six weeks later. After all, the Bill provides for their votes to be recorded, so it is a modest step forward to require their main views to be set out in those minutes.
      The men and women on the Monetary Policy Committee are not accountable to the House. They will not even be the subject of confirmatory hearings. Therefore, it is important that we, in the outside world, know their views. If a group of individuals on the committee consistently get it right, their reputation will be enhanced, but we are entitled to know if some individuals always get it wrong.
      Our proposal also provides a good defence against impropriety. We would have preferred confirmatory hearings to test the views of individuals before they are formally appointed to the committee. That was the opinion of the Treasury Select Committee, but for some mysterious reason the Labour members of that Committee did not back up their views by joining us in the Division Lobby earlier. This proposal is perhaps a poorer substitute, but at least it would salvage something of our earlier intentions if the views of those individuals were made known as they evolve through discussions on the Monetary Policy Committee.
      We should extend that proposal to the Treasury representative on the Monetary Policy Committee. They may or may not attend, but they have the right to do so: they will have a voice, but no vote. It is important for the outside world to know of the Treasury's views as expressed at that meeting. We want to know what influence the Treasury has on the committee, what view it has on the direction of the economy and what impact budgetary decisions and fiscal policy have on the committee's deliberations. That can be done only if the minutes record the views of the Treasury representative expressed at that meeting.
      There is no conceivable reason why our modest but important request should not be granted. It is entirely in line with the Government's expressed views about the public's right to know. We are not suggesting that the views of those individuals on a change in the interest rate should be made known to the markets immediately. There may be a case for keeping them back for a little while if a decision causes market disturbance, but it should be merely a delay, and not a permanent suppression of the views expressed. That may be particularly important if allegations are made that individuals or a group of members on the committee are biased or prejudiced in their actions. An individual who is usually wrong may be reappointed by the Chancellor because an election is coming up and the individual concerned is always in favour of expansion of the economy and low interest rates, which may help the Government of the day to win another term. The best defence against that is openness and disclosure, so that the world can see whether individuals justify their place on the committee by reason of their competence and record in judging the economy right.
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      For those reasons, I seriously urge the Government to give effect to their protestations of belief in openness, and accept these amendments in the spirit in which they are offered.
      Mr. Gibb: I support my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on amendment No. 16. Clause 15(4) provides for the minutes of the committee's deliberations to be published, and for voting preferences to be recorded, but it does not provide for the views expressed by members of the committee to be recorded. The Government are not providing information on the economic views held by members of the committee, and the Select Committee on the Treasury, when it participates in confirmatory hearings, will not be quizzing members of the committee on their economic views. Therefore, the only way that we can know their views is for them to be published in the minutes.
      Economic policy and the conduct of monetary policy are not part of an exact science. That view has been backed up by eminent people such as Sam Brittan, Tim Congdon and Lord Eatwell. Those matters are of wider interest. People outside the confines of the Monetary Policy Committee and the Bank of England want to analyse the committee's deliberations, so that they can establish in the weeks, months and years ahead who was right and who was wrong. Decisions on monetary policy remedies depend on the forecasts provided by the committee. If an inflationary period is forecast, the committee will recommend to the Bank of England that it raises interest rates and tightens monetary policy. On the other hand, if the economic position is forecast to be deflationary, it will recommend a looser monetary policy and lower interest rates.
      Such an economic analysis would be useful for the economy, for the country and for academic study. It would be useful to analyse the forecasts, so as to establish whether the recommended remedies have turned out to be correct. A wide debate of that kind took place for a few years, when we had the so-called Ken and Eddie show. Although their views were not necessarily recorded in the minutes, we could see the final recommendation. For example, we knew on one occasion that the Chancellor was recommending no interest rate rise when the Governor of the Bank of England was recommending a rise. In due course, the Chancellor was proved correct.
      The debate that took place during the Ken and Eddie show informed the wider debate in the country as a whole. I urge members of the Government to remove the partisan expression from their faces, to consider seriously the effect that the amendment would have in raising the level of informed debate about the conduct of economic policy and to accept it.
      The Economic Secretary to the Treasury (Mrs. Helen Liddell): I am always amused when the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) talks about the Ken and Eddie show. The point of the Bill is to rectify the failings of the Ken and Eddie show, during which partisan politics intervened in the setting of interest rates, to the economy's cost.
      We resist the amendments, not because we are opposed to openness, but because many of them are unnecessary. They relate to parts of the Bill that already provide for openness. In other contexts, the amendments are

      1217
      contradictory: in a number of respects, the amendments tabled by my hon. Friend the Member for Great Grimsby (Mr. Mitchell)—about which I shall say more shortly—contradict what he wants to achieve in relation to openness.
      As we discussed the issues fully in Committee, I do not intend to delay the House unduly, but I think it necessary to deal with a number of points, in a reasoned way. I know that there has been criticism relating to the fulness of some of the information given in the minutes of Monetary Policy Committee discussions, and I am sure that the committee will take those criticisms on board; but I believe that the amendments would have a negative effect.
      Speaking to amendment No. 30, my hon. Friend the Member for Great Grimsby spoke—as he had earlier—of the impact of our proposals on
      "inflation, economic growth, employment and the exchange rate".
      The amendment is quite unnecessary. If it were adopted, the Bank of England would have to publish a statement about the effect of changes in monetary policy on inflation, economic growth, employment and the exchange rate every time such changes were made. The Bill already provides for the arrangements for monetary policy in the United Kingdom to be among the most open in the world, and, in particular, for the publication of a statement after the debates of the Monetary Policy Committee.
      If a regular statement were published along the lines suggested by my hon. Friend, his amendment would be unnecessary. Press notices already accompany the conclusions of each MPC meeting, and, in the event of a change in interest rates, the main factors underlying the decision are set out—factors that, typically, include inflation, economic growth and the exchange rate. If my hon. Friend needs to be convinced, I suggest that he look at the notices that followed interest rate changes in August and November last year.
      Amendments Nos. 36, 37 and 39 would have a contradictory effect. They would weaken the commitment to transparency, because they would allow the Bank to delay publication of a decision to impose credit controls, or to require deposits from lending institutions, if it decided that publication of that decision was likely to impede or frustrate the action.
      I am aware of the commitment of my hon. Friend the Member for Great Grimsby to the concept of credit controls; indeed, we discussed such matters in detail during an Adjournment debate not long ago. My position has not changed since then: there is no evidence to suggest that credit controls would be effective when we have open, global capital markets. They can easily be circumvented. We know from our own economic history that such controls have been tried in the past, and have failed.
      I refer my hon. Friend to the minutes of the August meeting of the Monetary Policy Committee, in which such quantitative controls were considered and rejected. There is no sign that the Bank cannot control inflation without credit controls; indeed, low and stable inflation over time, which is the aim of the Government's economic policy, should lead to less volatile interest rates. The volatility that we are currently experiencing is largely due to the
      1218
      last Government's failure to take overall economic considerations into account in the run-up to a general election.
      8.15 pm
      Mr. St. Aubyn: I am curious to know whether the Economic Secretary agrees that, although credit controls may not work, reserve requirements may be an important factor in the operation of monetary policies. That has been the case in a number of countries; does the hon. Lady see a role for such requirements here?
      Will the Economic Secretary acknowledge that, for all her trenchant criticism of the last Government, they did at least meet the inflation target by the end of their tenure? Because of their tax-raising activities since the moment they took office, the present Government have signally failed to do the same.
      Mrs. Liddell: That—if I may use an expression that I had cause to use to the hon. Gentleman in Committee—is baloney. We observed the discussions about the setting of interest rates during the Ken and Eddie show, and we have had a lengthy discussion. Yes, the last Government managed to hit the target once, but there has been a cost to the overall structure of our economy, and, indeed, the whole concept of the Ken and Eddie show has been brought into disrepute.
      I am not sure why amendments Nos. 36, 37 and 39 were tabled, other than to give my hon. Friend the Member for Great Grimsby another opportunity to expound his theory about credit controls. Other amendments relate to the detail that goes into the minutes in relation to economic analysis. In amendment No. 38, my hon. Friend asks for fuller economic analysis to be included. Again, I ask him to look at the minutes that have been published. The minutes already include comprehensive discussion of economic developments, and a summary of the analysis presented by Bank staff. The quarterly inflation report—which is much respected by economic commentators and others—also contains the Bank's economic analysis. I do not think that amendment No. 38 would add to the information that is already provided.
      Amendments Nos. 16 and 40 bring us back to issues that were discussed fully in Committee, when I understood that the Opposition had accepted the force of the Government's arguments. Let me repeat what I said at the time. We do not want the legislation to be overly prescriptive, for a very sound reason: we want members of the MPC to be free to be as frank as possible in their discussions at the meeting.
      One of the reasons why we must resist the amendments is our experience in the United States, where the Federal Open Markets Committee publishes a transcript after about five years. Members of that committee have increasingly been in the habit of reading out prepared statements. We do not want that kind of discussion in the MPC; we want the fullest and frankest possible exposition of views on the state of the economy and the impact on the inflation rate.
      The voting record of individual Monetary Policy Committee members is available, and will therefore make it clear where each member stands. Although the thought might seem unusual in the House, Monetary Policy Committee members might change their mind during a

      1219
      debate, and we must give them that opportunity. Should they decide in economic discussion to change their position, they should feel free to do so.
      I reiterate, however, the point that I made earlier: we should like there to be fuller and perhaps more transparent minutes of Monetary Policy Committee meetings. I am sure that the committee will respond to those concerns.
      Mr. Gibb: What will happen when we try to read the minutes of the Monetary Policy Committee? We will look at the voting record, read the text of the opinions expressed and try to correlate one with the other, but we may not get it right. Would it not be far clearer, easier and more open to publish names next to the views?
      Mrs. Liddell: I reiterate the point that I made about the FOMC. Whenever such practice has become enshrined in procedure, it has led to a reduction in economic debate and the delivery of prepared statements, because people know that their views will be fully represented when the minutes are published. There is about five years' delay in publishing those minutes.
      The right hon. Member for Wells (Mr. Heathcoat-Amory) made a point about the Treasury representative's role in the meetings. The minutes already include a full record of discussion at the meetings, including the views expressed by the Treasury representative. Regardless, that representative does not have a vote and, therefore, does not take part in the decision-making process. I therefore believe that amendment No. 22 is also unnecessary.
      Therefore, because of the contradictory nature of some of the amendments, and because the amendments are unnecessary and could conflict with the Monetary Policy Committee's purpose and the nature of its debates, I ask the House to resist the amendments.
      Mr. Fallon: It is up to the hon. Member for Great Grimsby (Mr. Mitchell) to defend his own amendments and to decide what to do with them. However, I should like to respond to the debate and to the Minister's reply on amendment Nos. 16 and 22.
      The Economic Secretary really did deploy a poor argument against amendment No. 16. She tried to criticise the arrangements that she inherited, although those arrangements delivered very low inflation—inflation lower than we have now—and were working well. Bizarrely, she then went on to criticise her own arrangements. She admitted to the House that the current Monetary Policy Committee minutes were not full enough. She accepted that criticism, and even almost invited the Monetary Policy Committee to improve its way of recording its decisions.
      The Economic Secretary introduced a total red herring by making an analogy with the Federal Open Markets Committee. We do not want to be overly prescriptive. However, the amendment does not suggest that transcripts should be published, as happens with the FOMC; it simply suggests that, when the main views are noted, the name of the member who expressed those views should be included with them, as happens with any minute of, for example, a Cabinet Committee.
      It is important to realise, as the Economic Secretary did not, that the new arrangements introduced by the Government are regressive. Under the previous arrangements, we knew the Chancellor's views and we
      1220
      knew the Governor's views. It is fair enough to say that the views of the more junior officials attending the Ken and Eddie show were not recorded, but at least we knew where the Government stood, and we knew where the Bank stood.
      Now that the Chancellor has withdrawn from the exercise, it is even more important that we know the position of the Governor and the deputy Governor of the Bank and of the external members of the Monetary Policy Committee. It is precisely because the Chancellor himself has withdrawn from the exercise that it is important for us to know the Treasury's view and the Treasury representative's comments. Therefore, I again commend amendment No. 16 to the House.
      The Economic Secretary rather tried to brush aside amendment No. 22. Exactly what the Treasury representative will do on the Monetary Policy Committee is unclear in schedule 3 to the Bill. The matter was unclear until the point was raised in Standing Committee by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), who pressed the Government on it. It then emerged that the Treasury representative was not some observer or a mere assessor but would be playing something of a supervisory role.
      I shall quote the words of the Paymaster General—where is he, by the way? He dealt with the subject and the procedure in Standing Committee, and it is about time that he attended the proceedings on them. It is a shame that he has not done the House the courtesy of attending the conclusion of our proceedings on the Bill. Nevertheless, when pressed in Committee, he revealed the Treasury representative's role. He said that the Treasury representative would ensure that
      "the actions of the Monetary Policy Committee"—
      would not—
      "be violently at odds with Treasury fiscal policy."—[Official Report, Standing Committee D, 27 November 1997; c. 187.]
      We discover, therefore, that the Treasury representative is no mere notetaker; he has the freedom to intervene in the debate.
      The Treasury representative could be a very senior Treasury official. As Ministers are Treasury officials, a Treasury Minister might attend Monetary Policy Committee meetings. The Economic Secretary, the Paymaster General—if he finds time—or the Chancellor might attend the meetings. If relations continue to deteriorate, perhaps the First Lord of the Treasury might want to go along to the meetings to get a grip of what is going on.
      It is therefore all the more important that we ensure that, if the Treasury representative does intervene, his or her views should be recorded. If all the other amendments to clause 15 fall, I hope that the Government will think again on amendment No. 22.
      Mr. Mitchell: I did not expect the Economic Secretary to rush to her feet to accept my amendments. She has a fairly unique characteristic for a Treasury Minister: I do not feel bad when she rejects my amendments or arguments with her steely charm. She has exercised that characteristic in this debate. However, I reiterate my plea for openness. I should like more openness to be built into the Bill, as it would have been by my amendments.
      Monetary policy should be made the subject of a national debate in which all people and interests can participate. We do not want interests—whether

      1221
      manufacturing, finance or farming interests—to submit to the wisdom of bankers and monetary economists as if it were some type of divine wisdom. Such wisdom may be the rationalisation of a prejudice, a vested interest or a set of attitudes, and policy must be publicly argued and justified. Requirements for openness would have accomplished that, and I wish that they could have been built into the Bill.
      I wish also that we could include amendments to find some alternative to rationing money by high interest rates and some way in which to manage credit. I wish not to prescribe or require such measures but to include in the Bill the ability to develop desperately needed methods and systems for managing credit.
      The United Kingdom now has a terribly competitive market and too many institutions pouring out credit, inciting people to spend and to run themselves into debt. Credit is pouring out so much that we sometimes have a laxative-type economy. In managing our economy, we are unusually dependent on interest rates. Booms and busts—wild fluctuations—are therefore built into our economy and are almost inevitable.
      The first result of the attempt to provide greater stability, by giving independent power to the Bank of England, has been to increase instability. In real terms, interest rates are now at almost record levels and are certainly higher than in the 1960s and 1970s.
      That will have a dampening effect on the economy. Indeed, it is already happening. Comparative boom, which we had, will become bust. We must find a way of regulating things better to stop that. I was distressed to hear the Economic Secretary say that there was no way of controlling credit. If that is so, how can we control interest rates?
      If we are as subject to international markets and international fluctuations as that, there is no way of producing stability in the economy. Instability is inevitable, and all the international trends will wash straight in. That is a counsel of despair, against which I must warn my hon. Friend.
      We must try to find a way of managing credit. I would rather that opportunity were in the statute, but it will not be. I see little point in pushing amendments to a Division at this time of night, but I am sure that the Government are committed to openness and will expand and develop the idea as time goes on, even if that is not written into legislation as tightly as I should like.
      I am certain that the Government will be driven by the fluctuations in the economy to find a better way of managing and controlling credit than the simple use of interest rates—the one-club golfing technique—has allowed them. Content in the knowledge that those things will happen, even if more slowly than I want, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 17

      POWER TO OBTAIN INFORMATION
      Amendment made: No. 43, in page 7, line 21, after 'institution' insert
      ', or a former authorised institution,'.—[Mrs. Liddell.]

    Clause 21

      TRANSFER
      8.30 pm
      Mr. Fallon: I beg to move amendment No. 15, in page 9, line 36, at end insert—
      '(2) In exercising the functions transferred under subsection (1) the costs of the Authority shall not exceed the costs incurred by the bodies previously responsible for exercising these functions, as adjusted for inflation.'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 4, in clause 26, page 11, line 13, at end insert—
      '(2C) Before exercising the powers contained in subsection (2A), the Authority shall consult those persons likely to be affected by the imposition of fees, and shall publish any representations it receives on that subject".'.
      No. 23, in page 11, line 13, at end insert—
      '(2D) The power to charge fees under this section shall be exercised so as to ensure that the costs of regulation under this Act are proportionate to the benefits.'.
      No. 5, in page 11, line 27, at end insert—
      '(3C) Before exercising the powers contained in subsection (3A), the Authority shall consult those persons likely to be affected by the imposition of fees, and shall publish any representations it receives on that subject".'.
      No. 24, in page 11, line 27, at end insert—
      '(3D) The power to charge fees under this section shall be exercised so as to ensure that the costs of regulation under this Act are proportionate to the benefits.'.
      No. 6, in clause 40, page 16, line 5, at end insert—
      '(2A) Regulations under paragraph 1 of Schedule 6 shall not be made unless a draft thereof has been laid before and approved by the House of Commons.'.
      No. 8, in schedule 6, page 38, line 37, at end insert—
      '(3A) A condition of the imposition of fees under this paragraph is that in any year following 1998 they should not, taken together with the implied value of the cash ratio deposits for the time being required to be maintained under section 6, exceed the total amount of such fees payable in 1998, adjusted for retail price inflation, unless both Houses of Parliament, by resolution, have given their approval for that amount to be exceeded.'.
      No. 35, in page 38, line 37, at end insert—
      '(3A) The power to charge fees under this schedule shall be exercised so as to ensure that the costs of regulation under this Act are proportionate to the benefits.'.
      No. 9, in page 38, line 41, at end insert—
      '(aa) provide for the reduction of fees in cases where the expenses of the Authority incurred in carrying out the transferred functions are minimised by the record of the authorised institution.'.
      No. 10, in page 39, line 17, leave out 'instrument in writing' and insert 'statutory instrument'.
      Mr. Fallon: I acknowledge that this large group of amendments covers a subject that was raised at some length in Committee, but we make no apology for

      1223
      returning to it. There is widespread concern about the costs of supervision involved in the transfer of responsibility.
      It is to the Government's credit that they have recognised that concern right from the start. Ministers have used phrases such as "bearing down on costs", and suggested that costs should be no greater under the new arrangements than under the existing arrangements. We need to find a way of translating those good wishes into the statute to ensure that a duty is imposed that will bring about the desired results.
      If Ministers are sincere in wanting to bear down on costs, as I believe they are, they cannot possibly have any objection to amendment No. 15, which is one of the range of amendments that we suggest. It would simply cap costs at their existing level, adjusted for inflation as the years unfold. I cannot see how Ministers could resist that amendment.
      Amendments Nos. 23, 24 and 35 would ensure that the concept of proportionality, which was also proclaimed by Ministers in Committee, and by the Economic Secretary in her speech outside the House last week, can be placed in the statute.
      I understand why the earlier amendment on proportionality suggested by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in Committee was felt to be incomplete, in that it was rather too narrowly drawn and covered only a certain sector. The new amendments on proportionality go much wider, and I therefore hope that they will be more acceptable to the Government.
      I hope that there is no hang-up about the concept of proportionality. It is there in Ministers' speeches and is recognised in the consultation documents by the Financial Services Authority. I therefore hope to see a favourable reaction by the Economic Secretary.
      Amendments Nos. 4 and 5 try to extend the consultation already provided for under schedule 6 to the fee-charging powers of section 43 of the Financial Services Act 1986 and section 171 of the Companies Act 1989. The reason is simple: if we do not amend the Bill in that way, we will have differing degrees of consultation under different statutes, and that is undesirable in principle. I would in any case want to see an improvement in the consultation, and the same should apply to all fees imposed under the provision.
      Amendment No. 6 can be considered with amendment No. 10. It raises an important point which I believe was not considered in Committee, which may represent an inadvertent lapse in the drafting of the Bill. Unlike many of the other instruments that set the new fees structure, the instrument under schedule 6 is not subject to parliamentary scrutiny.
      That is wrong. The supervision fees represent substantial sums, and it is wrong to give the Financial Services Authority virtual freedom to raise taxation. If the Bank's regime for cash ratio deposits will be subject to affirmative resolution under schedule 2, the authority's regime should also be subject to proper parliamentary scrutiny. I should be most surprised if that amendment were thought unacceptable.
      Finally, amendment No. 9 introduces a new concept in that it provides for remission or reduction of fees for good compliance. In other words, it would ensure that
      1224
      well-established institutions with good track records of compliance that had not troubled the authorities would have their fees progressively reduced—or at least the authority should have the power to reduce their fees. That is because the costs of supervising them will be lower. It is not only sensible in itself but builds into the new system a strong incentive for better compliance as the system beds down.
      I fully accept that the amendment may not be as perfectly drafted as parliamentary counsel would wish, but I hope that the Economic Secretary will at least react positively to the idea, even if she does not like the amendment.
      I notice that paragraph 18 of the Financial Services Authority's consultation document says:
      "The charge made should be proportionate to some measure of the size of the bank and the nature and extent of its business."
      We should take the hint and build into the fee-charging mechanism some incentive for banks to ensure that the costs of supervising them are kept as low as possible.
      Mr. St. Aubyn: I believe that I can tell the House what happened when the third chapter of the Bill was first announced. I have it on the reliable authority of a book called "Blair's Hundred Days"—the inside story of that period. According to that book the Governor of the Bank of England, who is referred to as "George"
      "has gone through an experience that all bankers dread—being robbed in broad daylight."
      The purpose of the amendments is to ensure that the Government, having shown their capacity for grand larceny, do not proceed to go on robbing banks in London in broad daylight. They have only themselves to blame for the fact that we feel it necessary to table the amendments.
      If the entire concept in part III of the Bill had been thrown open to the type of consultation that would have been appropriate—at the very least, some sort of consultation with the Governor of the Bank of England—perhaps by this stage we would have had more confidence in the protestations, promises and general charm offensive that we experienced from the Economic Secretary in Committee and from her colleagues.
      I agree that we are disappointed not to have the Paymaster General by the hon. Lady's side. There was nothing more charming than watching them working in harness on the Bill. We raised some important questions about part III with the Paymaster General in Committee and hoped that by now he would be in a position to answer them, particularly those relating to the activities of banks in offshore tax havens and how they might impact on banks in London. Who knows, he may pop up unexpectedly—as he did in Committee—before the Report stage is over and provide us with some illumination.
      The point about cost is that we are not sure that the Government and the Bill demonstrate an understanding of what has driven the extraordinary success of the financial market in London. Underpinning that success was the good judgment of the Bank of England in administering a light touch to the wholesale market that is based in this city. It is fair to say that there were some failures of the banking system—there are always failures. If one tries to devise a system in which no failures can take place, one removes the principle of moral jeopardy and, as a result, people are simply tempted to chase the highest rates of

      1225
      interest from the most dubious, highest-risk-taking financial institutions, with the result that the entire system comes under threat.
      The risk of failure always has to be there and, as we all know, there have been at least three major failures in the past 18 years. I suggest to the House that each of those teaches us a lesson about the three guiding principles for the supervision of banks under part III. Our amendments would enable the new head of super-S1B to focus on those guiding principles, while reassuring banks in London that he would do so in a way that would not impose unnecessary and unreasonable costs on their operations.
      The first major failure in London in the 1980s was that of Johnson Matthey. That experience taught the Bank of England that the old way of doing things had to change. Indeed, the Government responded with the Banking Act 1987, as well as changes in the regulation of financial services in London. We needed to create a new legal framework for banks operating in this financial centre, which is what the previous Government did.
      8.45 pm
      The second major failure was that of Bank of Credit and Commerce International and on that subject I can do no more than quote carefully the words of the former Chancellor, now Lord Lawson, who said in his memoirs:
      "it is very rare indeed for there to be a major supervisory problem in which fraud is not involved".
      He goes on to explain that, even where the problem in the system originates elsewhere, fraud is often the means by which it is concealed and therefore it grows to be a much bigger problem when it finally hits the news.
      My colleagues and I are deeply concerned that, in the construction of part III and the later clauses to which the amendments relate, little is explained or put into effect in relation to how the new regime proposes to attack fraud. There is a great deal to be said for the new super-SIB, in its operations in the London market, being given the power to root out fraud wherever it suspects it may exist.
      I would very much welcome the considered comments of the Economic Secretary and her assurance that, having studied the matter carefully, she is completely confident that sufficient powers would exist as a result of the enactment of the Bill to deal with any possibility of fraud in the banking system in London.
      The Barings crisis is the third factor that comes across from the lessons of recent years. The collapse of Barings was partly the result of fraud—the result of a dealer in another centre opening up what he called his, "Six, six, double six account", which involved fraud. Above all, the Barings collapse came about through a lack of understanding, first, on the part of the directors of the bank, but also by those who supervised them. It was either a market risk that led Barings to pay out hundreds of millions of pounds from London to its operation in Singapore—a risk on a scale that it should have known was way beyond its legal powers or what the Banking Act enabled it to do—or the money sent to Singapore must have constituted a credit risk. Again, it was a risk on a scale that it was not empowered to take under the terms of its banking licence. The directors of Barings should have understood that, and so should the supervisors of Barings at the Bank of England.
      1226
      That brings us to one of the most important points. Whatever supervision system is constructed under the Bill, it must employ people who understand how the system works. Having such people costs money, but it is important for the Government to ensure that, under the new regime, the money is spent on having the right people, but so efficiently that the burden on banks in London is not excessive.
      Many of the burdens would result from demanding information. What matters is not the cost of the people at the centre of the new investment board, but the costs imposed on the banks in terms of the amount, the precision, the regularity and the detail of the information that they are required to submit. It is far more important that the key figures are given accurately and regularly to the Bank of England than that the minutiae of the operations of each bank in London are demanded of them. In Committee, the Economic Secretary was very helpful. She made some important statements about how the Government intend to bear down on the costs of banks in London.
      Although he was too modest to press the point, in amendment No. 24, my hon. Friend the Member for Sevenoaks (Mr. Fallon) took care to quote the Economic Secretary's exact words. Through the amendment, we are simply asking her to put her money where her mouth is, because it says exactly what she said at column 298 of the Hansard of our Committee proceedings. I would be curious to know why she should have any reluctance to accept that amendment.
      Unfortunately, proportionality alone is not enough. Smaller banks in London have a vital role to play. They may often be the motors of innovation and new products. This is where the idea of proportionality comes unstuck. Mr. Howard Davies, who is to be the head of the super-SIB, explained to a Back-Bench meeting at the House before Christmas that one way in which it is proposed that the burdens of regulation will be limited is that banks are to be allowed to take some risks with a modest proportion—about 5 per cent., I believe—of their capital.
      The difficulty is that small but sound institutions in London would need to use more than 5 per cent. of their capital to launch a new product and make it succeed. They would have to go over all the expensive regulatory hurdles that the new framework threatens to impose, at a time when no one knows whether the new products, services or markets are worth that investment of time and money; if, indeed, such a small institution could afford it.
      I hope that the Government will show that they accept that, while no system of regulation can be perfect, in a sound regulatory system the good will drive out the bad. London is an excellent financial centre for a bank to establish itself in, but it is by no means the cheapest or the easiest. Indeed, it is an extremely competitive marketplace.
      For a bank to survive in London it must have a profitable operation and a first-rate reputation. If either factor fails, the bank's borrowing costs will go up, its ability to do business will shrink, and the pressure of its overheads will oblige it to withdraw gracefully from the scene.
      It is the job of other banks to know which are the safe and the less safe banks. That is the market intelligence that drives the strength, security and reputation of the

      1227
      London market as a whole. No regulatory system, however expensive, can do better than that market system and that market intelligence. The Government should have no hesitation in accepting some constraints—that is all that the amendments would impose—on the charges that may be imposed on banks, which by and large will rely on their own market intelligence to ensure that they do not lend to other banks in London at an unacceptable risk.
      Mr. Tim Loughton: Does my hon. Friend agree that the risk to banks operating in London will be heightened by what is happening on the continent? It is generally recognised that London is one of the more costly places in which to operate, because of the regulatory costs placed on the many hundreds of foreign banks in the City. At a time when the financial system on the continent is being liberalised, it would be easier and, indeed, cheaper for many of those banks to up sticks and move to the continent, especially in the context of a single currency, if that ever comes about. By not being more liberal on charges on banks in London, the Government can only encourage that movement.
      Mr. St. Aubyn: That is a concern which we must all share. It is immensely encouraging that so many international banks, especially German banks, are concentrating operations in London. They might have been expected, in the build-up to the creation of the euro and a Euro-central bank in Frankfurt, to want to move there. Far from it: they have been scaling down operations in Frankfurt and coming to London because, as the global world of financial services becomes ever more competitive, economies of scale must be achieved.
      Provided we have control over the costs of supervision, the natural advantage that London has built up in this vital part of our economy will ensure that those banks remain here. It would not take a great deal to drive them out to another centre. Because of the lack of consultation before part III was unveiled to the world last May, banks in London are concerned that there may be more surprises in store once the Bill is enacted and some of the other instincts that we have seen betrayed under the skin of new Labour come to the surface.
      Either the amendments should be accepted or we should get some cast-iron assurances, perhaps from the Chancellor himself—I am delighted to see him here tonight—about the costs that will be inflicted on banks in London.
      There is another risk, which I thought that my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) might be about to allude to: the risk in transition. It is well known that, when the supervision of savings and loan institutions in the United States moved merely hundreds of miles, I believe, the disruption caused to staff and to the information-gathering process was identified by many who later studied the problem as a key cause of the institutions' immensely expensive collapse. Unless we have strict control over the administration costs of the new supervisory body, there is a real additional risk that the transition costs will be extremely high for banks in London.
      My hon. Friend the Member for East Worthing and Shoreham mentioned banks on the continent and I have mentioned those in the United States. It is striking, and a
      1228
      point worth making, that, although there were regulatory or banking failures in the London market under the old system from which we are moving away, they cost the British taxpayer scarcely a penny. In contrast, the collapse of Credit Lyonnais in France cost taxpayers there the equivalent of billions of pounds. Indeed, the scale of collapse of savings and loans institutions in the United States was measured in hundreds of billions of dollars.
      It is an extraordinary achievement in a fast-changing world that, whatever deficiencies or mistakes may have been made in the Bank of England's supervision under the old regime, the cost to the British taxpayer was virtually nothing. It is incumbent on the Economic Secretary to the Treasury to assure us that she does not envisage any circumstances under which the taxpayer might be forced to make up for mistakes in any market upset under the new regime, in which she and her colleagues are taking a much more pivotal role.
      When we discussed such regulatory matters in Committee, the Economic Secretary suddenly launched into a discussion about pensions. We are dealing primarily with wholesale markets. I look forward to debating with her the Conservative party's record in government on pensions at an appropriate time, but she should resist the temptation to do so on this occasion. We have a proud record of building up pensions provision in this country. I hope that she will—
      Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Gentleman is asking the Economic Secretary not to do what he is starting to do. The amendments are quite tightly drawn, and I would be grateful if he would stick to them.
      Mr. St. Aubyn: I am grateful to you, Mr. Deputy Speaker, for that point.
      We believe that the Government are trying to win credibility through introducing the Bill and through what they have said during the passage of it, but unless they accept the amendments, they will not establish sufficient credibility to reassure the banks in London.
      9 pm
      Mrs. Liddell: I commend the hon. Member for Guildford (Mr. St. Aubyn) on his after-dinner speech. I hope that he gets the job.
      On a couple of occasions during the debate, I found myself checking the subject matter of the amendments. We are talking about the cost of regulation, which the Government take extremely seriously. I am delighted to note that Conservative Members have been reading the collected speeches that I have been delivering over the past few weeks. I hope that they find a cure for their insomnia soon.
      As we said repeatedly in Committee, it is important to recognise that the Bill is about the transfer of the existing structure of banking supervision from the Bank of England to the new Financial Services Authority. I stress again that the Bill is about the transfer of the existing structure of banking supervision. The Government's proposals for financial services regulation comprise a two-part process. We are taking the opportunity to transfer banking supervision at the moment because we have a Bank of England Bill before us. It is about 40 years since the last such Bill was before the House. We are currently

      1229
      consulting and drafting a financial services reform Bill, which will be introduced in the next Queen's Speech. Several points raised in the debate relate to that next stage of reform of financial services regulation.
      I am grateful to Opposition Members for recognising the strength of the Government's view on the cost of financial services regulation. We have made numerous statements both in and outwith the House on the need to contain the costs of supervision.
      Conservative Members have on a couple of occasions alluded to the costs of financial services regulation in this country. We have had extensive discussions with the banking community and the wider financial services industry in this country and internationally. They pay tribute to the benign nature and cost-effectiveness of this country's banking supervision. That is what we want to continue. We want to continue a regime of financial services regulation for the banks which allows them to thrive in the City of London—and, indeed, in the city represented by the Chief Secretary to the Treasury, my right hon. Friend the Member for Edinburgh, Central (Mr. Darling).
      I regret that I do not find it possible to accept the amendments tabled by the hon. Member for Sevenoaks (Mr. Fallon) and his right hon. Friends. To some extent, they go against the intention fully to consult the financial services community on the future structure of the cost of financial services regulation. At present, we are operating within the structure that was laid down by the Conservative Government in the Financial Services Act 1986. We take on board the stated intentions of the Financial Services Authority on costs.
      As for amendments Nos. 8 and 15, as the hon. Member for Sevenoaks pointed out, my right hon. Friend the Chief Secretary to the Treasury was specific in Hansard, column 77, of the Standing Committee proceedings about the lack of wisdom of putting in the Bill a ceiling on costs or fees that would be unnecessary and inflexible. We have already said explicitly that we expect the Bank and the FSA to bear down on costs. I am happy to repeat the Government's intention that the overall burden on the relevant institutions in aggregate should be no greater than it is today. We would prefer it to be lower.
      Mr. St. Aubyn: Can the hon. Lady give a further assurance that the proportion of the burden borne by smaller banks will not grow—that the proportions borne by the smaller and larger will remain roughly the same?
      Mrs. Liddell: We have made a statement about proportionality. Later this evening, we shall discuss cash ratio deposits, which are another element of the costs on banks and other financial institutions, including the building societies. A consultation process is taking place. We believe that the financial services community is best placed to advise the FSA on the costs that should be levelled and the relationship between costs and effectiveness. If costs are disproportionate to the effectiveness and the nature of regulation, the overall impact of regulation is reduced.
      As for amendment No. 9, the FSA has already made it clear that, this year, it will consult on its longer-term proposals for a comprehensive charging regime covering
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      all the types of firms that will be regulated by the FSA. I imagine that any right-minded person would accept that that is a logical way to proceed. I reiterate what my right hon. Friend the Chancellor said when he launched the FSA in October last year. There will be a specific statutory requirement on the FSA to be efficient and effective.
      We have also concluded that we should give specific responsibility to the FSA to deal with financial crime. The Solicitor-General and I have already made extensive speeches on the matter and there can be no doubt about the Government's view on it.
      Mr. Fallon: I fully take the point that the FSA is to consult on the final regime, but, as the Minister referred earlier to the Government's intentions and wishes, will she say that the Government support the principle of amendment No. 9?
      Mrs. Liddell: In general terms, we have already made that clear in the debates in Committee. I would not wish anyone to assume from that that we have any attraction to the concept of caps. Caps can sometimes be used as targets. That would be a most unacceptable way to proceed. If we were to set a cap, people might believe that that was the figure aimed for. That is one of the reasons why we have a reservation about the use of caps in relation to fee setting.
      Amendment No. 9 would also require the FSA to reduce its banking supervision fees for banks with good track records. The amendment does not specify whether it is the cost of regulation or the inherent riskiness of the business that should be taken into account when setting the level of fees. The FSA has again undertaken to consult this year on the future charging regime. That is a more acceptable way forward, as that consultation will take into account the costs of regulation and the riskiness of the business. I assure the House that there will soon be a whole new framework for financial services regulation, which will include a statutory responsibility on the FSA to take costs into account.
      Amendments Nos. 4 and 5 relate to a large extent to the wholesale market. In that respect, we seek to rely on section 43 of the Financial Services Act 1986, which was passed by the Conservative Government and which provides for a special wholesale markets regime, with lighter-touch regulation than for retail financial services. I understand that that is sometimes referred to as the "grey paper". Section 171 of that Act makes similar provision for settlement arrangements for the wholesale money markets and, at present, only one body is regulated under that section.
      The amendments would also impose a requirement to publish representations. I do not see that it would be helpful to introduce another bureaucratic requirement, because that in itself would be costly; but I can assure the House that the FSA has made it clear that it is of a mind to make available any representations it receives, provided those making the representations have not said that they wish them to be treated in confidence. I hope that, on the basis of those assurances, the House will reject the amendments.
      I have to make it clear that the FSA has undertaken a major process of consultation, which is going on at the present time and which will be extended throughout this

      1231
      year. When we reach the next stage of reform of the financial services sector, the Government will publish the Bill in draft. It will be published in spring or summer this year so as to give the financial services community an opportunity to comment on the structure of the legislation. [Interruption.] I see that the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) is worried by the words "spring or summer". I am a Scot, and summer comes rather later to my part of the world, so I am always a bit variable about when spring and summer actually begin.
      I accept the points made by the Opposition and recognise that they have paid tribute to the Government's determination in respect of costs. However, I must emphasise that we are currently transferring the existing structure of banking supervision from the Bank of England to the FSA and that we are in the process of a much bigger reform. We do not want to constrain the consultation that is to take place as we structure the FSA for the future, so I ask the House to reject the amendments.
      Mr. Fallon: I have to say that I am somewhat disappointed, but first I want to correct the Economic Secretary on one small point. Time has passed more quickly than she thought: it is not 40 years since the last Bank of England Act was passed, but 51 years.
      I am particularly disappointed that, from the point of view of the Government, the hon. Lady did not accept the principle underlying amendment No. 9. I do not believe that she addressed amendment No. 6 at all, although that omission might have been inadvertent. She may not be allowed to speak again, but I shall give way if she cares to intervene in my speech. I asked why schedule 6 alone was not subject to affirmative resolution. That would strengthen the statutory protection and give comfort to those who have to pay the fees, so there is a case for parliamentary scrutiny.
      Mrs. Liddell: I inadvertently missed out the references to schedule 6. I was conscious that colleagues on both sides of the House were beginning to look at the clock.
      Under schedule 6, the relevant procedures are set out and state what the regulations can cover, as well as the consultation requirements. To repeat what I said earlier, we are transferring existing functions. The hon. Gentleman should reflect on the fact that this approach was adopted by his Government in the Financial Services Act 1986, and that is the model which we have followed. The purpose of providing for fee regulation to be made by the FSA is to mirror schedule 9 to the 1986 Act, which governs the collection and use of fees by the FSA under that Act. We do not see any sense in applying a different system in the Bill.
      9.15 pm
      Mr. Fallon: I am grateful to the hon. Lady for that intervention. The only difficulty is that it leaves us with two different regimes. There is an affirmative resolution procedure for the fees recovered through the cash deposit system, whereas the order to be laid according to the FSA procedure under schedule 6 will be not be subject to any parliamentary scrutiny.
      Be that as it may, we have tried to tempt the hon. Lady with a range of different methods of cost constraints. We have suggested capping, indexation, proportionality and
      1232
      the reduction of fees for good compliance. The amendment would not have required reduction, but merely provided for it. It would have been up to the FSA to devise its own scheme.
      Our amendments even offered the hon. Lady the possibility of using her own words as a form of cost control, because, in the end, that is all that we and those who have to pay the fees have to fall back on. We have heard the speeches of the Chief Secretary and the Economic Secretary. We have heard about her wishes, and we even heard about something else that she called "an explicit statement". We have heard her say that it is the Government's intention to bear down on fees. In the end, however, they are not the Government's fees to set; they will be set by the authority. That is why we think that it is important to get it right and put it in statute.
      The debate has quite convinced me that this is a matter that may well attract attention in other place. In the meantime, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 2

      CASH RATIO DEPOSITS
      Amendment made: No. 44, in page 19, line 11, leave out 'within the meaning of' and insert 'authorised under'.—[Mr. Betts.]
      Mr. Fallon: I beg to move amendment No. 21, in page 21, line 5, leave out
      'to be representative of persons'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 7, in page 21, line 7, at end insert
      ',and shall place in the Library of each House of Parliament a summary of all representations received.'.
      Mr. Fallon: I welcome the Treasury's early publication of its consultative document. It is not the weightiest of documents, but at least it was published in good time, and it appears to be suitably green. It is important that it is green. When the Minister replies, I hope that she will confirm that the Government are still reasonably open-minded on the definition of eligible liabilities and about the thresholds and the banding levels that will apply. Huge sums of money are involved, and it is important to get it right, because, although the first order can be revised once it is laid, according to the consultation procedure laid out, I suspect that that order will largely set the pace.
      The City needs some reassurance that the consultation process is absolutely genuine, because of the sums involved. It needs to know that the views of institutions will be heard. That is the objective of amendments Nos. 21 and 7.
      Amendment No. 21 would ensure that all eligible institutions are consulted, not simply their representative bodies. I do not believe that that represents a huge extra burden of paperwork—indeed, the Bill limits the consultation to those institutions that are materially affected. I look forward to the Economic Secretary finally welcoming one of our amendments.

      1233
      Amendment No. 7 ensures that the representations received are not simply ignored. We are simply asking that, as happens in the case of many other consultative processes, a summary of those representations be placed in the Library of the House, so that all involved can see the balance of the views expressed, and the extent to which the order that is laid takes account of those views.
      While we are on the subject of cash ratio deposits, perhaps we should address the little matter of the explanatory memorandum, which I gather is to be altered when the Bill is reprinted. Perhaps the Minister will explain why we must alter the explanatory memorandum; why we are bound by the statistical office of the Commission to do so, or indeed whether we are bound by Eurostat to do so; why that issue was not clarified before the Bill was drafted; and whether the change means that the Government can get away with a lower central Government expenditure total and—who knows?—easier qualification under the Maastricht criteria. Some clarification in support of the Chief Secretary's letter would be welcome.
      Mr. Gibb: I merely ask whether the Economic Secretary has addressed the economic concerns expressed by the Building Societies Association. Specifically, I wonder whether she can give the House, the City and the country an idea of the percentage that the Government are likely to choose. The Building Societies Association believes—as I do—that the percentage, which was 0.35 per cent. of eligible liability, should be considerably lower in view of the reduction in activities. Can the Government confirm that it will be lower, and will they give an idea of the percentage that is likely to be applied in future?
      Mrs. Liddell: I shall address that point with the point that the hon. Member for Sevenoaks (Mr. Fallon) made about the consultation process. There has been genuine consultation—I am glad that the hon. Member for Sevenoaks acknowledges that—and we shall be guided by the advice that we receive from those directly affected by cash ratio deposits, especially bearing in mind the fact that many new institutions—the building societies—now become eligible for cash ratio deposits as they move away from a voluntary structure.
      Before I discuss the amendments, I take on board the point about the explanatory memorandum. I admit that, when I saw the letter that my right hon. Friend the Chief Secretary to the Treasury wrote to the right hon. Member for Wells (Mr. Heathcoat-Amory)—and to the hon. Member for Kingston and Surbiton (Mr. Davey) and my hon. Friend the Member for North Durham (Mr. Radice)—which said that we were complying with Eurostat, I thought that the Pavlovian response of Conservative Members to matters European would cause a reaction; I am delighted to see that I was not disappointed.
      The Office for National Statistics has taken Eurostat's advice because Eurostat is developing a system that will give central bank coherence throughout Europe, so that there is a clear read across Europe. It is important for Governments to take seriously the advice of professional statisticians on these matters, and we have done so, in
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      terms of the advice that the ONS has received from Eurostat and advice that we, as a Government, have taken from the ONS.
      Regrettably, despite the honeyed words of the hon. Member for Sevenoaks, all these references to charm are getting him nowhere, and I shall resist amendments Nos. 21 and 7. We believe that the suggested procedure in amendment No. 21 would be much too cumbersome. We are happy to take representations from all interested parties, but if we must then consult each individual party, the Treasury would be obliged to consult separately more than 500 banks and building societies.
      I believe that Governments, past and present, have, and have had, a great deal of respect for the British Bankers Association and the Building Societies Association. We have forwarded the documents to both organisations, and they have in turn forwarded copies to all their members. We expect to receive responses from the representative organisations and from individual institutions that feel strongly about specific aspects. That process is much more efficient than the one suggested in amendment No. 21.
      I am sure that the hon. Member for Sevenoaks is as concerned about Government efficiency and value for money as we are. We believe that it is much more efficient to limit the statutory requirement to consult to those who are representative of persons likely to be materially affected. Therefore, the Treasury is responsible for finding the right representative bodies. If the hon. Gentleman is suggesting that the British Bankers Association and the Building Societies Association are not properly representative, we shall all be interested to hear why he thinks so.
      Amendment No. 7 asks that a summary of all representations be placed in the Library of the House. We have done some checking in this area, and we are not aware of any other references in legislation to the placing of documents in the Library. Therefore, we do not believe that it would be appropriate to put that kind of obligation into the legislation.
      However, I assure the House that the Government's response to the cash ratio deposits consultation will include a summary of representations received, subject to preserving the confidentiality of those who seek it. We are anxious to be as open as possible while respecting the confidentiality of those involved. We must also respect the need for value for money and efficiency on the part of Government. Therefore, I ask the House to resist the amendments.
      Mr. Fallon: The Economic Secretary said that the consultation is genuine; I assure her that the amendments are genuine also. We believe that they will improve the consultation process. Of course it is easier for the Treasury to send out only two letters rather than 500. That is a matter of judgment—and we know who will win the argument. We still believe that, in this instance where large sums of money are involved, it would be better to make the consultation as wide, rather than as narrow, as possible.
      The Economic Secretary took a rather hard tone in referring to amendment No. 7. However, she has almost satisfied me with her last assurance. If she will publish a summary of the representations received in the Government's response document, she is 90 per cent. there. At least those who have made representations will

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      be aware of the balance of views. In light of that assurance—for which I thank her—I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 7

      RESTRICTION ON DISCLOSURE OF INFORMATION
      Mr. Heathcoat-Amory: I beg to move amendment No. 11, in page 42, leave out line 12.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 12, in page 42, line 12, after 'any', insert 'legally binding'.
      No. 13, in page 42, line 12, after 'obligation', insert
      'specifically requiring the disclosure of information relevant to the purposes of this Act.'.
      Mr. Heathcoat-Amory: This small group of amendments touches on an issue that the Treasury Committee considered at some length, but unsatisfactorily. To be charitable to the Government, I do not believe that they had spotted the issue before we raised it. The debate was answered by the Paymaster General, whose mind was on other things by the time we reached this part of the Bill. It is an important matter, which was not resolved in Committee.
      The matter concerns the disclosure of confidential information to the European Union in circumstances of which the House may not approve. It is about the powers of the House, and about the apparently privileged position of the European Union regarding information gathered by the Bank of England in confidence. The Bill makes provision for the Bank to obtain information from institutions, banks and so on, and criminal penalties attach to those who decline to provide that information. That is understandable: the Bank needs a lot of information in order to carry out its tasks.
      That means that the Bank of England will possess much important information about the City of London, all of which could be useful to competitors, including other financial centres. There are quite proper restrictions on the uses to which that information can be put and to whom it may be disclosed. There is a table in schedule 7 that sets out the authorities to which information can be disclosed. It also lists the functions in pursuance of which those institutions need the information. All that is right and has our full support.
      9.30 pm
      However, there is an overriding permitted disclosure that does not have to be listed in this way or approved by the House. That appears at the end of the schedule, where it is specified that all information may be disclosed
      "in pursuance of any Community obligation."
      The House knows that that goes extremely wide. We have a great many obligations under the European treaties. To give just one example, article 102a of the Maastricht treaty states that member states must
      "conduct their economic policies with a view to contributing to the achievement of the objectives of the Community".
      Those objectives are defined in article 2 as including
      "an economic and monetary union".
      1236
      There are a number of other very general obligations.
      It is easy to see that some organ of the European Union—whether it is the Commission, the Council of Ministers, the European Parliament, or the Committee of the Regions—might want information about monetary policy or about the City of London. A European institution might, for example, believe that the City was gaining certain advantages outside the euro zone because of what it might term a competitive and unnecessary devaluation.
      Therefore, in pursuit of our obligation to assist economic and monetary union, European institutions could foreseeably demand information about British monetary policy and about banks and institutions operating in London. That follows logically.
      Our amendments would restrict disclosure, by removing the privileged position of the European Union and requiring its institutions to be listed in the table alongside UK authorities and institutions. We do not disagree with the proposition that information should be disclosed to the EU, if it is proper and if the House agrees. The House will shortly approve the institutions listed in the table. Why can it not also approve the European Union as an authority, and list the functions under which disclosure is required? That would put the EU on a par with any domestic institution. What could be fairer than that?
      If that does not appeal to the Government, there is an alternative that I commend to the House. That would make it clear that the relevant obligations are legally binding, and it would narrow the obligations to ensure that they specifically require the disclosure of information, pursuant to the purposes of the Bill.
      Those are modest requests. They would not inhibit or damage our relations with the EU, if that is what the Government fear. I hope that the Minister will respond positively, as an important matter is involved—the role of Parliament in regulating our relations with other institutions, especially those abroad.
      Sir Teddy Taylor: After my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) has made the point so ably, I have two questions to ask the Government. The first is why it is necessary to put in the words in line 11. We have been told time and again that European Community law is superior to our law. Surely, if the Bank of England revealed some information and someone challenged it, and if the disclosure was a Community obligation, there would be no problem, so why are the words included?
      We are constantly passing laws without thinking through their consequences, and without realising how silly and nebulous they are. It is a huge mistake to think that it is possible to specify Community obligations. I say that, having attended the meeting of the Sub-Committee of the Treasury Committee this morning, and a delightful meeting yesterday at the Bank of England, which was also attended by all the top bankers who operate in this country.
      At that meeting, the Bank of England handed out a delightful paper with a red cover stating clearly and precisely that, although the House had been told that Britain was exempt from article 109L of the Maastricht treaty—which, although it sounds small, is terribly important because it refers to fixed exchange rates and

      1237
      member states' obligations to pursue the single currency; all kinds of complicated things—in practice it would have to apply. It said that, because it was part of the monetary regulations relating to the euro, it would be enforceable in English courts. The Minister may wonder why the Bank of England referred to English courts, not British courts, but it did refer to English courts.
      Basically, the Bank of England was saying that, although the House of Commons thought, and thought rightly, when the previous Prime Minister, a dedicated and sincere person, came back and said that we need not worry about article 109L because we were exempt from it, nevertheless it will apply. This is a constantly moving situation, and there is no way in which we can specify our Community obligations.
      The next thing that I hope the Minister will bear in mind is that, as we approach the two years of convergence with the other currencies before we join, a complex and difficult situation will arise with fixed exchange rates. The one thing that seems abundantly clear from our own experience in the UK is that a certain number of those currencies will be under enormous pressure. There is no doubt that the United States will have an interest in such matters.
      Why on earth should the Bank of England be obliged to surrender information when it may be against our national interest, simply because it may believe that it is relevant to a Community institution?
      Who decides on these matters? Does the Bank of England decide, or does the European Community simply say what must go? I have always been suspicious of any legislation relating to the EU because, unfortunately, we have been misled time and again. I can think of many examples when we have been given the clearest of promises, only to find, sadly, that those promises are thrown out of the window.
      The day before yesterday, a large number of farmers came to the House, and we have had some fishermen recently. Those poor old fishermen were given clear and precise assurances, but, unfortunately, the European Court threw them out, and the obligation simply disappeared.
      The Minister must say why on earth we need this line at all when there is no need for it, and when the obligation is superior to our law. Secondly, is it fair and reasonable to include words which impose an obligation, when other countries will not be aware that information relating to them will be passed over without their knowledge?
      The line should be removed, as suggested in the amendment, but if not, I hope that the Minister will at least accept the wise and intelligent suggestions of my right hon. Friend the Member for Wells, who I hope will some day have responsibility for looking after such matters and sorting out the horrible mess that we have ended up in with European legislation.
      Mrs. Liddell: I hear the baying of Pavlov's dogs. We have just seen a vignette of the problems currently being experienced in the Conservative party. Schedule 7 is not about disclosure to the EU but about avoiding the possibility of the Bank and its officials being faced with a conflict between EU and UK laws.
      This is not a measure taken by the Government to advance our position in Europe. The specific provisions in the Bill that the right hon. Member for Wells
      1238
      (Mr. Heathcoat-Amory) seeks to remove exactly mirror section 85(1)(h) of the Banking Act 1987 and section 180(1)(t) of the Financial Services Act 1986. The previous Government included no fewer than 18 identical provisions in the legislation that they enacted. There was one per year on average while they were in office, including the Pensions Act 1995, the Railways Act 1993, the Water Industries Act 1991, the Friendly Societies Act 1992, the Companies Acts, the Gas Act 1986, and the Competition Act 1980. The exemption is in the Bill as a failsafe, to answer the point raised by the right hon. Member for Wells, and the hon. Member for Rochford and Southend, East (Sir T. Taylor). It was not included with any particular obligation in mind. The point is to avoid a conflict of law and a dilemma for officials who might otherwise be potentially open to prosecution for fulfilling a binding legal obligation under Community law. An identical amendment was tabled in Committee. What is more, as regards amendment No. 12, it is clear that the obligations concerned would have to be legally binding.
      Amendment No. 13 would unduly narrow the exemption by ruling out disclosure in meeting an obligation expressed in terms of collaboration or co-operation. Indeed, the obligation, the amendment, would do exactly the opposite of what Opposition Members are seeking to achieve. The term "Community obligation" has the meaning given to it in schedule 1 to the European Communities Act 1972, which refers to
      "any obligation created or arising by or under the Treaties, whether an enforceable Community obligation or not."
      The term "enforceable" in this context refers directly to the applicable Acts of the Community.
      Sir Teddy Taylor: I am sure that the Minister will accept that there is always the possibility that the previous Government may have made an error, too. I know that the previous Government achieved great things, but they made some mistakes. What is the point of putting in the line in question if Community law is superior to our law? How could a case arise? I just want to know why it has been included.
      Mrs. Liddell: The hon. Gentleman is showing an obsession with this matter. We are seeking to give protection to officials of the Bank so that they are not put in an invidious position. Opposition Members seek to put them in an invidious position. The Government cannot, therefore, accept the amendments. I urge the House to resist them.
      Mr. Heathcoat-Amory: That response rather typifies the Government's whole handling of the Bill. The Minister agreed that we are talking about legal obligations, which is not clear from the Bill as drafted, yet she is unwilling, for unspecified reasons, to accept the amendment, or, indeed, to table one of her own that will make the matter clear. The phrase "Community obligation" is incredibly vague and incredibly wide, and it was our intention to restrict it to what is more properly the intention of the House and, I think, the Minister. I am not surprised by her response, because she has done this before at other stages in the Bill's progress. We will not press the amendment to a Division because we want to get on to Third Reading so that we can review the Bill in its entirety. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 8

      TRANSITIONAL PROVISIONS AND SAVINGS
      Amendment made: No. 45, in page 43, line 5, leave out from 'satisfied' to 'shall' in line 6 and insert—

      '(a) any requirement to consult before making an order under this Act, or

      (b) any requirement of paragraph 2(1) of Schedule 6, that requiremene'.—[Mrs. Liddell.]

      Bill reported, with amendments.
      Order for Third Reading read.
      9.43 pm
      Mr. Darling: I beg to move, That the Bill be now read the Third time.
      This is an historic Bill. For many years there has been much talk and discussion about the merits of an independent central bank; indeed, there have been many debates in the House. On entering office we made it clear that we believed that the best way to obtain price stability and a commitment to low inflation was to give the Bank of England operational independence to meet the Government's inflation target of 2½ per cent. The Bill is a cornerstone of the Government's economic strategy. It is a major step forward. The passing of the Bill will put in place another plank in our economic policy.
      We have already made it clear that we want to promote stability and long-term growth. We are prepared to face up to the long-term issues, which the previous Government ignored for far too long. Those include the need to end the damaging cycle of boom and bust, which has affected this country badly for many years, and to put in place a framework for long-term stability. Controlling inflation is an essential precondition for growth.
      We are taking steps to tackle the structure of unemployment and to equip people for the future by improving educational standards and providing opportunities for people to acquire skills. The welfare-to-work reform and the new deal for the young and the long-term unemployed are major steps forward that no Government in recent history have attempted. Our tax and benefits system will be overhauled so that it encourages work and makes work pay.
      We have encouraged long-term investment; we shall abolish advance corporation tax; we have announced cuts in corporation tax, with more to come; we have overhauled the private finance initiative; and we have provided leadership so that we can influence Europe in the interests of this country.
      The reform of the Bank of England is a major part of that strategy. It shows our determination to achieve economic stability and low inflation, which is good for business, for savers, for pensioners and for anyone on low and fixed incomes. The new Bank of England will have one of the most open and accountable systems of any central bank in the world. It has a clear target. Its procedures are open; as we discussed this evening, there are many ways in which its policy and commitment are open to scrutiny, by this House, the country and the world at large. That marks a commitment to openness and transparency which this country has not seen before.
      This country depends on its international trade and on markets having confidence in the Government's ability to deliver economic stability and low inflation. The
      1240
      independence of the central bank, the code of fiscal stability and the pre-Budget report are all planks in the same strategy to ensure that there is openness. Openness brings confidence and certainty that the Government will not be moved from their determination to deliver low inflation.
      We therefore have a clear policy for monetary stability and for fiscal stability and, unlike the Conservative party, we have a clear policy on Europe. Nine months after the announcement by my right hon. Friend the Chancellor of the Exchequer that we would give the Bank of England operational independence, we still do not know where the Conservatives stand on this question. It is less than 15 minutes before we shall vote and they have not told us whether they are for or against the measure.
      Mr. Heathcoat-Amory: The right hon. Gentleman has not been here.
      Mr. Darling: I have been here at nearly every stage of the consideration of this Bill and not once have Conservative spokesmen told us whether they are for or against the Bill. The Conservatives are all over the place on this Bill, just as they are divided on Europe. Anyone listening to the debate tonight will have been struck by the fact that every time Europe was mentioned, the Conservative party went into a flurry of confusion and hatred. Every time they looked at a clause that might have involved Europe, all the old divisions and confusion resurfaced.
      We have a clear idea of the interests of this country, in both European and domestic policy. Reforming the central bank was an essential part of that. In nine short months we have achieved a major reform, which will deliver great benefits for this country. We took action almost immediately on entering office on 2 May last year, and we now have a central bank that is fit for the 21st century and an economic strategy that will rebuild this country. This Bill is a central part of that strategy. I commend it to the House.
      9.48 pm
      Mr. Edward Davey: I do not wish to detain the House for long, partly because the Liberal Democrats' support for the principle of the Bill is widely known and has been long-standing. Uniquely among the major parties, we campaigned for the reform of the Bank of England and we welcome the Labour party's conversion to that policy now that it is in government.
      The Chief Secretary to the Treasury explained the benefits of an independent central bank. It is important to have those benefits on record because we have heard so many arguments against an independent central bank. As the Bank of England builds its reputation as an institution that is ready to fight inflation, it is important that public and political support is strengthened and that people recognise the strong arguments for its independence.
      I reiterate the comments of the Chief Secretary to the Treasury about the need for the Conservatives to put their view of this policy on record. They should acknowledge their mistakes in government and their failure to produce a strong, anti-inflation policy through an independent central bank. They have still not changed their policy, but it is important that they do so, because for the Bank to be effective in the long term, there must be cross-party consensus on its independence.

      1241
      It may be presumptuous of me, as a young, new, junior Member, to give advice to the Conservative party, but I suggest that it will lack credibility if it does not change its position before the next election. Although I am not too concerned about the Conservative party's lack of credibility, it would do this country a great disservice if it did not change its policy, because that could create instability in the financial markets. We would have the intriguing prospect of a flight of capital from this country if a Tory victory at the next election were predicted and it had not changed its policy.
      The Liberal Democrats did not give the Bill their total support in Committee because of its shortcomings, especially on accountability. We are disappointed that the Government have not accepted our amendments or any of the cross-party amendments. However, we shall give them our support in the Lobby tonight, because the Bill is a major step forward for British economic policy.
      It is important that interest rates have been taken out of the political arena. Economic policy makers can now concentrate on the real issues that determine a country's prosperity, such as investment in education and in research and development, free, fair and sustainable open markets and an open trade policy. That is what determines the long-term economic future.
      The Liberal Democrats will support the Government, and we will look with interest to see which Lobby Conservative Members go into if they decide to vote.
      9.51 pm
      Mr. Heathcoat-Amory: Proceedings on the Bill have been characterised throughout by the Government's contempt for the House, and this debate has been no exception. This huge change in monetary policy, whereby interest rate decisions have been transferred to a committee of the Bank of England, was first announced not to the House but in a letter to the Governor of the Bank of England. That attitude towards the House has persisted.
      The Government have rejected the cross-party position on confirmatory hearings. They have rejected a modest suggestion that not only the decisions of the Monetary Policy Committee but the reasons advanced by its members should be published in the minutes, which is in line with the White Paper on the public's right to know. Now the Chief Secretary asks us whether we are in favour of the Bill. It is rather terrifying that the man who is in charge of the nation's finances cannot remember what happened as recently as 11 November. We gave our reasons for voting against the Bill on Second Reading, and nothing has happened since then to change our minds. Indeed, our careful scrutiny of the Bill in Committee showed up a number of deficiencies that were not clear at the time.
      The Bill still worries some Labour Members who were not represented on the Standing Committee and who do not like the idea of transferring decisions on economic policy from elected politicians to unelected bankers and officials. All I can say to them is that they have seen nothing yet. If the Government go ahead with their plan to transfer everything to the European central bank in Frankfurt, those hon. Members will know what it means
      1242
      to transfer decisions on the British economy offshore entirely. That, however, is for another day and another debate.
      In its current form, the Bill will not appeal to those of my hon. Friends who in principle support the concept of an independent central bank. The Bank provided for in the Bill will not be independent like, for instance, the Bundesbank or the Federal Reserve in the United States, and it does not qualify as an independent central bank under the treaty of Rome as amended at Maastricht. Further legislation will therefore be needed if and when we proceed to full economic and monetary union.
      Rather than being independent and having genuine discretion in monetary policy, the Bank will work on a short-term contract from the Treasury. The only discretion that it will have, albeit an important discretion, will be in the setting of short-term interest rates; everything else will be decided by the Treasury. The Treasury will make all the appointments to the Monetary Policy Committee, and will ensure that they are all short-term appointments that will not last even for a full parliamentary term.
      That brings us to the mysterious affair of the Treasury Committee. Conservative Members adopted in full the suggestions of that all-party Select Committee—
      Mr. Darling: Will the right hon. Gentleman give way?
      Mr. Heathcoat-Amory: I hope that the right hon. Gentleman will forgive me if I do not. I want to finish my speech shortly.
      Conservative Members adopted the suggestions of the all-party Select Committee—chaired by a distinguished Labour Member—in regard to asking for confirmatory hearings. It was a modest request, as the Government had signalled in the Standing Committee that they were in favour of the principle. We wanted to ensure not that the House should have nomination rights, but simply that we could make certain that the Bill's requirements were implemented in regard to the competence and independence of candidates for membership of the MPC. That, as I said, had all-party support. Indeed, the Chairman of the Select Committee tabled an amendment to that effect, and one of his hon. Friends—also a member of the Select Committee—spoke in its support.
      A Division was called, and all those Labour Members mysteriously disappeared. So much for democracy in the Labour party—but it should worry the House, as an institution, when, after the Opposition have picked up a modest, serious and well-argued proposition advanced in a Select Committee that has subsequently been tabled as an amendment and pressed to a Division, Labour Members are pulled off it by their Whips.
      Other deficiencies came to light in the Standing Committee. I must say in passing that most of them were discovered by Conservative Members. The Liberal Democrats are fond of saying nowadays that they are the only people who put up proper opposition, but I must point out that the two Liberal Democrats on the Standing Committee turned up very seldom. I believe that the hon. Member for Twickenham (Dr. Cable) attended only four sittings. As usual, the real task of scrutinising the legislation and providing constructive opposition fell to Conservative Members.
      Then there is the mysterious matter of the abstention, or disappearance, of the Paymaster General. We rather wish that he had been present this evening, because we

      1243
      all have happy memories of his not only attending the Standing Committee sittings, but answering a good many of our debates. For instance, he replied to many of the debates about the method of appointment to the MPC. Yesterday, when we debated the Paymaster General's tax affairs, he did not turn up for that debate, but I really think that someone should have told him that he could come out of hiding this evening, because we were debating not his personal affairs but the Bill on whose Standing Committee he served.
      We have had some inadequate replies to the points that we have made, but that does not completely surprise us. The central point is that our opposition to the Bill does not signal our opposition to low inflation. Whereas we met our inflation targets in the previous Parliament, the Government weakened their inflation target, and then missed it in every succeeding month. They have tried to shuffle off responsibility for those decisions on to the Bank of England. They will not succeed in that. We have no confidence in the Bill, and we will be voting against it.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 207, Noes 116.

      Division No. 139]

      [9.59 pm

      AYES

      Ainsworth, Robert (Cov'try NE)

      Cox, Tom

      Alexander, Douglas

      Cranston, Ross

      Anderson, Donald (Swansea E)

      Crausby, David

      Anderson, Janet (Rossendale)

      Darling, Rt Hon Alistair

      Ashdown, Rt Hon Paddy

      Davey, Edward (Kingston)

      Ashton, Joe

      Davis, Terry (B'ham Hodge H)

      Atkins, Charlotte

      Dean, Mrs Janet

      Ballard, Mrs Jackie

      Denham, John

      Barnes, Harry

      Dismore, Andrew

      Beard, Nigel

      Dobbin, Jim

      Beckett, Rt Hon Mrs Margaret

      Doran, Frank

      Begg, Miss Anne

      Dowd, Jim

      Bell, Martin (Tatton)

      Drew, David

      Bennett, Andrew F

      Eagle, Angela (Wallasey)

      Bermingham, Gerald

      Eagle, Maria (L'pool Garston)

      Berry, Roger

      Edwards, Huw

      Blears, Ms Hazel

      Efford, Clive

      Breed, Colin

      Fatchett, Derek

      Brown, Rt Hon Gordon (Dunfermline E)

      Field, Rt Hon Frank

      Fitzpatrick, Jim

      Brown, Rt Hon Nick (Newcastle E)

      Fitzsimons, Loma

      Bruce, Malcolm (Gordon)

      Flint, Caroline

      Buck, Ms Karen

      Follett, Barbara

      Burnett, John

      Foster, Michael Jabez (Hastings)

      Butler, Mrs Christine

      Foster, Michael J (Worcester)

      Byers, Stephen

      Gapes, Mike

      Cable, Dr Vincent

      Gardiner, Barry

      Campbell, Mrs Anne (C'bridge)

      George, Bruce (Walsall S)

      Campbell, Ronnie (Blyth V)

      Gerrard, Neil

      Caplin, Ivor

      Gibson, Dr Ian

      Casale, Roger

      Godman, Norman A

      Chapman, Ben (Wirral S)

      Godsiff, Roger

      Chisholm, Malcolm

      Grant, Bernie

      Clapham, Michael

      Griffiths, Win (Bridgend)

      Clark, Rt Hon Dr David (S Shields)

      Hain, Peter

      Clarke, Charles (Norwich S)

      Hall, Mike (Weaver Vale)

      Clarke, Tony (Northampton S)

      Hall, Patrick (Bedford)

      Clwyd, Ann

      Hanson, David

      Coaker, Vernon

      Harman, Rt Hon Ms Harriet

      Coleman, Iain

      Harvey, Nick

      Colman, Tony

      Heal, Mrs Sylvia

      Cooper, Yvette

      Heath, David (Somerton & Frome)

      Corston, Ms Jean

      Henderson, Ivan (Harwich)

      Cotter, Brian

      Heppell, John

      Cousins, Jim

      Hesford, Stephen

      1244

      Hewitt, Ms Patricia

      Pearson, Ian

      Hill, Keith

      Perham, Ms Linda

      Hoey, Kate

      Pickthall, Colin

      Hope, Phil

      Pike, Peter L

      Howarth, Alan (Newport E)

      Plaskitt, James

      Hughes, Ms Beverley (Stretford)

      Pollard, Kerry

      Hughes, Kevin (Doncaster N)

      Pond, Chris

      Hurst, Alan

      Pope, Greg

      Hutton, John

      Pound, Stephen

      Iddon, Dr Brian

      Powell, Sir Raymond

      Ingram, Adam

      Prentice, Ms Bridget (Lewisham E)

      Jackson, Ms Glenda (Hampstead)

      Prentice, Gordon (Pendle)

      Jackson, Helen (Hillsborough)

      Primarolo, Dawn

      Johnson, Alan (Hull W & Hessle)

      Prosser, Gwyn

      Johnson, Miss Melanie (Welwyn Hatfield)

      Quin, Ms Joyce

      Radice, Giles

      Jones, Mrs Fiona (Newark)

      Reed, Andrew (Loughborough)

      Keeble, Ms Sally

      Reid, Dr John (Hamilton N)

      Keen, Alan (Feltham & Heston)

      Rendel, David

      Keen, Ann (Brentford & Isleworth)

      Rooker, Jeff

      Kelly, Ms Ruth

      Russell, Bob (Colchester)

      Kennedy, Jane (Wavertree)

      Salter, Martin

      Khabra, Piara S

      Sanders, Adrian

      King, Andy (Rugby & Kenilworth)

      Savidge, Malcolm

      King, Ms Oona (Bethnal Green)

      Sawford, Phil

      Ladyman, Dr Stephen

      Sedgemore, Brian

      Laxton, Bob

      Shaw, Jonathan

      Lepper, David

      Sheldon, Rt Hon Robert

      Levitt, Tom

      Smith, Rt Hon Andrew (Oxford E)

      Lewis, Ivan (Bury S)

      Smith, Angela (Basildon)

      Liddell, Mrs Helen

      Smith, John (Glamorgan)

      Linton, Martin

      Soley, Clive

      Livingstone, Ken

      Spellar, John

      Lock, David

      Starkey, Dr Phyllis

      McAvoy, Thomas

      Stewart, David (Inverness E)

      McCafferty, Ms Chris

      Stewart, Ian (Eccles)

      McDonagh, Siobhain

      Stinchcombe, Paul

      Macdonald, Calum

      Stoate, Dr Howard

      McDonnell, John

      Stuart, Ms Gisela

      McGrady, Eddie

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      McIsaac, Shona

      Mackinlay, Andrew

      Timms, Stephen

      McNulty, Tony

      Tipping, Paddy

      MacShane, Denis

      Todd, Mark

      Mactaggart, Fiona

      Turner, Dr Desmond (Kemptown)

      McWalter, Tony

      Vaz, Keith

      Mallaber, Judy

      Vis, Dr Rudi

      Marshall, Jim (Leicester S)

      Wallace, James

      Marshall-Andrews, Robert

      Walley, Ms Joan

      Meale, Alan

      Ward, Ms Claire

      Michael, Alun

      White, Brian

      Milburn, Alan

      Wicks, Malcolm

      Miller, Andrew

      Wise, Audrey

      Moffatt, Laura

      Wood, Mike

      Moore, Michael

      Worthington, Tony

      Moran, Ms Margaret

      Wright, Anthony D (Gt Yarmouth)

      Morley, Elliot

      Wright, Dr Tony (Cannock)

      Morris, Ms Estelle (B'ham Yardley)

      Wyatt, Derek

      Mudie, George

      Naysmith, Dr Doug

      Tellers for the Ayes:

      O'Brien, Mike (N Warks)

      Mr. Jon Owen Jones and

      Olner, Bill

      Mr. Clive Betts.

      NOES

      Ainsworth, Peter (E Surrey)

      Bruce, Ian (S Dorset)

      Arbuthnot, James

      Burns, Simon

      Atkinson, David (Bour'mth E)

      Chapman, Sir Sydney (Chipping Barnet)

      Atkinson, Peter (Hexham)

      Bercow, John

      Clappison, James

      Beresford, Sir Paul

      Clark, Rt Hon Alan (Kensington)

      Body, Sir Richard

      Clark, Dr Michael (Rayleigh)

      Boswell, Tim

      Collins, Tim

      Bottomley, Peter (Worthing W)

      Colvin, Michael

      Brady, Graham

      Cran, James

      Brazier, Julian

      Davis, Rt Hon David (Haltemprice)

      Browning, Mrs Angela

      Day, Stephen

      1245

      Duncan, Alan

      Maclean, Rt Hon David

      Duncan Smith, Iain

      McLoughlin, Patrick

      Emery, Rt Hon Sir Peter

      Malins, Humfrey

      Evans, Nigel

      Maples, John

      Faber, David

      Mates, Michael

      Fallon, Michael

      Maude, Rt Hon Francis

      Flight, Howard

      Mawhinney, Rt Hon Sir Brian

      Forth, Rt Hon Eric

      May, Mrs Theresa

      Fox, Dr Liam

      Moss, Malcolm

      Gale, Roger

      Nicholls, Patrick

      Garnier, Edward

      Norman, Archie

      Gibb, Nick

      Ottaway, Richard

      Gill, Christopher

      Paice, James

      Gillan, Mrs Cheryl

      Paterson, Owen

      Goodlad, Rt Hon Sir Alastair

      Pickles, Eric

      Gorman, Mrs Teresa

      Prior, David

      Green, Damian

      Randall, John

      Greenway, John

      Robathan, Andrew

      Grieve, Dominic

      Robertson, Laurence (Tewk'b'ry)

      Hamilton, Rt Hon Sir Archie

      Roe, Mrs Marion (Broxbourne)

      Hammond, Philip

      Rowe, Andrew (Faversham)

      Hawkins, Nick

      Ruffley, David

      St Aubyn, Nick

      Hayes, John

      Simpson, Keith (Mid-Norfolk)

      Heald, Oliver

      Spelman, Mrs Caroline

      Heathcoat-Amory, Rt Hon David

      Spring, Richard

      Horam, John

      Steen, Anthony

      Howarth, Gerald (Aldershot)

      Swayne, Desmond

      Hunter, Andrew

      Syms, Robert

      Jack, Rt Hon Michael

      Taylor, Ian(Esher & Walton)

      Jackson, Robert (Wantage)

      Taylor, John M (Solihull)

      Jenkin, Bernard

      Taylor, Sir Teddy

      Key, Robert

      Thompson, William

      King, Rt Hon Tom (Bridgwater)

      Townend, John

      Kirkbride, Miss Julie

      Tredinnick, David

      Laing, Mrs Eleanor

      Tyrie, Andrew

      Lait, Mrs Jacqui

      VValter, Robert

      Lansley, Andrew

      Waterson, Nigel

      Leigh, Edward

      Wilkinson, John

      Letwin, Oliver

      Willetts, David

      Lewis, Dr Julian (New Forest E)

      Wilshire, David

      Lilley, Rt Hon Peter

      Winterton, Mrs Ann (Congleton)

      Lloyd, Rt Hon Sir Peter (Fareham)

      Winterton, Nicholas (Macclesfield)

      Loughton, Tim

      Woodward, Shaun

      Luff, Peter

      Young, Rt Hon Sir George

      Lyell, Rt Hon Sir Nicholas

      MacGregor, Rt Hon John

      Tellers for the Noes:

      McIntosh, Miss Anne

      Mr. John Whittingdale and

      MacKay, Andrew

      Sir David Madel.

      Question accordingly agreed to.
      Bill read the Third time, and passed.

Racism (Armed Forces)
Motion made, and Question proposed, That this House do now adjourn.—[Jane Kennedy.]
10.12 pm
Ms Diane Abbott: In the past few days, we have read in the newspapers of a particularly sad case of a black marine, Mark Parchment, who was subjected to the most horrifying racial abuse and violence in the marines.
Among other things, he was subjected to a special initiation for "niggers", which involved being soaked with a bucket of urine, attacked and having his genitals shaved. He was made to carry a spear on parade at all times and he was routinely taunted and assaulted.
Such episodes of racial abuse and violence in the armed forces are peculiarly tragic because in all cases, they occur with young men who have more than the normal sense of patriotism and of belonging to Britain. It seems peculiarly tragic that young men who really believe that they are British and want to serve their country are being treated in that way. Sadly, the Mark Parchment case is not the only one; it is but one of a series of sad cases to which I wish to draw the attention of the House tonight.
Black and Asian involvement in the armed forces is not new. The black and Asian peoples have had a relationship with the British armed forces going back to the 18th century. During the French revolutionary wars, locally recruited black regiments were first raised in the West Indies. In 1914–18, the Indian army served with distinction on the western front, and by the time of the 1939-45 war it had grown to 2.5 million men.
Thousands of West Indians—as many as 8,000—served with some distinction in the Royal Air Force. Along with other black Britons of my generation, I am often saddened that when this country remembers those who fought and died in the second world war, the contribution of West Indians and Asians is sometimes forgotten. Those people came and fought and died for this country, because they believed that they were citizens of the empire, serving king and country. It is important to remember their contribution.
Sadly, despite that history of centuries of patriotism and commitment to this country and its armed forces, the Army has a history of institutional racism and of operating quotas and exclusions. As late as 1961, the War Office had a 2 per cent. quota on black recruiting; and as late as 1964, it formally banned black and Asian soldiers from the Guards, the Household Cavalry, Scottish regiments and other supporting organisations, including the military police. In 1967, the Army was still operating a formal quota.
In 1989, across the Atlantic in the United States, the Americans appointed General Colin Powell, the child of West Indian immigrants, as head of their joint chiefs of staff. No one, even Conservative Members, who are quick to talk of tokenism and positive discrimination, would argue that General Colin Powell did not serve his country with distinction.
What were the British armed forces doing during that period? Their progress towards even the basics of racial equality was painfully slow. It is important to remind the House that the Commission for Racial Equality first took

1247
up with the military the issue of racism in the armed forces 17 years ago. Throughout the 1980s and 1990s, the British armed forces have spent their time in denial of the problem.
As late as 1990, the then Under-Secretary, Lord Arran, was saying that the armed services had done all that they could to stamp out racism. Tell that to Richard Stokes, who was desperately proud in 1990 to be the first black man to join the Household Cavalry in its entire history: a history, until the 1960s, of a formal ban on black men. He was driven out by hate mail, racial abuse and violence.
Tell that to Jacob Malcolm, who in 1991 was barred from the Household Cavalry because of his colour. Tell it to Stephen Anderson, another black man, who in 1991 was awarded damages for years of racial abuse. Tell it to Mark Campbell, who was the first black man in the Guards. In 1994, he was driven out by the taunts of "nigger", the abuse, the violence and the bed soaked in human urine.
In 1994 again, Geoffrey McKay was awarded damages by the armed forces. He was one of the brightest recruits in basic training, but on his very first parade his sergeant said to the rest of the assembled troops, "We've got a nigger in the troop, lads." Inevitably, like the others I have mentioned, he was driven out by abuse and violence. Eventually, the Army had to pay damages. With such a history of violence, abuse and racism, it is no surprise that two thirds of black and Asian young people—even those who have joined service cadet corps—believe that there is racism in the armed forces.
Today, black and Asian candidates are a third less successful than white candidates. That is a curious statistic. Only 1 per cent. of all black and Asian people are in the armed forces, compared with 5 per cent. in the civil service and 6 per cent. in the population as a whole. Only a handful of black and Asian people are above the rank of colonel. It seems to me very sad that the armed forces have continued to deny the existence of racism in the services and have had to be painfully dragged into the 20th century under the threat of a formal investigation by the CRE.
In the autumn last year, the armed forces launched a big initiative to recruit more ethnic minorities, bring some of their personnel practices up to modern-day standards and implement some measure of ethnic monitoring. It is now important that the Government monitor that process very carefully. It has taken the armed forces 17 years to get to such a stage. We hear all the time about the difficulties of recruiting suitable people to the services, yet, despite a potential pool of recruits in our big cities and communities, black and Asian young men and women are so painfully under-represented in the armed forces.
I am talking about people such as Richard Stokes who, as I said, was the first black man to join the Household Cavalry. I am talking about people such as Geoffrey McKay—and Solomon Raza, who was abused and beaten on a daily basis because his father was a Pakistani. Eventually, one of the beatings put him in hospital with a ruptured kidney and he had to leave the service. Many bright, idealistic young black and Asian men had to be terrorised, abused and brutalised before the armed services reached the standards of basic personnel practice, number-taking and monitoring that we find in any modern business.
1248
Black and Asian people in the Indian subcontinent, Africa and the Caribbean have a history of loyalty to the British Crown which goes back centuries. They want to serve their country, but they are being kept out—I believe—partly through fear following well-documented cases of abuse and maltreatment. The black and Asian community and the wider community want not just policies on paper, a verbal commitment and lip service to be paid to the issue from Ministers and the armed forces, but real commitment, and a line drawn beneath the history of the issue. They want the armed forces to reach out to young black and Asian people to say, "You are welcome, and once you are in the services, you will be treated as equals." Then, the brutality and humiliation suffered by the Richard Stokes, Mark Campbells, Stephen Andersons, Geoffrey McKays, Solomon Razas and Mark Parchments of the world will not have been in vain.
10.24 pm
The Minister for the Armed Forces (Dr. John Reid): I thank my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) for securing this debate. It provides me with an opportunity to reiterate clearly the Government's commitment to encouraging racial equality in the armed forces. In a vignette of the history of the British armed forces, she referred to the honourable, in many cases glorious, role of comrades in arms in the British Army who came from Asia and Africa. She did well to remind us of that.
In supporting that testimony, I wish to add a personal note. My father lost his oldest and youngest brothers in the second world war in what was probably the most glorious hours of the British armed forces when they stood alone against the most poisonous regime ever to emanate from Europe and possibly the globe—the Nazi regime. The poison at the centre of that regime was racism. The eradication of any element of racism inside our armed forces is compelled not only by the history of the black and Asian community but by the history of the whole of the British armed forces and the sacrifices that they have made.
The Government's commitment stems as much from what will be good for the operational effectiveness of the armed forces as from the inherent laudability of the ideal. Armed forces that better represent the society that they exist to defend will be better able to meet the challenges of the 21st century.
Over many years, the armed forces have not enjoyed a good reputation among members of ethnic minority communities. I understand why that has been so. But I, the Secretary of State for Defence and the armed forces do not accept that that perception or experience of reality should be allowed to continue. There have been, as we have heard from my hon. Friend, a number of highly publicised instances across all three services of unacceptable behaviour towards non-white personnel. Over the years, such events, however isolated they may be as a proportion of the personnel in the armed forces, have done immense harm to the image of the armed forces among the black and Asian communities. They ensured that we face an uphill struggle in persuading those from ethnic minority families that they can have a worthwhile career in the services. Although there are few such incidents, that in no way diminishes their seriousness. One act of racism proven to have taken place in the British armed forces is too many.

1249
Hon. Members will recall the severe criticisms mentioned by my hon. Friend made by the Commission for Racial Equality, which conducted a formal investigation into the Household Cavalry in 1995. These related not just to the Household Cavalry but to some common aspects of service personnel policy. That critique was followed by a report in 1997 by the Office for Public Management, an independent consultancy, into service and civilian ethnic minority recruiting initiatives, which called for greater commitment and leadership at all levels to the goal of equal opportunities. The Ministry of Defence and the services were challenged to do more to embrace greater diversity and to make greater efforts to create armed forces which better reflected the ethnic diversity of the United Kingdom.
I have been frank on the history and I want to be frank about the present and contemporary efforts. First, to their credit, the services have been prepared publicly to face up to these trenchant criticisms and to recognise the problems. Recognition through that self-criticism is the first and necessary step in confronting and solving the problems to which my hon. Friend referred.
I mention those criticisms because they are an important backcloth against which to consider the position today. However, I do so on the basis that increasing the currently inadequate level of ethnic minority representation in the armed forces is good, not only in its own terms, although it is; nor is it only a matter of correctness—political, social, moral or otherwise—although it is morally and socially justified; but because, in the interests of effectiveness throughout the armed forces, it is vital that we recruit people who represent the widest possible pool of talent in our community.
We want the best for the British armed forces, based on merit, not on background, skin colour, religion or creed. To neglect the 7 per cent. of the population who are of ethnic minority origin would be to ignore a valuable seam of potential recruits. That is a seam that we cannot afford to ignore, for our own sake and for the many reasons I mentioned.
Ms Abbott: It is perfectly clear that Ministers are sincere in what they say. I am even prepared to believe that the senior levels of the armed forces are equally sincere. However, from my experience of working and managing in other spheres of life, I know that it is one thing to get the top management to say the right things, but it is another to make sure that correct practice permeates all the way down through an organisation.
We hear about cases of quite unacceptable abuse and violence, but we never hear of anybody being disciplined for perpetrating these actions against fellow soldiers. Until members of the armed forces know that they can be disciplined for committing acts of gross racist abuse and violence, those practices will continue. The Office for Public Management found that officers saw nothing wrong in calling people "coon" and "nigger" and came out with extraordinary stereotypes, such as the notion that black people cannot fight or that they do not like water.
1250
It is one thing to talk the talk, but what we require of the armed services is that they walk the walk and implement these measures all the way down to the bottom.
Dr. Reid: I thank my hon. Friend for the several points which she raises. Her first point was that words were not sufficient—we need actions. I agree entirely and, apart from expressing our commitment, the Government, Defence Ministers and service chiefs want to examine practical ways in which to implement those policies on the ground—walking the walk, as my hon. Friend puts it, rather than talking the talk. I shall talk about that point later.
My hon. Friend's second point was that she accepts—I am glad that she does—the sincerity of Ministers and service chiefs in this respect, but that that is not sufficient in any organisation. Although not sufficient in any organisation, it is more useful in the armed forces, where the chain of command ensures that subordinate command structures carry out orders to a greater extent than could be achieved in many other organisations. That is in the nature of the armed forces.
Nevertheless, the service chiefs and I are completely in accord with my hon. Friend in the realisation that changing the ethos, culture and educational programme of personnel at all levels of the armed forces is essential. I say that with all due respect to generals, admirals and the hierarchy of all the services, but I have no doubt that, in many ways—operationally and culturally—the dynamo of the British armed forces is often found at the level of sergeants, warrant officers, corporals, and so on. Just as that pertains to our effectiveness as a fighting force, so it does to our effectiveness in changing the culture. I give credit to service chiefs, although their commitment is not a sufficient condition to achieve a solution to the problem.
I mentioned the criticisms earlier, because that was the first step in beginning to solve the problems. A vigorous implementation of policies designed to allow and encourage the recruitment of young men and women from the ethnic minorities is good for the forces, good for the defence of the country and good in terms of the numbers in our armed forces. It is also good because it offers the opportunity to able and talented young people to seek a pathway to progress through a system that offers promotion based on merit and ability, not on background. My hon. Friend has highlighted that change, which benefits all sections of the community.
Since coming to office, we have made plain our unequivocal commitment to stamping out racism. Let me spell that out again to anyone who may be listening to the debate. There is no place whatsoever for racial discrimination within the British armed forces. It will not be tolerated. I can assure my hon. Friend that that commitment is shared by the service chiefs, and is now well understood.
That is also made crystal clear to all personnel serving in the armed forces. We are trying hard to ensure that it is also made clear to those who might be considering applying to join either the Royal Navy, Army, or Royal Air Force, because it will be self-evident to everyone in the House that we recruit not in a vacuum, but from society. Many of the problems mentioned by my hon. Friend are prolific in society, particularly in some of the areas from which many of our recruits are drawn.

1251
Our starting point is that, if we are to attract and retain sufficient young men and women of the right calibre to serve in the armed forces, progression through the system must be based on merit alone, without reference to colour, race, gender or religion, and without fear of harassment or bullying.
On the practical measures which have been taken, all three services have either issued or revised their equal opportunity policies and directives. They leave all personnel, of whatever rank, absolutely clear on where their personal responsibilities lie. The Government are working with the service chiefs to build a climate within the armed forces that ensures that all personnel are free from any form of harassment—racial, sexual or religious.
It is also important for service chiefs to continue to underline publicly their personnel commitment to that cause. In my view, that is more important than leaving it just to politicians. I am particularly grateful to the service chiefs for the manner in which they have done that since the Labour party took office. As my hon. Friend has said, the Army's Chief of General Staff, Sir Roger Wheeler, did just that in October, when he relaunched the Army's equal opportunities strategy. He did so from a platform in a room packed with journalists and others who represent media interests. He did it without the presence of any Ministers or a display of political correctness. Sir Roger, like the other chiefs of staff, recognises that such a strategy is vital for the armed forces.
On that occasion, Sir Roger quite rightly said:
"We must also seek to change the attitudes that affect behaviour".
I also congratulate the Royal Air Force and the Second Sea Lord, Admiral Sir John Brigstocke, who also made clear his public commitment to equal opportunities at the British diversity award ceremony in December. My hon. Friend referred to the problems encountered in the Navy, but, to its eternal credit, it was shortlisted for one of the equal opportunities awards to be given at that ceremony. We should recognise the good that is being done, as well as some of the problems.
Ms Abbott rose—
Dr. Reid: I shall give way in a moment, but there is not much time left, and I know that my hon. Friend wants me to respond in practical terms. I should therefore like to list what we are doing.
Before I do so, I should like to note that Admiral Sir John Brigstocke made clear his public commitment to equal opportunities at the British diversity awards when he said that the Navy
"would not turn a blind eye to discrimination in any form."
Such high-level commitments are important, because, ultimately, it is only by influencing attitudes that the true breakthrough will be made.
My hon. Friend has asked me to detail the practical policies in hand. Let us turn from rhetoric to reality, from
1252
talking the talk to walking the walk, as my hon. Friend said. We are determined that the quality of our monitoring during recruitment, and subsequently in service, is improved. We are looking at, and want to look more closely at, performance across ethnic group and gender in both recruitment and subsequent career progression. We have made it clear previously that we wish to ensure the widest possible array and talent. If we failed to do so by monitoring, we would pass up a great opportunity to the detriment of the long-term efficiency of the armed forces.
Ms Abbott: Some regiments, such as the Guards and the Household Cavalry, have deliberately excluded black people. Will my hon. Friend introduce cap badge monitoring—monitoring by regiment?
Dr. Reid: Would my hon. Friend do me the courtesy of allowing me to answer the question? She mentioned the Household Cavalry three times. I am delighted to tell the House that, last week, the Major-General commanding the Household Division was in Brixton, mixing with people to find practical ways to take forward one of the initiatives that I shall mention.
Of course the figures will be studied in terms of targets across cap badges. There are no get-out clauses. There is no way out. We want to do that; we are not trying to escape from it.
We realise that we need to work hard to overcome the barriers among some ethnic minorities about careers in the armed forces, so the initiatives that we have taken in Sandwell, and in Newham in London, are crucial. We are working closely in those two boroughs—not using rhetoric, but working with local councillors and leaders of education and the ethnic minorities, and we are trying to find practical ways, resulting from their partnership, to build on the initial work done. We are also looking to involve local cultural leaders and the racial equality councils in that work, because we need to sell the message nationwide and locally—at the highest level and in the streets and on the ground.
I mentioned local visits by senior commanders such as the Major-General commanding the Household Division. Our goal is simple: we want the armed forces better to reflect the ethnic balance of society. I have said that publicly. I have said it to the Commission for Racial Equality and I think that it will accord the new Government and the service chiefs appreciation for the attempts that we have made.
We want it to be widely known that we resolutely wish the number of black and Asian personnel to increase during the next few years. We are providing role models. We have established ethnic minority recruiting teams. We have placed increased emphasis on targeting the gatekeepers who are influential in determining the career choices of young people, and we are seeking to make the best possible use of the ethnic media to communicate the message so that the services recruit and welcome applications.

1253
Our priority is clear. I was able to announce to the House earlier today, in answer to a parliamentary question, that I have established targets for recruitment from ethnic minorities of 2 per cent. for next year, of 3 per cent. for the following year, of 4 per cent. for the
1254
following year and of 5 per cent. for the following year, throughout the British armed forces. Those targets are not ambitious. They will put into practice our resolution to—
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 eighteen minutes to Eleven o'clock.

HOUSE OF COMMONS

  Land Mines
  Mr. Bruce George
  To ask the President of the Council, pursuant to the answer of the Secretary of State for Defence of 12 January 1998, to the hon. Member for Monmouth (Mr. Edwards),Official Report, column 130, if she will make it her policy to provide for the Bill to implement the Ottawa Convention to be subject to pre-legislative scrutiny. [24177]

  Mrs. Ann Taylor
  The Government have already said that they plan to introduce legislation as soon as the Parliamentary timetable allows. We will consider nearer the time the most appropriate way.

  Mr. Bruce George
  To ask the President of the Council which Department will be in charge of the legislation to give effect to the provisions of the Ottawa Convention. [24178]

  Mrs. Ann Taylor
  The Foreign and Commonwealth Office is the lead Department.

INTERNATIONAL DEVELOPMENT

  Aid (Rules for Use)
  Mr. Hancock
  To ask the Secretary of State for International Development, pursuant to her answer of 12 January,Official Report, column 86, which programmes will have a lower priority as a result of her policy to give programmes to combat poverty a higher priority; and what reductions in funding these programmes will receive. [24087]

  Clare Short
  The final allocation of our resources between programmes for 1998–99 and subsequent years is currently being considered. Priority will be given to interventions which combat poverty. The shift in spending priorities will be detailed in our annual report which we expect to publish next month.

  Mr. Hancock
  To ask the Secretary of State for International Development, pursuant to her answer of 12 January,Official Report, column 86, what measures she proposes to prevent aid being used for military purchases from countries other than the United Kingdom. [24088]

  Clare Short
  Department for International Development funding for development projects overseas is subject to existing detailed and stringent procedures involving regular and careful review at the design, implementation and evaluation stages to ensure that they fully meet the developmental purpose for which they are 604
  intended, as required in the Overseas Development and Co-operation Act 1980, and are not used for inappropriate military or other purposes.

  As I made clear in my answer of 12 January 1998, there is not and will not be any link between aid and sales of British arms equipment.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Coastguard
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to review the funding for the Coastguard Agency. [22871]

  Ms Glenda Jackson
  The Government intend to merge the Coastguard Agency and the Marine Safety Agency on 1 April 1998 to create a new Agency, to be known as the Maritime and Coastguard Agency (the Chief Executive of which will be Mr. Maurice Storey, currently a Director of Stena Line UK). The budget for the new Agency in 1998–99 will be higher than the sum of the current year budgets of the two existing agencies. The longer term funding of the Agency is being considered in the context of the Comprehensive Spending Review, in which we shall of course give due priority to safety and counter-pollution activities.

  Advisers
  Sir Robert Smith
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the special advisers in his Department, the Minister to whom each is responsible and the subjects on which they advise. [23193]

  Mr. Prescott
  Joe Irvin and Joan Hammell advise me on all my areas of responsibility both as Secretary of State and Deputy Prime Minister. Paul Hackett and Darren Murphy are part-time advisers, who together make up the equivalent of 1 full-time adviser's post, and cover regional and local government issues. David Taylor acts as a part-time, unpaid adviser mainly on regeneration and regional issues.

  Kate Davies and Tony Grayling advise my right hon. Friend the Minister of Transport on transport issues.

  Use Classes Order
  Mr. Cousins
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to review the Use Classes Order 1987. [23681]

  Mr. Caborn
  There are no plans to review the Order, although we keep under consideration the need for amendments in the light of representations received.

  London Boroughs (Landholdings)
  Mr. Cox
  To ask the Secretary of State for the Environment, Transport and the Regions what is the acreage of land and its current value that is owned by each of the London borough councils. [23285]

  Mr. Caborn
  This information is not held centrally.

  Roads (Greater London)
  Mr. Cox
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the present major road(a) developments and (b) improvements that are currently being implemented within the Greater London area. [23290]

  Ms Glenda Jackson
  Taking "road developments" as the building of new roads and "road improvements" as major enhancements to an existing road, the information for local authority projects costing over £2 million and Highways Agency projects costing over £3 million is as follows. Information on lower value projects, privately promoted road projects and maintenance led projects could be obtained only at disproportionate cost. London-wide traffic management programmes are also excluded.Road Developments

  1. Bexleyheath Southern Relief Road and Pedestrianisation, LB Bexley—the relief road is open to traffic but the pedestrianisation has yet to be completed.

  2. Hounslow Town Centre Relief Road, LB Hounslow—the relief road is open to traffic but further works are yet to be completed.

  3. Future A12, Hackney—M11 Link Road, Highways Agency—the new road is expected to be open to traffic in mid 1999.

  4. Future A13, Wennington—Mar Dyke, Highways Agency—the new road is expected to be open to traffic in late 1998.

  5. Future A13, West of Heathway—Thames Avenue, Highways Agency—the new road is expected to be open to traffic in mid 1999.

  Improvements

  1. Bexleyheath Town Centre Traffic Management Scheme, LB Bexley—due for completion mid 2000.

  2. Woolwich Road Improvement, LB Greenwich—due for completion 1998.

  3. Uxbridge Town Centre Improvements, LB Hillingdon—due for completion mid 1998.

  4. Harrow Road/Ladbroke Grove Widening, LBs Westminster and Kensington & Chelsea—due for completion mid 1999.

  5. A240 North-South Strategy, LB Kingston—due for completion mid 1999.

  6. A11 Stratford Gyratory Modifications, LB Newham—due for completion early 1998.

  7. Oxford Street Improvements, LB Westminster—due for completion 2002.

  8. Wood Green Spouters Corner Improvement, LB Haringey—due for completion 1999.

  9. A406 North Circular Road, Fore Street Underpass, Highways Agency—due to open to traffic early 1998.

  Poor People
  Mr. Pond
  To ask the Secretary of State for the Environment, Transport and the Regions if he will carry out an assessment of the impact of his Department's current policies on the(a) income, (b) employment opportunities and (c) living standards, of the poorest 30 per cent. of the population. [23338]

  Mr. Prescott
  Many of my departments policies directly address the problems of the poorest 30 per cent. of the population. Examples include: social housing provision; many regeneration initiatives; the rough sleepers initiative; the Home Energy efficiency scheme; and measures to promote transport accessibility.
  606
  My department has an extensive research programme which evaluates the impact of these and other policies, and particular attention is placed on assessing whether policies are reaching disadvantaged people and deprived areas. For example, my department is undertaking an extensive evaluation of the SRB challenge fund which includes an assessment of how far funds have gone to deprived areas, and residents surveys to assess whether deprived people are benefiting from the initiative. We have also carried out extensive evaluations of the Rough Sleepers Initiative which have assessed the contribution of the different elements of the RSI to meeting the housing and support needs of people sleeping rough. Through the five yearly English House Conditions Survey we are also able to look at how the circumstances of the poorest households change over time.

  More generally, we have commissioned a pilot study in three areas in order to trace how far public expenditure taken as a whole is being targeted on deprived areas where many of the poorest 30 per cent. of the population live.

  Of course, I consider the implications for the poor and socially deprived in framing all my policies, whether this is a direct aim of those policies or not.

  Water Industry
  Mr. Blizzard
  To ask the Secretary of State for the Environment, Transport and the Regions what progress has been made in improving the record of the water industry in respect of(a) leakage, (b) water quality and (c) value for money for consumers. [23697]

  Mr. Meacher
  My right hon. Friend the Deputy Prime Minister announced at the water summit in May 1997 a 10-point action plan to help secure a reliable, efficient and environmentally sustainable water industry which recognises that its primary duty is to meet the needs of its customers. The Government are looking for a sustained commitment from the water companies to the actions identified and is asking them for updates on their summit-related activities. There has been considerable progress.

  (a) Since the water summit the Director General of Water Services has set mandatory leakage targets for every water company to meet by the end of 1998–99. These will mean a 16 per cent. reduction in total leakage below companies' own targets for 1997–98.

  (b) The quality of drinking water is high. 99.7 per cent. of the 3.1 million tests carried out in England and Wales during 1996 met the relevant standards. Data for 1997 are still being collected by the Drinking Water Inspectorate and will be published later this year.

  (c) On prices, the Government look to the Director General to set tough new price limits, in his next periodic review of water price limits to apply from 1 April 2000, which represent the best value for money, given the industry's service and environmental obligations. As part of the drive towards meeting leakage targets, all companies now provide free supply pipe leakage detection and repair services for domestic customers.

  In addition, the Government are undertaking a fundamental review of utility regulation. The Government want the regulatory framework to deliver value, quality and choice to consumers while providing incentives to managers to innovate and improve efficiency.
  607
  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions how many sewage treatment plants in the United Kingdom include ultra-violet treatment systems; and if he will list their locations. [23716]

  Angela Eagle
  A list from the Environment Agency on locations of the thirty-five sewage treatment works which include ultra-violet treatment in England and Wales is attached in the table. The information relating to Scotland and Northern Ireland is a matter for my right hon. Friends the Secretaries of State for Scotland and for Northern Ireland respectively.

  Waste Water Treatment Works in England and Wales with UV Disinfection as at January 1998

  Agency Region

  Treatment Works

  South West

  Lyme Regis

  Exmouth

  Menagwins (St. Austell)

  St. Columb Major

  Gorran Haven

  Ashford (Barnstaple)

  Porthilly (Rock)

  Trecerus (Padstow)

  Porthleven

  St. Agnes

  Southern

  New Romney (Littlestone)

  Dymchurch

  Camber

  Thames

  None

  Anglian

  Newton Marsh

  Mablethorpe

  Wells-Next-The-Sea

  Heacham

  West Mersea

  Kings Lynn

  North East

  None

  North West

  Newbiggin

  Ashkham-in-Furness

  Silloth

  Midlands

  None

  Welsh

  Newgale

  Aberystwyth

  Llanelli (Bynea)

  Tywyn/Aberdyfi

  Criccieth

  Laugharne

  Amroth

  Tenby

  Dale

  Llangrannog

  Pwllhelli

  Treborth (Bangor)

  Beaumaris

  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the effectiveness of ultra-violet treatment of sewage. [23719]
  608
  Angela Eagle
  Ultra-violet treatment of sewage effluent can be a cost effective method of achieving microbiological water quality standards at some locations. It has been shown to inactivate a wide range of micro-organisms.

  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to introduce legislation to require ultra-violet treatment of sewage. [23720]

  Angela Eagle
  Legislation is not needed for this. The type of treatment process used to meet required water quality standards is a matter for the discharger and the environmental regulator.

  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions what research he has commissioned into the effectiveness of ultra-violet treatment of sewage. [23718]

  Angela Eagle
  The Department published comprehensive reviews of sewage disinfection techniques in 1988 and 1992, both of which examined the effectiveness of ultra-violet treatment. They were published by Consultants in Environmental Sciences Ltd. A further review, jointly funded by this Department, the Environment Agency and the water industry, on the fate of enteroviruses through sewage treatment processes, is currently in progress.

  Countryside
  Mr. Hesford
  To ask the Secretary of State for the Environment, Transport and the Regions when the Government's proposals on the right to roam will be published; and if he will make a statement. [23819]

  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects the consultation paper on access to the countryside to be published. [23808]

  Mr. Meacher
  The Government plan to issue for consultation shortly their proposals for giving greater freedom for people to explore open countryside.

  Gipsies
  Mr. Reed
  To ask the Secretary of State for the Environment, Transport and the Regions what representations he has received about Circular 18/94, in relation to the Police and Criminal Justice Act 1994; and if he will make a statement. [23831]

  Ms Armstrong
  Sections 77 to 79 of the Criminal Justice and Public Order Act 1994 give all local authorities powers to deal with unauthorised camping, and my Department's Circular no. 18/94, "Gypsy Sites Policy and Unauthorised Camping", gives advice to local authorities on the use of these powers.

  My Department has received a number of representations, both from local authorities and from groups representing gypsies and travellers, about the advice in Circular 18/94. We have commissioned a research project to consolidate existing good practice for local authorities in dealing with unauthorised camping, with a view to producing guidance. We will be consulting the Local Government Association and others on a draft of that guidance in the spring.

  Professional Divers
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the assessed(a) short and (b) long term health risks to professional divers; and if he will make a statement. [23813]

  Angela Eagle
  The assessed short-term health risks to professional divers include:

  1. decompression illness ("bends");

  2. barotrauma;

  3. cerebral arterial gas embolism;

  4. inert gas narcosis;

  5. oxygen toxicity;

  6. hypoxia (lack of oxygen);

  7. carbon dioxide toxicity;

  8. toxicity from other gases, for example carbon monoxide contamination;

  9. hyperthemeia and hypothermia;

  10. high pressure neurological syndrome in deep diving;

  11. infections;

  12. transient decreases in haemoglobin levels and lung function during the period of saturation dives.

  The longer-term health effects of professional diving are becoming better appreciated as medical knowledge has increased. These longer-term health effects include:

  1. dysbaric osteonecrosis;

  2. decrease in lung function;

  3. changes in neurophysiological function;

  4. changes in psychological function;

  5. changes in retinal function;

  6. changes in audiological function.

  The Health and Safety Executive is currently commissioning further research to investigate the potential long-term health effects associated with working in hyperbaric environments.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the number of United Kingdom nationals who have registered as professional divers broken down by category for each year since 1979. [23817]

  Angela Eagle
  All divers at work who dive in UK waters are required to hold a diving certificate issued by the Health and Safety Executive under the Diving Operations at Work Regulations 1981. The following information shows the numbers of UK nationals who have been awarded HSE diving certificates since 1981. Divers working in the UK before the Regulations came into force were exempted from this requirement and consequently do not appear in the table.

  Type of Diving Certificate awarded

  Year

  Part 1

  Part 2

  Part 3

  Part 4

  Total

  1982

  341.00

  162.00

  181.00

  220.00

  904.00

  1983

  332.00

  153.00

  129.00

  101.00

  715.00

  1984

  357.00

  143.00

  162.00

  118.00

  780.00

  1985

  443.00

  148.00

  157.00

  113.00

  861.00

  1986

  298.00

  94.00

  118.00

  116.00

  626.00

  1987

  103.00

  98.00

  110.00

  133.00

  444.00

  1988

  110.00

  118.00

  150.00

  168.00

  546.00

  1989

  162.00

  147.00

  167.00

  165.00

  641.00

  1990

  214.00

  120.00

  226.00

  156.00

  716.00

  610

  Type of Diving Certificate awarded

  Year

  Part 1

  Part 2

  Part 3

  Part 4

  Total

  1991

  272.00

  98.00

  277.00

  427.00

  1,074.00

  1992

  212.00

  56.00

  241.00

  338.00

  847.00

  1993

  224.00

  73.00

  277.00

  409.00

  983.00

  1994

  294.00

  46.00

  306.00

  391.00

  1,037.00

  1995

  187.00

  36.00

  274.00

  407.00

  904.00

  1996

  158.00

  13.00

  144.00

  272.00

  587.00

  1997

  179.00

  24.00

  130.00

  162.00

  495.00

  Notes

  1. HSE currently has four different diving competence standards, called Parts.

  Part 1 Basic Air Diving

  Part 2 Mixed Gas Diving

  Part 3 Air Diving Where No Surface Compression Chamber is Required On Site.

  Part 4 Air Diving With Self Contained Equipment Where No Surface Compression Chamber Is required on site.

  2. Under the Parts there are nine variations of the diver training certificates.

  HSE Part 1

  basic air

  —

  Unrestricted

  HSE Part 2

  mixed

  —

  Unrestricted

  gas/bell

  —

  Restricted to bell diving in air range

  HSE Part 3

  onshore air

  —

  Unrestricted

  —

  Restricted to diving in the Police Force

  —

  Restricted to diving in tanks

  —

  Unrestricted

  HSE Part 4

  SCUBA

  —

  Unrestricted

  —

  Restricted to diving in tanks

  —

  Restricted to instruction of recreational divers (discontinued in June 1996)

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions who is responsible for the hyperbaric medical monitoring of professional divers once they have left the profession. [23816]

  Angela Eagle
  There is no statutory requirement for the hyperbaric medical examination of professional divers once they have left the profession.

  However, the Health and Safety Executive is currently commissioning further research into the potential long-term health effects associated with working in hyperbaric environments. The subject group will include former commercial divers.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Environment, Transport and the Regions how much money offshore operators have contributed to hyperbaric medical research since 1979. [23814]

  Angela Eagle
  The total cost of hyperbaric medical research projects carried out by the Offshore Safety Division of the Health and Safety Executive (and the then Department of Energy) since 1979 is £6.2 million. The offshore industry's contribution is estimated as £1.4 million (approximately 20 per cent. of the total cost).

  Tobacco Smoke
  Mr. MacShane
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list environmental tobacco smoke as a hazardous substance under health and safety at work legislation. [23811]
  611
  Angela Eagle
  There are at present no plans to do so. However we intend to review our policies on control of environmental tobacco smoke when we have considered the forthcoming report from the Scientific Committee on Tobacco and Health.

  Millennium Experience
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the threat to(a) the environment and (b) public health of residual contamination which remains on the Millennium Experience site. [24220]

  Angela Eagle
  The Exhibition site has been subject to detailed ground investigation and assessment by British Gas Properties/Port Greenwich Ltd. who were the original owners and original polluters, to provide information on the presence of contaminants. English Partnerships bought the site from British Gas early in 1997 and has carried out further investigations.

  These assessments have allowed English Partnerships to carry out a safe, practical strategy for the remediation of the site. Rehabilitation proposals have been drawn up in accordance with current guidance from the Interdepartmental Committee for Redevelopment of Contaminated Land and the Environment Agency. The overall rehabilitation strategy has also been discussed and agreed with both the Environment Agency and the Environmental Health Department of the London Borough of Greenwich. All aspects of the remediation work have been carried out to statutory health and safety standards.

  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions if contaminated material found at the site of the Millennium Experience has been disposed of off-site. [24219]

  Angela Eagle
  The remediation strategy has involved the excavation of contaminated soils, treatment of the soils on site, the maximum re-use of material on the site and the disposal off-site of some of the soil to licensed landfill sites. The selection of sites for disposal is the responsibility of the contractors who, under the provisions of the Environmental Protection Act 1990, operate under a duty of care in the waste handling chain. All the sites used have been licensed by the relevant authority and are suitable for the material being disposed there.

  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions if contaminated material has been buried on the site of the Millennium Experience. [24221]

  Angela Eagle
  Low levels of contaminated material, have been left in situ in accordance with current Government guidance for contaminated land. The site has been capped with a multi-layered clean-engineered capping material to isolate the site users from this material. Risk assessments have been carried out and the remediation has been designed to protect all possible users from harm.

  Global Warming
  Mrs. Ballard
  To ask the Secretary of State for the Environment, Transport and the Regions what estimate his Department has made of the contribution of aircraft pollution to global warming. [24329]
  612
  Ms Glenda Jackson
  Aircraft currently contribute some 2–3 per cent. of anthropogenic CO2 emissions. They also emit NOx, which at altitude may cause a similar global warming effect. The total aircraft contribution to global warming is estimated as being 0.05 watts per sq m (Wm-2), compared with the combined effect of industrial emissions of 2 to 3 Wm-2. However, aviation emissions are expected to increase in the future because of the forecast world-wide growth in aviation. My Department will continue to work through the International Civil Aviation Organisation toward stricter emissions standards and to sponsor research on aviation and the environment.

  Airport Landing Charges
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the landing charges for comparable airliners at the main United Kingdom and international airports and the changes in Heathrow landing charges since BAA's privatisation. [24066]

  Ms Glenda Jackson
  The table shows the charges for four typical airliners at Heathrow, Gatwick and Manchester airports compared with other major European airports in ECU.

  Since privatisation in 1987, landing and parking charges at Heathrow for a Boeing 757–200 (an example of an aircraft that has been operating throughout the period) have risen by 62.9 per cent. in the peak period and by 69.7 per cent. off-peak. When allowance is also made for passenger charges the increase has been 12.1 per cent. in the peak (to £2,114) and 142 per cent. off peak (to £996). (These calculations have been made assuming that the Boeing 757–200 is operating an international flight with three quarters of its 196 seats occupied and that it will spend one hour parked at Heathrow).

  Airport related charges per turn round 1995–96 (in ECU)

  Airport

  Inter-continental Boeing 747–400 (peak)

  Intra-EU A320–100 (off-peak)

  Intra-EU Boeing 737–400 (off-peak)

  Domestic ATR 42 (peak)

  Heathrow

  6,552

  2,067

  3,798

  499

  Gatwick

  6,560

  1,703

  2,777

  393

  Manchester

  7,527

  2,361

  3,582

  253

  Amsterdam

  6,531

  1,798

  2,769

  420

  Brussels

  6,229

  1,623

  2,552

  157

  Frankfurt

  7,923

  2,272

  2,933

  624

  Paris Charles de Gaulle

  7,176

  1,601

  2,023

  274

  Source:

  Appendix 5.6, Table 2 of Monopolies and Mergers Commission Report on the economic regulation of Manchester Airport plc.

  (published October 1997).

  Note:

  Peak and off-peak apply at London Heathrow only.

  Airport-related charges include:

  runway usage fees, passengers terminal charges, passenger transfer charges, parking charges, airbridge charges, security charges, terminal navigation charges, noise charges, night operations or lighting charges, fuel throughput charges, state-imposed departure taxes.

  Pride of Bilbao
  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions what were the findings of the Marine Safety Agency's investigation
  613
  into the recent crossing to Spain of the Pride of Bilbao; and what assessment he has made of the Agency's investigation. [24056]

  Ms Glenda Jackson
  I have asked the Chief Executive of the Marine Safety Agency, Mr. R.M. Bradley, to write to the hon. Member.

  Letter from R. M. Bradley to Mr. Mike Hancock, dated 22 January 1998:
  The Secretary of State for the Environment, Transport and the Regions has asked me to reply to your Question about the vessel "Pride of Bilbao".
  The vessel recently completed a voyage from Bilbao to Portsmouth in poor weather conditions which worsened as the passage continued. The Master of the vessel was subsequently interviewed by MSA officials. It was established from weather forecasts available at the outset of the voyage that it was not unreasonable, on safety grounds, for the voyage to commence.
  There were several slight injuries on board, the worst of which was a broken arm; no damage to the ship was sustained. All of the injuries sustained have been reported to the Marine Accident Investigation Branch for their consideration.
  The MSA is content that the Master did not put to sea in overly adverse conditions and did not compromise safety in any part of the voyage.

  Shropshire County Council
  Mr. Gill
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the ability of Shropshire County Council to meet its statutory obligations in the next financial year within his proposed financial settlement. [24431]

  Ms Armstrong
  The Secretary of State has proposed for consultation that Shropshire's Standard Spending Assessment (SSA) in 1998–99 should be £170.325 million. SSAs are the Government's view of the level of net revenue expenditure that it would be appropriate for each local authority to incur, given overall national resources, to provide a level of service which is consistent across all local authorities. SSAs are calculated by formulae which use objective measures of spending need. We take account of statutory obligations when setting the level of SSA.

  Child Pedestrian Accidents
  Mr. Martyn Jones
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the United Kingdom record on child pedestrian accidents; and if he will make a statement on the progress of initiatives in this area. [24469]

  Ms Glenda Jackson
  The United Kingdom has one of the best road safety records in the world, but progress overall on child pedestrian safety has not been as good as in other areas. The previous administration set a target to reduce child pedestrian deaths from 1.3 to 1.0 per 100,000 children by the year 2000 using a combination of engineering, enforcement and education measures. In 1996 there were 1.1 child pedestrian fatalities per 100,000 children aged 0 to 14. Since then we have launched the `Kerbcrafe initiative designed to encourage local communities to play a part in helping young children to understand the importance of road safety. Improving child safety will be one of the issues addressed in the road safety strategy exercise announced on 15 October.

  London Underground
  Mrs. May
  To ask the Secretary of State for the Environment, Transport and the Regions when he will make an announcement about the future funding of London Underground, with particular reference to capital investment. [24671]

  Ms Glenda Jackson
  We are urgently developing proposals for a public/private partnership to provide London Underground with the funding it needs to increase investment and achieve the Underground that Londoners deserve. We will make an announcement when we have reached a decision.

  Virgin Trains
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions how many complaints were received by the rail users' consultative committees about the services provided by Virgin Trains during(a) the quarter ended 31 December 1997 and (b) the equivalent period in 1996. [24771]

  Ms Glenda Jackson
  The Rail Users' Consultative Committees' complaints figures for the quarter ending 31 December 1997 are currently being collated by the Central Rail Users' Consultative Committee. I will write to the hon. Member when the figures requested are available and will place a copy of my letter in the Library of the House.

  The complaints figures requested for 1996 are not available. Virgin Trains did not commence operation of passenger rail services until 5 January 1997.

  Eastern Regional Development Agency
  Mr. Burns
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on where the offices of the Regional Development Agency for the Eastern Region will be sited. [24497]

  Mr. Caborn
  It is not for Government to dictate where the Agency will be located. The agency itself will be best placed to decide where its offices should be.

  Air Traffic Control
  Ms Osborne
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on(a) the current delay in the development of the new air traffic control centre at Swanwick and (b) the implications for the proposed contract for the new Scottish centre at Prestwick. [24143]

  Ms Glenda Jackson
  The Chief Executive of National Air Traffic Services Ltd. (NATS) announced in July 1997 that there would be a delay to the operational date of the Swanwick centre. Following a review of the project plan, and consultation with NATS staff, users and the Government, the Board of the Civil Aviation Authority agreed a revised operational date of 1999–2000. NATS remain confident that this revised date is achievable, and have developed a robust and flexible implementation plan to bring the project to completion.

  To date, the delay to the operational date of the Swanwick centre has had no impact on the proposed contract for the New Scottish Centre at Prestwick.

WALES

  Sewage Treatment
  Mr. Ruane
  To ask the Secretary of State for Wales if he will list the coastal towns in Wales whose sewage receives ultra-violet treatment; and if he will list those towns for which ultra-violet treatment is proposed. [22027]

  Mr. Win Griffiths
  I am advised by the Environment Agency that ultra violet treatment has been installed at the following sewage treatment works operated by Dwr Cymru Cyf, some of which receive effluent from more than one location.

  Llanelli

  Laugharne

  Amroth

  Tenby

  Dale

  Newgale

  Llangrannog

  Aberystwyth

  Tywyn/Aberdyfi

  Criccieth

  Pwllheli

  Treborth (Bangor)

  Beaumaris.

  Dwr Cymru has stated that its long-term goal is to provide disinfection at all its coastal sewage treatment works.

  Travellers
  Mr. Barry Jones
  To ask the Secretary of State for Wales what action he will take to assist communities affected by unauthorised encampments of travellers in Flintshire. [24159]

  Mr. Win Griffiths
  Land authorities and the police have powers under sections 66 and 77–79 of the Criminal Justice and Public Order Act 1994 to direct unauthorised campers, including travellers, to leave land where they are camped without permission.

  Although these powers are discretionary, local authorities and the police have wide experience of dealing with unauthorised encampments and it is for them to decide whether the use of the powers is necessary.

  Literacy
  Mr. Wigley
  To ask the Secretary of State for Wales what plans he has to ensure that the development of literacy in the Welsh language is included in the Government's plans to concentrate on maths and literacy in schools. [24292]

  Mr. Ron Davies
  English and Welsh are dealt with on a basis of equality in the targets we have set for improving standards of literacy. An additional £1.5 million will be available in 1998–99 through the Grants for Education Support and Training Programme to support the development of literacy strategies covering English and Welsh. Local Education Authorities will be able to use these funds in ways which reflect their own language policies.

  Farm Support
  Mr. Wigley
  To ask the Secretary of State for Wales what steps the Government are taking to ensure that Welsh farmers receive their grant payments on time. [24294]

  Mr. Win Griffiths
  Significant overtime is being worked in the Welsh Office Agriculture Department's Divisional Offices, to help cope with the current delays in getting payments out to farmers. In 1997–98, the Welsh Office is investing an additional £1.4 million in better IT equipment and systems for the Agriculture Department, to secure long-term improvements. An Information Systems Strategy is examining options for investment in new IT programmes. In common with other aspects of delivery of services by Government, administration of Common Agricultural Policy schemes in the UK is being examined as part of the Comprehensive Spending Review.

ATTORNEY-GENERAL

  Serious Fraud Office
  Mr. David Heath
  To ask the Attorney-General if he will make a statement on the role of the Serious Fraud Office in investigating fraud against the European Union. [22338]

  The Attorney-General
  The role of the Serious Fraud Office is to investigate and where appropriate prosecute those suspected of serious or complex fraud. The Director of the SFO takes the public interest into account in deciding whether to investigate an allegation of fraud. The fact that the fraud is against local or central government, including frauds involving European Union funds, would be a factor which tends to favour an investigation. The Director may also use her investigating powers to assist other judicial or prosecuting authorities abroad who may be investigating such cases of fraud.

  Crown Prosecution Service
  Mr. John M. Taylor
  To ask the Attorney-General what representations he has received on the effect on morale in the Crown Prosecution Service of extending their rights of audience. [22340]

  The Attorney-General
  I know from discussions with members of the Crown Prosecution Service at all levels that the rights already granted are very welcome.

  Treasury Solicitor's Office
  Mr. Clifton-Brown
  To ask the Attorney-General what plans he has to reform the operation of the Treasury Solicitor's Office. [22339]

  The Attorney-General
  The Treasury Solicitor's Department is currently carrying out a Comprehensive Spending Review of its objectives and spending programmes, on which decisions will be made in due course. Other than that, I have no plans to reform the Department's operations at present.

CULTURE, MEDIA AND SPORT

  Digital Television and Radio
  Mr. Gordon Prentice
  To ask the Secretary of State for Culture, Media and Sport when he expects digital television and digital radio to be available in North-East Lancashire. [23374]

  Mr. Fisher
  The BBC and the Independent Television Commission (ITC) are responsible for planning the transmission of digital terrestrial television services. At present, plans are being formulated for the launch phase of digital television services from 81 transmission sites. I understand that the Winter Hill and Pendle Forest transmitters, which are both included in the 81 site plan, will provide digital terrestrial television services to North-East Lancashire. However, the precise coverage will not be known before transmission actually begins. Winter Hill should broadcast from the launch of digital terrestrial transmissions scheduled for later this year and Pendle Forest within 16 months of the launch.

  The BBC has already commenced the transmission of digital radio services, and estimates that its national radio services will reach 60 per cent. of the UK population from twenty seven transmitter sites. I understand these BBC services are already available to significant parts of Lancashire. Increasing coverage, including the provision of services from the Pendle Forest relay, will be considered by the BBC as part of subsequent phases of development. The Radio Authority plans to advertise the national commercial digital radio multiplex in March and the projected speed of roll-out of the services it is to carry is one of the factors to be assessed in determining which applicant receives the licence. A local multiplex licence for Central Lancashire is scheduled to be advertised by the Radio Authority in January 2000.

  Millennium Commission
  Mr. Wyatt
  To ask the Secretary of State for Culture, Media and Sport (1) which local authority areas with populations of more than one million have(a) failed to win and (b) failed to propose a millennium project of £1 million or more; [24532]

  (2) what audit the Millennium commissioners originally undertook to establish what projects of £50 million or more were appropriate for the United Kingdom; and what were their findings; [24531]

  (3) how many projects have been commissioned by the Millennium Commission to date; of those how many (a) are experiencing financial difficulty, (b) have not secured matching funds and (c) have requested additional funds from the Millennium Commissioners; and what response has been made in each case; [24445]

  (4) what (i) penalties will be imposed on and (ii) assistance will be offered by the Millennium Commissioners to projects which do not secure matching funds; and if he will make a statement on the role of the National Audit Office in this area; [24446]

  (5) how many Millennium Commission projects will be completed by (a) 1 January 2000 and (b) 1 January 2001; [24449]
  618
  (6) where the financial liability rests for those Millennium Commission supported projects which fail to fulfil their original criteria. [24448]

  Mr. Chris Smith
  These are matters for the Millennium Commission. I shall reply to my hon. Friend in my capacity as Chairman of the Commission, and place copies of my reply in the Libraries of the House.

DEFENCE

  Chemical and Biological Weapons (Iraq)
  Mr. Cousins
  To ask the Secretary of State for Defence what assessment he has made of(a) the stockpiles of and (b) the availability of production facilities for (i) chemical agent VX, (ii) ricin and (iii) anthrax in Iraq. [22973]

  Mr. George Robertson
  Before the Gulf war, Iraq had developed a significant chemical and biological warfare capability, a capability which she has since admitted using against Iran and has also deployed against her own people. The valuable work of the United Nations Special Commission (UNSCOM) over the past seven years has reduced, but not entirely eliminated, Iraq's capability in this field.

  The possibility therefore, that Iraq retains a small number of chemical and biological agents, possibly including VX agent, ricin and anthrax, cannot be ruled out.

  It has not been possible, for example, to confirm that all the VX agent which Iraq claims to have produced has been destroyed.

  UNSCOM has reported the supervised destruction of a pilot VX production plant. But the production of small quantities of VX could still be concealed within university laboratories or the chemical industry.

  In addition, whilst Iraq has told UNSCOM that it examined the potential of the plant toxin ricin without success, we cannot confirm that she has given a truthful account of her interest in ricin or that she has destroyed all stocks of the anthrax spores which she claims to have done. Again, Iraq could conceal production of biological warfare agents in facilities associated with biomedical research.

  Even if she does not possess such stocks, Iraq could be capable of producing small quantities of chemical and biological agents; a significant capability. Since we cannot vouch for Iraq's intentions in the future, UNSCOM's work must continue until the UN Security Council are satisfied that Iraq is complying with all relevant resolutions of the United Nations.

  Radioactive Waste
  Mr. Hancock
  To ask the Secretary of State for Defence what representations he has received from Portsmouth City Council requesting information concerning the dumping of(a) radioactive and (b) low-grade radioactive waste in the Portsmouth area. [23332]

  Mr. Spellar
  Officials within the Ministry of Defence have received a number of requests for information concerning the dumping of radioactive waste from
  619
  Portsmouth City Council. This has been supplied, subject to the constraints laid down in the Code of Practice on Access to Government Information.

  Mr. Hancock
  To ask the Secretary of State for Defence (1) what records his Department has collated in respect of the dumping of(a) radioactive and (b) low-grade radioactive waste in the Portsmouth City Council area; and if he will make the records available to the Council's Environmental Health Officer; [23377]

  (2) what records his Department holds on the dumping of radioactive waste and low-grade radioactive waste in (a) the Fareham Borough Council, (b) the East Hampshire District Council and (c) the Rushmoor Borough Council area; and if he will make them available to the councils' environmental health officers; [23717]

  (3) if he will make available records of the dumping of radioactive waste and low-grade radioactive waste, in the Havant Borough Council area, to the council's environmental health officer; [24058]

  (4) if he will make departmental records on the dumping of radioactive waste and low-grade radioactive waste, in the Gosport Borough Council area, available to the council's environmental health officer. [24059]

  Mr. Spellar
  Although the Radioactive Substances Act 1960 does not apply to the Ministry of Defence, radioactive waste is disposed of from MOD sites under arrangements with the Environment Agency similar to those required by the Act. As part of these arrangements, information on local disposals is passed to the relevant councils. The MOD also holds some reports which relate to activities pre-dating these arrangements, most notably at Aldershot. In that instance both Rushmoor Borough Council and the Environment Agency are involved in discussions about the site. Information is also made available in response to specific requests under the terms of the Code of Practice on Access to Government Information.

  Atomic Weapons Testing
  Mr. Llew Smith
  To ask the Secretary of State for Defence (1) what assessment he has made of the research conducted by the Medical Education Department of Dundee University into atomic test veterans' health; [23798]

  (2) what recent communications his Department has had with the Australian Government concerning the study being undertaken by Dr. Rabbitt-Roff of Dundee University on the effects on British veterans' health of the atmospheric atomic tests conducted by the United Kingdom in Australia. [23809]

  Mr. Spellar
  I assume that the hon. Member is referring to the research work undertaken on behalf of the British Nuclear Test Veterans Association by Dr. Rabbitt-Roff. There is no substantive evidence in her work which would undermine in any way our total confidence in the conclusions of the report published by the National Radiological Protection Board (NRPB) in 1993 which were that participation in the testing programme had not had a detectable effect on the participants' expectation of life or on their risk of developing cancer or other fatal diseases. Unlike the 620
  NRPB findings, which were published in the British Medical Journal, the BNTVA's studies have not been peer reviewed and published in scientific journals.

  My Department has not discussed this matter with the Australian Government.

  Tomahawk Weapons
  Mr. Hancock
  To ask the Secretary of State for Defence what plans the Royal Navy has to purchase the Advanced Tomahawk Weapon Control System; and what estimate he has made of the cost. [24359]

  Mr. Spellar
  A submarine variant of the Advanced Tomahawk Weapon Control System is being purchased as part of the arrangements under which Tomahawk missiles are being procured. The cost of the ATWCS is some £18 million.

  Mr. Hancock
  To ask the Secretary of State for Defence what plans the Royal Navy has to upgrade its Tomahawk Missiles to Block IV standard; and at what cost. [24360]

  Mr. Spellar
  There are no plans to upgrade Royal Navy Tomahawk Missiles to Block IV standard.

  European Regional Test Centre
  Mr. Ainger
  To ask the Secretary of State for Defence (1) if it is his intention to continue the United Kingdom commitment to NATO in respect of providing the European Regional Test Centre for interchangeability and interoperability of NATO small arms ammunition; and if he will make a statement; [24103]

  (2) if the collective decision of NATO in 1993 that the European Regional Test Centre for testing certain ammunition should be based at Pendine has been amended following Pendine's certification; and if he will make a statement; [24101]

  (3) if his Department or the Defence Evaluation and Research Agency have identified a single facility with the required range, size, technical facilities and experienced staff as an alternative to the European Regional Test Centre at Pendine; and if he will make a statement. [24102]

  Mr. Spellar
  [holding answer 20 January 1998]: NATO's 1993 certification of the European Regional Test Centre facility at DERA Pendine has not been amended.

  There are potentially a number of other sites in the UK that could conduct the small arms work for both MOD and NATO needs. The aim of the Ministry of Defence is to provide these capabilities in the most cost effective way to ensure best value for money for the UK and our NATO allies.

  There are presently no plans to discontinue provision of a European Regional Test Centre for small arms ammunition. Our commitment is dependent on suitable and affordable facilities being available.

  Mr. Ainger
  To ask the Secretary of State for Defence how much was charged by the Defence Evaluation and Research Agency for the operation of the European Regional Test Centre for small and medium calibre ammunition at Pendine in each of the financial years since Pendine was certified. [24104]
  621
  Mr. Spellar
  [holding answer 20 January 1998]: This is a matter for the Chief Executive of the Defence Evaluation and Research Agency (DERA). I have asked the Chief Executive to write to the hon. Member.

  Letter from John Chisholm to Mr. Nick Ainger, dated 22 January 1998:
  I am replying to your question to the Secretary of State about charges for the operation of the European Regional Test Centre and Pendine as this matter falls within my area of responsibility as Chief Executive of the Defence Evaluation and Research Agency.
  The Pendine range, which includes the NATO European Regional Test Centre for small arms and medium calibre ammunition, was not part of the Defence Evaluation and Research Agency (DERA) until FY 95/6. During FY 93/4 and FY 94/5 the Pendine site was vote funded and direct charges were not made. Costs were allocated on a notional basis, with much of the site running costs funded via the vote. Reliable figures are therefore not available for these years.
  Since FY 95/6 tasks have been costed individually and on a full recovery of costs basis. The total income from NATO work is:

  1995/96: £ 120K

  1996/97: £130K

  1997/98: £ 150K (Estimate of end of year outtum).

  During this period national work has produced the following income:

  1995/96: £633K

  1996/97: £1,041K

  1997/98: £1,180K (Estimate of end of year outturn).

  MOD also pays an annual maintenance charge to support the NATO and national facilities of:

  1995/96: £137K

  1996/97: £256K

  1997/98: £303K.

  I hope this information is helpful.

  WE-177 Bomb
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence, pursuant to his answer of 31 July 1997,Official Report, column 473, which of the types of WE-177 Bomb have been assigned to the Royal Air Force. [24763]

  Dr. Reid
  All three variants of the WE-177 bomb have been in operational service with the Royal Air Force. As the hon. Gentleman will be aware from the reply my hon. Friend the Parliamentary Under-Secretary of State for Defence gave on 31 July 1997,Official Report, column 473, the last of these bombs will shortly be withdrawn from service.

  A maritime version of the Type A bomb was also in service with the Royal Navy until 1992.

  Recruitment (Ethnic Minorities)
  Dr. Kumar
  To ask the Secretary of State for Defence what targets his Department sets in respect of the recruitment of ethnic minority personnel into the Armed Forces. [25490]

  Dr. Reid
  We have made clear, on a number of occasions, our determination that the Armed Forces should better reflect the ethnic composition of our society. As part of this commitment I am pleased to announce that, for the year starting in April, the goal for each Service will be that 2 per cent. of new recruits should be from the ethnic minorities, with that figure rising annually by 1 per cent. so that it reaches 5 per cent. by the end of the 622
  financial year 2000–02 and in time reflects the proportion of people from ethnic minority communities in the wider population.

  These recruiting goals represent a major challenge for all in the Services, especially recruiting personnel, and will be reflected in the Ministry of Defence Departmental Plan. I am confident that they are realistic and provide a strong indication of our wish to make real, tangible progress in this area.

  Joint Strategic Submarine Patrols
  Mr. Key
  To ask the Secretary of State for Defence what discussions have been held with the French authorities on joint strategic submarine patrols; and if he will make a statement. [24674]

  Mr. George Robertson
  Officials have discussed a wide range of subjects with their French counterparts relating to the maintenance of effective deterrence in changing circumstances within the Joint Nuclear Commission. There have been no discussions on the issue of joint UK/French deterrent patrols.

  Exercise Senator 97
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence, pursuant to his Answer of 12 November 1997,Official Report, column 580, on Exercise Senator 97, in which part of Lincolnshire and at which MoD sites the exercise took place; how many county councils (a) participated and (b) were invited to participate in the exercise; and what lessons were learnt from this exercise. [24764]

  Dr. Reid
  Exercise SENATOR 97, which took place between 22 and 25 September 1997, was located in the Grantham area of Lincolnshire with the Strategic Co-ordination Group, under Lincolnshire Police chairmanship, based at Lincolnshire Fire Brigade Headquarters, Lincoln. Prince William of Gloucester Barracks was used as a convenient location for the main MoD response forces. Lincolnshire County Council participated in the exercise and was the only County Council invited to participate. Lessons learnt from the exercise will be reflected in an all-agency post exercise report which will be placed in the Library of the House in due course.

  IT Equipment
  Mr. Barnes
  To ask the Secretary of State for Defence what is his Department's policy regarding the recycling of information technology equipment within his Department and relevant agencies and to other Government departments or agencies; and what arrangements have been made in this respect. [23277]

  Mr. Spellar
  [holding answer 21 January 1998]: Since April 1994, a contract has been in place providing for the recycling of laser printer and ink jet printer cartridges. A scheme to recycle mobile phones is currently in negotiation.

  The recycling of information technology equipment such as personal computers is currently the responsibility of local MOD management units and Agencies, and occurs either within their organisations or via third party suppliers. The Department is, however, currently seeking

  623
  to let a contract for recycling of information technology equipment. When a central contract is in place all MOD establishments and Agencies will be able to take advantage of this arrangement.

  We have no specific arrangements covering the recycling of information technology equipment with other Government Departments or Agencies. However, the Disposal Sales Agency have in place arrangements to dispose of IT equipment which is unsuitable for recycling within the Department on the open market once it has been cleared of all classified information. Eighteen other Government Departments and Agencies outside the MOD currently make use of these arrangements to dispose of their IT equipment.

PRIME MINISTER

  No. 10 Downing Street (Staff)
  Ms Abbott
  To ask the Prime Minster how many people work for him at No. 10 Downing Street; and of these how many are paid(a) from public funds and (b) by the Labour Party. [23025]

  The Prime Minster
  [holding answer 15 January 1998]: There were 152 people working at No. 10 Downing Street on 1 January 1998. Of these, 145 were paid from public funds and seven Political Office staff were paid by the Labour Party.

  European Commissioner
  Dr. Fox
  To ask the Prime Minister what discussions he has had with the right hon. Member for Yeovil (Mr. Ashdown) about the successor to Sir Leon Brittan as European Commissioner. [23711]

  The Prime Minister
  None.

  Dr. Fox
  To ask the Prime Minister what discussions he has had regarding the replacement British European Commissioner at the end of Sir Leon Brittan's term of office. [23712]

  The Prime Minister
  The members of the Commission were appointed for a five year period, ending on 6 January 2000.

  Announcements will be made in the usual way in due course.

  Millennium Compliance
  Mrs. Gillan
  To ask the Prime Minister if he will publish his response to the British North America Committee on millennium compliance issues. [23558]

  The Prime Minister
  [holding answer 16 January 1998]: I refer the hon. Member to the statement my right hon. Friend the Chancellor of the Duchy of Lancaster made to the House on 27 November 1997, Official Report, columns 1104–05.

  IT Equipment
  Mr. Barnes
  To ask the Prime Minister what is his Department's policy regarding the recycling of information technology equipment within his Department and relevant 624
  agencies and to other Government departments or agencies; and what arrangements have been made in this respect. [23280]

  The Prime Minister
  [holding answer 21 January 1998]: For this purpose my office is part of the Cabinet Office. I refer my hon. Friend to the answer given by my hon. Friend the Parliamentary Secretary, Office of Public Service on 21 January 1998, Official Report, column 600.

  Schengen Agreement
  Mr. Bercow
  To ask the Prime Minister when he was informed that the procedures for joining the Schengen Agreement under the Treaty of Amsterdam would be subject to unanimity. [24053]

  The Prime Minister
  I refer the hon. Member to the reply given to him today by the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), on 21 January 1998,Official Report, column 540.

FOREIGN AND COMMONWEALTH AFFAIRS

  Ministerial Visits
  Mr. Wilshire
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those visits made within the United Kingdom since 1 May on which(a) he and (b) other Ministers within his Department have been accompanied under Rule 83 of the Ministerial Code indicating (i) those persons accompanying and (ii) the cost to public funds. [23761]

  Mr. Robin Cook
  [holding answer 19 January 1998]: (a) (i) I was accompanied by my partner, Ms Gaynor Regan, on two visits within the UK. She accompanied me to CHOGM in Edinburgh on 23–27 October 1997. We travelled by RAF aeroplane. On 14 November 1997 I flew on a RAF aeroplane for an emergency meeting on Iraq with the US Secretary of State, Mrs. Albright. Ms Gaynor Regan accompanied me on that RAF aeroplane to Edinburgh. We both flew back commercially.

  (a) (ii) There was no cost to public funds on either occasion.

  (b) (i) No other FCO Minister has been accompanied by his or her partner on any visit within the UK.

  (b) (ii) None.

  Algeria
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the future progress of the EU-Algeria Partnership Agreement; and what assessment he has made of Algeria's commitments under the human rights clause of that Agreement. [24443]

  Mr. Doug Henderson
  The EU/Algeria Association Agreement is part of the Euro-Med process begun in Barcelona in 1995 and will provide for liberalised trade an enhanced political dialogue. The European Commission is currently negotiating the terms of the Agreement, including commitments by both parties to respect human rights and democratic principles. The EU/Algeria
  625
  Association Council set up under the agreement will allow discussion of compliance with all parts of the agreement once it enters into force.

  BBC World Service
  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his oral answer of 13 Janaury 1998,Official Report, column 141, what assessment he has made of the advantages of providing the BBC World Service in key languages. [24783]

  Mr. Fatchett
  Broadcasting in vernacular languages is an important element in the World Service's ability to reach its target audience. We and the World Service keep its 44 language services under constant review. New languages are introduced and others closed down to meet new priorities.

  Heathrow (VIP Facilities)
  Mr. Wilshire
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 12 January 1998,Official Report, column 23, if he will list the equivalent figures for the use and cost of VIP facilities at Heathrow Airport for 1996. [24500]

  Mr. Tony Lloyd
  The information is in the following table.

  (a)

  Number

  (b)

  Cost (£)

  May

  902

  May

  172,755.55

  June

  1,097

  June

  210,102.92

  July

  1,176

  July

  225,233.40

  August

  1,109

  August

  212,401.22

  September

  1,375

  September

  263,346.87

  October

  934

  October

  178,884.35

  November

  1,043

  November

  199,760.57

  The figures include use of VIP facilities by the British Council and the Bank of England. They also include VAT. The figures include use by Foreign and Commonwealth VIP visitors as well as HMG Ministers.

  Mr. Wilshire
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list by(a) month and (b) Minister the number of times each Government Minister has used VIP facilities at Heathrow Airport in the course of their official travel since 1 May. [24494]

  Mr. Lloyd
  Details of FCO Ministers are as follows:

  Secretary of State

  Mr. Lloyd

  Mr. Fatchett

  Mr. Henderson

  1997

  May

  3

  —

  2

  3

  June

  5

  —

  3

  4

  July

  5

  1

  4

  3

  August

  1

  —

  —

  1

  September

  2

  1

  3

  4

  October

  2

  —

  —

  6

  November

  4

  1

  3

  4

  December

  1

  1

  —

  2

  1998

  January

  1

  1

  2

  —

  Baroness Symons has not used the VIP facilities at Heathrow Airport during this period.
  626
  My Department does not have readily available a breakdown of use by Ministers from other Government Departments. We shall ask Heathrow Airport Limited to prepare one and my noble Friend the Parliamentary Under-Secretary, Baroness Symons, will write to the hon. Member accordingly.

  Correspondence
  Mr. Winnick
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the hon. Member for Walsall, North will receive a reply to his letter of 9 December regarding a constituent. [24519]

  Mr. Fatchett
  My noble Friend the Parliamentary Under-Secretary, Baroness Symons, sent a letter to my hon. Friend about this application on 20 January.

LORD CHANCELLOR'S DEPARTMENT

  Poor People
  Mr. Pond
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will carry out an assessment of the impact of his Department's current policies on the(a) income, (b) employment opportunities and (c) living standards of the poorest 30 per cent. of the population. [23346]

  Mr. Hoon
  This Department's aim is to ensure that all people, irrespective of means, can uphold their rights and fulfil their obligations, in particular through efficient and affordable courts and legal services, and by developing the civil law to meet society's needs. We will evaluate our policies in line with this aim.

  Magistrates Court, Chelmsford
  Mr. Burns
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement on the current status of proposals relating to the moving of Chelmsford magistrates court to Witham; and when he expects a final decision on this proposal to be taken. [24496]

  Mr. Hoon
  The Department has no proposals in respect of magistrates courts in Essex.

  Decisions concerning the future of magistrates courts is for the relevant magistrates courts committee to determine. A local authority that contributes financially may appeal to the Lord Chancellor against a proposed closure. The procedure for such appeals is set out in section 56 of the Justices of the Peace Act 1997. In the absence of an appeal, however, the Lord Chancellor plays no part in the process.

  I understand from the Essex magistrates courts committee that there are no current plans to move the Chelmsford magistrates court to Witham.

  Overseas Visits
  Mr. Wilshire
  To ask the Parliamentary Secretary, Lord Chancellor's Department, pursuant to his answer of 15 January 1998,Official Report, column 278, what is the share of the cost of the official visit to Trinidad and Tobago attributable to Lady Irvine's attendance. [24499]
  627
  Mr. Hoon
  Pursuant to my answer of 15 January 1998,Official Report, column 278 and my subsequent letter to the hon. Gentleman (a copy of which has been placed in the Library), the share of the cost of the official visit to Trinidad and Tobago attributable to Lady Irvine's attendance is approximately £2,350. The largest element of this is one business class return air fare from Heathrow to Port of Spain.

HOME DEPARTMENT

  CS Gas
  Mr. Baker
  To ask the Secretary of State for the Home Department in respect of each police authority which has made CS gas available to officers, if he will give, the date of introduction, stating(a) how many cases of CS cross-contamination have been reported, (b) how many officer days have been lost, (c) how many claims for compensation have been filed and (d) how many awards of compensation have been made, giving the amount in each case. [24302]

  Mr. Michael
  [holding answer 20 January 1998]: This information is not held centrally. At least 35 forces have introduced, or plan to introduce, CS spray. I am told that there are few, if any, cases in which officers are seriously affected by CS cross-contamination.

  Mr. Baker
  To ask the Secretary of State for the Home Department how many of the 588 officers who suffered cross-contamination effects during the CS Gas trials between 1 March and 31 August 1996 have(a) reported this cross-contamination as minor injury, (b) taken time off work as a consequence, (c) claimed compensation and (d) been awarded compensation, stating the amount in each case. [24283]

  Mr. Michael
  This information was not collected. The information available about cross-contamination suffered by police officers during the trials is contained in Chapter 4 of the Home Office Police Research Group report which was published in December 1996. A copy of the report is in the Library.

  Immigration and Nationality Directorate
  Mr. Allan
  To ask the Secretary of State for the Home Department what estimates he has made of staffing levels at the Immigration and Nationality Directorate offices at Croydon on(a) 1 April 1998, (b) 1 April 1999 and (c) 1 April 2000. [24549]

  Mr. Mike O'Brien
  Current estimates are that there will be surpluses of Immigration and Nationality Directorate staff in Croydon of between 170 to 467 in the financial year 1998–99 and of a further 150 to 250 in 1999–2000.

  Mr. Allan
  To ask the Secretary of State for the Home Department what time scale he has planned for the implementation of the new computer system at the Immigration and Nationality Directorate offices at Croydon in respect of(a) initial installation, (b) pilot phase and (c) full operation. [24548]

  Mr. Mike O'Brien
  The contract to design, build, install and operate the new computer system in the Immigration and Nationality Directorate was awarded to 628
  Siemens Business Services under the Private Finance Initiative. It is accordingly for Siemens to plan the implementation, and the contract places on it the main financial consequences of any delay. There has recently been a delay of a few months to the original timetable for the installation and piloting of the solution. Siemens is preparing detailed plans and will shortly propose revised dates. I shall write to the hon. Gentleman when these have been agreed.

  Mr. Allan
  To ask the Secretary of State for the Home Department what sum is budgeted for the operation of the Immigration and Nationality Directorate offices at Croydon for the years(a) 1997–98, (b) 1998–99 and (c) 1999–2000. [24547]

  Mr. Mike O'Brien
  The information requested is not available because the Immigration and Nationality Directorate budget is not apportioned by location or building. The total budget for the Directorate is £226 million in 1997–98 and £223.7 million in 1998–99. The budget for 1999–2000 will be set following consideration of the Comprehensive Spending Review.

  Asylum Applications
  Mr. Edward Davey
  To ask the Secretary of State for the Home Department how many applicants for asylum to the Immigration and Nationality Directorate are awaiting decisions on their cases; how many refused applications are awaiting appeal; what is the date of the oldest application still to be processed; what is the date of the oldest refusal still awaiting appeal; and if he will make a statement. [23918]

  Mr. Mike O'Brien
  As at 31 December 1997, there were 51,795 applications for asylum in the United Kingdom, excluding dependants, awaiting an initial decision. As at the same date, there were 25,555 asylum related appeals awaiting determination. A large backlog of cases has developed over a decade and the Government are reviewing all aspects of asylum law to make the handling of cases faster. This year we are also computerising the case handling procedures which should help speed it up in the future.

  I regret that reliable data for the other information requested are not available.

  Cannabis
  Mr. Flynn
  To ask the Secretary of State for the Home Department if he will list the research initiatives involving cannabis which have been granted a licence. [24326]

  Mr. George Howarth
  [holding answer 21 January 1998]: The information requested is as follows:

  Research initiative

  Current licences

  Professor A. Smith, University of Oxford

  Medical—effect of delta-9-THC and cannabis on the bladder reflex

  Mr. D. Todd, James Paget Hospital

  Medical—investigation claims of therapeutic benefits of cannabis

  Dr. R. Pertwee, University of Aberdeen

  Medical—neuropharmacology of cannabinoids

  Dr. G. Hall, De Montfort University

  Studies in Pharmacology

  629

  Research initiative

  Dr. D. Harvey, University of Oxford

  Studies in Pharmacology

  Professor F. Evans, University of London

  Studies in Pharmacology

  Professor M. Rubenstein, Liverpool John Moores University

  Studies in Pharmacology

  Professor P. Redfern, University of Bath

  Studies in Pharmacology

  Dr. R. Morgan, University of Sunderland

  Studies in Pharmacology

  Dr. K. Brain, University of Wales

  Studies in Pharmacology

  Dr. J. Smart, University of Portsmouth

  Studies in Pharmacology

  Dr. P. Dewick, University of Nottingham

  Studies in Pharmacology

  Dr. G. Lockwood, University of Manchester

  Studies in Pharmacology

  Mr. M. Aitken, University of Brighton

  Studies in Pharmacology

  Dr. P. Houghton, Kings College London

  Studies in Pharmacology

  Professor R. Richards, The Robert Gordon University

  Studies in Pharmacology

  Dr. C. Hunter, University of The West of England

  Studies in Forensic Science

  Dr. M. Cole, University of Strathclyde

  Studies in Forensic Science

  Professor D. Cowan, Kings College London

  Drugs Testing

  Expired licences

  Dr. G. M. Stern, Middlesex Hospital

  Medical—effects of cannabis on Parkinson's Disease

  Dr. P. Taylor, Bethlem Hospital

  Medical—effects of cannabis on psychosis

  Dr. A. Holdcroft, Hammersmith Hospital

  Medical—effects of cannabis on familial Mediterranean fever

  Mr. Illsley
  To ask the Secretary of State for the Home Department what research has been undertaken by the Government into the legalisation of cannabis following the report of the Wootton Commission. [24769]

  Mr. George Howarth
  Over the 30 years since the Wootton Commission published its report, the Home Office has undertaken studies of prevalence of cannabis (and other drug) misuse and attitudes towards legalising illicit drugs. I understand from my right hon. Friend the Secretary of State for Health that, although his Department has not recently commissioned basic research in this area, his officials, including professionals, are keeping the available research into the risks and medical use of cannabis under review.

  Criminal Convictions
  Mr. Barnes
  To ask the Secretary of State for the Home Department if he will make a statement on the length of time taken between arrest and conviction of criminals. [22336]
  630
  Mr. Michael
  Data on the exact period between arrest and conviction are not available. However, the magistrates courts Time Intervals Survey, published three times a year by the Lord Chancellor's Department, collects data on the time between offence and completion of magistrates courts proceedings. The latest available figures show that, in June 1997, the average time for defendants in indictable cases (including triable-either-way cases) was 132 days. This compares with 133 days in June 1996 and 132 in June 1995. Data collected by the Court Service show that the average time between committal and arraignment or start of trial in the Crown Court in 1997 was 12 weeks. This compares with 13 weeks in 1996 and 16 weeks in 1995.

  The Government are determined to tackle delays in the criminal justice system. Delays impede justice, frustrate victims and bring the law into disrepute. The Government are particularly concerned by delays in dealing with persistent young offenders. A survey was recently conducted to establish a baseline for the Government's pledge to halve the time taken between arrest and sentence for persistent young offenders. That survey indicates that in 1996 the average time was 142 days. Many youth justice practitioners are already making efforts to tackle delay, with Government encouragement. My right hon. and learned Friend the Lord Chancellor wrote to the chairmen of youth court panels in May 1997 and a circular issued in October set out good practice and asked local agencies to set up fast-track schemes for persistent young offenders. The Government plan to contact youth justice practitioners in spring 1998 to find out what action has been taken to give effect to the circular's recommendations and, in particular, to establish fast-tracking schemes.

  Following a public consultation exercise, the Government concluded that many of the recommendations of the Review of Delay in the Criminal Justice System had the potential substantially to reduce delay without impairing the quality of justice and accepted the majority of them. Those recommendations which require legislation are being implemented through the Crime and Disorder Bill currently before Parliament. The main recommendations relate to dealing promptly with straightforward guilty pleas, case management in magistrates' courts, Early Administrative Hearings in contested cases and starting indictable-only cases in the Crown Court.

  In addition, to reinforce the effectiveness of these new procedures for case preparation and management, the Government will introduce the regime of statutory time limits for the prosecution of criminal cases provided for in the Prosecution of Offences Act 1985 but not yet implemented. Stricter time limits will be set for juvenile than adult cases and even tougher time limits will be imposed for persistent young offender cases.

  Vessels (Fire Services)
  Mr. Godman
  To ask the Secretary of State for the Home Department how many vessels sought the assistance of fire services while in(a) territorial waters and (b) international waters in each of the past five yeawrs; of these what was the proportion of (i) bulk carriers, (ii) coastal vessels, (iii) tankers, (iv) warships, (v) fishing vessels and (vi) pleasure craft; and if he will make a statement. [23032]
  631
  Mr. George Howarth
  [holding answer 21 January 1998]: The readily available information on fires on vessels and other water craft at sea attended by local authority fire brigades is given in the table. Information on other types of incidents is not available.

  Fires in vessels or water craft at sea attended by local authority fire brigades, by type of vessel, 1992 to 1996

  United Kingdom

  Number

  Type of vessel or water craft

  1992

  1993

  11994

  11995

  1.21996

  Oil tankers

  —

  —

  —

  —

  —

  Defence vessels3

  n/a

  n/a

  —

  —

  —

  Fishing vessels3

  n/a

  n/a

  2

  7

  1

  Small craft, dinghies, etc.

  9

  13

  1

  6

  6

  Houseboats

  —

  —

  —

  —

  —

  Passenger vessels, ferries

  —

  —

  1

  —

  —

  Other ships

  —

  —

  1

  1

  —

  Barges, including narrowboats

  —

  —

  —

  —

  —

  Other water craft

  —

  —

  1

  2

  —

  All vessels

  9

  13

  6

  16

  7

  1 Figures are based on sample records weighted to brigade totals, excluding "late" call and heat and smoke damage incidents (not recorded prior to 1994).

  2 Provisional.

  3 Included with other ships prior to 1994.

  n/a = Not available.

  Millennium Compliance
  Mrs. Gillan
  To ask the Secretary of State for the Home Department, pursuant to his answer of 8 December 1997,Official Report column 433, when the copy of the Home Department circular to chief fire officers will be placed in the Library. [24495]

  Mr. George Howarth
  The circular letter which provided guidance to chief fire officers on contingency planning for the year 2000 was issued on 7 January 1998. A copy has now been placed in the Library.

  Mr. Mohammed Fayed
  Mr. Gerald Howarth
  To ask the Secretary of State for the Home Department (1) when he expects to conclude his consideration of Mr. Mohammed Fayed's application for British citizenship; and what factors will influence the timing of his decision; [24776]

  (2) if he will defer making a final decision on Mr. Mohammed Fayed's application for British citizenship until the police have concluded their investigation into the theft of items from a Harrod's safe deposit box. [24777]

  Mr. Mike O'Brien
  It is not our practice to comment upon individual applications for British citizenship. Applications are decided when sufficient information is available for a judgment to be made as to whether or not an applicant meets the statutory requirements for citizenship.

  Firearms
  Mr. Beith
  To ask the Secretary of State for the Home Department how many lawfully held firearms there were in England and Wales at the latest available date. [24362]
  632
  Mr. Michael
  On 23 December 1996, there were 418,300 firearms held on 141,900 firearm certificates and 1,335,000 shotguns held on 638,000 shotgun certificates. The number of firearms which do not need to be held on a firearm certificate (i.e. low-powered airguns and antiques held as curiosities or ornaments) is not known.

  Mr. Beith
  To ask the Secretary of State for the Home Department how many firearm licences have been revoked in each of the last 12 months for which figures are available and in total in each of the last five years for which figures are available. [24364]

  Mr. Michael
  Statistics on firearm certificates are collected and published as part of an annual exercise and a monthly breakdown is not available. However, the totals for the last five years for which figures are available are as follows:

  Year

  Shot gun certificates revoked

  Firearm certificates revoked

  1996

  1,163

  392

  1995

  685

  206

  1994

  753

  193

  1993

  687

  147

  1992

  630

  146

  Mr. Beith
  To ask the Secretary of State for the Home Department if he will list each category of firearm which can be currently held legally by private individuals; how many licences have been issued for each of those categories of firearm in each of the last 12 months for which figures are available and in total in each of the last five years for which figures are available. [24363]

  Mr. Michael
  There are three categories of firearm which may legally be held by private individuals. These are firearms for which no certificate is required; firearms which are required to be kept on a police-issued shotgun certificate; and firearms which are required to be kept on a police-issued firearm certificate. Statistics for the latter two categories are collected and published as part of an annual exercise and a monthly breakdown is not available. However, the totals for the last five years for both the issue and renewal of shotgun and firearm certificates are contained in the following table:

  Year

  Shotgun

  Firearm

  Issued

  Renewed

  Issued

  Renewed

  1996

  25,800

  193,100

  10,200

  38,100

  1995

  24,800

  195,900

  10,900

  38,500

  1994

  32,200

  201,400

  11,700

  37,900

  1993

  31,100

  195,800

  10,900

  37,300

  1992

  33,000

  197,200

  10,600

  38,500

  Wandsworth Prison
  Mr. Cox
  To ask the Secretary of State for the Home Department if he will make a statement on future developments relating to Wandsworth Prison. [24392]

  Ms Quin
  Planned development at Wandsworth prison in 1998–99 includes the following: upgrade of the fire and general alarm system on G, H and K wings; refurbishment of A and B wings; introduction of simple sanitation in the health care centre; provision of a new kitchen and
  633
  extension of the visits facility. The latter will entail the re-siting of the chapel and gymnasium. The application for a new gymnasium was submitted to Wandsworth Borough Council on 13 January and, if approved, the project will commence later this year.

  The planning application submitted in May 1997 to provide a pre-release hostel, visitors' reception centre and car park outside the front of the prison will not be taken forward. Following negotiations with Neals Nurseries Ltd., which currently occupies part of this land, the Prison Service have agreed to grant it a further lease but will take back the rest of the land. This includes a stores building formerly owned by Neals Nurseries Ltd. which will be used as a receipt and dispatch store to enable the prison to enhance its industrial activities.

  Immigration (Carriers' Liability)
  Mr. Malins
  To ask the Secretary of State for the Home Department if he will list the amount of charges(a) levied and (b) recovered, under the Immigration (Carriers' Liability) Act 1987 on (i) Biman, (ii) British Airways, (iii) PIA, (iv) Air Lanka, (v) Nigeria Airways and (vi) Ghana Airways for each year since 1987 for which figures are available. [23350]

  Mr. Mike O'Brien
  I am unable to disclose the payment record of individual carriers for reasons of commercial confidentiality. However, we are reviewing this policy of non-disclosure and intend to consult Government colleagues on this. I am able to say that a total of £112.8 million had been incurred by all carriers at 31 December 1997, of which £11.4 million (10.1 per cent.) remained outstanding.

  Young Offenders Institution, Colchester
  Mrs. Butler
  To ask the Secretary of State for the Home Department what plans he has to continue the operation of the experimental regime at Colchester Young Offenders Institution. [25491]

  Ms Quin
  The Government are determined to pursue an active regime in Young Offender Institutions (YOIs) as part of their commitment to focus the youth justice system on the prevention of offending by young people. Statutory provision for this is contained in the Crime and Disorder Bill.

  We are therefore continuing the experimental "high intensity training" regime which the previous Administration established at Thorn Cross YOI. Although, at £22,700 per place, this regime is more expensive than the cost of a typical YOI regime at £17,300 per place, the Thorn Cross programme has been shown to have a more sharply focused and better integrated set of activities. We believe therefore that Thorn Cross represents value for money.

  However, we have been unable to reach the same conclusion with Colchester. Colchester YOI opened on 20 February 1997, initially for one year. The costs per place at Colchester, at £31,300, have been running at nearly twice those for a typical YOI and nearly £9,000 more than those at Thorn Cross. The Colchester regime has encouraged positive change in attitudes amongst young offenders but the available evaluation has not supported the contention that it has been more effective in preventing re-offending than other initiatives.
  634
  In view of this, and of the very high costs, we have concluded that Colchester YOI does not represent value for money. It will therefore close on 31 March 1998.

  This decision in no way reflects on the hard work and commitment of the staff who have been involved with the experiment and to whom I pay tribute. Their work will assist us in improving regimes at other YOIs. We shall be using for this purpose the resources which we have saved from the closure of Colchester.

NORTHERN IRELAND

  Royal Ulster Constabulary
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland how many members of the RUC are members of the Sir Robert Peel Memorial Royal Orange Lodge. [20790]

  Mr. Ingram
  Information on this is not available.

  Council for Catholic Maintained Schools
  Mr. Trimble
  To ask the Secretary of State for Northern Ireland what assessment he has made of the extent to which the Council for Catholic Maintained Schools has complied with the requirements to provide a neutral working environment. [21595]

  Mr. Worthington
  None. All specified public bodies are required to carry out a formal review of their employment composition and practices at least once every three years. I understand the Council for Catholic Maintained Schools has complied with this requirement.

  Plastic Baton Rounds
  Ann Clwyd
  To ask the Secretary of State for Northern Ireland if she will publish the guidelines on the use of plastic baton rounds by the Royal Ulster Constabulary. [20011]

  Mr. Ingram
  I refer my hon. Friend to an answer I gave to my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) on 29 July 1997,Official Report, column 98, in which I said the relevant parts of the documents regarding guidelines were placed in the Library of the House. The RUC are currently engaged with their Association of Police Officers colleagues in Great Britain in reviewing the guidelines.

  Social Exclusion Unit
  Mr. Godman
  To ask the Secretary of State for Northern Ireland what assessment she has made of the priorities announced by the Prime Minister for the Social Exclusion Unit in relation to Northern Ireland; and if she will make a statement. [22734]

  Marjorie Mowlam
  Problems of Social Exclusion exist in Northern Ireland as elsewhere in the United Kingdom. Their nature and extent, the circumstances in which they arise, and the appropriate responses are however different.

  There is a resonance between the SEU's remit and the Northern Ireland Targeting Social Needs (TSN) initiative. Last year, the Standing Advisory Commission on Human Rights published their review of employment equality

  635
  issues in Northern Ireland. Their report included recommendations for the future development of TSN. I am now considering these recommendations as a matter of high importance and will decide on the most appropriate approach to tackling social exclusion in Northern Ireland in this context.

  Probation Board
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland how many of the new members appointed on 1 December 1997 to the Probation Board for Northern Ireland have been Alliance Party candidates; how many of the new members responded to press advertising for appointees; and what level of fees and expenses will be available to members of the Board. [22899]

  Mr. Ingram
  Three new members have been Alliance Party candidates. Of the 16 members of the board, 10 were new appointees, all of whom responded to press advertisements, the other six being re-appointees. Regarding the level of fees and expenses, I understand that the Chairman of the Board currently receives a remuneration of £11,150 per year. The Deputy Chairman and members of the board receive an attendance allowance of £26.96 for each meeting lasting up to 4 hours and £53.92 for longer meetings. (This is currently under review). In addition, travel and other expenses are met.

  Commission on Human Rights
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland what percentage of the new members of the Standing Advisory Commission on Human Rights have been(a) SDLP members and (b) members of a Unionist party in the last five years; and if she will make a statement about the political balance of the Commission. [22905]

  Marjorie Mowlam
  One member of the Commission declared an association with the SDLP. Mr. Robert Mullan was a member from 1987 to 1993. None have declared being members of a Unionist party in the last five years.

  The new Commission widely represents the political and community balance in Northern Ireland.

  Mr. Maginnis
  To ask the Secretary of State for Northern Ireland who are the members of the Standing Advisory Commission on Human Rights; what is the perceived religious affiliation of each; which members have been identified as having, or having had, an association with a political party; and what other paid public appointments each holds. [22910]

  Marjorie Mowlam
  The Standing Advisory Commission on Human Rights membership is as follows:

  Mr. Michael Lavery QC

  Mr. Bob Cooper

  Mr. Gerry Burns

  Ms Joan Smyth

  Mr. Paul Donaghy

  Mr. Leslie Allamby

  Mr. Robert Osborne

  Mr. Robin Wilson

  Ms Angela Hegarty

  Mr. Ivan Topping

  636

  Mr. Robert Mullan

  Mrs Margaret-Anne Dinsmore

  Ms Clodach McGrory.

  It is the Government's policy not to release the religious affiliation of each member, however the Commission has five catholics, seven protestants and one not known.

  The Commission has two members who have declared an association with a political party. Ms Angela Hegarty stood for the NI Forum Election in 1996 for the Womens Coalition and Mr. Robert Mullan was a member of the SDLP from 1987 to 1993.

  Mrs. Margaret-Anne Dinsmore holds two paid public appointments:- the NI Commissioner for the rights of Trade Union members, and the NI Commissioner for protection against Unlawful Industrial Action for which she receives £11,400 per annum in total.

  Government House, Hillsborough
  Mr. Robert McCartney
  To ask the Secretary of State for Northern Ireland if she will make a statement about the use by the Irish Government of Government House at Hillsborough for meetings with Northern Ireland political parties. [22901]

  Marjorie Mowlam
  One such meeting took place on 7 January, on matters relating to the multi-party talks. Hillsborough was a convenient venue for the participants, and I was happy to agree to the request to meet there.

  Telecommunications Masts
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland when she plans to introduce amendments to the Planning (General Development) (Northern Ireland) Order 1993 in respect of the planning regulations for the erection of mobile telecommunications masts. [22989]

  Mr. Paul Murphy
  Subject to a period of public consultation the amendments to the Planning (General Development) (Northern Ireland) Order 1993 are expected to be introduced in late April/early May this year.

  Beef Bones Regulations
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland when she expects to lay a statutory instrument to bring into force in Northern Ireland the changes in legislation covered by the Great Britain Statutory Instrument 1997 No. 2959. [23497]

  Mr. Paul Murphy
  Equivalent Northern Ireland legislation came into operation on 16 December 1997.

TREASURY

  Bank of England
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer when he plans to announce the appointment of the next Governor of the Bank of England; and if he will a statement. [24545]

  Mrs. Liddell
  The Governor's current term of office runs to 30 June 1998. The Government will make an announcement in due course.

  Reviews
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer if he will list the HM Treasury reviews which will have been completed in time to inform the Budget statement on 17 March; and if he will make a statement. [24544]

  Mr. Gordon Brown
  The reviews that will inform the Budget are listed in the table:

  Lead department

  Review

  Alcohol and tobacco fraud: a review aimed at reducing revenue losses through alcohol and tobacco fraud

  Customs and Excise

  Landfill tax: a review of the operation and level of the tax

  Customs and Excise

  Anti-avoidance: to consider the approach to the defeat and deterrence of tax avoidance schemes

  Inland Revenue/Customs and Excise

  Capital gains tax: to produce a fairer tax, which encourages long-term investment

  Inland Revenue

  Venture Capital Trusts/Enterprise Investment Schemes: a review of VCT/EIS guarantee and asset backed arrangements

  Inland Revenue

  North Sea oil: a review of the North Sea fiscal regime

  Inland Revenue/Department of Trade and Industry/Treasury

  Bus fuel duty rebate: to review differential rates of rebate to encourage lower emissions

  Treasuty

  Tax and benefit reform: to explore the scope for the tax and benefit systems to act as an incentive to move off benefit and into work

  Task Force under the chairmanship of Martin Taylor

  Energy efficient materials (review completed)

  Customs and Excise

  Charities Review (a consultation paper will be published in the spring)

  Treasuty/Inland Revenue/Customs and Excise

  Consultative documents

  Corporation tax

  Inland Revenue

  Individual Savings Accounts

  Inland Revenue

  Water pollution

  Department of the Environment, Transport and the Regions

  Public Sector Pay
  Mr. Malcolm Bruce
  To ask the Chancellor of the Exchequer when he plans to make a statement setting out the Government's response to the recommendations of the public sector pay review bodies; and if he will make a statement. [24546]

  Mr. Darling
  We expect to announce the Government's response shortly, when all the reports have been received in the usual way.

  Chernobyl Children Life Line
  Helen Jones
  To ask the Chancellor of the Exchequer if he will estimate the amount of revenue likely to be raised in 1997–98 from airport taxes paid by the Chernobyl Children Life Line. [23313]

  Dawn Primarolo
  [holding answer 16 January 1998]: I have no separate estimate of Air Passenger Duty paid by travellers sponsored by the Chernobyl Children Life Line.

  Child Benefit
  Mr. Gibb
  To ask the Chancellor of the Exchequer what is his estimate of the revenue which would be raised from taxing child benefit, assuming household total income were assessed for tax purposes. [24128]

  Dawn Primarolo
  [holding answer 20 January 1998]: The yield from taxing child benefit based on household total income would depend on the precise system of assessment.

  European Investment Bank
  Sir Teddy Taylor
  To ask the Chancellor of the Exchequer which body is responsible for supervising and directing the activities of the European Investment Bank; what are the financial obligations of the participant nations; and if all the necessary contributions have been made by participant nations. [24501]

  Mrs. Liddell
  The body responsible for supervising and directing the work of the EIB is the Board of Governors, which consists of Ministers, usually Finance Ministers, designated by each of the Member States. They represent the Member States as shareholders of the Bank.

  The EIB's capital stands at 62 billion ECU. The subscribed capital actually paid-in by Member States amounts to 7.5 per cent. of which the UK's share (along with France, Germany and Italy as the largest subscribers to the Bank's capital) is 17.7 per cent. Under the terms of the 1990 capital increase, the UK was required to pay about £77 million in twice yearly installments over five years. These payments count as public expenditure.

  The EIB makes a surplus on its lending operations, which in the past it has automatically added to its reserves. In 1996 (the latest year for which figures are available), the Bank made an operating surplus of 1.1 billion ECU thus bringing the level of reserves to almost 12 billion ECU. By a decision of the Board of Governors at its annual meeting in June 1997, it was decided to use part of the 1996 surplus to finance the four remaining payments due from each Member State in respect of the 1990 capital increase. The transaction putting this decision into effect took place on 30 June 1997. The UK's contingent liability on its subscribed capital available for call in the event that it may be required by the Bank to meet its obligations remain at 10 billion ECU.

  Endangered Species
  Mr. Baker
  To ask the Chancellor of the Exchequer what recent figures he has obtained in respect of seizures by Her Majesty's Customs and Excise of(a) illegal imports into the United Kingdom and (b) illegal transit through the United Kingdom of species protected under CITES. [22970]

  Dawn Primarolo
  [holding answer 19 January 1998]: The following table sets out the number of items seized in respect of endangered species in the last 3 years as reported by the Commissioners of Her Majesty's Customs and Excise in their Annual Report. Customs do not hold central statistics on the numbers of endangered species

  639
  found illegally in transit through the United Kingdom, though these would normally be seized unless operational circumstances dictated otherwise:

  Year ended 31 March

  Live animals and birds

  Plants

  Parts and derivatives

  1995

  2,305

  480

  29,916

  1996

  4,374

  2,748

  12,178

  1997

  121,411

  222

  2223,596

  1 This figure includes 20,000 medicinal leeches.

  2 This figure includes three batches of oriental medicines comprising 218,520 pills.

  Drug Smuggling
  Mr. Flynn
  To ask the Chancellor of the Exchequer how many operations were undertaken in the past three years on behalf of Her Majesty's Government by persons who were subsequently charged with drug smuggling offences. [23392]

  Dawn Primarolo
  [holding answer 19 January 1998]: So far as Customs officials are concerned, no officer undertaking investigations into drug smuggling during the past three years has been the subject of criminal charges for drug smuggling offences.

  European Central Bank
  Mr. Redwood
  To ask the Chancellor of the Exchequer what will be the cost of the United Kingdom's contribution to the European Central Bank's capital. [24716]

  Mrs. Liddell
  Under Article 9(c) of Protocol No. 11 to the EC Treaty, the Bank of England will be obliged to pay up its subscription to the capital of the ECB as a contribution to its operational costs on the same basis as national central banks of Member States with a derogation.

  Article 48 of the Statute of the ESCB and the ECB provides that central banks of Member States with a derogation shall not pay up their subscribed capital unless the General Council decides that a minimal percentage has to be paid up as a contribution to the operational costs of the ECB.

  Until the ECB is established, the General Council cannot take a decision on whether central banks of Member States with a derogation should pay up subscriptions to the capital of the ECB, nor decide what the contribution to the operational costs of the ECB should be.

  Savings
  Mr. Loughton
  To ask the Chancellor of the Exchequer what assessment has been made of the likely loss of tax revenue to the Exchequer from switching out of former PEP investments above the £50,000 ISA ceiling into offshore roll-up funds after October 1999. [21505]

  Dawn Primarolo
  The gains on offshore roll-up funds are taxed to income tax at the investor's marginal rate on withdrawals from the fund, and expenses are often higher than for comparable UK investments. In these circumstances, only a limited amount of PEP funds are likely to switch to offshore roll-up funds.

  Stamp Duty Reserve Tax
  Mr. Colman
  To ask the Chancellor of the Exchequer in what circumstances the powers to change the rate of stamp duty reserve tax applied to intermediaries and stock lending transactions contained in section 88B (5) and section 89AA (7) of the Finance Act 1986 may be exercised. [22898]

  Dawn Primarolo
  These powers were introduced by the previous Government, for reasons explained by the right hon. and learned Member for Rushcliffe (Mr. Clarke) on 24 October 1996,Official Report, column 6. The legislation does not limit the particular circumstances in which the powers may be exercised.

  Own Share Purchases
  Mr. Gibb
  To ask the Chancellor of the Exchequer how many companies have submitted clearance applications under section 707 of the Income and Corporation Taxes Act 1988 with regard to transactions involving the purchase of own shares between(a) 2 July and 31 December 1997, (b) 2 July and 31 December 1996 and (c) 2 July and 31 December 1995. [22891]

  Dawn Primarolo
  Clearance applications under section 707, which involved the purchase by a company of its own shares, were received by the Inland Revenue as follows:

  (a) between 1 July and 31 December 1995: 518

  (b) between 1 July and 31 December 1996: 634

  (c) five months 1 July to 30 November 1997: 489.

  The figures for December 1997 are not yet available.

  As statistics are compiled on a monthly but not daily basis, figures are given from 1 July rather than 2 July.

  Charities
  Mr. Hoyle
  To ask the Chancellor of the Exchequer if he will make a statement on the Government's proposals to reform general taxation on charities. [23098]

  Dawn Primarolo
  The Chancellor announced a review of the taxation of charities on 2 July 1997. In the first phase of the review people were invited to contribute their views on how to improve the taxation system for charities, by 1 December 1997. The Government received almost two and a half thousand responses. The issues raised were interesting and wide ranging. My officials are currently engaged in a detailed evaluation of these replies. I hope to publish a Consultation document in the spring setting out the issues that we think deserve to be considered further. A further consultation period will follow thereafter.

  Post-war Credits
  Ms Oona King
  To ask the Chancellor of the Exchequer how much money remains unclaimed from the total sum of post-war credits; what the Government propose to do with this money; and if he will make it his policy to use it to benefit the generation which provided it. [23706]

  Dawn Primarolo
  It is estimated that the amount of post war credits that remain unclaimed is £33 million. Approximately 200 post war credit claims per month are
  641
  still being received and therefore the amount unclaimed will remain in the post war credit fund to cover future claims.

  Smuggling
  Mr. Cotter
  To ask the Chancellor of the Exchequer if he will meet his counterparts in other EU member states to discuss the impact on independent retailers of tobacco in the United Kingdom of illegal sales of tobacco imported from Belgium. [22225]

  Dawn Primarolo
  I have no present plans to do so. However, the European Commission, in consultation with Member States, is currently preparing a report on tobacco and alcohol fraud. A report on alcohol and tobacco smuggling and fraud is currently being prepared by Customs and Excise.

  Mr. Cotter
  To ask the Chancellor of the Exchequer if he will make representations to the relevant EU Commissioner on the impact on independent retailers of tobacco in the United Kingdom of illegal sales of tobacco imported from Belgium. [22224]

  Dawn Primarolo
  I have no plans to make such representations.

  A report on alcohol and tobacco smuggling and fraud is currently being prepared by Customs and Excise.

  Mr. Cotter
  To ask the Chancellor of the Exchequer if he will introduce a scheme to compensate independent retailers of tobacco for loss of revenue as a result of being undercut by illegal sales of tobacco imported from Belgium. [22227]

  Dawn Primarolo
  No.

  Mr. Cotter
  To ask the Chancellor of the Exchequer if he will estimate the amount of revenue independent retailers lost as a result of being undercut by illegal sales of tobacco imported from Belgium in the last three years; and if he will commission independent research into this matter. [22226]

  Dawm Primarolo
  There is no official estimate of revenue lost by independent retailers from smuggling of tobacco from Belgium.

  A report on alcohol and tobacco smuggling and fraud is currently being prepared by Customs and Excise in consultation with the trade and other Government Departments.

  Mr. Cotter
  To ask the Chancellor of the Exchequer what estimate he has made of the amount of crimes associated with the illegal resale of tobacco bought in Belgium; how many people HM Customs and Excise have arrested for such activity since 1993; if he will commission independent research into this matter; and if he will make a statement. [22223]

  Dawn Primarolo
  Information is not kept separately for crimes and arrests associated with the illegal resale of tobacco bought in Belgium.
  642
  Since 1993 Customs have made the following seizures of tobacco smuggled into the UK from the Single Market.

  Financial year

  Number

  1993–94

  878

  1994–95

  1,723

  1995–96

  2,071

  1996–97

  3,949

  Customs have been working closely with the Kent Police in recent months to tackle both the smugglers and the associated crime in the Channel ports connected with their activities. Joint operations have proved very successful resulting in a number of arrests for both Customs and Police offences.

  Mr. Fallon
  To ask the Chancellor of the Exchequer what was the basis for the Financial Secretary's estimate, in HTV News on 4 December 1997, that tobacco smuggling amounts to a maximum of two and a half per cent. of all tobacco products sold. [22888]

  Dawn Primarolo
  Two and a half per cent. is a reasonable upper limit for the share of UK sales of cigarettes in 1997 represented by smuggled goods. This estimate is based on the survey of sea and Tunnel passengers conducted by HM Customs and Excise in June 1997 (reported in their News Release of 26 September 1997), and on their monitoring of smuggling by air passengers.

  Mr. Cotter
  To ask the Chancellor of the Exchequer when he expects to receive the Customs and Excise Report into smuggling, cross-border shopping and excise duties; and if he will make a statement. [22228]

  Dawn Primarolo
  The review team, which is looking into the effects on the Exchequer and industry revenue of alcohol and tobacco fraud, smuggling and cross-border shopping, are preparing a report for Ministers.

  Far East
  Mr. Loughton
  To ask the Chancellor of the Exchequer, pursuant to his answer of 22 December 1997,Official Report, column 479, if he will revise his projections for GDP growth in the United Kingdom over the next three years in the light of the continuing financial crisis in the Far East. [24437]

  Mrs. Liddell
  A revised forecast will be published with the Budget on 17 March.

  Cash Accounting
  Mr. Fallon
  To ask the Chancellor of the Exchequer what is his estimate of the number of extra audits likely to be conducted per annum as a result of the proposals announced by the Inland Revenue on 22 December to withdraw cash basis accounting for professional businesses; and what is his estimate of the average cost of such audits. [24290]

  Dawn Primarolo
  A change in the way a number of professional businesses calculate their taxable business profits would not increase the number of Inland Revenue self-assessment inquiries conducted per annum.

  Mr. Fallon
  To ask the Chancellor of the Exchequer what consultations he has held with the USA Internal
  643
  Revenue Service regarding the proposals announced by the Inland Revenue on 22 December to withdraw cash basis accounting for professional businesses. [24286]

  Dawn Primarolo
  None.

  Mr. Fallon
  To ask the Chancellor of the Exchequer (1) what percentage of businesses affected by the plan to withdraw cash basis accounting for professional businesses have fewer than(a) five, (b) 10 and (c) 20 partners; [24289]

  (2) what is his estimate of the number of professional businesses that will be affected by the proposal to withdraw cash basis accounting for professional businesses, as announced by the Inland Revenue on 22 December; [24288]

  (3) what is his estimate of the average extra tax burden faced by professional businesses as a result of the proposals announced by the Inland Revenue on 22 December to withdraw cash basis accounting for professional businesses; [24287]

  (4) what is his estimate of the extra tax revenue that will be raised by the planned withdrawal of cash basis accounting for professional businesses, in financial years (i) 1999–2000, (ii) 2000–01 and (iii) 2001–02. [24285]

  Dawn Primarolo
  On 22 December 1997 I announced the intention to withdraw the cash basis practices for professionals but views were sought on the details of the proposal, such as the suggested method for "catching up". The tax effect of the withdrawal will depend on the terms of the final arrangements, which at present are under consultation.

  No reliable information is available of the total number of businesses currently on the cash basis. The objective of withdrawing these practices for those that do currently use the cash basis is to level the playing field for all businesses.

  Charity Taxation
  Mr. Cousins
  To ask the Chancellor of the Exchequer if he will estimate the number of volunteering opportunities and jobs in uniform business rate exempt charity shops and the number of such properties; and if this relief is included in his review of charity taxation. [23683]

  Dawn Primarolo
  There are currently around 6,500 charity shops in the UK. These shops provide opportunities for around 175,000 volunteers. In addition, these shops employ around 8,500 full and part-time workers.

  The Review of Charities' Taxation announced by my right hon. Friend the Chancellor in his July Budget has considered submissions across the range of tax issues, including business rates. However, the Department of the Environment, Transport and the Regions is currently to review the local government finance scheme and will shortly be issuing a consultation paper. This paper
  644
  will cover the issue of business rate relief, and clearly it would not be sensible to duplicate it in the Tax Review. I have ensured that any letters received on this issue have been copied to the DETR.

  Tax on Air Travel
  Ms Osborne
  To ask the Chancellor of the Exchequer what has been the income to the Treasury from tax on air travel since implementaiton of the tax. [24125]

  Dawn Primarolo
  The amount of air passenger duty collected to the end of December 1997 was just under £1,120 million.

  Channel Islands
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer what estimate he has made of the number of United Kingdom citizens who circumvent United Kingdom tax laws concerning their country of domicile by commuting from the Channel Islands to the United Kingdom on a daily basis. [23295]

  Dawn Primarolo
  This information is not available.

  Taxation
  Ms Hewitt
  To ask the Chancellor of the Exchequer what proportion of income is paid in income tax and national insurance contributions, allowing for child benefit, in the tax year 1997–98 by(a) a single person with no children and (b) a sole earner in a married two-parent, two child family on earnings of (i) half of average earnings, (ii) three quarters of average earnings, (iii) average earnings and (iv) twice average earnings. [23928]

  Dawn Primarolo
  Estimates for 1997–98 are given in the table.

  Income tax and NIC as a percentage of earnings in 1997–981

  Multiple of average earnings2

  0.5

  0.75

  1

  2

  Single person with no children

  20.9

  24.9

  26.9

  30.7

  Married sole earner with two children under 113

  8.7

  16.8

  20.8

  27.7

  1 National Insurance contributions are at standard class 1 rate for employees not contracted out of SERPs.

  2 Full time males on adult rates, all occupations.

  3 Net of child benefit.

  Ms Hewitt
  To ask the Chancellor of the Exchequer at what proportion of average male earnings(a) a sole earner in a married two-parent, two-child family and (b) a single person with no children start paying income tax in 1997–98; and how this compares with the position in (i) 1978–79 and (ii) 1967–68, allowing for family allowances/child benefit. [23927]

  Dawn Primarolo
  Estimates are given in the table. A single person with no children has a tax threshold equal to the personal allowance. For a married person with two children—assumed to be both aged under 11—the `break-even' point is considered. This is the value of
  645
  earnings at which the income tax paid is equal to the money received through child benefit or family allowances.

  Percentage of average earnings1

  1967–68

  1978–79

  1997–98

  Married one earner with two children under 112

  69.7

  56.5

  47.7

  Single person with no children

  23.4

  20.4

  18.7

  1 Full time male on adult rates, all occupations.

  2 Assuming the full married couple's allowance is received.

  Current levels

  1978–79

  1990–91

  1997–98

  Change 1978–79 to 1990–91

  Change 1990–91 to 1997–98

  Personal allowance

  985

  3,005

  4.045

  2,020

  1,040

  Married couple's allowance

  550

  1,720

  11,830

  1,170

  110

  Additional personal allowance

  550

  1,720

  11,830

  1,170

  110

  Child tax allowance (under 11 s) (for each child)

  100

  —

  —

  -100

  —

  Revalorised to 1997–98 levels

  1978–79 Revalorised to 1997–98 levels

  1990–91 Revalorised to 1997–98 levels

  1997–98

  Change 1978–79 to 1990–91

  Change 1990–91 to 1997–98

  Personal allowance

  3,175

  3,895

  4,045

  720

  150

  Married couple's allowance

  1,770

  2,230

  11,830

  460

  -400

  Additional personal allowance

  1,770

  2,230

  11,830

  460

  -400

  Child tax allowance

  325

  —

  —

  -325

  —

  Change for the different families

  Change 1978–79 to 1990–91

  Change 1990–91 to 1997–98

  Revalorised change 1978–79 to 1990–91

  Revalorised change 1990–91 to 1997–98

  Single person no children

  2,020

  1,040

  720

  150

  Lone parent two children

  2,990

  11,150

  530

  1-250

  Married couple one earner two children

  2,990

  11,150

  530

  1-250

  Married couple two earners two children

  5,010

  12,190

  1,250

  1-100

  Unmarried couple two earners two children

  5,010

  12,190

  1,250

  1-100

  1 Married couples/additional personal allowance is restricted to 15 per cent. in 1997–98.

  Illegal Drugs
  Mr. Cox
  To ask the Chancellor of the Exchequer what has been the number of people suspected of carrying illegal drugs stopped and searched at ports of entry into the United Kingdom since 1 January 1997. [23291]

  Dawn Primarolo
  I regret that separate figures are not kept on the number of people stopped and searched specifically on suspicion of carrying illegal drugs. From 1 January to 30 September 1997 Customs staff at ports and airports stopped and searched 14,788 people on suspicion of carrying restricted or prohibited goods. Figures for the last quarter of 1997 are not yet available.

  Employment Statistics
  Ann Clwyd
  To ask the Chancellor of the Exchequer when he will publish the results of the review into the evaluation and publication of the employment and labour force statistics. [24450]
  646
  Ms Hewitt
  To ask the Chancellor of the Exchequer what was the change in(a) the level and (b) the value of personal tax allowances (i) from 1978–79 to 1990–91 and (ii) from 1990–91 to 1997–98 for (1) a single person with no children, (2) a lone parent with two children, (3) a married couple with one earner and two children, (4) a married couple with two earners and two children and (5) a cohabiting but unmarried couple with two earners and two children, taking into account child benefit. [23930]

  Dawn Primarolo
  The levels of tax allowances are given in the tables. The value of tax allowances to individuals is dependent on their income levels.

  Mrs. Liddell
  The information requested falls within the responsibility of the Chief Executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.

  Letter from Tim Holt to Ms Ann Clwyd, dated 22 January 1998:
  The Chancellor of the Exchequer has asked me to reply, as Director of the Office for National Statistics, to your recent question asking when the results of the review into the evaluation and publication of the employment and labour force statistics will be published.
  The ONS have recently been reviewing the future presentation and dissemination of labour market statistics. Wide-ranging public consultation was initiated in the May 1997 issue of Labour Market Trends. A summary of responses was published in the October issue of Labour Market Trends. Copies of both editions are available in the House of Commons Library. Responses to the consultation indicated strong support for:
  - ONS plans to provide an Integrated First Release covering all Labour Market Statistics.

  647
  - the proposals to give increased prominence to data from the Labour Force Survey.
  It is taking longer than hoped to put together a comprehensive package that meets users' needs. An announcement about the future of labour market statistics will be made in the near future.

  Drownings
  Valerie Davey
  To ask the Chancellor of the Exchequer how many school-aged children died in drowning accidents in the year 1996–97; and what percentage of those children were unable to swim. [24391]

  Mrs. Liddell
  The information requested falls within the responsibility of the Chief Executive of the Office for National Statistics. I have asked him to arrange for a reply to be given.

  Letter from Tim Holt to Ms Valerie Davey dated 22 January 1998:
  The Chancellor of the Exchequer has asked me, as Director of the Office for National Statistics, to answer your question on the number of school-aged children who drowned in the year 1996–97.
  Information for school-aged children's deaths from accidental drowning and submersion in England and Wales for the calender year 1996 is shown in the attached table. There is no information recorded showing whether these children were able to swim.
  Information for 1997 is not available.

  Deaths from accidental drwoning and submersion (ICD E9101), England and Wales 1996

  Age

  Description

  5 to 9

  10 to 14

  15 to 19

  Total

  M

  5

  8

  18

  F

  1

  0

  3

  E910.1 While engaged in other sport or recreational activity with diving equipment

  M

  0

  0

  1

  F

  0

  0

  0

  E910.2 While engaged in other sport or recreational activity without diving equipment

  M

  1

  3

  7

  F

  0

  0

  1

  E910.4 In bathtub

  M

  0

  0

  0

  F

  0

  0

  1

  E910.8 Other [including in swimming pools]

  M

  2

  3

  4

  F

  1

  0

  1

  E910.9 Unspecified

  M

  2

  2

  6

  F

  0

  0

  0

  1 International Classification of Diseases 9th revision.

CABINET OFFICE

  Coal and Energy Policy
  Mr. Redwood
  To ask the Minister without Portfolio what responsibility he has for the coal industry. [23479]

  Mr. Maude
  To ask the Minister without Portfolio what responsibility he has for(a) coal and (b) energy policy. [23454]

  Mr. Mandelson
  [holding answer 16 January 1998]: I am a member of EA(N), the Ministerial Sub-Committee on Energy Policy.

  Ministerial Visits
  Mr. Redwood
  To ask the Minister without Portfolio if the accommodation, meals and entrance fees to Disneyland for himself and his accompanying civil servant were paid for entirely out of United Kingdom public funds during his recent visit to Florida. [24756]

  Mr. Mandelson
  Only the cost of travel and accommodation was paid for entirely from public funds.

  Mr. Baker
  To ask the Minister without Portfolio if he will publish the programme for his visit to Washington in early January. [24774]

  Mr. Mandelson
  I visited Washington from 4 to 5 January 1998. During my visit I attended an official dinner at the Ambassador's residence, undertook a programme of meetings at the White House, and met the media for the launch of Britain's EU Presidency.

  Mr. Maude
  To ask the Minister without Portfolio what was the cost to public funds of hotel accommodation for(a) himself and (b) the representative of the Consulate General in Miami during his trip to Florida. [24804]

  Mr. Mandelson
  The cost to public funds of my hotel accommodation will (subject to any exchange rate fluctuation) be in the region of £125, and an identical figure for the accompanying official from the British Consulate General in Miami.

DUCHY OF LANCASTER

  E-mail
  Mr. Vaz
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the Government's proposals to introduce on-line red boxes for ministerial use; when he expects them to come into use; and what measures will be taken to ensure the security and confidentiality of information held on on-line red boxes. [23566]

  Dr. David Clark
  The prototype electronic red box, which I launched last week, shows the possibilities for Ministers to take advantage of modern Information Technology, and the potential for reducing the time and effort needed to fill and transport old-style boxes. The prototype demonstrates the principles, and will doubtless evolve; there is no reason why the final electronic red box should look much different from a normal laptop computer. Progress will depend on practical experience, but I expect Ministers who wish to use the operational version will be able to do so later this year.

  Information in an electronic red box merits protection to the same Government standards as are applied to the networks the box may be connected to. I shall not describe the security measures in fine detail, for obvious reasons. However, I can say that they will include strong access control features, Government-approved encryption, and clear guidance for users. The measures will be such that should an electronic red box go astray for any reason, the information in it will remain suitably protected.

TRADE AND INDUSTRY

  Competition Bill
  Mr. Boswell
  To ask the President of the Board of Trade what discussions she has had with the utility regulators on the implications of the Competition Bill on regulatory jurisdiction on the sectoral regulators and the Office of Fair Trading. [24383]

  Mr. Ian McCartney
  [holding answer 21 January 1998]: There has been regular and wide ranging discussions on the Competition Bill at official level between DTI and regulators' offices.

  Broadcasting
  Mr. Boswell
  To ask the President of the Board of Trade what assessment she has made of the impact on(a) cable companies and (b) the level of competition of allowing BT early entry into the market to provide broadcast channels over their national networks. [24385]

  Mrs. Roche
  [holding answer 21 January 1998]: The Government have been considering options for lifting the restrictions on public telecommunications operators' providing broadcast entertainment to the home over their national networks, and intends to publish a consultation document on this issue in the near future.

  Gas Industry
  Mr. Boswell
  To ask the President of the Board of Trade how many people are employed in the United Kingdom gas industry; and how many of these are employed in gas-fired power generation. [24318]

  Mr. Battle
  [holding answer 21 January 1998]: The latest available data show that in September 1996 38,300 people were employed in the downstream gas industry (i.e. the manufacture, transportation, distribution and supply of gaseous fuels). Those employed in gas fired power generation are regarded as part of the electricity generation industry and are not separately distinguished in centrally held statistics. However, it is estimated that around 700 people were needed to operate the 19 combined cycle gas turbine (CCGT) stations owned by the major power producers in Great Britain that were producing at the end of 1996.

  Pre-paid Funerals
  Mr. Caplin
  To ask the President of the Board of Trade what plans she has to introduce measures to protect the rights of people who have bought pre-paid funerals. [24801]

  Mr. Nigel Griffiths
  The Government plan to introduce measures to ensure that consumers who purchase their funerals in advance are adequately protected. My objective will be to ensure that there is sufficient financial provision available so these consumers get the funeral which they have paid for. I am also concerned to ensure that there should be transparency in the marketing of pre-paid funerals so that consumers are clear as to what services they are purchasing and who is responsible for providing them.

  Arms Sales
  Mr. Corbyn
  To ask the President of the Board of Trade what is the total level of export credit guarantee cover for arms sales to China. [24271]

  Mrs. Roche
  [holding answer 21 January 1998]: ECGD has no exposure in respect of defence business with China.

  Mr. Corbyn
  To ask the President of the Board of Trade what is the total level of export credit guarantee cover for arms sales to Thailand. [24275]

  Mrs. Roche
  [holding answer 21 January 1998]: From data readily available, total exposure under ECGD guarantees for defence business with Thailand was £46.5 million at the end of December 1997.

  Mr. Corbyn
  To ask the President of the Board of Trade what is the total level of export credit guarantee cover for arms sales to Singapore. [24272]

  Mrs. Roche
  [holding answer 21 January 1998]: From data readily available, total exposure under ECGD guarantees for defence business with Singapore was £35.6 million at the end of December 1997.

  Mr. Corbyn
  To ask the President of the Board of Trade what is the total level of export credit guarantee cover for arms sales to South Korea. [24274]

  Mrs. Roche
  [holding answer 21 January 1998]: From data readily available, total exposure under ECGD guarantees for defence business with South Korea was £76.7 million at the end of December 1997.

  Mr. Corbyn
  To ask the President of the Board of Trade what is the total level of export credit guarantee cover for arms sales to Indonesia. [24276]

  Mrs. Roche
  [holding answer 21 January 1998]: From data readily available, total exposure under ECGD guarantees for defence business with Indonesia was £855.2 million at the end of December 1997.

  Mr. Corbyn
  To ask the President of the Board of Trade what is the total level of export credit guarantee cover for arms sales to Malaysia. [24273]

  Mrs. Roche
  [holding answer 21 January 1998]: From data readily available, total exposure under ECGD guarantees for defence business with Malaysia was £208.2 million at the end of December 1997.

  Antarctica
  Mr. Corbyn
  To ask the President of the Board of Trade what research her Department has evaluated on the sustainability of fish stocks around Antarctica and the effect on mammal population of their depletion. [24130]

  Mr. Battle
  Scientists from the British Antarctic Survey play an active role in support of the work of the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR). All data received from fisheries research/surveys, fishing vessels and scientific observers are evaluated by the Scientific Committee of CCAMLR prior to the Commission's annual meeting.

  The Scientific Committee estimate stock sizes, recommend catch levels and assesses interactions within the Antarctic ecosystem, including mammal populations.

  Inward Investment (London)
  Mr. Cox
  To ask the President of the Board of Trade (1) what has been the breakdown of jobs created in the Greater London area from inward investment in each of the last three years; [24528]

  Year

  Number of projects

  Number of new jobs

  Number of safeguarded jobs

  Total number of associated jobs

  Total investment £000

  1996–97

  40

  2,651

  1,205

  3,856

  123,160,000

  1995–96

  23

  2,588

  2,235

  4,823

  96,754,000

  1994–95

  2

  27

  0

  27

  —

  The figures are based on information provided by companies at the time of announcement of the decision to invest.

  There is no requirement to notify the Department of Trade and Industry and so the figures include only those projects where the Invest in Britain Bureau (IBB) and its regional partners (LFC) were involved or which have come to their notice.

  Multinational Companies
  Mr. Matthew Taylor
  To ask the President of the Board of Trade if the Government will seek an amendment to the Multilateral Agreement on Investments to include a legally binding obligation for multinationals to provide an independent environmental and social audit in their annual reports. [24518]

  Mrs. Roche
  We do not intend to seek such an amendment—the MAI is not an appropriate vehicle for international rule-making on company reports.

  Inward Investment (Northumberland)
  Mr. Ronnie Campbell
  To ask the President of the Board of Trade how many jobs have been created in Northumberland since 1992 as a result of inward investment. [24031]

  Mrs. Roche
  Inward investment projects from 1992 are expected to create 1,800 new job opportunities in Northumberland.

  Business Links
  Mr. Ronnie Campbell
  To ask the President of the Board of Trade how many staff are employed in(a) the Northumberland Business Link and (b) Business Links in the United Kingdom as a whole. [24033]

  Mrs. Roche
  The information is given in the list:

  (a) Twenty two staff are employed by Business Link Northumberland.

  (b) Business Links are independent private sector companies. How many staff each Business Link employs is decided by their local management and these numbers are not collected centrally.

  Mr. Ronnie Campbell
  To ask the President of the Board of Trade how many requests for information were received by Northumberland business link's marketing information centre in each of the last three years. [24032]
  652
  (2) if she will make a statement on the inward investment made into the Greater London area in each of the last three years. [24527]

  Mr. Ian McCartney
  Inward investment made into Greater London and the breakdown of jobs as a result over the last three years is as follows:

  Mrs. Roche
  Business Link Northumberland does not have a Marketing Information Centre as such but does operate an Information Service. The number of inquiries recorded by this Service in each of the last three years was as follows:

  1994–95: 1,050

  1995–96: 1,595

  1996–97: 782.

  The apparent drop in the figures in 1996–97 is considered to have resulted from a change to the recording arrangements from recording all inquiries whatever their nature to recording only requests for business information.

  Post Offices
  Mr. Cox
  To ask the President of the Board of Trade if she will make a statement on her Department's policy on keeping post offices open in urban areas of the United Kingdom. [23803]

  Mr. Ian McCartney
  The Government are committed to the maintenance of a nationwide network of post offices.

  Kenya (Exports)
  Mr. Cox
  To ask the President of the Board of Trade if she will make a statement on the value of British exports to Kenya in the last 12-month period for which figures are available. [23804]

  Mrs. Roche
  In the 12 months to November 1997, UK exports of good to Kenya were worth £231 million. Figures for UK exports services to Kenya are not available.

  Unsolicited Faxes
  Mr. Jenkin
  To ask the President of the Board of Trade what representations she has received concerning the use of unsolicited fax transmissions as a means of advertising; what plans she has to regulate this activity; and if she will make a statement. [23834]

  Mrs. Roche
  Ministers in this Department have received five representations concerning the use of unsolicited fax transmissions as a means of advertising since taking office last May. Measures are already in place to deal with the problem of unsolicited faxes. The telecommunications and telephone selling industries have established a Fax Preference Service to help residential customers reduce the number of faxes they receive. Customers who have a fax machine in their residential
  653
  premises may register for inclusion in a database against which companies selling via fax "clean" their mailing lists. In addition, under the Telecommunications Act 1984, UK companies using fax marketing are subject to a class licence which contains measures aimed at limiting the nuisance which can be caused by unsolicited faxes. Anyone sending unsolicited faxes must cease doing so to any particular person on receipt of a written request from them, or face possible enforcement action, including the removal of their right to operate a telecoms system, by Oftel. The Department therefore has no plans at present to take further action against the transmission of unsolicited commercial communications through facsimile machines.

  Export Licences
  Ann Clwyd
  To ask the President of the Board of Trade (1) how many arms export licences for Saudi Arabia have been(a) applied for, (b) granted and (c) rejected since 1992, in each case listing the categories of equipment they cover; [23003]

  (2) how many arms export licences for Kenya have been (a) applied for, (b) granted and (c) rejected since 1992, in each case listing the categories of equipment they cover; [23004]

  (3) if she will list the number of arms export licences for Indonesia which were (a) applied for, (b) accepted and (c) rejected since 1992 by category of equipment covered; [23037]

  (4) if she will list the number of arms export licences for Turkey which were (a) applied for, (b) accepted and (c) rejected since 1992 by category of equipment covered. [23046]

  Mrs. Roche
  I will write to my hon. Friend as soon as possible and place a copy of that reply in the Library of the House.

  Trade (Argentina)
  Mr. Cox
  To ask the President of the Board of Trade if she will make a statement on the value of trading between the United Kingdom and the Argentine(a) currently and (b) in each year from 1994 to 1996. [24077]

  Mrs. Roche
  Data on UK trade in goods with Argentina are given in the table. Data on UK trade in services with Argentina are not available.

  UK Trade in goods with Argentina 1994–96 and January-November 1997

  £ million

  UK exports

  UK imports

  1994

  229

  171

  1995

  234

  252

  1996

  332

  285

  January—November 1997

  463

  242

  Source:

  HM Customs and Excise data.

  Mr. Cox
  To ask the President of the Board of Trade (1) what measures her Department is taking to support British exporters to the Argentine; [24079]

  (2) what action she is taking to promote trade between the United Kingdom and the Argentine. [24078]
  654
  Mrs. Roche
  My noble Friend the Minister for Trade took a trade mission to Argentina in September 1997. Trade opportunities in Argentina are also promoted throughout the United Kingdom in a variety of ways, including seminars, conferences and publications, with the support of my Department and its Export Promoter for Argentina. The full range of overseas trade services are available to individual exporters, such as supported trade missions to and trade fairs in Argentina.

  Internet
  Mrs. Gillan
  To ask the President of the Board of Trade what investigations she has undertaken into the prices charged by telecommunications companies to United Kingdom Internet providers for leasing data circuits to other European countries. [24007]

  Mrs. Roche
  [holding answer 19 January 1998]: The Department has not conducted any specific investigations into the prices charged by telecoms companies to United Kingdom Internet providers for leasing data circuits to other European countries, and neither has Oftel. I understand that Oftel has not received any representations about this matter, but that it would be happy to consider any such representation which it may receive.

  Mrs. Gillan
  To ask the President of the Board of Trade what discussions she has with her European Union counterparts on(a) the Internet and (b) charges for telephone and data circuits between European countries. [24016]

  Mrs. Roche
  [holding answer 19 January 1998]: These issues are regularly discussed in the European Union Telecommunications Council. On 26 February I expect to chair discussion in the Council on:
  a Commission communication on Globalisation and the Information Society, looking at international co-ordination of policies towards the Internet; and
  a Commission communication on Member States' implementation of European Union telecommunications legislation. including the directive on Leased Lines.

  Mrs. Gillan
  To ask the President of the Board of Trade what discussions she has had with her United States counterpart on the subject of the Internet with particular reference to delays in reorganising the domain name system. [24004]

  Mrs. Roche
  [holding answer 19 January 1998]: I and my officials have remained in close contact with the US administration on the future governance of the Internet Domain Name System. We have also supported European Commission action in this area. Much of the delay in reaching a satisfactory outcome to this issue is due to the need to ensure a robust solution which fully represents the interests of all classes of Internet stakeholders in all regions of the world, and anticipates future needs.

  Mrs. Gillan
  To ask the President of the Board of Trade what assessment she has made of the effect that the diversion of intra-European Internet traffic to the United States has on the United Kingdom Internet industry. [24015]

  Mrs. Roche
  [holding answer 19 Janaury 1998]: Industry views are divided, both as to whether the present traffic routing adopted by Internet service providers in the UK has a harmful effect on their competitiveness, and

  655
  whether it is caused by the high prices for leased lines to European destinations compared to trans-Atlantic rates. The presence in the United States of the majority of websites in the world makes it necessary for service providers throughout Europe to lease lines to the US, spare capacity on which can be cheaply used to access each others' networks. I do however share industry's concern at high intra-European leased line prices. I am confident that the full liberalisation of the European Union telecoms market from this month will bring about a rapid and significant fall in these prices.

  Mrs. Gillan
  To ask the President of the Board of Trade what are her priorities in respect of policies on the Internet during the United Kingdom's presidency of the European Union. [24002]

  Mrs. Roche
  [holding answer 19 January 1998]: I attach very strong importance to ensuring that we achieve an environment in the European Union which will foster the development of the Internet. I aim to take this agenda forward during the UK Presidency through discussion of the issues of converging technologies, on Globalisation and the Information Society and on the EU Internet Action Plan.

  Amway
  Mrs. Gillan
  To ask the President of the Board of Trade what representations her Department has received since 1 May on the operation of Amway; if she will publish her responses; what investigations her Department has made into the operations of Amway; what representatives of Amway her Ministers have met since 1 May 1997; and what meetings representatives of her Department have held with individuals to discuss the operation of the company. [24001]

  Mr. Nigel Griffiths
  [holding answer 19 January 1998]: The Department has received numerous letters from one individual and a letter from the hon. Lady on 15 October. I have placed a copy of my reply to her in the Library of the House, but regard other replies as personal to the recipient.

  In line with established practice in such cases. Ministers do not confirm or deny whether investigations are taking place or not.

  Ministers of this Department have not met representatives of the company during the period in question, nor have officials had any meetings.

  Action 2000
  Mrs. Gillan
  To ask the President of the Board of Trade if Action 2000 will define the levels of millennium compliance for each sector of industry. [24378]

  Mrs. Roche
  [holding answer 20 January 1998]: Action 2000 is encouraging businesses in all sectors of the economy to decide quickly what steps they need to take to make their critical systems compliant, and will be taking a particular interest in the plans of businesses in key sectors. Action 2000 will aim to benchmark the existing level of compliance across all sectors of the economy and monitoring progress.

  Biotechnology
  Dr. Kumar
  To ask the President of the Board of Trade what steps her Department is taking to develop manufacturing activity in the biotechnology sector. [24070]

  Mr. Battle
  My Department is committed to getting the climate right for the development of the UK's biotechnology sector. We support a range of research through the Research Councils and technology transfer through, for example, LINK, EUREKA and SMART and specific Biotechnology Challenges to encourage the start-up and growth of new companies.

  These measures will help sustain the strong science base and catalyse industrial research and development needed to underpin future manufacturing and production in this sector.

  Biochemical Engineering
  Dr. Kumar
  To ask the President of the Board of Trade (1) what assessment she has made of the impact of reductions in the level of support for biochemical engineering research and training in the Biotechnology and Biological Sciences Research Council budget; [24071]

  (2) what assessment she has made of the level of Government support required in respect of biochemical engineering research and training over the next five years. [24069]

  Mr. Battle
  Government support for biochemical engineering research and training is primarily the responsibility of the Biotechnology and Biological Science Research Councils (BBSRC). In accordance with its Royal Charter and the well-established relationship between the Research Council and Government, it is for the BBSRC to determine the nature and level of its support for areas of research and training, drawing on the advice of its research and user communities.

  I understand that the BBSRC has recently commissioned a review of all its biochemical engineering research and training chaired by Professor Bernard Atkinson, which is due to report in the early summer of 1998.

  Employment Law (Seafarers)
  Mr. Prosser
  To ask the President of the Board of Trade if she will list those sections of United Kingdom employment law from which British merchant seafarers are presently excluded. [24167]

  Mr. Ian McCartney
  Section 199(1) of the Employment Rights Act 1996 specifies provisions in that Act from which mariners—whatever their nationality—are excluded where they are employed in a UK registered ship under a crew agreement approved by the Secretary of State. The provisions in question are sections one to seven (concerning the right to a written statement of employment particulars), Part II (protection of wages) and sections 86 to 91 (minimum period of notice).

  Section 199(4) of the 1996 Act specifies provisions from which merchant seamen are excluded. These are sections eight to ten (right to itemised pay statement), sections 50–54 (time off work) and Part XII (payments where an employer is insolvent).
  657
  Other exclusions from the 1996 Act, as set out in section 196, apply equally to seafarers and other employees working wholly or mainly outside Great Britain, except that section 196(5) and 199(6) provides that certain of these exclusions do not apply to seafarers in certain circumstances.

  Equivalent provisions applying in Northern Ireland are included in Article 242 of the Employment Rights (Northern Ireland) Order 1996.

  Ethical Trading
  Dr. Tonge
  To ask the President of the Board of Trade what progress has been made in discussions with industry and commerce on ethical trading and the labelling of goods to give information on the ethics of their production. [22872]

  Mrs. Roche
  Increasingly companies are responding to consumers interests by voluntarily adopting codes of practice to help ensure the ethical production of their goods, including those originating overseas. The Government support the Ethical Trading Initiative, a partnership between business, non-governmental organisations and unions which aims to promote the use of such codes, the pursuit of best practice in monitoring them and developing a positive engagement between importers and suppliers to help the latter comply with the codes. The ultimate aim is the universal ethical production of goods sold in the UK. Some goods are already marketed with an indication of ethical production, and moves towards widespread transparency will be welcomed.

  Electricity Cabling
  Mr. Wigley
  To ask the President of the Board of Trade what representation she has received from electricity consumers, concerning the laying of underground cables in North West Wales. [24293]

  Mr. Battle
  One letter has been received which raised the question of underground cables in North West Wales since the General Election last May.

HEALTH

  Edgware Hospital
  Mr. Dismore
  To ask the Secretary of State for Health if he will make a statement concerning the review of Edgware Hospital. [22591]

  Mr. Milburn
  Following Barnet Health Authority's review of local health services to be provided from the Edgware Hospital site, the health authority has now submitted the recommendations from the review. I am pleased that the process of public consultation adopted by the health authority has achieved a considerable degree of local support and a high level of consensus on the range of services to be provided.

  The review has produced workable proposals about the general direction and future of the Edgware Community Hospital. Barnet Health Authority and the Barnet Healthcare National Health Service Trust, working closely
  658
  with representatives of the local community, will now need to develop these proposals in more detail to satisfy the formal approval processes.

  Hospital Trusts (Car Parks)
  Mr. Bob Russell
  To ask the Secretary of State for Health how much was received by each hospital trust which has a car park contract operated by Controlled Car Parking, in the last financial year for which figures are available; and if he will estimate the profit made by CCP on each contract in the last financial year for which figures are available. [24166]

  Ms Jowell
  The information requested is not collected centrally.

  Breast Screening
  Mr. Stinchcombe
  To ask the Secretary of State for Health how many breast screening units are not able to screen all women in the 50 to 64 years of age category every three years; and if he will make a statement. [24338]

  Mr. Boateng
  As at July 1997, 32 units in England were having some difficulty maintaining a three-year screening interval and as a result some women are having to wait longer than three years between screenings. Most of the 32 are less than three months behind schedule.

  The Government have made clear that adherence to national standards and rigorous quality control is essential to deliver an effective breast screening programme. Regional Directors of Public Health have been instructed to review the performance of the breast screening programme in their region and, where necessary, agree action plans so that national standards are met, including screening intervals.

  Mr. Stinchcombe
  To ask the Secretary of State for Health what account his Department has taken in allocating funds for breast screening of demographic changes. [24340]

  Mr. Boateng
  The number of women eligible for screening is rising steadily as a result of the post-war baby boom, with a projected increase of almost 10 per cent. between 1997 and 2002. Demographic pressures on the health service as a whole are taken into account in discussion between the Department and Her Majesty's Treasury on public expenditure.

  Mr. Stinchcombe
  To ask the Secretary of State for Health if he will make a statement on the number of women aged between 65 and 75 who attend breast screening. [24339]

  Mr. Boateng
  In 1995–96 (the most recent figures available), 57,535 women aged 65 and over were screened for breast cancer. This is a significant increase on the 1994–95 figure of 39,193, and the Government are delighted that more women than ever aged 65 and over are requesting National Health Service mammogram. We do not collect date specifically on the number of women aged 65 to 75 screened each year.

  Acheson Report
  Mr. Dalyell
  To ask the Secretary of State for Health, pursuant to the letter (reference S/J/PS0/11213/97) when he expects to receive the Acheson Report relating to accident involvement. [22797]
  659
  Ms Jowell
  Sir Donald Acheson is expected to report to Ministers in spring 1998, with the full report of the Independent Inquiry into Inequalities in Health to be published in the summer.

  Rohypnol
  Mr. Hoyle
  To ask the Secretary of State for Health if the Government will ban the drug rohypnol. [24673]

  Ms Jowell
  Rohypnol is the proprietary name for flunitrazepam, a prescription-only medicine for the short-term treatment of insomnia. It is not prescribable under the National Health Service but may be supplied under private prescription. In view of its attractiveness to drug misusers for self-administration it is already controlled under the Misuse of Drugs Act 1971.

  There are no plans at present to withdraw the drug rohypnol. Because of concern about possible misuse of rohypnol the manufacturers have modified the formulation, including a dye that will show up in a drink. This new formulation has been approved by the United Kingdom licensing authority and we understand that it will be marketed in the near future.

  The Government plan to bring forward amending legislation shortly which will increase the amount of regulation on the drug in the UK, including making it an offence to possess the drug without lawful authority.

  GP Fundholders
  Helen Jackson
  To ask the Secretary of State for Health what training general practice fundholders receive on how to handle personnel matters; and what plans his Department has to improve such training. [23044]

  Mr. Milburn
  General practitioner fundholders are expected to equip themselves with the skills to perform the full range of their management duties. Regulation 23(7) of the National Health Service (Fund-holding Practices) Regulations 1996 provides for the practice fund management allowance to be used to meet the cost of training members of the practice and their staff.

  The White Paper, "The New NHS" (Cmnd 3807) sets out the Government's intention to develop Primary Care Groups which will succeed the GP fundholding scheme and other current purchasing and commissioning arrangements. The training and development needs of Primary Care Groups will need to be kept under review by all concerned as the new arrangements evolve.

  Care Leavers
  Mr. Streeter
  To ask the Secretary of State for Health what recent research findings are available from the assessment of services for care leavers, following the Government commitment to monitor the implementation of the Children Act 1989 as it relates to provisions for children leaving care. [23945]

  Mr. Boateng
  A major research study of leaving care schemes was commissioned by Government following implementation of the Children Act 1989. The research was undertaken by Leeds University and published in 1995 under the title "Moving On". Copies have been placed in the Library.
  660
  Further research was commissioned in 1995 from Sheffield University to study the extent to which the extended families of care leavers might offer personal support during the transition to independence. The fieldwork has been completed and the study will be published shortly under the title "Leaving Care in Partnership".

  Neuroleptic Drugs
  Mr. Flynn
  To ask the Secretary of State for Health what new proposals he has to reduce excessive prescribing of neuroleptic drugs to residents of homes for the elderly. [24755]

  Mr. Milburn
  The responsibility for prescribing, including repeat prescribing, of medication rests with the doctor who has clinical responsibility for the patient's treatment. We have no present proposals to issue guidance on the prescribing of drugs specifically to residents of homes for the elderly.

  The Department provides support for doctors in their clinical decisions, providing information through the British National Formulary, the Drug and Therapeutics and Medicines Resource Centre Bulletins and the Prescribers' Journal, copies of which are available in the Library. Advice is also available from most general practitioners' computer systems which have drug databases with facilities to flag up potential interactions with other drugs or diseases, and when patient review is due. We also encourage the use of community pharmacists in the review and management of medication.

  Fibre
  Mr. Martyn Jones
  To ask the Secretary of State for Health what is Her Majesty's Government's recommended daily amount for fibre; and what assessment he has made of the amounts recommended by other organisations. [24459]

  Ms Jowell
  The Committee on Medical Aspects of Food and Nutrition Policy (COMA), in its Report, "Dietary Reference Values for Food Energy and Nutrients for the United Kingdom" published in 1991, set a Dietary Reference Value (DRV) for the population average intake of non-starch polysaccharide (dietary fibre) at 18 grams per day. In setting this DRV COMA took account of the recommendations of other national and international bodies in this area. Copies of the Report are available in the Library.

SOCIAL SECURITY

  Disability Living Allowance
  Mr. Cousins
  To ask the Secretary of State for Social Security, pursuant to her answer to the hon. Member for Bradford, North (Mr. Rooney) of 22 December 1997,Official Report, columns 459–61; if she will estimate the (a) regional distribution and (b) distribution between household income bands based on quartiles of the income range of claimants of disability living allowance care, disability living allowance mobility and attendance allowance in each year from 1992–93. [22994]
  661
  Mr. Denham
  The information requested is set out in the tables.

  People in receipt of DLA and AA at 1993–94 by Government Office region

  Disability Living Allowance

  Government Office region

  Care1

  Mobility1

  Attendance allowance2

  North

  35,500

  64,200

  —

  Yorkshire and Humberside

  57,800

  103,000

  —

  East Midlands

  41,400

  70,600

  —

  East

  39,600

  63,300

  —

  London

  56,000

  74,100

  —

  South East

  57,000

  80,100

  —

  South West

  40,600

  61,600

  —

  West Midlands

  59,400

  95,300

  —

  North West

  67,100

  124,800

  —

  Merseyside

  28,000

  49,800

  —

  England

  482,400

  787,000

  760,200

  Wales

  40,500

  81,600

  56,400

  Scotland

  67,000

  113,200

  73,800

  All

  589,900

  981,800

  890,300

  People in receipt of DLA and AA at 1993–94 by Government Office region

  Disability Living Allowance

  Government Office region

  Care1

  Mobility1

  Attendance Allowance2

  North

  44,800

  73,800

  —

  Yorkshire and Humberside

  73,400

  116,900

  —

  East Midlands

  51,200

  80,600

  —

  East

  49,600

  73,600

  —

  London

  72,300

  93,000

  —

  South East

  67,700

  94,600

  —

  South West

  46,800

  69,100

  —

  West Midlands

  75,400

  112,000

  —

  North West

  84,600

  141,100

  —

  Merseyside

  37,000

  57,800

  —

  England

  602,600

  912,500

  815,100

  Wales

  53,900

  94,100

  64,800

  Scotland

  85,100

  130,600

  82,400

  All

  741,600

  1,137,100

  962,400

  People in receipt of DLA and AA at 1994–95 by Government Office region

  Disability Living Allowance

  Government Office region

  Care1

  Mobility1

  Attendance Allowance2

  North

  56,600

  87,200

  —

  Yorkshire and Humberside

  88,000

  132,200

  —

  East Midlands

  61,100

  90,200

  —

  East

  60,400

  83,600

  —

  London

  89,400

  109,900

  —

  South East

  80,900

  108,500

  —

  South West

  57,600

  80,700

  —

  West Midlands

  92,200

  128,700

  —

  North West

  102,700

  160,100

  —

  Merseyside

  46,200

  66,000

  —

  England

  735,100

  1,047,100

  884,500

  Wales

  67,300

  110,100

  72,500

  Scotland

  105,600

  151,100

  89,500

  All

  908,100

  1,308,400

  1,046,500

  662

  People in receipt of DLA and AA at 1995–96 by Government Office region

  Disability Living Allowance

  Government Office region

  Care1

  Mobility1

  Attendance Allowance1

  North

  69,300

  99,200

  48,200

  Yorkshire and Humberside

  105,500

  150,500

  103,200

  East Midlands

  73,700

  102,500

  75,700

  East

  71,700

  95,000

  91,500

  London

  106,700

  127,600

  106,100

  South East

  93,600

  122,000

  121,200

  South West

  69,300

  93,100

  97,100

  West Midlands

  109,000

  146,400

  111,300

  North West

  123,700

  179,200

  126,400

  Merseyside

  55,400

  74,000

  40,800

  England

  878,100

  1,189,600

  921,400

  Wales

  82,200

  125,500

  80,000

  Scotland

  124,600

  170,700

  107,000

  All

  1,084,900

  1,485,700

  1,108,500

  People in receipt of DLA and AA at 1996–97 by Government Office region

  Disability Living Allowance

  Government Office region

  Care1

  Mobility1

  Attendance Allowance1

  North

  80,400

  108,800

  52,700

  Yorkshire and Humberside

  120,000

  163,500

  106,600

  East Midlands

  84,700

  111,800

  81,800

  East

  83,100

  103,600

  94,100

  London

  124,000

  142,600

  108,300

  South East

  106,500

  133,500

  122,600

  South West

  80,400

  102,900

  106,400

  West Midlands

  122,800

  158,600

  116,700

  North West

  63,300

  80,500

  132,100

  Merseyside

  143,200

  196,600

  43,500

  England

  1,008,400

  1,302,400

  964,700

  Wales

  97,800

  139,100

  86,800

  Scotland

  142,500

  188,000

  114,900

  All

  1,248,700

  1,629,500

  1,166,400

  Source

  Analytical Services Division: 5 per cent. data.

  Note:

  1 Figures relate to 28 February.

  2 Figures relate to 31 March.

  1. No figures by region for AA are available prior to 1995–96 because of the lack of a reliable regional indicator in the data.

  Position in the household income distribution of benefit units in receipt of Disability Living Allowance or Attendance Allowance (GB)

  1995–96

  Per cent.

  Quartile

  DLA (care)

  DLA Mobility

  DLA

  AA

  Either AA or DLA

  Bottom 25 per cent.

  16

  15

  17

  14

  16

  Next 25 per cent.

  39

  41

  41

  40

  41

  Next 25 per cent.

  32

  32

  31

  32

  31

  Top 25 per cent.

  13

  12

  12

  13

  12

  All

  100

  100

  100

  100

  100

  663

  1994–95

  Per cent.

  Quartile

  DLA (care)

  DLA (mobility)

  DLA

  AA

  Either AA or DLA

  Bottom 25 per cent.

  13

  13

  15

  12

  14

  Next 25 per cent.

  44

  44

  44

  44

  44

  Next 25 per cent.

  31

  30

  30

  30

  31

  Top 25 per cent.

  12

  14

  12

  12

  11

  All

  100

  100

  100

  100

  100

  1992–93 and 1993–94 financial years combined in UK

  Per cent.

  Quartile

  DLA

  AA

  Either AA or DLA

  Bottom 25 per cent.

  13

  10

  12

  Next 25 per cent.

  42

  51

  46

  Next 25 per cent.

  34

  31

  32

  Top 25 per cent.

  10

  8

  9

  All

  100

  100

  100

  1. The estimates for the financial years 1994–95 and 1995–96 are based on the Family Resources Survey (FRS).

  2. The estimates for the combined financial years 1992–93 and 1993–94 are based ont he Family Expenditure Survey (FES). As the FES has a smaller sample size than the FRS we have combined two financial years and not provided estimates for the separate components of DLA.

  3. The measure of income used is household equivalised net income before housing costs (BHC). Measured income will include the value of the DLA and AA received. The distribution of recipients changes if the value of DLA and AA from household income as in the following table.

  Position in the household income distribution of benefit units in receipt of Disability Living Allowance or Attendance Allowance (GB)

  1995–96

  Per cent.

  Quartile

  Household income includes the value of AA/DLA

  Household income excludes the value of AA/DLA

  Bottom 25 per cent.

  16

  39

  Next 25 per cent.

  41

  34

  Next 25 per cent.

  31

  19

  Top 25 per cent.

  12

  7

  All

  100

  100

  1. Incomes are equivalised to adjust for household size and composition. No adjustment is made to household income to reflect any additional needs that people with disabilities might have.

  2. Recipients in institutions are not covered by the Family Resources Survey.

  3. The FRS is a sample survey and all estimates must be treated as approximate.

  4. FRS estimates are available on a GB basis only as the FRS doesn't cover Northern Ireland and NI has no equivalent survey. FES estimates relate to the UK.

  5. Results show the proportion of benefit units receiving AA and DLA by position of the benefit unit in the household distribution of income. A benefit unit is defined as a single adult or couple together with any dependent children. A household can comprise more than one benefit unit, for example a pensioner living with their grown up children.

  6. Sample sizes are such that differences between the years are unlikely to be statistically significant.

  7. For the income distribution which excludes benefits the knock on effect on Income Related Benefit receipt has not been estimated, though this is likely to be small on average.

  8. As the question is using a series of years the FES comparable measures of income and FES comparable grossing factors have been used on the FRS.

  Pensioner Incomes
  Mr. Cousins
  To ask the Secretary of State for Social Security if she will estimate for the current year and for 1992 average pensioners income from all sources(a) for all pensioners and (b) for the age groups (i) over 75 years of age, (ii) over 80 years of age and (iii) over 85 years of age. [23669]

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

  1995–96

  1992

  Mean gross income (£)

  Sample

  Mean gross income (£)

  Sample

  All pensioner units

  196.80

  2,000

  181.00

  2,183

  Pensioner units where the head is aged over 75

  173.20

  731

  148.00

  778

  Pensioner units where the head is aged over 80

  170.80

  391

  136.70

  376

  Pensioner units where the head is aged over 85

  191.70

  133

  135.70

  122

  Source:

  The Pensioners' Incomes Series 1995–96 based on the Family Expenditure Survey.

  Notes:

  1. The latest year for which information is available is 1995–96.

  2. Pensioner Units are defined as single (non-cohabiting) persons over State pension age or couples (married or cohabiting) where the man, defined as the head, is over State pension age.

  3. All figures are in July 1995 prices and are rounded to the nearest 10 pence.

  4. Figures based on small numbers of pensioner units are subject to sampling error. Therefore, year on year comparisons of small groups, particularly those pensioner units aged over 85, may not be robust.

  Incomes
  Ms Hewitt
  To ask the Secretary of State for Social Security what is the net income of (i) married couple with one earner and two children, (ii) a lone parent with two children and (iii) a single person with no children, on gross earnings of(a) half of average earnings, (b) three-quarters of average earnings, (c) average earnings and (d) twice average earnings allowing for child benefit; and what is the net income of the same groups after allowing for council tax. [23929]

  Mr. Keith Bradley
  The information is in the tables.

  Net income of a married couple with one earner and two children

  £

  Gross earnings

  Net income before Council Tax

  Net income after Council Tax

  LA tenant

  Private tenant

  LA tenant

  Private tenant

  Half of average earnings

  183.80

  163.35

  163.35

  151.75

  151.75

  Three-quarters of average earnings

  275.70

  191.38

  167.98

  179.78

  156.38

  Average earnings

  367.60

  252.95

  222.64

  241.35

  211.04

  Twice average earnings

  735.20

  499.83

  469.52

  488.23

  457.92

  665

  Net income of a lone parent with two children

  £

  Gross earnings

  Net income before Council Tax

  Net income after Council Tax

  LA Tenant

  Private Tenant

  LA Tenant

  Private Tenant

  Half of average earnings

  183.80

  164.61

  164.33

  155.81

  155.53

  Three-quarters of average earnings

  275.70

  197.43

  168.96

  188.63

  160.16

  Average earnings

  376.60

  259.00

  228.69

  250.20

  219.89

  Twice average earnings

  735.20

  505.88

  475.57

  497.08

  466.77

  Net income of a single person with no children

  £

  Gross earnings

  Net income before Council Tax

  Net income after Council Tax

  LA Tenant

  Private Tenant

  LA Tenant

  Private Tenant

  Half of average earnings

  183.80

  111.17

  87.06

  103.67

  79.56

  Three-quarters of average earnings

  275.70

  172.75

  148.64

  165.25

  141.14

  Average earnings

  367.60

  234.32

  210.21

  226.82

  202.71

  Twice average earnings

  735.20

  481.20

  457.09

  473.70

  449.59

  1. The weekly average earnings figure of £367.60 has been taken from "Labour Market Trends", published by the Office for National Statistics. It represents national weekly average earnings for all full-time employees at April 1997.

  2. For family types with two children, one child is assumed to be under five and the other between five and 10-years-old.

  3. The net income figures in the table reflect each family's net weekly income after income tax, National Insurance Contributions, housing costs and all income from benefits (including Child Benefit) have been taken into account.

  4. Net incomes also depend on whether or not the family are local authority (LA) or private tenants, since this affects the amount of rent payable and also (possibly) the amount of housing benefit received. Net incomes for both LA tenants and private tenants are included in the table.

  5. Each family type is assumed to live in local authority or private rented property appropriate to its size, and to pay average amounts of rent and council tax at April 1997.

  6. No Council Tax Benefit is payable in any of the situations covered: earnings are too high.

  Councillors' Allowances
  Mr. Bob Russell
  To ask the Secretary of State for Social Security if she will bring forward proposals to exclude members' allowances received by councillors when calculating benefits and other entitlement. [24156]

  Mr. Keith Bradley
  We have no immediate plans to change the way councillors' allowances are treated when calculating benefits although we are keeping the individual benefit rules under review. Councillors do already enjoy some important concessions in the benefits system which are not available to other people.

  Lone Parents
  Mrs. Ballard
  To ask the Secretary of State for Social Security what estimate she has made of the projected change in the numbers of lone parents over the next 10 years. [23522]
  666
  Mr. Keith Bradley
  The information is not available in the form requested. Neither the Office for National Statistics, which is responsible for demographic statistics on the family, nor the Government Actuary's Department produces projections of the number of lone parent families.

  The Department of Social Security makes its own projections for planning purposes and these indicate that the number of lone parent families in Great Britain could increase by about 500,000 to over 2 million by 2006. Such estimates are subject to considerable uncertainty and may over-estimate growth over the next 10 years.

  Ms Julie Morgan
  To ask the Secretary of State for Social Security if the level of advice and guidance and staffing available in the pilot projects of the Lone Parent Initiative will be matched when the national roll-out takes place. [24111]

  Mr. Keith Bradley
  The Government plan to continue providing a high quality service once the New Deal for Lone Parents is extended nationwide. Precise staffing levels have yet to be decided but the intention is that advice and guidance available to lone parents and their Personal Advisers will match that available in the eight pilot areas.

  Notes:

  I. From April 1998, for the New Deal for Lone Parents programme, will be delivered to all lone parents nationally making a new or repeat claim for Income Support.

  2. From October 1998, for the New Deal for Lone Parents programme, will be delivered to all lone parents nationwide, existing and new claimants.

  Mr. Cousins
  To ask the Secretary of State for Social Security if she will list the number of claimants and the number of new claims of(a) lone parent benefit and (b) lone parent premium in the Newcastle Benefits Agency district in each year since 1992. [22984]

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

  Letter from Peter Mathison to Mr. Jim Cousins, dated 21 January 1998:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking if she will list the number of claimants and the number of new claims of (a) lone parent benefit and (b) lone parent premium in the Newcastle Benefits Agency (BA) district in each year since 1992.
  The information is not available in the format requested. Lone parent benefit details are not readily available and could be obtained only at disproportionate cost. Similarly, the number of new claims to Income Support (IS) which include the entitlement to lone parent premium could be obtained only at disproportionate cost.
  The following figures relate to the number of IS customers in the BA's Newcastle District, which includes the Newcastle St. James and Newcastle East offices, who were in receipt of lone parent premium from 1992 to 1996 and for 1997 the higher rate of the family premium, which from April 1997 replaced the lone parent premium. They do not include those lone parent customers who are pensioners nor those registered sick who would qualify for a higher

  667
  rate premium such as a pensioner or disability. These figures are a snapshot taken at the ene of November in each year; they are the latest available and may be subject to amendment.

  Year

  Number of cases

  1992

  7,625

  1993

  7,645

  1994

  7,663

  1995

  7,616

  1996

  7,529

  1997

  6,977

  I hope you find this reply helpful.

  Child Benefit
  Mr. Duncan Smith
  To ask the Secretary of State for Social Security what plans she has to review the operation of child benefit. [24492]

  Mr. Keith Bradley
  Our manifesto commitment is clear: we will retain Child Benefit where it is universal today, from birth to age 16, and uprate it at least in line with prices.

  An inter-Departmental review of all the arrangements for financial support for young people choosing to stay in education beyond compulsory school age is continuing. Child Benefit for 16–18 year olds is part of that review.

  Welfare to Work
  Mr. Duncan Smith
  To ask the Secretary of State for Social Security in what circumstances those individuals who have refused to take up one of the four options under the welfaretowork scheme and had their jobseeker's allowance removed for four weeks will(a) go back onto jobseeker's allowance for six months and (b) go onto income support. [24552]

  Mr. Keith Bradley
  Jobseeker's Allowance is intended for people who are out of work for reasons beyond their own control. Young people who unreasonably perpetuate their own unemployment by refusing to take up one of the four options offered under the New Deal will be subject to benefit sanctions for as long as they continue to refuse. There is no fifth option of a life on benefit.

  Young people will not qualify for Income Support unless they do so under current arrangements.

  State Earnings-related Pension Scheme (Rebate)
  Mr. Duncan Smith
  To ask the Secretary of State for Social Security what is the publication date for the Government Actuary Department's report on upgrading the SERPS rebate; and what are the terms of reference for the report. [24491]

  Mr. Denham
  I refer the hon. Member to the reply I gave my hon. Friend the Member for Vauxhall (Kate Hoey) on Friday 16 January 1998,Official Report, column 344, which explained that a copy of the report I have received from the Government Actuary has been placed in the Library of both Houses. Its terms of reference are clearly set out in the introduction of the report.

  Orders to set new rebate levels from April 1999, with an accompanying report from the Government Actuary, will be brought before both Houses shortly.

  Mortgage Protection Policies
  Mr. Webb
  To ask the Secretary of State for Social Security what is the effect of(a) income from mortgage protection policies and (b) income from other loan insurance policies on entitlement to income-related social security benefits. [24713]

  Mr. Keith Bradley
  Payments from a mortgage payment protection insurance policy (MPPI) are treated as income for income-related benefit purposes. In Income Support and Jobseeker's Allowance (Income-Based) different rules apply depending on whether or not payment is made directly to the lender or the borrower. If payment is made direct to the lender, the full amount is ignored including capital repayments, endowments, PEPs, building insurance and mortgage payment protection premiums and any ineligible interest payments. The only exception to this is when Income Support Mortgage Interest (ISMI) commences and MPPI is already in payment, the MPPI income is offset against the amount of ISMI due. If paid direct to the borrower, the amount taken into account is the excess after housing costs and related insurance premiums have been deducted.

  Income from other types of loan insurance is treated in the same way as most other types of income. It is disregarded if, under the terms of the policy, it is payable to a third party only (in this case, normally the creditor). If it is paid to the insured person it will be taken into account. It may also be taken into account if it is being paid to a third party but could be paid to the insured person.

  This approach to the treatment of income in the income-related benefits has been unchanged for many years. Representatives of the insurance industry have recently approached the Department and are having discussions with officials about the application of the rules.

AGRICULTURE, FISHERIES AND FOOD

  Hill Farming
  Mr. Connarty
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to assist hill farmers. [22304]

  Mr. Kirkwood
  To ask the Minister of Agriculture, Fisheries and Food what further steps he proposes to take to assist hill livestock farmers; and if he will make a statement. [22326]

  Dr. John Cunningham
  In my statement to the House on 22 December 1997, I set out proposals for a special aid package worth £85 million to the livestock industry. Hill Farmers will be particular beneficiaries. Consultation on the detailed arrangements are continuing with the European Commission, and I hope to announce these shortly.

  Farm Incomes
  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to monitor farm income in Yorkshire. [22314]
  669
  Mr. Rooker
  Farm incomes in Yorkshire are monitored through the Farm Business Survey, conducted in this part of the United Kingdom by Askham Bryan Agricultural College. The college publishes the results annually in "Farming in Yorkshire". It is expected that the next edition of this report, covering results for 1996–97, will be published in February 1998.

  Mr. Robathan
  To ask the Minister of Agriculture, Fisheries and Food if he will meet farmers from Leicestershire to discuss the fall in farm incomes during 1997. [22324]

  Mr. Rooker
  I have no plans to meet farmers from Leicestershire, but I am always ready to listen to farmers or their representatives.

  Fisheries
  Mr. Wilkinson
  To ask the Minister of Agriculture, Fisheries and Food what are the Government's priorities with regard to reform of the CFP. [22315]

  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food which aspects of the Common Fisheries Policy he is seeking to reform. [24762]

  Mr. Morley
  The Government are pursuing a wide-ranging agenda of improvements to the Common Fisheries Policy. Our priorities include making the CFP a more effective instrument for conservation, improving enforcement, introducing a greater regional dimension into decision-making, strengthening the economic benefits that countries derive from their quotas and improving the way we manage quotas in the UK.

  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food if the United Kingdom share under the 1983 allocation relating to fisheries will remain constant irrespective of any new members joining the EU(a) during and (b) after the transitional period to the Common Fisheries Policy has expired. [23700]

  Mr. Morley
  The Government are committed to maintaining the UK's share of fish established under the principle of relative stability both up to and after the review of the Common Fisheries Policy in 2002.

  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what benefits he seeks to achieve for British fishermen by reform of the Common Fisheries Policy. [24761]

  Mr. Morley
  By improving the Common Fisheries Policy, the Government seek to safeguard fish stocks and secure a sustainable future for the sea fishing industry.

  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food (1) what procedure he will follow to achieve reform of the Common Fisheries Policy; [24712]

  (2) what is his time scale for achieving reform of the Common Fisheries Policy. [24711]

  Mr. Morley
  The Common Fisheries Policy as a whole will be reviewed by the Council of Ministers in 2002. However, the Government are working to achieve improvements before then by promoting measures in the areas which it has identified as priorities.

  Food Standards and Safety
  Mr. Ben Chapman
  To ask the Minister of Agriculture, Fisheries and Food in addition to the Food Standards Agency, what plans the Government have to promote improved food standards and safety throughout the country. [22316]

  Mr. Rooker
  We are acting essentially as if the Agency were already in place. We continue to strengthen our approach to food safety issues, giving clear priority to the protection of public health and building on our commitment to openness, transparency and responsiveness to the consumer.

  Dr. Gibson
  To ask the Minister of Agriculture, Fisheries and Food what further research is being carried out by his Department to ensure the safety of UK meat products. [22328]

  Mr. Rooker
  The Department funds a substantial programme of research to ensure the safety of meat and meat products. This focuses on the control of foodborne zoonoses and potential zoonoses, meat hygiene and food hygiene. The results of this research, which includes work on transmissible spongiform encephalopathies, contribute to the data on which policy decisions and actions are based. In all, it is expected that some £16 million will be deployed in this way during the 1997–98 financial year.

  Milk Quotas
  Mr. Drew
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the future of milk quotas. [22317]

  Mr. Morley
  Current legal authority for the milk quota system is due to expire at the end of March 2000. We are pressing for reform of the dairy regime in Brussels to help our industry compete effectively on world markets. Detailed legislative proposals are expected from the Commission in March this year and these will be the subject of careful scrutiny and negotiation.

  Beef Farming
  Mr. David Heath
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to visit Somerset to discuss the beef sector with local farmers. [22318]

  Dr. John Cunningham
  I have no specific plans to visit beef farmers in Somerset in the near future. However, I continue to have meetings with the National Farmers Union and other organisations representing farmers interests, when matters affecting the beef sector arise.

  Pigs (Tail Docking)
  Mr. Mullin
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to enforce the regulations relating to the tail docking of pigs; and if he will make a statement. [22319]

  Mr. Morley
  The regulations concerning the tail docking of pigs are enforced by the State Veterinary Service. We have instructed our Veterinary Officers to pay particular attention to this practice when carrying out their inspections.

  Genetically Modified Organisms
  Mr. Pickthall
  To ask the Minister of Agriculture, Fisheries and Food what recent discussions he has had with food retailers about genetically modified organisms. [22320]

  Mr. Rooker
  I have held a number of meetings with food retailers since May where I have explained the Government's determination to ensure that all foods which contain genetically modified material are both safe and clearly labelled.

  Common Agricultural Policy
  Sir Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food which specific changes to the CAP would receive his support. [22322]

  Mr. Rooker
  The Government will support proposals to reform the CAP which would secure a more market oriented policy with lower overall costs and which do not discriminate against UK farmers.

  Beef Ban
  Mr. Russell Brown
  To ask the Minister of Agriculture, Fisheries and Food what progress he is making on lifting the ban on British beef. [22323]

  Mr. Rooker
  The Commission has approved a draft proposal for the Export Certified Herds Scheme which will be presented to the Standing Veterinary Committee very soon. The scheme would operate in Northern Ireland initially but the principles could be extended to Great Britain once the computerised tracing system is fully functional.

  In October we submitted proposals for a UK scheme to export beef from cattle born after 1 August 1996 (Date Based Export Scheme). In its Opinion of 9 December the Scientific Steering Committee gave a positive response to the principle of a Date Based Export Scheme. Officials are currently discussing the next steps with the Commission.

  Mr. Clifton-Brown
  To ask the Minister of Agriculture, Fisheries and Food what research his Department evaluated from other EU countries prior to its decision to ban the sale of beef on the bone. [22321]

  Mr. Rooker
  The research into BSE infectivity on which the Spongiform Encephalopathy Advisory Committee based its recent advice on dorsal root ganglia and bone marrow was carried out in the UK. The Committee keeps under review research findings worldwide, but, in the absence of any relevant research results from other countries, this particular advice was based solely on UK research.

  Beef
  Mr. Grogan
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to improve confidence in British beef. [22325]

  Mr. Rooker
  The Government have continued to support various initiatives to help restore and improve consumer confidence in beef. As a result we have seen significant improvements in the level of beef consumption, indicating the return of consumer confidence.
  672
  Mr. Blizzard
  To ask the Minister of Agriculture, Fisheries and Food if he will continue to allow family butchers to remove beef from the bone. [22327]

  Mr. Rooker
  Yes. The Beef Bones Regulations 1997 permit bones to be removed from bone-in-beef in food premises, which include butchers shops.

  Fishing Industry
  Mr. Jenkin
  To ask the Minister of Agriculture, Fisheries and Food how many(a) Spanish and (b) Dutch fishermen fishing against the UK quota have had their licences removed since 1 May. [22329]

  Mr. Morley
  No owners of UK registered fishing vessels have had their licences removed since 1 May.

  Mrs. Humble
  To ask the Minister of Agriculture, Fisheries and Food when he last met the National Federation of Fishermen's Organisations. [22330]

  Mr. Morley
  I last met representatives of the National Federation of Fishermen's Organisations on 19 December 1997.

  Mrs. Ewing
  To ask the Minister of Agriculture, Fisheries and Food what relationship his Department envisages witht he Scottish Executive in negotiations on the common fisheries policy. [22302]

  Mr. Morley
  Scottish Executive Minsters and officials will be fully involved, as part of the UK team headed by this Department, in formulating and supporting the UK's negotiating line on Common Fisheries Policy matters.

  Overseas Visits
  Mr. Wilshire
  To ask the Minister of Agriculture, Fisheries and Food if he will list all overseas visits made since 1 May 1997 on which he or any other Minister in his Department has been accompanied under Rule 83 of the Ministerial Code, indicating(a) who accompanied him (b) the cost to public funds of each such visit. [23263]

  Dr. John Cunningham
  [holding answer 15 January 1998]: I can confirm that under Rule 83 of the Ministerial Code, Mrs. Cunningham accompanied me on two official overseas visits, the details of which are given. Her costs, in respect of the visit to Rome, have not been met from public funds.

  Date

  Location

  Meeting

  £

  25 May 1997-27 May 1997

  Netherlands

  May Informal Agriculture Council of EU Ministers

  12,288.00

  10 October 1997-12 October 1997

  Rome

  Bilateral with Italian Agriculture Minister

  1,062.00

  1 £457.60 for Mrs. Cunningham.

  Countryside Stewardship Scheme
  Mr. Lepper
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the number and location of Countryside Stewardship Scheme
  673
  public access sites in (a) the Brighton, Pavilion constituency and (b) East and West Sussex; what steps have been taken to inform the public of access to Countryside Stewardship Scheme access sites; and what sums his Department has (i) spent to date and (ii) contracted to spend in respect of payments for public access to these sites. [23936]

  Mr. Morley
  There are no Countryside Stewardship Scheme public access sites in the Brighton, Pavilion constituency.

  There are 25 public access sites in East Sussex and 16 in West Sussex. Their locations are as follows:

  East Sussex

  1. Hole Farm, nr Herstmonceux

  2. Forge Farms, nr Burwash Weald

  3. Rocks Farm, nr Brede

  4. Hempstead Farm, nr Hailsham

  5. France Bottom, nr Alfriston, Willingdon levels, Folkington Hill

  6. Hewenstreet Circuit, nr South Chailey

  7. Wagmary Wood, nr Brede Broad Oak

  8. Great Danegate Farm, nr Rotherfield

  9. Pebsham Farm, nr Bexhill

  10. Court Lodge Farm, nr Wartling

  11. Lewes Brooks, nr Lewes

  12. Highfields Circuit, nr Mayfield

  13 Barelands, nr Wadhurst

  14. Brightling Park, nr Brightling

  15. Chilly Brooks, nr Lewes

  16. Scrag Oak Farm, Nr Icklesham

  17. Eridge Old Park, nr Frant

  18. Foxhunt Park Farm, nr East Hoathly

  19. Sunninglye Farm, nr Bells Yew Green

  20. Ouse Banks, nr Uckfield

  21. Pippins Farm, Pembury

  22. Little Buds, Hastings

  23. Lunsfold Farm, Hastings

  24. Northease Farm, nr Lewes

  25. Hale Court, Hartfield.

  West Sussex

  1. Wiggonholt Common, nr Wiggonholt

  2. Kings. Barn Farm/Foxhall Farm, nr Steyning

  3. Daylands Farm, nr Ashington

  4. Pulborough Brooks, nr Pulborough

  5. Quell Farm, nr Coldwaltham

  6. Glebe Farm, nr Coldwaltham

  7. Stonehill, nr East Grinstead

  8. Church Farm South, nr Shipley Meadows

  9. Chanctonbury Ring, Findon Park Farm, nr Washington

  10. Sutton Common Lords Piece, nr Petworth

  11. West Grinstead Downs Link, nr Cowfold

  12. Frylands Farm, nr Wineham

  13. Lower Fittleworth Meadows, nr Fittleworth

  14. Apuldram Manor Farm, nr Chichester

  15. Imberhorne Farm, nr East Grinstead.

  The list includes sites on which grant is already being paid and new sites entered into the scheme in 1997 on which grant has yet to be paid.
  674
  The sums spent on these sites to date is:

  East Sussex: £76,827

  West Sussex: £82,163.

  The sums contracted to be spent are:

  East Sussex: £217,840

  West Sussex: £198,687.

  The figures for contracted expenditure include the total ten-year cost for each access agreement, i.e. the sums spent to date plus the value of payments scheduled for payment during the remaining years of the agreements.

  The Department informs the public of access to Countryside Stewardship scheme access sites by actively promoting the location of the site, how to find it and features of interest. The details, which include a map of the site, are published annually in the Department's Conservation Walks register. This is sent to all interested national organisations such as the Rambler's Association and local Tourist Information offices, Councils and Libraries. It is also available on the Internet. Registers, which are available on a county basis, are regularly updated and copies can be requested from the Department's offices. Details of sites have also been included in several local authority and other publications and the register has been publicised through the "Country Walking" magazine.

  Offshore Dredging
  Mr. Blizzard
  To ask the Minister of Agriculture, Fisheries and Food what research his Department has evaluated regarding the effect of offshore dredging for aggregates on sea defences and coastal erosion. [23699]

  Mr. Morley
  Licences for the extraction of marine aggregates are granted by the Crown Estate only if there has been a favourable response under the Government View Procedure, co-ordinated by the Department of the Environment, Transport and the Regions. In contributing to the Government View, this Department takes account of studies undertaken by independent experts for each licence application to assess the potential impact on the coastline.

  Farming (New Entrants)
  Mrs. Ballard
  To ask the Minister of Agriculture, Fisheries and Food what plans he has for 1998–99 to provide financial support to new entrants into farming; and on what criteria such support will be based. [24361]

  Mr. Morley
  For many, the most appropriate way to enter the industry is through employment. Training is important. We are providing over £3 million in the next three years through the Department's contract with ATB-Landbase and through Sector Challenge to facilitate training as well as a grant to the National Federation of Young Farmers Clubs to support education and training activities. Newcomers to sheep and suckler cow farming may also apply to the National Reserve for free premium quota, subject to availability.

  Whales
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food what is his policy in respect of the applications by indigenous populations to recommend whaling. [23404]

  Mr. Morley
  [holding answer 19 Janaury 1998]: The Government recognise the need to preserve the way of life and culture of indigenous peoples, and within the IWC has supported the granting of aboriginal subsistence quotas where these were justified by the needs of the indigenous people concerned and are fully sustainable. We consider it unlikely, however, that indigenous people who are not currently whaling will be able to demonstrate a valid need.

  Agriculture Council
  Ms Lawrence
  To ask the Minister of Agriculture, Fisheries and Food what was the outcome of the Agriculture Council held in Brussels on 19 and 20 January; and if he will make a statement. [24853]

  Dr. John Cunningham
  I chaired the first meeting of the European Union Council of Agriculture Ministers under the United Kingdom Presidency of the EU on 20 January in Brussels. My noble Friend, Lord Donoughue, Parliamentary Secretary responsible for the farming and food industry, represented the United Kingdom. My noble Friend, Lord Dubs, Under-Secretary of State in the Northern Ireland Office, was also present.

  I informed EU Ministers of the United Kingdom's priorities in the Agriculture Council for the six months of the UK Presidency, emphasising in particular the priority we shall attach to starting negotiations on the CAP reform elements of Agenda 2000, on making progress on animal welfare proposals, on bringing the EU banana regime into line with the recent WTO ruling, whilst respecting the EU' s obligations to ACP and EU producers, and completing the forthcoming CAP price fixing.

  In the course of the Council, the Commissioner gave a presentation of his recent proposal to amend the EU banana regime, and Ministers gave their initial reactions to this. I undertook to take forward the technical work on this proposal as rapidly as possible in order to facilitate early agreement in the Council in the interests of all those, in particular producers in the ACP countries, who are affected by the WTO ruling.

  I invited colleagues to give their views on the Commission's recent reports on the operation of the agri-environmental and forestry regulations introduced as part of the 1992 CAP reforms. This gave rise to a useful debate which will inform the Commission's preparations for the agri-environmental and rural development elements of the forthcoming Agenda 2000 proposals.

  The Agriculture Commissioner gave a brief report to the Council on the recent ruling by the WTO Appellate Body on hormones in beef. The Council will hear further reports from the Commission on the handling of this ruling once there has been time to analyse its implications in greater detail. The Commissioner also reported in depth his recent exchanges with the United States Agriculture
  676
  Secretary about issues in discussion between the EU and the US concerning the adoption of a veterinary equivalence agreement. Commissioner Fischler emphasised the constructive and positive nature of recent exchanges, and expressed the hope that an agreement could be concluded in the near future. I emphasised my wish to see this achieved as soon as possible during the UK Presidency.

  Countryside Access Legislation
  Mr. Blunt
  To ask the Minister of Agriculture, Fisheries and Food what consultation there will be with the farming community in discussions preceding any countryside access legislation. [22307]

  Mr. Morley
  The Government have already had preliminary discussions with a number of organisations including those representing the farming community. It will hold further meetings and will consider carefully all points made in response to the consultation document which will be issued shortly.

SCOTLAND

  Health Service Trusts (Appointments)
  Mr. Godman
  To ask the Secretary of State for Scotland if he will list the names of the persons he has appointed to the posts of chairmen/women and non-executive directors of National Health Service trusts; and if he will make a statement. [19712]

  Mr. Galbraith
  [holding answer 10 December 1997]: The information requested has been placed in the Library and lists all appointments to Health Boards and NHS Trusts since 1 May 1997. In making these appointments, I have ensured that the voice of Scotland's local communities will be heard in the boardroom of these health bodies.

  Dental Services
  Mr. Wallace
  To ask the Secretary of State for Scotland how many dentists were engaged in NHS practice on(a) 31 October 1992 and (b) 31 October 1997, in each health board area in Scotland. [18703]

  Mr. Galbraith
  [holding answer 8 December 1997]: The information requested is contained in the table:

  Number of principal dentists offering NHS general dental services in Scotland1

  Health Board2

  September 19923

  October 1997

  Ayrshire and Arran

  121

  128

  Borders

  34

  35

  Argyll and Clyde

  160

  166

  Fife

  100

  124

  Greater Glasgow

  348

  356

  Highland

  68

  80

  Lanarkshire

  145

  165

  Grampian

  144

  159

  Orkney

  4

  4

  Lothian

  282

  311

  Tayside

  142

  141

  Forth Valley

  83

  82

  677

  Number of principal dentists offering NHS general dental services in Scotland1

  Health Board2

  September 19923

  October 1997

  Western Isles

  12

  13

  Dumfries and Galloway

  36

  38

  Shetland

  7

  7

  Scotland

  1,686

  1,809

  1 Includes principal dentists only—excludes vocational trainees and assistants.

  2 A dentist is counted in only one Health Board even if he/she practises in more than one Health Board area.

  3 Figures for October 1992 are not available from the Common Services Agency's Dental Practice Division. The nearest available date is September 1992.

  Human Identification Centre
  Mr. Cohen
  To ask the Secretary of State for Scotland what assessment he has made of the facial reconstruction techniques carried out by the Human Identification Centre at Glasgow University; and if he will make a statement on their application. [20251]

  Mr. McLeish
  The Scottish Office is aware of the work in this field being carried out at the University of Glasgow. The work, which is not yet complete, has the potential to benefit a wide range of disciplines, including plastic surgery and the modelling of facial characteristics based on skulls with no other form of identification.

  Locate in Scotland
  Mr. Ancram
  To ask the Secretary of State for Scotland if he will make a statement about the resources available to Locate in Scotland. [22033]

  Mr. Wilson
  Locate in Scotland's total budget for the current financial year is £8.8 million. This covers staff costs, operations and marketing.

  Welfare to Work
  Mr. Gorrie
  To ask the Secretary of State for Scotland what estimate he has made of the number of places likely to be offered and the number of likely applicants for places in the New Deal and welfare to work programmes in each area within Scotland. [22253]

  Mr. Wilson
  Current estimates suggest that in 1998–99 in Scotland around 30,200 young people who have been claiming Jobseeker's Allowance for six months or more will enter the Gateway stage of the programme. Of these around 40 per cent. are expected to find un-subsidised jobs and the remainder will take up one of the programme's four options. The table provides a breakdown into each of the 23 New Deal delivery areas in Scotland.

  Planning for the New Deal for people aged 25 or over who have been unemployed for two years continues. The information required is not yet available.
  678

  Estimate for 1998–99 of 18–24 year olds who have been claiming jobseekers allowance for six months or more

  New Deal delivery area

  Claiming JSA for six months or more

  Numbers entering gateway stage

  Numbers moving to one of the four New Deal options

  Argyll and the Islands

  300

  300

  180

  Ayrshire

  2,660

  2,660

  1,596

  Borders

  290

  290

  174

  Caithness and Sutherland

  190

  190

  114

  Dumfries and Galloway

  760

  760

  456

  Dunbartonshire

  1,430

  1,430

  858

  Edinburgh, East and Midlothian

  2,860

  2,860

  1,716

  Fife

  2,180

  2,180

  1,308

  Forth Valley

  1,730

  1,730

  1,038

  Glasgow

  5,870

  5,870

  3,522

  Grampian

  1,240

  1,240

  744

  Inverness and Nairn

  420

  420

  252

  Lanarkshire

  4,200

  4.200

  2,520

  Lochaber

  90

  90

  54

  Moray, Badenoch and Strathspey

  370

  370

  222

  Orkney

  60

  60

  36

  Renfrewshire

  1,830

  1,830

  1,098

  Ross and Cromarty

  300

  300

  180

  Shetland

  60

  60

  36

  Skye and Lochalsh

  60

  60

  36

  Tayside

  2,431

  2,431

  1,459

  West Lothian

  730

  730

  438

  Western Isles

  150

  150

  90

  Total

  30,211

  30,211

  18,127

  Economic Policies
  Mr. Sarwar
  To ask the Secretary of State for Scotland if he will make a statement on the Government's economic policies for Scotland. [22748]

  Mr. Wilson
  The Government's central economic objective is to achieve high and stable levels of economic growth and employment so that higher living standards and greater job opportunities can be shared by all. The conduct of UK macroeconomic policy is based on creating economic stability, with low inflation and low public borrowing, and improving the environment for long-term investment in technology and in education and training.

  The specific requirements of the Scottish economy are being addressed by The Scottish Office in conjunction with Scottish Enterprise, Highlands and Islands Enterprise, the Local Enterprise Companies and the other economic development agencies. By raising skill levels and increasing investment, we will work towards the goal of improving living standards across the country.

  Unemployment
  Mr. Sarwar
  To ask the Secretary of State for Scotland if he will make a statement on the trends in respect of long-term unemployment in Scotland. [22749]

  Mr. Wilson
  The Office for National Statistics (ONS) produces two measures of unemployment. The first is derived from the quarterly Labour Force Survey, and is defined on a consistent and internationally recognized
  679
  basis set out by the International Labour Organisation (ILO) and counts as unemployed people who are:
  (a) without a paid job; (b) available to start work within the next two weeks and (c) have either looked for work in the last four weeks or are waiting to start a job already obtained.

  ONS also publishes figures on the number of people who are claiming Jobseeker's Allowance or National Insurance Credits. This is published monthly and known as the Claimant Count.

  Defining long term unemployment as those who have been unemployed for 12 months or more, the data requested are shown in the table.

  Number of people in Scotland ILO unemployed for 12 months or more

  Summer 1992 to Summer 1997 (not seasonally adjusted)

  Number

  Summer 1992

  96,000

  Summer 1993

  102,000

  Summer 1994

  92,000

  Summer 1995

  92,000

  Summer 1996

  75,000

  Summer 1997

  70,000

  Source:

  Office for National Statistics, Labour Force Survey.

  Poor People
  Mr. Pond
  To ask the Secretary of State for Scotland if he will carry out an assessment of the impact of his Department's current policies on the(a) income, (b) employment opportunities and (c) living standards, of the poorest 30 per cent. of the population. [23340]

  Mr. Wilson
  The Scottish Office recognises the need to assess the impact of its policies on all groups in the community.

  A key factor in improving the income and living standards of the poorest 30 per cent. of the population will be the creation of better employment opportunities. The New Deal programmes for the young and long-term unemployed, for lone parents and for those with a disability or long-term illness are designed to help participants into real, lasting and worthwhile employment.

  We shall shortly be issuing a consultation paper on social exclusion in Scotland to take views on current policies and practices and on options and priorities for the future. This consultation process will be followed by a "summit" to discuss the way forward. We have also established a "Social Exclusion Network" of senior officials to co-ordinate the efforts of Government departments and Agencies in Scotland.

  Ministerial Visits
  Mr. Wilshire
  To ask the Secretary of State for Scotland if he will list all overseas visits made since 1 May 1997 on which he or any other Minister in his Department has been accompanied under Rule 83 of the Ministerial Code, indicating(a) who accompanied him or her (b) the cost to public funds of each such visit. [23250]

  Mr. Dewar
  [holding answer 15 January 1998]: None.

  Urban Transport
  Mr. Dalyell
  To ask the Secretary of State for Scotland, pursuant to his statement of 12 January 1998,Official Report, column 22, if he will list (a) the legislative requirements and (b) the financial resources needed to meet the integration needs of Scotland's urban transport system. [23309]

  Mr. McLeish
  [holding answer 16 January 1998]: My right hon. Friend is to publish in the spring a Transport White Paper setting out our proposals for an integrated, sustainable and effective transport system appropriate for the people of Scotland. The legislative requirements and the financial resources needed will depend upon the policies to be pursued.

  Broadcasting
  Mr. Dalyell
  To ask the Secretary of State for Scotland, pursuant to his statement on 12 January 1998,Official Report, column 63, when he will make a statement on the position of the Scottish Parliament and broadcasting. [23311]

  Mr. McLeish
  [holding answer 16 January 1998]: The Scotland Bill provides for broadcasting to be reserved. The White Paper indicated that the Scottish Parliament will be able to invite broadcasters operating in Scotland to give evidence to it. The provisions in the Bill are consistent with that. There will be opportunities to debate broadcasting in the Committee and subsequent stages of the Bill.

  Devolution
  Mr. Dalyell
  To ask the Secretary of State for Scotland on what basis the Minister of State asserted in his oral statement on 13 January 1998,Official Report, column 157, that asymmetric devolution should improve the government of the United Kingdom. [23532]

  Mr. McLeish
  [holding answer 16 January 1998]: My hon. Friend's statement reflects the Government's belief that the government of the United Kingdom will be improved by the decentralisation of power throughout Britain. The Government are committed to a programme of devolution appropriate to the needs and aspirations of each part of the United Kingdom which brings government closer to the people and gives people more control over their own affairs.

  Scottish Parliament
  Mr. Dalyell
  To ask the Secretary of State for Scotland, pursuant to his statement of 12 January 1998,Official Report, column 115, on which devolved matters, arising out of clause 27(7) of the Scotland Bill, the United Kingdom Parliament can legislate after the Scottish Parliament is established. [23304]

  Mr. McLeish
  [holding answer 16 January 1998]: Clause 27(7) of the Scotland Bill makes it clear that the ability of the Scottish Parliament to make legislation does not affect the power of the Parliament of the United Kingdom to make laws for Scotland. This applies in respect of all matters whether devolved or reserved.

  NHS Primary Care
  Mr. McAllion
  To ask the Secretary of State for Scotland what sums were spent on NHS primary care services in Scotland in (i) 1994–95, (ii) 1995–96 and (iii) 1996–97, broken down by(a) pharmaceutical

  FHS Expenditure

  1994–95

  1995–96

  1996–97

  £000

  Percentage of total

  £000

  Percentage of total

  £000

  Percentage of total

  Pharm Services

  469,294

  50.60

  510,501

  51.70

  550,559

  52.35

  General Medical Services

  286,249

  30.86

  303,145

  30.7

  19,959

  30.42

  Gen Dental Services

  146,618

  15.81

  147,025

  14.89

  152,664

  14.52

  Gen Ophthalmic Services

  25,048

  2.70

  26,108

  2.64

  28,186

  2.68

  Mise (refund of patient charges not due)

  214

  0.02

  666

  0.07

  285

  0.03

  Total

  927,423

  987,445

  1,051,653

  Mr. McAllion
  To ask the Secretary of State for Scotland what sums have been allocated to the NHS primary care service in Scotland in 1997–98, and the total broken down into(a) pharmaceutical services, (b) general medical services, (c) general ophthalmic services and (d) general dental services; and what percentage of the total each of these represents. [23841]

  Mr. Galbraith
  The information requested is set out in the table:

  FHS 1997–98

  £(000)

  Percentage

  Pharmaceutical Services

  599,481

  53.16

  General Medical Services

  336,372

  29.83

  General Dental Services

  162,192

  14.38

  General Ophthalmic Services

  29,288

  2.60

  Misc. (refund of patient charges not due)

  282

  0.03

  Total

  1,127,615

  Mr. McAllion
  To ask the Secretary of State for Scotland if he will list the sums paid for drugs, medicines, dressings and appliances prescribed and dispensed by dispensing doctors in Scotland under the NHS primary care service in(a) 1994–95, (b) 1995–96 and (c) 1996–97, and the allocation for 1997–98, and the budget from which these sums were drawn. [23826]

  Mr. Galbraith
  The amounts reimbursed to dispensing doctors in respect of items dispensed in the financial years 1994–95 to 1996–97 are set out in the table.

  No specific allocation has been made for the reimbursement of dispensing doctors in 1997–98.

  The budget from which reimbursement is made is on Class XIII, Vote 4 Hospital, Community Health, Family Health, and other health services and Welfare Food, Scotland.

  Dispensing doctors payments

  1994–95 £

  1995–96 £

  1996–97 £

  Net ingredient cost

  12,879,981

  13,421,024

  14,780,332

  VAT

  2,266,539

  2,361,167

  2,599,494

  Totals

  15,146,520

  15,782,191

  17,379,826

  682
  services, (b) general medical services, (c) general ophthalmic services and (d) general dental services; and what percentage of the total each represented in each of the above years. [23842]

  Mr. Galbraith
  The information requested is set out in the table:

  Mr. McAllion
  To ask the Secretary of State for Scotland what proportion of the Scottish NHS primary care pharmaceutical budget was allocated to the remuneration of pharmacy contractors in(a) 1994–95, (b) 1995–96 and (c) 1996–97; how this proportion is determined, and what proportion of the sums allocated to the Scottish NHS primary care pharmaceutical budget for 1997–98 has been made available for this purpose. [23840]

  Mr. Galbraith
  The proportion of the Scottish NHS primary care pharmaceutical budget allocated to the remuneration of pharmacy contractors in 1994–95, 1995–96 and 1996–97 and 1997–98 is set out in the table.

  Remuneration of community pharmacists is not determined as a proportion of the budget but is determined in negotiation with the profession within the parameters of the Government's policy in relation to public sector pay.

  The amount allocated for the remuneration of pharmacy contractors in 1997–98 reflects the introduction of local contracts for certain pharmaceutical services. £3.82 million was top sliced from the amount allocated for remuneration and distributed to health boards to pay for locally contracted services.

  Remuneration of pharmacy contractors as a proportion of the NHS in Scotland primary care pharmaceutical budget

  1994–95 percentage

  1995–96 percentage

  1996–97 percentage

  1997–98 percentage

  14.94

  14.08

  13.46

  12.12

  Mr. McAllion
  To ask the Secretary of State for Scotland if he will list the fees and allowances paid to dispensing doctors in Scotland under the NHS primary care service in (i) 1994–95, (ii) 1995–96 and (iii) 1996–97 and the allocation for 1997–98; from which budget these sums were drawn; and for what reason.
  [23839]

  Mr. Galbraith
  The information for Scotland for the financial years 1994–95 to 1996–97 is shown in the table.

  No specific allocation has been made for dispensing doctors' remuneration in 1997–98.
  683
  The budget from which these sums were voted is on Class XIII, Vote 4 Hospital, Community Health, Family Health, and other health services and Welfare Food, Scotland.

  Dispensing doctors payments

  1994–95 £

  1995–96 £

  1996–97 £

  Fees and Allowance

  3,208,762

  3,251,736

  3,450,439

  Agricultural Subsidies
  Mr. Paice
  To ask the Secretary of State for Scotland if he will give the levels of payment per hectare for(a) cereals, (b) set-aside and (c) oilseeds in Scotland for each of the last five years at cash prices and at 1997 prices. [23482]

  Mr. Macdonald
  [holding answer 16 January 1998]: The information is set out in the table.

  LFA

  Non-LFA

  Cash £/Hectare

  1997 Prices £/Hectare

  Cash £/Hectare

  1997 Prices £/Hectare

  1993

  Cereals

  114.07

  129.51

  131.39

  149.16

  Set-Aside

  205.33

  233.11

  236.50

  268.50

  Oilseeds

  368.85

  418.75

  445.67

  505.96

  1994

  Cereals

  156.98

  171.70

  180.52

  197.45

  Set-aside

  255.65

  279.63

  293.99

  321.56

  Oilseeds

  337.50

  369.16

  407.11

  445.30

  1995

  Cereals

  238.09

  251.91

  254.41

  269.18

  Set-aside

  301.58

  319.08

  322.25

  340.96

  Oilseeds

  421.17

  446.19

  502.34

  531.50

  1996

  Cereals

  236.06

  244.07

  246.08

  254.42

  Set-aside

  299.01

  309.14

  311.70

  322.27

  Oilseeds

  413.23

  427.24

  480.83

  497.13

  Note:

  Please note that all payment rates have been given to two decimal places.

  Hill liverstock compensatory allowance scheme

  Rates

  Cash price 1993 £

  1997 price 1993 £

  Cash price 1994 £

  1997 price 1994 £

  Cash price 1995 £

  1997 price 1995 £

  Cash price 1996 £

  1997 price 1996 £

  Cash price 1997 £

  1997 price 1997 £

  SD: Non-HIE

  SQF

  6.50

  7.28

  5.75

  6.28

  5,75

  6.07

  5.75

  5.93

  5.75

  5.75

  QF

  3.60

  4.03

  3.00

  3.28

  3.00

  3.17

  3.00

  3.09

  3.00

  3.00

  Hill cows

  63.30

  70.86

  47.50

  51.92

  47.50

  50.18

  47.50

  48.99

  97.50

  97.50

  SD: HIE (Highlands and Islands)

  SQF

  7.14

  7.99

  6.39

  6.98

  6.39

  6.75

  6.39

  6.59

  6.39

  6.39

  QF

  3.60

  4.03

  3.00

  3.28

  3.00

  3.17

  3.00

  3.09

  3.00

  3.00

  'A' Cows

  66.35

  74.27

  50.55

  55.25

  50.55

  53.40

  50.55

  52.14

  103.76

  103.76

  B' Cows

  74.89

  83.83

  59.09

  64.58

  59.09

  62.42

  59.09

  60.95

  121.29

  121.29

  'C' Cows

  79.16

  88.61

  63.36

  69.25

  63.36

  66.93

  63.66

  65.35

  121.49

  121.49

  684
  Mr. Paice
  To ask the Secretary of State for Scotland if he will give the levels of(a) suckler cow, (b) ewe premium and (c) HLCA payments for beef and sheep per animal at cash prices and at 1997 prices for each of the last five years and his proposals for 1998–99. [23483]

  Mr. Macdonald
  [holding answer 16 January 1998]: Set out below are the levels of payment per animal under the three schemes, at cash prices and at 1997 prices, except for proposed rates for 1998–99 which are not yet known. Rates for the Sheep Annual and Suckler Cow Premium Schemes are fixed by the Commission. The 1998 rates of Hill Livestock Compensatory Allowance have yet to be finalised and approved by the Commission following the 1997 Autumn Review of Economic Conditions in the Hills and Uplands.

  Sheep annual premium scheme (ewe premium)

  Rate including LFA Supplement £

  Rate excluding LFA Supplement £

  Cash price

  1997 price

  Cash price

  1997 price

  1993

  24.41

  27.32

  19.25

  21.55

  1994

  22.21

  24.08

  16.96

  18.54

  1995

  26.95

  28.47

  21.26

  22.46

  1996

  19.04

  19.64

  13.66

  14.09

  1997

  Rate not yet finalised

  Suckler cow premium scheme

  Rate including extensification premium £

  Rate excluding extensification premium £

  Cash price

  1997 Price

  Cash price

  1997 Price

  1993

  93.90

  105.12

  65.73

  73.58

  1994

  115.12

  125.83

  87.49

  95.63

  1995

  143.04

  151.10

  114.43

  120.88

  1996

  155.15

  160.03

  124.12

  128.02

  1997

  —

  —

  117.36

  117.36

  Cash price

  1997 price

  Rate including lower rate extensification premium £

  1997 total

  146.52

  146.52

  Rate including higher rate extensification premium £

  1997 total

  159.48

  159.48

  685

  Hill livestock compensatory allowance scheme

  Rates

  Cash price 1993 £

  1997 price 1993 £

  Cash price 1994 £

  1997 price 1994 £

  Cash price 1995 £

  1997 price 1995 £

  Cash price 1996 £

  1997 price 1996 £

  Cash price 1997 £

  1997 price 1997 £

  Disadvantaged land

  Sheep

  2.86

  3.20

  2.44

  2.67

  2.44

  2.58

  2.65

  2.73

  2.65

  2.65

  Cattle

  31.65

  35.43

  23.75

  25.96

  23.75

  25.09

  23.75

  24.50

  69.75

  69.75

  Key:

  LFA—Less favoured area

  SD—Severely disadvantaged land

  HIE—Highlands and Islands Enterprise

  SQF—Specially qualified flock

  QF—Qualified Flock

  `A'—Cows-Hill Cattle maintained on 'A' graded land

  'B'—'Cows-Hill Cattle maintained on 'B' graded land

  'C'—'Cows-Hill Cattle maintained on 'C' graded land.

  Paedophiles
  Mr. Dalyell
  To ask the Secretary of State for Scotland if he will make a statement on his proposals to set up a mechanism to track paedophiles throughout the United Kingdom. [23738]

  Mr. McLeish
  [holding answer 19 January 1998]: The Sex Offenders Act 1997, which came into force on 1 September 1997, requires certain convicted sex offenders, including those who have been convicted for sexual offences against children, to register with the police their name, current address and date of birth, and any subsequent changes to these details. This is a UK Act, which will help the police in each territorial jurisdiction to keep track of such offenders even when they move between jurisdictions.

  Section 48 of the Crime and Punishment (Scotland) Act 1997, which was brought into force in November 1997, extended police powers to take DNA and other samples from persons convicted of certain serious sexual or violent offences. This will significantly enhance the national DNA database, which is a vital tool in the investigation of such crimes.

  The Sex Offender Orders, proposed in the Crime and Disorder Bill currently before Parliament, will provide a further measure of protection for the public by prohibiting behaviour by convicted sex offenders where that is causing concern for public safety, and obliging them to register with the police.

  I know that the police in Scotland are fully committed to their operational role in monitoring the whereabouts of known sex offenders and given that the Sex Offenders Act is a UK measure there is full co-operation between Forces across the UK.

  Rights of the Child
  Mr. Gorrie
  To ask the Secretary of State for Scotland if the Scottish Office will respond separately to the UN Committee Report on the United Kingdom's performance in implementing the UN Convention on the Rights of The Child. [24343]

  Mr. Galbraith
  No. The obligation to report to the UN Committee applies to the UK as a whole. The forthcoming Report to the Committee will therefore be a UK Report, although it will fully recognise the significant contribution Scotland is making in implementing the Convention.
  686
  Mr. Gorrie
  To ask the Secretary of State for Scotland what plans he has to appoint a children's rights commissioner in Scotland. [24345]

  Mr. Galbraith
  The Government have no plans to appoint a children's rights commissioner in Scotland. There are already in place independent complaints procedures and inspection arrangements for services provided by local authorities. Voluntary organisations such as ChildLine and the Scottish Child Law Centre, which are both supported with Government grant, also play an important part. However in the process of preparing the Second UK Report to the United Nations Committee on the Rights of the Child this year, an assessment may be made of the potential contribution such an appointment might bring to safeguard the interests of children.

  Mr. Gorrie
  To ask the Secretary of State for Scotland what plans he has to involve young people in Scotland in the process of preparing the Government's response to the report on the United Kingdom's performance in implementing the UN Convention on the Rights of the Child. [24342]

  Mr. Galbraith
  During 1998 the Government will be preparing the Second United Kingdom Report to the United Nations Committee on the Rights of the Child in accordance with the requirements of Article 44 of the Convention on the Rights of the Child, 1989. Early in that process there will be a UK wide Launch Conference at which children will be making a presentation. We are currently considering the means by which the views of Scottish young people can best be reflected in the Scottish contribution to the Report.

  Forestry Stewardship Certification Scheme
  Mr. Paice
  To ask the Secretary of State for Scotland when he expects Forest Enterprise to commit itself to the Forestry Stewardship Certification Scheme. [24311]

  Mr. Macdonald
  [holding answer 20 January 1998]: The subject of the question relates to matters undertaken by Forest Enterprise. I have asked its Chief Executive, Dr. Bob McIntosh, to arrange for a reply to be given.

  Letter from Bob McIntosh to Mr. James Paice, dated 22 January 1998:
  The Secretary of State for Scotland has asked me to reply to your Question about when it is expected that Forest Enterprise will commit itself to the Forestry Stewardship Certification Scheme.

  687
  Forest Enterprise has no current plans to seek certification by the Forestry Stewardship Council. The wider issue of certification of British forests is being actively debated within the UK forestry community and the Forestry Stewardship Council is a party to these discussions. It is hoped that a scheme which satisfies all parties can be brokered by the Forestry Commission and at that stage Forest Enterprise will decide whether, in addition to independent certification, it sees market advantages in seeking endorsement by the Forestry Stewardship Council or indeed any other similar body.
  I hope this answers your question, but please come back to me if you would like further information.

  Unpasteurised Milk
  Mr. Connarty
  To ask the Secretary of State for Scotland what proposals he has to lift the ban on the sale of raw unpasteurised milk for drinking in Scotland. [24737]

  Mr. Galbraith
  None.

  Mr. Connarty
  To ask the Secretary of State for Scotland if he will make a statement on the practice of consumers in Scotland purchasing raw unpasteurised milk for drinking which originated from outlets in England. [24738]

  Mr. Galbraith
  The Dairy Products (Hygiene) (Scotland) Regulations 1995 prohibit the sale in Scotland of unpasteurised cows' milk for drinking. They do not prevent consumers purchasing, for their own use, raw cows' drinking milk in England and returning with it to Scotland.

EDUCATION AND EMPLOYMENT

  National Curriculum (Swimming)
  Valerie Davey
  To ask the Secretary of State for Education and Employment what effect the proposed revision of the curriculum structure for Key Stage II, in respect of literacy and numeracy, will have on the swimming requirement. [24390]

  Ms Estelle Morris
  The measures announced by my right hon. Friend on 13 January were designed to encourage a sharper focus on literacy and numeracy and will give primary schools greaterflexibility in how they approach six National Curriculum foundation subjects including physical education. Schools will continue to be required to teach all these subjects, and will be required to have regard to their existing programmes of study.

  Valerie Davey
  To ask the Secretary of State for Education and Employment what percentage of children in 1996–97, achieved the minimum swimming requirement of the national curriculum at Key Stage II, and on what basis the calculation was made. [24389]

  Ms Estelle Morris
  This information is not currently collected by the Department.

  School Population
  Mr. Dorrell
  To ask the Secretary of State for Education and Employment by how much he expects the school population to increase in the summer of 1998 as a result of the introduction of a single school leaving date of 30 June. [24299]
  688
  Ms Estelle Morris
  [holding answer 20 January 1998]: The single school leaving date for 1998 and successive years is the last Friday in June in the school year in which child reaches age 16. In 1998 the date will be Friday 26 June. It has been estimated that under the previous arrangements as many as 17,000 young people, many of them capable of securing good GCSE results, had been leaving school earlier in the year with no qualifications.

  Education Spending (Northumberland)
  Mr. Ronnie Campbell
  To ask the Secretary of State for Education and Employment how much was spent in total on education in Northumberland at constant prices in each of the last 10 years. [23994]

  Mr. Byers
  The following table shows total gross expenditure by Northumberland local education authority from 1987–88 to 1996–97, the latest year for which figures are available. These figures have not been adjusted for any changes of function.

  Total gross expenditure: (1997–98 prices)

  Year

  £000s

  1987–88

  143,673

  1988–89

  147,984

  1989–90

  149,737

  1990–91

  155,365

  1991–92

  163,844

  1992–93

  167,115

  1993–94

  151,660

  1994–95

  142,108

  1995–96

  136,734

  1996–97

  1138,392

  1 Provisional.

  Nursery Education
  Mr. Ronnie Campbell
  To ask the Secretary of State for Education and Employment what is the current average cost of providing a full-time nursery place in Northumberland Education Authority. [24017]

  Mr. Byers
  In 1996–97, the latest year for which data are available, the net institutional expenditure per nursery pupil was £2,000.

  Education Expenditure
  Shona McIsaac
  To ask the Secretary of State for Education and Employment if he will list the amount spent per pupil in each unitary authority in England for 1996–97 and the projected investment per pupil for the year, indicating the percentage change between the figures. [24060]

  Mr. Byers
  The following table gives the information requested for those unitary authorities formed as a result of Local Government Reorganisation. The figures are derived from the budget and outturn statements produced by the local education authorities under section 122 of the 1996 Education Act, for the financial year 1996–97.

  £per pupil

  Budget GSB

  Outturn GSB

  Percentage change

  Bath and North-east

  Somerset

  2,498

  2,542

  0.02

  Bristol

  2,637

  1n/r

  —

  689

  £ per pupil

  Budget GSB

  Outturn GSB

  Percentage change

  North Somerset

  2,442

  2,525

  0.03

  South Gloucestershire

  2,517

  2,466

  -0.02

  Hartlepool

  2,197

  2,063

  -0.06

  Middlesbrough

  2,635

  2,675

  0.02

  Redcar and Cleveland

  2,274

  2,259

  -0.01

  Stockton on Tees

  2,273

  2,247

  -0.01

  Hull

  2,241

  2,211

  -0.01

  East Riding

  2,396

  2,417

  0.01

  North-east Lincolnshire

  2,328

  2,325

  0.00

  North Lincolnshire

  2,413

  2,444

  0.01

  North Yorkshire

  2,307

  2,326

  0.01

  York

  2,186

  2,209

  0.01

  Isle of Wight

  2,298

  2,407

  0.05

  1 n/r indicates 1996–97 Outturn Statement not yet completed by the LEA.

  The General Schools Budget (GSB) for any financial year for each LEA is defined as the amount appropriated by the authority for meeting expenditure in the year in respect of all schools required to be covered in the year by an scheme made by the authority (s101(3)a Education Act 1996).

  Class Sizes
  Mr. Gill
  To ask the Secretary of State for Education and Employment what is the average class size in the Ludlow constituency of(a) primary schools and (b) secondary schools. [24429]

  Mr. Byers
  The average class size of classes taught by one teacher in maintained primary and secondary schools in the Ludlow constituency in January 1997 were 26.4 and 20.2 respectively.

  Temporary Classrooms
  Mr. Ronnie Campbell
  To ask the Secretary of State for Education and Employment how many temporary classrooms are at present located on(a) nursery, (b) primary and (c) secondary school sites in Northumberland Education Authority's area. [23988]

  Mr. Byers
  Figures supplied by Northumberland Education Authority indicate that they have 5 nursery units in temporary classrooms on primary school sites, 44 single and 9 double other temporary classrooms located on primary school sites and 36 single and

  Northumberland

  Administration expenditure

  Pupil numbers

  Lecturers and teachers

  Others

  Year

  £000s

  Non-manual full-time

  Non-manual part-time

  Non-manual full-time

  Non-manual part-time

  Manual full-time

  Manual part-time

  1994–95

  6,505

  44,153

  2,365

  936

  649

  2,166

  197

  1,955

  1995–96

  5,990

  45,414

  2,600

  888

  811

  1,873

  220

  1,999

  1996–97

  6,070

  45,372

  2,555

  914

  798

  1,134

  278

  2,918

  Rugby
  Mr. MacShane
  To ask the Secretary of State for Education and Employment if he will list by name, nationality and club(a) ruby league and (b) rugby union players who are not British citizens and have permission to work in the United Kingdom. [22730]
  690
  10 double temporary classrooms on secondary school sites. There are also 4 single and 1 double temporary classrooms on sites at special schools.

  Classroom Technicians
  Mr. Sawford
  To ask the Secretary of State for Education and Employment if he will list the numbers of classroom technicians broken down to show those employees in(a) part-time, (b) full-time, (c) permanent part-time and (d) all other categories. [24061]

  Mr. Byers
  The latest available information is shown in the following table.

  These figures supersede those shown in the Answer given on 8 December 1997, Official Report column 432; the figure for special schools is a revised figure.

  Full-time equivalent numbers of technicians1 in schools in England: January 1997

  Full-time

  Part-time

  Total

  Nursery

  n/a

  n/a

  n/a

  Primary

  n/a

  n/a

  n/a

  Middle

  24.2

  148.5

  172.6

  Secondary

  6,488.1

  5,933.0

  12.421.1

  Special2

  85.9

  67.5

  153.4

  Pupil referral units

  n/a

  n/a

  n/a

  City Technology Colleges

  125.0

  18.0

  143.0

  Independent

  n/a

  n/a

  n/a

  n/a = not available.

  1 Includes laboratory assistants/technicians, design technology assistants/technicians (including home economics assistants, craft technicians), IT technicians.

  2 Includes maintained and non-maintained special schools.

  Due to rounding there may be discrepancies between the sum of constituent items and the total shown.

  Northumberland Education Authority
  Mr. Ronnie Campbell
  To ask the Secretary of State for Education and Employment what were the numbers of staff and the administrative costs of the Northumberland Education Authority and the number of school pupils for which the authority was responsible in the last three years for which figures are available. [24018]

  Mr. Byers
  The following table sets out the requested information for the years 1994–95 to 1996–97, the latest year for which all three sets of figures requested are available. Data for different years may not be directly comparable, owing to changes in the pattern of direct service delivery by the LEA.

  Mr. Alan Howarth
  The Department is not able to provide the information in the form requested. Work permits are not required by citizens of the European Economic Area (EEA) or their spouses or by some Commonwealth citizens through their UK ancestry. During 1997 the Overseas Labour Service issued 124 work permits for rugby league players and 32 permits for rugby union players.

  Beef Industry
  Mr. Salmond
  To ask the Secretary of State for Education and Employment what estimate he has made of the impact on rural employment levels of the current crisis in the beef industry. [22596]

  Mr. Andrew Smith
  The Department for Education and Employment has made no estimate but the Ministry of Agriculture, Fisheries and Food has commissioned an independent study to provide a comprehensive assessment of the economic impact of BSE across the whole UK economy and within particular regions. For those whose employment prospects may have been adversely affected, the Department for Education and Employment has a wide variety of programmes to help unemployed people find work or improve employability through education and training.

  Student Loans
  Mr. Willis
  To ask the Secretary of State for Education and Employment what would be the maximum a student studying for a B.Ed honours degree paying full tuition fees on the grounds of parental income could borrow under the student loan scheme; how much of the loan the student would be expected to repay in the first year of a teaching career; and how many years are permitted for the repayment of the whole of the loan. [22866]

  Dr. Howells
  The maximum amount that a student can borrow will depend on the length of the course and the place of study, as well as the student's and his or her parents' or spouse's income. A student completing a four-year course outside London which began in 1999 who took out the full loan available each year might expect to have borrowed a total of between £10,470 and £13,710 in 1998 prices, depending on his or her individual, parental or spouse's income.

  A typical graduate teacher earning £14,463 in the first year of his or her career (in 1998 prices) would be expected to repay about £33.50 per month, slightly less than 3 per cent. of income. The length of the repayment period for the whole of the loan would depend on the individual graduate's income throughout his or her career and on the total amount borrowed. The more the graduate earned, the quicker he or she would repay the loan. We estimate that a typical teacher might take around 11 years to repay.

  Outstanding loans will be cancelled if borrowers have not repaid by the time they reach the age of 65, provided there has been no default.

  Mr. Willis
  To ask the Secretary of State for Education and Employment when the sale of the existing tranche of the Student Loan portfolio will be completed; and what level of subsidy to the private sector has been agreed.
  [22867]

  Dr. Howells
  Final bids from the shortlisted bidders are due on Friday 16 January and the sale will be completed before the end of the financial year. The level of subsidy will depend on the outcome of the competition.

  Tuition Fees
  Mr. Cousins
  To ask the Secretary of State for Education and Employment if he will estimate the distribution of households in each region of England 692
  between the income bands he recommends for the assessment of future tuition fees; and if he will estimate the marginal fee contribution increase rate against household income increase in the income band where a fee contribution short of the total amount is required. [22975]

  Dr. Howells
  On the basis of the most recent information reported by the LEAs for English and Welsh domiciled students attending institutions in the UK we have estimated that just over 30 per cent. of students (where parental income is taken into account) will make no contribution to fees. This corresponds to aresidual family income of less than £16,945. Just under 30 per cent. of students will contribute less than £1,000, corresponding to a residual family income between £16,945 and £27,115.

  Under the present mandatory awards regulations, parental contributions are calculated on the basis of residual income, which is derived by subtracting certain allowances from parents' gross income for income tax purposes. Total household incomes will thus usually be higher than the figures for gross income and residual income quoted above, but the figures will vary from household to household according to their family circumstances.

  The table sets out figures for 1995–96 for each of the regions of England, as requested.

  Mandatory Awards in England1,2 Dependent Students Assessed parental contributions academic year 1995–96

  Per cent.

  Government Office region

  Nil parental contribution

  Parental contribution up to £1,000

  North East

  34.3

  28.6

  North West

  35.6

  26.1

  Merseyside

  38.7

  27.6

  Yorkshire and Humberside

  34.3

  27.0

  East Midlands

  32.2

  28.3

  West Midlands

  36.5

  27.4

  Eastern

  27.7

  23.9

  London

  39.9

  21.1

  South East

  26.2

  21.7

  South West

  34.2

  26.7

  1 Made by LEAs in England to Students normally domiciled in their area.

  2 Regional totals have been grossed to compensate for missing returns.

  In academic year 1998–99 a students contribution to the £1,000 tuition fee will be calculated as follows: Students with residual family income between £16,945 and £21,659 will be required to contribute £1 for every extra £13 of residual parental income above £16,945. Students are then expected to contribute a further £1 for every £9.20 by which residual family income exceeds £21,660.

  Higher and Further Education Institutions (Mergers)
  Mr. Willis
  To ask the Secretary of State for Education and Employment who has the ultimate responsibility for
  693
  agreeing the merger of higher and further education institutions; and what is his Department's policy on such mergers. [22868]

  Dr. Howells
  Final decisions are for my right hon. Friend the Secretary of State, normally on the basis of advice from the Further Education Funding Council for England following consultation with interested parties. He will consider each case on its merits. He would welcome closer working relationships between FE and HE institutions, whether or not a formal partnership is involved.

  Student Support Agency
  Mr. Swayne
  To ask the Secretary of State for Education and Employment what estimate he has made of the efficiency savings which will result from the operation of the Student Support Agency. [24424]

  Dr. Howells
  Much would depend on the functions of the agency, the timetable for its introduction and the alternatives.
  694
  The National Committee of Inquiry into Higher Education recommended reforms to student support. It recommended that student support should be administered centrally, to improve efficiency and reduce costs. The Government see some attractions in this approach but consider that it needs to be examined in more detail.

  The Government are also conscious that there are complex transitional arrangements which form part of the Dearing student support reforms. Until the academic year 1999–00, there will be very many different entitlements for students in the HE system. Therefore the Government are adopting a traditional approach which will allow the new arrangements to bed down. After that, it is the Government's intention to review the means of administering student support.

  For the transitional period we shall be setting rigorous performance standards for LEAs, and the specific grant funding regime will be based on these standards. The Government are keen to ensure that students are given a high level of service that inspire confidence in the reforms. Our review, which will report in 2000, will consider this fully.

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

Redundant Farm Buildings
The Earl of Bradford The Earl of Bradford asked Her Majesty's Government:
What is their policy for the productive use of redundant farm buildings.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, as part of their commitment to sustainable development, the Government encourage the reuse of existing farm buildings which cease to be needed for agriculture. Such use is subject to the controls of the planning system. Planning policy guidance advises on the circumstances when it would be appropriate to convert such buildings for other business or residential use.
The Earl of Bradford: My Lords, I thank the Minister for that reply. However, is she aware that PPG7, which was published in February 1997 under the previous administration, discriminates positively in favour of business rather than residential reuse? Is she further aware that very often residential reuse is the only economic proposition?
Baroness Hayman: My Lords, the noble Earl, Lord Bradford, is absolutely right. In February last year, PPG7 was revised in order to introduce an emphasis on commercial development because residential use does not have an impact on rural employment whereas commercial use is beneficial to the maintenance or creation of jobs. However, I should say that the guidance stresses that residential use may be acceptable if commercial use is not viable.
Baroness Nicol: My Lords, given that we are now hoping not to use too many green fields in order to house the 4.4 million extra families that we are told we shall have to house, is it not even more important that any buildings which can be made available for residential use, including farm buildings, are used in that way? Will the Government consider encouraging, for example, the Rural Development Commission to give support to residential use in the way that it does in relation to commercial use?
Baroness Hayman: My Lords, it is absolutely right that the planning system needs to be responsive to the needs of people in rural areas for affordable housing. Wherever possible, we want to make sure that we make maximum use of the so-called brownfield sites. Therefore, the residential use of redundant farm
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buildings can help in that area. But it is important also that we look for the most sustainable solutions in the round. Sometimes because of problems of, for example, lack of access to transport, an isolated conversion may not be the most sustainable response. But at the end of the day, it is a matter of local circumstances and therefore for local authorities to decide.
Lord Luke: My Lords, yesterday the noble Lord, Lord Donoughue, in referring to the current difficulties facing farmers, mentioned the need for restructuring in the industry. Does that mean that medium-sized and small farms will be forced to amalgamate sooner or later? If that is the case many more farm buildings will become redundant. What plans do the Government have to deal with that?
Baroness Hayman: My Lords, I know that those matters were well debated yesterday in your Lordships' House. I believe that I made clear that the reasoning behind the changes to the planning guidance was looking at the ability to diversify and reuse buildings. Grants like the redundant building grant are available through the RDC in order to make sure that, where buildings become available, they can be used to regenerate countryside.
Lord Cledwyn of Penrhos: My Lords, does my noble friend believe that those farm buildings with perhaps 50 to 100 acres on the Welsh uplands should be totally disregarded? Those relatively small farm buildings are extremely important to the general life of the area.
Baroness Hayman: My Lords, indeed, it is important that we recognise that there is a whole variety of uses, both commercial and residential, for which we need to encourage the use of such buildings if we are to have thriving communities in the countryside.
Lord Elton: My Lords, does the Minister agree that a viable rural community depends upon the availability of rural employment and that a countryside populated with urban commuters will not provide either an economically viable or socially stable community? Will the Minister therefore assure us that PPG7 will remain unaltered?
Baroness Hayman: My Lords, as I said in response to earlier questions, it was exactly that thinking which accounted for the revision of PPG7 and its emphasis on commercial development because research had found that in remote areas, in particular, applications for residential use predominated. Residential conversions of buildings can have minimal economic impact whereas business conversion may have a much more positive impact on local employment. As I say, I believe that there is enough flexibility in the guidance to allow for residential development when there is no possibility of economic development.
The Earl of Shrewsbury: My Lords, is the Minister aware that the listing of farm buildings often renders

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them completely useless for any other purpose? Will she say what is the Government's policy towards the listing of those buildings?
Baroness Hayman: My Lords, the question of whether or not a building should be listed is a matter for the Secretary of State for Culture, Media and Sport, following recommendations from English Heritage. But PPG15 relating to planning and the historic environment gives guidance to local planning authorities on the handling of listed building consent applications and it explains that the best way of securing the upkeep of historic buildings is to keep them in active use.
Baroness David: My Lords, could I ask the Minister if the Council for National Parks has a policy about buildings which are no longer used as farm buildings? I have seen a number of excellent, strong barns in the national parks, and it is a great shame to see them in a not exactly derelict but rather an unusable state, and they would make very good houses.
Baroness Hayman: My Lords, developments in the national parks, as in areas of outstanding natural beauty and SSSIs, have particular planning constraints upon them. But I shall certainly look into the suggestion which my noble friend made and perhaps write to her on the subject.
The Earl of Courtown: My Lords, will the Minister advise local authorities that consistency of decisions in relation to planning applications would greatly help those who are putting forward planning applications?
Baroness Hayman: My Lords, that is why we have the planning policy guidance in the first place. However, there is a need to have a correct balance between putting forward a national framework and allowing for the sensitivity that comes from local determination of planning applications.

Bosnia: Mine Clearance
3.10 p.m.
The Lord Bishop of Oxford The Lord Bishop of Oxford asked Her Majesty's Government:
What progress has been made in the clearance of mines in Bosnia; and what support they are giving to this process.
Lord Whitty: My Lords, under the Dayton Agreement the responsibility for demining is that of the authorities in Bosnia and Herzegovina. Mine clearance operations are being funded by a number of international organisations and they are co-ordinated by the UN Mine Action Centre. The UK has contributed £400,000 through the EU and £280,000 bilaterally to the international effort. We have also seconded military
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personnel to assist in the establishment of the UN Mine Action Centre, and the regional demining operation in Mostar.
The Lord Bishop of Oxford: My Lords, I thank the Minister for his reply. Unfortunately, a good number of civilians have already been severely mutilated and maimed by these mines, including a fair number of Moslems. Are Her Majesty's Government able to offer any help, either through NGOs or through their own agencies, as regards the support and rehabilitation of some of these mine victims in Bosnia?
Lord Whitty: My Lords, clearly this is a tremendous problem. Indeed, about 50 civilians were killed and many others maimed during the last full year for which we have figures. However, there are about 1 million mines laying in the Bosnia area covering about 300 square kilometres. The process of clearing even the priority areas is very slow; only about 4.7 square kilometres have been cleared. The attention to victims is most important. We are providing assistance for the physically disabled and we supported capacity building projects with WHO and through other NGOs, such as Oxfam and the International Rescue Committee, in order to deal with the precise problems mentioned.
Baroness Strange: My Lords, can the Minister say whether any specific action has been taken about the little round, hand-sized mines which are attractive to children and which can be floated down rivers?
Lord Whitty: My Lords, as I understand it, such mines come under the general definition of anti-personnel mines. Therefore, they are covered by the Ottawa Convention which 120 nations signed in December. Of course, it is much more difficult in the Bosnia area to detect those mines than it is land-based mines. Nevertheless, they are part of the technical operation of determining which is under way.
Lord Hardy of Wath: My Lords, would my noble friend the Minister consider it reasonable to suggest that those who sold such mines, or the governments who assisted them to do so, should be asked to make a rather more significant contribution to their clearance?
Lord Whitty: My Lords, clearly the mines were laid by the protagonists of the catastrophe within the former Yugoslavia. The resources within that country for clearing such mines are relatively limited. The UK and other governments are providing substantial support to the clearance. The purpose of the convention to which I referred is to avoid a similar catastrophe happening elsewhere.
Baroness Williams of Crosby: My Lords, as the presence in Bosnia of the United States is pretty certain for the next year or so, can the Minister say whether, as well as the mine clearing policy, there could also be some sharpening and focusing of the purposes of our presence there? Further, in that particular respect, is the

1607
Minister aware of the initiative with the United States Congress to try to get agreement about the treatment of war criminals and bringing them to justice?
Lord Whitty: My Lords, as the House will know, my right honourable friend the Foreign Secretary has emphasised the importance of a sharper operation to bring such war criminals to justice. That is backed not only by the United States but also, most emphatically, by the European Union of which we now hold the presidency.
Lord Kennet: My Lords, in an earlier answer, my noble friend the Minister made a distinction between areas of Bosnia where mines are likely to be—or, indeed, are thought to be or probably are—and smaller areas where they are actually known to be. We know of a very interesting technology being developed in the United States to make that distinction more certain. When that comes into use, it will obviously be a great deal easier to get on with the only necessary job; namely, clearing the mines from where they are. Can my noble friend the Minister give the House any news about the bringing into action of such technology?
Lord Whitty: My Lords, my noble friend is correct to say that much of the present mapping of the whereabouts of mines in the area is a little hit and miss. The technology is intended to improve the definition of priority areas. But even were we to be more precise in the priority areas as a result of that technology, we would still be talking about at least 100 square kilometres which would need to be cleared. According to the present rate of progress, that would mean about 5 square kilometres a year.
The Earl of Sandwich: My Lords, in view of the enormous public interest in this important matter can the Minister say when the Government will ratify the Ottawa Treaty?
Lord Whitty: My Lords, the question of ratification of that treaty will come before Parliament in due course when I hope and, indeed, expect that it will receive overwhelming support in both Houses.

Depleted Uranium Ammunition
3.16 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
Where, and under what conditions, depleted uranium ammunition is being manufactured in the United Kingdom.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, the 120 millimetre ammunition for the Challenger 2 main battle tank has a depleted uranium component, which is being manufactured at Royal Ordnance plc's specialist materials facility at Featherstone, near Wolverhampton; the ammunition is then assembled into complete rounds at the Royal
1608
Ordnance factory Birtley. Responsibility for conditions of manufacture and compliance with legislation on radiological site licensing rests with Royal Ordnance plc, which is owned by British Aerospace plc.
The Countess of Mar: My Lords, I thank the Minister for his Answer. Does the noble Lord accept that depleted uranium has a half-life of 4.5 billion years; that because of its highly pyrophoric nature on impact it produces uranium dioxide dust which can be carried several miles in the wind; and that that dust is both chemically toxic and radioactive and is implicated in a number of cancers, including lung cancer and leukaemia, kidney problems and birth defects? Therefore, is the Minister satisfied with the safety of the community in Scotland where, I understand, test firing is carried out into the ground and into the Solway Firth from the Dundrennan army base near Kirkcudbright?
Lord Gilbert: My Lords, far be it from me to challenge the remarks or the mastery of statistics of the noble Countess, Lady Mar. All I can say is that we have no knowledge whatever of any danger to the civilian population living in the neighbourhood of that particular test range, just as we have absolutely no knowledge of any dangers sustained by Her Majesty's Forces in the Gulf when DU was used in the conflict.
Lord Jenkins of Putney: My Lords, is my noble friend the Minister aware of the fact that the use of depleted uranium has killed and maimed thousands of Iraqis, hundreds of American troops and an unknown number of British troops as a result of its use in the Gulf War? Therefore, will the Government do two things? First, will they investigate the possibility that this weapon is already bannable under the chemical weapons convention? Secondly, if it is not banned, will the Government consider doing so because it is ultimately a chemical weapon and should be banned under existing legislation? If that is not so, then there ought to be legislation to ban it.
Lord Gilbert: My Lords, not for the first time I am not sure that I can share all the premises in my noble friend's questions. In 1993 the defence radiological protection service concluded that there was no indication of harmful over-exposure of British troops to DU in the Gulf. Tests were made on some Gulf veterans who were concerned that they might have inhaled depleted uranium dust and that that might have had an adverse effect upon them, but none was found to have experienced detectable contamination. Similarly, as far as we know, no British troops sustained injuries from DU ammunition.
Lord Mackie of Benshie: My Lords, can the Minister tell the House what is good about depleted uranium ammunition?
Lord Gilbert: Yes, my Lords; it is extremely hard and is the only ammunition that is capable of penetrating the armour of the latest main battle tanks.
Lord Burnham: My Lords, I have a simplistic question for the Minister; namely, what is the definition of depleted uranium with particular reference to the degree of toxicity?
Lord Gilbert: My Lords, the noble Lord asks a highly technical question. Indeed, I should be in great

1609
difficulty if I try to answer it and give technical definitions of what constitutes depleted uranium. However, I shall be happy to get the noble Lord a technical answer and will ensure that it is put into the record.
Lord Parry: My Lords, on a simpler level, can the Minister reassure the House as to whether civilian carriers of the shells were warned of possible dangers, whereas the military users of them, often in contained tank space, were not?
Lord Gilbert: My Lords, I have no recollection as to whether or not specific warnings were given to Her Majesty's personnel at the time of the Gulf War, but we continue to have an inventory of depleted uranium ammunition. I am sure that those responsible for handling it are well aware of the risks, if any, to which they might be exposed. Our view is—it was the view of previous administrations—that those are very small indeed.
Lord Kennet: My Lords, I am sure that the House is aware that neither the noble Lord nor I can go too far into radio chemistry. Can the Minister confirm that depleted uranium is about 60 per cent. as radioactive as undepleted uranium? Since there is nothing to do with depleted uranium except to make it into bullets, about a billion pounds' weight of depleted uranium is in store in the United States. If that is so, what is the corresponding figure in this country?
Lord Gilbert: My Lords, I think that I should bring an encyclopedia with me to answer some of my noble friend's questions. Not for the first time my noble friend defeats me with his statistics.
This material is not made into bullets in the normal sense of the word. It is put into the front end of tank shells. The only exception is the Royal Navy which has some depleted uranium ammunition for the Phalanx close-in weapons system.
Earl Howe: My Lords, have the Government any assessment of the potential environmental effects of depleted uranium contamination on the battlefield? If so, what conclusions have they reached?
Lord Gilbert: My Lords, I am not aware of whether our predecessors made any assessment. Certainly this Government have not been invited to do so. It is rather out of date for us now to make such an assessment.
However, the only specific source of concern is that in some circumstances we believe that the radiation can be slightly increased when one of the shells hits the armour of an opposing tank.
Lord Ironside: My Lords, are there any proposals for using depleted uranium—of which there is quite a lot in the world—to replace lead shot in shotguns? Would that alter the ballistics of the gun and create safety problems?
Lord Gilbert: My Lords, I am not normally familiar with the habits of the hunting-shooting fraternity.
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I should have thought that noble Lords opposite would know far more about its intentions than I would. But I have heard nothing of the kind.
The Countess of Mar: My Lords, is the Minister aware that there is evidence that the United Kingdom Atomic Energy Authority was asked to go to the battlefields in Iraq and Kuwait to estimate the problems that might result from the depleted uranium left there after the war? Is the noble Lord aware that it was estimated that there might be some 500,000 deaths of civilians and soldiers; and that some 300 to 800 pounds of depleted uranium had been left in the Gulf?
I have put down a number of Questions for Written Answer on the subject, to which I have had no Answer. Will the noble Lord answer them and publish the answers in Hansard?
Lord Gilbert: My Lords, I cannot reply off the top of my head to the quite extraordinary statistics that the noble Countess produced; but I should be very surprised if 500,000 people were killed from any causes during the Gulf War.

Green Belt Development
3.24 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
Whether in view of the need for more housing, the shortage of available building land and the Government's present review of land use, they will endeavour to release smaller parcels of green belt land between existing buildings rather than untouched greenfield sites.
Baroness Hayman: My Lords, Planning Police Guidance Note 2—Green Belts already provides for circumstances where infilling in existing settlements and major developed sites within the green belt may be appropriate.
Changes to green belt boundaries and allocation of building land is a matter for local planning authorities when reviewing their development plans. Any such proposals would need to be subject to full public consultation and, if opposed, would be considered at a plan inquiry. In addition, my department would need to be satisfied that all opportunities for development within the urban areas contained by or beyond the green belt had been fully considered.
Baroness Gardner of Parkes: My Lords, I thank the Minister for her reply. I have studied carefully Planning Policy Guidance Note 2, but it is not clear on infill sites. It seems to refer only to infill sites in villages. The noble Baroness referred to infill sites in settlements. That is the grey area. I ask the Government at least to reconsider the matter and to clarify it. Does the Minister agree that it is preferable for new homes to be built within areas where infrastructure—drains, roads, transport, schools, and

1611
social services—are already available in the community, and that people moving into such homes find it easier to be assimilated and to integrate into an existing community?
Baroness Hayman: My Lords, I endorse the latter part of what the noble Baroness says. Sustainability of development, which brings in all those issues about connections with existing infrastructure such as transport, is important. PPG2 states that infilling is acceptable if not inappropriate. That means limited infilling in existing villages within the green belt provided that the village is listed in the local development plan; and infilling at major developed sites within the green belt may be permitted where the site is indicated in development plans. If the noble Baroness feels that there is still a lack of clarity. I shall look at the matter again and write to her.
Lord Dean of Beswick: My Lords, is it correct that the Government are reviewing availability of land as regards use and need for a highly improved housebuilding programme for houses to rent? I understand that there will shortly be a White Paper on the subject. Would it not be better for us to wait for the White Paper? If it presents us with options, we can debate them at length and make the right decision at the right time.
Baroness Hayman: My Lords, how we tackle the challenge of providing new homes that will be needed in the future is an issue for all of us, not just for central government. Regional solutions will need to be integrated with other plans.
The previous government issued their Green Paper on household growth. We are currently considering the responses to that Green Paper and hope to make a Statement in the not too distant future.
Lord Alton of Liverpool: My Lords, is the Minister aware of the article by Simon Jenkins in The Times yesterday which argued passionately against the further encroachment on green belt land? Perhaps I may draw to the noble Baroness's attention figures from her own department published last year indicating that in England alone there are currently 800,000 empty houses in the private and public sector. Would it not be better and more imaginative to put those empty properties back into housing use rather than destroying more of our countryside?
Baroness Hayman: My Lords, I think the whole House would agree that it is important that we make the maximum use of already developed land—that has been clearly stated as this Government's policy—and the bringing of empty buildings back into habitation.
I saw the article to which the noble Lord referred. I believe that one can overstate the extent of the problem. Since 1979 the amount of designated green belt in this country has effectively doubled to over 1.5 million hectares. Some 12 per cent. of England is covered by green belt designation; less than 11 per cent. is urban. Despite all the recent publicity, all the proposed changes in the pipeline would add up to a loss of less than 0.12 per cent. of the green belt.
Baroness Hamwee: My Lords, as new settlements may have to be created to deal with the housing
1612
shortfall, does the Minister agree that it is crucial that regard is given to the transport infrastructure in order not to create a double whammy for the countryside? If the noble Baroness agrees, is it a matter which will be addressed in the Government's forthcoming White Paper on transport?
Baroness Hayman: My Lords, in terms of the integration referred to in the forthcoming White Paper on transport, there is a recognition that we are talking not only of integration between different modes of transport, but with other policies, other government departments, and particularly with land use planning. I absolutely agree with the noble Baroness's point; we have to make sure that we do not cause two sets of demands on land use with inappropriate new housing developments.
Lord Bowness: My Lords, the Minister will recall that prior to the Christmas Recess she told me that the Government were still using targets set by the previous Administration for building on green belt and greenfield sites. Will she agree that her right honourable friend the Secretary of State, by a number of decisions, notably in the West Midlands, Hertfordshire and now Newcastle upon Tyne, is allowing development on green belt and greenfield sites and has already changed the policy? When will there be a Statement about the new policy that is being followed towards green belt and greenfield sites?
Baroness Hayman: My Lords, there is no new policy being followed towards the green belt. The Government remain committed to its protection. As I said earlier, we shall be making a Statement in response to the household growth figures and how we meet them. It is important not to use "green belt" and "greenfield" as interchangeable terms. It is also important to examine some of the examples given by the noble Lord, particularly in Hertfordshire and Newcastle. It should be recognised that, while some green belt land was being taken away, more green belt land was being designated in both those areas. In Hertfordshire, given comments about the need to locate new settlements near to existing transport infrastructure, that was exactly the basis of the decision.

Audit Commission Bill [H.L.]
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I beg leave to introduce a Bill to consolidate Part III of the Local Government Finance Act 1982 and other enactments relating to the Audit Commission for Local Authorities and the National Health Service in England and Wales. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question. Bill read a first time, and to be printed.

Teaching and Higher Education Bill [H.L.]
3.32 p.m.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 16 [New arrangements for giving financial support to students]:
Baroness Maddock Baroness Maddock moved Amendment No. 81:
Page 11, line 9, at beginning insert ("full time or part time").
The noble Baroness said: This amendment also stands in the name of my noble friend Lord Tope. Its purpose is to ensure that, in regard to financing, part-time students are treated equally with full-time students. I tabled the amendment partly because the Liberal Democrats believe strongly in the principle behind it, and partly because of a strong personal belief. As a mother who returned to part-time higher education, I was fortunate in being able to afford the fees and to continue my course. I make a plea to the Committee at this early stage. If we believe that the family and the nurture of children is important, this must represent important progress in helping mothers to carry out both tasks: to stay at home with their children as well as having the opportunity to further their careers and return to work in our present flexible labour markets.
I remind the Committee that the Government have expressed a belief in "lifetime learning", as have many of us. If they genuinely believe in lifetime learning, they have here a wonderful opportunity to put that principle into practice.
A third of all students at United Kingdom universities study part-time. It is expected that the growth in demand will continue as more flexible means of studying come about. The Government have committed funding for what they believe will be an additional ½ million students in what they describe as lifetime learning by 2002. They admit that the numbers of part-time students will increase significantly.
At Second Reading, during discussion on the Dearing Report, the message came through strongly that many noble Lords were concerned about evidence of inequality of treatment in funding as between full-time and part-time students. The proposals that we are now discussing relate to a new funding scheme. It is obvious that this new scheme will be geared to the needs of full-time students, and mostly those in the 18 to 21 age group.
Part-time study attracts students who would not otherwise enter higher education. It attracts many who are not in that age group I mentioned. However, the new funding system will continue to discriminate unfairly against part-time students, not only in the categories I
1614
have mentioned, but particularly against the low paid. I ask the Committee to examine carefully the consequences of some clauses in the Bill for those who have been in work or who are in low paid jobs, and particularly for those with children. How will the legislation marry up with social security legislation? There is strong evidence that it will be very difficult for many people, particularly those with children, to have an adequate living.
I am aware that the Government have already made some concessions in making sure that part-time students have extra income. Extra government money will be available to help the poorest students on part-time courses with tuition fees. The Government have also examined methods of making sure that help will be available for people who lose their jobs while attending a part-time course. In addition, they have examined the possibility—indeed I believe it is likely to happen—of helping part-time students who are presently not eligible for access funds. The Government have said that they will look into the matter.
The final report of the Dearing Committee pointed out that the funding of students in part-time education was possibly not a priority, since many of those students' course fees were paid by employers. That conclusion was based on certain research. However, since the report's publication other research has come to light which reflects particularly on Open University students. Subsequent work in that area suggests that the true figure is only 50 per cent. of students with course fees paid, whereas the Dearing Report indicated a much higher figure.
In relation to Open University students—it is important to note that the Open University is the largest provider of part-time undergraduate study in the United Kingdom—the report indicates only 22 per cent. in work and receiving help with their fees. I ask the Government to reconsider this issue. I and my colleagues believe that the Government's proposals will have a greater impact on part-time numbers than was originally expected. We believe that many students contemplating the choice between part-time and full-time study will look less favourably on the part-time option. This will particularly affect women who wish to be at home looking after their children; they may be tempted to try to do a full-time course. I know from experience that trying to study when one has young children at home is extremely difficult. We should examine closely whether the Government have got their proposals right on this issue.
A fall in the number of part-time students has a knock-on effect on higher education institutions. There is already some indication that that is happening. In addition, it will be difficult to encourage people into lifetime learning if the only choice open to them is full-time courses.
The Dearing Committee was attracted to the principle of levering up support for part-time students but thought that at this time, taking account of the figures, it was not necessary. I hope that I have demonstrated that there are very good reasons why we should look at the figures again and reconsider the matter. A report shows that the cost to the Government of extending loans to part-time

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degree and sub-degree level students would be only an extra 0.5 per cent. of expenditure in this area each year in the short term and an extra 1.5 per cent. in the long term.
I hope that the Government will look closely at this matter. We all have a commitment to lifetime learning. Studies show that particular groups will be affected. We believe in equality of opportunity for all and there is no area in which this is more important than access to education and higher education. Dearing concluded that there was not a good argument for spending the money at this time; I believe that subsequent studies have proved that that is not the case. I believe above all that equality of opportunity, particularly for women in this country, is paramount. I beg to move.
Lord Renfrew of Kaimsthorn: I rise at the earliest opportunity to raise what I believe to be an important procedural point. So far as I am aware, no draft regulations for these parts of the Bill have been placed in the Library. My noble friend Lady Blatch raised this point at Second Reading and said that it was the convention of this House—though it may not be an infallible one—that draft regulations are placed in the Library. I have in my hand the Ninth Report of the Select Committee on Delegated Powers and Deregulation. As I understand it, this debate is concerned with that report as well as with the Committee stage of the Bill. There may be issues to address later; I am aware that my noble friend Lady Blatch will propose an amendment on affirmative procedures.
In relation to Clause 16, the ninth report states, under the appropriate rubric "Henry VIII clauses":
"everything of importance will be in the regulations".
Where are the regulations? In the following paragraph the report goes on to say:
"We invite the House to consider whether the subject matter of the regulations under section 16 is so important that the bill should be amended to require affirmative procedure for the first regulations".
There I begin to touch on the amendment that my noble friend Lady Blatch will move at a later stage. I should like the Minister to give some explanation as to why we have a Bill so unsatisfactory in form that its whole content is in regulations, as is stated in the ninth report, but we do not have even draft regulations available in the Library, in accordance with what I understand to be the usual convention of the House.
3.45 p.m.
Lord Peston: The noble Lord, Lord Renfrew, will remember that we devoted some hours on Tuesday to rowing about regulations. Looking at other amendments, I have the suspicion that we could well spend the rest of today doing the same thing. The noble Lord's protest has already been made—I will not go so far as to say it has been made ad nauseam, but certainly at length. Secondly, I understand that my noble friend the Minister will intervene; I hope she will do so at an early stage. I believe that there is now a fair amount of documentation in the Library covering this matter.
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I have some sympathy with the amendment that I was under the impression we were debating. I hope that we shall not be constantly sidetracked, as we were on Tuesday, from discussing substantial matters because people wish to go through this continual ritual of complaining about regulations. I do not want to stop people making their protests. Quite the contrary; I have made them many times myself. However, the fact is that there is a substantial body of serious matter before us, including the specific amendment, and I for one should like to be able to take part in debating that and other amendments.
Baroness Blatch: I am sorry that the noble Lord finds this tiresome. Let me make him a firm promise that there will be many, many hours of debate on the Bill while we try to elicit some real information from what is a very skeletal Bill. I repeat, and will continue to repeat throughout the course of the passage of the Bill, that the Bill is skeletal. We are not having an indulgent debate about an educational issue but are here part of the process of making legislation. When making legislation, dots, commas and the meaning of particular words are very important indeed.
The noble Lord, Lord Peston, referred to the amount of information in circulation. I have never known such a plethora of information as that which is coming out of the DfEE and have never known such a degree of confusion about such documentation.
There has always been a tradition of this House, certainly once Second Reading has passed, that when any documentation is produced from a department every Member who speaks in a debate receives copies of that documentation. I certainly followed that tradition to the letter when I was on the other side of the House. I suspect that there are Members here this afternoon who are not even aware of some of the documentation that is available. The Library has no procedure for informing Members that information is available. Some Members will therefore be speaking today in a vacuum. Because of that vacuum there will be a great deal of concern.
Another point with regard to regulations is that there is a great deal of concern about a number of Bills. One Bill which will receive Royal Assent next week will be repealed when this Bill has passed through Parliament. I have never known such a crazy way of legislating. There is also concern about the saving provisions. It is provided in the Bill that the whole of the 1962 Act will be repealed in its entirety. However, we are then told that there are some savings provisions, and there are some allusions to those. Many Members of this House do not know about that. It is an incredibly complex subject. Each time we have asked the questions we have received different answers.
My noble friend Lord Renfrew wishes to know precisely what this will mean for students who have already made their choice this year to go to university and for those who are holding back because they are fearful of what these provisions may mean and are waiting to know what they will have to borrow, what they will have to pay on the first day of term and whether they will have to pay it all in one go and find money up front. These questions are material and

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important for students and their families and also for others. I have been talking to colleagues in local government who do not have information about their role. They have lots of circulars that are being published, but they do not know precisely what will be in the regulations. My understanding is that the regulations are to be put before this Chamber in February. If so, then the information contained in those regulations must now be available in some form and would in fact be helpful to Members of this Committee as we discuss this Bill.
Baroness Blackstone: Perhaps it will be helpful if I put the noble Baroness right on one point. The regulations will not be put before the House in the month of February. She is a little confused. I wrote to try to explain the position. What will be available is the standard document that students always receive in the month of February. That sets out clearly what the position is for loans and grants. That will be available in the month of February.
That document will provide, as it always does, all the information that students need to make decisions. When we talk of regulations, we talk of a highly technical document. In my long experience of working in higher education I have never met a student who reads the regulations. They are extremely complex, technical and hard to understand. I have difficulty in understanding them, as I am sure do other Members of the Committee. That is not documentation that students need in order to be clear about what their position will be.
That document will be placed in the Library and in the Printed Paper Office as soon as it is ready. Perhaps I can make clear that we also place other information in the Library in time for the Committee stage of this Bill. The noble Baroness, Lady Blatch, says that many people do not know that. All I can say is that when I was the principal Opposition Front Bench spokesman on education I always told my colleagues who were likely to speak in the Committee stage of the Bill what was available. That is reasonable. As the Minister, I cannot know who will be speaking on the opposite side. When, in Opposition, I received a letter from Ministers I passed it on and informed others. That is the only sensible way to proceed.
Perhaps I can say also to the noble Lord, Lord Renfrew—confirming what my noble friend Lord Peston said—that we had a long debate on this topic. I recognise that it is frustrating in some senses for people who are taking part in the debates on legislation that we cannot always have the regulations ready. But I must correct one thing that the noble Lord said. He said that it is normal for regulations to be ready when a Bill is being debated. That just is not true. I can quote many examples over the past 18 years, including education Bills in which I was involved, when the regulations were not only not here when we were debating a Bill in Committee, but they were not even complete when we reached Royal Assent.
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That was normal, particularly in relation to complex, specific and detailed regulations of the kind we are dealing with today.
Baroness Blatch: Perhaps I can come back to the noble Baroness. The progress report on new students' support arrangements in higher education says that publication of the 1998 mandatory award regulations will be in February. That appears in the timetable at the back of the document. It goes on to say that by July there will be further publication of the student loan regulations. There is therefore a set of regulations imminently due. We are almost in February and do not know what they contain.
I take the point made by the noble Baroness that it is not common for everybody to read the technical details of regulations. Students are interested in the regulations that will set the arrangements to which they will be obliged to conform in this coming September-October. It is the regulations that set the detail in law, after which the department produces a lay explanation of what that means to parents, students, LEAs and so forth.
There is, therefore, a real interest in the regulations, given that they come first. The legislation comes first and what it means to the people whom it affects follows. We are simply saying that we are discussing the legislation that will set the framework for the regulations and need to discuss what is to go into those regulations in order to make sense of these debates.
Baroness Blackstone: I want to be helpful to the noble Baroness and clarify the position. The regulations that will come out in February are based on exactly the same provisions that existed last year. There may be some minor amendments to them, but they have nothing to do with the changes that are being brought about in the Bill. Those will involve the second set of regulations to be published in July.
The regulations that the noble Baroness says are now in draft, are in draft; the noble Baroness is correct. But they will not provide the additional information for which she is asking because they relate to the provision of maintenance grants for students and are built on exactly the same provisions that we had last year, the year before and the year before that.
Earl Russell: I was about to make a speech in support of the amendment tabled by my noble friend Lady Maddock in relation to part-time students. Perhaps I can say to the noble Lord, Lord Renfrew of Kaimsthorn, and others who are concerned with the regulations, that there will be opportunity to discuss that issue on the next group of amendments. I hope not to take up too much of the time of the Committee but it takes two to make progress. I hope I may say that we have an amnesty in that direction.
The point in regard to part-time students is that this is part of a general change in the way the world is organised. The Prime Minister, speaking at the TUC conference, memorably referred to the flexible labour market as the "real world". There is a good deal of evidence to suggest that the labour market is changing in that direction. There is also considerable evidence to

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suggest that the social security system needs to change substantially in that direction to accommodate part- time work.
That is all part of a general change in the way the economy and society are run. It is part of a general change, as my noble friend pointed out, in the way parents care for children. The sharing of care between parents is a much more common situation than it was. My point is that education cannot be left out of that pattern of change. Because the part-time system is becoming more common everywhere else, it inevitably must become more common in education also. That is something on which the Government must be prepared to reach an accommodation. I strongly support my noble friend's amendment and am glad that she tabled it.
Lord Peston: Perhaps I too can join in the debate on this amendment. I should like to say from these Benches that at least one of us is extremely sympathetic to the ideas in the amendment, though I wait to hear what my noble friends have to say. Those of us who have been interested in the economics and financing of education, as I have for a long time, feel that the full-time and part-time distinction in financing has always been anomalous. It has been difficult to find any logical basis for it.
The position has got worse over the years, partly for the reasons explained by the noble Baroness, Lady Maddock, and the noble Earl, Lord Russell, but also because what is called a "full-time" student has completely changed. Though I am officially retired, because I am not quite sane I agreed to teach a lecture course this year. When I was making arrangements for the tutorial classes I was told "You cannot have classes on a Thursday because that is the day the students go and do their jobs".
When I was a student, full-time students worked every day of the week. That position has long since changed. It is a matter of fact—echoing what has already been said—that the full-time/part-time distinction is difficult to make. Even if one could define "part-time" it has never been obvious to me that those people who are often the most enthusiastic and devoted students should receive no state support. This is a point my noble friend always made against me. I do not like tuition fees. As my noble friend pointed out, part-time students are always being stuck with tuition fees.
As we enlarge our methods of finance it cannot be right that part-time students should not have access to loan finance. Those are my remarks of sympathy. But I believe it is all a complete waste of time. What drives everything in this area as in all other areas of government behaviour is public expenditure constraint. Therefore, though it is useful for us to place on record that we favour all this, I cannot see, within the current restraints on public expenditure, that there is any possibility of change.
If one were to be completely honest, when one is given a public expenditure restraint one must say what one's priorities will be. Much as I support the noble Baroness, whatever the cost—the noble Baroness quoted the figure as a percentage of the budget—I am not clear
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that if that money were available I would devote it to this purpose. However, I felt it right to add support to the ideas put forward in the hope that over the years, as we produce a more rational system of student finance, we will include in it part-time students. That is probably the reason for tabling the amendment in the first place.
4 p.m.
Baroness Carnegy of Lour: I suppose that if the main points were settled and on the face of the Bill, we would know whether part-time students were covered. At the moment we do not because, as I understand it, this is contained in regulations. So the noble Baroness, Lady Maddock, is trying to sort that out. But the debate would not be necessary if this was on the face of the Bill.
What the noble Lord, Lord Peston, has just said is, of course, true. I understand very well that budgetary constraints are a problem but, having been on the governing body of the Open University for 12 years until quite recently, I know that the number of people who can study depends upon the level of the fees; and the level of the fees, of course, depends upon the government grant. That is self-evident. The Government should not take it for granted that the number of students is necessarily constant. Indeed the Minister well understands the position of part-time students because she ran extremely ably a college which had only part-time students. Student numbers will not necessarily continue at the same level as costs go up. There is a market level beyond which students are not willing to pay, and the Committee will understand that. I have not checked the figures but of the order of 100,000 students are taking undergraduate Open University courses, to name one institution. Many of those people struggle to pay their fees. They pay a lot of money over a period of five or six years, but they struggle. Some drop out and have to return later; some drop out altogether because of the level of fees.
So if the Government do not help part-time students with their fees at all, and if the fees have to be paid by the students, as they are now, the Government will have to watch very carefully that the part-time population of students in this country does not begin to drop. That would have a very bad effect on the labour market, as the noble Lord, Earl Russell, would agree. That is something which must be watched closely. I do not think I have to tell the noble Baroness that but it may be necessary to tell the Treasury, and I hope that she will.
The Earl of Limerick: I would like to remind the Committee of an interest I declared on Second Reading as chairman of the governing body of one of the new universities—one which, as it happens, apart from the institution in which the noble Baroness served for so long, has just about the highest proportion of part-time students in the country.
There are two points to make. First, the importance of professional courses, education and continuing education, is being more widely recognised and is something which we must strive to support. Secondly, reference was made to the falling proportion of students receiving financial support for part-time courses. That

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is true. However, the other factor is that employers are increasingly unwilling to give students time off for part-time education and keep their noses much tighter to the grindstone, expecting them to work long hours. They are cutting down their own staff the whole time. Therefore, anything which mitigates against the encouragement of part-time education is doubly to be deplored.
Part-time education has been relatively disadvantaged over the years by the funding methodology that we have adopted. Therefore, I have great sympathy for the amendment before us. I hope that it might be possible to move at least some way towards redressing this balance and give more support to those undergoing part-time education on a continuing basis.
Lord Dormand of Easington: I hope that the Committee will forgive me if I intervene to repeat most of what my noble friend Lord Peston has said, and also what the noble Lord, Earl Russell, said in his contribution.
Things have changed very much indeed. There is no question about the number of part-time students. Perhaps I can give another example. The number of mature students now exceeds the number of those under the age of 21 who attend a college or university. Although that does not directly relate to this amendment, it does support the fact that things do change and are changing in education in the same way as they are changing in other areas.
This is where I simply underline what my noble friend said. It really is a matter of public expenditure. The Government have said that they will remain within the restraints of the former government for two years. That seems to be a reasonable length of time in which to say whether this system will work. I have no doubt—I think I have no doubt—that after two years the present Labour Government will look at the whole matter again, when we might be able to meet the kind of suggestions that are being made in this amendment.
Baroness Lockwood: I too have a great deal of sympathy with this amendment and I am sure that my noble friend on the Front Bench has a great deal of sympathy for it too. During the 20 years that I have been in this House I have consistently argued for part-time education to be treated on the same basis as full-time education. I think it is still the principle which I shall support. But we have to look at the situation that we are in. We came to power and inherited a situation where higher education is in the middle of a funding crisis of dimensions that we have not known in the past. I must say I think it is rather strange for Members opposite who have been in power for the best part of those 20 years to be now arguing for part-time education to be covered.
I agree entirely with my noble friend that it is a matter of priorities. I hope that in the foreseeable future the Government—it may not be two years because we shall have to cope with many problems—will be able to bring before the House another Bill which will put part-time and full-time students on the same basis. I do not know
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what my noble friend will say in reply to this debate, but I hope that she will give us some hope for the future. I think that we have to take our priorities as they come.
Lord Beloff: It would seem to me that there is great force in the argument for public expenditure, and clearly if more money was to go to part-time students—and I think it should—it would have to come from elsewhere in the higher education budget.
I remind the Committee that we hear many reports of students who begin full-time education and give it up after a period because they find they are unsuited either to higher education itself or to the particular course they have chosen. Should some way not be found of minimising this factor of waste and would that not save money which could go to part-time students? I would go a little further and say that some, at least, of the courses are in themselves wholly unsuitable for higher education. The noble Lords who heard me speak before will know what I have in mind, but I do think there is fat in the higher education budget which could be squeezed in order to meet what, I agree with the noble Earl, Lord Russell, is essentially a part of changing the form of society and of education.
Baroness Blatch: I agree with the noble Baroness, Lady Lockwood. There has been widespread sympathy across all Benches for extending into this area because of some of the difficulties. But it has always been a matter of priorities. At this stage the issue being addressed is the crisis in higher education, which was precisely why Dearing was commissioned in the first place with all-party support. It is rather a pity that the Government have deviated from Dearing's recommendations.
However, I have to say this to the noble Baroness, Lady Lockwood. I would have liked to have sat where the noble Baroness, Lady Blackstone, is sitting and received that degree of understanding about this issue. I can remember being pilloried by the noble Baroness, Lady Blackstone, the noble Lord, Lord Peston, and others, who called us an uncaring and unthinking government simply because we argued at the time that it was a matter of public expenditure and a matter of priorities. Indeed, the noble Baroness supported keeping benefits for students and extending them to part-time students. I remember an impassioned plea from the noble Baroness using her position as Principal of Birkbeck College to give an incredibly forceful speech about the plight of many students there. All I would add is that we will support the Government when they say it is a matter of priorities, but there is a real will, when funds are available, to extend into the area of part-time students.
Baroness Blackstone: Perhaps I may take that last point first. I cannot believe that I ever wanted to pillory the noble Baroness, Lady Blatch. What I readily admit to is making passionate speeches about the value of part-time higher education.
Perhaps I may explain to the Committee the difference between this legislation and the legislation brought in by the previous government of which the

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noble Baroness, Lady Blatch, was a distinguished member. Under the legislation of the previous Conservative Government, it was completely impossible to make available support for part-time students. It was categorically ruled out. However, under this legislation, we are making it possible, at some future date, to provide support for either full-time or part-time students.
Clause 16(2)(d) provides for regulations for prescribing categories of attendance on courses which are to qualify for any purposes of the regulations. That is one of the advantages of having some flexibility in relation to regulations. To come back to what was said earlier, if we were to try to put all of this on the face of the Bill, we would have had to exclude, for reasons I shall explain in a moment, part-time students. But we do not have to. I hope very much that at some future date it will be possible to do something for them because I genuinely sympathise with all the arguments put forward.
In considering this amendment it is important to bear in mind that the Bill is intended to create a framework which will enable us to provide adequate support for all students in both further and higher education. As drafted, the Bill enables the Secretary of State, if he so wishes, to make grants or loans available to part-time as well as full-time students. Clause 16(2)(d) enables him to prescribe in regulations the categories of attendance which will qualify. In that sense, if I may say so to the noble Baroness, Lady Maddock, the amendment is unnecessary. But it is, in a sense, a probing amendment designed to elicit general views.
Baroness Carnegy of Lour: Can the Minister tell us whether it is the Government's intention in regulations to confine the Bill to full-time students?
Baroness Blackstone: No, it is not the intention to confine anything to any particular category of students. It is our intention, as I shall explain in a moment, for the time being to accept the Dearing recommendation in relation to part-time students.
I should like to develop further what I said at Second Reading in response to the request of the noble Baroness, Lady Maddock, that loans should be made available to part-time students. The Government do not at this stage intend to extend the loan scheme to the generality of part-time students. While we recognise the immensely valuable nature of part-time higher education, we agree with the Dearing Committee's conclusion—this was said by my noble friend Lord Peston—that extending loans to part-time students should not be a priority at present.
As the committee pointed out, a high proportion of part-time students are in employment and are therefore able to support themselves, although I accept, as the noble Baroness, Lady Maddock, and others have said, that many of them do not have their fees paid by their employers. I know that from my own experience. Means testing access to loans for all part-time students would involve a great deal of effort of a nugatory kind, given
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that so many of them are in employment, many of them in jobs that pay more than would justify the provision of a grant or loan.
We have carefully studied the report to which the noble Baroness, Lady Maddock, referred. It was commissioned by the Open University. However, while the 1.5 per cent. per annum additional costs that she cited may appear modest at first glance, they would amount to some £147 million in 1995-96 prices by the year 2015-16. That is a quite substantial sum of money by any standards. As my noble friends Lord Dormand of Easington and Lord Peston said, given the public expenditure constraints under which we are working, it would at this stage be very difficult to justify extending the loan scheme to all part-time students.
In answer to the noble Baroness, Lady Carnegy, I see no reason why part-time student numbers should drop. Part-time students have always had to make a contribution towards tuition costs and have had to cover their maintenance costs. Their position will not be any worse under the new legislation; in fact, in some respects it will be better. I remind the Committee that we have taken alternative steps to ensure that those part-time students who might experience financial hardship are not disadvantaged. Unlike the previous government we will be extending eligibility for access funds to part-timers from 1998-99 so that part-time students in serious financial difficulty will be able to go to their university and ask for support from the access funds. They were never able to do that previously. It means that the Open University, with which I know the noble Baroness, Lady Carnegy, has had a long association, will get access to those funds in a way that did not happen before.
Moreover, our funding package for the sector for 1998-99 included £2 million for fee remission for part-time students in higher education who are unfortunate enough to lose their jobs. I know from my own experience that a part-time student may start a course with a quite well paid job but then loses that job for a reason which is completely out of his or her own control and finds it difficult to continue with the course. We want to avoid that and we are providing some funding to help them. We are currently consulting interested bodies on the criteria for fee remission in those circumstances.
I reassure the noble Baroness, Lady Maddock, that we are also considering with colleagues from the Department of Social Security the Dearing Committee's recommendation that the Government should review the interaction between entitlement to benefits and part-time study. Currently, unemployed people may study part-time while receiving the jobseeker's allowance, subject to their meeting certain eligibility conditions. We will be reviewing these rules on study for the unemployed in the light of the work skill pilots that we have introduced and of early experience of the new deal. We are also looking at ways to ensure that there are no financial disincentives to part-time study by those on low incomes. In summary, the amendment is unnecessary since Clause 16, as drafted, already

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achieves the desired effect. So I hope that the noble Baroness, Lady Maddock, is therefore able to withdraw her amendment.
Baroness Carnegy of Lour: Before the noble Baroness sits down, there is one point which I do not believe she quite picked up as regards what I said about the Open University. The level of fees there is directly related to the grant from the Higher Education Funding Council. I believe that is pretty obvious. So I was suggesting that the Government should make sure that the funding council keeps an eye on the level of grant. I have not discussed this with the Open University, but it is an obvious point that they keep an eye on the funding so that the market response of people to the level of fees, which they have to pay in their entirety, as the noble Baroness said, does not damage the number of people taking courses. It is very important in the context of this discussion.
Baroness Blackstone: Of course the Government will always keep their eye on the level of grant provided by the Higher Education Funding Council for all universities, including the Open University.
Baroness Maddock: I thank the Minister for her long and helpful reply. As she said, under this legislation it is possible to provide funds for students who are in higher education studying part-time. However, the fact is that, as the legislation stands, it is not going to happen yet. That is something the Minister has clarified today. I thank Members of the Committee for their support for the proposition that part-time students have equality of funding with full-time students. I hope that the Minister can, at some stage in the proceedings, give some idea as to when the Government might activate Clause 16(2)(d) to mean that money will be forthcoming to part-time students. But for the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Earl Russell Earl Russell moved Amendment No. 82:
Page 11, leave out lines 13 and 14.
The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 83, 85, 87, 88, 92 and 94. Amendment No. 86. in the names of my noble friends on the Front Bench, has a substantive policy point to make and I shall leave that to them.
I believe that the noble Lord, Lord Peston, was slightly cutting a corner in trying to draw a distinction between substantive policy issues and technical issues of regulation. The point about a regulation-making power is that one needs to discover two things about it. First, what the Government at present intend to do with it and, secondly, what they are taking the power to do, and could do in future without further legislation, were they to change the policy intention.
In putting down these amendments it was my object to find out what substantive points I might need to raise at Report stage and without probing them I do not
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believe I can know that. So the antithesis between the drafting matters and matters of policy is a lot less complete than it might appear.
As always, I want to ask three questions about regulation-making powers. What is the extent of these powers? Perhaps I may clarify a little. I am not asking the Minister to imagine six impossible things before or after breakfast. I am asking her a technical, drafting question. When these powers were drawn up, what barriers were put regarding the form of the drafting? Very often there are barriers to the scope of a clause, as drafted, in another clause on which it depends or in terms within it, which a layman—and I count myself among them—does not spot. It is important to know that. Very often one may be reassured by it. Secondly. I want to know the present policy intention. Thirdly, I want to know why the Government are setting out to do it in this particular way.
These are questions of some substance. I raised on Tuesday the question—I admit that I had not given notice of the matter because I only decided to do it that way at that particular moment—what are the powers under which tuition fees are being introduced? I was asked that question by noble Lords all round the Library this morning. I could not answer them.
To get through Clause 16 we need to know an answer to that. It illustrates the point that one needs to know what could, hypothetically, be done under the powers. We need to know the intention. As a legislative Chamber of Parliament, and as a revising Chamber, we need to address the question as to how we might change the Government's intention because, after all, when we are acting as a revising Chamber, that is what we are here for.
I am reminded of the phrase that the noble Lord, Lord Kilmarnock, used about the Education (Student Loans) Bill in 1990 as regards the difficulty of making amendments purchase on the slippery surfaces of this Bill. Frameworks are all very well when they are seen internally from within the great sanctuary; but in the world outside the great sanctuary what is flexibility to the Minister may be restrictions to others.
With those preparatory remarks, in these particular amendments I hope that I may address what powers the Government are taking and why. Amendment No. 82 deals with the power to make regulations,
"for determining whether a person is an eligible student in relation to any grant or loan available under this section".
I believe that I can understand why the Minister wants to do that by regulation. But I want to check the extent of the power. Are there any other powers in any other Act which limit how those powers are exercised or could it be used for absolutely anybody without restriction?
Amendment No. 83 refers to prescribing the maximum amount of any such grant or loan available to any person. Here again, it is a fairly far-reaching power. I can understand why a regulation-making power is needed. Where one needs an annual uprating I concede, and I have always conceded, that one needs a regulation-making power. But am I right in construing this clause as meaning that the Government could raise

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or lower the prescribed amount as much as they like? Obviously, the Treasury would create a limit on raising it, but I do not see any limit to lowering it.
I need to probe the powers, as regards Amendment No. 85, with some care. That deals with terms and conditions which may be prescribed by the Secretary of State for any grant to be made available under the section. Do the terms and conditions relate exclusively to repayment or would it be possible, under terms and conditions, to impose other conditions relating to other things; to categories of student or to place any specific requirement in academic terms on the student? Are these powers simply related to repayment? I hope to hear that they are simply related to repayment. The same point about terms and conditions applies to Amendment No. 88.
Amendment No. 87 creates a power to require the,
"grant to be suspended or terminated in any such circumstances".
If I have correctly understood the word "such"—and this is one of the things I ask—it appears to refer to terms and conditions not yet made. So it is, as they would say in the Latin grammar, in the future perfect. That means that there is a double uncertainty about what is meant here. Again, I would like some explanation of the real meaning.
Amendment No. 92 deals with the ability to prescribe a rate of interest. There is another amendment dealing with that so we do not need to spend long on it. But as I understand the wording, it allows the prescribing of a rate absolutely without ceiling and without a floor. I should like to know whether that understanding is correct.
Amendment No. 94 deals with a power in regulation to make certain provision as the Secretary of State considers necessary or expedient in connection with the recovery of amounts due from borrowers. I should like to know the extent of that. It is my understanding that regulations cannot create a power to imprison and that that can be done only by primary legislation. But there are other methods of debt collection such as the calling in of bailiffs. To what extent can that be done?
For the moment those are sufficient specific questions. I believe they illustrate the point that the framework method of legislation makes parliamentary control rather difficult. There is a real risk that if it went too far it might make Parliament redundant and I for one would regret that. I beg to move.
4.30 p.m.
Lord Renfrew of Kaimsthorn: This is an opportunity to take further a point discussed earlier which the noble Earl, Lord Russell, dealt with so systematically. It would be a matter for regret if my words moved the noble Lord, Lord Peston, further towards the condition of ad nauseam to which he referred earlier. However, having taken the opportunity to re-read the remarks on this subject two days ago, I note that the noble Lord himself contributed no less than four times to one amendment and may have made a contribution to his own indisposition in that respect.
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I seek the reaction of the Minister and the Committee to a statement relating to Clause 16—not in relation to some earlier clause that other noble Lords may have discussed two days ago—in the 9th Report of the Select Committee on Delegated Powers and Deregulation:
"We invite the House to consider whether the subject matter of the regulations under Section 16 is so important that the Bill should be amended to require affirmative procedure for the first regulations, but to allow Ministers the option of using either the affirmative or the negative resolution procedure for subsequent regulations, thereby enabling the negative procedure to be used for amending regulations unless they included new matter of significance".
That seems to me exceedingly good sense. It relates to this clause. I ask the Minister to comment on the proposal. I shall listen carefully to what she says but unless by her eloquence she persuades me that the proposal in the report is superfluous I shall table such an amendment at Report stage, assuming the noble Earl, Lord Russell, has not already done so.
Lord Tope: I shall not contribute further to the indisposition of the noble Lord, Lord Peston, whether or not it is self-imposed. I shall be brief. Amendment No. 86 in my name and that of my noble friend Lady Maddock is identical to Amendments Nos. 85, 87 and 88 in the name of my noble friend Lord Russell. As so often happens, my noble friend has said all that I wish to say in pursuing his identical amendments. I wait to hear the Minister's answers to the points that he put so well.
Lord Peston: I thank the noble Lord, Lord Tope, for saying that this set of amendments is the same as the single amendment. I worked out that to go from Amendments Nos. 24 to 28 and then to Amendments Nos. 29 and 30 to 33 was the same as going directly from Amendments Nos. 24 to 33. I would have thought that even my honourable friend the other Minister in the Department for Education would be able to do that much arithmetic. I am glad to have that reassurance.
If it is believed that there should be regulations as a method of dealing with these matters, then surely the Committee agrees that regulations of precisely this kind must be in the Bill. There must be regulations in the Bill which enable one to decide who should get grants and loans and all the other bits and pieces. I take it that the noble Earl, Lord Russell, and the noble Lord, Lord Renfrew, seek to repeat that they do not want it done by regulation. I agree with the noble Earl that the decision as to what is substantial and what is technical is not an easy one. Since he did not say anything about the actual content I took it that he did not want this to be done by regulation.
Earl Russell: It is not quite that simple. If one concedes the need to have regulations—I concede it in principle but have an open mind in relation to this clause—one must still consider whether it should be done by these regulations. Until I have an answer to that I have no opinion on the question.
Lord Peston: If it is conceded—I do not suggest that those who do not want regulations should concede it—that it is to be done by regulation, I am not persuaded

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that these should not be the regulations. If I were writing regulations I believe that I would need regulations that covered precisely this ground; otherwise, I would not end up with a scheme for grants and loans.
I look forward to hearing what my noble friend says. The noble Baroness, Lady Blatch, rightly said that there is an enormous amount of documentation. I have read the documentation. I find it very hard to say that a suitable background has not been given to us for debating the matter without seeing the precise regulations. In trying to be both sensitive to the views of others and supportive of the Government, the simple logic is that if it is to be done by regulations, given that we have been informed about the content of some of these regulations, and if these amendments are carried—although I am sure the noble Earl is merely seeking clarification—we will have to have regulations of this kind conditional on having regulations.
Earl Bathurst: On the way home last night my cab driver told me that in London a cab driver had to undertake three years' training, which is not far off a period of higher education, with no vacations. There is no financial assistance given to those who train for such professions. Would the amendment of the noble Earl—perhaps the noble Baroness can deal with the existing arrangements within the Bill—provide financial help to cab drivers for such training?
Lord Glenamara: The simple fact remains that this Bill, when it becomes law, will be the means by which tuition fees are imposed on very large numbers of young people. A considerable financial burden will be imposed on graduates at work. There is no mention of that in the Bill. I have been in Parliament for 47 years. This is the most skeletal Bill I have seen in that time. It tells one nothing at all. This morning I obtained from the Library every word that is available from the Department for Education and I am still no wiser. We are legislating for something which we know nothing about. It is a lunatic situation. It is really a contempt of Parliament to legislate on something so important which will affect many young people and place on them enormous financial burdens at the beginning of their working lives and for there to be no mention of it in the Bill. I protest about the way the Government are proceeding.
The Earl of Limerick: The problem raised by the noble Lord, Lord Glenamara, is known to most noble Lords. I am quite familiar with the dilemma of detailed regulations and the difficulty of producing them at a certain stage. Whether or not students read detailed regulations, there is one group of people who will certainly do so with great care and attention. I refer to the governing bodies responsible for the maintenance, solvency and good management of universities.
I am always prepared to accept that I am dimmer than others, but I have shared this problem with others. I have so far received no enlightenment as to how cash will flow as a result of the fees—a point I was intending to raise later, but it is as well to do it on the Floor now.
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We need enlightenment on that point. There is a Motion later on the Marshalled List, that Clause 18 do not stand part. I am sure that we shall receive all sorts of information on the way to reaching that Motion, but how we can be informed is a serious point. If the Minister were able to comment positively on the suggestion made by my noble friend Lord Renfrew, that the first time regulations, which will govern the way all universities will behave for many years, are brought forward, they should be subject to the affirmative procedure, that would be helpful. If that were conceded, we should all find it easier to make progress.
Baroness Blatch: During the debate on the 1992 Act, which introduced student loans, there was this kind of spirited debate. I remember the Minister, the noble Baroness, Lady Blackstone, making an important point, and it took me until Third Reading before I was able to convince my department that it was something that we should concede to her. It was the Government's intention at that time, when introducing the loan scheme, that it should never go beyond the point of 50 per cent. grant and 50 per cent. loan.
The noble Baroness gained the support of most of this place, and indeed myself. The department accepted that that should be the case, and that if there were to be any deviation from that principle and intention Parliament itself should take a view about it. There are two major introductions for students which will impact on every student in the land, neither of which will be on the face of the Bill. We are therefore, as I said earlier, having to debate in a vacuum.
The first proposal is complete abolition of the grants for maintenance system, and the second is that students should contribute to tuition fees. It is unfortunate that, given the tradition of this place, we do not vote against secondary legislation: we cannot properly debate those two major changes which will materially affect students.
I apologise for what might be irksome to many Members of the Committee who are listening to this pedantic debate. We are frustrated by being unable to discuss in detail those matters, because the Bill just takes powers to the Secretary of State to do what he will following the Bill. We shall be discussing later whether tuition fees should be pegged. There is nothing in the Bill about that. Tuition fees could go the way of Australia, where they just go on rising as a percentage of the average cost. The matter is important. Many of us feel a genuine frustration, because we should be having a fundamental debate about the introduction of those two policies.
Lord Quirk: Could I add to the pedantry briefly, and echo, in particular, what the noble Baroness, Lady Blatch, and the noble Lord, Lord Glenamara, said. I am one of those who has been frustrated by being unable to find what I want in the Bill, but at least there is reference in departmental papers to some relative scale of tuition fees to be charged; that they should bear a relationship—as yet unspecified and as yet to be agreed—to the average cost of courses.
A couple of the amendments that the Committee will be discussing later use that phrase which derives from a DfEE document. I hope the Minister can at some point

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explicate what is meant by, "average cost of courses"; whether it is an average on the individual fees in the whole range of fees, or whether it is an average of the total cost of courses to institutions. The difference is obviously vast, depending on the number of students taking the course. That kind of average is extremely sensitive to variation.
4.45 p.m.
Baroness Blackstone: We are at the moment discussing a group of amendments tabled by the noble Earl, Lord Russell, and the noble Lord, Lord Tope. It is difficult to make sensible progress if Members of the Committee keep coming up with issues that will be debated on later amendments. We have to be orderly and have a sensible discussion, otherwise we cannot make progress. I want to be helpful. We shall be all over the place. There is no point in having a system in which Members of the Committee are asked to put down amendments in advance if, when we come to the Committee stage, they take no notice of the programme we have before us for discussing those amendments.
We are coining to a discussion on the whole issue of the affirmative procedure, and my noble friend Lord Whitty or I will answer the question asked by the noble Lord, Lord Renfrew, when we get there. The same applies to issues raised by the noble Earl, Lord Limerick. We shall try to deal with the point when we reach the appropriate amendments.
I return to the amendments tabled by the noble Earl. I shall begin by answering a question he put about the power under which we can charge tuition fees. It is in the Education Act 1962. Fees were means tested from 1962 until the 1970s. Many of us may have forgotten that, but that is the case.
The noble Earl has tabled a number of amendments which would have the effect of removing key regulation-making powers from the Bill. Amendment No. 86, tabled by the noble Baroness, Lady Maddock, and the noble Lord, Lord Tope, would have the same effect. The noble Earl explained that his purpose in tabling the amendments is to challenge whether it is appropriate to use secondary legislation for the purposes envisaged in the Bill, and to seek to establish what are the limits of the powers; that is, what use a future Secretary of State might, in theory, be able to make of them. Those are important points. I hope that I can reassure the noble Earl.
In order to do so, I hope that the Committee will forgive me if I am somewhat longer than usual. It is probably worth being a little longer than usual so that we can all be clear. I acknowledge that the powers in Clause 16 are drafted in fairly general terms. There is no getting away from that. We have taken that approach to allow flexibility to respond to changing circumstances, including, in particular, the changing nature of post-compulsory education; for example, as the Dearing Committee made clear, we face a challenge to become a genuine learning society.
As the system adapts to meet that challenge, the distinctions, for example, between different modes and levels of study, will become increasingly blurred, as
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Members of the Committee have already said. It would not make sense to refer to those concepts on the face of primary legislation which we intend to be on the statute book for a number of years. That is why Clause 16(2) provides, for example, for the rules determining eligibility for support to be set out in regulations.
Similarly, we must remember that we are dealing with maintenance as a long-term loan. It would be shortsighted—would it not?—to imagine that technical changes will not be needed to the administrative mechanisms over the next 30 to 40 years. It is inevitable that changes will be needed from time to time, not least to keep pace with any changes in the administration of the tax system. For example, any move towards greater self-assessment would have a knock-on effect on the arrangements for repaying student loans. It would clearly not make sense to amend primary legislation every time there was a technical change to procedures of this kind. I believe that that is well understood in this Chamber.
In addition, it would be wholly impractical to include on the face of the Bill all the detail of the new arrangements. By definition, any system of financial support embracing large numbers of people needs to take account of a wide variety of individual circumstances. The new repayment arrangements will need to be linked into the tax system and make separate provision, for example, for the employed, the self-employed and those not liable for UK tax. The result will be detailed and complex provisions which are precisely the kind of thing which it is appropriate to set out in regulations. The current mandatory awards regulations, for example, are 36 pages long. It would be quite inappropriate to incorporate all this detail into primary legislation, even if one could be confident that no changes would be required for a number of years. In practice, of course, changes are needed annually—not least to uprate the levels of support available—as I am sure the noble Baroness, Lady Blatch, will confirm from experience.
The noble Earl is concerned about the possible misuse of these powers. I should like to make two points here. I am not sure whether I can reassure him. It is difficult because he feels strongly about the matter. First, flexibility is not necessarily a bad thing. The current drafting of the Bill would enable either this Government or a future one to make more generous provision for students than is currently envisaged; for example, to extend the loans scheme to part-timers, postgraduates or further education students; to increase the level of support available; or to reduce the repayment burden on graduates. That is surely not the kind of flexibility which the noble Earl would wish to curtail.
I accept that a future Secretary of State could, on the other hand, make less generous provision. He could not stop providing support to students altogether, since Clause 16(1) requires him to make regulations governing the payment of grants or loans to students. But he could, for example, reduce the level of that support or restrict the categories of students to whom it is available.

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This is where my second point comes in. The fact is that these powers are no more open-ended than the powers under which the current student support system has been operating for over 35 years. The 1962 Act requires local authorities to make grants to certain students, but it says nothing for example about the level of those grants. And the Student Loans Act 1990 does not even require the Secretary of State to arrange for the making of loans: it merely enables him to do so, as I am sure the noble Baroness, Lady Blatch, will confirm.
Baroness Blatch: I am grateful to the Minister for giving way. She might be relieved to know that I agree with almost everything she said; certainly the case she is putting for secondary legislation. However, the previous legislation provided for the extent to which loans should go. The 50-50 arrangement was codified and agreed by both Houses of Parliament on the insistence of the noble Baroness. Would it not have been possible to provide in this Bill for the introduction of tuition fees and the abolition of the maintenance grant and introduce all secondary legislation thereafter? If that is the case, I agree with the Minister. She is saying that regulation-making powers are not open ended. I am afraid that they are. If they allow the Government to dispense with the 50-50 arrangement and for the introduction of tuition fees they are very open ended indeed.
Baroness Blackstone: I accept that the 1990 Act provided for a 50-50 arrangement. I am aware of that and remember our debates. However, the suggestion was then made that progress in moving towards 50 per cent. loans would be longer than was the case because the Government, of which she was a Member, wished to have the flexibility to make the changes in terms of the proportion of student support by either loan or grant as they wished. I remind her that they left that open and moved faster towards 50 per cent. loans than they stated at the time. As regards this Bill, it is important that we understand the proposal clearly. We have set it out and we announced it in Parliament when the Dearing Committee reported. It is a manifesto commitment to abolish maintenance grants. We could not have made the position clearer.
Baroness Blatch: This is a serious point. Manifestos do not substitute for the sovereign power of Parliament. It is for Parliament to determine whether tuition fees are introduced. It is for Parliament to decide whether the 50-50 loans agreements should be broken to make way for the abolition of grants. All we are saying is that we should be given an opportunity at this stage to discuss the primary legislation and to use a vote, rather than dealing with issues in secondary legislation when this House debates them but does not vote against them.
Baroness Blackstone: I am sorry, but I have difficulty in understanding the noble Baroness's point. She has tabled a later amendment on the matter. It would be helpful if we could confine our discussions to the amendments in the groupings. When we reach the
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relevant amendments, I shall listen carefully to what she says about whether it is right to abolish maintenance grants.
What is being proposed in Clause 16 is nothing new. The current system of enabling legislation and annual regulations has worked well for 35 years without any of my right honourable friends' predecessors abusing the powers in the way the noble Earl fears. Any such abuse would in any case be open to legal challenge on the grounds of unreasonableness.
I should add that we have already included one key safeguard in Clause 16; a provision which would in practice require any increase in the level of contributions to fees above the rate of inflation to be subject to affirmative resolution. That answers a point made earlier by the noble Baroness, Lady Blatch. As I indicated at Second Reading, we also hope to amend the Bill to limit the rates of interest which can be charged on loans. I am not convinced that any further safeguards are necessary.
Concerns have been expressed that we do not yet know exactly what will be included in the regulations. It is not possible to produce draft regulations at the present time because some of the fine detail—for example, on how the new collections mechanism will work—is still under consideration. Nor would one normally expect to see draft regulations at this early stage in the Bill's passage through Parliament. However, the Government have made their intentions very clear, not least in the progress report which was placed in the Library at the end of last week.
The noble Earl addressed his comments to a number of specific points. Perhaps I may take a little time to deal with them. He asked what provision we intended to make in regulations made under Clause 16(2)(a), which will determine who is an eligible student. We have made clear that we intend to retain the present criteria for deciding which students will receive support. This will mean that full-time undergraduate students on designated higher education courses, plus students on part-time and postgraduate courses of initial teacher training, will normally be entitled to receive grants towards the cost of their tuition and loans for maintenance. I am afraid, therefore, that cab drivers doing "the knowledge" will not be eligible. Clause 16 would enable us to extend this support to students in further education or to the generality of part-time or postgraduate students, but we have no current plans to do so. Such students will, however, continue to be eligible for support towards the costs of their study on a discretionary basis.
The eligibility criteria for student loans and for support for fees under the existing arrangements are currently set out in annual regulations and summarised in the progress report, to which I referred earlier. While we have no plans to change the criteria for the 1998-99 academic year it is likely, as I have already indicated, that changes will be needed over time to take account of changes in the system of post-compulsory education. In a dynamic environment, it is important that the Government are able to respond flexibly to changing demands. The power to deal with issues relating to eligibility in regulations will enable us and future administrations to do so.

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The noble Earl asked about the power to set maximum levels of support available to students under Clause 16(2)(b). The maximum amounts of grant and level to which students are entitled are currently set out in annual regulations. We are proposing no change in this respect. I am sure the Committee will agree that it is entirely sensible to make such provision in secondary legislation, given that the amounts will be adjusted routinely each year to take account, for example, of inflation. We have made clear, however, that the value of maintenance loans will be broadly equivalent in real terms to that of the current student support package. As I have mentioned, provisions elsewhere in the Bill will place limits on increases in the amount of grant which is payable towards fees; and by extension to the level of contribution which individuals and their families are expected to make.
The noble Earl asked about the provisions in Clauses 16(2)(e) and (f). These provisions give the Secretary of State the specific power to set out in regulations the terms and conditions attaching to grants. There is nothing sinister about these powers, which broadly mirror powers in the existing legislation. Indeed, our intention is to impose terms and conditions which are broadly the same as those applied to mandatory awards currently. We need in particular to be able to ensure that grant continues to be paid only for as long as a student is attending an eligible course. So we need to be able to prevent the payment of further instalments where a student has dropped out of, or been required to leave, his or her course. We may also wish to provide for grants paid to help with living costs—for example, to students with dependants—to be repaid, in full or in part, in circumstances such as these. It is clearly right to protect taxpayers' money in this way.
5 p.m.
Earl Russell: I seek a small amount of clarification. I accept what the Minister is saying but I am interested in what sort of terms and conditions could be imposed. Does that relate only to eligibility as a student and to repayment, or could that clause be used to impose other terms and conditions upon grants? Is there any restriction as to type?
Baroness Blackstone: I believe that the terms and conditions element is largely related to the issues which the noble Earl has just raised. However, I cannot predict what may happen under regulations in five or 10 years' time. That is the whole point of having some flexibility. I hope that the noble Earl will accept that.
The noble Earl asked about the power to specify in regulations under Clause 16(2)(g) the terms and conditions attaching to loans. That power is clearly essential: one cannot make a loan without specifying the terms on which it is made. Clause 16(3) describes in more detail the kinds of terms and conditions we have in mind; for example, interest rates, repayment terms and deferment and cancellation arrangements. In addition there will be various more technical points. For example, we will want to be able to require borrowers to inform the Student Loans Company if they leave their course early, or if they change their address.
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We have made clear our intentions in relation to the terms on which the new loans will be made. Students are aware of those. The key terms—for example, in relation to interest rates and repayment terms—have been widely publicised. Further details are included in the progress report on the new arrangements to which I referred earlier. That report also explains that a working group involving officials from my department, the Inland Revenue and the Student Loans Company has been set up to consider the fine detail of the new arrangements and that further details will be published in due course.
We believe that it is entirely appropriate for provisions of this kind to be set out in regulations, rather than on the face of the Bill. As I explained earlier, there will be a great deal of technical detail and we will need the flexibility to respond to changes in circumstances—for example, future changes in the way the tax system operates. On one key point—interest rates—it remains our intention to clarify the position on the face of the Bill. But with this one exception I am clear that the only sensible way of setting out the detailed terms and conditions attaching to grants and loans is to do so in regulations. That is, of course, the case under the current arrangements. I hope that the noble Earl will withdraw his amendment.
Earl Russell: I thank the Minister for that long and careful reply. I hope it will not seem ungenerous if I ask for just one more piece of information which I do not believe will cause her any trouble; that is, the section and subsection of the 1962 Act under which tuition fees are imposed.
The noble Baroness talked throughout about flexibility. I am reminded of the story of the American who received a gas bill for 0 dollars and 0 cents. He explained to the gas board that he could not possibly pay that; there was no way he could do it. After the umpteenth exchange he was told, "Yes, we see your point but we hope you will send us a cheque for this amount because our computer won't take 'no' for an answer". Therefore, he sent a cheque for 0 dollars and 0 cents. He then received a letter from his bank saying, "This cheque may well have satisfied their computer but it has caused real chaos in ours". Therefore, the flexibility may satisfy the noble Baroness while causing real chaos for us.
There is a balance to be struck here. I take the point about changes in the tax system but I hope that the noble Baroness also takes the point about parliamentary control.
The point made by the noble Baroness, Lady Blatch, about the introduction of tuition fees and the abolition of the maintenance grant was well taken. If it took us outside the technical wording of the amendment, that is because, on both sides of the argument, we have had to address general questions about the regulation-making power.
The view of the Renton Report and the Hansard Society Report Making the Law from Lord Rippon of Hexham is that the broad general principles must be in primary legislation so that the House can address them.

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Having listened to the noble Lord, Lord Glenamara, I am not certain that that principle has been observed in this Bill.
There is a long history of tension between this House and this department on this subject. We shall get on a great deal faster in future if some attempt can be made to improve communication between us on this point. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 83 not moved.]
Baroness David Baroness David moved Amendment No. 84:
Page 11, line 23, at end insert—
("( ) prescribing the administrative arrangements for the payment of grants or loans to eligible students;").
The noble Baroness said: In speaking to this amendment, I should like to speak also to Amendment No. 89. Amendment No. 84 is a probing amendment, the purpose of which is to enable the Minister to make an announcement on the new administrative arrangements for the new system of student support.
The Bill does not describe the detailed arrangements for the administration of the new student support arrangements. LEAs currently administer the system of mandatory and discretionary awards in England and Wales and in the short term will be responsible for implementing the new student support system in HE in 1998-99 and 1999-2000. On Second Reading, the Minister indicated that an announcement would be made shortly about those administrative arrangements in the light of discussions with representatives of LEAs, the Student Loans Company and other interested parties.
The Government are now understood to have made a decision in relation to the arrangements for 1999-2000. The Minister is expected to confirm that for that year the LEAs will have a continuing role in administering student support arrangements alongside the Student Loans Company and a new central unit established within the DfEE which will take over from the LEAs the means-testing of EU students wishing to study in England and Wales.
The Government's position regarding subsequent years—that is, from 2000 to 2001—is rather less certain. This issue needs to be clarified as a matter of urgency. It would be helpful if my noble friend the Minister could confirm how and when any decision could be anticipated in the area.
Is it correct that the DfEE will be establishing in February a steering committee to manage the introduction of the new arrangements which will draw on the expertise of a committee which will advise on the precise allocation of responsibilities between LEAs, SLC and DfEE's central unit? Will the committee be making a thorough review of the current means-testing arrangements with a view to simplifying the system wherever possible? The review is expected to be completed by the end of September.
To a limited degree the announcement which is anticipated from Ministers on administrative arrangements for 1999-2000 can and will be welcomed
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by LEAs and others. An announcement about 1999-2000 only will not, however, enable the 172 LEAs in England and Wales to plan effectively for the future. It would appear that the present uncertainty for current and prospective students, their parents and families will continue in the short term at least pending any clarification by Ministers of the process they anticipate for reaching decisions on the administrative arrangements beyond 2000-2001.
I hope that my noble friend the Minister realises the importance of resolving uncertainty as soon as possible, and indeed the real advantages and value of opting decisively for continuity of service through locally accountable LEAs. LEAs are pleased to work in partnership with the Government in implementing the significant changes to the current system of student support and also in helping to determine what other improvements might be progressively introduced from 1999-2000 onwards. It is far from satisfactory that uncertainty is expected to continue in this critical area in relation to 2000-2001.
I turn now to Amendment No. 89. Its purpose is to seek clarification of the progress made in establishing the ministerial advisory group on the new arrangements to replace discretionary awards. The enabling approach in the Bill, which gives very wide-ranging powers to the Secretary of State, is also noteworthy in relation to the powers which LEAs currently have to make discretionary awards. The Government are taking the opportunity in this Bill to discontinue discretionary awards made under the 1962 Act, as they feel that the current arrangements are inadequate and need reforming. In December 1997, the Minister invited Councillor Graham Lane, Chairman of the Education Committee of the LGA (the Local Government Association) to chair an advisory group to provide advice on what new arrangements might be introduced to replace discretionary awards.
The Further Education Student Support Advisory Group has so far met on two occasions and a detailed programme of meetings has been agreed on a fortnightly basis up to the end of March when the group is required to report back to the Minister with detailed recommendations. Although the Minister may not feel it appropriate to comment on the detailed discussions in the advisory group, particularly since they are evidently still at an early stage, it might be helpful if she could confirm for the official record details of the group's membership and terms of reference, and set out what work the group has already initiated in terms of collecting information and comments from interested parties to inform its deliberations. If that is too much for my noble friend to do today, perhaps she could place a note in the Library about it.
The Minister has already indicated that she would not intend,
"to leave LEAs without a power to make awards to students in exceptional circumstances and at their own discretion",
in the future. Could the Minister confirm that that is still part of the department's policy pending further consideration of the recommendations of the advisory group and subsequent consultation by Ministers on

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detailed proposals before any new changes to student support arrangements in this area are implemented for the future?
The point of both amendments is to find out rather more about what is going on for the sake of the LEAs. They have a certain amount to do at the moment and they very much want to know how much they will be expected to do in the future. After all, they have to make arrangements about the number of staff they employ and so on. The process of means testing for grants is really quite a considerable job. I beg to move.
5.15 p.m.
Baroness Blatch: I rise to express my support for the plight of LEAs in particular. I believe that they are at a very real disadvantage. There is one aspect of means testing which I know is taxing their minds very much. I know that there is a sentence in the latest progress report which says that the Department for Education and Employment will give substantial help in means testing European students from other EU countries.
Means testing a young Italian applying to come to a university in this country with the added complication of applying to study in Scotland rather than in England, will be most difficult. Unless one is automatically and entirely to rely on what the family puts in the application form, any verification system will be extremely bureaucratic or even costly. For example, will we have DfEE officials going on interesting trips around France, Italy, Spain or Germany? It will make it the most incredibly difficult task.
However, for the moment, the responsibility will rest with local authorities. If that goes wrong and we discover that there is a great deal of malpractice going on, it will be exceedingly difficult for local authorities to deal with it. I have singled out only one element, but there will also be a twin-track system. I make the assumption here that any second-year, third-year or fourth-year student in the system at present from 1998 will in fact receive the larger maintenance grant. Although I know that they will not have to meet any tuition fees, my understanding is that they will receive the 50-50 split of loan and grant. In other words, local authorities will be means testing for the existing system and means testing for the £810 maximum amount of grant for new students, in addition to means testing families for the degree to which they pay all, part or none of the tuition fees. There is a real job and a real challenge here for local authorities. For that reason, I wish to support the noble Baroness, Lady David, in her amendment.
Baroness Park of Monmouth: I should like to add my strong support for the amendment, principally because I am most concerned about the anxiety which is to be found among all students and prospective students regarding the lack of clarity on what is going to happen. I refer especially to the respective responsibilities of the LEA, the Student Loans Company, and others. If loans are to be paid termly, for example, there is very great scope for problem and delay. Is the Student Loans Company now fully organised and able to respond to students? Moreover, will it be accessible and effective?
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The LEAs are local and accessible but, as I understand it, they are no longer to have the responsibility in the long run for paying grant cheques.
I am particularly concerned about the mayhem that could occur and the blow to student morale if students are unable to get through, not once a year but every teen to the Student Loans Company to secure their loans. At present, in Scotland, the Student Awards Agency, which deals with payment of grants, is the subject of an inquiry because some grants which were due in October last year have still not been paid. As with the Student Loans Company, students telephone the agency and receive no answers. Telephoning costs money. The student union in Aberdeen, for example, has helped to pay for telephone calls and even helps students to fax their increasingly urgent inquiries.
Another aspect which concerns me very much is that, hitherto, students coming up could count on the maintenance grant as some money while they sorted out everything else. If they are to lose that, and unless they arrive with everything completely sorted out on the loan side, they will be in desperate straits. I therefore feel that it is extremely important that those aspects of the situation should be cleared up as soon as possible.
Lord Tope: I should like, first, to express my support for the amendment. I want very much to support what the noble Baroness, Lady David, said in moving it. Perhaps on this occasion I may do so as a leader of an LEA, although I forget what the description was of an LEA—perhaps "a beleaguered LEA". If this is to happen, the sooner that LEAs are clear about their role and responsibilities, the better. It is not surprising that students and prospective students are ringing up their LEAs to find out what is happening. The fact that LEAs are not in a position to tell them in detail simply adds to the pressure and stress of students, of parents and indeed of the staff of LEAs.
As I believe is well-known to Members of the Committee, LEAs are undergoing a considerable amount of change and innovation in one way or another at this time. A lack of early clarity adds to the stress that students feel. As soon as the Government are in a position to give clear instructions to LEAs it will be appreciated by all concerned, not least, I suspect, the Government.
Lord Walton of Detchant: In reply to the amendments raised by the noble Earl, Lord Russell, the Minister said that special arrangements would be made for students reading for a postgraduate certificate in education. It has been reported that similar concessionary arrangements will be made available to medical students in the final year of a five-year course.
Will extended concessionary arrangements be made for medical and dental students, and perhaps some architectural students, who may be studying on a six-year course?
Baroness Blackstone: To deal with the specific question by the noble Lord, Lord Walton of Detchant, yes, special arrangements will be made for fifth and subsequent years.

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My noble friend Lady David made clear that these amendments are designed to elicit a statement of our plans for the future administration of the system. I am very pleased that I am able to oblige.
The Dearing Committee argued for the establishment of a single student support agency to replace the functions currently performed by local education authorities. There are attractions in setting up such a body rather than continuing to rely on more than 160 LEAs. In most cases their performance has been perfectly adequate, although there have been exceptions and some LEAs appear to operate much more efficiently than others in this area. But there must be doubts about whether an essentially executive function needs quite so many local delivery agents.
But there are arguments the other way. LEAs have been doing the job for many years, as Members of the Committee have said, and have built up a lot of highly specialist knowledge; and the Dearing Committee was not able, in the very short time it had to examine a huge range of topics, to look at the issue in detail. Furthermore, as the committee recognised, the priority must be to implement the new arrangements, in particular those for new fairer loans. The next couple of years will be transitional ones.
We have therefore decided that during that period we shall continue to use LEAs and the Student Loans Company to deliver the new arrangements. LEAs will conduct the means test and the student eligibility checks. They will therefore have a key role to play for at least the remainder of this Parliament.
The Student Loans Company will be expected to pay loans on time—that is very important—so that students have the money they need in order to live.
We shall be setting rigorous performance standards for LEAs and a new specific grant regime will be based on those standards. We shall involve LEAs and other interested parties in devising the detail of the new arrangements. Our priority will be to ensure that students and others receive a high level of service.
Once the system has bedded down we shall review the arrangements and look, in more detail than the Dearing Committee was able to do, at the best way of administering the student support system. We shall aim to complete that review in 2000. We shall make an announcement about the terms of reference and nature of the review shortly.
Perhaps I may say this to my noble friend Lady David. As regards the other review taking place on discretionary grants, I shall put a note in the Library which sets out the membership, terms of reference, and so on. They are already publicly known, and I can certainly do that. I also confirm that it is the Government's intention to leave with LEAs the power to make awards on a discretionary basis.
I should add that no amendment will be needed to the Bill to facilitate the new arrangements. Although the power to make grants and loans will rest with the Secretary of State, he will be able to delegate certain functions to LEAs and the SLC under Clause 16(7). The
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first of these amendments is not therefore necessary: regulations will in any event prescribe administrative arrangements insofar as it is necessary to regulate in this area.
The noble Baroness, Lady Blatch, raised the issue of means testing for EU students. It has been decided that it would make more sense if, from the beginning, there was a small central unit in the Department for Education and Employment taking on that work rather than that 160 LEAs should undertake it separately. I confirm that the intention is to do that in 1998-99 rather than in the subsequent year. I do not think that civil servants in the department will need to travel around Europe in order to do that work. I believe that through other means they will be able to acquire information about the tax regimes of European Union countries.
The clause as it currently stands would also enable the Secretary of State to make regulations under which he could pay grants to students in exceptional circumstances, such as exceptional financial hardship. It would be difficult, however, if not impossible, to make regulations that specifically addressed the potential needs of every student facing financial difficulties. I have listened carefully to representations by local education authorities that they should continue to have a discretion to offer financial support to students in exceptional circumstances. As I have already said, I agree that such discretion is needed. The primary legislation already exists to permit my right honourable friend the Secretary of State to make regulations allowing authorities this discretion. The Education Act 1996, Section 518, provides for the Secretary of State to make regulations which empower local education authorities to grant allowances in cases of hardship. In view of this existing power, the second of these amendments is also unnecessary.
I hope that the information I have provided is what is sought by my noble friends and that they will therefore be able to withdraw the amendments. I am very confident that the local education authorities will be able to rise to the challenge—a number of Members of the Committee have referred to it—and I know that the LEAs are anxious to do so.
Lord Peston: Leaving aside the European Union question, the Minister said that LEAs will be dealing with the issue until the year 2000. Did I understand the noble Baroness to say that what will happen after the year 2000 is still open? I believe that that is what she said. Is there not a slight problem? If LEAs are to handle the matter—as the Minister said, it is not an easy matter—they will have to invest in systems. If they are no longer to deal with it after two years, there will be less of an incentive to invest in those systems.
Can we be assured that the LEAs will be given good notice? I appreciate that the department has problems. I do not change my views on tuition fees, which is another matter. But, given the other pressures on them, can we be assured that the LEAs will be given as much notice as they will require? Will they be asked suddenly,

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"Can you keep going?"; or will they be told, "We don't need you any more"? The answer has been left out of the reply.
Lord Wallace of Saltaire: I am concerned about the European dimension. The students I taught this morning included students from Finland, Sweden, Germany, France, Italy, Spain and Portugal. A small central unit in the Department for Education and Employment seems to raise a large question. One talks about knowledge of tax regimes in other European Union states. That also raises questions.
Last week, for other reasons, I read cases heard in the European Court of Justice on payment of fees to students from different countries operating across boundaries within the European Union. It seems to present a potentially classic case and we shall find ourselves before the European Court of Justice if we are not careful. Alternatively, we may find ourselves up against questions about the way in which tax regimes are interpreted in different states.
Universities have discussed this issue. How does one demonstrate that a student from northern Greece is who he says he is without investigating in great detail? I wish the Minister to be aware that a small central unit may get us into potentially extremely deep waters as we try to impose a British system on students who come from 14 other countries.
5.30 p.m.
Baroness Blatch: Perhaps I may add to that point. A rather technical exercise is undertaken in this country to calculate residual income, on the basis of the commitments that an English, Scottish, Irish or Welsh person has in terms of taxation, national insurance, mortgage payments and so forth. It is the most incredibly complicated system. If one is to rely entirely on what the student or his or her family says by way of submitting an application and everything is taken as read because there is no sophisticated verification system, I see great problems building up.
Sadly, I also foresee a kind of resentment building up on the part of students at home, who may see that all sorts of tortuous processes are gone through to verify whether a parent is working, whether everything is being declared that should be declared and so on, and yet see almost none of that taking place for an EU student, simply because it is difficult, because the system is bureaucratic and information is hard to get hold of.
I wish to refer to the question put by my noble friend Lady Park of Monmouth. Like the rest of us, my noble friend is very concerned that in this new world in which students will be living, the only money they will have in their hands come the beginning of term will be money they may have received through the loans system. The latest document from the DfEE states:
In September new students will begin applying for loans following the start of their courses".
That is inconsistent with the reply given to my noble friend by the Minister. As my noble friend knows, and certainly I know, having seen my own children through
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the system, as students arrive at university landladies and landlords expect money in advance for rent and other things. Moreover, students will have some expenses to meet simply in order to eat and to live during the first weeks of their course.
A very large number of young people in this country will be unable to turn to their parents for help. They will be unable to turn to them for the sort of sums they will need to put down as advance rent. Therefore it is important that they have this money in their hands, as a loan—especially those who are borrowing 100 per cent. of the moneys they will need for maintenance. That point is not covered in the documentation.
Baroness Carnegy of Lour: Will the noble Baroness tell the Committee whether any changes will have to be made in Scotland in implementing this provision? In Scotland local authorities are not involved: there is an agency. Will that agency have to be enormously enlarged, and will there have to be an extra unit for overseas students? I could put this point when we discuss the Scottish provision under clause stand part. However, it might save time if the noble Baroness could answer now. I see that the Scottish Office Minister, the noble Lord, Lord Sewel, is sitting at her side.
Lord Walton of Detchant: I agree with noble Lords who said that the problem of means-testing overseas students will bristle with difficulties. I wonder how a central unit in the department will deal with the kind of case that I recall from my former university, of an overseas student who applied to the hardship fund but made the mistake of parking his BMW outside the window.
Baroness Blackstone: A number of questions have been raised. To return first to the point made by my noble friend Lord Peston, yes, of course we will give local education authorities ample notice of any change in the system. We ought to be clear that the means-testing regime which presently applies to grants and will apply to tuition fees will be exactly the same. There will not be two different sets of means-testing. The same eligibility criteria will apply. I wish to be clear on that point.
On the issue of means-testing students from the European Union, we are required under EU law, as I am sure the noble Lord. Lord Wallace of Saltaire, is aware, to treat EU students in exactly the same way as we treat UK students. So it is necessary to have a means-testing regime for tuition fees for European Union students if we are to have it for UK students.
Lord Mackay of Ardbrecknish: I have listened to the argument with some interest. Is it not possible that we could argue before the European Court that a student from a European Union country would not, in his or her own country, receive help from the government? In many countries students do not; they are very much on their own and dependent upon their parents. Yet if they

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come to this country, they will receive help. That would seem illogical enough even for lawyers at the European Court to understand!
Baroness Blackstone: Far be it from me to comment on the logic or otherwise of lawyers in European Union courts. The legal advice that we have received is that we cannot change this provision, at least not for the foreseeable future. We have to accept European Union law and abide by it in this particular respect.
Yes, of course I accept the point made by various Members of the Committee. This is a technical and difficult area, and I do not under-estimate the difficulty. Nor do I under-estimate the strengths of DfEE civil servants in being able to sort out the matter. I am sure that they will be able to do so.
It is also the case that the vast majority of European Union students studying in the UK come from families whose incomes are much higher than would qualify them for the sort of support referred to by the noble Lord, Lord Mackay of Ardbrecknish; namely, exemption from fees. We know that that is the case. After all, such students do not receive any support for maintenance in this country. In most European Union countries they would live at home. If they can afford to pay to live in the UK, away from home, it is very unlikely that they will be eligible for exemption from tuition charges.
Baroness Blatch: I wish to make two points. First, I imagine it would be unlawful to make the assumption that if someone comes from an EU country he or she can afford tuition fees, and therefore the exercise of means-testing has to be undertaken. Secondly, I wonder whether the noble Baroness will tell us for the next stage of the Bill what the verification system will be for EU students.
Baroness Blackstone: It would be unlawful to make an assumption if someone applied for exemption in relation to a fee. But I suspect, and hope, that those EU students whose parents' incomes are well above that which will qualify them for exemption from a fee will not apply. They would be wasting their own time as well as that of everybody else. We shall be making available all the information that we possibly can to applicants from the European Union, setting out what the eligibility will be. There may be people who think that some way or other they can get round the provision. I do not deny that. That is why it is important that the central unit to be established is extremely well-informed and operates effectively in carrying out the means-testing. I made the point in order to provide some reassurance. We should not imagine that every EU student coming here to study will apply for exemption.
Lord Wallace of Saltaire: I strongly agree with the Minister that most of the students who come here are not among the poorest classes. I wish, however, to make two points. Will the Minister assure the Committee that the small central unit so designated will at least consult with other EU member governments as early as possible
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as to how such a scheme might be managed? The British Government have an unfortunate record of pushing matters through without consulting other governments first, and then discovering that there are large problems and obstacles to be faced. The DfEE has not always been the most internationally-minded department.
Secondly, the precise reason that I was reading through the ECJ cases last week was that it seems to me the law is not entirely clear on this whole matter. There are some interesting questions that the British Government ought to be considering as we and other governments move forward on university financing. There is a mess that has to be sorted out. Whether or not the legal advice is entirely clear, some of us are seeking additional legal advice on the matter.
Baroness Blackstone: Officials in my department will, of course, consult with the governments of other EU countries in order to obtain the best and most up-to-date information. I also take the second point made by the noble Lord, Lord Wallace of Saltaire.
Perhaps I may return to one or two other points. The noble Baroness, Lady Blatch, raised the question of what happens to students on day one. Perhaps I can remind her that this autumn students will still be in receipt of grants, and their grants will be available from day one. From 1999, when the grant is to be abolished, it will be vital that the Student Loans Company has paid the loan from day one. That is what I said before, and that is what we intend to do. The noble Baroness's point related to the position in 1998, which is slightly different.
The Student Awards Agency for Scotland currently carries out the functions of the LEAs in relation to student awards. The intention is that it will continue to do so for home and EU students. There should thus be no significant difference in the scale that is required.
Earl Russell: The Minister sets me thinking when she talks about imposing means tests on an equal basis across the EU. As things stand at present, that will he affected by exchange rates. My noble friend Lord Avebury has asked me whether the means test will rest on the exchange rate at the time of application or the rate when the money is to be spent. There can be a considerable difference. Is the Minister here setting up a system which will not be viable—unless, as my noble friend suggests to me. we do it all in euros?
Baroness Blackstone: My understanding is that the Liberal Democrats are in favour of moving towards a more federal Europe and the introduction of the euro. If their wishes on this matter are granted, we shall not he faced with this problem for very long. Yes, of course, there are problems of detail about the exact date on which the exchange rate is set for this purpose. I cannot answer the question; the matter is still being looked into. In answer to the noble Baroness, Lady Blatch, I shall try to provide more information about how the scheme

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will work in this respect. I very much hope that my noble friends will be able to withdraw their amendments.
Baroness David: I should like to thank the noble Baroness, Lady Blatch, for her support as far as LEAs are concerned and other noble Lords and Baronesses who have spoken about these two amendments—even though the EU did rather take over. If we moved to a single currency fairly quickly, that would clearly be a great help in this respect.
I thank my noble friend for her reply. Once she had reassured my noble friend Lord Peston that LEAs would have plenty of notice of what would be expected of them, her answer to me was satisfactory. I thank her and withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 85 to 88 not moved.]
Lord Tope Lord Tope moved Amendment No. 90:
Page 11, line 35, at end insert—
("( ) For the purposes of subsection (2)(c), "circumstances" shall not include the income or other financial resources of the person's parents or spouse.").
The noble Lord said: I shall speak briefly in moving this amendment, partly so that we can make some progress this evening and partly because my noble friend Lady Maddock has some important things to say. In speaking briefly, I do not wish in any way to indicate that we regard the amendment as unimportant. On the contrary, it is fundamental to the Liberal Democrat approach to student funding.
We regard people who reach the age of 18 as independent adults, not as dependent children. That is a fundamental point and is the purpose of the amendment, which provides that in assessing these matters the income of a student's parents or spouse should not be taken into account.
In almost all other aspects of life people are regarded as adults once they reach the age of 18. They can vote, fight for their country and enter into contracts. But when it comes to going into higher education, they are still treated as dependent children. We know that many parents are generous in their support of their children while they are at university. Many are willing and able to be so; but that is not always the case. Many parents do not meet their contributions. However, that is not the point. The point is that a person who is 18 should be treated as an adult in his or her own right, and the system of student funding should recognise that. We wish to see the amendment put into the Bill as a fundamentally different way of approaching student funding, recognising people aged 18 as adults, as they are in other situations. I do not imagine that, in the perhaps unlikely event of an 18 year-old applying to a bank or a building society for a mortgage, he or she will be able to obtain a higher mortgage because of his or her parents' income. The same should apply in the education system. My noble friend Lady Maddock will add to the points I have made. With some passion, I beg to move the amendment.
5.45 p.m.
Baroness Maddock: I rise to give my wholehearted support to my noble friend in the proposition that students should be treated as economically independent at the age of 18. There are three reasons why I believe this is a sensible proposition.
First, it would deal with the problem of assumed income, which is often not received by students from their parents. Figures show that almost one in three students do not receive the money that government and others assume they will receive from their parents.
Secondly, it would make it much simpler for students to deal with social security benefits. We heard earlier from the Minister that she is looking carefully into the interaction between this legislation and social security legislation.
Thirdly, it would deal with the muddled situation that exists today with regard to the age at which students become independent. Here I speak from personal experience. My elder daughter was in higher education for two years and decided to give up her course and go out to earn her living. She has now decided that she wishes to go back to university. She is 21 but is not considered independent, although she has been leading an independent life for two years. If she had gone on to work for another couple of years, she would be considered independent of her parents. It is difficult for students going in and out of courses. Students are not always sure what they want to do when they leave school and may choose a course which is not suitable for them, as my own daughter did. I believe the amendment would deal with some of the problems and anomalies that arise.
This proposal to ensure that students are considered independent at 18, together with our earlier proposal that part-time students should be treated the same as full-time students with regard to fees and our later proposal that all students should have their fees paid, would make the job of dealing with this legislation and the administration that will ensue much simpler, not only for the Government but also for local education authorities and higher education institutions.
For those reasons, I hope that the Minister will look favourably upon this amendment and give us some indication as to where the Government stand on whether, perhaps sometime in the future, they will look seriously at this proposal.
Lord Desai: I am in some difficulty here. I grant that people who are over the age of 18 are responsible for themselves and should be treated as such. However, in charging the education fee of £1,000 we have taken to means testing in relation to the resources of the parents. That is my understanding; but I may be wrong.
In an ideal world, peopled by economists and a few of their friends, one would only judge people in terms of their future income and not by their parents' income or anything else. Eligibility for the grants should be on the grounds of future income; therefore, all grants should be loans against future income and they should be collected by the Inland Revenue. That is in an ideal world, but we do not live in an ideal world.

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We cannot have an inconsistent treatment of students as between tuition fees and maintenance grants. That is the dilemma. Maintenance grants are actually consumption loans which are terrible things. One cannot say that for the consumption loans the students are going to be treated as adults, responsible for themselves, and all will qualify, more or less, and then say that when it comes to tuition fees they do not qualify because the parents are supposed to pay. In that case they would lose out both ways.
The world is not consistent and therefore we will have to live with this anomaly, that students cannot be treated as responsible adults as far as this Bill is concerned at the present time.
Lord Quirk: Is it not the case that after the passage of this Bill maintenance grants will not be paid; it will all be on the basis of loans? Therefore, it is possible to treat tuition fees and loans on precisely the same basis.
The amendment proposed by the noble Lord, Lord Tope, and the noble Baroness, Lady Maddock, stands and seems to me to be perfectly logical. The problem is that the justification for having (c) in here is to protect the poor, to ensure that the poorer student will get to university and, a fortiori, if one is going to protect the poor there has to be some way of unprotecting the unpoor, or, as one would have said until last week, some kind of affluence test.
The fact remains that the worst off under the present system is the student of the parent who is affluent but who either does not feel able, or simply refuses, to pay for the reasons that the child, who may be 20 or 21 years old, is an adult and they therefore say, "Why should I?"
We have a real dilemma here. I hope that the Minister will be able to clarify this. We are in the position, surely, where affluence will affect both the ability to pay tuition fees and the ability to get a loan.
Baroness Perry: I strongly support this amendment, most particularly the part of the amendment which refers not just to the student's parents but to their partner. Unfortunately—and I hesitate to say it in this male-dominated House—there are still many men who refuse to support their partners, despite the fact that their income has been taken into account in determining the amount of the £1,000 fee which the woman student has to pay. It does give enormous power to the man in question if he is able to say, "If you are nice to me, I might pay your £1,000 for you; if you are not, I will not." I feel it is quite distasteful to perpetuate a system in which the partner's income should be taken into account, particularly in the case of a woman, in determining the amount of the fees she has to pay.
Unfortunately, there are many women who themselves have limited or no resources and who therefore could be blackmailed in quite an unpleasant way, and who are, apparently, often blackmailed over the issue of the maintenance grant. That will be gone. Everyone will lose that and will get a loan. However, as
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far as the £1,000 fee is concerned, I very much hope that this amendment will be taken on board by the Government.
Earl Russell: The noble Lord, Lord Desai, always interests the House and he always tends to deal with arguments with which he does not agree by the use of the technique of reductio ad absurdum. That technique is, of course, a revolving door. I agree with the noble Lord that we can never hope to abolish anomalies; I am not that Utopian. What I believe and what I think the noble Lord also believes is that one can occasionally attempt to make the anomalies slightly more logical. The real anomaly in what the Government are proposing is not the charge on the parent but the contrast between the obligation to the student to rely on the parent and the lack of any obligation on the parent to support the student.
I should declare an interest in this amendment. As a serving university teacher I am dealing here with something that takes up a good deal of my working life. It is a constant, recurrent problem.
As I believe the noble Lord knows, I have been asking for quite some time for the age of majority to be referred to the Law Commission because, as with the case of part-time students, we are dealing here with a problem that stretches much wider than the educational world or this amendment. We are regularly developing a gap between the age at which parents cease to be bound to maintain their children and the age at which children are treated as having the rights of adults. That is the gap into which students are now falling.
It is obviously a disadvantage to those from low income households, but it is not only a disadvantage to them. It is a disadvantage to any people whose parents do not think they should be having higher education or, indeed, do not think they should be having that particular sort of higher education. Of course, power is capable of abuse among parents as among any other people who hold it.
Just last night I was talking on the telephone to somebody still in her 30s, who almost missed the chance to get a higher education because her father believed that women should not be educated. It still happens. It was not my first case of this by a very long way. I had hoped by now I would be past meeting it, but not yet.
There are, of course, also people who are estranged from their parents. In the increasingly common situation of fractured families, very often people are not on speaking terms with the parent on whom they are compelled to rely for financial support. That is a situation which creates a great many strains within families. The harm it does is not just the harm of being sometimes without money; it is the harm of a great deal of resentment and tension within the family.
There are people who do not get the money from their parents because they are the less favoured child, sometimes because another child is getting his fees paid at an independent school. That is also within my experience. In these cases there is obviously no justice, no connection between the person's claim to higher education and their actual chance of getting parental support.

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During the last recession one of the commonest reasons I found why my pupils were not getting what their parents were assessed to pay for them was bankruptcy which, of course, the parent cannot do anything about. The grant can be reassessed, but it takes a very long time and, as with so many things in this new, flexible universe, there is a very big gap.
Before the noble Baroness, Lady Blatch, leaves the Chamber, I should like to say that I am extremely grateful to her for the trouble she took, when Minister, in regard to grants being assessed more quickly. But not even the noble Baroness's industry and dedication was enough to get the job done properly. There will always be a problem.
It is also true that means tests are inefficient. There will always be people who fall through the net and people whose circumstances are not assessed properly. In particular, with the students' means test, when residual income is assessed it does not properly take account of housing costs. That is based on the mortgage interest tax relief system. It takes account only of the first £30,000 which, as those of us who live in London or the south east know, amounts to practically nothing in terms of a mortgage.
Again, there may be higher as well as lower income people who fall through the net. And an injustice is an injustice, no matter to what sort of person it is done. I hope therefore that we do not assume it is only low income people who are involved. The ultimate objective must be to get higher education to the best people. We will not do it unless this amendment is carried. I am glad to support it.
6 p.m.
Lord Glenamara: This difficulty, so far as it relates to tuition fees, arises because the Government are trying to achieve their objectives in the wrong way. Parental income need not enter the situation at all. Let me remind the Committee that the Dearing Report said:
"On balance of considerations, we recommend to the Government that it introduces arrangements for graduates in work to make a flat rate contribution of around 25 per cent. of the average cost of higher education tuition, through an income contingent mechanism".
When it says, "income contingent mechanism", to whose income does it refer? The way the Government are doing it, it is contingent on the income of the parents and the family home which the student probably left 10 years earlier. Let me give an example. There are two students, John and Jane. John comes from a low income family. Under the Government's proposals, he does not have to pay any tuition fees. Jane comes from a middle-income family. Her parents do not pay the fees and so she must borrow £3,000 towards her tuition fees. Ten years later John, who is a bright boy, has become a barrister, maybe a QC—who knows, he may have married a QC—and will be on a high income, perhaps £100,000 a year. Jane, on the other hand, is a schoolteacher and will earn £15,000 a year if she is lucky. What happens? John, with an income of £100,000 a year, has to pay nothing towards his tuition fees. Jane, with an income of £15,000, must pay off the whole £3,000. That is grossly unjust.
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Have the Government thought out this situation? It is ludicrous. Parental income need not enter the equation at all. If the Government wanted to do this, they should have introduced a graduate tax for all new graduates. I would still have opposed it, but it would be logical and fair. It would be collected through the Inland Revenue. But the Government are basing the system on the original parental income and that is a grossly unfair way of doing it. This difficulty therefore arises because of the way the Government are operating the system.
Lord Desai: The Dearing Report must have meant the income of the student. The words "income contingent" must have meant the future income of the student. My colleagues at the LSE have for a long time worked out and argued that a loan system based on income contingent repayments will finance higher education and time and again that has been shown to be so. When I read the Dearing Report I understood "income contingent" to mean the income contingent of the students who enjoyed the higher education.
I agree with my noble friend that the problem is not what is happening to maintenance grants. Indeed, the anomalies of maintenance grants could be eliminated if they were made into loans. An anomaly arises with the tuition fees. If the Government did not press means testing on the tuition fees and everybody paid them, regardless of what they are, all students would pay £1,000 and pay it back from their future income. If that amendment was proposed, I would embrace it. But Amendment No. 90 does neither one thing nor another.
Baroness Blatch: The noble Lord, Lord Desai, says almost exactly what was said by the noble Lord, Lord Glenamara. The noble Lord, Lord Glenamara, made it absolutely clear that if the Dearing package was put before the Committee, he still would not support it. But it makes more sense.
We shall attempt, in the course of the passage of the Bill, to turn this back into a Dearing recommendation. What is incredible is that the income of the parents will be taken into account for £1,000 and yet the students from the poorest families in the land start off life by borrowing almost £4,000 each year they are at university.
We have a scheme that leaves the poorest families and the poorest students with the highest and greatest burden of debt when they leave university. I cannot better the example given by the noble Lord, Lord Glenamara; it is absolutely right. The future income of students may reflect different situations to the backgrounds of the families from which they come. It makes no sense to have a means test for a family for £1,000 and to consider the student economically independent for the purposes of borrowing almost £4,000. This hybrid system has not been thought through.
Perhaps I may read a letter from the University of Aberdeen written by the president of the student council in which he says:
"The Government's plans appear to be very poorly thought through. Poorer students who will not have to pay the tuition fee will be losing out on £1,685 which they currently receive in the

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form of grants and will have to borrow that instead while richer students will lose out on £1,000, £685 less per year than their contemporaries. This is hardly fair".
That is one aspect. Members of the Committee have given other examples of where there is unfairness. For the student from the affluent family, the family is deemed to be paying part of the loan, whereas the student from the poorest family has to meet the whole of the loan. There are lots of anomalies. It is a scheme which is extremely badly thought through and which will be costly in administration.
Baroness Park of Monmouth: I strongly support the amendment too. When one looks at the plan, it says that family income will be considered without regard to the number of children. It is likely that there will be two or even three clever children in a family which is earning around £20,000 a year. That sounds like a lot of money, but it will be impossible for them to pay for three children. They may be poor hill farmers or small businessmen struggling to keep going. Not only does it mean that they cannot do it; it is probable that the children will not ask them to do it because they will feel it is a gross infliction upon the parents, knowing their other circumstances. It is vital that students should be considered adult for the purposes of this argument and assessed on what they have, not on what their parents have.
Lord Davies of Oldham: I first declare an interest as chair of the Further Education Funding Council, but I have an even deeper interest in seeking to extend opportunity to all our young people who can benefit from courses in higher education.
The nature of the anomaly which has been identified is being discussed without any real appreciation of the problems which higher education faces and which the Government are under a signal obligation to meet. When this Government came into office, higher education was in deep crisis in terms of the shortfall of resources it needed. For three years, there had been a freeze on the numbers going into higher education. That restriction on opportunity has bitten deeply upon people as they increase their qualifications in our society. It is a block which the Government are under a moral obligation to raise. In doing so, they must produce resources, as Dearing identified. And they must produce them quickly.
No one thinks that tuition fees are of themselves a good thing. Of course not. But when resources are needed in higher education, the Government had to attend to the issue against the background of an additional £165 million having been put into the sector this year. But if tuition fees are to be introduced, what is being argued here today? Of course, my noble friend Lord Glenamara argues quite clearly that tuition fees ought not to have been introduced and therefore the resources should have come from elsewhere. Perhaps he thinks they ought to have come from the same direction that the Liberal Bench suggests, increases in taxation. All I can say is that in terms of the demands upon taxation represented by the Liberal Party's arguments,
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and particularly one earlier on which suggested that we could assimilate the whole strategy for part-time students on the same basis as higher education, we would be talking of increases in income tax of many pence in the pound.
The other argument appears to be that tuition fees, if introduced, should have no means-test attached; in other words, that young people from well-off backgrounds, who can afford to pay tuition fees, should be on the same basis as young people from poorer backgrounds who cannot afford to pay. That cannot be right. I am sure that we will have arguments later on during our debates today, but if the argument is to be that the danger is that there are deterrents involved—
Baroness Blatch: I am grateful to the noble Lord for giving way. Does the noble Lord think it fair, if he is concerned about rich students versus poor students, or rich families versus poor families, for the poorest of the students to lose the maintenance grant completely and have to borrow the whole of it when richer students have half the grant paid for them and only borrow half of it?
Lord Davies of Oldham: I recognise that as far as poorer students are concerned they are to be faced with a proposition by the Government that their repayments will be over the course of a lifetime's career activity and not, as at the present time, where they are faced with circumstances in which they have to repay on a mortgage style repayment within five years. So I have no doubt that there is no deterrence to students from poorer families on the Government's improved scheme with regard to maintenance. But there may be—and it will be suggested on many sides that there is—a deterrent involved in the tuition fee obligation. That is exactly why the Government have introduced a means-tested arrangement which ensures that students from poorer backgrounds will not be expected to pay. I will give way to the honourable gentleman.
Lord Mackay of Ardbrecknish: Is the noble Lord trying to argue that students from poor backgrounds will be put off by having to borrow a thousand pounds but they will not be put off by borrowing £4,000? Furthermore, will the funding council be attempting, by other means, to encourage universities to increase the number of poorer students they take against the background of the disincentive being imposed upon them by his Government?
Lord Davies of Oldham: The trouble with that proposition is that it seems to be presumed on the position that the present system is both equitable and fair and not any restriction on people entering higher education. The present system puts very severe obligations upon people in terms of repayments. What is more, the present system has resulted in a situation in this country where, over the course of 35 years of the operation, first of all of the maintenance grant introduced in the early 1960s, and then subsequently with the last government's reform to the combination of maintenance grants and loans, the participation rates of people from poorer backgrounds in our society have

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scarcely increased at all as a proportion of the student bodies. So we still have circumstances remarkably similar to those of the 1960s, that the vast majority in percentage terms of people who enjoy higher education in this country come from better-off backgrounds.
Why, therefore, should it not be obligatory upon the Government to secure funds for higher education to impose a tuition fee which brings in the necessary resources but at the same time to have a means-test to ensure that it protects the least well-off in our population.
6.15 p.m.
Earl Russell: The noble Lord, Lord Davies of Oldham, is of course quite right that higher education has been in a deep financial crisis. But anyone who knew only his speech might have been forgiven for believing that that crisis disappeared on 1st May and they all lived happily ever after. It is not that simple. There is still a deep financial crisis. All the evidence reaching people inside higher education is that it is likely to get worse rather than better.
The noble Lord then drew attention to the decision of this Government to lift the cap on student numbers. Would he agree that he is introducing tuition fees, or his government are, to pay for lifting that cap before they have solved the financial crisis?
Baroness Perry of Southwark: I really feel that the noble Lord, Lord Davies, is turning the world upside-down when he thinks that somehow we are increasing access opportunities for poor students by taking away from them the full maintenance grant that they used to receive.
I have just come from having three weeks of interviewing prospective mature women students, many of whom come from very deprived backgrounds. They are, of course, unhappy about the £1,000 fee. Many of them will be able to obtain loans for that on a means-testing arrangement but they are extremely unhappy to have lost almost £2,000 a year maintenance grant which before, coming from deprived backgrounds, they would have had. That has made access for the deprived student infinitely less attractive and less easy.
I fear very much for the opportunities that there are for poorer students from places like my old university in South Bank where people from Lambeth and Southwark, from very deprived backgrounds, were able to come in on full grant, and for my present college in Cambridge where we take very many students from deprived backgrounds as mature women. I promise you that when they discuss with us the financial arrangements for their time as undergraduates they are dismayed entirely by the fact that they will end up with a loan of over £5,000. And that is on top of the loans they are already taking for their maintenance, which to many of these women is a total deterrent.
Baroness Blotch: May I say to the noble Lord, Lord Davies of Oldham, that he has just made a comparison between a poor student under the new system and a poor student under the present system.
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Under the present system they receive 50 per cent. grant, take out a 50 per cent. loan and have no tuition fees. They do not even start to repay the loan until they are earning 85 per cent. of the national average wage which is £16,750, give or take a penny or two.
A student under the new system will start by borrowing the whole of the maintenance fees and, depending upon the income of their parents, may or may not be responsible for some of the tuition fees, and will start to pay back at £10,000. A person under the new system, the repayment scheme, earning £12,000 a year, will pay the equivalent of 1.5 pence in income tax for the whole of their working life. In fact, if there was not a cut-off point at 65 they would pay it for 83 years.
Lord Whitty: We have had a wide-ranging debate on this amendment, much of which will no doubt come up again later if we are not careful.
I recognise that this is a fundamental principle of the Liberal Party policy to education. I recognise also that on occasions the Liberals sound as if they are arguing that a single measure can possibly rectify all the anomalies of previous systems of student support and the other social problems that have arisen.
But I have to say to the Liberal Benches and to others who have supported them that there are fundamental objections to this, both in terms of principle and in terms of cost. The provisions in this clause will enable us, contrary to what has been said, to target support for fees and for maintenance to those who most need it. There is a clear case for relating the level of support to family income. If we did not do so, any new arrangements would disproportionately deter the poorest and benefit the better off.
Our aim throughout has been to encourage access to higher education from those sections of society that are currently under-represented. I do not believe that these proposals will have the consequences that the noble Baroness, Lady Perry, was referring to.
Parental means-testing for fees will ensure that students from the least well-off backgrounds will not have to contribute at all. Means-testing loans will mean that these students will have access to the maximum funds available for living costs. Since the loans themselves will be highly subsidised, this also means that the largest subsidies will go to those from the poorest backgrounds. This is a progressive system of income support—substantially more progressive than the one it replaces.
On the issue of costs, making available support for fees and loans for living costs without regard to the income of the households from which the students come would be both regressive and extraordinarily expensive. All sides of the Committee have referred to the need for more resources for the higher education sector. But this amendment would cost about £700 million per annum in the short term. That is money we can ill afford to divert from the higher education system. It would not be right to reduce the support available to the poorest students in order to give additional support to those from a background of middle class incomes.

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While I agree that there is a certain ambiguity in the reference in Dearing, to which my noble friends Lord Glenamara and Lord Desai referred, it is also the case that the Dearing Committee recommended maintaining the parental and spouse's contribution. I know that there is a point of civic rights and I acknowledge that 18-year olds are, for most purposes, regarded as adults, although, as the noble Earl, Lord Russell, indicated, the precise age varies according to the area we are talking about. They are legally adults but in most cases they are not individually financially independent. Their parents generally can continue to support them not just by contributing to their grant but in a whole variety of other ways. That is recognised, and has been recognised for decades in our system of student support and is recognised in the systems of student support in almost every country in Europe.
Despite the high-flown ambition of some of the contributions to the debate, we are in essence not changing the existing system. We are not making worse the situation which previously existed. The new arrangements have been carefully designed so that parents and spouses will have to pay no more, whatever their income, whatever the number of children and whatever the nature of the student. I acknowledge the existence of the problems to which the noble Earl, Lord Russell, and others referred, in terms of parents and spouses refusing to pay towards the cost of their child. Those cases occur now. However, what we propose will not increase the incidence of such cases. To spend £700 million on trying to address such cases will not avoid those tensions. Under these proposals, no one will be asked to spend more. Indeed, the improvement on the present situation is that all students will have access to larger loans and they will be repaid in most cases over a longer period related to their future income and in fairer terms than under the present loan provisions. That will be irrespective of their pre-existing family circumstances.
Our proposals build on the existing and generally accepted principle in our society that students' families should, where they can, meet a proportion of their costs. Where they cannot, we make provision for those poorer students. However, our proposals do not impose any additional burden on either parents or spouses. I therefore recognise the point the Liberal Democrat Party is urging on us, but it is wrong in principle and would divert much needed funds from the higher education system. I therefore urge the Committee to reject the amendment.
Baroness Maddock: I rise to reply on behalf of my noble friend Lord Tope. I take to heart the Minister's words that we must try to proceed in a logical order. Therefore, my comments will be brief. I wish to reply briefly to the sideswipe from the noble Lord, Lord Davies of Oldham, about funding. Later on, when we come to tuition fees, we shall make quite clear how we would fund what we have in mind. The funding arrangements we propose are based on the work of
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Nicholas Barr and lain Crawford, who gave evidence to the Select Committee and are considered to be experts in this field.
The whole point of our amendment is that it needs to be looked at in conjunction with the other proposals we have made today, first, about equality between part-time and full-time students; and, secondly, the proposal we shall be putting forward later that all students' fees are paid. This amendment together with our amendments on those proposals would be supported by many people, including students. Finance could be found to make sure that it happened. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blatch Baroness Blatch moved Amendment No. 91:
Page 11, line 35, at end insert—
("( ) Regulations under subsection (2)(b) which prescribe the maximum amount of fees payable for attending a course of higher education shall ensure that the prescribed amount does not exceed 25 per cent of the average cost of courses of higher education.").
The noble Baroness said: I make the assumption, as I rise to move this amendment, that the Government, with their majority, will introduce tuition fees. I have therefore had to anticipate what that might mean for students. There have already been debates concerning the pros and cons of tuition fees but there is a real concern on the part of students about where it will all end. When Australia introduced tuition fees they started off as a relatively small percentage of all the course fees that had to be met. Year by year, the figure has crept up, until now it is a much higher percentage of the average cost of course fees.
The Bill has been brought forward to us in a skeletal state and we have been denied the opportunity to discuss, other than through amendments, the policy of the introduction of tuition fees and the abolition of grants. I therefore believe it is right that Parliament—not the Labour Party, not the Conservative Party and not the Liberal Democrat Party—should determine whether the figure, which I understand to be 25 per cent., should increase or decrease. My amendment seeks to put on the face of the Bill an absolute constraint on the Government not to go beyond £1,000 or 25 per cent. of the average cost of courses. I beg to move.
Lord Wallace of Saltaire: Amendment No. 97 has been grouped with Amendment No.96 and has much the same effect. I merely wish to underline that we are putting down a marker. We are embarking on a major change in the nature of the funding of higher education—the introduction of tuition fees and a contribution to tuition fees. We all know from the Australian experience that once this starts Ministers of Finance are greedy for more and that one slips down that road. I therefore wish to ensure that the level at which the costs of university education are imposed on students should be specified more clearly on the face of the Bill. I understand that there were discussions about whether there should be a flat £1,000 fee or whether the figure should be fixed at 25 per cent.

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We are trying to make the best of a bad job. I agree with the noble Lord, Lord Glenamara, that it would have been more satisfactory to have gone down the road of a graduate tax. That would have been less offensive in a whole host of ways. It would have raised questions about who can pay and it would not have been seen to overload the student immediately. However, we have to make the best of the Government's proposals.
We would not be rushing the Bill through at this speed if the two Front Benches had not agreed before the election that the Dearing Report was a way of putting off the debate, knowing that the financial crunch which all the universities, including my own, would be facing in 1998-99 would require immediate action. The purpose of the two amendments is to ask the Government to specify more clearly what proportion of overall university costs they wish to take from students and to require that before they raise that contribution, as we anticipate some future government will, we have a thorough debate.
6.30 p.m.
Baroness Carnegy of Lour: I have met several groups of students and discussed this business with them at some length. One of their fears is that, above all, they do not know whether the proportion will stay the same. It is alarming to face this situation as a student and to wonder whether one can cope with it. An assurance on the matter, preferably on the face of the Bill, would go some way towards alleviating that particular fear.
Lord Desai: Perhaps I may make it clear that, more than at any other time, I am now speaking entirely for myself and do not represent the policy of my party on this matter. This amendment can be passed, but it will not make the slightest difference to the fact that the financial crisis in higher education will not be solved at this stage. Very soon, and within the lifetime of this Parliament, the Government will have to ask for more money because the great British public has decided that it does not want to fund the full cost of higher education. Therefore, we shall have to find ways of passing on the burden to those who benefit from it.
The present government have faced the problem to some extent and proposed the figure of £1,000. People do not like that. If all that income from students, without means testing, were to go to universities, it would not make even a small dent in the financial crisis in higher education. As I said at Second Reading, the true cost of higher education is not £4,000, but £8,000. That is the sum we charge foreign students and that is the real cost. Foreign students subsidise British students. Those students are not from the OECD countries, but from poor countries. We tolerate a situation in which Singaporeans, Malaysians, Chinese and Indian students subsidise British students.
Very soon, after this Bill has been passed, British universities will face further financial problems. No one should kid themselves that this matter will be solved straight away, because very soon ways will have to be found for students to pay a much higher proportion of
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their education costs than they do at the moment. I hasten to add that that is my view and not that of my party.
Lord Wallace of Saltaire: As an economist, is the noble Lord concerned about the inter-generational dimension of this issue? Some of us talk about inter-generational transfers. But what we are all saying now is that the great British public—namely, all those who went through higher education and were given it free because their parents were paying tax--now do not want to pay tax so that their children can have higher education. Therefore, we are imposing on future generations costs for further education which our parents did not pay. Let us recognise what we are doing.
Lord Desai: Let us get this straight: this is a middle-class subsidy. This scandal has gone on for about 30 years. A very small proportion of the population were subsidised by way of free higher education. The sum of £4,000, after tax, is about £7,000 before tax is deducted. A £21,000 loan was being given to middle-class students. We have concluded that working-class students do not get access to higher education, not because of what it costs, but because secondary school education is lousy. However, I shall not go into that.
The British public is saying, "The majority of us did not have higher education and the majority of us pay tax. How long are we going to continue giving £21,000 to every 18 year-old whose parents put them through A-levels?" It will have to stop. We are just holding back the tide. If we were really sensible and cared about access to higher education, we would say that we cannot continue paying a middle-class subsidy. The full £4,000 will have to be paid by students in higher education. They should take loans of £4.000 for fees with the £4,000 maintenance grant.
I get tired when people say that the British public do not like debt. But many of them have mortgages. People are willing to borrow in order to buy a house, so why should they not borrow for human capital? We have to pretend that everyone is poor and that we should go on subsidising the great British middle class in the comfort to which they are accustomed. It is real welfare dependence. The middle class have a real dependence on the welfare state. That will not stop because the world is not rational. Sooner or later we will have to transfer to a system in which all higher education is fully paid for by the students, financed by loans. If one wants to educate 30 per cent. of the population and not 10 per cent., no society is going to pay for it.
Baroness Blatch: I wish to speak to my amendment. I do not know whether I speak for the noble Lord, Lord Wallace of Saltaire. This is a fascinating debate on where we shall finish up in future. The two amendments in the Marshalled List have been tabled for two reasons. The first is because the Government, through primary legislation, have introduced tuition fees without reference to this House. That has caused great disquiet in the Chamber. Secondly, if at some future date the Labour Government wish to go further and take

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the £1,000 beyond the 25 per cent. of the cost of the average course, then it is our view—certainly my view—that that should be a parliamentary decision and not simply a sleight-of-hand decision by the Government. I hope that they will at least agree that Parliament should be involved in the debate and be allowed to vote, not simply through secondary legislation, but through primary legislation. Parliament should be allowed to vote, and through my amendment I wish to put that constraint on the face of the Bill.
Lord Glenamara: I support this amendment. I would have preferred the noble Baroness, Lady Blatch, to have included the figure of £1,000 in her amendment instead of 25 per cent. Either that should be done and this amendment passed, or the Government should undertake that any subsequent regulations made under this part of the Bill will be subject to the affirmative procedure. It must be one or the other. The Government must agree to one. We spent the whole of Tuesday meeting implacable rigidity from the noble Baroness. She did not accept anything at all. We ended up with a travesty of a thing called a general teaching council, which was no such thing. Please, can we have just a little flexibility? Will the Government agree to one proposal or the other? They should either give an undertaking that this matter will be subject to an affirmative vote, if it ever comes up, or that they will accept the amendment of the noble Baroness, Lady Blatch.
Earl Howe: I intervene briefly on this amendment to support what my noble friend Lady B latch has said and to direct the attention of the Committee in particular to the difficulties faced by medical and dental students. The needs and unavoidable commitments of that group of students differ in a number of important respects from those of other students. I am very concerned that the introduction of tuition fees on the basis proposed will disadvantage those who undertake a course of study in those subjects and indeed discourage others from taking up such courses.
Medical students have to face five or six years of lost earnings rather than three years. Their academic year—at least from year three onwards—can be up to 50 weeks rather than the standard 30 weeks. That in turn deprives them of the opportunity of supplementing their income through part-time work. The expenses of a medical student on things like reference books, clothing and equipment are at the best of times higher than those typically faced by other students and they cannot be avoided.
Similar considerations apply to dental students. A survey by the British Dental Association has already found that 90 per cent. of newly qualified dentists have debts averaging £9,200 per head. The BDA believes that dental graduates with that sort of level of debt will increasingly have to rely on income from private patients. So the level of debt is further increased by tuition fees. The availability of NHS dental treatment is likely to become increasingly limited.
The Secretary of State has said that the Department of Health will pay all tuition fees from year five onwards for all medical and dental students, and that is
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welcome so far as it goes. But why should a student of medicine or dentistry be treated differently from a student who studies another discipline and pays three years' fees? It is not only a matter of equity but a question that is likely to impact directly on the numbers of young people who put themselves forward for courses in medicine and dentistry. We are already woefully short of GPs and specialists in other medical disciplines. It is essential not to exacerbate an already severe recruitment crisis. I hope that the Government will look again at this issue. If fees rise it will hit a key group of students disproportionately, and that can only be a cause of great concern.
Earl Russell: The noble Earl raises a serious point. I observe the Minister shaking his head. I hope that it is about something else. We need a supply of doctors and dentists who have much longer courses than anyone else.
Lord Sewel: Will the noble Earl accept that on the basis of my experience in a university which has a medical school medicine is about the most over subscribed discipline? The A-level and other requirements for entry into medicine are the highest of any discipline. There is no problem about lack of applicants.
Earl Russell: First, the Minister is unwise to suppose that that is written in tablets of stone. Secondly, the Minister should listen to what the noble Earl has said about private practice. As to the effects of very heavy student debt on professional conduct, I suggest that if he has regard to what has happened to American lawyers he will perhaps be a little less confident than he appears to be at the moment.
Lord Desai: The £9,200 debt for a dentist cannot be a serious matter in relation to the income that can be earned. Doctors and dentists are not at the bottom of the earnings table. The reason why they take five or six years to qualify is that at the end of it they can make more money than the people who pursue three-year courses. It is simple economics: people invest money because they know that it will repay them. A sum of £9,200 is not likely to present a serious problem.
Baroness Blatch: Perhaps I may put a question to the Minister so that he can deal with it when he comes to reply. Would a dental or medical student have to borrow the maintenance for each of the six years? At the moment we are talking mainly about tuition fees. However, would students have to borrow the maintenance money, in which case the sum would not be £9,200 but £4,000 a year for six years and so a great deal more than £9,200?
Lord Whitty: The question just asked goes rather wide of the amendment. To deal with the principle, medical and dental students will borrow for each year although very substantial bursaries are available in medical and dental schools for the later years of the course. The statements of the Secretary of State and two

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of my noble friends earlier this afternoon have to a large extent addressed the particular problems faced by medical and dental students. We have ranged rather wider than this amendment. Some of the points raised are not wholly irrelevant to the general strategy, but they are fairly irrelevant to this amendment.
It is the intention of the Government that there shall be a maximum annual contribution. In Clause 18 we seek powers to limit the top-up fees. In Clause 16(5) we provide safeguards to ensure that the Government cannot increase grants for fees, and therefore also the contributions towards fees, by more than the level of inflation without seeking the approval of both Houses. That is how we shall control the absolute level, which at the moment is set at £1,000, beyond the increase in inflation. I hope that that will provide the reassurance that a number of noble Lords suggest students and potential students require. To a large extent I believe that it meets the point raised by my noble friend Lord Glenamara. It would require parliamentary approval before the Government increased the maximum level of student contribution above the £1,000 level set at the beginning. It is set at that level because effectively it is 25 per cent. of the £4,000 that is currently estimated to be the average cost of fees.
If we adopted these amendments that arrangement would be complicated. If one seeks to control the maximum level in relation to inflation one cannot also control it in relation to a proportion. I agree that if the RPI and the average cost of fees go up by exactly the same amount the answer is the same. However, if the average cost of fees goes up faster than the RPI and it is controlled by reference to the 25 per cent. it is a disadvantage rather than an advantage to the student. Therefore, we believe that the safeguard relating to inflation which we propose to build into these arrangements, and which would require parliamentary approval if it were to be breached, offers sufficient protection. This would complicate matters and in terms of the precise form of words would be totally unnecessary. I ask the noble Baroness to withdraw her amendment in the light of the fact that the intention behind it is already met by the Government's proposals.
Baroness Blatch: I have no intention of pressing the amendment at this stage but I have every intention to return to the House with this amendment in future.
Amendment, by leave, withdrawn.
[Amendment No. 92 not moved.]
6.45 p.m.
Earl Russell Earl Russell moved Amendment No. 93:
Page 11, leave out lines 38 and 39 and insert—
("(a) for any such loan to bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that—

(i) the interest (which shall accrue from day to day) shall be added to the outstanding amount of a loan; and

(ii) the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms.

and for the purposes of this paragraph the Secretary of State shall have regard to the retail price index published
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by the Central Statistical Office, any substituted index or index figures published by that Office or such other index as appears to him to be appropriate;")
The noble Earl said: Amendment No. 93 has been devolved to me. The purpose of the amendment is to introduce what is known popularly as a zero real rate of interest. The noble Lord, Lord Peston, if he were still in his place, would doubtless raise questions as to precisely what a zero rate of interest meant. As I remember from the events of 1990, this is a subject on which he is extremely expert. The general intention is perfectly clear. This provision already exists in the Education (Student Loans) Act 1990 which this Bill repeals while continuing a lot of the main outline. The object is to continue that particular provision. It makes a good deal of difference. A zero real rate of interest is the cheapest credit on the market. Every year I have a great deal of trouble persuading students to take up loans. They all prefer to work in Waitrose or Marks & Spencer rather than take up loans. The fact that it is a zero real rate of interest is rather important in trying to persuade them.
I move this amendment with a certain amount of optimism. Last night I read—a good deal later than I would have liked—the document that the noble Baroness kindly circulated, for which I thank her. I refer to Progress Report on New Student Support Arrangements in Higher Education from 1998/99. In paragraph 5.3 of that document the Government state:
"Interest rates on loans will, as under the current loans scheme, be linked to the RPI so that borrowers repay in real terms broadly what they borrowed. The Government is considering how best to rule out in primary legislation the imposition of real interest rates, which have no part in its plans, whilst recognising the technical complexities arising from the income-contingent nature of the loans".
Put another way, we are asking the Government to put into the Bill what they already intend to do. I welcome that intention. But why not put it into the Bill? On the previous amendment I drew attention to the fact that the Bill as presently drafted allowed the Government to fix a rate of interest which in cash terms could be anything from nought to 100, even 1,000 per cent. That is a rather extreme form of flexibility. When they intend to do what we ask them to do, why not say so?
I accept that there are technical difficulties because of repayment through the income tax scheme, but I do not believe that they are insoluble, nor do the Government; otherwise, they would not have stated in this paragraph that they intend to do this in primary legislation. What it shows is that the decision to introduce this measure was taken in very great haste after the appearance of Dearing. It was within a matter of hours rather than days, if my memory serves me right.
It looks like a case of legislating rather in haste. I wonder whether, if the Government had delayed the Bill even as little as a couple of weeks, they might have found time to solve that difficulty, and whether they may yet do so before the Bill completes its passage through both Chambers. If the Minister remembers the torrid time that she had last August, she might appreciate that in this area people can be easily alarmed. Were they to put into the primary legislation the

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provision for which we are asking, some of that alarm would be stilled. I should have thought that that would have been in their interest, as it is in ours, the students, and, as I believe, in the country's. I beg to move.
Lord Whitty: I think that I can be of assistance. I have a number of technical comments which I will skip because the noble Earl already understands the technical problems involved. Let me reassure the Committee that we have no intention of introducing interest rates above the RPI level, and that we wish to bring forward, as early as possible, an amendment which will write in almost precisely what the noble Earl wishes. It will not be in the terms of this amendment, but it will have the overall effect of restricting the ability to charge interest to the RPI. We still have to discuss how to do that. I cannot give a guarantee that those discussions will be completed by Report stage. However, during the Bill's passage we shall bring forward such proposals. In the light of that reply, I hope that the noble Earl will feel able to withdraw the amendment.
Baroness Carnegy of Lour: Will the Government undertake to publish a statement quickly about that matter so that the students will know about it? With all the problems and considerations involved in trying to frame the Bill, the Government are forgetting the students and how they are reacting. They are alarmed about this. Talk about the future and how in the end they will be earning so much more that it does not matter what the interest rates will be, does not comfort them. It would be a great help if it were possible to publish something in simple terms quickly so that the students can understand the matter.
Earl Russell: I agree with what the noble Baroness has just said. I am extremely grateful to the Minister who has said everything that I hoped he might say. I am therefore delighted to be able to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 94 not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 95:
Page 12, line 30, at end insert—
("( ) The Secretary of State shall ensure that, in any regulations made under this section in relation to any eligible student for any prescribed purpose for any academic year—

(a) the maximum amount of any loan made available to that student is no greater than half the prescribed cost of maintenance for such a student for that purpose for that year, and

(b) provision continues to be made for maintenance grants to be payable to such a student, subject to—

(i) a maximum amount of half the prescribed cost of maintenance, and

(ii) assessment of any contributions applicable in his case.").

The noble Baroness said: This is an amendment about which I feel extremely strongly. I support the recommendation made in Sir Ron Dearing's report. On that I shall quote from paragraph 108 of the summary of his report which states
"We would be particularly reluctant to see any reduction in public subsidies being concentrated on students from the poorest families and even more reluctant to see the funding released by this, and more, being used to increase the subsidies for others".
I suspect that if the students for whom the noble Lord, Lord Davies of Oldham, now has a responsibility which he will be exercising materially over the next few years—I know that it is further rather than higher education—are watching, listening, or read about the debate, they will be deeply depressed by his approach to their plight. At the moment a student from a poor family receives 50 per cent. grant, takes up a 50 per cent. loan, and has no tuition fees. That same student is under no obligation to start paying back that loan until he or she is earning 85 per cent. of the national average wage which at the moment is £16,750. At the age of 50, or 25 years, whichever comes first, the loan is written off.
When referring to parents and students earlier, the noble Lord, Lord Whitty, was right when he said that no parent under the new proposal would be asked to pay any more. But the student at the lower end of the group is seriously disadvantaged by the scheme. How can the Labour Party introduce a scheme which leaves the poorest students with a greater burden of debt as they leave university than students who themselves are more affluent and come from more affluent families? I just do not know. I do not know how Government Members here will justify that to their own colleagues in another place, where I know there is serious disquiet, let alone to the students.
The students will have to borrow the whole of their maintenance, which will be just under £4,000 per year, or will be when the scheme is fully up and running. They will start to pay back their loan when they are earning £10,000 gross per annum. That is almost £7,000 less than the present threshold. I shall give three examples. I could give more, because we have had some actuarial work done on the repayment scheme. Let us take teachers who rise to the middle rank of teaching. If they are earning £12,000 throughout the period—I am not adding anything for interest, because if one adds interest and some or all of the tuition fees the burden is even greater—they would pay the equivalent of 1.5 pence income tax for 83 years. Of course, it will not be 83 years, because there is a cut-off point at the age of 65. That is if they have borrowed £15,000. If a student borrows £12,000, the period comes down to about 65 or 70 years. If a student earns £14,000 he will pay the equivalent of 2.57 pence income tax, and on a £10,000 loan he will pay for almost 28 years; if he borrows £15,000 he will pay for 41 years. On a £17,000 income, which is still modest and still below the national average wage. they will pay the equivalent of 3.71 pence income tax for 23.8 years.
Students under the present system are a great deal better off. If one is going to lose a grant, paid for by the state, which is replaced by a loan, which the students

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pay throughout their working lives, that is a burden on poorer students which I find almost impossible to justify. I believe that Sir Ron was right. He started by believing that that was the right way to go. Sir Ron and his team looked at the possibility of removing maintenance grants. After a long period of consideration, they came to the conclusion that it would disadvantage students from lower income families. I speak today for those students. He therefore reinstated his recommendation.
Before the ink was hardly dry on that report, the Government came out with a response and set that recommendation aside. They did not merely remove the grant system from students, they added tuition fees. It is that package which we reject entirely. I hope there will be some sympathy for the idea that maintenance grants be retained for the lowest income students. I beg to move.
Baroness Carnegy of Lour: This is a serious matter. It looks as if the Government did not take time to study all the modelling that the Dearing Committee did, which revealed to it that this approach would not work. I do not know whether that is true. The Government made a rapid announcement. They probably had their own reasons for doing that. When it was made, none of us knew what the implications were. Those members of the Dearing Committee whom I know were astonished at the proposal and believed that the report could not have been studied. If that is so, and if the wrong solution has been reached, perhaps the Government should change tack. The situation is sufficiently serious.
The National Union of Students has not concentrated on the problem. I do not know whether that is because of its loyalty to the present Government and of its wish not to make things difficult. All the figures I have were produced by the St. Andrews Student Association. The students at St. Andrews, who are not affiliated to the National Union of Students, believe that the students are being let down by that body. Perhaps the NUS is behaving with a good conscience because it believes that it has a duty to support the Government. That makes an even greater case for the Government to look seriously at the issue.
I am sorry to keep quoting the students at St. Andrews, but the issue is important. They further stated that the previous government did away with housing benefit. The Labour Party were very much against that. I did not like it myself, although with a heavy heart I agreed to it on a number of grounds which existed at the time. Of course, it was in the light of the student funding regime which was then in place.
That regime is being changed to a great extent. The package of fees and maintenance means that even in the first year a badly off student will lose £685 more than a well off student. That being the case, perhaps we should table an amendment on Report to make it possible for students again to receive housing benefit. The short term problems present the difficulty. When a young person first goes to university he or she does not look ahead at how to become a QC. I have no children and therefore I have not experienced these problems. However, I have
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met young students a number of times and they feel that people will be extremely put off. They also believe that the proposal is immoral.
It is disappointing that new Labour should take such a step. I should be horrified if my own party did so, but I am even more horrified at new Labour doing it. I hope that the Government will look seriously at the problem to see whether they should swallow their pride, look again at the Dearing Report and do something slightly different.
7 p.m.
Baroness Warnock: Having heard the figures produced by the noble Baroness, Lady Blatch, it is impossible for me to remain silent about the two issues which I feared would arise. First, the number of students will decline; it is happening already. The thought of poorer students incurring the kind of debt that has been outlined is a serious deterrent, particularly when firms such as Marks & Spencer provide good training programmes. Pupils can join straight from school and be paid while they are training. With higher education leading students into the kind of debt about which we know, and with the existence of such alternatives, the number of students will further decline.
I worry more about the second issue. The trend of declining numbers entering the teaching profession will continue. The salaries earned even by teachers in secondary schools are extremely low by the average national standard. Recently, I read a job description of a head of department at a not very rich independent school. The maximum salary offered was £21,000, which one would be unlikely to receive until one's 30s or 40s. From what we have heard from the noble Baroness, Lady B latch, the proposal would deter people going into teaching. Large-scale debt would be inevitable for someone from a poor family having to take out the full loan for the entire university career.
We have heard about the distinction between, say, medical students and all others. Almost all science degree courses are now for four years, as are modern language degree courses at most universities. Realistically, the number of three-year degree courses is small. It is not only medical students and dentists who have long undergraduate lives but also architects, vets and others. We must concentrate our minds on whether the aims of encouraging more people into higher education and of recruiting more teachers are compatible with the proposals relating to loans.
Lord Glenamara: I wish to make a point about maintenance grants because people who are not associated with universities do not appreciate the kind of costs that students have to bear. The minority of students who have rooms in universities pay £43.50 a week. If they move out to private accommodation they often pay £50 a week, plus their daily fares to the university. An increasing number are moving out, particularly in my town where some 40,000 students are moving further away from the university. They have to pay their fares home during the vacations and they have to pay for books and stationery. They also have to feed themselves and I am sure that many do not have

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sufficient to eat. Today, a student in a modern university has high maintenance costs. Therefore, I hope that the Government will look at the amendment favourably.
Baroness Maddock: I believe that the amendment reinstates the previous government's policy of 50 per cent. grants, the rest being taken in loans. The Liberal Democrats have not changed their view of the proposal. We have examined it carefully and have concluded that students' tuition fees should be paid in full and that maintenance should be paid for by student loans.
Like the noble Baroness, Lady Carnegy, I have spoken to many students about the matter. As student numbers increase we must find ways of paying for that. Many of them reluctantly agree with our solution. We on these Benches cannot support the amendment.
Lord Desai: I wish to make an observation regarding the horrific statistics presented by the noble Baroness, Lady Blatch. It is important to remember that the loans are not like mortgages. There is a cut-off point after 65 years. The noble Baroness is telling me that the poorest people, rather than repaying for the required 83 years, will repay for only 40 years. The poorer the student the larger the subsidy of non-payment as regards the remainder of the loan. It is a progressive scheme. The noble Baroness proved that the rich will pay the full amount and the poor will pay half. That is exactly what we want, is it not?
Baroness Blatch: The rich will not pay the full amount. That is the point. The rich will borrow only half of the maintenance grant and the poor will have to borrow the full amount. If you are a medical student from a poor family, you will borrow £24,000, which is the maintenance for each of the six years at university. The noble Baroness is shaking her head but I am not talking about tuition fees; I am talking about maintenance. If you are on a four-year course, you will borrow £4,000 for four years and if you are on a three-year course, you will borrow £4,000 for three years. Therefore, somebody from a low income family may come out of university with a debt of £12,000, £16,000 or £24,000. But if you are a student who comes from a wealthy family, your parents will meet half of the cost and you leave university with only half of that debt but pay the £1,000 tuition fees. Therefore, the burden on the poorer students is greater.
I know what the noble Lord, Lord Desai, is saying, and the way in which the scheme would work if he were the architect of it would be fairer. But this scheme leaves students from low income families with a greater burden of debt. At present, they receive a grant and they will move to a situation in which they have no grant and will have to borrow all the money. They are the only students who will have to borrow all the money; the wealthy students will borrow only half.
Perhaps I may answer the noble Baroness, Lady Maddock. We have spoken to a large number of students. When they were consulted about how they felt as regards paying more of their maintenance grants, they acquiesced in the early stages. They were minded to go
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along with the Government because they knew that more money must go to the universities. They did so for two reasons. First, they believed that more money would accrue to students in universities. That is not the case. It pays for more students but it is not putting in more money per student.
Secondly, at that time it was not proposed that there would be the introduction of tuition fees and the abolition of grants. Students were surprised by that. They are now having second thoughts about this package which is very dramatic and is having a very real impact on students who come from low income families.
The last point is a matter to which the noble Lord, Lord Glenamara, referred. The Government are sounding extremely generous about helping people in particular from low income families. I know the noble Baroness is very irritated by what I am saying but these are important points and I am speaking on behalf of students who will have that burden to meet. They are told that the Government will meet their tuition fees. However, they are not aware—in particular, those coming from families which do not have a tradition of going to university—that they will have to meet their maintenance costs by borrowing heavily each year at university. That means that they must start to pay off the debt almost immediately on leaving university.
7.15 p.m.
Baroness Lockwood: A few amendments back, the noble Baroness and her noble friends were arguing that parents do not meet their parental contributions. That was being said in relation to earlier debates on student fees. Student fees and maintenance were being brought together on many of the amendments that we have so far considered.
Baroness Blatch: I do not know whether the noble Baroness has heard somebody else say that, but she certainly would not have heard me say it. I am a parent who met my contribution to my children's fees when they were means-tested. Indeed, at this moment, parents are meeting 50 per cent. of students' fees. There are some parents who do not, but I have not prayed in aid for my case that parents are not meeting their obligations to their children. I am talking about parents who are means-tested or—I use the jargon—affluence-tested to the point at which they are not in a position to meet any or all of the fees for their children.
Baroness Lockwood: If the noble Baroness, Lady Blatch, was not making that point, I apologise. But others on those Benches and on the Liberal Democrat Benches too have been arguing that the reason that we should treat 18 year-olds as adults is that one could not always expect their parents to meet the obligations. That has been said around the Committee.
We are now being told in relation to this particular amendment that students who come from less well-off families will bear a heavier burden than students coming from better-off families because the students coming from the better-off families will have to pay only half the cost of maintenance in terms of loans. All I am

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saying is that we cannot have it both ways. Either parents are meeting their parental obligations or they are not.
But the main point that I want to make on this amendment is that one of the reasons that the British system of higher education has been regarded as more expensive than many of the continental systems of higher education has been because we have been very generous indeed in relation to maintenance grants for students at university and in higher education. We have been more generous to students in higher education than we have been in further education. Parents of students in further education have had to help maintain their children in a way that parents of students in higher education have not been doing.
This particular change in the funding of higher education reflects the principle which is now being accepted widely: that those who benefit from higher education should pay for that higher education. Therefore, maintenance grants are being ended and student loans are being made available for all students, including students in lower income groups. The difference is in the repayment system of the loan which in future will be income-contingent. That means that those who can afford to pay will do so.
The only question that I raise—and it is quite different from that raised by the amendment—is whether £10,000 is the right amount at which repayment should start. But the principle behind this scheme is correct because it means that maintenance of those people who are enjoying higher education, with the opportunity to earn higher incomes in the future, should pay for that privilege.
Lord Pilkington of Oxenford: Perhaps I may add one point which was made on Second Reading by the noble Lord, Lord Glenamara, and myself, and the same point has been made by the noble Baroness, Lady Warnock; namely, the problem of people in teaching carrying that load. I fear that the noble Baroness has glossed over that.
I consulted three banks. They spoke off the record. I put to them the same situation to which the noble Lord, Lord Glenamara, referred on Second Reading; namely, a teacher earning about £20,000 who has a loan of possibly £12,000 plus because, as the noble Lord, Lord Glenamara, said, students often have to pay rent for 52 weeks of the year. The banks said that there was no chance of such a teacher obtaining a mortgage because he might take ill or he might lose his job. Therefore, the only people to benefit from this long-term scheme will be those who become barristers or go into highly paid jobs. It is a positive disincentive for people to go into teaching. Of that there can be no doubt. There will be never the chance of them obtaining a mortgage.
Lord Desai: I do not believe that the noble Lord listened carefully to his noble friend: the teacher will not pay the full loan. No one has to pay the loan; they will only have to pay the flow charges and a certain amount of interest per year. Therefore, by the time they stop paying at the age of 65 they will not have repaid the full loan. There is. perhaps, one criticism. If I were
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an orthodox finance champion, I might say that the scheme would encourage over-borrowing. Why should I not borrow £32,000 as I am not going to pay it back? I am only going to pay income tax relative to my income, and if I earn very little, I shall repay very little. It is a perfectly sensible proposal. The bank may not like the teacher but the teacher is not going to pay back the loan.
Lord Pilkington of Oxenford: Would that the noble Lord, Lord Desai, was running the bank. I gave a figure of £17,000 a year with a repayment of £630 a year, which is equivalent to 3.7 per cent. on income tax, to three banks. But they were not as generous as the noble Lord; indeed, they said that they would not give a mortgage. So I should work to become a director of one of the big banks and we would all benefit!
Lord Desai: I was only citing the figures put forward by his noble friend. Perhaps they should talk to each other.
Earl Russell: I believe that the noble Lord, Lord Desai, may inadvertently have strengthened the point made by the noble Lord, Lord Pilkington. The noble Lord, Lord Desai, was talking about the amount of repayment, but he raised the spectre of over-borrowing. The noble Lord, Lord Pilkington, talked very strictly about mortgages. Over-borrowing is something which might possibly concern a person who was being asked to lend money for a mortgage. It is quite a serious point. Can the Minister say whether the Treasury has had any consultation with the public service review bodies on the likely effect of the Bill?
Baroness Park of Monmouth: I should like to make a further point. Everyone is saying that, once they are graduates, students will be relatively well paid and that, therefore, they can well afford to repay the loan for their education. All that sounds perfectly sensible in principle. However, at present, students are feeling threatened and anxious. They will try to borrow as little money as possible and to earn as much as possible in ways that no academic wishes them to do; for example, they will go and stack shelves in supermarkets and work in bars. They will try to make enough money so as not to have to borrow too much for the future, especially if they know that they will not be going into the very highly paid professions. The result is that they very probably get a much worse degree than ought to have been the case. Indeed, we shall be turning out, with great pride, people with thirds and lower seconds who will never, therefore, make it in the high-flying professions and we shall have wasted all this effort. It seems to me to be quite mad that that issue is not being considered and that we are going towards a false economy which is against the interests of the country and, above all, against those of undergraduates.
Baroness Blackstone: The amendment strikes at the heart of the Government's policy on student support and raises fundamental issues relating to access to higher education by students from lower income backgrounds.

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I should point out to the noble Baroness, Lady Blatch, that I was not at all irritated by her raising a number of questions on the issue. However, I see from the noble Baroness's expression that she may not have been referring to me in that respect. Nevertheless, this is a most important matter. I hope that Members of the Committee will forgive me if I give a slightly longer answer than is usual in Committee as I believe it is essential to set the record straight on such a critical point.
There has been some confusion in the debate among those who have contributed regarding the issue of the position of students while they are at university and the issue regarding the position of graduates after they have completed their courses and when they are paying back what they owe. We need to keep those two aspects slightly separate.
I should tell Members of the Committee who have talked about the problems of students while they are at university that, under the scheme that the Government are introducing, students will have access to no less money than they have under the present scheme. Therefore, the suggestion that we, for example, should reintroduce housing benefit for students (which was abolished by the previous government) seems a little odd coming from the Tory Benches. As I said, students will not be any worse off under the new scheme than they are under the present one.
I should also tell my noble friend Lord Glenamara that of course I accept that rents charged by universities are often quite high. But, again, students will not have any less money up front to pay for their rents while they are at university than is the case at present. Therefore, we must be careful in distinguishing two quite different matters.
I should like to correct the noble Baroness, Lady Blatch, on one matter. I recognise that we are discussing very complex issues but, so far as concerns medical students, they will in fact be eligible for 50 per cent. of the cost of their maintenance in years five and six through a bursary scheme. Therefore, they will not be any worse off than they are currently. I believe that the noble Baroness misunderstood the position in that respect. It has been suggested that students are not, and will not be, aware of how much they will have to repay. I should like to reiterate the fact that we have worked very hard to provide students with as much information as we can about the new scheme.
The Government's proposals for an entirely loans-based system are grounded in what I believe to be a very sound principle; namely, that students' living costs should be met out of their future earnings after graduation. I am grateful to the Liberal Front Bench for their support on the matter. As we have consistently made clear, the arrangements for repaying loans will be fairer than under the current scheme. The level of the repayments that graduates are expected to make will depend on their income, as a number of my noble friends said in their interventions, and so will reflect the career success to which their higher education contributed. No student should be deterred from entering higher education by these arrangements.
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Indeed, I should like to take this opportunity to refute suggestions that our proposals have put students off applying to enter higher education in 1998-99. I believe that that suggestion was made by the noble Baroness, Lady Warnock. It is true that, when the normal deadline for applications expired in December, the figures indicated a year-on-year reduction of 6 per cent. However, that was more than offset by the numbers of students choosing to start this academic year rather than defer until 1998-99. In any case, more recent figures produced in the light of the unprecedented late rush of applications suggests that this figure might be even lower. That is a welcome sign that students and parents have understood the fairness of our proposals.
The noble Baroness, Lady Blatch, asked why the Government have not adopted the Dearing Committee's preferred option of retaining maintenance grants at roughly their present level. The Government share the committee's commitment to access and equity. There have been a number of comments suggesting that perhaps the new Labour Government do not do so, but of course they do. We also share its view that there should be a fairer balance between what graduates pay and what taxpayers pay; indeed that is what these arrangements are about in part. Our proposals build on the committee's recommendations. It is true that Dearing recommended keeping grants and that we are phasing them out, but Dearing also recommended that all students should make a contribution of £1,000 towards fees. Our starting point is that it is right to provide help with fees for those who need it. We will ask only those families who can afford to do so to contribute to fees. Perhaps I may tell the noble Baroness, Lady Carnegy of Lour, that of course we looked at the Dearing modelling before we made any final decision, but we do not believe that grants for maintenance have a place in a modern student support system. Graduates are the main winners in higher education: we believe that they should contribute towards the costs of maintaining themselves through a progressive, common-sense, purely income-contingent system of student loans. As the noble Baroness, Lady Maddock, said, students have largely accepted that fact. The National Union of Students accepted that before the election. It has nothing to do with wanting to support a new Labour Government. It had already believed that that was a fair and reasonable change to make.
It has been argued here that grants promote access, and that loans hinder it. I do not remember the noble Baroness or her colleagues arguing this when they introduced the loan scheme originally. Nor has it turned out to be the case. In the five years before loans were introduced, when students still received support from grant alone, participation among younger students from lower socio-economic groups rose by 2 percentage points, from 8.3 per cent. to 10.3 per cent. So any of us who had fears at that time have been proved to be wrong. I know that the noble Baroness will suggest that I was among them. But before she does so, I have to tell her that my fears were based on the former

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government's system of mortgage type repayment loans rather than the income-contingent loans that we are introducing.
Lord Mackay of Ardbrecknish: Will the noble Baroness give way?
Baroness Blackstone: I shall not give way. I wish to get on.
Lord Mackay of Ardbrecknish: It is the convention of this Chamber.
7.30 p.m.
Baroness Blackstone: I do not wish to give way; I wish to go on. I shall answer any question the noble Lord wishes to raise at the end, because I may be answering it now.
Between 1990 and 1995, during which time loans were introduced and the proportion of support available through the loan increased, the rise was much greater-7.1 percentage points, from 10.3 per cent. to 17.4 per cent.
Students from less advantaged backgrounds were not put off by the flawed mortgage style scheme introduced in 1990. All the more reason to believe that they will not be deterred by the fairer loans which we are introducing. Loans do not put off students from lower social groups entering higher education.
Nor is it right to suggest that students from lower social groups, having entered higher education, are unwilling to take out loans or will find other ways of supporting themselves rather than commit themselves to a loan—if I may say that to the noble Baroness, Lady Park. The most recent student income and expenditure survey indicates that, in 1995-96, nearly 70 per cent. of students from social groups D and E had loans. That is well above the overall figure.
Participation by lower social groups in higher education remains poor. Of course that is of great concern. But the evidence shows, crucially, that this cannot be put down to finance. The reasons students enter higher education are more diverse and complex than that, as are their backgrounds and circumstances. The rapid rise in participation all over the developed world is testament to that.
Yet I believe, and the facts suggest, that there is one fundamental factor which governs a young person's choice to enter higher education. That is having the school qualifications which universities demand. Students must have the opportunities to study for them and be helped to attain them. But survey after survey shows that students from lower social groups are either not getting those opportunities or are not succeeding in exploiting them. This is where students from lower social groups are disadvantaged and why I believe that they are not entering higher education in the numbers they should be. For example, analyses of the youth cohort studies suggest that students from higher social groups on average achieve higher A-level points scores that those from lower social groups. They also show that young people from lower socio-economic backgrounds are less likely to go on to A-levels after compulsory
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schooling and have higher sixth form drop-out rates. In other words, numbers of students from lower social groups going on to do A-level and similar programmes, completing them and coming out with good grades are comparatively low. Of course we must do everything we can to put that right. Indeed, the measures that we are introducing to create excellence in schools are about trying to do just that.
The key challenge is to get young people from poorer backgrounds onto the launch pad. Once they get to that point—once they achieve good A-level results—the proportions going on to higher education are very similar for different socio-economic groups. Student funding issues are secondary, but it is obviously vital to ensure that the financial package is adequate in particular for those with extra needs. That is why we have also taken specific action to encourage less well-represented groups to enter higher education.
First, as I have already explained, we are targeting basic support towards those students who need it. Less well-off students will receive free tuition and the full basic support available towards living costs.
Secondly, we are increasing the support available to students who find themselves in difficulty, either because of their circumstances or unforeseen problems. The access funds are there to provide extra help if students find they need it. They will be doubled for 1998-99, and extended to part-time students, as I have already said. A new £250 supplementary loan will be available. The sum of £5 million has been set aside for this for next year.
Thirdly, we are making special provision for students in particular circumstances. The disabled students' allowance will continue to be paid as grant and will no longer be means-tested. The other supplementary allowances which relate to students' personal circumstances—for example for students with dependants—will also continue as grants. We plan to convert some of the course-related allowances—for example, for extra weeks' attendance—to supplementary loans from 1999-2000. But I can assure Members of the Committee that broadly the same levels of support will be available to students while they are attending their course as in previous years. I believe that this is the key issue.
Of course, our proposals are aimed at generating additional resources for investment in further and higher education. I am sure that Members of the Committee do not need to be persuaded of the case of making this investment. By moving to an entirely loans-based system we shall be able to achieve greater savings, and so make more funding available for universities and colleges. At the same time, students will be assured of the support they need while they are studying, and will only be asked to contribute to the costs of their higher education once they have graduated and are earning enough to do so—and I must emphasise that again in response to noble Lords who spoke of graduates on low incomes.
In summary, this amendment would have the effect of perpetuating a student support system which is inconsistent with our aim of securing greater

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opportunities for participation in quality higher education. Most importantly, it would mean that fewer resources were available for much-needed investment in universities and colleges. I therefore urge the Committee to reject the amendment.
Earl Russell: Before the noble Baroness sits down, perhaps I may ask her to be a little less certain that present figures indicate that loans do not deter students. I advise all my first year pupils to take the loan. But I find the idea that higher education is supported by grants is so deep in the culture that at least half of them believe that they will be able to get through without taking the loan. Until that assumption goes, we shall not know how much loans deter students. Can we all keep a decent uncertainty for a little longer?
Baroness Blackstone: Of course there are uncertainties when a completely new system of this kind is introduced. But it is slightly dangerous to base assertions on anecdotal evidence. I, too, have much anecdotal evidence that I could give, one way or the other. Like the noble Earl, I have taught students for many years in various colleges of the University of London, just as he has. But we have to consider the proper statistical evidence before us. On 15th December, this year's applications were 6 per cent. down. However, we had an increase of 6 per cent. more than was anticipated in the numbers entering in October 1997.
On that basis, and on the basis of more recent statistics which suggest an even smaller decrease, I think that we can be reasonably confident. But of course I take his point.
Baroness Blatch: After what the noble Baroness said, I think all students ought to thank the Government for what they are doing and go away happy with no concerns at all!
Not only are students coming to me and my colleagues, and no doubt to Members on the other Benches, but so, too, are the noble Baroness's own colleagues both in this and in the other place, exceedingly disquieted by the proposition that there should be such unfairness in the scheme.
The noble Baroness addressed many other issues in the course of responding to the amendment. My amendment refers to the proposal's unfairness to young people from low income families. An enormous amount of money is to be saved. Grants are simply to be taken away, and all those grants accrue to the Treasury. It is a Gordon Brown proposal. There has been much talk about what will happen to the income from tuition fees, but no guarantee has been given that the money, ring-fenced, will come back into the higher education system. We are talking about billions, not millions, of pounds.
The noble Baroness said that broadly the same level of support will be sustained for students. I am afraid not. A student who at present qualifies for a 50 per cent. grant, which he or she has no responsibility to repay
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moves to a 100 per cent. loan, which they have full responsibility to repay. That is not "broadly sustaining the present system".
The noble Baroness talked about how much help is being afforded to students. Help is being afforded to students for £1,000 of their financial obligations. Four thousand pounds is being ignored completely. They have to borrow and repay £4,000; they may receive help with £1,000.
I wish to ask a straight question as to there being some guarantee. If money is saved from the abolition of grants, will that money accrue to higher education pound for pound? If it does not, I return to a point I made at another stage of the debate—namely, it turns out to be a tax, not a charge.
Finally, may I employ the example used by the noble Lord, Lord Glenamara, and return to "John and Jane". The reason the system is unfair is that John, from a high income family, ends up, after a three-year course, with a debt of £9,000. Jane, from a low income family, ends up after a three-year course with a debt of £12,000. However they pay the money back, whether or not it is income contingent, the person from the low income family leaves university with a greater burden of debt. I cannot believe that anyone can support that proposal.
Everyone is looking expectant in relation to the amendment. The debate has been wide ranging, and there is much support for it around the Chamber. There is a lot of support for the amendment in another place, too; Members believe that there should be some fairness in the system. I wish in particular to read the noble Baroness's remarks. I would like answers to the straight questions that I have set out. Therefore, just as I will reflect on this amendment between now and the next stage of the Bill, I hope that the noble Baroness will, too. I hope that we shall use all our energies in this place to make sure that students from low income families are not left with an unfair burden of debt at the end of their time at university. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Haskel: I beg to move that the House do now resume. In moving the Motion, I suggest that the Committee stage begin again not before 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Deregulation (Licence Transfers) Order 1997
7.44 p.m.
Lord Hoyle Lord Hoyle rose to move, That the draft order laid before the House on 17th November 1997 be approved [8th Report from the Delegated Powers and Deregulation Committee].
The noble Lord said: My Lords, this order is designed to streamline arrangements for transferring liquor licences from one licensee to another. Its provisions

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relate specifically to circumstances where it becomes necessary to replace an existing licensee at short notice. The order is unusual in that its parliamentary consideration has crossed a general election. That in itself indicates the broad extent of the support it has attracted.
The order introduces two new sets of arrangements into licensing law. First, it provides for approval of people as prospective licensees. These are individuals who, in effect, go through the normal process of approval for holding a liquor licence. But instead of being granted a licence for particular premises they are approved as potential licensees should the existing licensee need to be replaced.
The second set of arrangements introduced by the order allows for a form of emergency procedure in order to replace licensees who leave at short notice. The order does that by providing for an interim licence which can come into effect at once. This interim licence is subject to early confirmation by the licensing justices and is dependent on police approval.
These new arrangements have been proposed because of inflexibility within existing licensing arrangements. Under the present law, if someone holding a licence leaves the licensed premises which he or she operates, the owner—whether an individual or a company—has to go through the rather cumbersome procedure of having the licence transferred formally to a new licensee. That process can take a number of weeks, or sometimes a matter of months. So, where a departing licensee does not give sufficient prior notice, a problem arises with the continued operation of the premises.
There is a current form of emergency arrangement—called a protection order—but the procedures for obtaining one of these orders are rather cumbersome. The applicant has to go to the magistrates' court, as opposed to the licensing justices, and, crucially, the applicant for a protection order must be the person who intends to take on the licence on a permanent basis. In other words, the law does not allow for a temporary substitute to step in while arrangements for a new licensee are made. The order before the House allows for temporary arrangements of this kind and allows, in certain circumstances, for clerks to licensing justices to approve interim licences, so cutting out another element of bureaucracy.
A public consultation exercise on the proposed legislation took place between July and September 1996. A proposal for a draft order was laid before Parliament on 3rd February 1997 and was duly considered by the respective committees of this House and in another place. Both committees reported in favour of the proposals, but the intervention of the general election prevented the measure's further progress.
Following the election, the Government decided to support the principle behind the measure, and a draft order was laid before Parliament on 17th November 1997. The draft order has been amended in accordance with recommendations by the committees of both Houses during the initial scrutiny period.
The Delegated Powers Scrutiny Committee considered the amended draft order and recommended approval by the House in its 8th Report dated 26th November 1997. The draft order was approved in another place on 11th December 1997. I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 17th November 1997 be approved [8th Report from the Delegated Powers and Deregulation Committed].—(Lord Hoyle.)
On Question, Motion agreed to.

Museums and Galleries (Northern Ireland) Order 1997
7.49 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs) rose to move, That the draft order laid before the House on 25th November be approved.
The noble Lord said: My Lords, the draft order is the culmination of a process begun in 1995 with the report, entitled A time for change…, by Alistair Wilson OBE, who was commissioned by the previous government to carry out a policy review of Northern Ireland's three major museums—the Ulster Museum, the Ulster Folk and Transport Museum and the Ulster American Folk Park.
The key recommendation of Mr. Wilson's report was that the three museums should be brought together under a single management framework. Public consultation on the report confirmed a broad consensus in favour of the concept of merger. In particular, the three museums themselves confirmed their support for the proposal, any reservations mainly relating to the details of implementation rather than the concept. The Government wholly accept the case for merger and are convinced that Northern Ireland will be best served by a single substantial museum institution working within a coherent framework rather than separate entities in competition with each other. The Government have decided, therefore, to proceed with the necessary legislation and have introduced amendments to reflect comments received during the consultation process.
The purpose of the order is essentially threefold: it will establish a single museum institution for Northern Ireland; it will repeal the Museums (Northern Ireland) Order 1981, which currently governs the two statutory bodies—the Ulster Museum and the Ulster Folk and Transport Museum; and it will make provision to enable the Ulster American Folk Park, an independent charitable museum, to transfer to the new institution by separate arrangements.
I will now turn to the detail of the order, focusing on what are the most significant provisions. One of the main issues which emerged from consultation on the legislation was the model for governance of the new institution. At present each of the two statutory museums is governed by a board of 15 trustees, consisting of six members appointed by district councils,

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two university appointments and seven departmental appointees. The new merged institution will have a single tier of governance which will be known as the Board of Trustees of the National Museums and Galleries of Northern Ireland, this title reflecting the status of the institution in terms of both the importance and breadth of its collections.
As to membership, the Government believe they are best placed to achieve a balance of membership which includes individuals with relevant interests and expertise and is in broad accord with the plurality of Northern Ireland. It has therefore been decided to adhere to the original proposal that there will be no rights of representation on the new board but that all members, including the chairman, will be appointed by the government following consultation with a range of persons and bodies, including the district councils and those which represent educational and heritage interests. While specific provision for consultation is included in the order, the appointments process will, of course, follow the guidelines laid down by the Commissioner for Public Appointments.
In response to comments received during consultation, the order specifies a minimum of 12 and a maximum of 15 members of the board and a term of appointment not exceeding five years. The provision enabling the chairman to be paid an annual honorarium has been retained but such provision for a vice-chairman has been removed. The honorarium has been set at £8,000, which is a modest figure taking account of the level of commitment required and the particularly challenging task of overseeing the reorganisation in the initial years. The detailed provisions are set out in Schedule 1.
This model of governance has worked well to date in other public bodies in Northern Ireland, having produced well balanced membership structures with a strong commitment to the development of the work of the bodies concerned. In reaching its decision on the governance issue, the Government have taken into account the concerns expressed by several district councils and some political parties that the influence of local government should not be diluted. This is a particular issue of broad significance in Northern Ireland. In response to these concerns, the Government have ensured that district councils will be consulted as part of the public appointments process.
The Government have also taken a further step in response to district councils' concerns by requiring, in Article 4(7), the board of the new institution to consult with district councils, education and library boards and other bodies on the exercise of its functions. This should allay any fears by the district councils that they will no longer be able to play an influencing role in the management and development of the new institution. The Government believe that this new body must form a relationship with district councils in order to be aware of the views of the community it serves and to encourage and support the district councils themselves with their local museum provision, which is much less developed than in the rest of the UK. The Government see this as complementary to, rather than duplicating,
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the role of the Northern Ireland Museums Council which provides services to local museums and advises on local museums and heritage development. The specific model for this consultation has not been worked out, but it is expected that the council would play a part.
I turn now to Article 5, which is probably the article that has caused most comment recently. Article 5 places more explicit controls than at present on the disposal of objects in the collections. These controls were introduced to meet the strongly expressed views of the three museums themselves. However, I am aware that reservations have been expressed about the powers accorded to the department to consent to the disposal of any object and to permit the overriding of any trusts or conditions prohibiting or restricting the disposal of any object, in that they bring into question the autonomy of the board. That is not the case.
I emphasise that these are enabling powers only and assure your Lordships that these provisions are intended to give the board greater flexibility and not to give the department an interventionist role. The powers would only ever be exercised at the behest of a proposal emanating from the board itself. I can assure noble Lords that it is envisaged that they would only be applied in exceptional and appropriate circumstances and for that reason we included a safeguarding provision requiring the department's approval.
None the less, I understand the concern of the museum professionals that this power of the board may make benefactors reluctant to donate artefacts to the new institution because they have no absolute assurance in the legislation that any condition attached to the donation will not be overturned in the future. I emphasise, however, that it would be the independent trustees who would have the authority to initiate the disposal of artefacts and the department in the public interest could override that decision in order to retain them.
While it is inherently difficult to anticipate the exceptional conditions in which the use of this power might be appropriate, it may none the less be helpful if I try to illustrate the circumstances in which the board of the museum might think it appropriate to consider the use of the power. In recent years there has been a welcome development of local authority museum provision across Northern Ireland, so that there are new opportunities to display artefacts in locations particularly relevant to their context. The new museum might wish to assign an artefact to one of the local museums to enhance its display and interpretation and its availability to the local community. This could be beneficial to the preservation and presentation of the heritage and would merit consideration by the department if the board were to propose it.
It may also be helpful if I illustrate the circumstances which could not be considered appropriate. The government would not expect the board to propose a disposal simply as a means of raising money. The overriding presumption would be in favour of the retention of artefacts and the museum would have to present a convincing case which satisfied the department that the action was in fact beneficial to the preservation and presentation of the heritage.
The concerns about these powers have been fully aired with representatives of the three museums, who have accepted the good intentions of the Government. It is their unanimous view and that of the Museums and Galleries Commission that this draft order must proceed and that the most appropriate way forward on the disposals issue is for the new board to draw up, in consultation with the commission, a disposals policy and code of practice that will conform with accepted guidelines. This code of practice would include provision about the use of moneys generated by the disposal of an object. I wish to stress that the Commission has confirmed that it is content with this approach. I can assure noble Lords that the Government's intentions are entirely positive and that exceptional disposals would have to be fully justified in accordance with a code of practice which was consistent with national standards. I can give a further categorical assurance that the Government will not permit the use of this power under Article 5(2)(e) until the code of practice has been drawn up and agreed. I hope that this will assure benefactors that their gifts are safe and that their wishes will be respected.
Lord Rees: My Lords, would the noble Lord allow me to intervene in order to ask a question? Having looked as carefully as I can at Article 5, it seems to me that the board can make a proposal without explaining the reason and, provided the department consents, that proposal will become effective. The Minister has tried to reassure us by saying, "Yes, but there will be a code of practice". But that will not have any statutory force. A disposal that appeared to conflict with the broad principle that he is adumbrating could not be challenged in the courts. Is my reading of the order correct?
Lord Dubs: My Lords, perhaps I could return to that point. I think I could give an answer off the cuff, but I would rather consider the matter and return to it towards the end of the debate, if the noble Lord agrees. Article 5 is quite complicated and I spent a lot of time discussing with officials the specific meaning of it. Perhaps I may answer briefly and then come back to it later.
If the museum authorities under the new arrangements wish to dispose of an artefact in accordance with the trust under which it was established, then that would be an order. That is a constraint which would be similar to that which applies to museums generally. However, if they wish to dispose of an artefact against the original trust, then they would not be allowed to do so unless the department itself gave them permission. That is a double lock. It is an additional safeguard to ensure that a museum, if it wished to breach the trust under which it operates, could only do so with the department's consent. That is essentially the way the matter would operate, unless we are talking about damaged items and others which would have no intrinsic value, where such disposal would be permitted; but, in addition, there would be a
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code of practice guiding the overall approach to that. I do not know whether the noble Lord wishes to pursue the matter.
Lord Rees: My Lords, I apologise for taking up more of the Minister's time, but, as I read it, the department does not have to relate its consent to any particular set of criteria in this order, or indeed in any other statute. I am sure it would not be, but it might be entirely capricious. I do not know whether the action of the board could be impugned on that ground, but it does not seem that the department has to give any explanation of the reasons for giving the consent to the disposal. It may be that I have not understood the position correctly and perhaps the Minister can reassure me and the House.
Lord Dubs: My Lords, perhaps the noble Lord is unduly apprehensive. There would have to be a combination of the most unusual circumstances for the board of the museum to behave capriciously and for the department also to give its consent capriciously. What we have in the role of the department is an additional safeguard to ensure that all is handled properly but, essentially, the disposal of artefacts would be governed by the trusts covering the work of the museum and it would be only in cases, as I said earlier, where the museum wished to breach such a trust, that they would also have to get the department's approval, and the department's approval would normally not be forthcoming.
We therefore have two safeguards, whereas it is my understanding that in the case of most museums there is only one safeguard, so we are simply using the department as an additional safeguard. That is the basis of the assurance I am seeking to give. I will proceed, if I may. When I have reflected on what the noble Lord said, I may wish to add further comment when I wind up.
I now wish to turn to Article 6, which provides for the transfer of any body, by agreement, to the new institution and explain that the primary purpose of this article is to enable the board to enter into an agreement for the transfer and management of the Ulster American Folk Park on agreed terms and conditions approved by the department. I stress that the folk park will not be forced to transfer into the new institution. It will take place only on terms which are mutually agreed. I am confident that this is possible and will be in the best interests of the folk park and the new institution itself.
Another main issue which emerged from consultation was the degree of influence and control by the department over the new institution's procedures and activities. Many of the comments received stressed the importance of ensuring an arm's length relationship. The Government have carefully considered these comments and have also taken into account the need for it to be assured that the new institution is properly accountable for its actions. They have therefore relaxed some of the original provisions. For example, in Schedule 1, in relation to the membership of the board, the requirement that the vice-chairman should be appointed by the head of the department has been removed and substituted by provisions enabling the

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trustees to elect one of their number as vice-chairman. All provisions for the appointment to the board of a departmental nominee have been deleted.
Only two changes have been made to strengthen the provisions. Firstly, a trustee may be removed when he or she fails to comply with the terms of appointment; secondly, the department will approve the standing orders of the board and its committees and sub-committees.
Overall, the Government's intention is that the department's controls will focus on proper systems and accountability and not on interference in decision making and it is believed that the changes made will achieve the right balance between autonomy and accountability.
Inevitably, there will be a degree of reorganisation to facilitate the merger and smooth transfer will be essential to maintain stability as the museums move to a single management framework. The detailed transfer provisions are contained in Schedule 2 to the order. In particular, these provisions ensure that staff transferring to the new institution will do so on the basis of existing terms and conditions. This is in accordance with requirements relating to the transfer of undertakings. Any changes to those terms and conditions will be negotiable through the ordinary course of industrial relations.
I am aware that the Northern Ireland Public Service Alliance, the union which represents employees of the museums, has sought certain assurances relating to the position of staff transferring to the new institution, including their pension arrangements.
I can confirm that the new institution will continue the existing arrangements whereby the staff of the Ulster Museum and Ulster Folk and Transport Museum participate in the Northern Ireland Principal Civil Service Pension Scheme. Employees of the Ulster American Folk Park participate in the Local Government Officers' Scheme and a proposal that on transfer they would switch to the Civil Service Scheme is currently under consideration. My understanding is that the switch would not be to the detriment of these staff. Beyond that, the Government cannot be definitive, as the handling of the various issues will be for the board and management of the new institution to resolve. However, the Government will require the new institution to promote good industrial relations and to treat its staff fairly and with consideration.
Finally, I wish to turn to Articles 12 to 14 which are largely a continuation of the existing legislation empowering district councils to provide museums and galleries. However, the new order removes the need for the department to have an approval role in relation to district council expenditure. Instead, a modified control has been introduced, requiring district councils to consult the department, and any body that the department may determine, on museum provision. Government have in mind, for instance, that the district councils should consult the Northern Ireland Museums Council, a non-statutory body, part of whose remit, as I
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said, is to advise on local museum provision. I consider that this alternative arrangement will assist in promoting a more strategic approach to local museum provision.
In conclusion, I have dealt with the main provisions of the order. The remaining provisions are largely of an administrative nature in relation to such matters as by-laws and provision for annual reports, and accounts by the new merged institution. My Lords, I commend the order to the House.
8.6 p.m.
The Earl of Clancarty: My Lords, I am adding my voice to those who will express concern this evening about certain aspects of this draft order. I thank the Minister for his reassurances. No one to whom I have spoken is of the opinion that there is anything Machiavellian behind the wording of Articles 5(2)(d) and (e) and 5(4) of the order, which deal with the disposal of art objects. However, Picasso once said that the most interesting thing about paintings was their mistakes—and sometimes mistakes lead you down new roads, whether they are right or wrong ones.
The Museums and Galleries Commission, the National Art Collections Fund, the Ulster museums, Members of Parliament and others have all expressed concern over the powers seemingly given to DENI to dispose of artworks. I have these concerns, too, even after the reassurances carefully spelt out by the Minister. One of the major concerns is that, even if without intending to do so, this order sets a precedent within the UK, going against the accepted understanding of art works as "inalienable cultural assets" as defined in the Government review, Treasures in Trust. There are those who would be happier if the "or" at the end of Article 5(2)(d) of the order was changed to "and", so that the department has always to act in consultation with the hoard, and not capriciously or unilaterally. My view is that it would be safer if Article 5(2)(e) were to be entirely removed. Also, it is serious that Article 5(4) allows the breaking of trusts.
It has to be noted that the idea of departmental intervention as far as the UK is concerned is new, anyway. The Museums and Galleries Act 1992, on which the order is modelled in relation to the disposal of art objects, makes no provision at all for this kind of intervention. If that is so, how can the Minister describe the problematic articles as providing "enabling powers", if the 1992 legislation has operated without disablement, as one might say?
Another important point in relation to the order is a concern as to how moneys raised by disposal might be used. There is no clause, as appears in the 1992 legislation—Schedule 1 and Clause 4 (7)—which ensures that such moneys would be used for reacquisition.
I also want to mention the fact that the Museums and Galleries Commission, the Ulster museums and the Museums Association among others have expressed concern at the lack of consultation on the order. The Ulster Museum tells me that it received the second draft of the order, containing the problematic articles on disposal, only two days before the Sixth Standing

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Committee on 10th December last. A government which profess a desire for open government should take note of that.
I understand that there would be considerable logistical difficulties if the order were to be withdrawn, and that the process of creating the new board is already well under way. Nevertheless the presence of the clauses may affect benefaction, purely through what is perceived in existing legislation. Also, another government, at a future date, may have quite different ideas as to how to interpret the articles, even with assurances and a code of practice in place. Ideally, the order should be reworded and I ask the Minister whether he intends to revisit the legislation at a future date.
8.11 p.m.
The Earl of Carlisle: My Lords, it is a pleasure to take part in this debate. First, I congratulate publicly the noble Lord. Lord Dubs, on his appointment. I have no direct interest to declare in Northern Ireland, but 20 years ago I had the privilege to spend 18 months there, wearing uniform. Unfortunately, time and pressure of work did not often enable me to visit museums. However, I am fully aware, having visited many private collections there, of the wealth of property, artifacts, art and culture. As we know, culture belongs to everyone—the rich, the poor. the mighty and the lowly. I congratulate the noble Earl, Lord Clancarty, on again revisiting this subject, which is dear to the hearts of so many of our fellow citizens.
Alarm bells are now sounding in the museum world. On 18th December we had a debate on free entrance to museums. I know that that is not the subject of today's debate, but I can assure the Minister that many of us, both inside the Chamber and outside and especially those of us who receive information from curators of museums, feel a great uncertainty. I hope that the Minister will today assure us that the Government's aim is to enable the widest access to museums.
I rise to express anxiety, as others will, in relation to Article 5 on the disposal of objects from museums and galleries. The order sets a dangerous precedent in that regard. Why does the Department of State require such wide powers to intervene in disposal decisions?
So far only the figure of £8,000 has been put forward. But what will be the cost of the new board? It will not be that of just one chairman's salary; there must be many administrative costs involved. Will it be more expensive? Will it mean that there is less money for museums and cultures in Northern Ireland? Perhaps the Minister will enlighten us on that subject.
I do not like to use the word "quango"; I prefer the phrase, "quasi-autonomous non-governmental organisation". For a government that is prepared to decentralise, it does not look good when they accept something from a previous administration; that is, another board, another quango. I am also concerned about its composition. We know that two representatives from the universities were members of the old board. Why are they not to be appointed again, or will they be appointed?
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Finally, I am concerned about benefactors; the families of those who have given objects from their possessions and those who will give them in the future. Once the subsection is accepted, future benefactors will not be encouraged to give of their possessions.
I look forward to hearing from other speakers hut, like the people of Northern Ireland, I have great misgivings about this article and will listen with care to what my noble friend Lord Alderdice has to say about the opinion of Northern Ireland on the order.
8.16 p.m.
Lord Strabolgi: My Lords, I am glad to follow the noble Earl, Lord Carlisle, and, like him, I should like to say a few words about Article 5.
First, I greatly regret that the order has been tabled at such short notice. There may he good reasons for that; I do not know. But I have been asking for some while when it would appear, and it did not in fact appear on the Order Paper until yesterday.
Secondly, I welcome the statement by my noble friend about the reservations that noble Lords—the noble Earls, Lord Clancarty and Lord Carlisle, in particular—express in relation to Article 5. It is right that it should be raised in this House; after all, we are a revising Chamber. When the order came before another place, the Minister in reply did not refer to the same reservations expressed by honourable Members.
The defective wording caused considerable concern to the National Art Collections Fund which, as your Lordships know, has 83,000 subscribers and has done so much to preserve our heritage. The right to dispose of art treasures and artifacts from our museums by governments and to overrule the rights of trustees beyond the provisions of the 1992 Act, is a dangerous one. I accept of course the assurances given by my noble friend. I am glad that he made those and they will go into the record. But what will a future Minister or a future government do? At present the wording is defective.
I should have thought that if this kind of power had existed in the past, there would be hardly any Victorian paintings left in our museums. They were not fashionable between the two world wars and now they fetch large prices because tastes change. Certain museums in the United States have sold paintings, including some good impressionist paintings, in order to buy currently fashionable contemporary works which may not stay the course for long. I understand that that is called, "de-accessioning" and in my view it should not be countenanced over here.
I welcome my noble friend's assurances, but it would be much better if the article could be amended by the substitution of the word "and" for "or" in Article 5 (2)(d). I realise that the order cannot be amended, nor can it be rejected; but I hope that my noble friend will introduce an amending order to tidy up what is really very bad drafting and, if it is taken for what it is, a dangerous right to give. I hope that we shall see something done about it in the near future.
Lord Freyberg: My Lords, like other noble Lords who have spoken this evening I agree that the real

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danger from which all other national museums and galleries in the UK must be protected is that of precedent. If in Ulster this amalgamation of institutions results in the de-accessioning by DENI of what are deemed duplicates, by whatever means, and without following the procedures normal in England, this will imply that all other galleries in England, and perhaps in Scotland—though other rules apply there—have a precedent that enables them to de-accession exhibits that are surplus or irrelevant to the collections.
There was some de-accessioning a generation ago of a kind unlikely ever to happen again, lending strength to the argument that de-accessioning should always be avoided. The most notorious example is the Lady Lever Gallery at Port Sunlight in 1958, when many very considerable works of art were sold at auction at Christie's to the regret, 25 years later, of the new staff and trustees of the gallery. The V&A in 1960 could not even be bothered to sell its surplus drawings by Burne-Jones, and its youngest curator was instructed to burn them in a bonfire. Tastes change with the generations, as the noble Lord, Lord Strabolgi, has already mentioned, and we must guard against precedent for wanton dispersal.
Is there any way in which the Minister can ensure that what has happened in Ulster cannot be treated as a precedent in England?
Just as worrying, as the noble Earl, Lord Clancarty, has already mentioned, is the lack of a clause defining the use to which moneys raised by the disposal may be put. For all other museums in Britain, Clause 4(7) of the Museums and Galleries Act 1992 decrees that moneys resulting from disposals
"shall he applied by the Board in the acquisition of relevant objects to be added to their collection".
Although the Minister has given us an assurance that moneys raised by disposal will be used in this way, without such a clause it is impossible to ensure that moneys so raised will not be syphoned off into the general funding requirement of the museum. That would be both contrary to the Museums Association's Ethical Guidelines and the Museums and Galleries Commission's Guidelines for Registered Museums, and might eventually force the museum to consider disposing of items for financial gain rather than curatorial reasons. Worse still, funds may not be protected for the use of the museum but may find their way into the general purse of DENT. Again, I hope the Minister is correct in what he says.
There have been suggestions that to counter these omissions—if they are omissions—a code of practice will later be introduced. A code of practice, easily abused and more easily forgotten, offers no long-term protection to the national museums.
8.24 p.m.
Lord McConnell: My Lords, I would like to say a few short words in the gap. From time to time Northern Ireland business is put on last thing on a Thursday when most Northern Ireland noble Lords have gone home. But on this occasion it is even worse. This order was only
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put on the Order Paper yesterday and we were given the absolute minimum of notice. I do not think that is a proper way in which to treat this House.
I wish to add to what some other noble Lords have said about Article 5. Reservations have been expressed about that in a letter from the Museums and Galleries Commission, which is the government advisory body for museums and galleries, and it should be given due weight.
I do not intend to go into other parts of the order simply because I have not been given time in which to consider them. But Article 5, as other noble Lords have said, provides that the board shall not dispose of any object the property in which is vested in it and which is comprised in its collections except in accordance with the provisions of the article. Paragraph (2)(e) says that this can be done when the department consents to the disposal. But an object may only be disposed of, as mentioned in paragraph (2)(a), (b) or (c) but not (d) or (e), where the disposal is not inconsistent with any trust or condition, express or implied, prohibiting or restricting the disposal of the object.
Paragraph (4) says:
"An object may be disposed of as mentioned in paragraph (2)(d) or (e) notwithstanding a trust or condition (express or implied) prohibiting or restricting the disposal of the object".
That is a very wide power to give. Normally the variation of trust can only be done by the High Court but in this case it is proposed that it should be done at the say-so of the department.
The noble Lord said that many of the provisions in the order are unlikely to be used. In that case why put them in the order at all? He may give undertakings but he cannot bind his successors. He cannot say at no time in the future will these things ever be done.
It has been suggested, and I agree, that amendments should be made to the order. That, of course, is the difficulty. We, even though we are called a revising Chamber, are not allowed to alter the order. There should have been a proper Bill with both Houses able to propose amendments. The subject could even have been included in a Bill covering the whole of the United Kingdom.
8.26 p.m.
Lord Puttnam: My Lords, may I contribute also briefly in the gap to add some news from the front, as it were. By an extraordinary coincidence I was lecturing last night at the Ulster Museum. The noble Earl, Lord Clancarty, is not overstating the situation when he says there is colossal concern about the potential impact of Article 5.
I accept entirely what the Minister says. His assurances are generous and go as far as they possibly can. I ask him to remember, however, that future or potential benefactors of the museum will be entirely reliant on the text of those assurances. Unfortunately, the rather clumsy wording of the order fails to give them the reassurance that any benefactor has every entitlement to seek in making a gift.
8.27 p.m.
Lord Alderdice: My Lords, I find myself unusually rising in the gap because of the very late notice in regard to the order which led to a degree of confusion in the usual channels. Messages do not appear to have been transmitted.
I speak as one who was a member of the board of the Ulster Museum from 1993 to 1997. I have no doubt that the Minister is transmitting entirely faithfully the briefs he has been given. I have to tell him of the considerable concern felt by myself, other board members and senior members of staff in the whole matter of the merger of the three museums. But the view was that the department was so determined to proceed down this route that any obstruction would simply be brushed to the side. Now, as mentioned by noble Lords, the matter has proceeded to the point where it is rather like planning blight into an old house. To not proceed now would be more disastrous than anything else. It is not because there is happiness about the proposition.
The relative suddenness with which the order has appeared before your Lordships' House appears to be consistent with what has happened before in respect of the order. When the redrafted order came to the Ulster Museum it was again with only a day or two's notice and there was no possibility of proper consideration. We need to ask why. There is one common feature covering a whole series of issues. The very doubtful article on the disposal of materials has already been mentioned. I shall not revisit it because of the problems of time. Another issue is the appointment of chairman and of board members, not as representatives coming from the community but top down from the department.
The Minister says there is a guarantee of consultation. That means consultation with the district councillors and the education and library boards. There are 26 district councils and five education and library boards. Proper consultation of one meeting a week would take almost a whole year. Is that the kind of consultation one would have with proper representatives who had right of being on the board? I say that that is not so. All the way through the order one finds that the Department of Education is insisting on controlling what is going on.
In another place the Minister with responsibility indicated that in the contentious and sectarian atmosphere of Northern Ireland there had been difficulties in the Ulster Folk and Transport Museum and that therefore the Department of Education needed to have its fatherly hand in to make sure that there was not misbehaviour. I would be rather more convinced of that if it were not the case that this was the department that presided over the apartheid in education and proved so obstructive to the development of integrated education.
I have profound concerns about the order. I am clear that certain of the provisions give good reason for concern. I am clear that many of those involved as staff and board members in the various organisations have deep concerns about the matter. I hope that we shall have an assurance from the Minister that there will be words in the record or even regulations and that the Government will seriously consider revisiting the whole
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matter with some amendments in legislation which will give due protection and not establish a precedent not only for Northern Ireland but elsewhere.
8.31 p.m.
Lord Cope of Berkeley: My Lords, as has emerged in the debate, this order has been sprung on the House. We have known it was coming since November, but, as the noble Lord, Lord Strabolgi, indicated, it was put down on the Order Paper only yesterday. That might not have mattered much if the order was uncontentious or if the timing of the debate had been a little more convenient. But neither of those things is true. The contentious nature of the order has come out clearly in the course of this short debate, and this time of the week is not a convenient one for Northern Ireland Lords in particular and for those who have to travel long distances.
There was no great urgency for this debate which might have excused the timing. It was debated in another place on 10th December and it was a sharp debate then which left many unanswered questions. As the debate in your Lordships' House was so delayed, I thought it possible that the order might be withdrawn and amended on the lines that had already become clear both from the debate itself and from representations sent in by museum interests on both sides of the water. Indeed, that is what should have happened. It could perfectly well have happened.
Instead of that the Government have taken some weeks considering the points made in the representations and in the debate in the other place and have then decided to press ahead with the order unchanged, despite the criticism, and give out instead a series of ministerial assurances saying that they do not really mean what is in the order and that they are not going to use the powers which they are asking Parliament to give them. The Minister read out assurances this evening in precisely the same terms. I was following them in the correspondence and they have also been sent out in the past few days to the Museums Association and to my honourable friend in another place who spoke in the debate. Those ministerial assurances are not anything like as good as rewording the order, which is what should have happened here.
We do not disagree with the main purpose of the order and we support the proposed merging of the museums. It is the more detailed provisions that are contentious, as has emerged in the debate. Article 5 concerns the sale of objects from national collections. The 1992 Act, as far as concerns England and Wales, took the view that disposals from national collections should never be of objects accepted on condition that they are not sold, that they should in other cases be subject to strict conditions, that they should be the decision of the relevant trustees themselves, and that the proceeds of any sales should be used solely to acquire new objects for the collection in question.
That seems to me, and, much more importantly, to many in the museums and galleries world and to noble Lords who have spoken, to be a satisfactory policy. But it is not the policy embodied in the order. Logically, it

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seems to me either that the new Government have a different national policy about disposals—one which anticipates greater disposals by museums—or else that there are some special features of Northern Ireland museums which lead to the possibility—or, I suppose, the desirability—of extra disposals. It does not seem to me that there are special features of Northern Ireland museums which should lead to a greater or different disposal policy from the national disposal policy. Nor do I think it desirable to change the national disposal policy in the way the order does for Northern Ireland.
Concern has already been expressed about the position of donors. Article 5(4) is the most difficult and dangerous part of the whole order. It provides that any stipulation of a donor or the terms of a trust—perhaps a deed of gift or a will—which is intended to limit the ability of the museum to sell something can be completely over-ruled and made legally void by the stroke of a departmental pen. However, when an owner gives a valuable object of whatever kind to a museum, he does so because he wants people to be able to see it in the museum and not to have it sold. If he wanted to make the museum rich he need not bother to give it the artifact. He would give the museum money instead which the museum could spend.
The fact that the provision is in the order in respect of Northern Ireland museums means that a similar provision could be put in place for England, for Wales or for Scotland. thus destroying the donor's ability to attach any conditions to a gift in those jurisdictions as well as in Northern Ireland. That is why there is great concern in England and Wales and in Northern Ireland about this provision. It is believed—I think correctly—that it will deter donors even in England, because it has been inserted retrospectively, as it were, so far as the donor is concerned, in Northern Ireland legislation.
There is no provision for limiting what the money raised by the sale of artefacts can be spent on. There is a natural suspicion that at some point the department might press the Ulster museums to sell objects in order to finance their day to day expenditure. Whatever reassurances we are given by Ministers at this time, that, as I understand it, could happen in law as the order stands. It is therefore important that the Minister is very specific in the undertakings he gives in this respect in regard to Northern Ireland. I hope that he will also give us assurances that it is not the intention to apply provisions of this character in the other parts of the United Kingdom.
There are other concerns arising from the order, some of which have been put by the Museums and Galleries Commission, the Government's own advisory body, which are covered by the general phrase that the Government, in the person of the Department of Education in Northern Ireland, are taking greater powers unto themselves and limiting the independence of the trustees.
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The Museums and Galleries Commission said in its submission on the order.
"The degree to which the order gives the Department of Education of Northern Ireland control over the new institution goes beyond that in force for any of the other national museums and galleries in the United Kingdom".
That was discussed in the debates in the other place. As the noble Lord, Lord Alderdice, said, the Minister explained that it was because of problems that there had been at the Ulster Folk and Transport Museum. I accept that there is a reason for particular care over the choice of trustees arising from the nature of the Northern Ireland community, but stringent powers over the actions of the trustees, once appointed, goes much further still and is provided for in this order. Again, I hope that this will not be a precedent for the other parts of the United Kingdom.
Concern has also been expressed at the diminution in the powers of the local authorities. They are being stopped from direct intervention. They are also to be consulted by the board, for what that is worth. They are also to be consulted on the appointment of trustees, but not until the board has been in existence for 12 months. The initial appointment of trustees can be done under the order without consulting local government or anybody else. That provision only comes into force after the order has been in place for 12 months. In any case, it runs counter to the general wish of giving more powers to local authorities in Northern Ireland.
There was clearly, as it emerged in the debate, a lack of effective consultation before the order was laid. There are errors in it which have not been corrected since they have been pointed out and since publication. That has led Ministers to say that they will not use the powers given by the order. But the correct course, as has been said by several noble Lords this evening, is to withdraw the order and table a corrected version. I believe that this has been a reflection of the arrogance of the department in particular and of the Government in general. It has been a mismanaged episode and a bad piece of legislation. We should pass it tonight in order to avoid the confusion that would otherwise result, but I hope that the Minister will be able to say that the order will be replaced by one with more satisfactory wording at the earliest convenient opportunity, following adequate consultation.
8.43 p.m.
Lord Dubs: My Lords, I fear that I have three and a half minutes to deal with many important issues—
Lord Cope of Berkeley: My Lords, I apologise for interrupting the noble Lord so soon. I took advice on the matter. If the debate continues after the time stated, that is not material. The Minister has as long as he likes to reply.
Lord Dubs: My Lords, I am grateful for that help from the noble Lord, Lord Cope. In that case, to do justice to the many important points that have been made, noble Lords will forgive me if I take more than just two or three minutes to answer the debate. Many of

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the points made were covered by several noble Lords. In the interests of time, if I do not mention them all by name, I hope 1 shall be forgiven.
I shall deal first with the point made by the noble Earl, Lord Clancarty, and the noble Lords, Lord Freyberg, Lord Cope and Lord Alderdice, about the use of money that will be obtained from the disposal of objects. These, and many other matters, will be addressed in the code of practice. Although it will not have statutory force, nevertheless there are many examples where codes of practice play an important part in governing the proceedings of public bodies. I have no reason to believe that a code of practice applied in this case, and in consultation with the appropriate museum bodies, will not be faithfully adhered to by the new museum body when it is established. We have to have some confidence that a code of practice which is the result of proper consultation would be adhered to and would deal with many of the concerns to which noble Lords have referred today.
Much concern was expressed about the department's position. I say emphatically that it cannot, will not and has no powers to act unilaterally. Apart from the appointment of members of the committee, the department's powers only come into play when the board has itself made certain proposals. The department has, in certain limited cases under Article 5, the power not to consent to a particular disposal. But there is no question of the department being given such wide powers, they only come into action when the board itself has initiated a course of action.
A number of noble Lords asked whether there could be future revisions of the legislation. Of course, nothing is fixed forever. But it would be misleading of the Government to suggest that an early revision of legislation—which will not yet, as it were, receive full parliamentary approval until later on this evening, I trust—is likely or that the legislative timetable would permit it. It is not an assurance that I could give with any honesty and therefore I do not intend to give it.
The noble Earl, Lord Clancarty, the noble Lord, Lord McConnell, and others, talked about precedence. The legislation covers only Northern Ireland. Any changes to legislation governing museums in England, Wales or Scotland would have to be brought forward and considered in the usual way. So unless one is saying that anything that happens anywhere is a precedent for anything elsewhere—I hope that noble Lords are not saying that—then we are not establishing a precedent. This is legislation intended to cover the particular circumstances in Northern Ireland.
A number of noble Lords said that there had been a lack of consultation. Perhaps I may explain the procedure. The draft order received full consultation over a lengthy period. As a result of that consultation, certain changes were made. It is not the usual practice to consult again on those changes, but in this particular instance further consultation was entered into. It is that second phase of consultation that did not have the full time period attached to it that some noble Lords would have wished. I understand the point, but we have gone in for more consultation in this particular instance than is normally the case with Northern Ireland legislation. I give noble
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Lords an assurance that the Ulster museum played a full part in this consultative process prior to the publication of the draft order.
A question was asked about more information on the code of practice. That will be for determination by the museum and by the Museums and Galleries Commission. It will be in accordance with national guidelines. I do not believe that it will be possible to give more information on the code of practice until such consultations and discussions have been embarked on.
I believe that the noble Earl, Lord Carlisle, asked about the cost of the new institution. I cannot give a full answer to that. The new body is not expected to cost more than the three existing bodies which will be included in it, although there will be some transitional costs associated with the changes that will have to take place. I believe that ultimately the new body will be more economic than the three bodies, but that is speculation on my part. If I am able to get more detailed information on that, I shall write to the noble Earl.
He also asked why there were not two university appointments on the new body. The underlying principle is that there were to be no rights of representation on the new board, but that the department will consult a wide range of bodies, including the universities, about appointments. They will be made on individual merit as regards the new procedures for public appointments. We believe that that will result in the best board that can be achieved for the new body.
My noble friend Lord Strabolgi asked about taking the order at short notice. It was laid on 25th November, which is nearly two months ago. It was considered in the other place on 10th December. But I regret that noble Lords did not have as much notice as they would have wished. I do not know why that is the case. I am sorry if noble Lords had notice only yesterday that the order was to be taken today.
The noble Lord, Lord Strabolgi, referred to the desirability of introducing a further amending order. I have already replied to that. That is not an undertaking that the Government can possibly give as we only now have the new legislation. The noble Lord, Lord Freyberg, spoke about the use of moneys for the general requirement of museums. That will definitely be covered in the code of practice to which the new board will have to adhere.
The noble Lord, Lord Alderdice, spoke about the control to be exercised by the department. The control by the department relates to proper procedures and safeguards. I believe that the right balance has been achieved between the responsibilities and powers of the department and those of the board. I believe that the department's control has been reduced compared with the original proposal which went out for consultation. I appreciate that in relation to an issue as difficult as this the accusation can always be made that insufficient time for consultation has been allowed. However, I believe that in this case reasonable time has been allowed and that has been accepted by the bodies consulted.
I turn to the nub of the issue: Article 5. At the risk of repeating myself, any initiative on disposals—I understand that noble Lords are concerned mainly with Article 5(4)—must come from the board itself. There is

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no question of the department saying to the board that it must dispose of something in order to obtain money or for any other reason. The department's part in this is to be able to exercise safeguards lest the board goes too far in seeking to achieve a disposal.
Lord Alderdice: My Lords, perhaps I may put the question back to the noble Lord. He has made much of the protection that exists. He has said that the board must initiate matters and that the department does not intervene. The whole point is that the department has taken over control of the business of the appointment of the chair and the board. It is no longer in the hands of those who make representations. The board can be hired and fired by the department and yet we are supposed to believe that it is an arm's length arrangement. That is the problem, and the attempts by the noble Lord to reassure the House must fall and break on that particular rock.
Lord Dubs: My Lords, I believe that the noble Lord goes a little further than the facts justify. Many public appointments are made by departments in Northern Ireland. I am not aware that that gives the particular appointing department those powers or that those powers are exercised in the way suggested by the noble Lord. In my experience, boards and committees are appointed by departments. I make some of those appointments myself. From that point onwards the persons appointed under the public appointments procedures are appointed on merit and exercise their powers without the department breathing down their necks. I believe that it is beyond reasonable expectation that the department would exercise a tyrannical hold on this new board in the way that the noble Lord suggests. I do not believe that is how it will be or that the people appointed will allow the department to behave in that way.
I believe the real safeguard is that only the board can initiate some of these matters and that the department can then say "No" to the board. I have indicated the very limited circumstances in which the department would allow an original trust or condition to be breached. I remind noble Lords of the example that I gave. If the board of a museum felt that a particular artefact or exhibit could more properly be displayed perhaps in a local museum run by a district council where it would be more relevant to the local community, in such a case the department might allow the original trust or condition to be breached.
I understand the concerns but I believe that there is very little scope for the realisation of them. I believe that the safeguards in the order are pretty good ones. I do not believe that we can talk about new legislation. I believe that when tested the safeguards will prove adequate and that when noble Lords see how the safeguards operate, they will be satisfied that there is no need for further legislation in the foreseeable future. I beg to move.
On Question, Motion agreed to.

Teaching and Higher Education Bill [H.L.]
8.55 p.m.
House again in Committee on Clause 16.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 96:
Page 12, line 30, at end insert—
("( ) Regulations under this section shall ensure that any arrangements for the payment of grant in respect of tuition fees for the fourth or any subsequent year of study at a higher education institution in England or Wales apply equally to a student whose parental home or normal place of residence for purposes other than attendance at that institution is in Scotland or Northern Ireland as they do to a student whose parental home or normal place of residence for purposes other than attendance at that institution is in England or Wales.").
The noble Lord said: I beg to move Amendment No. 96 and speak also to Amendment No. 128. I understand that the noble Lord, Lord Sewel, intends to reply to this debate. I am sorry about that for two reasons. I would have preferred the noble Baroness, Lady Blackstone, to reply but I am happy to see that she is at least in her place. First, before dinner I attempted to intervene in the speech of the noble Baroness and she declined to allow me to intervene. I attempted to intervene to draw her attention to the handbook on the procedures of this House. She had just refused to allow the noble Earl, Lord Russell, to intervene. An hour or two prior to that she had refused to allow my noble friend, Lord Renfrew of Kaimsthorn, to intervene. I should like to say in the gentlest way to the noble Baroness that the Companion states:
"Giving way accords with the tradition and customary courtesy of the House".
I admit that it goes on to say:
"It is, however, recognised that a Lord may justifiably refuse to give way: for instance when he is in the middle of an argument, or to repeated interruption, or in time-limited proceedings when time is short".
Clearly, these are not time-limited proceedings. In the period when I was a Minister on the other side of the Chamber I cannot recall once having refused to allow a noble Lord to intervene during a speech, certainly in Committee; nor can my noble friends Lady Blatch and Lord Howe.
Baroness Blackstone: I am sorry that the noble Lord believes that I did not give him an opportunity to ask his question. I did so. I was in the middle of an argument. Although we needed to move on, I offered the noble Lord the opportunity to put his question when I got to the end of my argument, but by then he had left the Chamber.
Lord Mackay of Ardbrecknish: I understand that. I simply make the point that that is what the Companion says. In addition, the three ex-Ministers sitting here cannot in their memory ever recall refusing to give way. I am sorry that the noble Earl is not here. On many occasions I felt quite tempted to refuse to allow in the noble Earl, but I always did so. I cannot recall ever

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having seen a Minister do that—I may be wrong—but to see it three times in one afternoon is, I believe, going beyond what is provided for in the Companion.
The second reason I am sorry that the noble Baroness is not to reply to the debate is that this is her business, not the business of the noble Lord at the Scottish Office. I move this amendment because it affects Scottish universities. It does not affect Scottish students at Scottish universities but students who come from the bailiwick of the noble Baroness, Lady Blackstone: England, Wales and Northern Ireland. Those are the students who are affected by the proposal which these two amendments try to make fair. I am sorry that the noble Baroness is not to reply to the debate because it is her department that refuses to take any steps to act in a fair and just way towards students in England, Wales and Northern Ireland.
9 p.m.
Baroness Lockwood: I do not want to become involved in the Scottish argument, but does the noble Lord appreciate the difference between Committee and Report? In Committee, it is often convenient for the Government and Front Bench to put its arguments so that they can then be taken up by different Members in different parts of the Chamber. I suggest that that is what my noble friend was doing.
Lord Mackay of Ardbrecknish: First, this is Committee; and, secondly, I still cannot recall ever doing at any stage what the noble Baroness suggests could be done on Report or Third Reading. Perhaps that was my idiosyncrasy and folly.
Baroness Blackstone: I am afraid that it is not an idiosyncrasy, because I can recall many occasions in Committee when Ministers in the noble Lord's party put their argument in the hope that it would answer the question. At the end of putting their argument, they were willing to answer any question that had not been answered. That is all that I was doing. We are much further behind than we wanted to be. It seemed to be helpful to get on. I am prepared to go back to Hansard where I can give examples of where many Ministers in his party have done the same.
Lord Mackay of Ardbrecknish: We will have to agree to differ about that. I cannot recall not giving way to anyone. I had some fairly mammoth Committee stages which at this moment make this look a pretty short Committee stage.
I return to my principal argument. It is a pity that the noble Lord, Lord Sewel, is to answer a question which should be answered by the DfEE which is responsible for students from outside Scotland but within the UK. The Committee will be aware of the position: in Scotland, honours degrees are, by tradition—a tradition which is greatly valued—of four years' duration. The government policy of charging fees of £1,000 per annum means that students going to a Scottish university for a four-year degree would be paying £4,000.
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Interestingly enough, from my previous experience I know that the Government rely heavily on their manifesto to justify their policies. So I had a look at their manifesto. There I discovered that the costs of student maintenance should be repaid by graduates on an income-related basis from the careers success to which higher education would have contributed. Clearly, the noble Lord, Lord Desai, had some hand in writing at least that sentence of the manifesto if none of the other sentences. There is not one word about fees. Then along comes this proposal for fees.
Lord Desai: I assure the noble Lord that I am not lucky enough to be party to that bit of power.
Lord Mackay of Ardbrecknish: The economic policy might be a good deal more sensible if the noble Lord were involved. Therefore we are entitled to ask for a full and proper justification about the decision on fees. I can fully understand that were I to be arguing about maintenance grants the noble Lord would merely point me, as he did over many weeks in the summer, to the manifesto as the only argument that was necessary and leave it at that. This evening he will have to try to do a good deal better.
A student going to a Scottish university would have to pay £4,000, whereas a student going to an English university, where the degree length is three years, would be asked to pay £3,000 only. That was manifestly unfair to Scottish students. So after a great deal of coming and going in Scotland, a bit of rotation and so on, the Government announced that they would, sort of, ignore the fourth year, and students in Scotland would he asked to pay only £3,000 for the four years. That of course leaves students from outside Scotland paying £4,000. Well, yes, it does and it does not! Because due to the influence of the EU, students from EU countries will have to be dealt with in the same way as Scottish students not English ones. So children of EU countries coming to Scottish universities will be charged £3,000 only.
I find that particularly galling, because I happen to have two grandchildren.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): Hear, hear!
Lord Mackay of Ardbrecknish: I do not wish to disappoint the noble Lord, Lord Sewel, about that. I have actually got more than that, but we will just take two at the moment. One of them lives in Italy.
Noble Lords: Ah!
Lord Mackay of Ardbrecknish: Yes, Members of the Committee have heard about that before. One lives in Kent. I see the noble Baroness, Lady Ramsay, and the noble Lord, Lord Gordon, in their places. They will appreciate this. One hopes that those grandchildren may follow their grandfather and their parents and find their way eventually to the University of Glasgow. I was going to say the Irish thing—there is an Irish dimension to this also—but the daft thing is that the young lady

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from Italy, if she does that in the fullness of time, will be charged £3,000. The young lady from Kent will be charged £4,000. That is bluntly illogical.
Mr. Brian Wilson, who is responsible for these matters at the Scottish Office, was being interviewed about this issue on one of the UK programmes. The interviewer was not using Italy as an example; he was using France. He said, "Why is the student from France going to be asked to pay only £3,000 and the student from England £4,000?" Brian Wilson—a man with a razor sharp mind it has to be said—said, "It is because France is in the EU". The interviewer then came back very quickly and said, "Isn't England?" That is my point: are not England, Wales or Northern Ireland in the EU?
Northern Ireland is even dafter, because a student from the Republic of Ireland—we get many of them in Scotland—and a student from Northern Ireland will have the same differential applied. One will pay £3,000 and the other £4,000. I could not defend that, even if I were paid the princely salary that the noble Lord, Lord Sewel, is being paid to make that defence this evening.
I have a serious point to make about this. If the Government believe that they could not sustain a case in the European Court of my Italian granddaughter paying £4,000 while a Scottish student is paying £3,000, how on earth do they think that they will sustain a case brought by an English student who can surely go to the same European Court if necessary saying, "I am a member of the EU, can I not be treated on the same basis as the students in Scotland?" Have the Government taken legal advice on these matters? Do they believe that they have a watertight case in law? If so, the law must be as big an ass as the policy is unfair.
In order to reduce the fees to £3,000, it requires only the Department for Education to be prepared to pay the £1,000 for every student who goes to a Scottish university. The same applies to students from Wales and to Northern Ireland. What will the cost be to the department's budget? What would it be for England, and how many students from England go to Scottish universities? How many students go from Wales and what would the cost be? How many students go from Northern Ireland and what would the cost be? I cannot believe that it would break the bank, and it will be less than it will cost the Government in legal fees when they are taken before the courts and found to be in the wrong, as I am certain they will be.
Scottish universities, especially those which take many students from south of the Border and from Northern Ireland, fear that the numbers from those areas will decline. It is interesting to note that there has been a decline in the number of students applying to Scottish universities this year, but we do not know why. I was pleased that the noble Baroness, Lady Blackstone, acknowledged that during the past 18 years there has been a significant increase in the number of students going to university. I feel justifiably proud of that, as a member of the previous government. I also heard the noble Baroness give statistics showing that there has
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been an increase in the number of students from disadvantaged families, although perhaps not as large as we would like.
I wish to read from col. 805 of yesterday's Hansard of the House of Commons, giving the statistics for the past three years at the same time of year. At the turn of the year in 1995 there had been 340,711 applications; in 1996, 347,037 applications; in 1997, 326,220. There may be many reasons for the decrease, but I am allowed to say that perhaps it is as a result of the change we are discussing tonight. I wonder whether the Minister has a breakdown of the statistics, giving a table of Scottish students and a table of those from outside Scotland. I do not expect that he has, because it would be a complicated collection.
I have made my point, but perhaps I may add to it. For the first time in a long time I have been written to by students' unions throughout Scotland in a polite manner. In fact, I could probably visit universities in Scotland without being booed. After tonight, I hope that I might even be cheered. I am not sure that the Minister could visit universities there with safety. However, I wish to quote from a letter I have received from Shamin Akhtar, president of the National Union of Students in Scotland. She writes:
"We are most concerned that this benefit",
that is, the benefit of study in higher education in Scotland by people who do not live in Scotland,
"which was recommended in the Garrick report, is not to be extended to students domiciled in other parts of the UK".
The Scottish Students' Association wrote to Mr. Blunkett, Secretary of State for Education, stating,
"Natural justice demands that students, wherever they reside in the UK, receive the same assistance as Scottish and other European Nationals. We do not accept arguments that avoid the central issue, namely, that domicile should not determine difference in treatment or restriction of choice. The chance of benefiting from Scottish higher education should apply equally to all applicants in the UK".
I do not greatly approve of the Government's policy of charging fees, but I appreciate that they responded to the demand that Scottish students should not be disadvantaged by having to take four-year degree courses. The Scottish Office recognised that and have been prepared to accept that they must pick up the tab for the £1,000 for that extra year. I believe that in all honour the Minister's colleagues in government should accept the same moral responsibility. It may not be the biggest issue in the Bill, but it is a very serious one. If the Government do not follow the lines that I suggest we shall certainly return to the matter. Furthermore, whatever their legal advice, they will be unable to sustain the position in court. I beg to move.
Lord Alderdice: I am eager to speak on this amendment not because the noble Lord, Lord Mackay of Ardbrecknish, failed to make a robust case. Quite the contrary. The feeling of students and their families in Northern Ireland is very strong indeed on this matter.
My own university, Queen's University, has suffered a good deal over recent years. We have suffered from the lack of input and enrichment from young people from other parts of the United Kingdom and other places coming to our university because they have been

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frightened away, at least in relatively recent years, by events which have taken place. In truth, part of the business of being a student anywhere, and not least part of the business of being a student in the United Kingdom, is the enormous richness that becomes possible when you can meet, study, live and work with other young people from whom you can learn a great deal.
One of the things that has been rather disturbing recently has been a number of developments which has meant that many students have been discouraged from moving around, even within our United Kingdom. But in this situation it is quite remarkable that we find ourselves treating our own students and their families within the UK less favourably than students from other places. As the noble Lord has said, the situation in Ireland is especially anomalous because we now find that young people from the Republic of Ireland can move around with greater freedom within the United Kingdom and are less discouraged than young people from Northern Ireland who have a tradition, going back not 10 or 20 years but some hundreds of years, of going to Scottish universities. That is sad and really rather absurd.
As regards finance, one of the matters that we must understand is that if young people wish to travel, live, work and study with other young people, that is something to be encouraged. But if we discourage them from doing so within the United Kingdom, students from Northern Ireland will find themselves going not to Scotland, England or Wales but going to the Republic of Ireland. Their funds and grants will follow them outside the United Kingdom altogether, actually worsening the situation.
It is unnecessary to speak at any great length. The argument has been made with great clarity and persuasion by the noble Lord, Lord Mackay. It does not seem to me that there is some great matter of principle; that in some fashion to accept this amendment would change radically the whole nature of the Bill or transgress some important policy. It seems to me rather that if the Government were to be able to consider the amendment and were simply to ensure that the Secretaries of State in Scotland and Northern Ireland could address those matters appropriately, the matter could be resolved and everyone, particularly students and their families, not least in Northern Ireland, would feel grateful to the Government rather than aggrieved by their actions.
9.15 p.m.
Baroness Carnegy of Lour: I have raised this matter twice already in this Chamber and on the last occasion, on a Starred Question, the Minister told me that I had asked the question in the wrong way so he was not allowed to answer. That was rather unconvincing. I wonder now whether he can tell us clearly whether this policy is legal under the Maastricht Treaty, equal opportunities legislation and the Race Relations Act. If he cannot answer the question on this occasion, I believe that noble Lords really will be feeling rather strongly about the situation.
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Members of the National Union of Students in Scotland who were here yesterday want to know, in addition to the answer on legality, whether a French student living in England who comes for a four-year course to a Scottish university will pay the same as a French student living in France or an English student living in France will pay coming to a Scottish university. Those questions may sound theoretical, but the issues may arise and they are very important as regards the legality of the matter.
There is an additional question that I wish to ask the Minister which has been raised with me by the principal of Heriot-Watt University, Professor Archer. He asks, who will fund the £1,000 which Scots will not pay for that fourth year of tuition? That is the £1,000 missing from the fees of the Scottish students. The Scottish Office appears to think that universities will be compensated through the Scottish Higher Education Funding Council, but the funding council is not expecting to receive any extra money earmarked for that cost. If the fees paid by students are really to be new money into the universities, which is claimed by the Government, and a concession has been made to Scots' students on the four-year courses that they need not pay one-quarter of the fees due, surely the universities in Scotland are entitled to that new money from somewhere else.
I understand that that is rankling a good deal with the universities and they want to know the answer because neither the Scottish Office nor the funding council has been able to answer the question. It is quite an interesting question. If the noble Lord cannot answer it now, I should be very glad if he would write to me. I hope that I have expressed the matter clearly but if not, I shall explain it to him again. It is quite complicated. Who will pay for the fourth year for which the Scottish students have been allowed not to pay?
Mr. Brian Wilson has suggested in a letter to Tam Dalyell that he will ask the universities to rejig their four-year courses so that they are entirely suitable for people coming with A-levels from England to enter the second year because he wants more people to be able to enter the second year.
The Minister probably saw in the Scotsman newspaper, on Wednesday 7th January, an article in which Professor Archer was talking about the situation. He said:
"There seems to be some kind of misconception in the mind of the minister that all university degree courses are simple extensions of a continuous process from school. That is far from the truth. Heriot-Watt welcomes suitably qualified students into the second year of four-year degree programmes, but it is not necessarily true that three A-levels will prepare a student for such entry. This is particularly the case when the degree course has been designed as a coherent programme over the four years, with second-year success dependent on mastery of first-year topics".
In the same article, Professor Swinfen, a vice-principal at Dundee University, said that less than 3 per cent. of non-Scots UK students were allowed directly into the second year, and that there were "practical academic limits" on how many could be admitted. So he was making the same point. Therefore, it is not possible simply to say that students with A-levels from England can easily get into the second-year. They can do so in

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some subjects in some universities. However, it would he most difficult to make those courses suitable to enable that to happen on a large scale, so that is not a solution.
I hope that the Minister will be able to give answers to some of those questions because they relate to very serious points. The noble Lord may also have noticed in today's press reports that the population of Scotland is dropping in relation to that of England; indeed, it is going up in England and down in Scotland. The reason for that drop is that young people are not coming into Scotland; it is the older people who are coming back. Young people are leaving and are not coming in. We all know that one of the reasons for young people coming into Scotland is that they come to take up university courses. They then get attracted to it and want to stay or, indeed, to return to work. This is quite an urgent issue and I hope that I shall receive a good answer.
Lord Mackay of Ardbrecknish: I wonder whether my noble friend saw the table in a Written Answer from Mr. Wilson in the Official Report of the other place on 2nd December, in which he gave certain statistics for all undergraduate entrants from England, Wales and Northern Ireland who entered directly into the second year of their course in Scottish universities. Mr. Wilson could only give figures for the past three years but it is interesting to note the decline in England over those three years. For example, in 1994-95, 11 per cent. entered directly into the second year; during 1995-96, the figure was 8 per cent. and in 1996-97 the figure was 6 per cent. Does my noble friend agree that that underlines her argument?
Lord Lewis of Newnham: I do not wish to add complications to the problem, but I find it somewhat difficult to understand that, while the English system seems to be acquiring knowledge by going north of the Border, a number of degrees in England, as my noble friend Lady Warnock said earlier, are now developing into four-year degrees, especially in the sciences. From that, do I understand that, if students attend such courses, the English will pay for three years and that the Scots will pay for four? Alternatively, exactly how are we going to deal with this particular problem?
Lord Sewel: I shall try to reply to all the points made during this debate. I should like, first, to deal with one of the points made by the noble Lord, Lord Mackay of Ardbrecknish. It is perfectly right and proper that I stand here tonight and speak to these clauses. I do so because they seek to translate into English practice, to a limited extent, those procedures which will be adopted in Scotland. Therefore, it is perfectly sensible for me to be the Minister who speaks on behalf of the Government in this context.
Let me take the various points made by noble Lords. It was an utter delight to learn more about the details of the family of the noble Lord, Lord Mackay of Ardbrecknish. I spent many a happy hour sitting in this Chamber during the debate on the referendum Bill learning about the iniquity of the daughter of the noble
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Lord who lived in Italy not being able to vote in the referendum Bill on Scotland. Lo! and behold, we now have the iniquity regarding his grandchildren. The issue ties in with the point that noble Lords made about the legal basis upon which these proposals have been put forward. I have made the point before that it is not the custom of the Government to indicate the content and detail of the legal advice that they have received. Let me make clear that the Government are confident that they would be able to rebut robustly any legal challenge they faced in the courts. On that basis, we have every confidence that what we propose is perfectly lawful in terms of European law.
The noble Lord, Lord Mackay of Ardbrecknish, made a further point on, effectively, cross-Border flows, with English students going to Scottish universities. The figures this year are somewhat difficult to interpret. I have spent most of my professional life trying to interpret figures. These figures are particularly difficult to interpret. At a specific date, before what we know has been a last minute rush, the figure for Scots-domiciled students applying to Scottish universities has fallen. But for the English-domiciled students applying to Scottish universities the figure has fallen by a smaller rate. It is an interesting observation. It does not make the point that the extra £1,000 tuition fee for the extra year is differentially discouraging English-domiciled students from applying to Scottish universities.
The noble Baroness, Lady Carnegy of Lour, made two points. I was a little confused about the French student living in France and the French student living in England. The point she sought to draw out, I think, was not so much nationality but domicile. Where a person establishes a domicile qualification is the basis upon which he will be judged.
Baroness Carnegy of Lour: Perhaps I may make the point clear to the noble Lord. The question is whether the position of a French student with French nationality, and therefore protected by the Maastricht Treaty, who resides in England will remain the same as that of the French student residing in France who goes to the same university in Scotland.
Lord Sewel: If the French student residing in England establishes an English domicile he will be treated as an English-domiciled student. The French student residing in France will not be treated as an English-domiciled student. That is the difference.
Finally, the noble Baroness asked who would pay. We can give a convoluted answer to that, but essentially the answer routes its way back to the good old Scottish Office. The Scottish Office eventually will pay for that extra year. The institutions will be compensated for it.
In making the general point in support of the Government's position, let me recognise for a start that there will always be practical administrative difficulties in bringing about an articulation between two school systems and two university systems that are inherently different. The Scottish schools system, with its tradition of "highers", prepares students particularly for a Scottish higher education career. English A-levels do a very good job within the English system.

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The difficulty is that students in Scotland tend to go to university earlier, around the age of 17. They tend to have done four or five highers, so there is breadth but a lack of depth. The higher has been criticised in the past as being a "two-term dash". It does not provide the same depth of knowledge in a subject as does the A-level— which I hope has not changed too much since my day. In England, three A-levels are taken over a two-year period: breadth is sacrificed, but, it is argued, there is considerably more depth.
For that essential reason, in the Scottish higher education system, universities have traditionally offered four-year degrees. I do not wish to be disparaging, but it could be argued in a popular, colloquial sense that the first year is designed almost to "make up" for the lack of depth that is achieved with the one-year or two-term higher.
We were faced with the anomaly of Scottish domiciled students and English domiciled students coming through different school systems, passing through two different university systems and reaching an end point—the end point judgment being the first degree. We took the view that it would be a gross anomaly if a Scottish student and an English student were to pay more in tuition fees for ending up at the same point; namely, the achievement of their first degree. Our view was that that should not happen, and that there should be a common amount of £3,000 for Scottish domiciled students taking a degree in a Scottish university.
That, I admit, did not resolve the smaller anomaly of the English student going to a Scottish university. It is indeed a smaller anomaly and not of great moment. It has to be recognised that 40 per cent. of students are unlikely to pay anything at all towards the £1,000 because of the means-tested element.
It is also the case that English students currently going to Scottish universities are effectively bearing a greater cost than the £1,000 a year. By choosing to go to a Scottish university rather than an English university, they are forgoing one year's income; in many cases they are taking out an additional year's loan. So the sum total, as it were, the cost to the English domiciled student going to a Scottish university, is already somewhere in the region of £15,000 to £20,000. The £1,000 is a marginal addition to that sum. The figures that we have seen this year indicate that the system we are introducing has certainly not—differentially— deterred English domiciled students from applying to Scottish universities.
I take issue with my former colleagues, as reported by the noble Baroness, Lady Carnegy, regarding the principal of Heriot-Watt University and, I understand, the principal of Dundee University. I have to say bluntly to those distinguished members of the academic community that my view, based on experience, is that a little application and a little imagination would clearly enable well-qualified English students with A-levels to join school-based Scottish university courses in their second year with virtually no disruption at all. It simply requires the application and imagination of which I am sure the Scottish universities are capable. My message
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to them is: stop whingeing, indicate that you have a good product and go out and sell it. I oppose the amendments.
Earl Russell: The Minister said that he asserted with confidence that the Government were capable of meeting any challenge in European law. He may learn over the next five years, or however long it may be, that when a Minister says, "The Government are confident", he is saying, "We are quite sure we are right but we cannot really tell why". I have heard a great many Ministers say that. At least half of them have lost the case in court. If this should be one of those cases, will the Minister review the quality of advice on European law available to his department?
Lord Sewel: Of course; but I have to reflect upon the fact that the Ministers to whom, I am sure, the noble Earl refers are, of course, members of the party opposite.
Lord Mackay of Ardbrecknish: I suspect that the legal advice came from exactly the same sources, so perhaps I should warn the noble Lord to be careful.
I am pleased to hear from the Minister that applications to Scottish universities from other parts of the United Kingdom have not fallen in the way that the totality appears to have fallen. I hope that that will be borne out. To a small extent that removes one of my anxieties. However, it in no way gets round the problem of fairness. The longer I listened to the Minister, the more turns to the argument I came across. The noble Lord, Lord Lewis, made an interesting point that an increasing number of English universities were providing four-year degree courses. What will happen when English students find that they have to pay £4,000 to go to their local university whereas a Scottish student undertaking a course of the same length at a Scottish university has to pay only £3,000? I believe they will say that it is unfair on the English student attending an English university.
On the question of entry into the second year, I think the Minister assumes that there will be a continuum between school and university. In many cases people do not do honours degrees in subjects which they studied, or indeed could have studied to any extent, at school. My recollection is that to be allowed into the single ordinary mathematics class at a Scottish university one needs to have a mathematics qualification from school, but that is not necessarily the case with many other subjects, where a school qualification is not required for entry. Some of the science courses do not require a qualification in the particular subject but may require it in mathematics. It is not true to say that with a bit of application students could get into the second year. In many cases students will choose courses and subjects for which they have to start at the beginning.
I was not in the least convinced—nor, I suspect, was the noble Earl, Lord Russell—by the legal argument. I cannot reconcile it with what was said earlier this afternoon by the noble Baroness's colleague with regard to affluence testing. Here I must say to my noble friend Lady Blatch that she must become more politically correct; we now have to say "affluence testing", not

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"means testing". With regard to means testing, we are told that youngsters from the European Union who come to Britain would have to be means tested, otherwise we should be found to be infringing European law. I cannot believe that it is the same lawyer who gave the Government that advice and the advice on the Scottish position. Perhaps the Minister will tell the Committee whether these two questions were taken to the same lawyer. I do not believe they were. The advice seems to me, as a layman, to be contradictory. If one case fell foul of European law, I believe that the other would.
As to the argument that the school system in England is different from the school system in Scotland, that is indeed the case. I am not entirely sure that the same could be said for Northern Ireland. The school system in all the other European countries is different from the school system in Scotland, so why is the argument only applicable to the rest of the United Kingdom and not to the rest of the European Union? I am sorry to tell the Minister that he has not convinced me at all. I know that my fire ought not to be directed at him because his colleagues in the other departments have the responsibility on this issue.
I note that he did not answer my questions about how much it would cost the Department for Education and Employment in England and Wales and how much it would cost the Northern Ireland department to right this wrong. I appreciate that perhaps he was not able to answer that, and I would be grateful if he could write to me about these issues. However, I have to say that whether it be about my scattered family or about the amazing position of a couple of families, one living on the north side of the Border and the other on the other side of the Border, and one being asked to pay £1,000 more than the other, it really is a ludicrous position. I can tell the Minister that he is only hearing about my scattered family because of some of the daft things the Government do. If he does not want to hear about this matter again, I hope he will sort this out inside government and come forward with a fair and equitable arrangement for all the youngsters in what remains, may I remind him as one of the ministers of the Scottish Office, the United Kingdom of Great Britain and Northern Ireland. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 97, not moved.]
Baroness Maddock Baroness Maddock moved Amendment No. 98:
Page 12, line 37, leave out ("or") and insert ("and").
The noble Baroness said: I do not intend to keep anybody very long on this amendment. It is a short amendment. It is to do with regulations on grants for fees. All we are saying is that we want to have better control over the regulations and, rather than it being a case of the Secretary of State or each House approving, we want it to be all of those things.
I am very grateful to the noble Baroness, Lady Blatch, for supporting this amendment. I do not intend to say any more. We had this debate before during the last Session of this Committee and tonight. I beg to move the amendment.
Lord Whitty: I will try to be equally brief. The noble Baroness ought to recognise that this is really a step too far. We all recognise the anxiety and understand that there is a wish to restrict the freedom of the Government to increase the parental contribution. We accept that and we have written into Clause 16(5) that we will not increase it above the rate of inflation except by affirmative resolution of Parliament.
This amendment would not allow the Government to increase it even by a tiny amount, well below the rate of inflation. We ought to recognise the consequence that it would also not allow us to increase it above the rate of inflation, even were Parliament to approve it. I understand the need for restrictions but there are times when the belt and braces turn into a straitjacket. Allow us just a little flexibility. I ask the noble Baroness to withdraw this amendment.
Baroness Maddock: I am not particularly surprised by the reply from the Minister on that amendment. It is something that students are extremely concerned about. as to what will happen to fees in the future. I know that we are not directly talking about that situation, but it is affected. It is something that people care about. If it is to be changed, I suggest that there ought to be a wide debate.
I do not necessarily believe that it is a step too far. My personal view is that we are here to offer constructive opposition, dare I say, and to make sure that the Government do not go that step too far. I am sure we will return to this again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.45 p.m.
Lord Tope Lord Tope moved Amendment No. 99:
Page 12, line 40. leave out ("(6)(a)") insert ("(5)(a)").
The noble Lord said: I rise with an unusual measure of confidence on this amendment. I have a feeling that I may be about to score my first victory in this Bill and thus extend the spirit of constructive opposition a little further.
In looking at Clause 16(6) for its meaning I noted that it begins,
"For the purposes of subsection (6)(a)",
and I searched hard for that subsection. I cannot find it. I believe it would be more appropriate for it to refer to subsection (5)(a). If we go on a couple of subsections further, subsection (8) refers in the second line to "subsection (8)". That confused me a little since I cannot believe that governments bring forward Bills that have mistakes in them. They may be mistaken in their intent. but not in their content. These are errors in the Bill.

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I tabled the amendments confident of victory tonight and in the spirit of constructive opposition. I beg to move.
Baroness Blackstone: It is rare that a Government Minister is able to accept a proposed amendment not just in principle, but also in its drafting. It is therefore all the more pleasurable to be able to accept two at once. I am grateful to the ever vigilant noble Lord, Lord Tope, for spotting the mistakes and providing us with an early opportunity to correct them. I recommend that the Committee accepts the amendments.
Lord Tope: I am grateful to the Minister. Perhaps we could quit now!
On Question, amendment agreed to.
Lord Tope Lord Tope moved Amendment No. 100:
Page 12. line 48, leave out ("(8)") and insert ("(7)").
On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 101:
Page 12, line 49, at end insert—
("(9) A statutory instrument containing the first regulations under any provision of this section shall be laid in draft before, and shall be subject to approval by resolution of, each House of Parliament.
(10) A statutory instrument containing the second or subsequent regulations under any provision of this section which is made without a draft having been laid before, and approved by resolution of, each House of Parliament shall he subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Baroness said: In speaking to Amendment No. 101, I shall speak also to Amendments Nos. 118, 119 and 134. These amendments respond directly to the 9th Report of the Delegated Powers and Deregulation Select Committee. This Chamber has a 100 per cent. record in always responding to the recommendations of that committee and that record should not be broken tonight. Therefore, I hope that the noble Baroness, having turned the corner in accepting an amendment rather than rejecting it, will also consider that that is appropriate in this case.
I believe that the Government will see the sense in the amendment. The case is well argued in the report and my noble friend Lord Renfrew of Kaimsthorn earlier read the words verbatim. They are on the record and I shall not repeat them. But it is not only the possibility of an increase in fees that concerns me. Clause 16 is an extremely important clause in the Bill and the scope for change—if we simply leave it to the Secretary of State and regulations and do not go down the road of allowing Parliament to have a say—will be a step too far. For that reason I hope that the Government will see that it is only fair that, should any modifications or changes be made, Parliament should have an opportunity to debate them. The Committee will also see that two amendments refer to making the same changes to those clauses that refer to Scotland.
A great deal of correspondence has passed between myself and the noble Baroness, Lady Blackstone, in relation to the use of regulations and it may be helpful for me to use this opportunity to refer to a Written Answer that appeared on 21st January in response to a
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Question tabled by the noble Earl, Lord Russell, relating to tuition fees and the way in which the powers can he used. The noble Baroness, Lady Blackstone, answered,
"The Education (Mandatory Awards) Regulations to be made for the 1998–99 academic year will provide for a student's resources to be set first against any tuition fees payable by him. The regulations are made under Section 1(5) of the Education Act 1962".
I have Section 1(5) of the Education Act in front of me. I will read it for the purpose of the point I wish to make:
"The provisions of subsection (3) of this section and of the regulations made in accordance with that subsection (except so much of those provisions as relates to the conditions and exceptions subject to which the duty imposed by subsection (I) of this section is to have effect) shall apply in relation to awards under the last preceding subsection as they apply in relation to awards under subsection (1) of this section".
Fees were not charged in those days. The fees that are referred to are fees that the Government paid on behalf of each student. The fees now being charged out to students are a very different matter. Using these regulations does call into question the legitimacy of this. Noble Lords will see from the final page of the Bill that the Education Act 1962 is to be repealed in its entirety. It says that the whole Act will be repealed. In letters from the noble Baroness, she says that it will only be partially repealed and that it may not be repealed immediately. Clause 17 says:
"Regulations under Section 16 shall make such transitional provision and savings in connection with the repeal by this Act of any relevant enactment as the Secretary of State considers necessary or expedient".
Why repeal the whole Act if you put into this Act a clause that says you can save any provision of the Act you are about to repeal? Why repeal the 1962 Act at all if we are then allowing a clause in this Act to save any provision? It goes on to say:
"In this section "relevant enactment" means any enactment contained in (a) the Education Act 1962, (h) Section 3 of the Education Act 1973, or (c) the Education (Student Loans) Act 1990".
This is incredibly confusing. My reason for this point is not just to say that if there are to be changes to Clause 16 they must come before both Houses of Parliament under the affirmative resolution procedure. I think that all of us in this House would like to see a cast-iron guarantee for the interests and the protection of students receiving loans and grants and fees under the existing system well into the future, both for the existing students and those students who will come in under the gap year scheme in 1998-99; and that everything about the provision for protection of those students is properly guaranteed and has a legitimate basis in law so that that protection carries on alongside and in tandem with protection for students who will be the subject of the new system. I beg to move.
Lord Renfrew of Kaimsthorn: I had some very serious problems with this Bill, some of which I sought to indicate earlier. It may be that the noble Baroness, Lady Blackstone, was correct in suggesting that I should defer my observations until this point. My difficulty has been to find out what the Bill is asserting or what the Government are planning to do. We have a whole series

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of enabling sections and clauses. We are talking about Section 16 now but the same observation, to some extent, applies to Section 18 with very minimal content.
I have found it very difficult to find what the substance might be. I find myself in the awkward position of being very much less well informed on the factual content of the Government's intentions than was the noble Lord, Lord Desai, in his observations earlier. I am happy to defer to the noble Lord, Lord Desai, on many occasions but I was puzzled to understand the source of his information and that of other information being referred to this afternoon and this evening.
I went to the Library some days ago and again at 2.30 this afternoon to ask for draft regulations. We have already had it explained by the noble Baroness that draft regulations are not available now and are not likely to be available until July. The supplementary papers available in the Library, so far as I could understand through a brief inspection, relate to Part I of the Bill. I went to the Printed Paper Office. I had some days ago obtained the Notes on Clauses to the Bill which are perfectly explanatory of what the clauses say, which is evident enough on a close reading, but give no inkling of the actual factual content of the Government's plans. It was not until this evening, when the noble Earl, Lord Russell, brandished a document which had a cover in orange and purple, that I began to realise—I see that the noble Lord, Lord Whitty, opposite has a copy in his hand at the moment—that there was a source of information available to some but not available to me. After dinner, I went back to the Printed Paper Office and said, "There is something more on this Bill. Do you have it, please?" Initially, the Printed Paper Office said, "No, we have nothing supplementary on the Bill".
Lord Carter: Is the noble Lord aware that the Companion says that noble Lords should not speak from the gangways in the House?
10 p.m.
Lord Renfrew of Kaimsthorn: I am grateful to the noble Lord for drawing my attention to that. I shall centre myself in the middle of the Bench and hope that the noble Lord will not feel threatened by my demeanour or indeed by my remarks.
To resume, I went to the Library, which was able to unearth a copy of the document. I then had a phone call from the Printed Paper Office, which, as ever, is diligent in these matters, pointing out to me that there is nothing on the cover of the document to indicate that it relates to this Bill. I wish to make it clear that I am making no criticism of the Printed Paper Office or of the Library. My criticism relates to the Bill rather than to this information.
I have had the opportunity during the rather lengthy discussion on the previous two amendments to study this document. It states:
"This progress report is designed to provide more detailed information about the development of the new student support arrangements … It will also be of interest to Members of both Houses of Parliament considering the Teaching and Higher Education Bill".
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I should like to ask noble Lords opposite how one is supposed to know of this. This may seem a trivial procedural point but I shall relate it to the Bill in a moment. The noble Baroness was good enough to say earlier that sometimes she will be in the habit of writing to her colleague on the opposite Bench to indicate the existence of useful information and that that news might then be circulated. I do not know whether she has written to my noble friend Lady Blatch to draw her attention to the document. No doubt my noble friend has it available.
The document goes on to state:
"We do not envisage this report being made widely available to students and prospective students".
However, turning the pages, I find a lot of information which is useful and relevant. I have one or two questions to ask. The first is one to which I would not expect an immediate oral answer but perhaps a written answer. It relates to page 8 and refugees. There the document deals with eligible students—British nationals, nationals from another European economic area country, and those recognised by the British Government as refugees. I might have written to the noble Baroness about this had I been aware of the document.
I should like to ask this question. Would an applicant for asylum who is not yet accepted and not yet given exceptional permission to remain—an applicant of long standing in this country—be recognised by the British Government as a refugee? Perhaps the noble Baroness or her colleague could write to me about that. There is a series of interesting remarks pertaining to the Bill. The main focus of the report deals with plans for 1998–99, but there is a whole section in it dealing with plans from 1999 to the year 2000.
The main point of my remarks is not really to complain about the lack of availability of this information. The noble Baroness and certainly the noble Lord, Lord Whitty, will recall that at an earlier stage there was difficulty in obtaining information which was supposed to be publicly available. That brings one back to the circumstance that, on the face of the Bill, there is very little information about the Government's intentions. If one asks what Government intentions are publicly available, unless it is press releases which are not available in the Printed Paper Office or in the Library, most of that comes from the noble Baroness's speech at Second Reading. From that one is informed that on the same day in July that the Dearing Report was published, the noble Baroness "announced our intentions"—that is fine because I recall them also. One has to search a long way in the Printed Paper Office and the Library of your Lordships' House to find those intentions.
The noble Baroness went on to say,
"We announced that loan repayments would be linked to graduate income".
I am not sure that that itself is available in the Bill. There are enabling powers to make that clear, but is that in the Bill? There are no draft regulations. Further on in the speech the noble Baroness said.
"A further third will only pay part of the fees. Only the remainder will pay the full £1,000 a year".—[Official Report, 11/12/97; col. 256.]

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That is all that one finds about information which is publicly and officially available in your Lordships' House and Offices about the £1,000 a year. Of course, it is common knowledge.
The noble Baroness went on to say,
"If a graduate's gross income drops below £10,000 a year, repayments will be suspended".—[col. 257.]
I recall that that was in Government announcements. But if one does not have access to the progress report—I have already indicated how difficult it is to find information about it because one could not find it by asking in the Printed Paper Office or the Library—one has no knowledge of these circumstances at all.
Those are perhaps rather trivial circumstances. The important circumstance is that none of this is in the Bill. It is entirely an enabling Bill and a Henry VIII clause. None of this information is officially available as far as I can ascertain.
Reference has been made to the 9th Report of the Select Committee on Delegated Powers and Deregulation. No one has yet been unkind enough to make the observation here in Committee, although I have heard it made quite often outside it, that that report is a rather feeble document in view of the nature of the Bill. The noble Baroness reminded us of one paragraph, which began,
"We invite the House to consider whether"
etc. That is pretty feeble. In my view the committee should have strongly recommended to the House the precise wording which my noble friend has produced for this amendment and which I am supporting.
I do not propose to discuss Clause 18 in detail. As the Committee is aware, this clause is controversial and considers the possibility that the imposition of conditions might be regarded as the exercise of secondary power. Too true it might! I believe that the committee has been feeble. I wish its members no disrespect, but I hope they will accept that there are Members of it and of your Lordships' House, who believe that it has not been over-emphatic in its expression of opinion.
The noble Baroness, Lady Blatch, has said all that needs to be said in moving this amendment. I emphasise that it is an absolutely essential amendment, otherwise if we do not see the regulations so that we can discuss their content in a debate on an affirmative resolution, we have no clear knowledge of the Government's intentions and, moreover, no way of finding out what they are through official channels. I am happy to support the amendment.
Earl Russell: The noble Lord, Lord Renfrew of Kaimsthorn, has made a very powerful and important speech. But I hope that he will forgive me if I qualify it with one point, which is about the recommendation of the Delegated Powers and Deregulation Committee which we invite the House to consider. That committee was set up on the initiative of Lord Rippon. The decision must always be finally that of the House and not the committee. Therefore, it is established convention that, however critical the committee feels, those are the words in which its recommendation is cast.
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Having said that, I add that the terms of reference of that committee are twofold; namely, to consider whether any delegated powers are subject to a sufficient degree of parliamentary control and whether any Bill improperly delegates legislative power.
Increasingly, the committee has tended to concentrate on the first of those terms of reference rather than the second. I believe that the question as to when and in what circumstances it is proper to delegate a legislative power is a live one which I hope the committee will in future help us to consider. We would value its advice a great deal.
The noble Baroness, Lady B latch, opened a substantial can of worms. I also thank her for telling me the contents of my Written Answer. It had not reached me at lunchtime, which was the last time that I had my post. In fact, I am glad to be relieved of the labour of opening post. It takes an awful lot of time every day. I thank the Minister for the Written Answer. Having said that, I believe that it raises many more problems than it answers.
The reference is to Section 1(5) of the Education Act 1962. We are dealing with the skin of an onion. Section 5 deals with conditions and exceptions to the provisions of subsection (3). Subsection (3) is the next inner skin of the onion:
"Regulations made for the purposes of subsection (I)) … shall prescribe the conditions and exceptions subject to which the duty imposed by that subsection is to have effect".
Subsection (1) simply places a duty on the local authority to pay grant. What one has here is a condition and exception to the payment of grant. I am not a lawyer—above all, I am not trained as parliamentary counsel—but I am not sure how far it is an accurate use of language to describe a tuition fee as a condition and exception to the payment of grant. Moreover, since grants are no longer to be paid I am not sure whether a condition or exception to the payment of a grant which is not being paid can govern the levying of money which is no longer in any way related to a grant and therefore cannot be a term or condition of it. The Joint Committee on Statutory Instruments regularly describes this kind of issue as an unexpected use of powers. It is the kind of provision that invites the attention of the noble and learned Lord, Lord Simon of Glaisdale. I hope that he will turn his mind to this question. I shall listen to the answers with very great interest.
I do not want to speculate, but were I in the Government's shoes I would not be 100 per cent. confident that this clause and its meaning would survive the scrutiny of the courts. A tuition fee levied under the powers set out here may turn out to be ultra vires. Undoubtedly the question will come before the courts. I would not bet either way on what might happen.
There is the further question of the timing problem between the repeal of the Act and the laying of the regulations, to which the noble Baroness, Lady Blatch, drew attention. Even assuming that the Government lays the first regulations before the repeal of the Act, one supposes that there will be further regulations and uprating; otherwise, the whole matter will wither on the vine, just as we thought back in the 1980s that child

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benefit would wither on the vine. If the tuition fee is simply to wither on the vine it will not be an answer to the financial problems of a university. Indeed, in 50 years it may be totally unimportant. Under what powers do the Government propose to uprate the tuition fee? Clearly, from the wording of the Bill they believe that they are doing so under regulations, but on what possible statute can those regulations be grounded? We cannot ground regulations on thin air. Regulations cannot walk on water. I hope that the Government will go back and take some really competent legal advice. I do not pretend that I can offer any such thing, but it is something for which I should hate to be ministerially responsible in its present form.
The Earl of Limerick: I have a simpler and far less erudite view of the amendment. I listened to the case made by my noble friend Lady Blatch. Earlier my noble friend Lord Renfew and I were probably rightly rebuked for coming in prematurely on this point. When looking at what is intended under the Bill, and how it will affect us all in the future, the Committee does not have the advantage of knowledge of the regulations which will put the framework provisions into effect. The concept contained in the amendment is modest, proper and irresistible. As Members will not have had the advantage of that knowledge when considering the Bill, they should be given the opportunity to comment under the affirmative procedure when the regulations are produced. That is the simple and unanswerable argument.
Lord Whitty: Despite the temptation offered by the noble Earl, I shall not re-rehearse the arguments about the regulations. I shall try to address his latter remarks. First I shall try to dispose of three other issues that have been raised. I am as happy as anyone to take a side-swipe at lawyers from time to time, but the noble Earl must recognise that departments take competent legal advice.
With regard to the power to introduce tuition fees, the 1962 Act clearly allows local authorities and others to pay awards for students' fees. Section 1(5) enables students' resources to be taken into account and so enables the award and the means testing of that award to be introduced. There is no dubiety about that. We are confident about our legal advice on that. I fail to see the hilarity.
Earl Russell: The Minister will recall what I said a few moments ago about Ministers who say that they are confident of their legal advice.
Lord Whitty: If in addition to having a side-swipe at lawyers the noble Earl wishes to have a side-swipe at the colleagues of the noble Baroness, Lady Blatch, I am happy.
Baroness Blatch: Will the Minister point us to the precise place in the 1962 Act which provides not just that LEAs can pay fees on behalf of a student, but that the student is expected to pay tuition fees?
Lord Whitty: I referred to it just now. It is Section 1 (5).
Lord Pilkington of Oxenford: May I offer the Minister a copy of the Act?
Lord Whitty: No. I referred to Section 1(5) of the Act which provides for students' own resources to be
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taken into account, and therefore allows a contribution from the student to be made. As interesting exchanges are apparently going on between the two Front Benches, I shall move rapidly on to the next point.
The noble Baroness, Lady Blatch, asked about the repeal of the 1962 Act. As she will be aware, that Act has been amended several times. We had the same argument about the repeal of the student loans Act. When the Act is repealed in total, as the schedule provides, that will make it no longer possible for the Secretary of State to make loans to new students, but there will be reserve powers to deal with students in the existing system until those students pass through the system. The principle that applies to the student loans Act 1990 will apply to the 1962 Act, as several times amended. I hope that that partially clarifies the legal position.
10.15 p.m.
Baroness Blatch: Where are the reserve powers, or where will they be? Point me to the statute showing the reserve powers when the Education Act 1962 is repealed in its entirety.
Lord Whitty: I thought that we had explained the matter. We dealt with it in the student loans debate. When the Act is repealed, the powers which apply to students remaining within the system will continue to apply until those students who started the process have finished. Thereafter, the Act will be repealed in total. I am advised that that is the normal practice. I am surprised that the noble Baroness, and the noble Earl even more so, are not familiar with the practice. It has been the practice and will be so, in the area of education as elsewhere.
Earl Russell: Tell us where in the Bill that is stated.
Lord Whitty: The point is that the Bill does not have to state it, any more than it did in the case raised by the noble Lord, Lord Tope, relating to student loans.
Baroness Blatch: Is the noble Lord saying in lay language that the 1962 Act will not be repealed in its entirety? Is he saying that it will be repealed, first, partially and eventually in its entirety? If that is the case, I understand him. However, I understand that it will be repealed in its entirety and that there will be some reserve powers somewhere to continue the old system and to underpin the new system. Where will those reserve powers lie?
Lord Whitty: Those are saving powers—
Baroness Blatch: Where are they?
Lord Whitty: The Act will be totally repealed in that the Secretary of State and the department will no longer be able to start new processes with new students. There will be reserve powers—
Noble Lords: Where are they?
Lord Whitty: People who are more experienced of parliamentary procedure than I must have come across such a case several times—
Lord Pilkington of Oxenford: The situation is most perplexing for Members on this side of the Committee.

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I remind the Minister that we are dealing with legislation. Letters are going backwards and forwards to the Box where there are four civil servants. As an Opposition debating a Bill going through Parliament, we are asking where the powers lie. If the Minister cannot answer that we are most concerned.
This is not a debating society and, quite honestly, this situation is ridiculous! The Minister has civil servants and a whole department behind him. We are puzzled because we are asking a question about an Act. The Bill before us does not appear to have the necessary powers. All the Minister can offer is a vague explanation saying, "I know this happens". I am not a lawyer, but I am responsible for this matter and I believe that we deserve a better answer.
Lord Whitty: We have explained the principle in three or four letters between my noble friend Lady Blackstone and the noble Baroness, Lady Blatch. The requirement will be met when we reach Clause 17(1) on page 13. It deals with transitional arrangements, which are the reserve powers. It does not explicitly relate to the section of the Act to which reference has been made, but it is there in the Bill which is what the noble Lord was pressing me to say—
Baroness Blatch: Where?
Lord Whitty: If it is in order, I shall pass the piece of paper to the noble Baroness. No, I cannot do so. In that case, I ask the noble Baroness to forgive me for a moment—
Lord Pilkington of Oxenford: May we take an adjournment for a while?
Lord Whitty: Clause 17(1) refers to transitional arrangements which cover the situation. Similar provisions exist in similar circumstances.
Baroness Blatch: I read out the whole of Clause 17 when I made my first presentation and I referred to the clause in my letter. I say simply that when the Bill is passed we shall repeal the whole of the 1962 Act. Regulations under Clause 17 provide that the Secretary of State can re-enact any part of the 1962 Act. Why repeal that Act if in Clause 17 we are giving the Secretary of State the power to re-enact it? Clause 17(2) states:
"In this section 'relevant enactment' means any enactment contained in … the Education Act 1962".
Why should we repeal it only to re-enact it?
Earl Russell: Perhaps I may take this matter a little further. I wish to follow up a point made by the noble Baroness Blatch, a few moments ago. She asked where, in the 1962 Act, there are any powers to impose a fee or a payment from a student. I have been looking at the Long Title of that Act which is a fair guide to what the Act is intended to cover. It states:
"An Act to make further provision with respect to awards and grants by local education authorities and the Minister of Education in England and Wales, and by education authorities and the
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Secretary of State in Scotland, and to enable the General Grant Order, 1960, and the General Grant (Scotland) Order, 1960, to be varied so as to take account of additional or reduced expenditure resulting from action (including anticipatory action) taken in accordance with that provision; to make further provision as to school leaving dates: and for purposes connected with the matters aforesaid".
I presume that the Government are relying on the words,
"purposes connected with the matters aforesaid".
I do not believe that there was any such connection in the mind of the legislator in 1962, although I admit that there may be such a connection in the mind of the present Minister.
But the courts clearly construe legislation according to the intention of Parliament at the time the Act was made. It passes my imagination to understand how any raising of a fee of any sort from a student can be brought within the intention of Parliament in this 1962 Act as governed by the Long Title. Therefore, I shall be very interested to hear expert opinion on the vires which the Government are claiming.
I do not believe that we shall solve this question tonight, however hard we try, but I hope that we can all agree that we need to take expert advice and return to this subject on another occasion and at rather greater leisure. Meanwhile, we should all agree not to be more certain than the nature of the matter and our own knowledge permits. I have merely asked questions to which I do not know the answers. I should like answers to those questions. I believe that we should adjourn this matter and discuss it on another occasion.
Lord Whitty: The noble Earl is making something of a meal of this matter. The noble Earl may regard this as hilarious but I regard it as an example of prudent government to take serious legal advice before coming before this House. We are confident in that. I undertake to obtain detailed advice as regards the 1962 Act and to write to the noble Earl in accordance with that advice.
As regards the transitional arrangements—and I am now comforted by the presence of one of the Law Officers sitting with me—those are normal arrangements. We are effectively repealing the prospective effect of the Act; that is, the Secretary of State cannot take any new measures under the Act. However, we are saving its effect on existing students. Leaving aside all the legal jargon, that is the obvious intention. I am strongly advised that those transitional arrangements, as in Clause 17(1), are normal and will be sufficient for these purposes. I hope that we can perhaps now move on to the amendment which the noble Baroness is proposing.
I now refer briefly to the noble Lord, Lord Renfrew, because I am concerned that he is rather uncertain about the information that has been provided. We do not yet have the regulations. It would be unusual for us to have regulations at this stage in the passage of the Bill. However, even prior to the submissions in the Library during the past few days, back in July the department provided information regarding our policy not only to this Chamber but also to the student population and the prospective student population. I do not really think that

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people can say that they had no information on the Government's intentions. I regret that the noble Lord did not receive a copy of the report earlier. But, as my noble friend Lady Blackstone has said, our practice is to provide such information to the Printed Paper Office or the Library and, indeed, to Opposition spokesmen. I regret that there are a large number of Conservative Peers—some of us may think there are almost too many of them—and we have no way of telling who will speak in the debates. Therefore, we have to rely on the parliamentary channels and the parliamentary parties to provide such information to those who are lucky enough to take part in the debate.
Lord Renfrew of Kaimsthorn: I apologise to the Minister, but I should like to intervene briefly. If material relevant to a Bill is provided, I believe that there should be an indication on the front of the legislation stating that it is relevant to the specific Bill. As I have already made clear, I asked both in the PPO and in the Library earlier today for such information and they were not able to provide it simply because they did not know that they had been provided with material which was specifically relevant to this Bill. I make no criticism of that fact, and I do not wish to take the matter any further. However, I respectfully suggest that it is perhaps a lesson for the future.
Lord Whitty: There are those who did understand what the information was for, but I take the noble Lord's point. We will discuss with the relevant authorities how we might provide such information in the future.
I turn now to the question of the affirmative resolution in the recommendations of the Delegated Powers Scrutiny Committee. We have a serious respect for the committee's recommendations in this area. However, the recommendations that it has made on this occasion give us some difficulty. First, the scrutiny committee suggested that it might be appropriate for the first set of regulations under Clauses 16 and 21 to be subject to the affirmative resolution procedure. Secondly, it suggested that the Bill might leave open for the future the possibility of either affirmative or negative resolutions beyond that first stage. That is quite an unusual recommendation.
On the first substantive set of regulations, I understand the committee's concern and that of many noble Lords that Parliament should have an opportunity to scrutinise the recommendations made under those clauses. Indeed, those regulations will include a very substantial amount of material, much of which we judge not to be appropriate to place on the face of the Bill.
In principle, we are happy to accept that first recommendation in relation to Clauses 16 and 21. However, in this case, it would appear to be appropriate not to target the first set of regulations—that is, those dealing with the academic year 1998–99—because, in essence, they are transitional arrangements. Indeed, some of the factors that we have just been discussing relate to the 1998–99 regulations which will deal with fees and residual grants under the 1962 Act. Moreover, we are not making any substantive changes on the
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eligibility requirements and the means-testing arrangements for 1998. The real issue will be covered in the 1999 regulations. Therefore, the Government propose, in line with what I believe to be the basic intention of the amendment, to bring forward an amendment on Report which will make regulations under Clauses 16 and 21 (dealing with the 1999–2000 academic year) subject to the affirmative resolution procedure. In other words, we accept the spirit of the committee's recommendation and, indeed, what the noble Baroness proposes in that regard.
The second suggestion which relates to regulation changes beyond that—namely, the suggestion that we should have a choice between an affirmative or a negative resolution—seems to us somewhat difficult. It is perhaps also difficult for Members of the Committee. Of course, it was an approach which we accepted in relation to the particular circumstances of the Northern Ireland processions Bill. However, as I am sure Members of the Committee will accept, that Bill falls within a particular, volatile political context and applies to a situation which can change from year to year. I do not really believe that educational regulations fall into the same category. They are no different from any other regulations governing the normal course of government business which are re-made every year, at least in detail. The complexity of the regulations means that we shall probably wish to change them at least in minor detail each year.
If we were left with the committee's recommendation that this House and another place would have an obligation to consider exercising their discretion whether to use the affirmative procedure every year, that would leave the Government and perhaps this House subject to challenge in the courts involving my noble friend. I am not convinced that putting the House and the Government in that position would be sensible.
However, we shall consider the matter further, albeit that regulations on student support have been made annually using the negative resolution procedure for the past 35 years. The amendment that we shall bring forward at Report stage will relate therefore to the affirmative resolution on the first substantive change; that is, the year 1999–2000.
I hope that in the light of that commitment, and in anticipation of that amendment at Report stage, the noble Baroness will feel able to withdraw the amendment.
10.30 p.m.
Baroness Blatch: I am grateful for the constructive way in which the Minister has approached the matter. However, I am not fully satisfied, first, because of the enormous concern and confusion there has been over the use of the 1962 Act—the repeal of it, partial repeal, savings provisions—and our concern about the intake of students in 1998–99. That is the last year of the old scheme and the introduction of the new scheme. There are also the hybrid arrangements for students who should be in the new scheme but have been given special exemption to be part of the old scheme. For all those reasons I wish to include 1998–99 as well as 1999 and beyond.

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That is important because it will allay a lot of fears that many of us have expressed. It will also lay the ghost about where the parliamentary legitimacy comes from.
There is no policy in this Bill. The policy is in the Labour Party's manifesto and other documents. The Bill is a framework Henry VIII Bill. It will be followed by secondary legislation. That is why we take such a rigorous view about the nature of secondary legislation.
I am conscious of a question asked by the noble Earl, Lord Russell, on, I think, the first day in Committee. He asked a straight question about the extent of the Secretary of State's powers under the regulations. The noble Baroness said that it was impossible to say: these were powers to be used in the future. We do not know the extent or the scope of those powers. We have asked for examples to give some idea of the outer limits of the powers. We have had no indication whatsoever of the extent to which they can be used. For that reason, I believe it is important that the amendment is accepted.
The Minister referred to the dilemma of the department as to whether some provision should come through on the negative or affirmative resolution procedure. Frankly, looking across the Chamber to some of the officials I recognise from former days (and some new ones), it is not beyond the wit of any person I see to make a decision about a normal uprating, a minor technical amendment to which none of us would take exception, and a provision which makes a substantial change. If tuition fees can he introduced by secondary legislation, in the future one could do something equally dramatic by secondary legislation that would have an impact on students.
When a Bill is produced in such a skeletal form, secondary legislation takes on a very different complexion. On the basis that half a loaf is better none, I should like to pocket what the Minister has offered so far, but I am not satisfied. In the context of this Bill, secondary legislation is essential. Therefore I believe that it should come through this House through the affirmative parliamentary procedure. I shall press for that at later stages of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16, as amended, agreed to.
Baroness Lockwoodmoved Amendment No. 102:
After Clause 16, insert the following new clause—
REPORT ON MONITORING OF ACCEPTANCE OF COURSES
(" .—(1) The Secretary of State shall monitor and report on the acceptance to courses of higher education of persons, having regard to—

(a) personal or spouse's income;

(b) parental income;

(c) ethnic background;

(d) gender;

(e) any registered disabilities; and

(f) mode of attendance at an institution.

(2) Any report made under this section shall he laid before both Houses of Parliament within twelve months of the beginning of each academic year.
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(3) For the purposes of this section. any government department, or other organisation determined by the Secretary of State, shall provide such information as may be requested by the Secretary of State.
(4) In subsection (2) "the beginning of each academic year" shall be taken as the first day in September.").
The noble Baroness said: The purpose of this amendment is to monitor the impact of the proposed new funding arrangements on access to courses in higher education.
The amendment would require the Secretary of State to monitor on an annual basis the effects that the changes in funding arrangements would have on different levels of individuals and on social groups and sub-groups within the potential university population. It would also require the Secretary of State to report to Parliament on an annual basis. It is a probing amendment, and I do not want to take up too much time, nor to rehearse many of the arguments that have taken place during the course of our debates today.
My noble friend Lady Blackstone, both at Second Reading and in her remarks today, was anxious to underline her belief that these new funding arrangements will not have a deterrent effect on students, that safeguards are being built into the system to ensure that under the new arrangements loans will be repayable on the basis of ability to pay, and that lower-income groups will be excused from having to pay the new fee and therefore access will not he affected. I think all of us in this place are concerned about access and are anxious to increase access from lower-income groups.
The reality of the situation may well be, as my noble friend put it, that students will be no worse off under the proposed new arrangements than under the existing ones. But perceptions could be quite different. Indeed the perceptions expressed in the debates today have been, let us say, very variable—and perceptions can be a very strong emotive force.
Therefore it is important that we put in motion steps to monitor in quite a detailed way the effects that these changes will have. That will be particularly important in the earlier years of the new arrangements. It will be especially important for us to see whether or not there are differing effects on different sections of the community, and whether it is necessary to take any remedial action either to try to stop or to improve a process.
I hope therefore that my noble friend the Minister is able to inform the Committee and reassure us that there will be a proper monitoring system following the introduction of these changes. I beg to move.
Lord Tope: I wish to give our very warm support to the intention of this amendment, so eloquently moved by the noble Baroness, Lady Lockwood. As she rightly says, we may all have our perceptions of what is going to happen; we probably all have our perceptions and beliefs in relation to what is happening, and has happened. But none of us will actually know unless the monitoring takes place.

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I am sorry for delaying the Minister slightly in rising: however, I hope she is about to give us the assurances that were sought. The intention of this amendment is extremely important. I hope the Minister will tell us that all of this is going to happen in a proper and satisfactory way, and that we shall receive the reports that are sought.
Baroness Blackstone: My noble friend Baroness Lockwood is right to stress that we need full, reliable and public information about the entry into higher education of different groups in society. We recognise that there are still important differences in rates of participation by different groups. We are committed to taking steps to reduce those differences as part of our overall aim of expanding access to higher education.
Clearly we need to keep track of progress. We intend to monitor the impact of the new student support system. I therefore welcome the spirit of my noble friend's amendment and accept what the noble Lord, Lord Tope, said. I hope, however, that my noble friend will not undervalue the information that is already available on a non-statutory basis. The Higher Education Statistics Agency and the Universities and Colleges Admissions Service, in particular, collect and publish a wealth of information. Statistics on student numbers by gender and ethnic group, by disability and by mode of study are published annually in some detail by HESA. Information on socio-economic groups is published by UCAS for the majority of full-time higher education entrants. Information on students' finances is provided by the Student Income and Expenditure Survey.
As the Dearing Committee pointed out, there are some gaps and weaknesses in the data. For example, information on mature and part-time students is less comprehensive than for young full-time entrants. Information covering students in higher education institutions needs to be brought together with information on those studying on higher education courses in further education colleges.
Work is in hand to improve the data. We fully intend to take this forward and to improve the information available to both Parliament and the public. However, a lot of work remains to be done to achieve the comprehensive data framework envisaged by Dearing. Those involved are working constructively on a voluntary basis. I believe it would be premature to impose a statutory requirement and might even introduce an element of suspicion and protectiveness that could be harmful to the prospects for improvement. When so much progress has been made on a voluntary basis, I would be reluctant to hang the threat of compulsion over those concerned.
In addition to seeking better information in the longer term, we are committed to assessing the impact of the new system of student support. My department already has in place a programme of evaluation work to assess the impact of the new policies on participation in higher education of different types of student. The programme will include analysis of participation data of the types listed in the amendment. We also plan to commission
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research, which may include examining the influences on decisions to enter higher education. I can assure the House that the key results of our monitoring and research will be published and available to Parliament.
I hope that my noble friend will accept my assurance that we are committed to improving the quality of information on entry to higher education by building on existing non-statutory arrangements and to monitoring the new system and that she will feel able to withdraw her amendment.
Baroness Lockwood: I am grateful to my noble friend the Minister for the sympathetic way in which she dealt with the amendment and for her detailed reply, which I shall study with interest and care. On the basis of her assurances, in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
10.45 p.m.
Clause 18 [Imposition of conditions as to fees at further or higher education institutions]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 103:
Page 13, line 46, leave out first ("specified") and insert ("prescribed").
The noble Baroness said: In speaking to Amendment No. 103 I will also speak to Amendments Nos. 104, 105, 106, 107, 109, 110, 121, 122, 123, 124, 125 and 126.
During our debate at Second Reading a number of Members of your Lordships' House expressed concern about Clause 18 and about the breadth of powers that they believed the Government were seeking. I sought then to provide reassurance that what we were seeking was simply a reserve power to require, through conditions of grant, that universities and colleges limit the fees that they charge to certain students, essentially home and EU full-time undergraduates and PGCE students. We see a need for such a reserve power in order to be able to reassure students and their parents that tuition will continue to be free for home and EU full-time undergraduates and PGCE students from lower income families and that parents will be expected to contribute no more than under present arrangements.
We also believe that students should choose higher education institutions and courses on the basis of what would be most appropriate for their needs, rather than on the cost of tuition; but it is not our purpose to control the fee levels generally for part-time students, postgraduate students or overseas students for whom we make no direct financial support available, nor are we seeking power for the Secretary of State to set university fees generally.
I undertook to bring forward clarifying amendments to Clause 18 at Committee stage with a view to ensuring that our intentions were quite clear, and I have now tabled a number of amendments to fulfil that undertaking.
Amendments Nos. 103 and 105 make provisions for the classes of student and types of course that are to be covered by any condition controlling top-up fees on

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higher education courses to be prescribed in regulations rather than specified by the Secretary of State in conditions. I know that noble Lords have expressed reservations about approving powers for the Government to make regulations without knowing the content of such regulations. We have therefore placed in the Library a first draft of the regulations that we would seek to make under Clause 18 if Members of your Lordships' House agree that we should do so. The draft will no doubt need further refinement in the light of consultations with the CVCP, but it should serve to indicate that the classes of student we wish to protect from top-up fees are, broadly speaking, home and EU students who have not previously received public financial support to undertake higher education. Universities will continue to be able to charge higher fees to those home students who have exhausted their entitlement to public financial support on a previous full-time course.
I hope that this will reassure the noble Lord, Lord Soulsby. I am afraid that he is not in his place. He expressed concern at Second Reading about veterinary schools' continuing power to charge higher fees to self-financing students. Universities will also be able to continue charging higher fees to overseas students. Amendment No. 109 puts this beyond doubt by providing on the face of the Bill that conditions may only control fees paid by students connected with the United Kingdom as determined by regulations under the Education (Fees and Awards) Act 1983.
Conditions may not therefore be used to prevent institutions from charging higher fees for overseas students, as permitted by the Education (Fees and Awards) Regulations 1997 currently in force.
Amendments Nos. 106 to 107 make it clear that conditions can only be imposed in relation to a class of students if the maximum amount of grant to fees has been prescribed to such students under regulations made under Clause 16(2)(b). In other words, if no grant is to be made available under such regulations for, say, postgraduate or part-time fees, then a condition cannot be imposed to control postgraduates' or part-timers' fees.
The draft regulations make clear that the courses we intend to be subject to conditions of grant are the same as those courses in publicly funded universities and colleges for which mandatory awards are currently available and for which in future grants for fees are likely to be provided. We therefore intend to refer to full-time or sandwich undergraduate courses leading to a first degree or diploma and courses of initial teacher training including PGCE courses whether part-time or full-time.
So as to leave no room for doubt, Amendment No. 110 provides specifically that conditions may not impose controls on fees for part-time or postgraduate courses, other than courses of initial teacher training—that is, PGCE courses.
Finally, Amendment No. 104 removes the scope for the Secretary of State to specify the types of fees covered by condition. Fees are now just defined in Clause 20. We recognise that that definition may not
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be perfect. We do not, for instance, intend to restrict universities and colleges in the charges that they make for board and lodging or field trips and are therefore willing to consider amending as appropriate that definition of fees in the light of further consultations with the CVCPs. In the meantime, I hope that Members of the Committee will be reassured about our intentions and accept the amendments. Amendments Nos. 121 to 126 make identical amendments to the parallel provisions in the Scottish Clause 22. We commend them to the Committee also. I beg to move.
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendments Nos. 104 to 107:
Page 13, line 46, leave out ("any specified matters in connection with").
Page 14, line 1, leave out ("specified") and insert ("prescribed").
Page 14, line 3, after first ("amount—) insert (", in relation to any such class of persons attending courses of any such description:").
Page 14, line 6, leave out from ("fees") to end of line 7 and insert ("payable by such persons in respect of their attending such courses.").
The noble Baroness said: With the leave of the Committee I shall move Amendments Nos. 104 to 107 en bloc.
There have been allegations in this Chamber of the threat to academic freedom that Clause 18 poses. Some have alleged that it is a back-door route for a hostile government to interfere in the courses provided by individual universities with a view to closing them down. Those allegations are quite misplaced. This Government are firmly committed to the principle of academic freedom. It has never been our intention to tell universities which courses they should or should not provide. We therefore wish to make clear on the face of the Bill that the only penalties that might be imposed on an institution that decided to impose top-up fees would be financial ones.
We hope of course that we never have to use the power to impose conditions controlling top-up fees. But ultimately there would need to be some sanction against an institution that broke ranks and decided to charge fees in excess of the £1,000 grant for fees that we are proposing. In that unfortunate and, we trust, unlikely event, our intention is that we would ask the Higher Education Funding Council to hold or to see the repayment of grant equivalent to the additional income raised by the top-up fees. If significant time had elapsed, then the payment of interest on that sum might be appropriate. That would ensure that such an institution did not gain an unfair advantage over other universities which had shown restraint in not charging top-up fees.
But, in all cases, we would seek the appropriate financial penalty. Amendment No. 108, along with the parallel Scottish Amendments Nos. 120 and 127, make it absolutely clear that imposing some other penalty is out of the question. These amendments put beyond doubt that it will not be within the power of any

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Secretary of State, whether current or future ones, to control top-up fees in order to interfere in a university's academic affairs. I beg to move.
The Earl of Limerick: I seek clarification. I accept that I should perhaps have mentioned the matter on Amendment No. 103. Can the noble Baroness confirm my understanding that the difference between "specified" and "prescribed" for this purpose is that "specified" means specified by the Secretary of State, which can be done by a procedure which comes nowhere near Parliament, whereas "prescribed" means that it has to be prescribed in regulations that come before Parliament? Would that be a correct interpretation?
Baroness Blackstone: I believe that to be the right answer. Perhaps I can write to the noble Earl confirming it.
On Question, amendments agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 108:
Page 14, line 10, after ("further") insert ("financial).
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 109:
Page 14, line 13, at end insert—
("( ) No condition under subsection (4) shall apply in relation to any fees which are payable, in accordance with regulations under section I of the Education (Fees and Awards) Act 1983 (fees at universities and further education establishments), by students other than those falling within any class of persons prescribed by such regulations for the purposes of subsection (1) or (2) of that section (persons connected with the United Kingdom, etc.).").
Baroness Blatch: I rise only to make this point. I took the trouble to adapt my own Bill to these amendments and to write out the whole list of amendments. I shall need to take legal advice to understand them. They are extremely technical amendments, so I need more time to think about them.
I know that a great deal of discussion has gone on between the CVCP and the department. I heard a rumour before I came in today that the CVCP are not happy with the amendments, but that is not direct information, so I shall certainly follow that up.
This way of operating with the universities creates tensions between the department and the universities—to say, "If you do one thing, we will threaten you with something else". I understand why it is this way round. It is because they are free-standing, chartered institutions and it would not have been possible under the law to put a direct clause in the Bill to stop a university from doing what it wanted to do.
There is still a great deal of anxiety about the lever that the DfEE will have over the academic freedom of the universities. I retain a residual concern about that. But until I can be talked through these amendments to
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understand precisely what they mean and I am hoping that the safeguards for the universities are there, I want to reserve my judgment as to what to do about them.
The Earl of Limerick: Again, as a point of clarification, in speaking to these amendments the noble Baroness made some very helpful statements which I and others shall wish to study in detail.
It may be that I am raising this point on the wrong amendment, in which case I apologise. But one of the points she put to us was that there would be a further amendment defining what was meant or what was not meant in terms of top-up fees in relation to such matters as field trips. That is something I would have raised at a later stage.
May I take it that in the course of consultation or discussion on what is required in that amendment she will take into account other matters which I think have already been raised? I have in mind such matters as course materials. At universities such as mine, where we have courses concerned with goldsmithing and silversmithing, clearly these are not trivial matters when it comes to the materials concerned. May I take it that that consultation will go fairly wide?
Finally, if I have understood the situation correctly, in relation to Amendment No.109, to whom it does or does not apply, it could be summarised in a way by saying that he who does not pay the piper does not call the tune. Therefore, where there are no fees payable in respect of those students, there would be no powers taken to regulate the contents of those matters.
Baroness Blackstone: Perhaps I may begin with the questions raised by the noble Baroness, Lady Blatch. We have had very extensive discussions with the CVCP about these amendments. They are acceptable to them and they have been agreed with them. I put that forward just to reassure her on that matter.
The amendments define those categories of students to which Clause 18 will not apply. In that sense I think it is providing reassurance that there is no intention of withholding grants for top-up fees for postgraduate students, for example, and overseas students, to which the noble Earl, Lord Limerick, has just referred.
As far as the noble Earl's question on types of charges is concerned, as I said earlier, we are still in discussion with the CVCP about that. We will come back at a later stage if and when we can reach agreement. I hope that is helpful.
11 p.m.
Lord Wallace of Saltaire: I have with me a copy of a letter from the Vice-Chancellor of Birmingham University. It states:
"We remain unhappy. The Secretary of State might instruct us … but henceforth it will be a condition of grant that institutions are able to demonstrate that their admissions policies are based solely on merit and not on the ability to pay. That would not require Clause 18".
The suggestion that the universities subject to these amendments would be happy to accept Clause 18 is a considerable exaggeration. All of us who have any

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connection with universities are deeply unhappy about Clause 18 as a whole. That is something we shall want to come back to at Report stage.
Baroness Blackstone: At no point did I say that the universities were collectively happy with Clause 18. I said they were happy with the amendments that the Government have just brought forward in relation to identifying those categories of students to whom this clause would not apply.
I am aware that the Vice-Chancellor of Birmingham University has written to suggest that Clause 18 is unnecessary. He has suggested that the Secretary of State should instruct the Higher Education Funding Council for England that from now on it will be a condition of grant in the financial memoranda that institutions are able to demonstrate that their admissions policies are based solely on merit and not on ability to pay. That suggestion simply will not work. Section 68(3) specifically bars the Secretary of State from framing conditions of grant with reference to the criteria for the admission of students. That is why we need to seek a further reserve power to control top-up fees through Clause 18.
Moreover, this is not simply where the universities base their admissions policies on the ability to pay. There is also the question of how students will react if different universities charge different amounts for full-time undergraduate and PGCE courses. There remains the danger that students will base their choice on the price of the course rather than suitability for them. Much as I would like to have been able to accept what Maxwell Irvine, the Vice-Chancellor of Birmingham University, has said, I am afraid that it just is not acceptable or appropriate. It will not work.
Lord Wallace of Saltaire: I do not want to detain the Committee at this late hour but I do think that Clause 18 is a classic example of hurried drafting without proper consideration. It will not stand for more than two or three years. The problems to which it leads in terms of challenge, definition, and so on, are extremely large. The further incursion into the autonomy of universities, which this implies, following the major incursions suffered under the previous government, is extremely unfortunate. It stems from over-hasty government reaction to the publication of the Dearing Report. It is sadly mistaken. Clearly, we shall have to come back to the matter at Report stage and Third Reading.
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 110:
Page 14, line 14, at end insert—
(""course", where it appears in subsection (4) or (5), does not include any part-time course or any postgraduate course other than a course of initial teacher training;").
On Question, amendment agreed to.
Baroness Perry of Southwark Baroness Perry of Southwark moved Amendment No. 111:
Page 14, line 14, at end insert—
(""connected", in relation to two higher education institutions, means that one institution controls the other; for which purpose a person controls an institution if that person has
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the power to secure, by virtue of any powers conferred by the instrument of government or other document regulating that or any other institution, that the affairs of the first-mentioned institution are conducted in accordance with the wishes of that person.").
The noble Baroness said: Before I speak to the amendment, I should point out that I did not agree to the groupings and I am not quite sure why this amendment is grouped with Amendment No. 117, although both in different ways test the extent of control. The noble Lord, Lord Wallace of Saltaire, may wish to present his as a separate amendment.
The purpose of Amendment No. 111 is to add to Clause 18(7) some definition of the word "connected". At present the financial penalties which could be imposed on a university charging top-up fees would extend also to top-up fees being charged by,
"any college, school, hall or other institution connected with the institution".
For a definition of "connected" we must go to Clause 19, which imports a definition of the term "connected institution" into the Further and Higher Education Act 1992, and states that "connected institution" means any,
"college, school, hall or other institution which the Council in question are satisfied has a sufficient connection with that institution for the purposes of that subsection",
which I suggest leaves with the funding council or the Secretary of State a rather vague decision as to what that connection is meant to be and how much control is exercised by one institution over another.
My assumption is that the clause as it stands is intended inter alia to apply to the colleges of Oxford and Cambridge on the basis that each of those universities is connected with all the colleges in the university. The amendment would negate that intention, making the point that the colleges and universities are constitutionally independent bodies without control over one another.
Rather than seeming totally parochial in the sense of speaking only about the two universities of Oxford and Cambridge, I raise the concern also that the connection could apply to many other universities; for example, to those many universities which validate other colleges' courses and work. Courses can be "franchised" into other institutions. Undoubtedly, the validating or franchising university then controls, in academic terms, the work of the other institution, but it has absolutely no control over the financial activities of that other institution. I respectfully suggest that it is both unreasonable and unjust for conditions to be imposed on a university with which it has not the power to ensure compliance, especially when the penalty for non-compliance could potentially put the whole of its grant from the funding council at risk.
I hope very much that the Minister will accept that my college does not find it unreasonable—nor, I am confident, do any of the other Cambridge colleges—that the Government as a matter of policy should seek to prevent universities charging top-up fees. I strongly support the principle that access to higher education should be on the ground of merit only and not on the ability to pay. However, the Government cannot ignore

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the interaction of that policy with the existence of the college fees at Oxford and Cambridge; nor can they properly ignore the constitutional independence of the colleges which, for a long time, have charged for the tuition which they provide and which, in a fair number of cases, are constrained by their own statutes to charge fees for tuition at levels estimated sufficiently to fund their tuition accounts.
I know that discussions with the Government between Oxford and Cambridge universities in relation to college fees are continuing and I assure the Minister that, as far as the colleges are concerned, top-up fees are simply not on the agenda—that is, top-up fees in the sense of fees paid by students out of their own resources in addition to the £1,000 now being introduced. I hope that the Government will be willing to rely on the good faith of the colleges in this matter, but if they are unwilling so to do, I respectfully suggest that they must introduce legislation which addresses the matter of the colleges, and not of the totally separate and independent universities which, as I said, have no control over their financial matters.
Sadly, I think that this legislation has not been properly thought through and, in this specific case, more consultation with universities and colleges is necessary. It is not the business of this Committee to put through legislation which has been hastily prepared and which would be extremely oppressive and contrary to natural justice. I beg to move.
Lord Wallace of Saltaire: To save the time of the Committee I shall speak also to Amendment No. 117 as these amendments concern related subjects. They relate to the problem of defining how far the concepts of connection and fees extend. We are in considerable difficulty on this Bill. Clause 20 states,
"'fees' means tuition, enrolment or other fees payable".
As the Minister well knows, there is a great deal of nervousness about how one is going to be able to define that in practice. My children have attended a comprehensive school for the past few years and I am aware that all state schools have encountered increasing difficulty over what is a compulsory charge and what is a voluntary charge, as the Government have attempted to tighten that up. We are about to go down the same road with higher education institutions. There is a tremendous quagmire here which needs to be addressed. I understand that the Government have been in discussion on this with the CVCP and that the Government may bring forward an amendment at a later stage to clarify the situation. I merely wish to underline that that is extremely important if we are not to have a whole host of knock-on cases once this Bill becomes law.
Lord Whitty: These two amendments seek to redefine a connection in two almost diametrically opposed directions. The amendment of the noble Baroness seeks narrowly to define a connection. As far as I can see, the amendment of the noble Lord, Lord Wallace, would extend and tie down a connection. We may need to look at the precise wording here. In so
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far as the amendment of the noble Baroness is designed primarily to deal with Oxford and Cambridge, it would define a connection far too narrowly, were it not to allow for the reality that the relationship between the universities and the colleges in Oxford and Cambridge is indeed a connection in the terms of this Bill. It is virtually inconceivable that those two universities and their colleges could live without each other. As I say, the effect of this amendment would be to exclude the colleges from the constraints on top-up fees which would destroy much of the intention of this Bill.
People outside this Chamber would find it difficult to comprehend why such colleges should be exempt from conditions on controlling top-up fees. In the current academic year public funding for teaching per student is £5,800 in Oxford and Cambridge compared with an average of £4,000 elsewhere. I think it is well known that Oxford and Cambridge take disproportionately more students from private than from state schools. If the amendment were accepted and colleges started to charge top-up fees—I accept that very often it does not appear the intention of those colleges to do that—clearly Oxbridge would become increasingly the preserve of the rich rather than of the excellent.
Baroness Perry of Southwark: I hope the Minister will forgive me for intervening even though I know it is late and we want to get on. However, the Minister has misunderstood what I said. We are not in any sense attempting by this amendment to exclude the colleges from the provisions of the Bill. What I said quite clearly was that we would hope that the Government would address the question of how to penalise the colleges should they charge top-up fees and not try to penalise the university which has no control over what the colleges do. Of course they are connected in many, many ways, in the same way that universities which validate the courses of other colleges and which franchise courses to other colleges are connected. The point is that the university has no control over the financial matters of colleges by statute; they are Royal chartered institutions and many of them have a duty to charge fees. The amendment seeks to detach the university from penalties as a result of the colleges' actions. Let the colleges be penalised for their actions, not the university.
Lord Whitty: We hope that we do not have to enforce this provision but I think it would be impossible to enforce this regulation if you could not take the aggregate fees of the colleges and the universities together. The noble Lord, Lord Wallace, referred to the fact that we are looking at mechanisms for dealing with the colleges in Oxford and Cambridge. We may well need to look further at the wording. However, as I understand it, it is the intention of the noble Baroness to separate entirely consideration of the fees charged by the colleges and by the universities of Oxford and Cambridge. I cannot accept that intention in any sense.
Therefore, I regret that I have to oppose the amendment and ask the noble Baroness to withdraw it. As regards the noble Lord, Lord Wallace, subject to the

1735
fact that we may need to clarify it, his amendment, as it stands, would not be helpful in clarifying the arrangements.
11.15 p.m.
Baroness Perry of Southwark: I give up on trying to repeat the argument. It is not a question of trying to separate the college fees from university fees. They are separate. We shall have to return to this matter at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 112:
Page 14, line 29, at end insert—
("( ) The terms and conditions subject to which grants are made by the Secretary of State to either of the Councils, or under which the Councils make grants to the governing bodies of relevant institutions, may not be framed by reference to particular courses of study or programmes of research (including the contents of such courses or programmes and the manner in which they are taught, supervised or assessed) or to the criteria for the selection and appointment of academic staff or for the academic conditions under which students are admitted.").
The noble Earl said: Perhaps I may say a very brief word, first, on the previous amendment. I did not speak to it. I hoped that there might be more clarification achieved. As I understand it what the noble Baroness, Lady Perry, is invoking is the principle of subsidiarity. In that context I wonder whether that might help the Government to understand what she is saying. One hopes that negotiation may be achieved. But that cannot be done until people know what is being negotiated.
As regards Amendment No. 112, I must declare an interest. This Bill attempts to reverse what is known as the Beloff amendment in relation to Section 68(1) of the 1992 Act. My name was second on that amendment. I must admit that one gets a certain attachment to those very few bits that one has put into the legislative process.
The noble Lord, Lord Beloff, is not here tonight to defend his offspring, partly because he said that he was not really prepared to stay up past 11 o'clock at night to do it and partly, as anyone who looks at the Second Reading speech of the noble Lord will appreciate, he is beginning to lose faith finally in the possibility of a continuing, workable relationship between the universities and the state. He believes that the battle is already lost. I am very near reaching that conclusion, but I have not quite done so yet.
I should explain the context in which that amendment was brought in in 1992. There was a clause in that Bill—thank God, not in the 1992 Act!—authorising the government in some circumstances to reduce the length of university degrees from three years to two. It appeared to a number of people that that was a real encroachment on the sphere of academic judgment; that it was making a judgment of a type that the then government were not competent to make.
I can remember at the time comparing it to the then Prime Minister making a grant, say, for the restoration of Lord's and claiming to alter the lbw law as part of the terms and conditions of the grant. I will not speculate
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on what the equivalent would be for the present Prime Minister. It appeared to underline the point that in any activity there has to be a sphere of independent judgment, which the government do not control or else that activity is not worth having. That must include any terms and conditions framed with reference to the content of particular clauses or the selection of individual staff and students. Selection by merit is a principle which is very dear to universities and, we believe, not contested by the Government.
This is not the first attempt to reverse the Beloff amendment. One was made by a very remote back door in the Disability Discrimination Bill 1995. That was beaten off largely by the kindness and understanding of my noble kinsman Lord Henley, who took a great deal of care and trouble over it. One hopes that one might be as lucky this time because if we are not, frankly, I do not see the point of carrying on.
When Ministers fly they do not instruct the pilot on the speed and angle at which he should fly his plane. They recognise that if they are to get to their destinations safely they must let the pilot exercise his own judgment in the area of his own expertise.
Every academic is supposed to be an expert within a particular area. What is the point of having people to do a job in which they are expert if the Government then make decisions over their heads? If government does not recognise that there is an area of academic freedom within which it is not competent to make judgments then the noble Lord, Lord Beloff, is right and the relationship between universities and the state is at an end. I believe that that would be a very tragic loss.
Lord Renfrew of Kaimsthorn: My Amendment No.113 is grouped with Amendment No.112. With the leave of the Committee, I should like to take them separately. I shall speak very briefly to my amendment later. As to Amendment No.112, I very much agree with the noble Earl, Lord Russell. Many of us will clearly recall that during the debates on the 1992 Act this matter was very strongly contested. The noble Lord, Lord Peston, is not in his place at the moment, but earlier he spoke about the ritual whereby when in government one made one kind of speech and another kind of speech when in opposition. The noble Lord, Lord Howie of Troon, made a remark, with which I agree. He said that he tried to make the same kind of speech. I was among those who were quick to criticise my own government in the debate on the 1992 legislation. I would be falling down in my responsibilities as an academic and a citizen of this country, despite the lateness of the hour, if I did not express my full support for this amendment.
Baroness Park of Monmouth: I too strongly support the noble Earl. I believe that this is the fundamental anxiety about the clause. While I support the point about the constitutional problems facing colleges and universities, the serious and long term point of the present discussion is academic freedom and the importance of preserving it.
Baroness Blatch: If this kind of amendment were accepted by the Government it would allay a good many

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fears. All of the earlier amendments to Clause 18 went so far but this one goes one step further and establishes the confidence that the university sector desires in the changes that will come about.
I was present when my noble friend Lord Renfrew vigorously fought his corner. I appreciate that both Ministers have worked very hard on the Bill. He will recall that while I and my colleagues gave the usual DfE answers throughout the Bill, nevertheless we took away the arguments deployed in the Chamber and used our best offices, if we were convinced of those arguments, to line up with the noble Lord, Lord Howie of Troon, the noble Baroness and my noble friend Lord Renfrew. That was how changes were made to the Bill. It was entirely consistent that my noble friend Lord Renfrew worked vigorously in private, and publicly in the Chamber, to make all noble Lords aware of his case. I am not sure who is to answer the debate, but if the noble Baroness, Lady Blackstone, is not able to accept the amendment I hope that she will go away, discuss the matters with officials in the department and convince colleagues that this is a powerful argument. The amendment will go a long way to establishing confidence in the university sector which I believe is somewhat shaken at the moment.
Baroness Blackstone: Of course I fully understand the motives behind Amendment No. 112, and I sympathise with its aims. I think that I can claim better than most—certainly better than many people who have occupied my position in government previously—that university autonomy is a sensitive issue for vice chancellors. I understand and share their concerns about academic freedom. However, I assure the Committee that the Government are committed to upholding the principle of academic freedom.
Clause 18 is not an attack on academic freedom. Universities will retain all their essential freedoms to decide which courses of study to provide and which programmes of research to undertake. They will have complete control when deciding which students to admit, which staff to appoint, and what to teach students—and so they should. Methods of teaching, supervision, and assessment will also remain the preserves of universities and colleges themselves. We are far from seeking to reverse the provisions of the Further and Higher Education Act 1992, which protect universities from government interference in those matters. Those provisions will stand.
I am aware that subsection (8) has given cause for concern among those who see it as undoing all the safeguards that the universities won in the 1992 Act, but I should not want that to happen. All it does is to ensure that there could be no legal conflict between those provisions and the power sought to place conditions on grant to control top-up fees. For instance, if the criteria at a particular university for admitting students included a requirement that they should pay fees charged by the university, subsection (8) adds no powers that are not already in the previous subsections. It does not give the
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Secretary of State the power to intervene, for example, in research programmes, or the selection of academic staff.
How, for instance, could a condition controlling top-up fees for students be framed by reference to the appointment of academic staff or to the nature of research undertaken? It is for that reason that reluctantly I cannot support Amendment No. 112. Most of the amendment is unnecessary, however much I sympathise with the underlying principles. However, I understand the fear that a future Secretary of State might seek to apply conditions controlling top-up fees to some particular courses but not others. We are currently looking again, with the CVCP, at the clause to see whether an appropriate amendment could be drafted to ensure that, so far as possible. conditions on grant to control top-up fees could not be framed by reference to courses in particular subjects. We shall of course come back if we can do that. With that assurance, I hope that the noble Earl, Lord Russell, will withdraw his amendment.
The Earl of Limerick: Before the noble Earl decides what to do about his amendment, perhaps I may make just one simple point. Does the Minister accept that it is not merely vice-chancellors but the many people concerned in a lay capacity with universities who are worried about this point? I am not clear whether she is saying that the amendment is wrong or merely unnecessary. If she is arguing that it is unnecessary, I urge her to think carefully about the effect of resisting an amendment the acceptance of which, or something similar, would give enormous reassurance to the whole sector.
Earl Russell: I listened carefully and with great interest to the Minister. I shall have to read what she said. Perhaps I could ask for a few points of clarification. First, she said that most of the amendment was unnecessary. Before we go further, could she tell me which parts of it are not?
11.30 p.m.
Baroness Blackstone: I made it clear that with respect to matters such as programmes of research or the selection of academic staff, the Secretary of State would not intervene. The amendment is unnecessary in that respect. However, I have said that I understand the fear that a future Secretary of State might seek to apply conditions controlling top-up fees to some courses but not others. It may well be that a university decides to charge a top-up fee in relation to students on a particular course. A university can hardly introduce a top-up fee in relation to research, or in relation to the selection of academic staff. Therefore, that aspect of the amendment is not necessary.
We are having further discussions with the CVCP and it would be helpful if, in the light of that, the noble Earl withdrew his amendment. As regards the comments of the noble Earl, Lord Limerick, I am aware that there are others in universities besides vice-chancellors who have concerns, including the lay members of governing

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bodies. We would he happy to hear more from the CUC or its members about what might allay their fears. I hope that that is helpful, too.
Earl Russell: I am sorry to ask for further clarification. The Minister said that the Secretary of State would not intervene in these matters. If she could change one letter and say that the Secretary of State "could" not intervene in these matters that would make a great deal of difference. I am not clear whether she is denying that Section 68(1), including its condition, is hereby repealed. If she is denying that, and will do so with the case of Pepper v. Hart in mind, that would influence me considerably. Or is she saying that it is repealed but the repeal is not significant? The difference matters a great deal.
Baroness Blatch: Perhaps I may make a brief point which is a variation on the same theme. The issue is not so much the intentions of the present Secretary of State, nor what he might do in future. It is whether the clause allows the scope for some of these things. That is important. No one is doubting the intention, but we are interested in the scope of the clause.
Baroness Blackstone: Clause 18 does not repeal any section of the 1992 Act. I hope that that clarification is helpful. Subsection (8) adds no powers which are not already in the previous subsections. It certainly does not give the Secretary of State the power to intervene. I give the same examples of programmes of research and the selection of academic staff. I hope that that is helpful.
Earl Russell: That is very helpful. I must still go away and think very hard indeed. I appreciate that the provision does not give the Secretary of State power, but before 1992 the Secretary of State claimed an inherent power by his power to make grants and impose terms and conditions. The question is whether the bar that was put on that power by the 1992 Act still stands.
At this time of night, we cannot usefully pursue the matter further. I shall read the Minister's comments with a great deal of interest and so, I am sure, will a number of others. I look forward to hearing their opinions. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn moved Amendment No. 113:
Page 14, line 29, at end insert—
("( ) Before exercising his powers under subsections (3) and (4) the Secretary of State shall consult the governing body of any institution which proposes to charge a fee greater than the prescribed amount, and shall have regard to any representations made by such governing body.").
The noble Lord said: Due to the lateness of the hour, I shall be brief. This is a mild amendment relating to some of the issues discussed by my noble friend Lady Perry in relation to Amendment No. 111. They were also addressed by the noble Earl, Lord Limerick. A whole range of fees, including college fees, are involved. In addition, there are potential fees for course work and charges for enrolment and graduation. There
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are a plethora of factors which we have been told are under discussion or review. I suspect that that will still be the case when the Bill is enacted and when the regulations are discussed and approved.
The amendment is very mild. It simply requires, before exercising powers, that the Secretary of State shall consult in order to have the opportunity of being fully aware of the circumstances and the facts. In view of the mildness of the amendment, I hope that it will prove acceptable to the Government. I beg to move.
Baroness Blackstone: I understand the wish for an institution's views to be taken into account before any condition is placed on its grant. In practice, I believe that that would happen in any event. No Minister would embark on the process of setting conditions lightly. I cannot envisage that any Government would seek to the take the ultimate step of imposing a condition on the grant to the HEFC requiring it in turn to impose a condition on funding for an institution without having in practice discussions with that institution. Indeed, I should expect Ministers to have regard to representations from all parties affected and the institution must count as a principal party.
I really do not believe that this amendment is necessary and I do not feel able to accept it. I hope that the noble Lord will withdraw the amendment.
Earl Russell: It is rather difficult to ask universities to trust the Secretary of State and assume that there are certain things he cannot do. The vast majority of what he has done since I entered this House are things which, 30 years ago, we should all have assumed he could not do.
In general, it is not the purpose of Parliament to trust Ministers with powers. It is the purpose of Parliament to hold Ministers to account and to ask questions about them.
The relationship between the universities and the state is far too battered and bruised for it to be useful to subject us to this sort of request. It may be that he will not do these things but asking people to trust him not to is asking for rather a lot.
Lord Renfrew of Kaimsthorn: I find the remarks of the noble Earl, Lord Russell, helpful. As I said earlier in relation to the 1992 Bill, ultimately I did not feel able to trust my own right honourable friend the Secretary of State at that time. Although I have no reason at all to doubt the word of the noble Baroness, or, indeed, that of her right honourable friend the Secretary of State, I do not see why I should trust him further than I would trust my right honourable friend Mr. Clarke.
Therefore, although at this late hour I shall not press the amendment, it is a matter to which we may need to return later. I beg leave to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
On Question, Whether Clause 18, as amended, shall stand part of the Bill?
Earl Russell: I very nearly decided not to raise this issue at this time of night and I shall not take very long

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with it. I probably should not have raised the matter had the noble Baroness not said what she did in reply to my previous amendment. She said that Clause 18 constituted no threat to academic freedom because the universities retain complete academic control. I do not have an exact recollection of her words, but I believe she said that universities could continue to put on whichever courses they liked and to teach whichever subjects they liked.
However, that cannot be done unless you have ultimate control over your own costs. The decision whether to put on a particular course is a decision which inevitably, and always, must have cost implications. It has cost implications in terms of staffing. If you decide to put on a particular course, you may either need a new member of staff or you may need to be able to make a commitment to replace an existing member of staff when he is due to retire. It has library implications, which may often be considerable. It has space implications within the college. You cannot put on a course if you cannot find any room in which it can be taught. That is becoming an increasingly common problem.
Therefore, if you do not have residual control over the cost, you cannot have academic freedom to decide what you teach. I am afraid that that is inescapable and in any context internal to government, I believe that the Treasury would recognise it quite quickly. I wish it would show the same sensitivity outside government.
I believe it is understood that no one wants to charge top-up fees. The arguments put against them by the noble Baroness, Lady Kennedy of the Shaws, on Second Reading were powerful and I listened to them with sympathy. Indeed, no one wants to do it. However, in the end, there comes a point where, simply in terms of academic safety, either one has to have a particular amount of money or one has to decide not to do it. There comes a point ultimately where one has to decide that either the college can raise a certain level of support, or it would be better not to operate; it is like going out on the road in a car with no brakes.
In the struggle between the Treasury and anything dependent on public funds, there has to be an element of negotiation. Obviously it is for any government to determine the total level of public expenditure and, therefore, the amount that they can spend on any particular entity. What government cannot do is go on from there and say how much that money will buy. The Government cannot tell an aircraft factory what it costs to build a jet fighter; it cannot tell a surgeon what equipment he needs to conduct an operation. Indeed, government cannot make clinical judgments. That parallel is one which I believe academics should regard as being applicable to themselves.
Therefore, if government do not recognise that whoever they are bargaining with can have the ultimate say in how much the money that government are prepared to spend will buy, there is no negotiation. It means the absolute power of the Treasury. If we get to that situation, I believe that the relationship between
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universities and the state, however slow and painful its death, will have received a blow from which it will not recover. I beg to move.
Baroness Blackstone: Perhaps I may remind members of the Committee again that the new funding arrangements that we are seeking to put in place will, in 1998–99, yield an estimated £130 million in students' own contributions to fees in England alone, after allowance has been made for costs of some 5 per cent. for collection and default. Our £165 million package of measures for higher education in 1998–99 will mean that universities and colleges will receive directly around £130 million in extra funding in 1998–99. They will benefit fully from the money derived from students' contributions to tuition fees.
We have thus honoured our pledge that our proposals would mean more money for universities. Levels of funding for future years will necessarily have to be considered in the context of the Government's comprehensive spending review, but we fully intend that higher education should benefit from the new arrangements. Perhaps I may reiterate that savings from the introduction of tuition fees will be used to improve quality, standards and opportunity for all in further and higher education.
The Dearing Inquiry identified as its first priority the need for additional funds to enable the reduction in the unit of funding to be limited to 1 per cent. Our funding package provides for that and, in addition, will allow for more investment in infrastructure and a start on growth in student places. There should be no need for universities and colleges now to consider introducing top-up fees. Our provisions do not, as some have suggested, threaten the university system. Instead, they provide the means of improvement and expansion.
However, in seeking to address the financial crisis that has been facing universities and colleges over recent years, we should not forget the interests of the students. Indeed, many members of the Committee mentioned students during our debates today. Clause 18 is not about altering the fundamental nature of the relationship between the Government and universities, as the noble Earl, Lord Russell, has claimed. It is simply about protecting the interests of students, and particularly those who come from families that are financially less well off, at a time when some of them are being asked to contribute to the costs of their education.
We need to have a reserve power to control top-up fees, if necessary, in order to be able to reassure home and EU full-time undergraduate and PGCE students that tuition will continue to be free for those from lower income families and affordable for those from slightly better off backgrounds. And we need to assure their parents that they will be expected to contribute no more than under present arrangements. We also believe that students should choose higher education institutions and courses on the basis of what will be most appropriate for their needs rather than on the costs of tuition. Top-up fees would undermine that principle.
I know that some universities or colleges might be willing to introduce bursary or scholarship schemes alongside top-up fees. But I do not believe that anyone

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can guarantee that all would do so. We cannot be certain that such schemes would ensure that all students from lower income families received bursaries equivalent to the top-up fees while fees for students from slightly better off families would be kept to affordable levels. That is why we are seeking a reserve power to control top-up fees, if necessary.
But all we are seeking is a reserve power to limit the amount that universities may charge home and EU full-time undergraduates and PGCE students in return for the £3.5 billion of public funding they already receive through grant and the further £1 billion they will receive through tuition fees. The Bill does not give the Secretary of State power to set university fees. Nor is it, as I said, our purpose to control fee levels generally for part-time students, postgraduate students or overseas students for whom we make no direct financial support available. I trust that the amendments that we have brought forward today have made this amply clear.
We have also said that we hope we never have to use this power. But I do understand universities' concerns about the possible use, or misuse, of powers that are on the statute book. Clause 18 is not, however, an attack on academic freedom, nor is it an attempt to prevent universities improving their financial position. Universities retain all their essential freedoms to decide which students to admit, which staff to appoint, what courses to provide and what to teach on those courses. They will also remain responsible for their overall income and expenditure, and will be free to maintain and develop funding from other sources.
In drafting Clause 18 it has been necessary to make sure that there could be no legal conflict between certain provisions in the Further and Higher Education Act 1992. But I should like to emphasise again that the safeguards for academic freedom in that Act will still stand.
I also wish to stress that we are prepared to look again at particular elements of the drafting of Clause 18 and to continue working with the CVCP to clarify as far as possible any remaining uncertainties. If Members of the Committee agree that Clause 18 should now stand part, we would, for instance, be willing, as I said, to see whether an appropriate amendment could be drafted to ensure as far as possible that conditions on grant to control top-up fees could not be framed by reference to courses in particular subjects.
With those assurances, I hope that noble Lords will accept the importance of Clause 18 in the new funding arrangements that we are proposing for students, and particularly in giving reassurance to full-time undergraduates and PGCE students as we ask them to contribute to the costs of their tuition. I commend Clause 18 to the Committee.
11.45 p.m.
Baroness Blatch: I wish to ask a technical question. It is pertinent not only to the clause but also to one or two future amendments. One hundred per cent. of tuition costs for each student are met by the state. From the beginning of the next academic year students will be required to meet approximately 25 per cent. of that
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through the first £1,000 of fees. Am I right in assuming that the state will continue to provide the equivalent of the 100 per cent., and that the income generated by the 25 per cent. will he additional money; or will the Government adjust their grant to the higher education sector and include the 25 per cent. that is being met by students to make up the 100 per cent?
Baroness Blackstone: As I have already explained several times, both at Second Reading and earlier today, universities are able to keep the fees that they are charging to students under the new arrangements. We have already said that during 1998–99 universities will have an extra £130 million to deal with making sure that the efficiency gain is no more than I per cent. and to deal with some of the problems of their infrastructure. The amount raised from fees will be £125 million, so the universities will receive more next year than is raised by the fee. As I have said on countless occasions, it is our intention to ensure that the new arrangements will lead to more money for the universities. Because of our comprehensive spending review, I cannot anticipate the precise arrangements after 1998–99. I can only repeat what I said: for 1998–99 the universities will retain the additional funds that derive from charging students fees.
Baroness Blatch: I am sorry to come back on the point, but does that then mean that the university sector as a whole will receive the equivalent of 125 per cent. of the cost of tuition? In other words, universities already receive 100 per cent. from the state and they will receive a further 25 per cent. from students, which tops up to 125 per cent.; or will the government adjust the amount and pay 75 per cent. in future with 25 per cent. coming from the students? In that case there is no extra money. As I understand the noble Baroness's remarks, the Government will continue to pay the equivalent of 100 per cent. tuition fees and the student will add to that a further 25 per cent., which will be kept within the universities.
Baroness Blackstone: It is very late, and I have tried to explain the position. Next year, the amount of money that is raised from tuition fees, which will be charged and collected by the universities, will be kept by the universities. I cannot—
Lord Pilkington of Oxenford: What my noble friend is asking is this. At present the state pays all tuition fees. The state is now to charge for 25 per cent. of tuition fees. I realise that we are all tired, but it is a very simple matter. Universities receive the 100 per cent. paid by the state, but they are to receive the 25 per cent. extra that the student pays—in other words, as my noble friend says, 125 per cent. The amount will not be the same as it is now. The student's contribution will be extra to the 100 per cent. presently paid by the state.
Baroness Blackstone: The existing arrangements in relation to fees will not continue. So the answer to that has to be no. There will not be a fee in the same respect so far as the state is concerned. All the arrangements will change. What is important is whether the

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universities will benefit, and the answer is that they will. They will be collecting the fee. For next year they will have the total amount of the fee that is collected. What I cannot do, because of the comprehensive spending review, to which we were committed prior to the election, is say what will happen in subsequent years.
Lord Pilkington of Oxenford: I am sorry to be an awful bore at this time of night. It may be that my mathematics are wrong. At the moment, universities receive from the state 100 per cent. The Government have now decided that 25 per cent. of that 100 per cent. will be paid by students. It seems to me that the noble Baroness is saying that universities will receive almost the same, except that 25 per cent. comes from the student and 75 per cent. comes from the state. I therefore find it hard to understand where the extra money comes from. If the state pays 100 per cent. and the student pays 25 per cent., there is 125 per cent. That is marvellous; the university has 25 per cent. extra. If the state only pays 75 per cent. and the student pays 25 per cent., the university only receives the same amount as before.
Baroness Blackstone: I think the noble Lord, Lord Pilkington, is perhaps a little unfamiliar with the system of providing financial support for universities. At present it is done by a complex system of grant paid by the Department for Education and Employment to the Higher Education Funding Council for England and by the Scottish Education Department, and so on, for the other parts of the UK, and by fees that are provided through the local education authorities. The system of supporting universities is much more complex than the noble Lord implies. The fee arrangements will be changed, so the percentages that he and his noble friend keep giving have absolutely no meaning. The scheme does not work in that way.
Lord Pilkington of Oxenford: Will the noble Baroness, who understands the scheme, tell us in words of one syllable where the extra money will come from? That is all I want to hear.
Baroness Blackstone: The extra money will come from the decision to charge students tuition fees. Extra money will also come from providing students with their loans on a termly basis rather than paying the whole amount up-front at the beginning of the year. During 1998–99 that will provide additional resources which will go direct to the universities.
Lord Wallace of Saltaire: I too listened carefully to what the Minister said and shall want to read it. A number of things worried me. The reserve power question leaves a lot to be desired and I still do not understand the rationale for it. If it is a reserve power which is not to be used except in the gravest cases, we are in a rather different situation.
Secondly, if I understood correctly, the Minister said that the universities will continue to have full control over their income and expenditure. It seems to me that
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the purpose of this provision is to ensure that the universities will not have full control over their income. I have taught in German and French universities and am very conscious of the fact that allowing universities to expand their number of students while holding down their income leads to a rapid deterioration in quality and a rapid expansion in the number of students.
The Minister spoke about efficiency gains. I met my efficiency gains this morning in two or three extra students in the graduate seminars I am teaching. That is what efficiency gains mean. We all recognise that quality in British universities is now beginning to go down and is likely to go down further if universities do not increase their income. The Government are now saying that they want reserve powers to prevent universities in extremis from increasing their income.
Lord Renfrew of Kaimsthorn: At an earlier stage the noble Lord, Lord Wallace of Saltaire, referred to a letter from the Vice-Chancellor of the University of Birmingham. The noble Lords, Lord Quirk and Lord Walton of Detchant, who were unable to stay until this stage of this evening's Committee, asked me to express their support for the sentiments contained in that letter, although I perfectly understand that they did not have the benefit of hearing the Minister's reply on that point. I do not want to prolong the debate on that issue.
I wish to emphasise that I believe that the debate on this point has made clear that there is evidently great unease throughout the university world and beyond. As we have already heard, not only the Committee of Vice-Chancellors and Principals but all university teachers, or almost so, and most students are deeply concerned about some of the issues which have been debated. There is particular concern about the two matters which have surfaced in the past 15 minutes of our discussions: the issues of academic freedom and of funding and whether such benefits as will accrue from the imposition of tuition fees will really be felt by the universities and bring about the improvements that are hoped for.
The noble Baroness, in her earlier speech on this point, made some helpful remarks which we shall want to reflect upon. I think it appropriate that I should repeat in Committee this sentiment, widely felt, of the very deep unease which surrounds this clause and, indeed, the Bill as a whole.
Midnight
The Earl of Limerick: I listened carefully to the reply of the Minister to the speech of the noble Earl, Lord Russell. It can be summarised as, "You have nothing to worry about. Trust us." It was the same answer, in essence, as that given by the noble Baroness to the noble Earl on Amendment No. 112. In her response to that amendment the noble Baroness said that the Government would be looking to introduce its own amendment at a later stage. It is only right to signal that many of us will be looking very carefully at the text of that amendment when it comes forward.
Baroness Blackstone: Perhaps I can make one point to the noble Earl, before he intervenes. He was

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suggesting that universities will have no control over their income as a result of this clause. Nothing could be further from the truth. Universities will still set their own fee levels for all kinds of groups of students: part-time students, postgraduate students, except PGCE students, overseas students. They will also be able to raise income from research grants and contracts and consultancy fees.
The noble Lord, Lord Wallace of Saltaire, referred to efficiency gains. He might have the good grace to recognise that, as a result of the new arrangements that the new Government are making, the efficiency gain required from universities next year will be I per cent, which is much lower than it would have been under the arrangements and projections of the previous government. It is, in fact, exactly what the Dearing Committee recommended should be required of universities.
I shall try to reassure the noble Lord. He made the suggestion that the reserve power might be widely and frequently used. That was implicit in what he said. I said earlier that the Government hope that they will never have to use this reserve power. We keep hearing that universities do not intend to charge top-up fees. The noble Baroness, Lady Perry, made that point earlier. If it is the case that they do not intend to charge top-up fees for home and EU undergraduates, the power will never be used. It is a reserve power.
I remind the noble Lord that the universities are in receipt of £3.5 billion worth of public money. That is a great deal of the taxpayers' money. In return for that enormous receipt of public money they have to accept that when a government have made it clear to both parents and students that they will not be expected to pay more than is set out in these new arrangements, we have some obligation to both parents and students.
I move on to what the noble Lord, Lord Renfrew of Kaimsthorn, was saying. I believe that he is not living in the real world if he is suggesting that students are concerned about this clause. On the contrary, the Government have been criticised by the NUS for not going far enough. They did not want a reserve power; they wanted us to take an actual power in relation to top-up fees.
I also do not believe that the noble Lord is living in the real world if he thinks that university teachers as a whole are concerned about this clause. Again, on the contrary, many university teachers believe it is vital that entry to universities should continue to be open to all students, regardless of their families' income and that none of them should start choosing courses according to what is charged.
Finally, I refer to my old colleagues in the CVCP. Again, there are divisions in the CVCP. I readily accept that some vice-chancellors do not like this clause. There are many other vice-chancellors who believe that it is absolutely essential. When we are discussing something like this, we ought to be accurate when we are reporting the views of people. I accept that there are divisions, and I know that the noble Lord is absolutely right in saying that some people are concerned. But he was
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suggesting that there was universal condemnation of the use of the provision on the face of the Bill, and that simply is not true.
Baroness Perry of Southwark: Before the noble Baroness sits down, perhaps I may ask whether she will accept this. While there is widespread acceptance of the undesirability of top-up fees and a great deal of sympathy with the Government's wish to find ways to prevent universities charging such fees, I sense that she, like many of us on this side and like many members of the CVCP, would wish to find a sanction that did not run the risk of infringing a university's freedom. Is it not, even now, worth testing the ingenuity of her officials to find another form of sanction against universities topping up their fees other than the one suggested in Clause 18?
Earl Russell: The Minister has tried very hard indeed. I thank her warmly for that. But the gulf between us is still extremely wide. She tells us that in the additional money she has offered the condemned man a hearty breakfast. I tell her that 1 am afraid it is only a continental breakfast. She really does not have any idea—indeed, the Government as a whole do not have any idea—how severe the shortage of funding actually is in relation to the job we are asked to do. If she understood that, she would not be talking about "efficiency gains".
I grant that it is smaller than it might otherwise have been, and I am thankful for being allowed that small mercy. It is a bit like the mercy of Polyphemus to Odysseus of being allowed to be the last to be devoured. But we really cannot carry on like this. The Minister says that if we do not want to charge top-up fees, what is the fuss about? I do not want to run my car on alcohol, though I believe technically it may be done. But that is contingent on my being able to obtain a supply of petrol. Were I to run out of petrol in the middle of the desert and find that the local garage could not sell me any, I might well attempt to run my car on alcohol. It would not prove that I wished to do so. If I reserve a power to do so, it proves only that I do not trust the garages in the desert.
That is very much the way I feel about government funding. I do not trust, and I believe most of my colleagues do not trust, the Government to fund universities to a level which makes it possible for us to do our job at all. Though the Minister is right that I and many of my colleagues want admission to remain free and by merit only, we cannot do that unless the Government do their part also. That is not under the university's control. We do not know whether the Government will do it.
The Minister says that we should also consider the interests of the student. Of course we do. We on these Benches are deeply aware of the force of that point, myself not least. But the interest of the student is two-fold. It is in having only a manageable amount to pay, and in receiving value for money for what he or she will be paying. When students are being asked to pay for higher education, they are entitled to be sure

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that what they are getting deserves the name of higher education. That is now very much in doubt. If things get any worse, it becomes impossible.
We are not yet within shouting distance of each other. I do not want to begin shouting at this time of the night. I shall withdraw my Motion to oppose the Question that Clause 18 stand part of the Bill. But I hope that when we return at Report stage, it may be possible to begin a dialogue. It is just about our last chance.
Clause 18, as amended, agreed to.
Lord Tope Lord Tope moved Amendment no. 114:
After Clause 18, insert the following new clause—
TUITION FEES: PAYMENT BY STUDENTS
(" . In exercising any powers under this Part of this Act, the Secretary of State shall ensure that fees in respect of tuition for any course of higher or further education at a publicly-funded institution shall only be payable by the student concerned where a grant in the same amount has been made available for that purpose to that student.").
The noble Lord said: It is unfortunate in the extreme that we come to the first amendment which is clearly and specifically about tuition fees at some time after midnight on the last night of the parliamentary week; an issue which is perhaps of the greatest concern to the greatest number of people, many of whom were listening to this earlier in the day.
My noble friend, Baroness Maddock, promised your Lordships that I would explain in full the Liberal Democrat proposals for student funding rather than deal with it piecemeal as we moved successive amendments. I could explain that it is a coherent package, but your Lordships may be relieved to know that I do not intend to do that at ten minutes past midnight on the last night of the parliamentary week.
All I want to do at this stage is to say that the Liberal Democrats remain unequivocally opposed to tuition fees. Our first objective is to remove the provision for tuition fees from the Bill. However, if tuition fees are to be charged, and we feel that they should not be—and that is the purpose of this amendment—we will expect the Government to pay the student the equivalent sum, thus removing any additional cost to the student or their parents.
One of the effects of this will be that through that method the universities will receive a little more money than they currently receive through the LEA system. If all else fails—and this is a last resort—we will be seeking to ensure that all revenue from fees is hypothecated back to higher education and not to the tertiary sector as a whole.
I do not intend to pursue this further at this time of night. I know that the Minister needs no reassurance from me that we will pursue it most vigorously at Report stage whatever time of day or night we reach that point. I beg to move.
Lord Whitty: My Lords, despite the lateness of the hour one has to admire the ambition of the Liberal Benches. This clause, as drafted, would not only prevent the introduction of tuition fees but also, in effect, extend
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free education to a whole range of people who have never previously had it. There are objections to that both on grounds of principle and cost. It would extend it to everybody not only in higher education but also in further education, irrespective of the course they are on, irrespective of income and, as it stands, irrespective of whether they live here or abroad. The objections in principle are clear. It would benefit far more greatly those of higher income than the lower income groups we are attempting to attract into universities.
The objections on cost are colossal. Even if we extended the same funding arrangements that used to exist it would cost an additional £4 billion per year. If we add on the increased participation since then and the additional categories of students that would be covered by this clause, we are talking of a minimum of £6 billion, probably more—the equivalent of at least a 3p increase in taxation. The next line in my notes says, "The only other option would be fewer resources for higher education". But unfortunately there is not £6 billion of state resources to take out of higher education.
This is not a feasible amendment. A nice world though it may portray, it is not feasible in terms of cost; but nor is it sensible in terms of equity. The noble Lord says he will return to this matter. I trust a slightly less ambitious amendment may come before us, but even so I regret that we would have to object, and oppose the principle that this amendment seeks to introduce.
Lord Tope: My Lords, I am grateful to the noble Lord for his reply and his clearly more limited ambitions than the Liberal Democrats have for education. I prefaced all my remarks by making it clear that we prefer that neither this amendment, nor any similar amendment, was necessary because we oppose tuition fees, and that will remain our first objective. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.15 a.m.
Baroness Blatch Baroness Blatch moved Amendment No. 115:
After Clause 18, insert the following new clause—
RECEIPT AND DISPOSAL OF FEES
(" .—( 1 ) The governing body of a relevant higher education institution shall be entitled to receive, and to dispose of as it sees fit, the full amount of any fees or grants in respect of fees payable to it in respect of tuition by or on behalf of any student.
This subsection is without prejudice to any arrangements under which the governing body proposes, with the consent of the Higher Education Funding Council, to pay the whole or part of any fees or grants in respect of fees to any connected institution, as defined in section 65(3B) of the 1992 Act.
(2) In this section, "relevant higher education institution" means an institution providing courses of higher education, where "higher education" has the same meaning as in the Education Reform Act 1988.").
The noble Baroness said: I shall be brief, but I feel as strongly about this amendment as the noble Lord, Lord Tope, felt about the previous amendment. There are two forms of saving to the Government. First, there is to be a 75-25 split between those partners who pay tuition fees—75 per cent. state and 25 per cent. student.

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I also understand that, with the abolition of the maintenance grant, there is to he a considerable saving to the Government. I should be grateful if the noble Baroness could put a figure on that.
If the average cost of tuition for students in this country, which is wholly met at the moment by the state. albeit that it goes round in a convoluted way through the LEA, is to remain at the same level, the money charged to students, which is equal to 25 per cent. of the average cost, is additional money. If it is to be a 75-25 split, it is not additional money. It would be very helpful at some stage to get a proper clarification of that.
The purpose of the amendment is to ensure that income raised from fees from students, and the families of students, moving into higher education should reside exclusively in higher education. It should be received by higher education and used for higher education. In a number of the answers we have had in previous debates and at earlier stages of the Bill the noble Baroness has coupled further education with higher education in terms of the spending of income raised. I would not want to argue with the noble Baroness's aspiration that if more money can be found it should be spent in further education. Indeed, I have been a great supporter of further education. It is the rung in the ladder that is very important in terms of young people making their way into the world of work and, indeed, making their way into the world of higher education. But if the money for higher education is to be raised from students and their families, unless it is spent in higher education it is a tax on those students, raising money to be spent elsewhere. That would be quite wrong.
At some point I should like clarification as to whether the money raised by tuition fees is additional; and if it is additional, it means that 100 per cent. of the cost of tuition will continue to he met by the state and the 25 per cent. contribution will be additional to that. How much money will be raised from maintenance? Where will it accrue? Will it accrue to the Treasury or will it accrue to the DfEE? The figure will be some billions of pounds and it will accrue somewhere in Whitehall. It would be helpful to know where and for what purpose it will be spent. I beg to move.
Lord Tope: I rise to support what the noble Baroness, Lady Blatch, said and to speak specifically, in view of the hour, to Amendment No. 116, which seeks very much the same objective. The amendment has two purposes. First, it is designed to ensure that revenues collected as a result of student tuition fees are retained by the institutions for the sole purpose of the provision of higher education courses; and, secondly, it requires that those revenues should be disregarded in the calculation of grant made available to the funding councils and thus constitute additional resources for higher education institutions. We are at one on this point. I agree with the noble Baroness, Lady Blatch, that, however it is achieved, it is a very important point.
There is no assurance anywhere in the Bill that money raised by the tuition fee contributions of students will remain within the higher education sector. This point has been pressed time and again. As the noble Baroness has just said, we are still not clear about that.
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There is a fear that it will provide the basis for commensurate reductions in money allocated to the funding councils for higher education. Consequently, there are fears that the imposition of tuition fees will not result in a real increase in resources for higher education institutions. That has been mentioned previously in debates on this Bill and I am certain that we shall return to it. I support Amendment No. 115 and propose Amendment No. 116. I am not too anxious how we achieve the result, as long as we do so.
Baroness Perry of Southwark: My name is also down to Amendment No. 115 and I support what my noble friend Lady Blatch said. As I understand it from a reply given in the other place by the Minister's colleague, Dr. Howells, for 1998–99, the introduction of private contributions to tuition fees for higher education will mean an extra £125 million for higher education, plus £4 million for sub-degree courses mainly in FE. In addition, some £15 million of the higher education savings have to be allocated to the FE sector. Much as I support further education —I have taught in FE and have the greatest respect for it—I do not see why students in higher education should be asked to contribute to the education of their younger brothers and sisters, or whatever, in further education.
This is not a tuition fee. It is a tax. It is a poll tax on any student entering a university, requiring that student to pay £1,000 which then goes back into the Treasury maw. At least for 1998–99 we have some promise that it will go back into further and higher education but, beyond that, we are not promised anything—nor are the students, yet for a student £1,000 is a lot to pay in additional tax.
Earl Russell: Perhaps I may add one point without detaining the Committee. I am beginning to understand the Minister's difficulties about the additional money. Her problem essentially arises from parliamentary sovereignty. She seems to be saying that she cannot commit future parliaments and future Chancellors of the Exchequer. I understand that, which is why the element of hypothecation, which is included in both amendments, may turn out to be vital. If I know anything about Whitehall theology, I suspect that somewhere in the margin of the Minister's briefing are written the words "Treasury Minute 1919". I am aware that the Treasury Minute of 1919 on hypothecation is regarded in Whitehall as holy writ, but I do not think that it applies to these amendments. As envisaged, I can see very few virtues in the tuition fee, but this is one: it is not actually government revenue, it is a fee paid to the university; and if it is not government revenue it is entirely outside the scope of the Treasury Minute. I hope that that thought might open a few Whitehall minds.
The Earl of Limerick: It is very late, but one has to take one's opportunities. The purpose of the first subsection of Amendment No. 115 is clear: it is to ensure that governing bodies shall be entitled to receive the full amount of any fees or grants in respect of fees payable to the university in respect of tuition by or on behalf of any student.

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Since Second Reading, I have taken quite some time over this and I hope that I now understand the way the system works. The amendment would mean that the two parts of the £1,000 (whether paid by the student—lucky the universities that receive it in full and upfront from the students!—or, on means-testing, by the local authority) will remain with the university, but that is not what is going to happen. It will happen in the first instance but then, as I understand it, the local authorities will put in their bill to the DfEE for the amount they have had to pay by way of subvention to the students. So the £1,000 in its entirety, however it is divided between the two elements, remains with the university. But then comes the kick in the tail; namely, the LEAs will claim back the amount they have contributed from the Department for Education, which presumably will take that into account in the amount that it decides to devolve to the funding council.
The estimated sum is £130 million of extra money. I use the term "extra" advisedly and not the term "new" money, because the new money will be a greater sum. The impact of that will be twofold. First, it will impact differently on different universities. Some of them—lucky old things—will have 100 per cent. of students who can pay their £1,000 and not miss it, if such there be. However, other institutions, like mine, will have few people who will do other than apply for means-testing. Therefore, the £1,000 sum will impact differently on different universities. I hope to hear that that will be taken into account through the funding council so that one is not penalised in financial terms for teaching many means-tested students, when a good part of the thrust of this Bill is to get more such students into higher education. I hope I can take that assurance for granted, but I should obviously like to hear it.
My other point is really a budgetary point; namely, that governing bodies are responsible for the solvency of their institutions, and that includes budgeting which they require on their own account. Even if they did not require it on their own account, it would be required by the funding council. At the moment we are conducting that budgeting on a series of assumptions of which we are quite uncertain. Our budgets rest on shaky and possibly quite unsound ground. What is lacking—perhaps this could be addressed in the near future—is any form of funding model, whether that be in the form of examples or parameters. It would be an enormous help to the sector if there were some basis on which institutions could test their assumptions against a model and begin to see how it might affect them, because they are having to make some fairly fundamental plans about what they do in the near future. Behind that lies a point of public accountability as regards the institutions adopting prudent plans. If that could be arranged it would take us forward. I should be happy to be involved in that.
Baroness Blackstone: I am afraid I shall have to disappoint the noble Lord and the noble Baroness with regard to their amendments. They are unnecessary. The money which students pay directly to universities and colleges in tuition fees will in any case remain with the
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institutions. So, too, will the contributions that local authorities pay on students' behalf, if the assessed income of students and their families means that they do not have to pay all or any of the fee.
I can reassure the noble Earl, Lord Limerick. Of course the institution, like the one whose governing body he chairs, which has many such students, will not in any way be worse off than the institution that has many students who are paying the full fee. There will be no problem in that respect. It will be for universities and colleges themselves to decide on how to use these resources. Amendment No. 115 in the name of the noble Baroness, Lady Blatch, is therefore unnecessary, as is the first part of Amendment No. 116 in the name of the noble Lord, Lord Tope.
The proposal in the second part of Amendment No. 116 to disregard fee income for the purposes of calculating grant for the higher education funding councils, on the other hand, goes a little too far. A large proportion of fee income will continue to be paid from public funds. Thus, while universities and colleges will receive £1,000 for every home or EU full-time undergraduate new entrant in autumn 1998—either from students, their families or local authorities—not all of this will be new money, as I think the noble Earl, Lord Limerick, was aware. Local authorities have long paid tuition fees on students' behalf to universities and colleges and will continue to do so. I should explain to the noble Baroness, Lady Blatch, that those fees do not necessarily or normally cover the whole cost of tuition. That is covered by grant, which is paid through the Higher Education Funding Council.
We estimate that the contribution from public funds for fees in 1998–99 will be just over £1 billion in England alone. We clearly cannot leave such a very large sum of taxpayers' money out of account when calculating the other channel of public funds for higher education, which is the grant to HEFC.
Nevertheless, I would like to give some assurance about funding for higher education. I did so as regards an earlier amendment. In future the new element will be the student's own contribution to fees. As I said before, we estimate that these will amount to £130 million in England in 1998–99 after allowance has been made for costs of some 5 per cent. for collection and default. As I have also said, we have already announced a package of measures allowing an extra £165 million to be spent in higher education in 1998–99.
I now turn to the point about further education raised by the noble Baroness. I do not believe it right to suggest that we have robbed higher education to pay for further education. The funding package we have announced for higher education for next year means that institutions of higher education will fully benefit from the money derived from student contributions to fees. The sector as a whole will receive an increase in funding, including the student support access package, greater than the amount that we expect will be raised by the introduction of tuition fees.
The bulk of the additional funds for further education next year have come from savings brought about by a drop in unemployment and not from this particular

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source. Incidentally, the fact that we have been able to make savings derived from the drop in unemployment reflects the success of our policies.
I make no apologies for putting extra money into further education next year. Our initial response to the Dearing Report made clear that the savings from the new funding arrangements will be used to improve quality, standards and opportunities for all in further and higher education.
I return to the specific amendments before us. As I explained earlier, it would be wrong to leave out of the reckoning fee income for the purposes of calculating grant for the higher education funding councils. All public funds must be taken into account when assessing the needs of higher education. Given the assurances that I have just made and that all fees paid by or on behalf of students will remain with higher education institutions, I hope that the noble Lord and the noble Baroness will withdraw their amendments.
12.30 a.m.
The Earl of Limerick: I hope that the noble Baroness will forgive me. I believe that she partly misunderstood my point. I recognised and explicitly said that I understood that £1,000 per student will come to the university in whatever mix between students and local education authorities. That is the direct result. I was talking about the indirect result. My local authorities will have a much bigger recoupment claim on the DfEE than the local authorities from universities with a predominance of rich students. In consequence, would there be a knock-on effect in terms of what the Higher Education Funding Council might allocate to universities in such different positions?
Baroness Blackstone: Of course not. The grant that the noble Earl's institution receives would not be lower simply because there needed to be more provided from public funds to make up for the lower level of tuition fee income that the noble Earl's institution could obtain.
Baroness Blatch: I take it from that that the local authority would be the body to be compensated? Let us take a very simple example. If 50 per cent. of the students who come through my noble friend's university, which is university A, are students for whom the whole £1,000 is met by the local authority and 50 per cent. pay £1,000 and in university B all the students pay £1,000 themselves, with no call on local authority funds, will the local authority that has to meet 50 per cent. of the student's £1,000 be compensated for the extra amount of money it has to pay out to the university?
Baroness Blackstone: Yes, of course. Just as at present the local authority fee contribution to universities comes direct from the Department for Education and Employment, this will continue. No local education authority will be worse off as a result of having to make up the difference because the money
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comes direct from central government and is paid simply through the local education authorities. I hope that is helpful.
Baroness Blatch: I knew it was only a mechanism and that the money went round in that way. It is helpful to have it confirmed that that will continue to be the case.
Perhaps I may raise another question. I have read so much background to the Bill from different sources—newspapers, media interviews and so forth—and also noted Kim Howells' point. He specifically spoke about the sum of money that would come in from tuition fees and broke it up into chunks, some of which would go into further education and some into higher education. That is not consistent with the answer given by the noble Baroness. There is confusion about whether this money will remain exclusively with higher education. I also read somewhere that it is merely a mechanism and that the £1,000 per student, in whatever mix, will go to the university but there will be a clawback. It will be taken back and reallocated centrally in the way that Kim Howells has set out in his reply. I do not know whether the noble Baroness will be able to enlighten the Committee. Can she confirm that there will not be a clawback and that the £1,000 will reside with the university or college where the student is taking up a place?
My next question is critical. Will there be any adjustment? We have been told that students who do not make the contribution this year will make a contribution to the university equal to 25 per cent. of the average cost of tuition across the country. Is that to be a 75–25 split between that which is met by the state, whether LEA or government, and that which is met by the student—which represents no extra money because it still makes up the whole cost of tuition fees—or will the Government continue to meet the equivalent of the 100 per cent. cost of tuition fees for all students? Will they contribute a further 25 per cent., which will constitute extra money that remains with the universities? It would be helpful to have an answer to that.
I shall seek to press this amendment at some stage. I know that it has a great deal of support. I shall check the technicalities and read what the noble Baroness said. This is probably the last word for tonight.
I should like to take this opportunity to apologise most profusely for espying strangers in the Chamber earlier. I understand that that was wholly against the rules of the House. I also apologise most profusely to the strangers whom I espied for any embarrassment that I may have caused them.
I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
[Amendment No.116 not moved.]
Clause 20 [Interpretation of Chapter I.]:
[Amendment No.117 not moved.]
Clause 20 agreed to.
Clause 21 [Grants and loans: Scotland]:

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[Amendments Nos.118 and 119 not moved.]
Clause 21 agreed to.
Clause 22 [Imposition of conditions as to fees at further and higher education institutions in Scotland]:
Baroness Blackstone Baroness Blackstone moved Amendment No.120:
Page 18, line 17, after ("further") insert ("financial").
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendments Nos.121 to 126:
Page 18, line 33, leave out ("specified").
Page 18, line 34, after ("persons") insert ("prescribed by regulations").
Page 18, line 34, leave out ("any specified matters in connection with").
Page 18, line 35, leave out ("specified description") and insert ("description so prescribed").
Page 18, line 36, after ("may") insert (", in relation to any such class of persons attending courses of any such description,").
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Page 18, line 37, at end insert—
("( ) No condition under subsection (3B) above shall apply in relation to any fees which are payable, in accordance with regulations under section 1 of the Education (Fees and Awards) Act 1983 (fees at universities and further education establishments), by students other than those falling within any class of persons prescribed by such regulations for the purposes of subsection (I) or (2) of that section (persons connected with the United Kingdom etc.).").
On Question, amendments agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 127:
Page 18, line 41, after ("further") insert ("financial").
On Question, amendment agreed to.
[Amendment No. 128 not moved.]
Clause 22, as amended, agreed to.
House resumed.
House adjourned at twenty minutes before one o'clock.

Official Report of the Grand Committee on the National Lottery Bill [H.L.]
Thursday, 22nd January 1998.
The Committee met at four of the clock.
[The Deputy Chairman of Committees (Lord Strabolgi) in the Chair.]
The Deputy Chairman of Committees (Lord Strabolgi): Clause 5, Amendment No. 19: the noble Lord, Lord Skidelsky.
Lord Rees: I hope I may be permitted to speak briefly before my noble friend moves this amendment. On Monday we were debating this very same clause, Clause 5, and I ventured to intervene. I made the proposition that if the clause were passed unamended—and I had drawn attention to the anxieties that I and other people in Wales felt about it—it was quite possible that Wales would have no maritime, no industrial and maybe even no mining museum. The noble Lord, Lord McIntosh, was kind enough to say that he would write to me on this point—I hope, to reassure us. In fact, in Hansard it is reported at column CWH 40 on Monday, 19th January, that I said that not just Wales but every part of the United Kingdom would be deprived of museums of this character.
First, because I feel that the record should be corrected and, secondly, because I do not want the noble Lord to have to go to the trouble of writing to me on the basis that every part of the United Kingdom would be so deprived, I hope that it may be possible to correct that error, or at any rate to put this on the record. I fully understand the difficulties of the Hansard reporters on Monday evening; indeed, it was drawn to the attention of the Committee that they found it rather difficult to hear people speaking from the back row and I had modestly on that occasion spoken from the back row, so I quite understand how this arose. However, I hope that noble Lords will feel able to allow me to have this corrected.
Lord McIntosh of Haringey: I shall be glad to send a shorter letter to the noble Lord.
Clause 5 [The new good cause and the re-allocation of lottery money]:
Lord Skidelsky Lord Skidelsky moved Amendment No. 19:
Page 8, line 12, leave out subsection (9).
The noble Lord said: The purpose of this amendment is to prevent the retrospective re-allocation of lottery money to the new good cause. On 1st October last year the Secretary of State announced that the money would start being set aside for the new good cause and NESTA from 14th October. I accept that it is desirable that the new opportunities fund should be able to start work as soon as possible, but that does not justify backdating its
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cheque to 14th October. When the Minister made his announcement he did not have the power to do that. That power was not given by the 1993 Act because the new good cause did not exist; it was not in that Act. In our submission, he has had no legal basis for depriving the existing distributors of the use of National Lottery money since 14th October.
These are not negligible sums. Back-of-envelope calculations suggest that their loss has been running at about £3 million a week since October, and by the time the Bill becomes law he will have robbed arts, heritage and sport of over £50 million.
Clause 5(9) seeks to make this robbery retrospectively legal. I can see why the Government need to do this, but there is no reason why we should aid and abet them in their felony. I beg to move.
Lord Redesdale: I rise to support this amendment. This is something that I spoke about at Second Reading. Indeed, I should like to come back to what the Minister said at Second Reading: he said that he was able to announce that the Government could do even better. They had taken steps to ensure that the money from the lottery would flow into the new opportunities fund ahead of legislation.
I would not go so far as to say that it is a felony to do this. But it is highly regrettable that the Government have decided to adopt this position. The Minister gave an assurance to the Committee that there was a precedent. But exactly what precedent could there be, given that this is the first National Lottery Bill that has come before the Chamber? I am worried about future legislation on the lottery because, as I said on a previous occasion, I do not believe this will be the final piece of legislation on the lottery. What can we hope for from the Government in the future?
Lord Birkett: I confess I have considerable sympathy with this amendment. The original intention was to make the arts, sport, heritage and the environment the beneficiaries of the lottery. The Committee may recall that as long ago as 1988 when we had the first debate on the subject in the Chamber, long before a lottery was even considered to be a good thing by the Government, the lottery was established to benefit those causes. The thinking behind that was that education and health, although absolutely vital to the nation, should be funded by the taxes of this country as they were too essential to be at the mercy of a lottery, however successful and well-heeled that lottery might be. I hope therefore that the noble Lord, Lord McIntosh, will be able to reassure the Committee that it is not the Government's intention to spread the benefits of the lottery wider than those causes it will properly be able to support; namely, the arts, sport and the environment, with an allowance for charities on the basis that they may suffer as a result of the lottery. I hope the noble Lord, Lord McIntosh, will reassure us that those are still the main objectives of the lottery, and that the Government do not envisage any reversal of that principle.
Lord Redesdale: I rise to make a point that I have neglected. I seek guidance from the Minister as I do not wish to make allegations before hearing his reply. The

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Minister said at Second Reading that allegations that it was illegal to take the step we are discussing were completely unfounded. Can he tell me how—without the appropriate legislation—it is not illegal? I would hate to think that I had made an unfounded allegation.
Lord McIntosh of Haringey: We have certainly started off this Session of the Committee with a bang—the Government are being accused of robbery! The noble Lord, Lord Birkett, whom we are glad to see among us, is raising issues of additionality which we discussed at considerable length in his absence on Monday. I have no objection to that because I am not in any way afraid of the arguments. Before I discuss the specific amendment let me say to him that at that time it was indeed the intention of the government and of Parliament that the arts, sport, heritage, charities and the millennium should be the good causes to benefit from the lottery. However, there is nothing sacred about that. As I sought to argue—without for a moment convincing the noble Lord, Lord Skidelsky—it is a fallacy to think that the arts, sport, heritage, charities and the millennium are wholly, of their nature, additional to normal or core government spending, whereas health, education and the environment are not. In all of these sectors of activity there are some elements which are core expenditure—I hope at least that the noble Lord, Lord Birkett, with all his experience will agree that this is true of the arts—and which ought to be core government expenditure. In 1993 the then government opened up additional possibilities with regard to lottery money. That is exactly what we are doing with education, health and the environment now.
I turn to the issue of retrospection, which is at the heart of the amendment tabled by the noble Lord, Lord Skidelsky. He has said that this subsection is objectionable because it is retrospective, that it is unfair and that it is illegal. Let me give a little of the history of how this provision has come about. We want to set up the new opportunities fund and NESTA as soon as possible so that the country can benefit from their work. We also want to ensure that the existing good cause distributors can plan sensibly in their own sectors.
It is now nearly 10 months since we announced our intention, before the election, to create a new good cause and to divert £1 billion into it and into NESTA by 2001. We said—we have stuck to this—that it would be done without undermining the existing distributors' original expectations of an income of £1.8 billion by the end of the licence period. Therefore, as soon as we were elected—not on 1st October, but immediately after the election—we began to discuss with the distributors how best to effect this change.
We had two options. We could have waited for the passage of legislation and then adjusted the percentages so that the new good cause would receive £1 billion in the time remaining between Royal Assent and 2001. That would have meant making a considerable reduction in the percentage shares and would have created a period of unnecessary uncertainty, blighting the ability to plan. Alternatively, we could have agreed to make the necessary adjustments over a longer period of time,
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allowing the distributors to adapt and plan sensibly. It was no surprise that the distributors preferred the latter to the former.
The Secretary of State therefore announced on 1st October that, as agreed with the distributors, as from 14th October they should plan on a reduced percentage share, as is set out in the Bill. Working with the distributors we have, therefore, set up shadow accounts for their shares of the National Lottery Distribution Fund in line with this agreement. There is no question that we are acting unlawfully. The funds flowing into the NLDF are being properly allocated to each good cause in line with the provisions of the existing legislation, while the distributors are planning on the reduced levels tracked in the shadow accounts. The actual reallocation of funds will take place only if the Bill is passed.
The Secretary of State's announcement in October also informed lottery players of the change, so that they would know where their money would be going. Therefore, I do not accept the arguments put forward in support of this amendment.
I have been asked specifically about retrospective legislation. There is some misunderstanding here. I have not claimed that the original Act of 1993 was retrospective legislation. Clearly, it set up a new lottery which did not already exist. There was no occasion for retrospective legislation and I am not claiming that what we are doing now had any precedent in the 1993 Act. I am, however, saying that there are many benign examples of retrospective legislation. I shall gladly write to the noble Lord, Lord Redesdale, on that point, and place a copy in the Library between now and Report stage.
May I offer two or three examples? The Recreational Charities Act 1958 was overturned by the Judicial Committee of your Lordship's House, but that Act had restored retrospectively to recreational charities the tax benefits to which they had been accustomed. In fact, I do not have two or three examples, and shall cite only that one in the short time available. However, there clearly are many examples of provisions which are made where, in order to secure continuity of provision, whether in taxation or in other areas, the legislation allows for some provisions of that Act to come into force when first announced, rather than when the Act is passed. That is true every single year for the Finance Act, because the provisions in the Budget sometimes come into effect at six o'clock or at midnight on Budget day, but they are not authorised by legislation until the Finance Act is passed.
Lord Rees: I hope the noble Lord will allow me to correct him on one point. Such provisions are, of course, authorised by legislation under the Provisional Collection of Taxes Act. That, if I may be permitted to say so, is a bad precedent.
4.15 p.m.
Lord McIntosh of Haringey: I accept the correction of the noble Lord, who served in the Treasury with great distinction, and it will teach me not to give examples off the top of my head. The point of all of this is that

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the effect on the distributors' income is the same, whether or not the percentages are changed after Royal Assent and whether or not a shadow account is set up on 14th October. There is no distinction in the end. Therefore, the word "robbery" is quite inappropriate. The distinction is whether it is done in a way which allows the distributors to undertake sensible planning on the basis of what they know will be the resources available to them, rather than having to do things at the end of the day. In the end not a single penny more goes to or from any of the distributors whether or not the shadow accounts were set up on 14th October.
Lord Redesdale: I apologise for intervening. I am not a finance expert, and I think this is an area that would do well to see the light of day. May I ask whether there is any precedent for these shadow funds? I realise that such funds can be set up only rarely.
Lord McIntosh of Haringey: I am not aware of any comparable examples because there has not been any subsequent lottery legislation in the past. This is clearly a matter on which I need to take advice, and I shall need to reply to the noble Lord before the next stage.
Lord Skidelsky: Can the noble Lord confirm that the money deposited in the shadow accounts of the new opportunities fund since 14th October has not been available to the other distributors? Is it not money that has been subtracted from what they would otherwise have received?
Lord McIntosh of Haringey: They have agreed that this money should be put in a shadow account in order that there should be continuity of provision and in order that the new opportunities fund should be able to start its activities as soon as possible. If they had wanted to spend, they had a long period of notice—nearly 10 months—of the fact that we were going to restrict their funds to that which they had expected when the lottery started, and when the Lottery Act was passed in 1993. They have had a very clear view of their future commitments. As far as I know, no commitments have been made which would use the money which has been put into the shadow accounts. Therefore, they have not lost the ability to make any particular distribution of their funds.
Lord Skidelsky: The fact that someone agrees to a robbery does not make it any less of a robbery. It does not alter the fact that, with their agreement or not, the distributors have had less money to plan for as a result of the announcement of the setting up of the shadow account of the new opportunities fund. As I have hinted, they have had some £60 million less than they would have had. That seems to me, on the face of it, to contradict the Minister's assertion that the other causes would get not a penny less than they would otherwise have received. I just do not see how he reconciles those two facts.
Lord Montague of Oxford: I wonder if I may comment on how the distribution system works. At our last Sitting we debated the fact that there is between £3 billion and £4 billion in surplus doing nothing, and
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we considered what could be done to release that money. So, there is no shortage of liquidity. What we have here is notional accounting. That is what the Minister is referring to when he says—that the good causes will not have less money than was forecast. They have not had less money than was forecast, but we all know that the actual amount varies depending on whether there is a roll-over and on other factors which influence the amount the public spend on the lottery.
Lord McIntosh of Haringey: Perhaps I may reply with the help of my noble friend to the noble Lord, Lord Skidelsky, before the next point is made. He says, "I am not an expert on the Theft Act", but he also says, "robbery is no less robbery if it is agreed to". I rather think that, since it is his analogy and not mine, robbery is not robbery if it is agreed to, but I do not hold either of us responsible for the analogy to which he has committed himself. However, the point is that, if we had not set the date of 14th October 1997, we would have had to set up the new fund from the date of Royal Assent and the percentages would have had to be different in the Act. Therefore, knowing that there was, shall we say, a high probability that Parliament would pass the Act, it would have been wise for the distributors to plan for exactly the effect that would have happened if the change had taken place on Royal Assent rather than on 14th October.
What has happened now is that a notional account, as my noble friend Lord Montague has said, has been set up and the distributors know that when the Act is passed they will not have access to it. If by any chance—his is the only realistic point which arises from this debate—the Act was not to pass in these terms, was either to be rejected totally or the percentages changed by Parliament, the shadow accounts would not have effect and nothing would have been lost to the existing distributors.
Lord Skidelsky: I thank the Minister very much for that reply, which does not seem to get him out of his hole. Is the Minister denying that, as a result of the Secretary of State's announcement, the other good causes have had £60 million less to spend than they would otherwise have had? That is the point I am making. Into the shadow account of the national opportunities fund has been going a certain amount of money every week in accordance with the Secretary of State's announcement. That money has not been available for others to spend. The issue of whether they would or would not have spent it in the time concerned is completely immaterial, I am afraid, and these facts seem to be completely incompatible with the Minister's statement that the Secretary of State's announcement did not make any difference to how much money the different distributors would get in the end. I have just been arguing that it has made £60 million difference already.
Lord McIntosh of Haringey: It is not immaterial. The point is that all of the existing distributors have very large balances. They are not deprived of cash-flow as a result of the announcement that has been made. That is not the issue. The issue is whether the change takes

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place when it is announced, after consultation, or whether it takes place on Royal Assent. In the end there is no difference in what they get, and in the interim there is no difference in their cash-flow because they have the necessary balances.
Lord Crickhowell: I am surprised that the noble Lord is pursuing this argument and delaying on this point. In an earlier intervention, he made a perfectly fair summary of the situation, except for the fact that if he had lived in the age of highwaymen he might have thought that giving consent to robbery did not lessen the fact that it was robbery.
The simple fact is that it does not matter what the cash-flow situation is. The analogy produced from the Benches opposite does not add to the argument. The Government have stated that there will be less money available than there would have been otherwise. In that situation, the distributors would be very foolish not to take note of what the Government's intentions are, and that therefore there is less to spend. It is not a question of cash-flow. A declaration has been made by Government that there will be less money—I take the calculation of my noble friend Lord Skidelsky, I have not calculated it myself—than there would have been. Legislation will be put forward in due course and the distributors had better act accordingly. We can go on arguing about what words we apply to the process, but the process seems to be perfectly clear to me. I do not see why the Minister continues to deny it, when in at least one statement from the Dispatch Box he described that statement which describes that situation precisely.
Lord McIntosh of Haringey: I have already made it clear that whether the date chosen is 14th October 1997 or the date of Royal Assent the effect both for the new opportunities fund and for the existing distributors will be the same. I have already made it clear that in the interim the effect on the individual distributors is the same because they have had adequate warning. Agreement has been achieved on the setting up of the shadow accounts, but their existing balances are such that they do not need the shadow accounts.
Nobody has asked me why we should do this if in the end the effect is the same. The answer is very similar to the answer which the previous government gave when setting up the Millennium Commission. They provided money for the Millennium Commission before legislation had been passed to authorise the existence of the commission. The answer is that between now and Royal Assent the new opportunities fund and NESTA will need money, and money will be available for them to set themselves up in order that they can start work as soon as possible. There are positive benefits from proceeding as proposed in subsection (9). There are no conceivable disbenefits to the existing operators either in the future or now. I must resist the amendment.
Lord Redesdale: Before the Minister finishes the argument, I hesitate to press him on these points, but as he has stated himself, there are few precedents for the actions which the Government are taking. This is our first opportunity to press him on some of the issues that concern many people.
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May I ask him two points? I will not use the word "robbery" because the Government in conducting legislation are entitled to undertake forced distribution of lottery wealth however unwelcome it may be. The first concerns the shadow accounts, which are fairly unprecedented. Where does the interest go from these accounts? This may be a totally superfluous question but it has a bearing considering the amounts involved.
I would welcome the Minister's assurance on my second question, which many will be asking. I understand the point he makes that in the long term it will have no effect on the money distributed and that, perhaps in the medium term, before the new opportunities fund was set up, the distributors were making allocations on the basis of the amount of money they expected to receive. Have there been any cases where the five good causes have allocated money in the very short term to projects—perhaps a building development or whatever—and have had to rein in that finance because, in the extremely short term, they will not receive the money that is now allocated to the new opportunities fund? I realise that they will receive the same amount of money in the fullness of time, but if you are involved in a building contract, in the very short term that will mean putting developments on hold. I would hope that this is not the case.
4.30 p.m.
Lord McIntosh of Haringey: There are two questions there. The first is, where does the interest from the shadow account go? The answer is that it goes to the new opportunities fund. The answer to the second question is that, pursuant to what I have already said about the distributors having large balances, they do not just have large balances in cash. As we have already discussed, the fact that they award a grant does not mean that the money is paid out all at once. My understanding is that none of the existing distributors had made decisions that had to be cancelled because of the setting up of the shadow account.
Lord Skidelsky: I think we have examined this topic sufficiently but I would like to say a few things at this point. As a historian I hate to say this, but when a politician resorts to history one knows that he is not going to answer the question. Indeed. I was justified in that belief.
Lord McIntosh of Haringey: The noble Lord, in his current position at the Dispatch Box, is no more a historian than I am a market researcher—we are both politicians for the purposes of this debate!
Lord Skidelsky: Absolutely, and I am not going to resort to history either.
Let me go through some of the arguments. In all honesty, the Minister has not produced one single good argument in support of this retrospection. He said we are committed to providing £1 billion for the new opportunities fund and NESTA by the year 2001, but that is simply no argument for allocating National Lottery money to these bodies before parliamentary consent has been obtained. He has said that, had the money not been allocated before the Bill was passed, a considerable adjustment of its percentage share would

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have been suffered by the national opportunities fund. In fact, my back of envelope suggests, and he has not challenged the figure, that it has been about £60 million: £60 million out of £1 billion is not a considerable readjustment, and they could not even wait five months before starting the reallocation.
The Minister said at Second Reading that people buying lottery tickets after 14th October would know that part of the money was going to the new good cause, and that this would be very gratifying to them, but the Secretary of State had no right to tell them that. The Minister said that distributors can plan their commitments and expenditure on the basis of the new percentages, but it is immaterial whether the new percentages start in October or when the Bill becomes law. They know, within a very small margin, when the Bill will become law, and they would have had a basis for planning just as well on the basis of a legal development.
The Minister said we are trying to avoid the problem of underspending. The way to do this is to speed up the processing and prune red tape and not divert underspent sums to purposes for which they are not intended. Underspending is a slippery concept. Moneys may be allocated and not spent, and it is inevitable that this should be so when capital projects are considered. A great deal of money is allocated. The Arts Council has allocated £1 billion, a great deal of which is unspent and in balances simply because it takes time to put up a building.
I return to my original question. Where, in the 1993 Act, was power given to the Secretary of State to make the decision he announced on 1st October 1997? Does the Minister persist in denying that in fact the other good causes have lost a definite sum of money as a result of that decision? Because there has been no good argument that I can make out in support of the position set out in the Bill, in withdrawing my amendment I retain the right to come back to it at a later stage.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [The New Opportunities Fund]:
Lord Skidelsky Lord Skidelsky moved Amendment No. 20:
Page 8, line 41. leave out ("such").
The noble Lord said: I draw the Committee's attention to the fact that Amendment No. 22A was intended to be the successor to Amendment No. 22, which I shall not move.
This group of amendments is designed to call a halt to what my noble friend Lord Gowrie called on Second Reading the whittling away of the hands-off principle. It aims to safeguard the independence of the new opportunities fund and place it in the same statutory relation to the Secretary of State as the other distributing bodies.
Just as we have had a reinterpretation of additionality, so we have had a reinterpretation of the arm's length principle; it is no longer what we used to think it was. The Government do not tell the Arts Council that it will spend so much on literature, so much on violin playing, and so on, but here we have exactly that position.
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The new opportunities fund will make decisions on individual applications independently. That is the only liberty it has. It will be told about everything, and it will be given the freedom to decide among the various applications which ones it will support. I would hardly expect the noble Lord to spend his waking hours going through thousands of applications. I am glad that he has delegated that to the new opportunities fund. But that does not seem to me an expression of the hands-off principle as it has been commonly understood.
We want to safeguard the hands-off principle in its original meaning, so Amendments Nos. 20. 21 and 22A are designed to remove the Secretary of State's power to tell the new opportunities fund on what to spend money or, as the Bill puts it, to order the fund to spend money on particular initiatives connected with health, education and the environment.
I suggest to the Committee that the Government's determination to control the distribution of grants from the new fund is itself evidence that they regard the new good cause as much closer to the sphere of their responsibilities than the old causes; they want to have as much control over the spending of National Lottery money on the new good causes as they exercise over normal tax finance spending. The powers being claimed by the Secretary of State in respect of the new good cause goes far beyond the general power given to the Secretary of State under Section 26(1) of the 1993 Act, which simply states that,
"a body shall comply with any directions given to it by the Secretary of State as to the matters to he taken into account in determining the persons to whom, the purposes for which and the conditions subject to which the body distributes any money".
That seems to me a perfectly fair statement of the relationship.
To be directed to take something into account is very different from being ordered to do something. We have only to compare the framework conditions specified for the old distributors with those laid down in new Section 43B for the new distributor to appreciate the much greater control that is now being inserted in this Bill. I beg to move.
Lord Redesdale: I speak particularly to Amendment No. 21 which is grouped with these other amendments. I have to admit that there is a degree of open-endedness about the expression—I realise it is a legal term—
"may from time to time be specified in an order made by the Secretary of State".
One of the problems we have with the new opportunities fund is that it seems to be so open-ended. Almost anything that enters the Secretary of State's mind on that particular day of the week may be inserted into the new opportunities fund, and the wording of this clause gives no indication of where limitations should be put on the Secretary of State over his actions. I would like clarification from the Minister on whether measures are to be taken to specify under what circumstances he is from time to time to make these decisions.
Lord Crickhowell: First, I should like strongly to support what has been said by the noble Lord in moving these amendments. I, too, share the concern and regret

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that it seems to be a whittling away of the arm's length principle in the arts. Indeed, the whole government machine seems now to display a growing tendency to interfere with bodies that were set up to be at arm's length and independent. I understand, for example, that the Environment Agency, which is the successor to the National Rivers Authority, which I chaired, now has to submit to a constant barrage of interference by questions from Ministers. Whenever an environmental body complains about anything, the government thought police ring up the Minister, the Minister instantly rings up the chairman, and the whole process of having an independent agency seems to be whittled away.
For many, many years and under successive administrations, the arm's length principle has been at the heart of the good administration of the arts and I believe has been to its enormous benefit. I am afraid that the previous government made a very bad move in putting a Minister as chairman of the Millennium Commission. That in itself was a mistake because it effectively brought departmental involvement close to one of the lottery's distributing bodies. I have expressed the view elsewhere, and I do not intend to repeat or to justify it at any length today, that that led to a situation where in many ways—I am speaking in the presence of the former Millennium Commissioner—the Millennium Commission is a less satisfactory body than the other lottery distributors. An extension of this principle and growing interference in what is done by the distributing bodies will be detrimental and we will all regret it in the longer term. Therefore, I support the amendment.
I hope it will not be considered unreasonable if I also use this group of amendments to raise another issue. I do it in the sense of being helpful. The last time we met, my noble and learned friend Lord Fraser of Carmyllie asked for an indication of what parts of the Bill would come within the legislative competence of the Scottish Parliament. Most helpfully, the Minister undertook to prepare a paper and give us guidance at Report.
I thought that we could perhaps leave the matter there; and I should explain that I choose to raise the issue at this point because of the reference in my noble friend's amendment to the deletion of the part of Clause 6 (new Section 43B) which refers to the order-making powers of the Secretary of State. Because it refers to order-making powers, it is an appropriate moment to give notice, so that the Minister will have more time to consider, though I do not expect him to reply today, of the important and complex issues that have emerged on the Floor of another place in the two debates that have taken place this week on the Welsh assembly Bill.
There has been a very extensive, very interesting set of debates about whether the new assembly would have the power to block or initiate legislation. There has been—and I shall not trouble the Committee with the frequent references that I could quote—notably on 20th January (Hansard cols. 831 and 832 particularly), later in Mr Win Griffiths winding-up (cols. 860 and 861) and again in an intervention by the Secretary of State for Wales (col. 867), a thorough examination of the circumstances in which powers might be transferred.
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The Government have helpfully tabled elsewhere a draft transfer order which indicates the powers that will initially be transferred. It is indicated that it is only the first draft, that there will be other drafts and that the thing is likely to be amended considerably by the time we get to the passing of the Bill.
The Ministers made it absolutely clear in those debates that whatever happens to any particular piece of legislation in regard to the transfer of powers to the Welsh assembly—and I expect the same will be true of the Scottish Bill—will depend crucially on the way that the order-making powers are drafted subsequently in those Bills. Here we have a reference to something that may be done by order by the Secretary of State. The words "may" or "shall" are going to have crucial relevance to whether powers are transferred to the assembly.
As those debates covered several hours on the Floor of another place and because they were in such detail, I do not intend to detain the Committee tonight. However, it struck me when I turned up Hansard and read them that we had come right back to the fundamental and crucial issues that had been raised by my noble and learned friend Lord Fraser of Carmyllie when we last met. Since our Bill is being examined in Parliament in parallel with the Bill that is before another place, it is not absolutely certain that the draft transfer order, when it is finally tightened up and follows on from the Welsh assembly Bill, will cover exactly what goes into this Bill. It is certainly clear that every time a Bill comes before Parliament in future it will have to be examined in minute detail as to exactly what the intentions of Parliament are with regard to the powers that go to the Scottish and Welsh assemblies. Also, it will have to be noted whether they allow some discretion for further change, or for not implementing the powers given in the Bill, as well as a variety of other related topics.
I draw the attention of my noble friend on this side of the Committee to this matter because we may wish to return to it at Report stage, when we have had an opportunity to consider the issues that have been raised in another place. I draw it to the attention of the Minister because, when he comes to respond with the paper he has promised, he should consider very carefully these issues which his right honourable friend the Secretary of State for Wales has acknowledged are both complex and important.
4.45 p.m.
Lord Monro of Langholm: I should like to intervene only briefly, since I spoke at our previous Sitting of how much I disagreed with the sixth good cause, which would certainly take money away from the five already in the National Lottery Act. I share with my noble friends Lord Skidelsky and Lord Redesdale very strong reservations about the hands-off attitude. We were only too pleased, with Ministers in the last government, to have had direct involvement in saying how the money would go to the various five good causes. But we were absolutely firm that it must be on a hands-off basis and that individual organisations which we set up would

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allocate the money after applications had been received. The Ministers were to stand right back and have nothing to do with it.
Here we are going over that principle and saying that the Government can give directions to the sixth good cause, and they are doing so already. Last week the Scottish Office announced that £25 million was going to information technology. This was announced before anyone had considered whether or not they felt it was a good idea, so there was no question of a hands-off attitude to the Bill. I therefore strongly support my colleague on this side of the Committee that we should have a hands-off attitude rather than government direction as to where this lottery money should go for the sixth good cause.
I share with my noble friend Lord Crickhowell a concern about where we are relative to Scotland, and how the matters relating to the sixth good cause will stand under the direction and responsibility of the new Scottish parliament. How will the interchange work, particularly over the next year or two, with the Secretary of State for Scotland—if he still is in post in the Cabinet—or will it be the first minister for Scotland who will make the decisions? We want clarification on that point, so that people know how things stand in relation to the legislation coming to this House in due course.
Lord Chorley: Speaking as it were from the Cross Benches, I have some sympathy with the amendment of the noble Lord, Lord Skidelsky. Like the noble Lord, Lord Crickhowell, I am worried about the erosion of the arm's length principle. I call it Lord Keynes's principle because I believe he first advanced it when the Arts Council was set up all those years ago.
I shall be interested to see how the Minister replies. As I read it, there seems to be a distinction between the additional powers which the Bill seeks to award to the Secretary of State in respect of the new opportunities fund and the original funds. If I am right in that, I wonder what is the Government's thinking. Why is there something special about this fund which does not apply to the other three funds? I suspect it may be something to do with additionality and perhaps the long arm of the Treasury. I do not know but I shall be interested to hear what the noble Lord has to say.
Lord McIntosh of Haringey: I am grateful to noble Lords for those contributions because it gives me an opportunity to answer the points that have been made about the differences between the new opportunities fund and the existing distributors. If I address my remarks particularly to the noble Lord, Lord Chorley, who posed his remarks as questions rather than as challenges, perhaps I may be forgiven.
Of course, the relationship between the Secretary of State and the new opportunities fund, as proposed in the Bill, is different from that which exists between the Secretary of State and other lottery distributors. There is no pretence otherwise. However, I do not accept, or even recognise, the description of the relationship which the noble Lord, Lord Skidelsky, in particular has put forward and I would argue that the arm's length principle has remained intact in this legislation.
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The relationship is different because the new good cause is different. The existing good causes are pretty well defined and the distributors are in the main well established as expert bodies within their fields. In the case of sport and the arts, the distributors are the key sectoral bodies; the Heritage Lottery Fund was not the biggest player but was well placed to understand the whole sector, and the National Lottery Charities Board has quickly established itself as a respected and knowledgeable body in the charitable field.
By contrast, the new good cause ranges over a vast area. It encompasses health, education and the environment, each of which in itself is broader than any of the other good causes. If, as we do, we want these areas to benefit in a sensible and focused way from the lottery, then we clearly need a different approach. That is why we proposed right from the outset that the new good cause should focus on a limited number of initiatives at any particular time, targeting its money effectively so that it could make a tangible difference through time-limited programmes and then be free to move on to a different priority. The nature of those initiatives will vary from time to time, as the noble Lord, Lord Redesdale, said, and Parliament should and will have the opportunity to decide what they should be.
Let me focus particularly on the point made by the noble Lord, Lord Redesdale. He seems to be worried about the phrase "from time to time" as if it was something that the Secretary of State should have in mind on a particular day of the week. That is far from the truth. What is provided here is that the new initiatives, which are broad initiatives designed to cover a range of particular provision, should be decided after consultation and after parliamentary approval. I remind the Committee that the parliamentary approval proposed here—the affirmative resolution procedure—has been accepted by the Delegated Powers and Deregulation Committee as being the appropriate parliamentary conclusion, provided that I give the assurance—as I have—that the provisions for the first three initiatives, which have already been announced, are not extended to future initiatives.
As to the phrase "from time to time", new initiatives will be initiated through consultation and through parliamentary action when the resources are available. Clearly the first tranche of funding to the new opportunities fund is going to the three initiatives which have already been announced. That is a rather different pattern of decision-making on new initiatives from that which some Members of the Committee have described.
Lord Redesdale: I apologise to the Minister. Through the affirmative resolution procedure I believe that there will be the opportunity to debate the merits of each of the new areas to be covered by the new opportunities fund. During these debates would it be possible, if it was proven that the area under discussion fell into the area of additionality, that the Government might withdraw at that stage?
Lord McIntosh of Haringey: I cannot anticipate what Parliament might do on any future date whether this Government are in Office or any other government.

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Governments would be well advised to respond to proven process—that is a high test to apply—but of course the whole process of formulation of a new initiative will be drawn up on the basis that it does not breach the principle of additionality. That is largely what the consultation will be about. If it is proven that it is not additional—and it is difficult to do that because, as we have seen from Monday's debate, it is difficult to define additionality—I have no doubt that any government would take seriously the views of Parliament when it comes to applying the affirmative resolution procedure.
If I may return to the nature of the new opportunities fund as a distributor, we see it as being a small and flexible body, able to run quite different programmes concurrently, working with different partners and drawing on different knowledge and expertise. It will have an independent chair and independent members rather than politicians. In other words, the people who will be on the new opportunities fund will be—as all such appointments are under this Government—appointed under the Nolan procedures. It will not just decide, as has been suggested, individual applications. It will have a considerable role in designing the delivery of the initiatives within the limits set by the order and by the directions.
We propose that the new opportunities fund priorities, the initiatives, should be decided after broad consultation, and the new opportunities fund will play a part in these consultations. It is right that the results of the consultations should be considered by government and then by Parliament, and that is why the order is subject to the affirmative resolution procedure.
In these circumstances the provisions of the order making powers, which the noble Lord's amendments seek to remove, are sensible provisions. He seeks to remove them because he is afraid that the Government rather than the new opportunities fund will make all the directions. I simply do not agree with that. Parliament will approve each initiative, and the Government will set a high level framework for each initiative through the directions under new Section 43C(1). The order will set the initiative and its geographical extent. Directions under new Sections 43C(1) and (2) will be used to set the parameters, and they might encompass targets, for example providing IT training for 450,000 teachers. They could set indicative funding levels and target or priority groups, for example priority for out of school hours activities in education action zones.
The direction making power must of necessity be broadly cast to accommodate the range of issues which may need to be covered, which will vary from initiative to initiative. The new opportunities fund will then be responsible for designing and implementing each initiative, and in particular for making the key decisions on who should get the money, just as the other distributors do. The new opportunities fund will invite bids, assess them on their merits, and award grants entirely free from government intervention.
Perhaps I may refer to the point made by the noble Lord, Lord Crickhowell. I am ready to reaffirm to him the assurances I gave to the noble and learned Lord, Lord
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Fraser of Carmyllie, on Monday. I understand the point he makes but that is true of all legislation. The government of Wales Bill and the Scotland Bill will take time to pass through Parliament and legislation on other subjects must proceed as those two constitutional measures proceed. The assurance I gave to the noble and learned Lord, Lord Fraser, and which I repeat to him now, is that the paper which I will produce in good time before Report stage, will cover both Wales and Scotland and will consider the issue of reserved powers between the Welsh assembly and the Westminster Parliament, just as they will consider the issue of reserved powers between the Scottish parliament and the Westminster Parliament.
5 p.m.
Lord Crickhowell: I am grateful to the Minister for what he has just said. However, listening to his remarks about the nature of the powers being given under this section, I am struck by the extreme importance of the issue I have raised with regard to Scotland and Wales for the very reason that he has identified the difference of this part of the Bill to the legislation covering the existing body. He gave two examples of the way in which further schemes might be brought forward, for example for teaching and activities in education. Those, of course, are precisely the responsibilities that are to be transferred to the new Scottish parliament and the Welsh assembly.
It will therefore be important for us to be precise as we deal with this legislation as to whether we are introducing powers that will simply be transferred as they are, or whether the Welsh assembly—and I will concentrate on simply one body rather than two—will have a discretion as to whether it uses these powers, and indeed as to whether these are its priorities. if you take the two examples given by the Secretary of State, the needs and requirements in Wales might be wholly different from those in England, and I speak as someone who had responsibility for education in Wales for eight years. The very fact that we have the Welsh language and other needs means that the requirements in Wales are wholly different.
I say with due deliberation that it may be necessary at Report stage to decide whether the drafting of this Bill is adequate or whether this point will be picked up in the parallel legislation that is passed. The worst possible situation would be for the devolution legislation to be passed, and for this to pass almost in parallel, and we find that we have an unresolved situation which will leave both Parliament and the assembly unhappy. Once again I give notice to the noble Lord that these are important practical issues; it is not just a question of guidance, but it is a question of getting the drafting of one or other, or both Bills, right before they leave Parliament.
Lord McIntosh of Haringey: I do not deny the importance of the issues which the noble Lord has raised, nor indeed the issues which the noble and learned Lord, Lord Fraser, raised in relation to Scotland on Monday. I agree with him that we have to give careful consideration to ensuring that, at the end of the day, when all the legislation has been passed, it is coherent. The principle which governments have adopted over many years has been that interim legislation is

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sometimes necessary, or you have to have legislation which is subject to amendment even by other legislation going through Parliament at the same time. As long as when the last piece of the jigsaw puzzle has been put in place the thing works, then honour and parliamentary scrutiny and good administration are satisfied.
I am anxious to have these matters as much out in the open as possible, and that is why I have given the undertaking that I have. If the noble Lord has any particular worries, I am happy to answer them before Report stage as well, if he cares to write to me or comes and sees me to talk about them. Of course, that applies to any noble Lords who make similar points. In the end, it is the legislation on the government of Wales and of Scotland which will define the relationships in detail. The Welsh draft transfer order, to which the noble Lord referred, is, as he rightly says, in draft form. It will be changed, I hope, because of the views expressed by Parliament as the Government of Wales Bill proceeds and that is exactly as it should be. It is right that Parliament should be as well informed as possible of the Government's thinking at the time, but it is also right that government should pay attention to the views of Parliament as the legislation proceeds.
I return to the issue raised by the amendments. I believe that the provisions of the Bill protect the interests of Parliament and preserve the arm's length principle. I ask the noble Lord to withdraw the amendment. I know that he will do so under the procedures of the Grand Committee, but I ask him to understand why the Government resist these amendments.
Lord Skidelsky: We are all grateful to the Minister for saying two things: first, that the new good cause is very different from the old good causes—we have argued that, but I did not think that the Minister was so willing to admit it on Monday—secondly, that the new good cause ranges over a vast area, so presumably its potential for spending money also ranges over a vast area.
In this short debate, there has been expressed a general feeling that the arm's length principle should be supported and some disquiet that the clause weakened it. The noble Lord, Lord Chorley, asked a question about that. My noble friend Lord Monro supported the arm's length principle, but the noble Lord, Lord Redesdale, was worried, as was my noble friend Lord Crickhowell.
In view of that disquiet and also in view of the powerful arguments that my noble friend Lord Crickhowell presented about the possible inconsistency of drafting between this Bill and the Welsh Bill going through Parliament, I beg leave to withdraw the amendment but I reserve the right to consider the matter at a later stage.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 and 22 not moved.]
The Deputy Chairman of Committees: I must inform your Lordships that if Amendment No. 22A is agreed to, I cannot call Amendment No. 23.
[Amendment No. 22A not moved.]
Lord Redesdale Lord Redesdale had given notice of his intention to move Amendment No. 23:
Page 9, line 40, at end insert (", including such persons as appear to him to represent local government").
The noble Lord said: The Minister gave a very full assurance at the previous stage that he would consult local government on these amendments, and in the light of that, I will not move the amendment.
[Amendment No. 23 not moved.]
Clause 6 agreed to.
Clause 7 [Provisions supplemental to section 6]:
Lord Skidelsky Lord Skidelsky moved Amendment No. 24:
Page 11, line 7, leave out subsections (5) and (6).
The noble Lord said: These amendments are consequential to Amendments Nos. 20 and 21. They relate to the orders to be given under Section 43B. We are seeking to remove the Secretary of State's power to give such orders. As I have already withdrawn the previous amendment, I am not quite sure whether I automatically withdraw the consequential amendments without having to speak to them. I would like to be advised of the procedure by the Deputy Chairman.
The Deputy Chairman of Committees: The noble Lord has a perfect right to speak to the amendments, even if they are consequential.
Lord Skidelsky: In that case, to give the Minister an opportunity to speak, I beg to move.
Lord McIntosh of Haringey: I am grateful for that. I love to hear the sound of my own voice! I answered the points raised by this amendment in response to the previous amendment. I pointed out that our policies were endorsed at the election, in the following White Paper, and in the consultation on the White Paper. I also pointed out the provision for parliamentary scrutiny which is set out in the Bill. I understood that the noble Lord did not accept my arguments and I respect that, but I doubt that the Committee would thank me for repeating them.
Lord Skidelsky: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Schedule 2 [The New Opportunities Fund: Schedule 6A to the 1993 Act]:
Lord Redesdale Lord Redesdale moved Amendment No. 25:
Page 25, line 15, at end insert—
(".—(1) The New Opportunities Fund shall establish four committees for the purpose of exercising the Fund's functions in relation to applications for grants in respect of the appropriate activities in England, Northern Ireland, Scotland and Wales respectively.
(2) Section 25A shall apply in relation to the establishment of the four committees.").
The noble Lord said: I would be very surprised if the amendment is not accepted by the Government although I am a hostage to fate for saying that. The amendment is based on Schedule 5 of the 1993 Act and is consistent with the setting up of the National Lottery Charities

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Board Scottish Committee. The purpose of the amendment is to devolve powers that should go to the Scottish parliament in respect of the new opportunities fund.
The major issue behind the proposed amendment is an apparent discrepancy in the Government's approach to the decentralisation of decision-making. The National Lottery Bill and the Bill on Scotland highlight this discrepancy. While the Scotland Bill gives certain autonomous rights to Scotland, including health, education and the environment, the National Lottery Bill holds firm centralised control over the distribution of the new opportunities fund in these areas. In the long term it is likely that the Scottish parliament will oppose the lack of statutory Scottish representation for the new opportunities funds. Therefore it would be prudent for the Government to legislate for a Scottish committee in the National Lottery Bill.
The National Lottery White Paper states that the new opportunities fund structure will be designed to take account of the needs and structures of each part of the UK. The structure of the new opportunities fund outlined in the National Lottery Bill makes provision for the delegation of powers to a committee. However, there is no mention of the constituent parts of the United Kingdom. With a membership of only eight to 12, it is hard to see how fair representation can be achieved.
The Scottish Council for Voluntary Organisation welcomes the proposal that the new opportunities fund will be able to delegate decision-making. However, there is deep concern that the new opportunities fund will not choose the correct institutions to implement ideas relating to health, education and the environment and that the expertise of the voluntary sector in these areas will be overlooked.
The National Lottery Act 1993 provided for distribution of funds to be based on England, Scotland, Wales and Northern Ireland for arts, sport and charities. It is necessary for the new opportunities fund to embrace that same vision and to have the same equality of representation for distinct areas such as health, education and the environment. I very much hope that this committee has been overlooked by the Government in drafting the legislation, and I believe that this is the right opportunity to put this amendment forward.
I must apologise at this stage that my noble friend Lord Mar and Kellie, whose name also stands to the amendment, has not been able to speak, but I believe that his absence has highlighted why there should be a separate Scottish committee as he is on his way to the station to take the last train to Scotland. I beg to move.
5.15 p.m.
Lord Randall of St. Budeaux: I rise to speak because I am confused as to what the motives are behind the amendment, although the noble Lord, Lord Redesdale, made it clear that he felt that the amendment was necessary in order to replicate the points in the White Paper, particularly with regard to decentralisation and the way in which the new distributing body, the new opportunities fund, should represent the different parts
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of the United Kingdom. I felt that that had been covered by the Bill itself in that the members of the particular board should have knowledge of the interests of Scotland, England, Wales and Northern Ireland. In a way, the notion of the decentralisation of power and the need to have a board that represents these interests seems to me to be incorporated in the Bill.
There is a point of concern, about which I am confused, as to whether this amendment is there in order to have block funding to the Scottish parliament. If that is the case, I would ask my noble friend the Minister whether the Government would be satisfied that, in having block funding, that could result in inefficiencies as far as the administration of the fund is concerned. Many of us have experience of local government where big blocks of money are allocated. We have heard about the Barnett formula and we have to consider whether having a system whereby money has to be spent at the end of the year is not more wasteful than one which looks at the merits of individual cases when they are submitted.
Also if we were to have these four committees which have been proposed in the amendment, how would this affect the number of people on the board? It is stated quite clearly that there should be between eight and 12 people on the board, so the number could be as few as eight with a chairman. How would we allocate these people to the various committees? Are we saying that we would divide eight by four and have two per sub-committee looking after individual parts of the United Kingdom? If that is the case, it would look frankly absurd. You could not possibly have a small number of people allocating moneys in this way. It would not be in the interests of the board or of the nation to do that. Does the Minister agree that, if there were to be a change of this kind to have four committees, the other parts of the Bill would have to be changed in order to increase the number of members on the board?
Those were the main points I wanted to raise. I would like to know a little more about the motives behind the amendment, and whether it genuinely is a question of having some kind of Barnett formula in order to ensure that certain sums of the total money in the fund are allocated to particular parts—particularly Scotland, Wales or wherever—or looking at the White Paper and trying to help the Government in pursuing their policy of distributing powers to the various parts of the United Kingdom.
Lord Redesdale: I find myself in the unusual position of answering questions, which I must admit I rather enjoy. Indeed, the noble Lord, Lord Randall, has raised a point which this amendment tries to address, namely the constitution of the board. When we talk about that board, I assume that it will be based in London.
The noble Lord went on to talk about local government. But we are not talking about local government here with devolution. We are talking about a Scottish parliament which will have its own separate legislative abilities in the areas of health, education and the environment. The whole purpose of this amendment, although I realise it will have knock-on effects in the

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make-up of the committee and this will have to be looked at, is to bring about decentralisation away from London so that these issues can be looked at within Scotland or Wales or in the other committee. In the future I believe it is going to be a very sore point indeed within the Scottish parliament that distribution of the new opportunities fund may be from London, whereas it should perhaps be taking place in Scotland. The point of the amendment is to help the Government in an area that should not be overlooked at this point with regard to devolution and the legislation that is about to be introduced.
Lord Randall of St. Budeaux: I point out to the noble Lord that if one looks at page 25, paragraph 1(2) says that four of the members of the board shall:
"be suited to make the interests of England, Scotland, Wales and Northern Ireland, respectively, their special care".
So in fact the Bill suggests that, although we are talking about a very small committee, its members would be informed about the special needs of the constituent parts of the United Kingdom. In that sense, we would have a mechanism that would ensure that those interests are protected and there will be somebody on that board who will be able to speak up for, and be in contact with, for example Scotland. I would need to be persuaded that we need to go further than that current arrangement and to have this rather cumbersome committee structure advocated in the amendment which, according to the other parts of the Bill which refer to the maximum and minimum numbers, would not be viable.
Lord Crickhowell: I had not intended to speak to this amendment, but one of the advantages of the procedures we are following in this Committee is that it gives an opportunity to raise issues which have not occurred to one before, or for others to raise issues. I have to say that the comments of the noble Lord, Lord Randall, again drew attention to the difficulties that we now face.
I start with sympathy for his view that you do not want to break up United Kingdom organisations unnecessarily. I argued as strongly as I possibly could when I had responsibility for the National Rivers Authority that it would be mad, for all sorts of reasons, to break up the NRA, not least because the Almighty had decided that the rivers that rise in Wales flow through England, and also because of the waste of the highly technical and professional resources that such a change would involve. Even then we had to set up a special Welsh committee answerable to the Secretary of State when such an organisation and structure already existed.
I also have a certain sympathy for the idea that there are problems in breaking up the funding arrangements within the lottery. One of the reasons that in an earlier incarnation I had the unpleasant experience of having to do business with the Millennium Commission over a certain bid for an opera house in Cardiff, rather than the Arts Council, which I believe would have understood the whole proposition better, was that the Welsh Arts Council share of the lottery was too small to consider such a large project. Therefore there are real difficulties.
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There may also be difficulties here if you subdivide and allocate particular sums of money to one country or another. However, as I observed in an earlier intervention, we are dealing with central responsibilities that are going to be given to the new Scottish parliament and to the new Welsh assembly. Education, the environment, and so on, are exactly the subjects for which they are going to be responsible and with which they will wish to deal.
I simply state as a fact—one which I do not believe would be challenged by anyone who knows anything about Scotland or Wales—that if this is left to a UK structure as proposed in the Bill, without special provision for Scotland and Wales, it will not be acceptable to the new Scottish parliament or the new Welsh assembly.
At the moment I do not have a solution, but this is yet another subject to which further thought must be given as the Bill proceeds to a later stage. Otherwise we will be creating a situation which will be unstable, which will cause conflict quite soon, and which will not last. We should be grateful to the noble Lord who moved this amendment for raising the issue. He himself probably does not think that his amendment provides the final solution, but he has enabled us to think again before reaching the next stage about how to address this kind of problem.
We are going to face this type of problem with almost every single Bill that we pass through Parliament in future, and it is going to cause a great deal of difficulty. Every time we consider a Bill we will have to think in minute detail about exactly what powers are or are not being transferred to the Scottish parliament or the Welsh assembly and how that is to be done. I do not envy the Government's business managers having to handle that problem.
Lord Redesdale: Before the Minister replies, and before anyone else intervenes, I would like to say that the problem which the amendment brings out is that we are still talking in terms of centralisation, whereas there has been the referendum on devolution. Although the Minister will produce the minutiae involved in bringing about the distribution of funds, this will he a source of conflict in the future if it is not dealt with at this stage. I would like the Minister to give an assurance that something will be done about this situation, or to explain why it will not be a point of conflict.
Baroness Rawlings: I, too, support the amendment of the noble Lord, Lord Redesdale. It follows clearly the point made by my noble and learned friend Lord Fraser of Carmyllie the other day in relation to Scotland and also my noble friend Lord Crickhowell's point regarding Wales today. It seems to me rather pointless, however, to legislate now, knowing that it will have to be changed. As the Minister so rightly said—he repeated this twice when speaking on the last clause—it will have to be changed, and this is in the space of less than two years.
Lord Randall of St. Budeaux: I feel we are now moving down the path of deciding other matters outside the framework of this Bill, particularly regarding the

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way in which not only the new opportunities fund but a whole host of other systems are funded. I feel that it is outside the scope of the Bill. Perhaps the Minister could advise us whether this is the case? In looking at this particular amendment, we should decide on the basis of ensuring that the fund is administered in the best possible way and that the money that has been put into this fund—I understand about £1 billion pounds—will be spent efficiently and effectively. This Committee must start and finish on that basis.
If there are other matters regarding the decentralisation of funds, which could cover a whole host of programmes and pieces of legislation, perhaps those should be dealt with quite separately. There should possibly be some other kind of legislative structure which would apply to the Bill when it becomes an Act. We are outside the scope of the Bill and I return to the fact that the decisions here should be made on the good administration of this particular fund. I would argue that having block allocations is not necessarily the most effective way of dealing with this matter and that each submission to the board should be looked at on its merits.
Lord McIntosh of Haringey: This is a most interesting debate. I spent half an hour earlier this afternoon being attacked on the grounds that the Government was breaching the arm's length principle for the new opportunities fund. This was on the grounds that the orders and directions concerned with initiatives to the new opportunities fund were an intrusion and that somehow we were introducing direct government control of expenditure by the new opportunities fund. I enjoyed that debate because I thought I had a good answer to it.
Now, my opponents have gone round behind my back 180 degrees. The noble Lord, Lord Redesdale, and the noble Baroness, Lady Rawlings, are now saying that we must introduce additional directions to the new opportunities fund. They are now saying that something which we believe should be, and can be, within the scope of the new opportunities fund's own decision, should be decided by Parliament in a direction to the new opportunities fund. I am flabbergasted that noble Lords should think that it is appropriate to have such detailed central direction of the expenditure of lottery money.
Of course, I share the concern to protect the interests of Scotland, north Wales and Northern Ireland, and the Bill provides in Schedule 2. paragraph 2 that the Secretary of State shall appoint members who appear to him to be suited to making the interests of Scotland, Wales and Northern Ireland their special care. I can assure him that in making those appointments the Secretary of State will have regard to the views of the Secretaries of State for Scotland, for Wales and for Northern Ireland. If that is the way that the legislation on the government of Wales and of Scotland works in due course, that will be a matter for the Scottish and Welsh bodies.
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But what is wrong with the new opportunities fund itself setting up the committees rather than being directed to do so by the Secretary of State? Of course, the members can do that; it is entirely within their powers. They can appoint outside members for that purpose; there is no difficulty about numbers; there is no difficulty under those circumstances. They would not have the difficulty to which my noble friend Lord Randall referred. Indeed, since these are major initiatives which, if the first three are to be any example, will be on a UK-wide basis, but which will be different as initiatives proceed, they could well set up special committees to deal with particular initiatives, comprising in Scotland people with particular knowledge and expertise of the area. We should not be restricting the new opportunities fund in the way that the noble Lord is proposing.
5.30 p.m.
Lord Redesdale: I apologise. I ask some clarification. We are talking about the setting up of one committee at the moment, which then could set up sub-committees. The Minister has said that it would be perfectly reasonable for it to do that. What is the difference between setting up one committee and three sub-committees, and four committees at this point?
Lord McIntosh of Haringey: The difference is that the new opportunities fund, which will be set up by statute, will have the freedom to do what it thinks appropriate when it has asserted its priorities and set out its programme of work. I do not deny that it may decide that separate committees for Scotland, Wales and Northern Ireland would be appropriate. It may decide that permanent committees for Scotland, Wales and Northern Ireland would be appropriate, or it may decide that special committees for different initiatives would be appropriate. I do not know, and it is not government's job to second-guess it.
What we are saying is that what the noble Lord is seeking to achieve by this amendment, which is flawed in the way that my noble friend Lord Randall has pointed out, can and should be achieved without legislation on the initiative of the new opportunities fund. That is my argument against the amendment.
The noble Lord raised the issue of the National Lottery Charities Board, and I think it is right that I should respond to that. The NLCB has a different remit, and it operates in a different way. because it does not pursue broad initiatives in the way that the new opportunities fund will. What it does is give out grants which, of their nature, are normally geographically more limited. The new opportunities fund initiatives—if we are to take the first three initiatives as examples—are nationwide.
I referred on Monday to the IT training for teachers. The proposal here is that IT training should be provided for about 450,000 teachers. It should be provided for all those teachers in need of IT training. Not all teachers are in need of IT training; we do not know where they are. The allocation of funds should reflect the need for IT training for teachers; in other words, it should reflect the numbers of teachers who need training at different levels. We do not know that in advance. If the Scottish

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education system, as Scots claim, is so much better than that in other parts of the United Kingdom, presumably Scotland will need less money for IT training than other areas. If, on the other hand, other initiatives are concerned with issues where there is greater need in Scotland. Scotland will need more money. The flexibility that I am describing is appropriate for all of those circumstances.
Lord Redesdale: The Minister said that he would have no objection to the main committee setting up permanent sub-committees in these areas. The purpose of the amendment is to make sure that the views of those in Scotland, Wales and Northern Ireland are listened to. Indeed, there has been some well founded criticism that centralised bodies based in London do not have the ability to look at problems in Scotland in the detail that those in Scotland would wish. I suggest to the Minister that it would have no effect upon the arm's length principle if he says now that he would have no objection to the main committee being set up with three permanent sub-committees being set up at the same time. Clearly, that would not change the nature of the permanent committee but it would address one of the fundamental ideas behind the amendment, which is that the views of those in Scotland, Wales and Northern Ireland should be addressed by people within Scotland, Wales and Northern Ireland.
Lord McIntosh of Haringey: I do not think the Secretary of State would have any objection. I clearly failed to make my point clear. What we are saying is that it must be a decision for the new opportunities fund itself. If it decides that committees of the sort that the noble Lord is proposing are desirable, the Secretary of State will certainly not intervene to ban them. If it decides the other way round, that again is its prerogative. We believe in the arm's length principle.
Finally, it is by no means certain that the new opportunities fund will be set up in London. The shadow fund is to be set up in London, but the actual new opportunities fund could be set up anywhere in the United Kingdom.
Lord Redesdale: I do not believe I shall make any further gains this evening, but I do believe that there is a case to be heard. However, if the Minister likes the idea of setting up a committee that does not have bodies in Wales, Scotland and Northern Ireland, he is fundamentally missing the central point of devolution. I reserve the right to bring this matter back at a later stage, but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
Clause 8 [Power of distributing bodies to solicit applications]:
On Question, Whether Clause 8 shall stand part of the Bill?
Lord Howell: I rise to support Clause 8. I had prepared a great speech, which my noble friend Lord McIntosh will be delighted to know I do not now intend to deliver in the absence of the criticism of the noble
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Lord, Lord Skidelsky, which I was anticipating in view of his speech at Second Reading. He throws his arms up in disbelief and surrender! I am very pleased about that. I simply say that I regard this as the most welcome part of the Bill because there are great vacuums all over the country in the provision of sports facilities in particular, and no doubt of arts facilities. The need for the Sports Council to develop strategies, to go out and encourage grant applications to meet great deficiencies in the needs of local communities and above all, to issue a strategy for sports provision, is absolutely essential. I appreciate and welcome the Bill.
Clause 8 agreed to.
Lord Howell Lord Howell moved Amendment No. 26:
After Clause 8, insert the following new clause—
DISTRIBUTING BODIES: VOUCHER SCHEMES
(" . In section 25 of the 1993 Act (application of money by distributing bodies) after subsection (2B) there shall he inserted—
"(2C) A body may, in connection with any distribution falling within subsection (1). make provision in relation to the availability of any facilities or services to which the distribution project or arrangement relates.
(2D) The provision which may be made under subsection (2C) includes provision—

(a) for any facilities or services to which the project or arrangement relates to be made available to persons holding vouchers, and

(b) for or in connection with the issue of such vouchers.".").

The noble Lord said: I hope this amendment is welcome to the Government too because it follows from the strategies and initiatives which I mentioned a moment ago which I would like to see the Sports Council, the Arts Council and others operating. At the moment there is considerable Treasury bureaucracy as regards grants. A by-product of moving these amendments is to ask my noble friend if, when he has time—because he seems to be the busiest man on the Government Front Bench at the moment—he would kindly look at all this bureaucracy. I understand that there are 40 pages of Treasury documentation guiding these councils as regards applications that can be made, and how they are to be considered.
When people make applications for grants, these 40 pages have a big effect upon them. To a certain extent, we now have a new industry growing up of people advising others how to make grants. This all comes from this ridiculous bureaucracy. One can understand that if you are proposing to build a national stadium there have to be careful guidelines about matters of that magnitude. However, when we are talking about local tennis clubs and so on that cannot be true, but this is in fact what is happening.
It has been pointed out to me, for example, that if you want to make an application to resurface a tennis club, you have to go through the same bureaucratic procedures as if you are making an application to build a £2 million sports centre, and yet the difference between the two is enormous. This cannot possibly be right. In pursuing my amendment now I would just express the hope that my noble friend the Minister will look at that to see what can be done to ease the situation.
One of the ideas that has come forward to help us with small applications is contained in my Amendment No. 26 which seeks to enable the Sports Council, the Arts Council and others to distribute vouchers in lieu of actually making payments. That can have considerable benefits in relation to tax as well as in other areas. For example, it will be possible—speaking about sport, which I know more about—for the Sports Council to give a school vouchers to buy cricket equipment. They could then buy the cricket equipment with the vouchers and it would cut out a great deal of the bureaucracy we are complaining about. The same could also happen in other areas. With community awards, for example, if you knew a local community needed football equipment but that giving it money would involve all sorts of bureaucratic complications, then it would be sensible to give vouchers. Voluntary sports clubs and schools, in particular, could benefit from this amendment, which I know has the support of the Sports Council which has considered it carefully. There is no need for me to say more to make my case. I hope the Minister is sympathetic to it. I beg to move.
5.45 p.m.
Lord Addington: As somebody who has spent a great deal of time involved in sports clubs, I can safely say that the noble Lord is absolutely correct to say that paperwork is incredibly difficult for amateur bodies to deal with on a large scale. If you put 20 forms in front of somebody, with about three people having to read them, the chances are that nobody will go through them at all. Something that is straightforward and cuts out a totally unnecessary piece of red tape is surely to be welcomed by all those involved. I would hope that even if this particular scheme is not appropriate something like it could be included in the Bill because it would mean that those people who need the money or maintain activity in these sectors would receive direct support much more easily. Surely this is something which could easily be done and it should have been done earlier.
Lord Skidelsky: I nearly always agree with what the noble Lord, Lord Howell, says and I certainly do on this. Anything that can cut down bureaucracy is to be welcomed and I am absolutely sure that some of the money that is unspent—not all of it—is simply the result of bureaucratic delays in processing applications. What I am not quite sure about is how vouchers—and perhaps he was a little too short on that—which are the right to spend money, differ from money?
Lord Howell: I agree with the noble Lord that in essence they are not different from money. In practice, however, they save all the bureaucracy that we have been talking about. I hope the provision will be acceptable to the Government as it will enable applicants, as the noble Lord has said, to avoid the detailed processes of filling in forms and so on. It will enable the Government to know that they are making grants which will he accountable—which is not always the case with money grants—because the vouchers will
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be spent and the information as to where they have been spent will come back to the Sports Council, so there is a great safeguard there as regards public funds.
Lord McNally: On that point the difference between vouchers and money is that the accountability trail is much surer with vouchers than it is with cash, and that is the appeal of the scheme. I would like strongly to support this idea which has been raised before at Second Reading and in this Committee. There is worry about what I termed before the sclerosis in dispersing funds, and it seems to me that this is one sensible way of getting funds out quickly.
The other thing that really attracts me about this concerns another fault or snag in the lottery system, which is how we get funds down to small projects that can make a real difference. Again at Second Reading I mentioned the matter of primary schools falling foul of some of the big rules in getting funds. It seems to me that in this amendment the noble Lord, Lord Howell, has come up with a good solution, which will get funds down to areas that strike me in particular, for example inner-city schools and inner-city clubs where they do not need, or cannot build, a new pavilion or some other such grand scheme, but where the supply of some basic equipment can make all the difference to the success or otherwise of a sporting venture. I understand the English Sports Council would consider grants as low as £100 and thinks that if it did that it might be able to help over 100,000 recipients. That is a much more exciting way of using lottery funds than through some bigger projects that we could mention. So I really hope that at this stage we are going to hear not the ministerial "dead bat" on this but a reception that treats an imaginative proposal with the imagination that it deserves.
Lord Monro of Langholm: The noble Lord, Lord Howell, and I have been friendly sparring partners on sport for longer than I care to remember, and often we have come to the same conclusion. Here is a case in point and I strongly support the principle behind his amendment; for goodness sake let us with the proposed new clause try to reduce the bureaucracy in distributing grants. Like other noble Lords I am also deeply involved in sport and community work. When one looks at the detail required to fill in an application form for a grant, I am surprised that anybody ever asks for anything at all. I really believe that we have to aim for simplification. It is a slight paradox of what I was saying earlier that I want arm's length control by the distributing bodies. Here I am saying that it should be in the Bill and that that would make life simpler for those who wish to apply. Sometimes I feel we allow the distributing bodies to insist on matching funding, which often puts the whole project out of court from the point of view of costs.
Broadly speaking, I know the Minister will have taken on board that we are all very much in favour of trying to do something on the lines recommended by the noble Lord, Lord Howell, and I hope he gives us a favourable response.
Lord Chorley: I feel my former profession of accountant coming upon me. I do not see how the voucher scheme makes a great deal of difference, with the greatest respect to the noble Lord, Lord Howell. The

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fact is that the voucher is a right to spend money, and therefore the same sort of control has to be applied to the actual spending of money. There may be some saving later on, but surely any of the grant giving bodies have to pay just as much attention to the issuing of vouchers as to the spending of cash.
I spent this morning going through a charity's fund application which was 35 pages long. I had put my name to it as a referee, wisely or unwisely, and I rather wilted. If money is going to be spent properly, it has to be controlled. It is an interesting idea. Perhaps there is too much bureaucracy. There was not too much in the one I looked at this morning, even though it took rather a long time.
I have sympathy with the amendment, but if it came to a vote, I am not sure I would support it because it would not have the effect that the noble Lord seeks. I suspect I may be doing the Minister's job for him to some extent.
Lord Montague of Oxford: I wonder whether that is totally true. The assumption has been that the voucher will be for cash. It is a redeemable voucher which could be for any sort of equipment and it might enable the distributing body to engage in some bulk purchase at a very advantageous price. It could be redeemed through a voucher for the specific item.
Lord McIntosh of Haringey: Before I turn to the amendment itself, let me refer to the wider issues which my noble friend Lord Howell raised both in introducing the amendment and in speaking on Clause 8 stand part. He is right, of course, that it is important that we should as far as possible avoid bureaucracy in the issue of grants. I speak with some feeling having been involved before the election in the preparation of a grant application to the National Lottery Charities Board, which incidentally did not succeed. That may be my fault. Certainly, the complicated calculations which had to be made on the distribution of expenditure and benefit over an artificial number of years was extremely difficult. I quite see, as the noble Lord, Lord McNally, says, that people such as governors of primary schools will have enormous difficulty in dealing with matters of that sort.
The fundamental rules behind which bureaucrats shelter are propriety and accountability. We have to admit that they are right. If you relax the rules too far, you will get money going out in a way which is not accountable and may far too easily go to friends or to people who are not the most appropriate recipients of public money. We are keen to see that bureaucracy is kept to a minimum, and I give one particular example.
The community grants scheme, which we are going to pilot in Scotland and which we hope will extend to other parts of the United Kingdom in due course, will provide a simple, user-friendly, one-stop shop service for small groups including community sports organisations. If we can do that on a wider scale, I believe we will be making progress. A large section of this part of the Bill is concerned with trying to reduce bureaucracy. The parts which we have agreed without
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comment, which are concerned with the power to delegate from the major body to other people, to officers or to outside advisers, all contribute to this.
The power to solicit funds in Clause 8, to which only my noble friend Lord Howell referred, is concerned with seeing that we have a proper balance, because bureaucracy has sometimes, as noble Lords have suggested, inhibited a proper balance. I am sympathetic to any initiatives, including those in this legislation, to reduce bureaucracy.
I turn now to my noble friend's specific amendment. I am grateful to him and to the noble Lord, Lord Weatherill, for tabling it. I am also grateful to the English Sports Council, whose officials have been in consultation with mine over the possibility of extending the powers to distribute by other means than cash grant, which we propose for the new opportunities fund to existing distributors. I do not think it is entirely clear from the debate that what my noble friend is proposing is not something new; he is proposing that the voucher system which applies to the new opportunities fund should go to existing distributors.
Not all distributors have asked for this, but we see no reason at all why the voucher system—for the reasons that my noble friend, and indeed my noble friend Lord Montague, gave—should not be applied to other good causes. It is particularly valuable where large numbers of small awards are being made for similar easily defined purposes. The accountability insisted on for the first award could then be more easily extended to other awards. It allows a much more cost-effective and less intrusive approach to monitoring.
I cannot see any objection to what my noble friend is trying to do. If he will allow me, his amendment is technically defective in the sense that there are going to be other amendments required to the 1993 Act if it is to have effect. We would need to consult some other departments, and we would certainly want to consult other distributors to see that there is no objection that we have not thought of. Subject to that consultation, I can undertake to my noble friend that I will table amendments at Report stage which will give effect to what he wants, and on that basis I ask him to withdraw his amendment.
6 p.m.
Lord Howell: I am extremely grateful to my noble friend for that very wise and welcome statement. I would only say to him that I am always surprised if any amendment I move is found to be technically in order, so I have no difficulty in allowing him to improve on the wording.
I am sorry the noble Lord, Lord Chorley, has doubts about it. I would simply say to him as an accountant that vouchers are much more accountable than cash grants. I know that the Sports Council and others have had difficulties when they have made grants in ensuring themselves that the money has been properly spent. Here I have no doubt we will have auditors and accountants—finding more work for the noble Lord's profession, may I say—checking up on how these

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vouchers are spent, and that indeed it will produce a great deal of information which will be welcome to us in our future considerations.
In view of the extremely helpful statement by our noble friend, and with that spirit very much in mind in the Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Delegation by distributing bodies of their powers of distribution]:
[Amendment No. 27 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 28:
Page 13, line 9, at end insert ("only").
The noble Lord said: This is purely a drafting amendment. Clause 9, among other things, ensures that a charity which by mutual consent accepts the delegation of functions by a lottery distributor is thereby empowered to exercise those functions, notwithstanding the absence of specific provision for that in its governing instrument. In making this provision, the Bill needs to define what is meant by "charity". It was intended to use the standard definition in Section 506(1) of the Income and Corporation Taxes Act 1988, but the word "only" was inadvertently left out of the end of the definition. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 29:
Page 13, line 25, at end insert ("(or the holder of any corresponding office in relation to)").
The noble Lord said: This is what I am told is a precautionary drafting amendment. Clause 9 provides for the delegation of the lottery grant-making functions of a body to, among other bodies and persons, committees of its own members or members of another body. For the avoidance of doubt, the Bill already makes it clear that the members of a body include its chairman or deputy chairman. However, in some organisations the holders of equivalent offices go by other names. We would not wish the legislation inadvertently, for example, to exclude the convenor of a body from membership of a grant-making committee because he or she was not styled "chairman". I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 30:
Page 13, leave out lines 29 to 32 and insert—
(""(3A) In exercising any power under section 25A, a body which distributes money under section 25(1) shall comply with any directions given to it by the Secretary of State."").
The noble Lord said: I understand that the noble Lord, Lord Skidelsky, has agreed that his amendment, Amendment No. 31, will be grouped with this amendment. It may be for his convenience and the convenience of the Committee if I first explain my amendment and then say a word about his.
I am sure that those who feel that we are seeking to destroy the arm's length principle and dictate to distributors exactly how they should distribute their money—although I have already assured the Committee that that is not our intention—would agree that it would not be right for Ministers to direct distributors to delegate functions against their will or to direct distributors to delegate to particular bodies. Unfortunately, following representations from, among others, the chairmen of the Scottish Arts Council and the Arts Council of Northern Ireland, for which I am grateful, we now conclude that the drafting of subsection (2) as it stands inadvertently gives us that power. The amendment seeks to deal with that problem.
The amendment of the noble Lord. Lord Skidelsky, is similar, I believe, in objective. The purpose of Clause 9 is to enable lottery distributors to delegate any of their functions relating to the distribution of funds. In drafting the Bill, we were sure that noble Lords and others would be concerned that to ensure that if distributors were to be given the power to delegate functions, we would, by various means, provide for proper accountability and controls over their exercise of that power.
I appreciate that Amendment No. 31 in the name of the noble Lord, Lord Skidelsky, seeks to serve the same purpose. However, his wording would enable the Secretary of State to direct distributors only on the financial aspects of delegation. We believe that the Secretary of State needs a wider power of direction. He may need to direct distributors on matters of policy concerning delegation; for example, by requiring them to obtain his consent before they delegate to, say, local authorities the responsibility for monitoring the projects that they are funding. Our amendment limits the power to direct on delegation to that which we intended all along and enables the Secretary of State to direct distributors on policy as well as on financial issues.
Before I leave this, it may be helpful if I make it clear that we have no intention of using these powers to interfere in a detailed way with distributors' approach to delegation. We will also make directions only after careful consultation with distributors, as provided for in Section 26 of the 1993 Act. In particular we see internal delegation as very much a matter to be guided by the good sense of the bodies concerned and their accounting officers. The directions will merely specify broad requirements which give the Secretary of State and his Permanent Secretary (as accounting officer for the NLDF) sufficient assurance that there is no doubt about the importance of, for example, delegating decisions only to those who are properly qualified to make them or ensuring that major decisions are not made on the say-so of one individual. We have no intention of using the directions to go beyond that; for example, to say which staff in a distributor body should take particular decisions, or who should counter the decisions. I hope that the noble Lord, Lord Skidelsky, will recognise that his amendment, with similar objectives to mine, ought to be withdrawn and that mine should be accepted. I beg to move.
The Deputy Chairman of Committees (Lord Brougham and Vaux): I have to advise the Committee that if Amendment No. 30 is agreed to, I cannot call Amendment No. 31.
6.15 p.m.
Lord Skidelsky: I do not agree with the Minister. He has confirmed my suspicion that his amendment is rather more than a drafting amendment. It certainly simplifies the convoluted language of the original subsection, but it achieves that by widening the Secretary of State's powers. In the original, the body is to comply with any directions given to it by the Secretary of State with respect to the exercise of certain powers which are then specified. However, in the new subsection, we are to have,
"a body which … shall comply with any directions given it by the Secretary of State".
There is no limitation there. That is certainly unfortunately in line with an attempt throughout the Bill to widen the powers of the Secretary of State wherever possible. Our amendment seeks to narrow them to a particular point which, as the noble Lord said, is to secure:
"the proper management and control of money paid to the body".
Our amendment is somewhat narrower in scope than the original, but we prefer the original to the Minister's amendment. The amendment is exactly contrary to what the noble Lord said: it widens, rather than narrows. I may have misinterpreted that, but to say that:
"a body …shall comply with any directions given to it by the Secretary of State",
in exercising any power under new Section 25A is ambiguous. The Minister's amendment states:
"In exercising any power under section 25A, a body … shall comply with any directions given to it by the Secretary of State".
That seems to be a very broad remit.
Lord Birkett: I am glad that I think I understand the distinction between the two amendments. I was going to propose a more radical way out of the dilemma, which was to remove the whole of Clause 9 and not replace it with anything. I cannot see why the Secretary of State needs to have powers to direct in this matter at all.
As the noble Lord, Lord Skidelsky, said, the whole question of the powers of the Secretary of State dogged the original lottery Bill right the way through. I remember thinking then that the Secretary of State figured far too much in the 1993 Bill. I seem to recall prominent Members of the Front Bench of the Opposition of the time agreeing with me on that subject.
Therefore, the helpful suggestion I make is to remove the clause altogether. I say that for three reasons: first, in Clause 9(1), new Section 25A(4) defines very narrowly the kind of bodies to which the present distributing bodies can delegate—very sensibly so. Secondly, the distributing bodies themselves are, after all, in a position now to dispose unilaterally of enormous sums of money. They have very sensibly been trusted to do that, and I cannot see why they should not be trusted to delegate their powers to the right sort of people. Thirdly, when you are dealing with very large
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sums of money, such controls invariably arise because people tend to think of such moneys as public money. Lottery funds are not in any sense public money. The fact that they are very large makes the Treasury look at them in rather a different way than it might look at smaller sums. It is not, however, public money and therefore does not need the degree of ministerial control required by public money. By far the best solution is not to allow the Secretary of State to meddle with the question of delegation at all, but to leave it to the good wisdom of the present distributors.
Lord McIntosh of Haringey: As there is disagreement about this, let me take it in stages. First, what is the intention of the Bill as drafted in Clause 9(2)? Secondly, what is the effect of the existing wording? Thirdly, what is the effect of the wording as proposed in my amendment? The intention of subsection (2) is to give the Secretary of State powers to direct distributors on requirements they must observe in using their power to delegate. For example, it will enable the Secretary of State to require a distributor to ensure that the body to whom it delegates decision-making is capable of doing so properly and efficiently and within appropriate financial controls. The intention was that the distributor should decide whether to delegate these powers. He cannot, however, be forced to do so by the Secretary of State.
As I said earlier, the Chairman of the Scottish Arts Council and the Chairman of the Arts Council of Northern Ireland have expressed the view that the subsection as drafted could enable the Secretary of State to insist on delegation and even to insist on delegation to particular bodies. New Section 26(3A) says:
"A body shall comply with any directions given to it by the Secretary of State with respect to the exercise of its powers to"—
and I summarise—delegate. They considered that to be undesirable, as we do.
What we are saying, therefore, in Amendment No. 30 is that, in exercising any power under Section 25A—which means it is up to them to decide whether to exercise that power or not—a body which distributes money under Section 25(1) shall comply with any directions. That really is a reduction in central power rather than an increase, and I hope that that allays the fears of the noble Lord, Lord Skidelsky.
On Question, amendment agreed to.
[Amendment No. 31 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 32:
Page 14, line 5, at end insert—
("(6) In paragraph 3 of that Schedule (tenure of office) in sub-paragraph (4)(a) (removal on grounds of absence from meetings) for "or (as the case may be) from meetings of the committee without the committee's consent" there shall be substituted "or from meetings of a committee of the Board without the committee's consent".").
The noble Lord said: In moving Amendment No. 32, I should like to speak also to Amendment No. 46. These amendments correct the inadvertent removal of a provision in the 1993 Act allowing for the removal of board or committee members of the National Lottery

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Charities Board from meetings of its committees. The amendments mean that unauthorised absence from meetings of board committees will continue to be grounds for removal from office, as is continued unauthorised absence from board meetings. I beg to move.
On Question, amendment agreed to.
Clause 9, as amended, agreed to.
Clause 10 [Joint schemes for distribution of money by distributing bodies]:
On Question, Whether Clause 10 shall stand part of the Bill?
Lord Crickhowell: I would like to say a word about Clause 10, or I would like an explanation. It is perfectly possible at the moment for co-operation to take place between funding bodies. Indeed it has done so in at least one well-known case: the arts centre at Salford Quays. The arts centre there and the three funding bodies produced a total of around £60 million for that project. It was the intention that there should be joint funding in connection with the project to which the noble Lord, Lord Rees, has referred in earlier interventions: the arts centre in Cardiff that was a successor of a project with which I was involved. I do not intend to speak about that project because I have written about it elsewhere and I have made very plain my criticisms of what happened. I had no involvement in the project that succeeded and I want to refer to one or two things that happened there, because it raises some significant issues.
I believe I understand the purpose of this clause in that it goes rather further than the powers that were available before. It was possible, where there were three clearly separate component parts, for people to get together and the separate funding bodies each to fund part of the building. The clause here enables a rather more flexible approach. I simply want to make the point that whatever happens we really need to have sensible, practical, working arrangements between the funding bodies if we are not to have disaster.
I point to the example of what I regard as an extraordinary piece of mismanagement of the scheme to which my noble friend Lord Rees referred the last time we met. This was a project to build a centre for the performing arts which was to be funded jointly by the Arts Council in Wales, the Millennium Commission and the National Heritage Memorial Fund. The original intention was that the leadership was to be provided by the chief executive of the Millennium Commission. However, there have been a number of changes in the role of the chief executive of the Millennium Commission, and the person originally involved, Jenny Page, moved on and events moved on.
The reason I raised the issue and voiced my criticisms and my concerns was that after these three bodies had considered this project for a very long time, perfectly properly going into the business plan and the design and all the things that have to be done, we suddenly had an announcement by two of the bodies, the Millennium Commission and the Arts Council of Wales, that they
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were approving the project to the tune of £37 million between them, but that the National Heritage Memorial Fund had not come to a decision about the bid to it of £19 million for the wing which was going to be occupied by the national Museum of Wales, which has been mentioned by my noble friend Lord Rees.
Several weeks passed and then, for reasons which have been touched on by my noble friend Lord Rees, the National Heritage Memorial Fund said, "We cannot agree to our part of the project". That creates a pretty extraordinary situation. You have a building for which £51 million is being sought from public funding and suddenly £19 million is taken out, and at the very least if the project is to go ahead, and it is uncertain at the moment in what form it will go ahead or indeed if it will go ahead, you have to take out a major section of the building, you have to re-design it at considerable additional cost. If you take out one-third of the building, it is very unlikely that you will reduce one-third of the capital costs and, whatever else is uncertain, one thing that is absolutely certain is that the business plan cannot be the same as the business plan which has been the basis of the approval given by the first two funding bodies. Public money—I am not allowed to call it public money—lottery money is at risk and considerable sums of private money directed into the project by the architect, by the backers and by everyone else, is put at risk.
My simple point is that, if you approach three funding bodies in the City, three merchant banks, for financial support, I would consider it a pretty gross display of mismanagement if two of them were suddenly to announce that they approved the project and three weeks later the third one said, "We are going to turn down our bit of it". What they would do is get their act together. Here we have the situation where one of the funding bodies is chaired by the Secretary of State. I should have thought that in that situation one would have effective co-ordination. It is a public scandal that needs investigation as to why there was not effective co-ordination. We shall have to inquire in due course whether there has been a fresh look at the business plan and so on.
I rise to speak on this occasion with two purposes: first, because I want to understand exactly what Clause 10 will make possible which is not possible under the existing legislation. Secondly, I want to urge in the strongest terms I can that if we are to have co-operation between the funding bodies, we must ensure that it is conducted in a sensible manner and that the people who approach those funding bodies are not landed in the frankly lamentable situation that those responsible for this project now face. I know some of the individuals well. I know that they are struggling to rescue the project. However, after suffering one disaster in Cardiff with the demise of the so-called "Opera House" project, there is the possibility that the second, with identical objectives, with exactly the same things going into it, and with the original total cost not very different, might fail simply because of the administrative incompetence of the funding bodies being unable to get their act together. That is a public scandal of major proportions.
Lord Rees: I had not intended to intervene again particularly as I had sketched out some of the problems with which we have been faced, and I declared my interest on that occasion. Perhaps I should say again that I have been a member of the court and council of the Museum of Wales which was a great privilege. I am still a member of one of the committees.
My noble friend, who speaks with the authority of someone who has held high ministerial office in the Principality, has outlined some of the problems with which I am acutely concerned more lucidly and more authoritatively than I could. I hope therefore that we shall be privileged. I cannot expect the Minister to give us a reply today because he has not been given notice. He may be in a position to do so, but if he is not, if there are certain factors that he would like further time to consider, I hope he will be able to write to us, so that in the future we will be better informed. These are all continuing problems and if one project grinds to a halt it may be resurrected in some other form. It may be that the problems we have regrettably faced on one or two occasions in the Principality may be reproduced elsewhere in the United Kingdom. I am not in a position to say whether that will be the case.
I should like to be reassured on a further point. It may be that had I read the Bill with a more practised eye I need not have asked this question, but I do ask it and I hope I can be illuminated by the Minister when he comes to reply. If what has happened in the recent case in the Cardiff bay development affected the museums part of the application and were to arise again, could the difficulties be avoided by the passage of this subsection, or does this have no direct bearing on it? In other words, had this provision been law at the time this last application was made, would there have been some possibility, through whoever chaired or co-ordinated it, of resolving the problem? I do not want to go over the ground my learned friend has covered so eloquently, but there seems to be a faint absurdity in this particular case which has struck us acutely in South Wales.
Lord Crickhowell: Before the Minister replies, I should probably have declared an interest. I have no direct involvement with the project but I am a director of Associated British Ports who actually own the land on which this project will be constructed. I declare that interest.
Lord McIntosh of Haringey: I can offer the noble Lords who have spoken unstinted sympathy for the frustration they must have felt when two out of the three funding bodies agreed and one did not, but I cannot give unhesitating assurances that problems of that sort will never arise again. We are back to the arm's length principle. If we stick to the arm's length principle, then the bodies to which we give these responsibilities must make their own decisions and they will sometimes make wrong decisions. By the way I am not saying that anybody concerned made a wrong decision. I have undertaken to write to the noble Lord, Lord Rees, and I shall do so.
I can confirm that in certain circumstances Clause 10 will make it easier for there to be effective co-ordination and effective working relationships between bodies.
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I have to say that Clause 10 is not mandatory: it says that distributors may collaborate and they are not forced to. We could have exactly the same situation in Cardiff as we had before if the distributors decline to collaborate, but the provisions here in Clause 10 for joint schemes are provisions which have been requested by the distributors. They are given by the Government in this scheme because it is believed that they will result in more sensible working arrangements.
It is unlikely that these joint schemes will be for such major capital projects as the one to which the noble Lords have referred. It is much more likely that they will be used for smaller community schemes like the Scottish community grant scheme to which I referred earlier today. In that case they are indeed working together to establish sensible working relationships when the delegation provisions come into force. They will find it easier to handle applications which span the boundaries between the individual good causes because they could, for example, delegate the processing of an application to a single lead body which would make it more effective. We are of course in favour of more effective co-ordination, but that does mean that, with these extra powers, mistakes will not be made.
Lord Rees: I am grateful to the Minister and I apologise to him and to the Committee for intervening in the middle of his speech. He has made such an interesting and important point for the future that it is unlikely that the powers of co-operation and co-ordination would apply in relation to a scheme of the size of the one to which my noble friend Lord Crickhowell and I referred to, but rather to a much smaller one. Is that to be derived from the Bill, or is there some code of conduct, or some governmental direction? What leads him to make that point? I am not querying the merits of it, but I just want to know why that should be the case so that those of us who have to be at all concerned, in whatever capacity in the future, may have a little guidance on this.
Lord McIntosh of Haringey: There is nothing in the Bill which says it shall not be for large capital projects, and there is nothing I am saying which should be used in Pepper v. Hart terms to indicate any ulterior motive behind what I say. I am simply observing as a layman in this respect that the cost of setting up joint schemes will be significant as will the administrative time involved. However, they are more likely to be worth that administrative cost if they are schemes like the Scottish community grant scheme which apply to a large number of applications which could be handled more simply by a joint scheme. On that basis that is more likely, objectively, to be the way in which they will work, but I could be wrong.
The other objective point I would make is that one of the participants in the scheme to which the noble Lord referred was the Millennium Commission which has virtually run out of money. That additional participation is highly unlikely to occur again.
Clause 10 agreed to.
Schedule 3 [Joint schemes: Schedule 3A to the 1993 Act]:
6.30 p.m.
Baroness Rawlings Baroness Rawlings moved Amendment No. 32A:
Page 27. line 14, leave out ("£5 million") and insert ("£10 million").
The noble Baroness said: I beg to move Amendment No. 32A. The amendments in this group cover joint schemes and authorisation or approval by the Secretary of State. They are probing amendments intended to establish the real intention of the provisions. The first one is intended to ensure that the allocation of funds between the distributing bodies, as voted by Parliament, is respected and not improperly diverted to other purposes through joint schemes. I ask the noble Lord whether it gives the opportunity to the Secretary of State to intervene in the day-to-day decisions over joint scheme applications by the distributing bodies.
We fear that the financial limit in the Bill of £5 million is too low. If the joint scheme involves three bodies, the contribution of each would be only £1.6 million but would nevertheless trigger the requirement of an order from the Secretary of State. We do not think that these provisions will make the distribution process work better for the applicants, as the White Paper claims. We fear that it will make the application process more bureaucratic unless the requirements are more limited. For these reasons, we are proposing to raise the upper limit in the second amendment to introduce a lower threshold of £100,000, below which no approval will be needed.
Will the Minister give an assurance that these provisions do not represent an erosion of the arm's length principle, and will he also undertake to reconsider the limit and the bureaucratic consequences of the provision?
Lord McIntosh of Haringey: I am grateful to the noble Baroness for the care she has taken to probe the way in which joint schemes will operate. She clearly feels that the provisions in Schedule 3 are too cautious, and she may be right; I am certainly not saying she is wrong. There is a good reason why we set the approval limits at the level they are. We believe that Parliament will be concerned that distributors taking part in joint schemes should not be permitted to undermine significantly the controls over the allocation of lottery funding which are laid down in the 1993 Act. At first sight I am not sure whether there is any need for a category of very small joint schemes for which there is no approval mechanism. We think it is highly unlikely that any joint scheme will involve expenditure of less than £100,000, and that refers to the second amendment of the noble Baroness, Lady Rawlings.
However, in the light of the noble Baroness's amendments and the arguments that she has put forward, and subject to the views of other noble Lords—this is, after all, an issue of what Parliament is prepared to delegate—I am certainly prepared to give her amendments further consideration. I think they would
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have to be discussed with the distributors, and it could be that the limit on her first amendment could be higher than £10 million. I just do not know. I certainly would not reject the amendments out of hand, and perhaps we can talk about it between now and Report stage.
Before sitting down, I ought to assure the noble Baroness that there is no interference involved here in the day-to-day decisions of the distributors. Once a scheme has been set up with the approval of Parliament for the reasons I have given, the day-to-day operation of the scheme is entirely a matter for the distributors.
One further point I would wish to correct: the noble Baroness is implying that the contribution of different distributors in a scheme would always be equal. That is not necessarily the case, as indeed the example of the Cardiff Opera House shows. On that basis, I hope that the noble Baroness will feel she has achieved what she wanted in these amendments and that she is able to withdraw them now.
Baroness Rawlings: I thank the Minister for his very clear answers to the questions, and I look forward to discussing the matter further with him. For the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 32B not moved.]
Schedule 3 agreed to.
Clause 11 [Strategic plans for distributing bodies]:
Baroness Rawlings Baroness Rawlings moved Amendment No. 32C:
Page 14, line 42, leave out from beginning to ("in") in line 43 and insert ("A body which distributes money under section 25(1) may.").
The noble Baroness said: In moving this amendment let me say at once that we are not against distributing bodies drawing up strategic plans. Such plans may reveal gaps in coverage which should be filled. We think that, most of all, the distributors will draw up such plans, but we are against them being told to do so by the Secretary of State. We would prefer the language of this clause to be permissive and encouraging rather than imperative. We do not see why the Secretary of State should insert himself into the process. I beg to move.
Lord McIntosh of Haringey: I am grateful for that explanation. I have to say that the purpose behind this part of the Bill is not that which the noble Baroness implies. We have always been committed, as we were in the White Paper, to ensuring that lottery funds are spent according to strategies based on an assessment of need: put simply, getting the money where it is most needed and can be spent most effectively.
The lottery distribution bodies are doing a tremendous amount of valuable work already and their approach is by no means reactive or demand-led. The National Lottery Charities Board, for example, has run a whole succession of themed rounds, each for a particular segment of the charitable and voluntary sector. The Heritage Lottery Fund's programme of grants for urban parks is an excellent example of how an area which needed funding can be identified and funds channelled to it. We want to build on this existing success and take it even further.

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One aspect of this is the relaxation of some legal restrictions imposed by the current law, and that is the subject matter of Clauses 8, 9 and 10 which we have already agreed to. We also intend to revise thoroughly the policy directions issued by the previous government to ensure that they do not prevent the kinds of development by the distribution bodies which we are talking about.
This clause deals with another element of the policy—our desire that distribution bodies should produce a strategic plan every three years or so based on widespread consultation, making an assessment of the needs of their sector and setting out their priorities and dealing with them. This formed part of the approach we put before the electorate last year, which we incorporated in our White Paper and which was widely welcomed in responses to it. Distributors also have welcomed this element of our proposals.
The clause is at the heart of our plans to build on the success of existing lottery distribution; it is not an optional extra—yet I am afraid that the amendment of the noble Baroness would make it an optional extra. It would say: "The bodies may prepare a plan". Whether they did so or not, and when, would be entirely up to them. I do not believe that gives sufficient weight to our proposals.
This is not an interference with the arm's length principle. The strategies we require will be developed by, and belong to, the independent distributor bodies. They will not be imposed by the Secretary of State. Subsection (5) provides for him to be consulted, not for his approval.
The assessment of need is not only a matter for the internal good governance of the distributing body. It is also an element of open government. These strategy plans will be published. They will be available to the general public for them to react to. They will be available to potential applicants so that they can understand the context in which grants are being made. For that purpose, we believe it should be a requirement on the distributing bodies rather than an optional extra, as is proposed by the amendment.
Baroness Rawlings: I thank the Minister for his explanation, but I still feel the provision interferes with the arm's length principle when it says very clearly that the Secretary of State "instructs" it to do so. I will for the moment withdraw the amendment, but I hope we will consider it later.
Amendment, by leave, withdrawn.
Lord Redesdale Lord Redesdale moved Amendment No. 33:
Page 15, line 23, at end insert—
("() a statement of the body's assessment of how the strategic plan will further sustainable development, and
()a statement of how the body intends to assess the environmental impact of the projects they propose under section 25(l)").
The noble Lord said: The purpose of this amendment is simple. It is that we wish to put the environment on the agenda for applications for lottery funding. The purpose of this is that many lottery funds involve large
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tranches of money that can have a significant impact on local strategies in the way that planning application is sought and granted. Indeed, the very fact that a large amount of lottery money is to be available will have a direct impact on how that application is dealt with. The purpose of the amendment is to ensure that the environment is protected and that on the forms and applications the strategy concerning the environment is involved. The purpose is also to fulfil the obligations under the Amsterdam Treaty, which says that environmental policies should be included in routine legislation. I beg to move.
Lord McIntosh of Haringey: These are very important issues which were raised by the noble Lord at Second Reading and also by my noble friend Lady Young of Old Scone. As the White Paper makes clear, the Government share the view that these are important issues, and I am sure that distributors will want to cover them in their plans.
Sustainable development is a concept which goes much wider than simply environmental protection. This is why in Clause 5 we extended the definition of environment to cover also the living and social environment. The definition of sustainable development comes from the Brundtland definition from the Rio Earth Summit:
"development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
The Government, and their predecessor, have expanded this in terms of broad objectives which will be very helpful to distributors and particularly the new opportunities fund in considering their funding programme—social progress, which recognises the needs of everyone, effective protection of the environment, prudent use of natural resources, maintenance of high and stable levels of economic growth and employment. We are very much in agreement about the objectives and the thinking behind the noble Lord's amendment.
I believe the distributors have this well on board already and they undertake environmental assessments where necessary and include environmental impact as an assessment criteria. Many lottery projects have made significant contributions both to improving the environment and to sustainable development. The Millennium Commission, for example, has made an award of £30 million to the Millennium Seedbank project to collect seeds of almost all UK flowering plants for preservation through the next millennium, for academic research and re-introduction to the wild. The Heritage Lottery Fund has made an award of £400,000 to the Pollockshields Burgh Hall Trust in Glasgow to restore a Grade A listed Victorian Renaissance building, permitting its continuing use as a community centre. The National Lottery Charities Board has just undertaken a themed round—Improving People's Living Environment—which specifically addressed many sustainable development issues such as environment, housing and poverty.
This amendment adds to the very limited list of fundamental requirements for the plan contained in new Section 25C(3), taking it beyond the most basic issues

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of resources, needs and priorities, to specific points of content. I recognise how important the specific points are, but we can leave it to the good sense of distributors to include that in their plans. Once we start adding topics of this nature, however important, to the list in the legislation itself, I am sure that the noble Lords and others would find many other points which could be mentioned, both of a general nature and specific to each good cause. It would be better to confine the requirements of the clause to the basic list of resources, needs and priorities as drafted in Clause 5, to which I have already referred. I hope that, on that basis, the noble Lord will think it proper to withdraw his amendment.
6.45 p.m.
Lord Redesdale: It is unfortunate, considering the impact that many of the larger projects will have on the environment, that it is not a requirement to put such a provision on the face of the Bill. I understand the Minister's point that it is a requirement of many of the distribution bodies that an environmental impact assessment is undertaken, but I find it disappointing that he does not see it as one of the core provisions—even though the number is limited—that can be put on the face of the Bill. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 34 to 36 not moved.]
Clause 11 agreed to.
Clause 12 agreed to.
Clause 13 [Orders and regulations]:
[Amendment No. 36A not moved.]
Clause 13 agreed to.
The Lord Bishop of Oxford The Lord Bishop of Oxford moved Amendment No. 37:
After Clause 13, insert the following new clause—
PARTICIPATION OF YOUNG PERSONS IN THE LOTTERY
(". A licence under sections 5 or 6 of the 1993 Act shall include a condition that the minimum age for participation in the National Lottery or in any lottery or description of lottery specified in the licence is eighteen years.").
The right reverend Prelate said: This amendment concerns the age at which people should be allowed to take part in the lottery. The Churches arrived at a common view on the lottery in November 1995. Among the agreed positions was a concern that the minimum age for play should be raised to 18. We twice visited the Secretary of State to discuss the issue. On both occasions we requested that more effort be directed to research into the study of gambling, particularly among young people. We also requested that the age for lottery play should be raised to 18.
There are four reasons for taking that approach. The first is Oflot's research findings on under-age gambling. The department has had a clear commitment under this, and the last, Government to conduct research into the gambling aspects of the lottery. It is understandable that the Government should wish to see the results of more
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extensive research before making up their minds on my question, including on the age for participation in the lottery. They have been greatly helped in that by the quality of the research commissioned by Oflot, the lottery regulator.
The study (published in 1997) indicated that there was a connection between young people's problem gambling on fruit machines and under-age participation in the lottery. The 1997 study suggested that this connection was leading to a measurable and worrying degree of excessive under-age play on the lottery, particularly with instant gains games.
Oflot's response was open and immediate. The regulator directed the operator to require retailers to be much more stringent in their vetting of young people's participation. Further research was commissioned. This research has been published in the last day or two and it confirms that 18 should be the age at which people should be allowed to gamble. It indicates a strong factual foundation for not allowing people of 16 to take part in the lottery. So, first, there are the research findings (which more and more people regard as highly significant) about the addictive effects of gambling on young people.
Secondly, we should take into account American and European views. Neither the United States nor our European partners permit gambling under the age of 18. It is not necessarily wrong that the age limits for gambling should be so distinctively low in Britain, but if research is leading us in that direction it seems reasonable to explore the value of other people's experience.
Thirdly, there is the commonsense attitude to teenage multi-millionaires. It seems out of proportion, indeed unseemly, that a government scheme to raise money for good causes should invite 16 year-olds to win £20 million. Again, neither the United States, nor any of our European partners, permit such a thing.
Finally, there seems to be a growing consensus on raising the age limit. It is understood that neither the operator nor the regulator wishes to resist the raising of the age for understandable reasons. The present scheme is accompanied by scandal, harm and difficulty: scandal, in that large amounts can be won by quite young people; harm, in that the accumulation of research is showing that the lottery is associated with problem gambling among a minority of young people; and difficulty, in that the scheme is hard to police without placing undue pressure on already hard-pressed retailers.
The lottery was introduced on the basis of an age limit of 16. That is not in the Bill, but is specified by regulation. It was probably necessary for some time to elapse before the initial policy decision could be reconsidered. That time, and the time for decision, has now arrived. I beg to move.
Lord Redesdale: I rise to support this amendment. I hope the Minister will give some guidance on whether this provision includes scratch cards. Although it was envisaged originally that the lottery itself—now with two draws a week—would encourage only adult gambling, scratch cards are a completely different issue.

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Although the sales of scratch cards have fallen away, as by their very nature they can be quite addictive—especially to those in the 16 and 17 years age group—perhaps their sale should be limited. The figures given are that there will be a shortfall to good causes of between £17 million and £18 million per year, out of the £1.5 billion per year which is to go to good causes. Considering the aims of the lottery and the aims of the good causes, this must be a small price to pay. I hope that the Minister will support the amendment.
Lord Rees: I had not intended to intervene in this. In general terms, one must approve of measures which discourage the young from involving themselves in gambling to any considerable degree. However, the right reverend Prelate the Bishop of Oxford struck a jarring note to me, in saying that it was obscene for a young person to win a great prize. I see no reason why that should be so. It is no more obscene than anyone else being worth a great deal of money.
The noble Lords opposite, with their egalitarian traits, may dislike the whole concept of anyone having a large sum of money, but I do not see why it should depend on a person's age. It is not for me to speculate about settlements, or trusts, set up by, or for, any Member of either House. Their children may well be entitled to participate in and to benefit from those trusts. Does that strike a jarring note with the right reverend Prelate the Bishop of Oxford? If so, what measures does he propose introducing?
I am also worried about the practicalities of this amendment. It must be difficult for anyone selling lottery tickets to ask young people to confirm their age. Is this a prelude to the introduction of identity cards and so on?
Finally, supposing this amendment is carried, and someone under the age of 18 wins a huge sum, what will be the consequences? Is the right reverend Prelate the Bishop of Oxford suggesting that that person should be deprived of their prize? Again, I am uninformed about the legalities. Perhaps the Minister can help us. If some child of, say, 16, looking mature (as so many do these days), flouts the law and wins a vast sum, is he able to handle it? Would he be required to surrender the prize? Can the right reverend Prelate enlighten us on the legal consequences of this amendment if it should be carried?
Lord Montague of Oxford: Perhaps I may comment on the proposal. I have not read the study which finds that 18 would be the appropriate age. I have not been everywhere, and seen everything that goes on with the lottery, but I have not observed that this thing is so addictive and so damaging to anybody, young or old. What I have observed is that the lottery gives a tremendous amount—indeed, a disproportionate amount—of pleasure and fun, and why we should deny that pleasure and fun to those between 16 and 18 years I do not quite understand.
Lord Crickhowell: The noble Lord quoted a figure of £17 million to £18 million as a consequence. Is that soundly based? If it is, it suggests that the problem is a pretty small-scale one in terms of the number of people
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under the age specified by the right reverend Prelate the Bishop of Oxford who are actually gambling to a significant extent. I would like guidance as to whether those figures are accurate and how that translates into the volumes with which we are concerned.
Lord Redesdale: Perhaps I may be of help. These figures come from Camelot itself, and, of course, the amount going to good causes is not the amount spent on tickets. It is only approximately 28 per cent. of the amount. That indicates that we are talking of at least £18 million-plus in this case.
May I also ask the Minister one question, because I believe scratch cards are more of an issue here than the actual National Lottery? Because the age definition has been brought up, have there been any studies into how many 14 and 15 year-olds regularly undertake the playing of scratch cards?
The Lord Bishop of Oxford: It may be appropriate for me to comment on one or two of the points which have been directed towards me. First of all, there is the question of big prizes. One has to be honest and say that all the Churches have been worried about the big prizes on the lottery. We have felt that the huge prizes have been unseemly and inappropriate. We are thinking of a 16 year-old suddenly winning £10 million and posing questions about his or her ability to cope and retain any kind of sanity or sensible lifestyle. Of course there can be a difference of judgment on it. From the Church's point of view there is no doubt that there is a worry about those vast prizes coming to teenagers.
But that was not the strongest argument. The strongest argument is the research which has been published in recent days to show that teenage gambling, particularly on something like scratch cards, but also the lottery, can be addictive and therefore destructive of a person's whole life.
The point was made about the difficulty of enforcement, but we now have a law forbidding people under a certain age to buy cigarettes, and that law is quite enforceable. It seems to me that it would be equally enforceable to impose an age limit on people buying either scratch cards or lottery tickets; it would probably make it easier than enforcing the present system.
I am not qualified to comment on legal consequences. It may be that there have yet to be laws enacted which would answer the noble Lord's question.
Lord McIntosh of Haringey: I am grateful to the right reverend Prelate for raising the issue, which has certainly stimulated a very interesting debate. I should begin by saying that the changes to the minimum age limits may be made without primary legislation. There are provisions within the current Act—in Section 12—to allow the Secretary of State to issue regulations to change the minimum age limit. The matter is also dealt with by directions under Section 1 I of the Act for the director general to ensure that the licensee allows sufficient controls to prevent National Lottery tickets being sold to persons under the age of 16, which is the

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current age limit. I understand that the right reverend Prelate's purpose is to raise the issue in Parliament, and I value that.
The current minimum age limit for participation in the National Lottery was set, in line with that for other lotteries, at 16. Society lotteries and the Pools have the same age limit. Sixteen year-olds can also play certain types of amusement machines. These have always been considered to be relatively harmless forms of entertainment at the softer end of the gambling spectrum, where the possibility of addiction or major losses is seen as minimal. For this reason the age limit of 16 has been considered to protect adequately the interest of players on the National Lottery.
As part of the director general's statutory duty to protect the interests of participants, his office has undertaken, and continues to support, a programme of lottery gambling research by leading academics and researchers, and they regularly publish the results. These reports have not so far indicated that the age limit should be re-visited. I have not seen the research to which the right reverend Prelate refers as having been published in the last few days. If the research appears to indicate that the age limit should be revisited, the director general and the Government would certainly look at it very carefully under existing powers. At the moment, we are not persuaded that there is a case to make for the age limit, but we have a very open mind on this issue.
The noble Lord, Lord Redesdale, referred to scratch cards. We have research on scratch cards for 16 to 18 year-olds. It should be remembered that the director general has a duty not to license games that lead to excessive participation. His research suggests that, on average, only 10 per cent of the adult population regularly buy National Lottery scratch cards, compared to more than 60 per cent who play the on-line game regularly. Of those 16 to 18 year-olds questioned, some 8 per cent.—in other words, less than the average—report playing at least weekly. I do not have any
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statistics on 14 to 15 year-olds using scratch cards, and I am suspicious of research which asks people if they break the law.
On the question which was raised as to whether someone who played under age and won a huge prize would be entitled to his prize, I am advised that to play a game under age is itself a criminal offence. Presumably the courts would therefore have to make a decision on whether, in addition to any other penalty, the prize itself should be forfeited.
There have been views expressed in the Committee in response to this question. We do not have a closed mind and under certain circumstances we might well be prepared—either ourselves or the director general—to make changes in the age limits. I would very much welcome an opportunity to see the research to which the right reverend Prelate has referred, and if he would like to discuss the matter between now and Report I would be glad to do that. In the meantime, I hope he will consider it proper to withdraw his amendment.
The Lord Bishop of Oxford: I thank the Minister for his expression of openness of mind on this. I will certainly ensure that the research is sent to him and I am very grateful for the assurance that this will be looked at as objectively as possible. I can quite see the difficulty of having one age range for the lottery and perhaps scratch cards and others, say, for fruit machines. I can see there could be a difficulty if there was that difference, but nevertheless the lottery and scratch cards do pose a particular kind of problem. It could be relevant that there should be either a regulation, or a direction at least, which indicates a different age group for the lottery and scratch cards. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey: I beg to move that further consideration in Committee be adjourned until Thursday next at 4 p.m.
The Committee adjourned at three minutes past seven o'clock until Thursday next at four o'clock.

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