Sitting of 1 July 1998

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

Gap Year Students
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]
9.34 am
Mr. Nick St. Aubyn: I am grateful for the opportunity to debate gap year students. One of the great advantages of being a Member of Parliament is that one can occasionally highlight an issue that is not always in the public mind, and this is certainly one such issue. I congratulate those hon. Members who have survived the tribulations of last night on making it here this morning in one piece. I hope that we can score a few goals on behalf of students, but that is in the hands of the Minister.
The Parliamentary Under-Secretary of State for Education and Employment (Dr. Kim Howells): I am a rugby player.
Mr. St. Aubyn: That sounds ominous. Perhaps the hand of Government will be as effective as the hand of God was on another occasion.
First, I shall define gap year students. This month, if their A-level results are good enough, many students will make plans to go on to the university of their choice in the autumn. Every year, some school leavers decide to take a year out from their education programme to widen their experience and find out more about the world. Those are predominantly gap year students.
I have tried hard to get exact figures on the number of such students, but there are little data in this area. Most estimates show that 20,000 to 30,000 school leavers who intend to go to university take a gap year. However, as I shall show, a greater number may fall into that category. We should also consider students who enter university and meet students who took a gap year. They may put a gap year in their plans between leaving university and starting a full-time career.
I should declare an interest because I was a gap year student a few years ago. It was a tremendous experience, thanks to the organisation Project Trust. It was first in the field, following the decision by Voluntary Service Overseas to concentrate only on graduates. The trust started 30 years ago, and has developed programmes throughout the world specifically to enable school leavers to spend nine months to a year on structured projects that they had identified. In those 30 years, the trust has sent more than 4,000 school leavers abroad, and it has had great success. Those who go abroad for a year take on a big commitment, and the success rate says a great deal for the assessment, back-up, training and knowledge that the trust has developed.
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One way in which gap year students gain experience is by self-selection. Perhaps that is why relatively few examples of poor experiences by gap year students come to light in the media. For students, it is a self-selecting experience, because the Project Trust base is on the island of Coll: applicants have to go from Glasgow to Oban to catch the island ferry early in the morning. If my memory is correct, it leaves before 7 o'clock. Anyone who faces those rigours must be willing to spend a year abroad.
The image of gap year students has perhaps limited the number who come forward. When I was applying for a project, I had in mind working on a sheep farm in Australia, on a ranch in South America with racehorses, or some such idea that one has at that stage. It was only when I was on the training and induction programme that I became interested in doing volunteer work, and I ended up as a care worker in a children's home.
In many ways, that was a life-determining opportunity for me. The striking fact—as the evidence of the Project Trust and other organisations suggests—is that that experience, if it is well structured and successful, does make a difference to the rest of volunteers' lives. Therefore, although we may be talking about only a small proportion of school leavers—the Universities and Colleges Admission Service estimates that only 6 per cent. of university applicants currently decide to take a gap year—the ones who do stand to benefit tremendously if the experience is right.
The other factor to bear in mind is that the nature of students taking gap year opportunities has changed. Seventy per cent. of the Project Trust's volunteers come from the state sector, and only 30 per cent. from the independent sector. The idea of the year off as the rich kid's luxury has gone. It is an opportunity that is and should remain open to all school leavers. However, there are problems.
The grandfather of overseas volunteering is Voluntary Service Overseas. Earlier this year, it reported that the number of its projects has had to be reduced by 10 per cent. because of a fall in applications. It sends about 2,000 people abroad on projects. That is at a time when, in the United States, with a $50 million grant from the United States Government, the number of Peace Corps volunteers—Peace Corps is a programme that was directly inspired by the example of VSO—has doubled to 10,000 a year.
There is other evidence that there has been a change in attitudes in our country, which we must do something to address. There is evidence that the number of people aged between 18 and 24 who are involved in any volunteering activity in this country has fallen in recent years. In 1991, 55 per cent. of those in that age group were involved in volunteering. Last year, that fell to 43 per cent., a drop of 1.4 million volunteers.
The new Government came to power promising the giving age, but for that age group it has become the taking age. One of the most worrying aspects of the current situation is the great increase in the burden on 18 to 24-year-olds implied by the Government's new proposals for tuition fees and for taking away the maintenance grant. I have seen correspondence between the Minister and some of the organisations in this sector making the case that those from less well-off backgrounds will not have to pay tuition fees, but, as we all know, that is only part of the package. The other part is that the maintenance grant

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will be abolished, so, when they leave university, those from less well-off backgrounds will find that the debt on their shoulders will be higher than the debt of those from well-off backgrounds.
Therefore, across the board, members of that important, in many ways idealistic, age group who may want to take part in community activities, will find that the burden imposed by the Government deters them. Instead of spending a year doing voluntary activity, whether in this country or abroad, they feel that they must spend that time building their savings to help them to pay for their tuition at university.
That has clear consequences. One is that, if school leavers want to enjoy the benefits of a gap year, it is now more important than ever that they do so in a structured way, through an organisation that provides a well-founded experience. Not only will that be their best chance of ensuring that they gain the most from that experience, but, when they come on to the job market, it will be a plus with their prospective employers.
A recent survey showed that more than 50 per cent. of employers are more likely to choose a candidate who has had gap year experience; I am grateful to The Guardian of 12 August for that survey. Community Service Volunteers—the domestic equivalent of VSO—which in any year has 1,200 volunteers on its programmes, has done its own survey, which found that more than 50 per cent. of human resource directors in companies it questioned would prefer to take on an employee who had been involved in voluntary work, compared with one who had just been on a backpacking holiday of their own design.
Therefore, it is important that those programmes have a structure. There are five key issues that students and potential students should be looking for when they go on a programme. First, they should be on a programme that provides for assessment of the school leaver. That assessment will guide the school leaver into the right sort of project to suit them.
Secondly, a well-grounded programme will ensure that the projects to which the school leavers go have a correct and well-prepared specification. Thirdly, the organisation will provide sufficient training for school leavers, so that, when they go on their project, they genuinely deliver benefits to their host country and to the charity or school where they may be working, rather than becoming involved in an experience that may, for want of a better word, be nothing more than aid tourism.
Fourthly, when school leavers are on a project, that will be their first experience of being away from home for an extended period. It is important that pastoral care is available to school leavers in the country where they work. Again, the organisation should not only be able to show that it provides pastoral care, but, if the political situation becomes threatening—in many of these countries, there is often political instability—it should be aware of that and able to take school leavers out of a country as a last resort, in good time and with minimum fuss.
Lastly—in many ways, this is almost as important as all the rest—there should be proper debriefing for school leavers when they return home. There is an element of culture shock in going abroad. There is more than an element of reverse culture shock when school leavers come back to this country, particularly if they have been on a posting lasting between six months and a year.
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That is why the cost of the best programmes is not cheap. Project Trust charges its volunteers £3,500 for their year's experience abroad. Gap Activity, which has been going for 25 years, is another well-established provider in the sector; it sends around 1,200 school leavers abroad a year and charges, all told, about £1,500 typically for a six-month experience abroad. Those figures sound high, but, in the case of those organisations and the other better organisations in the sector, that money is raised through sponsorship.
The organisations not only help school leavers to find sponsors, but give them some training in how to win sponsorship. The training is a part of the programmes' development of the individual, from which school leavers benefit. School leavers are successful, and achieve their sponsorship. Moreover, major British companies greatly value the results produced by the programmes, which provide volunteers with a leadership development programme as they are maturing as individuals. The required money is therefore forthcoming.
As the numbers of those going into higher education increases, and as awareness of the gap year experience and opportunity have grown, so organisations offering programmes have proliferated. It is estimated that more than 70 organisations now offer some gap year experience. However, the programmes are entirely unregulated. I shall deal with that point in more detail later.
I came across one company, for example, that employs in the United Kingdom only eight staff, who are responsible each year for almost 800 postings, lasting less than three months, for which they charge a total of about £2,000. Such programmes clearly do not provide the same value for money as those provided by the other, good organisations that I have mentioned.
The worst organisations do not provide training, or even an assessment of the school leaver and his or her suitability for a post. The image of the United Kingdom in countries where gap year students are sent will be tarnished if they show up for a few months, do not know why they are there, and perhaps return to the United Kingdom confused in their own minds, whereas people in the country involved simply think, "That's just another aid tourist who has been through our patch." That is not the image we want to project abroad.
Dr. Howells: Will the hon. Gentleman do the House and the country a favour by naming that company?
Mr. St. Aubyn: There are several such organisations, and I shall give the Minister their details later.
Such organisations pose a problem and have to be checked out. The question is whether we should regulate or offer guidance. The case against regulation is that volunteers are, as I said, a group of school leavers who are self-selecting. They have a self-awareness, and a "get up and go" that will stand them in good stead. Moreover, if they are to go abroad, they will have to have their wits about them. The problem with regulation is that it would create an extra cost for the best organisations, without providing any better value in the experience they offer.
The United Kingdom regulates similar organisations.
Mr. Phil Willis: Regulation is one of the most important aspects of the

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hon. Gentleman's speech and of the point that he is trying to make. Does he accept that the appalling situation that developed after Louise Woodward went to the United States to take up a post without supervision, regulation or training shows that we have to include within guidelines not only traditional, university gap year students, but all young people who participate in a gap year experience?
Mr. St. Aubyn: The hon. Gentleman makes a very good point, and I shall certainly deal later with the Louise Woodward case.
The decision whether to regulate should be based on our experience in the United Kingdom. Until quite recently, expeditions in the UK were not regulated. Only the previous Government introduced the requirement that expeditions be regulated and use qualified staff. When those regulations were introduced, after a canoeing accident in Lulworth cove, there was a sharp drop in the number of applicants to all organisations, however well established and reputable, which put their futures at risk.
Senior and responsible organisations offering overseas gap year projects have serious concerns that, if regulations were to be introduced, a hiatus would be created during which they would suffer serious effects. Developing a specific project can take a very long time, and, once the project is up and running, it is important that the flow of able and committed volunteers continues. If the Government were to interrupt and jeopardise that flow by announcing the need for regulation, many organisations would have a difficult time keeping their show on the road.
Most of the most reputable and longest-standing organisations are charitable, and are consequently run on a very tight budget.
Mrs. Teresa Gorman: The points that my hon. Friend is making are extremely important, very serious and valid. However, I am sure that he will agree that parents who are releasing their children into organisations that will send them to foreign lands have a very big responsibility to check out those organisations to which their children will be consigned.
Mr. St. Aubyn: My hon. Friend makes a very good point, which leads on to the main point of the debate.
If parents are to investigate programmes with due vigilance, and if schools are to allow organisations into their career evenings and access to children—often the point of contact is the school's careers officer—they must have guidelines on what to expect and consider. Issuing such guidelines is the role that I think should be played by the Minister and the Department for Education and Employment—not only to ensure that the best organisations thrive, and that those that do not offer a fair deal fall by the wayside, but to endorse the idea, if the Minister is prepared to do so, of the gap year experience.
Organisations such as Project Trust and Gap Action tell me that they often visit a school to find that the school's head and teachers have no concept of a gap year. Issuing guidelines to schools would raise consciousness of gap years, and broaden the group who think that the gap year experience might be for them.
Mr. Gerald Howarth: Issuing guidelines is an interesting idea. However, further to the point raised
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by my hon. Friend the Member for Billericay (Mrs. Gorman), I should like to tell my hon. Friend of my own experience when my son wanted to go to Vietnam for his gap year. As a responsible parent, I sought to discover as much about the programme as I could, and found the Foreign Office extremely helpful. I suggest to my hon. Friend that he might include as one of his proposals to the Minister that the Foreign Office should itself investigate some of the organisations, and make its knowledge available to parents before their children go abroad.
Mr. St. Aubyn: My hon. Friend also makes a very good point. Perhaps I should say how much the organisations involved in sending school leavers abroad appreciate the back-up they receive from Government—not only from Foreign Office officials in the countries involved, in helping them to identify people living locally who are prepared to help; but, in extreme situations, from the Foreign Office in performing its general role of protecting all United Kingdom citizens in political hot spots. The Foreign Office has a role to play in all those circumstances.
The Department for International Development also is very much aware of the positive aspects of the organisations, and should have an input to the Minister's Department in drawing up helpful and constructive guidelines.
The hon. Member for Harrogate and Knaresborough (Mr. Willis) mentioned the case of Louise Woodward. I am told that, when the phrase "gap year students" is mentioned to the Prime Minister, he immediately thinks of Louise Woodward. I have deferred mentioning her case until now, because I wanted to emphasise to the House that a much wider group of people is involved in the gap year experience. However, an unknown number of school leavers, who may not be going on to university, nevertheless want the gap year experience. They are being sent overseas without appropriate assessment, training or back-up, and thus run the risks which tragically led to the case involving Louise Woodward in the United States.
I am grateful to the House of Commons Library for the following figures. Although the official estimate is that about 20,000 to 30,000 school leavers take a gap year, in the current year 137,000 18-year-olds, 55,000 19-year-olds and 20,000 20-year-olds entered a university course. Clearly, a much larger group is entering university education later, perhaps having changed their minds after leaving school. They would benefit from guidelines about where they are going and with which organisation.
Mr. Roy Beggs: Most of the hon. Gentleman's remarks have focused on the gap year experience overseas. Does he agree that, before entering university or teacher training college, most students would benefit from a gap year even within the United Kingdom, and that steps should be taken to encourage that, because of the confidence that students gain from experience of the real world?
Mr. St. Aubyn: I am grateful to the hon. Gentleman. I have deliberately focused on the experience of school leavers going overseas, because it is with them that all the factors I have outlined come into play. School leavers doing voluntary work in this country will probably stay at home and do something in their own locality. However, I agree with the thrust of the hon. Gentleman's question.

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The Government plan a programme involving millennium volunteers, and I believe that they hope for 100,000. Over the past six months, the Government have been asked many times—most recently in the House of Lords by Baroness Hooper—whether they will include overseas volunteers in the category of millennium volunteers. Millennium volunteers are contributing to their community, and overseas volunteers are contributing to the wider international community. I believe, as do the organisations involved, that overseas volunteers should also be allowed to wear the badge of the millennium volunteers, thus highlighting a very special opportunity for those involved.
I would not want to conclude without stressing the support that students receive for the gap year, not only from employers but from universities. I have here one of the many letters that I have received on the subject. The vice-chancellor of Loughborough university today wrote:
"we regard gap year experiences as very valuable not least in taking forward students' key skills in terms of informal learning from work, travel etc. This fits in very well with the Dearing recommendations on key skill development for all HE students."
I represent a university town—it contains the university of Surrey—and I know that my vice-chancellor supports the idea of well-structured gap year experiences.
A year ago, the Department for Education and Employment was barely aware of gap year students. We know that, because of the hiatus caused for gap year students when the Government's plans for tuition fees were first announced. On that occasion, the Government performed a U-turn which might have done credit to a certain football team last night. They certainly performed a valuable service in recognising that there needed to be an exception for those students, but several thousands were still caught by the change in policy. I think that the Department is now much more aware of the nature of the gap year experience, the wide range of school leavers who take part, and of the importance of answering this call for them to be given guidelines.
10.4 am
Mr. Phil Willis: I thank the hon. Member for Guildford (Mr. St. Aubyn) for raising this topic. I apologise to the House for the state of my voice, but a great deal of cheering and shouting went on last night. Having then to go into the radio studios at 11.15 pm to do a late-night phone-in was not the best of experiences, but no doubt the Minister is familiar with that, having had to respond to the drubbing that Wales took in the southern hemisphere recently, on which the whole world commiserates with him.
The gap year experience is a very important subject. The one thing we learned from last summer's fiasco involving Government policy, or the lack of Government policy, on gap year students—the hon. Member for Guildford was generous in not spending too much time on it—is that there is a need to tighten the regulations, and to put the gap year on a much more secure footing.
I shall be brief, as I do not want to relive the nightmares of 1997; nor do I want to re-run in any detail the arguments about the introduction of tuition fees. At about midnight tonight, we shall have yet another vote, after a long debate on Scottish fees, and hon. Members will be
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able to make their feelings known. However, the Minister must still expect to respond to last summer's fiasco concerning the gap year, particularly the way in which it was handled.
It is now a matter of record that the Secretary of State's statement on 25 July gave the clear impression that there would be no leeway for gap year students going off in 1997, and deferring their higher education places until 1998. The Government then performed a number of U-turns, which we welcome, as did the hon. Member for Guildford. However, it was clear from what the Government did that they did not understand the nature of the gap year, and were not familiar with the reasons why students took a gap year, or what an integral part it is of the higher education system.
On 14 August, Baroness Blackstone issued the famous press release which made the Government's position clear. However, it was not until about 24 September that universities were given hard information on what the Government's policy was. By that time, students who had not got offers of a place and had not taken up gap placements by 1 August were left out in the cold.
The Government failed to recognise that many students do not make their gap year arrangements as early or precisely as some would like, but wait until their A-level results come out. Only then do they make their decisions. It is important that they have that leeway, and can make their decisions as late as possible. The higher education system should be flexible enough to enable them to do so.
When they made their decision last year, the Government gave no hint to potential gap year students that there would be any change in the regulations. Students who expected to wait until their A-level results came out before making a decision had no indication that there was to be a change. The Government made a retrospective decision, which was applied arbitrarily to the 1997 student cohort. That was wrong. The way in which it was communicated to students was absolutely deplorable. At every stage, it was revealed in the press—through a leak to The Times on 11 August and a press release by Baroness Blackstone on 14 August. Individuals or institutions were obliged to monitor the press in order to find out what was happening in respect of Government policy. In his response to the debate, will the Minister assure us that future policy changes will not be announced only in press releases, but that the data will be sent to the relevant organisations and institutions involved, so that the information is available to everyone at the same time?
My purpose in making that point is to draw attention to the fact that many students who had not decided to take a gap year by 1 August have been disadvantaged. That is an inequity that could be redressed, even at this late stage, if the Government extended to students who took a gap year but had not applied by 1 August the same facilities as were available to those who had applied earlier.
Many hon. Members will have received correspondence from parents, and from individuals who decided to take a gap year, who feel disadvantaged by the fact that they will go to university this year on different terms and conditions from those affecting students who had applied by 1 August. I know that the Minister, who is an honourable and decent man, will accept that the deadline of 1 August was an arbitrary decision. I should like to think that, even at this late stage, the Government will acknowledge that it was an arbitrary decision, and change their mind.

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We are concerned about the future of the gap year, and the hon. Member for Guildford made some extremely interesting and detailed points about its extent and nature. However, he did not refer to the statement by Baroness Blackstone on 14 August:
"The Government recognises the numerous advantages that taking a year out can bring. The Government is particularly keen to encourage volunteering and we will be examining ways of how we can encourage it in the future."
I may have missed something, but yesterday I searched the web pages of the Department for Education and Employment, and found absolutely no reference to any Government plans regarding gap years. The Minister may be able to give us a detailed résumé of the Government's plans. We would certainly like to see the noble Baroness's words put into action.
No doubt others will extol the virtues of students working as volunteers or travelling. Many are obliged to take a gap year in order to earn the money to enable them to go to university, either to pay their tuition fees or to help defray the costs. I am sure that the Minister and hon. Members accept that most students who take a gap year will not be going off to East Timor or Borneo, but working on building sites or doing manual work to earn enough money to pay their way through university; and that is honourable, too. I do not believe that there are two categories of gap year—one that is good for a certain type of student and one that should be regarded as less worthy.
The Government should recognise all students who take a gap year, irrespective of whether they work as volunteers or to raise the money to pay their way through university. One small concession that they could make is to allow students who take a gap year to have their fees paid at the level at which they would have entered higher education in the first place. It would not cost a great deal, but it would represent the Government's recognition that a gap year is important for students.
Mr. St. Aubyn: Does the hon. Gentleman agree that it would be helpful if the Minister would mention the Government's plans for post-qualification entry, which will also affect the organisations involved, and explain how he proposes to involve the best of those organisations in his discussions on the introduction of post-qualification entry to universities?
Mr. Willis: I am grateful to the hon. Gentleman for that intervention, which relates to the answer that I am trying to get from the Government in respect of the noble Baroness's statement. She made a powerful statement, and the Secretary of State has made similar ones. It is only right that the Minister is given an opportunity this morning to explain to the House what plans the Government have, so we look forward to his reply to the debate.
Finally, I strongly support the point that the hon. Member for Guildford made about guidelines and registration of organisations offering facilities to gap year students or any students who are taking time out. There is no doubt that the Louise Woodward case has highlighted some of the problems faced by young people who go abroad without being properly prepared, and the fact that there is no proper regulation or the necessary support mechanisms to help them. A register and clear
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Government guidelines would be welcomed by the organisations involved, but regulations certainly would not.
Mrs. Gorman: The hon. Gentleman has twice mentioned the Louise Woodward case. Surely that is a different issue, as she obtained employment through an employment agency, which is a different animal from the voluntary organisations to which my hon. Friend the Member for Guildford (Mr. St. Aubyn) referred.
Mr. Willis: I am grateful to the hon. Lady for her intervention, but I think that the two issues overlap. Many gap year students find work abroad or at home through employment agencies. More and more young people, particularly those travelling to the United States, Australia or the Pacific rim countries, are being encouraged to find work through employment agencies. Although I accept the hon. Lady's point that there is a difference between the two, it is important that the Government do not turn a blind eye, but seek the same guidelines for all relevant organisations, irrespective of whether they deal with undergraduates or others seeking work experience abroad.
I am grateful to the hon. Member for Guildford for initiating this morning's debate, and look forward to the Minister's response.
10.17 am
Mrs. Teresa Gorman: I have listened with great interest to my hon. Friend the Member for Guildford (Mr. St. Aubyn), and congratulate him on raising an important subject that obviously has ramifications outside the orthodox type of gap year. In my constituency, students have expressed the hope that they will be able to take a gap year, and employers have told me how much they value that experience for students.
We have been told that, whereas in the past increasing numbers of students have taken a gap year, this year there has been a fall in the numbers. I put it to the Minister that that is not unconnected with the fact that the Government have now decided to raise the cost of higher education for better-off students, who will have to pay their tuition fees, and for less well-off ones, who will face higher accommodation and maintenance costs. As a result, as the hon. Member for Harrogate and Knaresborough (Mr. Willis) pointed out, many more students will have to work in order to pay the expenses that the Government have increased for people in pursuit of higher education.
The Minister must accept that the Government's policies are having a detrimental effect on what we all agree has given a valuable dimension to many people's higher education experience. The majority of universities support the idea and go to great lengths to praise it, because the students who go to university after a gap year have more mature and focused views on why they are in higher education.
Many of us have had vast experience around the world as students and adults. We can all agree that there is no substitute for that contact with a variety of cultures and other people's way of life, as part of what would once have been called the university of life. That facility is undervalued. The Government's policies of increasing the cost of higher education are likely to deter many of our young people from gaining such experiences.
Mr. St. Aubyn: Does my hon. Friend agree that that highlights the Government's mistake in ignoring the

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recommendation of the Dearing report not to abolish the maintenance grant? The fact that they flew in the face of that recommendation is at the heart of the problems we are discussing.
Mrs. Gorman: I agree with my hon. Friend. We are discussing a very important issue. The gap year is not a frivolous extra in the pattern of education that has evolved in this country, but an integral and very important way to help those entering higher education to broaden their knowledge and develop a sympathetic view of the life style of what we choose to call ordinary working people and those overseas who are so much less fortunate than people in this country.
We sometimes take for granted the tremendous advantages of being a British citizen and having the opportunities of higher education offered by the taxpayer, which the previous Government, like all Conservative Governments, sought to expand. The proportion of young people going into higher education has risen from, I think, one in eight to one in three. That is a massive increase. It is important that those young, and to some extent privileged, people go out into the world and learn how the other half lives.
I urge the Minister not to neglect the damage that his party is doing by making higher education more expensive. Those who decide when they leave school that they cannot afford to go to university may be lost to higher education for ever. They may go off into the world of work and find that the cost of severing that connection to go back into higher education is too great. We can take credit for the fact that so many mature students joined our universities under Conservative Governments. Such students have already achieved what might be called gap years by having worked. They now realise the value of education, and have gone back for it.
I left school at 16 and went for what would now be called a gap year, although I did a Louise Woodward and got a job abroad, which was quite poorly paid, but was a wonderful experience—and one that I would not have had if there had been a minimum wage and the employers had had to pay me more than they thought I was worth. That experience was worth a great deal more than money. We should emphasise that point.
The Minister should not just encourage such schemes, but should review again the Government's detrimental move that has made it more difficult and more expensive for people on lower incomes to take those opportunities. There is a fine balance for people coming from what we call a working-class background between choosing higher education and going into work, which they may never come out of to return to higher education. Pushing people in one direction—I think that it is the wrong direction—is one of the many downsides of the Government's policy.
I hope that the Minister will take that criticism on board. It is meant to be constructive, and is based on my experience. I am sure that many other hon. Members have a similar background. Many of those who have come up the hard way to sit on the Labour Benches would, if they were here—I understand that they are busy elsewhere—undoubtedly support the idea of not just keeping but extending the possibilities of the gap year, and making it financially possible.
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For all the grandiose talk about the value of such schemes, we shall not achieve an increase in the university of life year unless we make it financially viable. I hope that the Minister will give us a constructive answer, not a lot of political propaganda trumpeting Labour's changes to education. He should admit that there are downsides to his policies, which he should ask the Secretary of State for Education and Employment to review carefully.
10.25 am
Mr. Damian Green: I congratulate my hon. Friend the Member for Guildford (Mr. St. Aubyn) on securing this debate on such an important and topical subject. He should be given credit for the work he did in his gap year, which he described as having taken place a few years ago. As he and I were contemporaries at university, I have inside knowledge on how few those years are. It is probably better for both of us if I draw a veil over the number.
My hon. Friend made a powerful case based on his experience. Being a social worker in Soweto in those days would have been radically different from any experience that he had had before or has had since. It will have been important for his personal growth, and for those for whom he did useful work. It certainly sounds more useful than my gap year, which I spent as a journalist. I am not sure that that improved my social and moral growth, and it may not have been as useful for the community.
I also thank the other two hon. Members who have spoken. The hon. Member for Harrogate and Knaresborough (Mr. Willis) gave a learned and thoughtful dissection of the chaos that fell on the Government when they made their tuition fees announcement last summer. My hon. Friend the Member for Billericay (Mrs. Gorman) made a characteristically pungent and thoughtful contribution on the wider benefits of the gap year.
It is regrettable that more hon. Members did not feel impelled to join the debate. The last time that I looked, the parliamentary Labour party had five ex-presidents of the National Union of Students, and their specialist knowledge might have been useful. I can assume only that, like much of the rest of the country, they are spending the morning sticking pins into wax models of David Beckham. That will be my last reference to that national disaster.
We all agree on the importance of this subject. The gap year is important for students. It needs to become more important, but it is in danger of becoming less important for a variety of reasons relating to the attitude of young people and the Government's policies on student funding. It is widely agreed across political divides that promoting lifelong learning is one of the most important steps forward we can take to educate our people and provide a more competitive economy. However, we might be about to take a step backwards on this issue, in which the interaction of real life and academic life has been encouraged for many years. It seems perverse—just when, as a society, we are encouraging people beyond the traditional student age to go into education—to discourage people of the traditional student age from gaining experience in the real world.
The Minister will be aware that several extremely good organisations have for many years been trying to promote gap year activities. Indeed, one, which is neatly called GAP—the Gap Activities Project, an educational charity—

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has the Government's specific endorsement. Its most recent brochure contained a message from the Foreign Secretary, celebrating the project's 25th anniversary.
The best quotation in that brochure is from the chief executive of the Universities and Colleges Admissions Service, who makes the point that gap year activities benefit not only students and society as a whole but universities:
"most universities and colleges are now very much in favour of a constructive gap year"—
one would emphasise "constructive"—
"some are even beginning to insist on it. GAP volunteers take on social responsibilities and learn the hard way to manage their lives. This means they bring a more mature and broader approach to their studies."
That is clearly true, as I am sure the Minister would agree. GAP is just one of the relevant organisations. My hon. Friend the Member for Guildford mentioned others, and I shall say a word about Voluntary Service Overseas in a minute.
The points made by GAP were emphasised by one of its trustees, Baroness Hooper, who told another place earlier this year that the organisation currently sends 1,300 young people overseas, and that, on her recent visit to the Falkland Islands, she found eight GAP students working in various ways on farms or in local museums. The organisation also brings volunteers from overseas to this country.
Baroness Hooper asked the Government for assurances on three points; I hope that the Minister will be able to assure us on them in this debate. She said that the Government need to encourage broader educational experience and young people should play a more active part in citizenship. All of us must have such an important general aim; we must not let young people drift away from their wider responsibilities.
Baroness Hooper's second point, which I hope the Minister will address, concerned post-qualification applications to university. That fits the wider theme of lifelong learning, about which I am sure the Minister will want to talk. Baroness Hooper suggested that the Government should move to a system of post-qualification applications that
"would provide those in the GAP organisation"—
and no doubt other organisations that promote such useful activity—
"with a clear means of communication to the Department for Education and Employment in terms of being able to provide information from their experience and being able to explain clearly their needs."—[Official Report, House of Lords, 4 March 1998; Vol. 586, c. 1264.]
Baroness Hooper's third issue—my hon. Friend the Member for Guildford also raised it—concerns the millennium volunteers initiative, which has been widely welcomed. It would be impossible to say that all millennium-related activities are uncontroversial. I am sure that the Minister is grateful that the one with which he has most contact—the millennium volunteers programme—is one of the least controversial ideas on the subject that the Government and others have come up with. I congratulate him on that. Nevertheless, I echo my hon. Friend's words, and hope that the Minister will clarify the status of overseas volunteers in the programme. That would clearly give the programme some imprimatur, some badge of approval, which would help to raise its profile and status.
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That brings me to VSO, with which, I suppose, most people would associate gap year activities. VSO springs to mind most readily; everyone has heard of it, and everyone has some image of it, which might be wrong. As it is one of the pioneering organisations in its field, the news to which my hon. Friend the Member for Guildford alluded is rather disturbing. VSO has 2,000 volunteers working in 59 developing countries. This year, for the first time, it has seen a fall in the number of its recruits. I am sure that the Minister will have read, as I have, comment inspired by that fall and the possible reasons for it.
The first suggested reason is that many 15 to 25-year-olds simply have not heard of VSO. That is a problem for the organisation. The 10 per cent. drop in the number of volunteers that it will send abroad, which is reflected by a 22 per cent. fall in applications and a 50 per cent. fall in applications for teaching posts, deserves wider consideration. VSO identifies as a potential problem the fact that the word "volunteering" puts people off. As one representative of another voluntary organisation said,
"Volunteering doesn't have a cool image."
I am happy that, almost officially, the phrase "Cool Britannia" has been buried. It was always a terrible idea. By its very nature, something that is cool today is bound not to be cool tomorrow. Attempting to brand an entire country as cool was an extremely short-term and foolish idea. Behind the slightly flip phrase, however, lies a genuine problem. If it is not considered attractive to young people, the good work—concerning both the people involved and the projects—will suffer. This is one issue on which, for once, the Government's warm words would be useful. I hope that the Minister will consider that.
There appears to be a difference between the attitude of young people to volunteering overseas and to volunteering in this country. The number of volunteers who want to do community service in this country is still rising.
That gives the lie to the general point that has been made in much coverage of VSO's problems that we are entering a "me" generation, in which young people are much less altruistic. My experience is that that is simply untrue. I suspect that the level of altruism in young people does not shift very much from generation to generation. A certain number will be inclined to volunteer, and a certain number will not. The idea that the morality available in any cohort changes radically is slightly short-sighted.
Mrs. Gorman: My hon. Friend has raised an important point about altruism and participation in voluntary activity. Is not the Labour party's continual harping on the claim that unpaid or lowly paid work is invalid, and its insistence on minimum wages for people over the age of 19—an age at which we still expect people to volunteer—a factor in the changing attitude of young people? The issue is becoming political. Constant harping about slave wages and people being ground into the dust by wicked employers is undermining the spirit of altruism, which once encouraged young people voluntarily to give up their time.
Mr. Green: My hon. Friend tempts me on to the interesting subject of the interaction between voluntary work and the minimum wage, but, as time is short, I shall resist that temptation.

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The central question that the Minister must answer is whether the Government are taking action to encourage young people to take gap years and widen their experience. Considering objectively the Government's actions over the past 15 or 16 months since they came into office, they are not improving the situation; they are making it worse.
The hon. Member for Harrogate and Knaresborough pointed out last year's funding arrangements fiasco. We have to put that in the wider context of the Government having rejected the Dearing committee recommendations on the preservation of the maintenance grant, which has had a series of deleterious effects on student funding—one of which we shall debate this evening, with, I suspect, rather more hon. Members present on both sides. I shall not use this debate to rehearse my arguments on that subject.
The gap year problem is simply one of a range of problems into which the Government have stumbled because of their proposals for funding arrangements. I am sure that they regard it as a relatively minor problem, but they have sent an important signal about how they regard the gap year.
The lack of maintenance grants will, for many students, mean larger debts when they leave university. Those of us who are involved in the minutiae of that subject have argued about it at great length, and will continue to do so, but the one fact that students thinking about their time at university have grasped about the new funding arrangements is that many of them will leave with large debts. The net effect is that fewer will consider taking a gap year, and more of those who want to do so will feel impelled to take a paying job rather than do any low-paid or unpaid voluntary activity.
Far fewer students are likely to take gap years after they have finished their main university course, because they will have a large debt and the bank manager will be breathing down their neck. Perhaps most importantly, they will have noted the Government's attitude when it was discovered that the introduction of tuition fees would cause a specific problem for gap year students. As the hon. Member for Harrogate and Knaresborough has pointed out, weeks passed before the Government dealt with the problem, because, although it was a serious and immediate problem for those involved, the Government clearly did not regard it as such. They simply had not thought about guidance for gap year students in that case, or at all.
That sent gap year students the clear message: "Forget about the warm words, and the Foreign Secretary making nice comments in brochures for organisations that promote gap years. Look at our deeds. The Government do not care all that much about gap year students and the activities they promote." I hope that the Government have learnt from that lesson, and that the fiasco will not be repeated. I hope that the Minister can reassure us that the Government have changed their deeds, and words, on gap years.
Moving on to what I should like to hear from the Minister, the first action the Government could take is to change their message and take practical action, or gap years will become unfashionable. I am indebted to
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The Guardian—not a phrase one often hears at this Dispatch Box—for summing up many people's thoughts on gap years in an article last year. It said:
"The convention wisdom is that it's best to do something `worthwhile', whether that's working in a shelter for homeless people or backpacking in the Punjab with nothing but a bottle of diarrhoea medicine and a Kula Shaker album for company."
That may well be the traditional, popular view of a gap year, but in this age, students who are thinking of taking a gap year will think that it is impractical, and will be put off. The first practical action the Government could take, for example, is to give us more information on the millennium volunteers.
Secondly, as my hon. Friend the Member for Guildford said, the Government could produce guidelines for gap courses that are available. I shall not ask for registration or detailed regulation—that would be inappropriate and wrong. However, the Government could issue guidelines so that students know that they are taking reliable, decent courses, and that they are not simply spending a year doing something life-enhancing while listening to Kula Shaker or anyone else. They would then know that they will benefit from their gap year activities, and so will other people.
Thirdly, the Government could collect some decent figures. My hon. Friend the Member for Guildford has pointed out that even the unparalleled resources of the House of Commons Library cannot find any accurate figures about the numbers of people taking gap year courses or what they are doing. I take it as read that, if the Library cannot find those figures, they do not exist. Clearly, policy would be better informed if there were decent figures. For example, do the Government have a target for numbers of students taking a gap year? If not, do they think that more students should take gap years? If so, what will they do about it?
The overall message is that the pressures on students are increasing, and it is possible that gap years will disappear altogether. That would be extremely damaging for the health of the education system, the personal growth of the students involved, and Britain's image around the world, where many gap year students have done much good over the past few decades. That would be a step back from the idea of lifelong learning, and I hope that the Minister will provide reassurance on all those points.
10.45 am
The Parliamentary Under-Secretary of State for Education and Employment (Dr. Kim Howells): I add my thanks to the hon. Member for Guildford (Mr. St. Aubyn) for bringing this important subject to the attention of the House, and for his thoughtful speech.
On statistics, the hon. Member for Ashford (Mr. Green) knows that I too am very concerned about how we collect statistics in this country. We are not very good at it; we spend a lot of money on it, but do not get very good value. We prepared some calculations for the debate, which show that currently just over 19,000 students have been offered a deferred place. The hon. Member for Guildford mentioned between 20,000 and 30,000 students, and I suspect that he is not far off the correct figure. They are students who said that they were interested in taking a gap year or a year off.
Mr. St. Aubyn: One has to distinguish between those who had a gap year lined up by the time they left school

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and those who made a conscious decision to apply to university after they knew their A-level results. They are certainly in addition to the 19,000, and they are the several thousand students who, last year, sadly still suffered because of the way in which the Government dealt with the problem induced by their new rules on student funding.
Dr. Howells: I am sure that those statistics are not far wrong, and I would not argue with them. I hope that the hon. Gentleman appreciates my giving the figure of 19,000 so that he has a baseline from which to work, because I know that he is interested in pursuing the matter.
On volunteering, I was interested in what the hon. Member for Billericay (Mrs. Gorman) said—I am always interested in what she says, although she has lost her radical edge these days. I used to love listening to her old philosophical stance, but I fear that it has mellowed somewhat.
Mr. Willis: Sweet reason, but not on Europe.
Dr. Howells: Yes, sweet reason.
Volunteering is not exclusive to would-be students. I know many volunteers who are in their 50s, 60s and 70s. We are all sure of the virtues of volunteering, and know that we must encourage it in every way, but we must pay tribute to everyone who volunteers. It is not only the student cohort, but many other people who volunteer—indeed, society depends on volunteering in many different ways.
As the hon. Member for Ashford said, VSO has been of enormous importance to the image of this country. In addition, it has touched many families: my brother was a VSO volunteer in New Guinea, although he did not have a Kula Shaker album with him, and his anti-diarrhoea medicine did not do much good; after spending about four years abroad, he returned to this country with some awful bacterial disease.
As the hon. Member for Billericay says, guidelines and safety are key issues. The Government recognise the advantages to society and to individuals of young people undertaking enriching activities such as voluntary work, cultural exchanges, educational visits and work experience. We are keen to encourage volunteering by students, especially before they take up courses in higher education, if that is what they intend to do.
Our manifesto commitment to develop proposals for a national programme of citizen's service for young people is being fulfilled through the millennium volunteers programme. That programme's aim is to support young people between the ages of 16 and 25, and encourage them to make a sustained commitment to volunteering in a way that benefits the community; £15 million has been made available for the programme in this country. Decisions on the availability of future funding for millennium volunteers will be taken after this month's announcement of the outcome of the comprehensive spending review.
A consultation document was issued last October. We received 500 responses to the separate consultation exercises in England, Scotland, Wales and Northern Ireland. There was strong support for millennium volunteers, and widespread recognition of the fact that
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volunteering helps young people to develop as responsible citizens. We have made the criteria for the programme as flexible as possible, without losing the requirement of a sustained personal commitment from the young person, which is the key to making millennium volunteers distinctive.
We recognise that the investment of time alone is not a measure of quality—that point lay at the heart of the speech of the hon. Member for Guildford. We have developed the idea, proposed in our consultation exercise, of a volunteer plan, which sets out the voluntary activity and the learning opportunities for the young person. I was glad that the hon. Gentleman emphasised the importance of having such a plan, and of knowing that quality training will be offered and that the experience will be of value; and that the young person will not be exploited to enrich the sponsoring organisation, or, in a more barefaced way, used as cheap labour.
National delivery of the programme will not be carried out by the Government; instead, a new organisation will be set up in England to deliver millennium volunteers. We are currently advertising in the national and voluntary press for the chairperson of that organisation. On 24 June, voluntary sector partners hosted a national conference to discuss the implementation of the programme in England, and to publish the document "Setting the Framework". Several demonstration projects in England are being set up over the next few weeks, and the Department intends to publish a millennium volunteers guide, which invites organisations to apply for funding, after the summer.
The consultation document expressed explicitly an expectation that activities undertaken by participants should
"offer the prospect of value to the wider community".
We are not yet convinced that volunteering overseas can achieve that result on its own. We have to widen the consultation to take into account some of the arguments that have been advanced, not least by the hon. Member for Guildford today.
Mr. St. Aubyn: Will the Minister consider the suggestion that, if he is going to draw on 100,000 volunteers without endorsing the concept of overseas volunteering, he might draw into his programme those who would derive greater benefit from overseas projects and jeopardise the viability of some of the valuable projects that they would otherwise have undertaken?
Dr. Howells: I could not agree more, and I shall certainly take that important point into consideration. I am determined to ensure that we do not jeopardise organisations that plan properly and offer volunteers who go overseas real training, valuable experience and education.
We are fully aware of the valuable work done by volunteers working abroad. I agree entirely that voluntary work overseas offers young people opportunities for personal development. I can give the hon. Gentleman the undertaking that the Government are sympathetic to the idea of encouraging volunteering overseas, and that we are considering how that might be recognised within the millennium volunteers programme. My officials recently met key organisations involved in volunteering overseas, and agreed to consult them further. A final decision on

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recognising volunteering overseas as part of the millennium volunteers initiative will be made when the consultation process is complete.
Voluntary work can be challenging for the individual concerned—that is part of the reward—but I accept that working overseas has its own particular challenges and difficulties. I have therefore listened carefully to the hon. Gentleman's comments about the activities of certain organisations, and I hope that, at some stage, he will see fit to name those organisations, either in the House or outside. I was shocked by some of the figures he quoted—everyone should be concerned about the examples he gave of eight staff arranging 800 placements a year, each costing £2,000, with inadequate guarantees about the conditions awaiting the volunteers; and of the 70 organisations offering gap year experience entirely unregulated.
The hon. Member for Ashford will be relieved to hear that we do not believe that the Government should act as big brother, and try to regulate every single activity. That would impose a straitjacket in an area in which organisations need to be flexible in providing volunteering opportunities. The way forward lies in a voluntary code of self-regulation for organisations involved in arranging gap year projects, but that has to be a genuine exercise in drawing up a code that has some teeth and that can be effective when organisations step out of line. I am conscious of the fact that, occasionally, gap year arrangements do not work smoothly, so organisations need to ensure that adequate controls are in place.
Most students who take a year off have a rewarding experience. As the hon. Member for Guildford made clear, Guildford and many other universities and institutions of higher education appreciate the beneficial effects of the gap year.
There is now a Central Bureau for Educational Visits and Exchanges, which receives a grant of £5 million. It facilitates gap year placements and produces an advice booklet that covers health and safety issues. I give an undertaking that the hon. Gentleman's suggestion that departmental guidelines should be issued will be given careful consideration, especially in relation to our deliberations on extending the millennium volunteers programme to overseas placements. I shall ask the appropriate officials from my Department to meet the main voluntary organisations to discuss the question of guidelines.
Therefore, I hope that the hon. Gentleman will accept that we have achieved some progress. I cannot give him a parallel or simile for last night's match, as he wanted. I am afraid that, as a rugby fan, I have not yet got over the 96:13 defeat of some of my constituents by South Africa. I hope that he will take that as an answer.

National Health Service (50th Anniversary)
10.59 am
Mr. Llew Smith: Some anniversaries, like birthdays, are best forgotten, but others cry out for recognition because of their relevance to present-day society. Fifty years on, the national health service is one such example. As a Labour Member of Parliament and one who has the privilege of representing a constituency that in many ways gave birth to that service, I believe that that legislation was the finest piece of socialist legislation this century and created the jewel in our crown. We should never forget that the service was created when we had just gone through another world war and this country was just about bankrupt.
There is a certain irony here in that, 50 years on, we are still not only debating what form the national health service should take but, in the rich country that we are today, whether we can afford the sort of service that my predecessor Nye Bevan envisaged. When he spoke on Second Reading of the National Health Service Bill on 30 April 1946, he outlined his vision of a health service, saying:
"it will lift the shadow from millions of homes. It will keep very many people alive who might otherwise be dead. It will relieve suffering. It will produce higher standards for the medical profession. It will be a great contribution towards the wellbeing of the common people in Great Britain."—[official Report, 30 April 1946; Vol. 422, c. 63.]
As we were reminded, it was to be a national health service in which the rich and the poor were to be treated alike, where poverty was not a disadvantage and wealth not an advantage.
I was reminded of that many years ago when Professor Richard Titmus recalled a visit to a London hospital for the treatment of cancer. He was being treated at the same time and the same place by the same doctor for the very same reason as a young West Indian lad. Titmus observed that what determined who would be treated first each day had everything to do with the vagaries of London's traffic and nothing to do with the amount of money that they had in their pockets.
How different that philosophy and that of the early pioneers of the NHS is from what happened during those awful 18 years of Tory government. We all remember the then Prime Minister, now Baroness Thatcher, proclaiming to the world that the national health service
"is safe in our hands",
when in reality she was transforming the service to one that someone described as geared to meet the young, the rich and the healthy, ignoring the poor, the old and the chronically sick.
Obviously, I am pleased that the Government are making considerable efforts to reverse that trend and rectify those wrongs. Additional investment in the service is one of the many ways in which they are doing so. However, Nye also recognised that good health did not depend merely on the health service. He was the first to draw comparisons and to state that, to have good health,

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one also needed a good standard of living—therefore, if one wanted to tackle bad health, one had to tackle poverty. That was also recognised many years later with the publication of the Black report, which explained
"inequality in health can only be understood in relation to poverty and poor working conditions."
That is still obvious in my constituency, the birthplace of the national health service, which unfortunately is either at or near the top of the league tables for heart and respiratory diseases, cancers, mental health problems, long-term sickness, disabilities and rates of infant mortality, standardised mortality and low birth weight babies. No one will be surprised, if one accepts the link between poverty and bad health, that my constituency is in one of the poorest local authority areas in Wales. We have the highest unemployment in Wales and some of the lowest income levels in the United Kingdom. We also have inadequate housing. If all those and many other factors are brought together, one gets the sort of deprivation that we experience every day.
Neither this debate nor the 50th anniversary celebrations should be an exercise in nostalgia. I suspect that Nye would treat such an exercise with disdain and that he would want us to learn from those 50 years how we can build on his achievements and those of others. Nye would also be honest enough to see the need to point out where successive Governments have been going and are going wrong in their attempts to tackle bad health.
Once again, I shall give an example from my local authority, which is one of the smallest and poorest in Wales. In the past three years, successive Governments with their cuts have made the local authority make resulting cuts of approximately £14 million. One cannot have such cuts in a poor local authority area without adversely affecting the service provided and the health and standard of living of people in the community.
Local authorities like mine also lose out in other ways. For example, many of our health clinics have poor resources and many of the valley constituencies, including mine, also lose out because they find it difficult to attract doctors to set up practices. In my constituency, that situation has been exacerbated by the actions of the local area health authority. For example, a doctor retired in Cwm, Ebbw Vale, which has serious health problems, as do other parts of the constituency. Instead of the health authority replacing that doctor with another, it decided to transfer his work load to another local general practitioner. Obviously, that was not good enough and did not respond effectively to the problems of our community. Much to their credit, the local people raised their voices in protest and, as a result, the health authority was forced to reverse its plans. It then promised us another full-time permanent doctor, but we are still awaiting the replacement a number of years later and we still have only a part-time, temporary doctor.
The Government are not only aware of the link between bad health and deprivation, but are trying to do something about it and, for me, the most important legislation during this Parliament must be the introduction of a minimum wage. However, the effectiveness of such a wage in combating poverty will obviously depend on the level at which it is set. I accept the arguments put forward by many individuals and trade unions, including those representing health service workers, that, if the wage is to be effective, it should be set at £4.60 per hour.
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My next question concerns the possible privatisation of the health service. Successive Governments have proposed or enacted legislation to privatise different public services. Indeed, they seemed to want to copy the United States of America, for example, and how it runs such services.
Many years ago, I read a book on health care in the United States, which mentioned that the chair of Kentucky Fried Chicken had decided to resign his position to head the new Hospital Corporation of America because, as he said:
"The growth potential in hospitals is unlimited. It's even better than Kentucky Fried Chicken."
I do not know how many hon. Members have tasted Kentucky Fried Chicken but, if they have, they will be justifiably concerned that the quality of the product will be what we could expect if the health service is privatised. To allow such an organisation to be involved in the health service would be as nonsensical as to allow McDonald's, for example, to be involved in the organisation of education zones.
I know that the usual response to those who warn about the privatisation of the health service is to say that it will never happen, but the reality is different—one has only to think of the private finance initiative, for example. It is good to see the Secretary of State for Wales here today. He was sponsored for many years by the National Union of Public Employees, and then by Unison, as it became. Unison described the PFI as creeping privatisation, and I agree with that sentiment. It referred to Labour's announcement of major acute hospital PFI schemes, and reminded us that
"PFI in the NHS is not simply about bricks and mortar. It is about the ownership and control of NHS assets, services and staff… Private consortia will finance, build, own and run new hospitals or services and lease them back to the NHS… PFI is also beginning to dominate other forms of investment and service delivery in the NHS. For example, the lack of public investor finance for sterile supplies or NHS catering facilities is resulting in PFI being used extensively in this area also."
Responsibility for running services is being handed to the private sector in return for private finance. That, as Unison argues, is creeping privatisation, which will, in the long term, be very expensive for the NHS.
If Government spokespersons are not willing to accept the opinions of so great a union as Unison, I am sure that they will want seriously to consider the words of my right hon. Friend the Secretary of State for Social Security, whom we all respect. In 1996, as a shadow health spokesperson, she said to a Unison conference:
"When the private sector is building, owning, managing and running a hospital, it has indeed been privatised."
I agree with what she said then, just as I agree with Unison now.
If Nye had wanted a health service to be provided by private companies, he would not have created the national health service. He inherited a patchwork of voluntary, local authority and private hospitals, from which he created a national health service free at the point of use—a service for people, not for profit. If he had wanted a national health insurance system, he would have created one. Nye believed that it was vital that the NHS should be provided by the public sector—the PFI undermines that vision.
As we celebrate the 50th anniversary of the foundation of the NHS, the Welsh Office has published a consultative document proposing a trust to cover the whole of Gwent.

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I believe that that will damage the service in the northern part of Gwent. I want Gwent to have two trusts, but that is not my opinion alone—it is also the opinion of the Blaenau Gwent borough council, Monmouthshire county council, the community councils in the area, the Nevill Hall trust, the community health councils in north Gwent, many voluntary organisations and thousands of people who have signed a petition.
If the Minister is unwilling to listen to those bodies, perhaps he will listen to the 166 general practitioners who have gone public in their opposition to the Welsh Office's one-trust proposal. When I raised the issue some months back, only 50 GPs opposed the proposal; now, 166 GPs oppose it, and that number is increasing every day. Those people should not be ignored. I know that the Welsh Office will say that Gwent health authority supports the scheme, but, in fact, the health authority expressed only a marginal preference for that option. All the main players—for want of better description—have come out in opposition to the Welsh Office proposal.
I am aware that one of the reasons why the Under-Secretary of State for Wales, my hon. Friend the Member for Bridgend (Mr. Griffiths), opposes the two-trust option for Gwent is that he does not want to break up local authority areas. However, in giving trust status to Cynon Valley and Merthyr as part of the North Glamorgan trust, he accepted the need to break up the Rhondda Cynon Taff local authority area. We in my constituency do not object to that proposal—indeed, we applaud the Minister's wisdom—but we argue that he should apply the same reasoning to our community. He may argue that Cynon Valley and Merthyr already had their own trust, but that does not detract from the fact that he is willing to break up local authority areas.
It is proposed that there will be 15 trusts in Wales to serve 2.9 million people—each trust will, on average, serve just under 200,000 people. However, a single trust for Gwent would cover some 550,000 people, although even that is a considerable underestimate, as it does not take into account the catchment areas in Powys and, indeed, parts of Herefordshire.
On 30 March, my hon. Friend the Member for Bridgend perceptively conceded that the trust, if approved, would be very large. In the consultation document, he said:
"With a project turnover of £240 million in 1999–2000 and fixed assets of £180 million, the trust would be one of the largest in the UK."
He could also have said that it would employ a massive bureaucracy of 10,000 people and that it would probably cover an area of some 300 square miles. He seemed to be of the opinion that, for Gwent, big is beautiful. However, for some reason, he decided to reject that philosophy for his constituency. Indeed, the trust that he has set up to cover his constituency and the two neighbouring constituencies will serve a population of only 270,000. I wonder why that is. If we accept the logic of the view that big is beautiful—that trusts to serve 550,000 people are acceptable—Swansea should be added to the trust that will cover those three constituencies, as such a trust would be similar in size to the one that is proposed for Gwent. We in my area and in the area of my hon. Friend the Member for Monmouth (Mr. Edwards) do not argue that the trust serving Bridgend, Port Talbot and Neath should be merged with the one serving Swansea. All we are saying is that that is the logic of the Minister's position.
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We want a trust in north Gwent that can concentrate on the health problems that I have outlined. We do not want a single trust covering the whole of Gwent, under which we would be lost, as we have been lost in the past. The present health funding formula does not take into account the number of people who need long-term care, so areas such as Blaenau Gwent are discriminated against because of their poverty and serious health problems. That is hardly a socialist principle, but it is the reality.
To deal with the winter bed crisis, north Gwent received only 22.5p per patient, whereas the south of the county received £3.47. A year or two ago, it was decided that the provisions for mental health in Gwent should be reorganised. The person appointed to carry that out admitted at a public meeting that he knew nothing about the area. He did not bother to consult the patients, their families and friends, nurses, doctors, local authorities, community councils, trade unions, Members of Parliament or the community health council. That is how we in Gwent have been treated, and we do not want history to repeat itself.
The Minister says that there will be a phased replacement of existing technology and information systems. How long will that take and what will it cost? He says that the existing management responsibilities will be retained until April 1999 and that key responsibilities will be identified as soon as possible. Tell that to a demoralised staff, who are facing yet another major upheaval.
The Minister tells us that locally delivered services will continue to be provided in north Gwent, but he does not say whether they will be the existing services or whether they will be enhanced or reduced. Of course local services will be provided locally: they would not be local services otherwise. What guarantee do my constituents have that they will not have to travel 30 miles to a hospital for treatment or to visit friends or family?
I warn my colleagues in other parts of Gwent that, if high-quality clinical and surgical services are transferred to south Gwent, day-to-day routine operations could be transferred to the north. That would not only affect morale and recruitment in the north but would mean that patients and visitors from Newport would have to travel to Abergavenny.
There are no real health arguments for the one-trust option, and even the possible savings seem to have been watered down. The Government's penny-pinching attitude does them no credit in a country that is now so rich and that was so desperately poor when the national health service was created 50 years ago.
We are told that this is a consultation exercise. We hope that it is; if it is, the Minister will find out that virtually all the community is opposed to the proposals. If it is consultation, and not merely another public relations stunt, the Minister will have the courage to alter the proposals from one trust for Gwent to two. If he fails to do that, we shall all know that it was consultation in name only, and our communities will lose out once again.
We hope that the legacy of the Government will not be one of damaging the national health service that Nye and others had the imagination and courage to create. Future generations would not forgive us for that. Let us build on the positive aspects of the Government's work in the national health service and ensure that, this time at least, justice is done for the people in our communities.
11.23 am
Sir Geoffrey Johnson Smith: It is a pleasure to follow the hon. Member for Blaenau Gwent (Mr. Smith), who represents a constituency that, as he said, was once represented by the right hon. Gentleman who is associated with the founding of the national health service, the 50th anniversary of which we are celebrating.
Let me say en passant that I understand the philosophy behind the primary care groups, but we do not contemplate anything in my part of England that would be as large as the hon. Gentleman suggested for his part of Wales. The group that has been proposed for my health authority would involve 50-odd general practitioners and cover a population of 80,000.
I know a little about the medical profession, and I find that GPs have their own way of doing things: they and other members of the medical profession rightly have an independence of attitude towards the way in which they carry out their duties and ply their skills. There are those in rural practices who have developed particular attitudes to fit the needs of their patients, and if we amalgamate all those people with their different priorities, combining urban and rural areas, I fancy that it will not always be easy to find the harmony that one would expect among professional people carrying out their duties on behalf of the public.
I do not want to go into great detail, because I want to cover a wider canvas on the question of the national health service, but I want to fire a warning shot across the Minister's bows—I welcome his presence, because I know that he takes a keen and practical interest in these matters—to show that I hope to get an assurance, at some future date, that my worst fears are not well founded.
It is an honour to speak in this debate and to pay tribute to the national health service and to all those who work or have worked in it, giving of their time, skill and dedication—bywords among many of us who have had the opportunity to meet at their work those who have given such excellent service to the public.
I was almost in at the birth of the national health service, as I am one of the few Members of Parliament who was alive and well at the time of its introduction. Little did I know that, some years later, I would represent the constituency now represented by the Secretary of State for Health—Holborn and St. Pancras, South, as it then was—which contains some of the finest teaching hospitals in the world. I got to know members of the medical profession, nursing staff and administrators extremely well. I pay a warm tribute to them, as they carry on the best traditions of medicine to be found anywhere on the globe.
I also compliment those who give service in my health authority area—they are dedicated, as one would expect, and try to observe the highest standards, although it is not always easy for them so to do—and especially those who give of their time and money to help out the smaller hospitals.
We are fortunate enough to have two community hospitals. It took two deputations to persuade the previous Government not to close the community hospital at Crowborough, which, like so many in the 19th century, was founded by voluntary contributions. Today, it is still charged with raising £2 million—it has raised £1 million—to ensure, with help from the health authority, that it can be modernised and fulfil the
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important function of allowing elderly people and women with babies not to have to travel to the district general hospital in a congested town far away. I pay an especially warm tribute to the voluntary side, which has spent so much time trying to raise money, with some success, although there is still a long way to go.
I also congratulate the previous Government, whom I have heard rubbished on more than one occasion, including at yesterday's Question Time. It is now part of the ritual to say, "No, we spent more than you did," "No, you didn't, you spent less," "You destroyed what we tried to build up," and so on. All new Governments say such things. The previous Government did the same after the cuts in the health service imposed by the previous Labour Government during the stormy economic days of 1976 to 1979.
I wish to goodness that we could get rid of some of the ridiculous party politics. One reason why the national health service is failing us—not in terms of health, but in terms of its structure—is that the concept of it leads to too much low-grade politicking. I try to avoid that, but I do not think that it was pointed out yesterday that, overall, we increased expenditure on the health service by 3 per cent. in real terms. Of course, the amount varied from one year to another; we would have liked a smoother financial passage.
When the last Conservative Government came to office in 1979, expenditure on the NHS in England, as opposed to the United Kingdom as a whole, was some £9 billion. When we left office, it was well over £35 billion—and that was not small beer. We spent more, standards improved, and so it went on. I do not think that that record should be rubbished.
Nor should our record be rubbished in respect of the birth of the national health service. It is true that Conservative Members of Parliament opposed it, but so did doctors. It should not be assumed that a politician who opposes the NHS does not care for the people, any more than doctors who opposed it should be accused of not caring for the people. What they did not like was state control over health matters, which they saw as socialism.
Even Lord Beveridge, the architect of the modern welfare state, was not keen on the creation of a national health service. He had certain things to say about it. They may sound rather old-fashioned now, but I think that they are worth repeating. He said:
"It is a logical corollary to the receipt of high benefits in disability that the individual should recognise the duty to be well and to co-operate in all steps which may lead to diagnosis of disease in early stages when it can be prevented. Disease and accidents must be paid for in any case… One of the reasons why it is preferable to pay for disease and accidents openly and directly in the form of insurance benefits, rather than indirectly, is that this emphasises the cost and should give a stimulus to prevention."
That is, perhaps, a rather Victorian concept.
Beveridge went on to say:
"British people are clearly ready and able to pay contributions for institutional treatment. Should a payment for this purpose be included in the compulsory insurance contribution and be passed on as a grant from the Social Insurance Fund to the health departments towards the maintenance of the institutions?"
He referred to
"the importance of securing that suitable hospital treatment is available for every citizen and that recourse to it, at the earliest moment when it becomes desirable, is not delayed by any financial considerations. From this point of view, previous contribution"—

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through the insurance system, I assume—
"is…better even than the free service supported by the tax-payer. People will take what they have already paid for without delay when they need it, and they pay for it more directly as contributors than as tax-payers."
It is possible that, because it is free at the point of demand, the NHS has weakened that link—weakened the citizen's feeling that he should take responsibility for his own health, and his awareness of the connection between his treatment and the cost to the nation, as well as to his family. That point is ripe for debate, because it cuts right across the concept of the service being free at the point of demand. I am merely quoting the views of someone who was not cruel or hard-hearted, and who recognised the importance of health treatment to the poorer members of the community, but who thought that there was another way—perhaps a more responsible way—of ensuring that there was a link between the insurance taken out by a citizen and the service that he received as a consequence.
The hon. Member for Blaenau Gwent spoke of Aneurin Bevan's dedication to the health service. Bevan, however, realised that he was opening the floodgates. He referred to the cascade of medicine that would flow down the throats of the British people. Even at that time, he was aware of the mounting costs of the health service. Although he did not want to, Bevan—and the House of Commons—had to accept that prescription charges would have to be introduced. Then came the question of paying for spectacles, and so on.
Bevan was clearly disappointed, because he resigned, but he understood what had happened. He is on record as saying that costs were increasing at an alarming rate—more than he had ever imagined.
Mr. Llew Smith: If the right hon. Gentleman reads Nye Bevan's resignation speech, he will see that Bevan resigned not just over prescription charges, but over such issues as defence spending. He thought that one area of spending was causing problems to another. It is interesting to read that speech.
Sir Geoffrey Johnson Smith: I am sure it is, but I do not think it can be denied that Bevan realised that the floodgates had been opened to heavy expenditure that he had not envisaged. I lived through it, and I know that, at the time, many people said that the health of the nation would improve and that costs would therefore fall. How wrong they were. I cannot criticise them, because that was the received wisdom at the time; but they did not realise that the health service was not the only vehicle for improving the health of the nation. Health can be improved by a better standard of living—by a better diet, better housing and better education. The health of the nation does not improve markedly more than that of any other nation because we have a national health service.
Although I admire what has been done and what is still being done, I think that we must face up to the reality of the NHS and what it has achieved. We should not just look back; we need to look forward, and ask ourselves how we can provide a better and more affordable health service. The present system is not good enough, for many reasons. It can be improved.
Since 1948, most countries have looked at their own health services. Germany, for instance, has continued with a system that was introduced years ago by Bismarck.
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Its system of compulsory insurance for health treatment must have influenced Beveridge; otherwise, he would not have made the comments that I quoted. New Zealand, Canada and Holland have looked at their health services in recent years, and have introduced reforms on the principle to which most of us adhere: that the door should not be closed to people who happen to be poor. Such people should not be deprived of decent medical care.
Interestingly, not one country that has examined our system has adopted it. That should make us, on this 50th anniversary, take stock of the present situation, and ask ourselves what we can do to improve our service in the face of rising costs—costs that I cannot see declining, for several reasons.
First, the health service is labour intensive. As the Minister knows, a fair proportion of low-paid people work for the NHS. One reason why they put up with low pay is their feeling that they are doing something for others: that voluntary spirit is very strong in the health service. Those workers are better paid than many others, but, given the range of skills that they possess, and the salaries that such skills would command in other walks of life, they are not overpaid, by a long chalk. If we want to improve recruitment and reduce the notorious wastage in the NHS—especially among nurses—we must consider that point.
Secondly, there is the problem of the aging population, but I shall not dwell on that. Then there are the sensational advances in medical care and diagnostic technology. We all know how expensive that technology is. Someone was telling me the other day—I do not know whether it is true—that a little drip feed that could once be bought for very little now costs £140. Why is it so expensive? It is computerised, so doctors do not need to attend to it. They know what is going into the patient, and whether the mixture is right. That is a great advance, but it is expensive.
Expectations are always rising. I will never forget being absolutely astonished to meet a woman who I thought had gone into hospital, but who was back and walking after her hip operation. It is not uncommon to meet people who have had two hip operations. Expectations are rising because people know that a wide range of surgical techniques hitherto undreamt of—and certainly unthought of by the medical profession at the foundation of the health service—are now available, and might improve the quality of their lives.
Dr. Chris Adams, a consultant to the department of neurosurgery at the Radcliffe infirmary, Oxford, is not regarded as a wild, radical doctor who runs ahead of the pack. In the November edition of Parliamentary Review, whose editorial judgment would, one assumes, lead it to employ only those whom it believes to be reasonably rational, Dr. Adams said:
"Financing medical care is a world problem."
However, we need not feel guilty about that,
"Because each year advances make medicine more expensive—and that trend will accelerate. This country cannot afford a comprehensive free health service, and it is not providing one."
He went on to say, as others do, that we should not put up with the present system of rationing. It is, of course, not always called "rationing", but there are long waiting lists for certain treatments for which there is great demand. If one believes that the health service should be free at the point of demand, one might argue that that is immoral.

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I do not want to generate party political heat, so I recognise that the Government do not accept that gloomy prognosis. The White Paper takes a different view, saying that, at its best, the NHS is the envy of the world. I do not use the word "envy"; I have seen too often how other countries employ the best techniques. I do not envy them that; they are pretty good, and we are pretty good, too, and have institutions and practices that are as good as any. However, as the hon. Member for Blaenau Gwent said, we are a rich country, so that might be expected.
The White Paper also says that the Government reject arguments that the NHS cannot cope with the pressure of public expenditure without a huge increase in taxation or charges for services or radical restriction in patient care. It states:
"The health service is a strong and resilient organisation."
It also says that the NHS has met past challenges and will rise to future ones. It is not my purpose to say dogmatically that the Government are wrong, but hon. Members may have gathered that I have my doubts. They are not irrational doubts, and they are not motivated by emotion, but I have practical doubts about whether the Government's worthy aims can be met.
Funding the NHS by taxation always involves the menacing figure of the Chancellor. Chancellors are not cold-blooded men; even the present one has decent feelings, just as his predecessors did. However, Chancellors have a duty to the nation. They must consider defence, and there may be arguments about why defence should have more money. The hon. Member for Blaenau Gwent mentioned that Nye Bevan was concerned not only about the increasing costs of the health service and charges, but about the cost of defence. Chancellors are always concerned about rising costs. There are always battles between one Department and another.
Perhaps that is one reason why we are more politically conscious of the health service than virtually every country that I have visited. The politics of health in the United Kingdom stem largely from the fact that so much decision making lies here because we—rather, Chancellors—control the purse. The Chancellor has more control over decisions balancing how much should go to defence or other parts of public expenditure than any other Minister. Although the economy does not have to go from boom to bust, we all know that no economy can sail along year after year in the assumption that things will get better and better. There may be a world economic crisis from which we cannot be insulated, especially now that there is a global economy. That would have a profound effect on the Government's ability to deliver from taxation all the services that they want. That is one reason why people think it would be a good idea if the Government were to consider additional ways to finance health.
The Government should not underestimate the serious defects of the NHS. First, there is the money problem. In a few days, the Government will announce an extra injection of money, and I have read that it will be a greater real-terms per annum increase than has been accomplished before. I do not know if that is so, but there will be a substantial increase. All will look good for three years, but the Government cannot guarantee that there will not be some change in the economy that will leave the Chancellor having to tell a Secretary of State for Health that the belt has to be tightened. One of the service's problems is that it is wholly dependent on money from taxation.
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There is an acute shortage of personnel—a particularly serious problem among nurses, doctors and specialists. One reason why there is a waiting list is that there are appallingly few consultants. According to 1994 figures, not very out of date, and still true, we have 9.5 consultants per 10,000 of the population. Sweden has 20 consultants, Germany 19, France 14, Finland 15 and the Czech Republic 20. We are not quite as badly off for general practitioners, but France has 14 per 10,000 of the population, while Great Britain has six. Germany has 11, and I could list other countries. The simple message is that the people on whom we rely for skilled advice and knowledge are in short supply. The NHS executive has also mentioned that we are short of modern equipment. We simply do not have enough of it. I visited the United States recently, and found that magnetic resonance imaging was everywhere. Here, we have made a start, but there is much to do.
I should like the Minister to pay attention to training—a difficult problem. The training of our medical profession is too unstructured and is inefficient. What happened at Bristol would not have happened if training and qualifications had been more specific. Junior doctors spend hours walking round wards looking after patients, but those hours are out of all proportion to the time when they should be provided with specific teaching. Our emphasis on teaching is not high enough. Of course, more teaching will not come cheap.
It is difficult to understand why the Government refuse to consider topping up revenues for the NHS, as happens in the European Union. Stephen Pollard, a former director of the Fabian Society, has said:
"Continental Socialists find little time for the politics of narrow-minded statism which has in recent decades characterised the British Labour movement's approach to healthcare. In countries such as France, Spain, Belgium and Greece, they really accept the complementary benefits that can be derived from actively involving their independent healthcare sectors and putting them to good use."
The socialist Government in France have no problem about topping up their taxpayers' contribution in that way. Other international comparisons also show the use of additional sums from, for example, non-profit mutual societies—an old Labour conceptߞand friendly societies. I cannot think why we do not make better use of them. For those reasons, the time has come for us, and especially the Government, to examine the matter and perhaps to go back to some of their old Labour roots to find how much we can better use our resources to ensure that the NHS is better funded and well funded.
Mr. Deputy Speaker (Mr. Michael Lord): Order. Before I call the next speaker, I remind the House that this is a brief debate. Many hon. Members wish to speak. If they are brief, many will get in; but if they are not, many will be disappointed.
11.50 am
Mr. Paul Flynn: I congratulate my hon. Friend the Member for Blaenau Gwent (Mr. Smith) on securing his sixth Adjournment debate in this Parliament. He almost holds the record, but two Members have had seven. I have several points which, unfortunately, cannot be made in a couple of minutes. I want to draw attention to what I believe are the NHS's major weaknesses.

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Like the right hon. Member for Wealden (Sir G. Johnson Smith), I remember the start of the health service. As a 13-year-old schoolboy at a May day rally in Sophia gardens in Cardiff, I heard Aneurin Bevan speak about the NHS. I remember it more vividly than, say, the events of yesterday evening, which is probably just as well. He used as a measure of the success of the health service something that strikes us as astonishing today—the increase in the birth rate. He pointed out that he was not claiming any personal responsibility for the increase. How extraordinarily things have changed. He would have been surprised that we rate the NHS by the crude measures of waiting lists and the amount of money spent.
I am sometimes critical of the Government, but we are doing splendid work on the NHS. I congratulate Ministers on tackling the major weaknesses. People will look back in 50 years and say that this was a turning point in the reform of the health service. I refer to the Government challenging the omnipotence of clinicians, which led in part to the terrible Bristol tragedies. So much of medicine is based on mythology, on the first thing that comes into a doctor's head, not on science or evidence. A series of individuals make thousands of decisions in their domains. Hip operations—on which I had a debate many years ago—are an example on which research and evidence exist.
The main weakness of the health service is not private medicine but the commercialisation of all medicine, with so much being done not for the needs of the patients or to advance medical science but to serve the interests of commercial companies. It was true even five years ago that anyone having treatment for cancer would have had as good treatment in the health service as they would have had privately. That is no longer true. It is now a gamble. People's treatment depends on where they live and whether drug companies are conducting trials in the area. The drug companies are leading research into cancer treatment. The whole business is a sad gamble with people's lives, because it is commercially driven.
Enormous damage is done by the vast over-use of medicinal drugs. It is a great tragedy and lives are being lost. We make a great fuss about illegal drugs, but the figures for Wales over the past four years show that six people died from heroin and only 13 from all illegal drugs, while 108 died from paracetamol, 28 from co-proxamol and 55 from methadone, which is a legal drug. In the UK, 2,500 people die annually from the misuse of medicinal drugs.
To see zombies with damaged lives who exist in a perpetual trance, one should go not to some slum to find kids with needles sticking out of them but to the residential homes. There, people are drugged unnecessarily with neuroleptic drugs. There have been two major reports in Britain on the subject. One was in a northern town, but I cannot say where because the report has not been published. It discovered that 54 per cent. of residents of such homes who were on neuroleptic drugs did not need them; 20 per cent. of admissions to hospital for elderly people resulted from misuse of medicinal drugs. That involved not only neuroleptic drugs but the interactions between all drugs. An identical figure was found at Gloucester royal hospital: 20 per cent. of elderly admissions were for misuse of such drugs. A Glasgow
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study showed that the figure was 88 per cent. These terrible, powerful drugs mimic the symptoms of dementia and Alzheimer's disease.
Many people have stories of relatives entering homes frail but with alert minds. Within weeks, they are put on regular prescribed medication. It becomes routine and they are turned into zombies with a poor quality of life. The study that I mentioned visited hospitals with a pharmacist and a doctor and examined all the medication that the elderly took. They were able to reduce it by at least half. Each individual was taking an average of six drugs. Some had been taking them for years and did not realise why. It had all been forgotten. The interactions between drugs were doing great harm. Neuroleptic drug use was cut enormously. The result was a better quality of life. People returned to being sensible and taking an interest in what was happening around them and they lived longer.
That is going on now in this country. We must address it. I hope that there will be support for a Bill that will come up during the slaughter of the innocents this Friday when 60-odd Bills come before Parliament. I hope that no Conservative King Herod will kill them all. We must address the problem. The Bill chimes in with what the Government are doing by saying that we need transparency. The Government have a battery of measures to ensure that we can know what is happening. When we find a residential home where 100 per cent. of residents are on neuroleptic drugs, that cannot possibly be right. The savings which can be made by dealing with this issue can be applied to other areas of care in the homes which greatly benefit people.
Drugs are misused in many other parts of the health service. We know about antibiotics, with the creation of methicillin-resistant staphylococcus aureus. The philosophy of medicine is vast over-use of drugs because of the commercial interests and bodies that press, influence and lobby us and the health service to oversell drugs. We have become a society that does not want to accept the human condition. If we are sadder today than yesterday, we feel that we need a pill to take. For every discomfort, grief or pain, we think that there is an answer. Common sense tells us that someone suffering from a bereavement must suffer, weep and wail. We cannot smother it with drug-created euphoria, because the grief will recur in a more damaging form.
People going to hospital will routinely be told that they have to take daily pain-killers when they are not in pain, just in case, or anti-depressants when they feel happy. Huge amounts of drugs are then given to counteract the effects of other drugs. When the House meets in 50 years, our time will be seen as a period when people were obsessed and our lives full of drug use. That is the main heresy of our time.
The answer to many of our problems is not to be found in superficial measures. People are far better on a waiting list than having their babies attended at Bristol royal infirmary or having a dodgy hip replacement. We must examine the quality of the health service. That is the measure that will improve things. We must escape from the present situation, where so much of the health service is driven not by the needs of patients but by the greedy needs of commerce to make extra profits.
11.58 am
Mr. Simon Hughes: I am conscious that we have far too little time, so I shall be brief. I thank the hon. Member for Blaenau Gwent (Mr. Smith) for giving us the opportunity to say thank you to the national health service. On behalf of my Liberal Democrat colleagues, I pay tribute to that 50 years of history. We stake our claim to the genesis of the NHS. After the Webbs in the 1920s, Beveridge in the 1930s and 1940s—he was briefly a Liberal Member of Parliament and then a peer—wrote the report that said that a precondition of a welfare state was a national health service that dealt with all conditions. For those who have not read it yet, I recommend the book by Nick Timmins as a very good and timely read about the history of the welfare state in those great days.
Nye Bevan did the country proud and the Labour Government did the country right after the war. The rest of us have a duty to build on the basis of that. We could all eulogise the good things that the health service has done in all four countries of the United Kingdom, this great capital city and our constituencies. I add my words of thanks to those who work and have worked for the health service, not only at the sharp end—consultants doing difficult and acute operations every day, experts in paediatrics and intensive care—but people such as health visitors going out and about and those who work for environmental health improvement. As the right hon. Member for Wealden (Sir G. Johnson Smith) said, for every curative health service, we need a preventive health service to match. The two work hand in hand.
Like others, like the House as a whole and, thank goodness, like almost everyone in Parliament, we are committed to retaining in this country a health service free at the point of delivery. I have seen the recent figures. We spend £45 billion a year on the health service. Last year, 30 million people used it. That means that for every person who used it, it cost £1,500. For all of us, who might need it any day, it costs less than £1,000 a year. We pay 6.5p in the pound in tax for the NHS. It is very good value for money.
The debate, which I welcome, is about what the health service should do in the years to come. My colleagues and I believe that we have to connect—in Forster's words, "only connect"—the funders and the job. We have to agree as far as possible what the NHS should do, what is the core service, what is the provision. The Minister of State, Department of Health, the hon. Member for Darlington (Mr. Milburn), was honest enough yesterday to admit to the House that in some parts of the country services are available while in other parts they are not. He said that we should have parity of service. I share that view. The public want to be engaged. I read in the newspapers today that a survey by the Institute of Health Services Management for the conference down the road reveals that one of the things that matters most to people is what the health service does, and that they want much more involvement in the debate about what it does. I hope that, in future, the debate about the boundaries of the NHS will become a public, orderly and regular debate and one in which we can all take part. If things cannot be agreed nationally, our local councils and health authorities—we believe that they should be together—should be able to decide to add on services and to raise the money locally to do so.
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I welcome the fact that the Government are soon to announce significant amounts of money for the health service. All the indications are good. I will not be churlish. I shall analyse the figures carefully and see how much the real increase is in percentage terms. I shall criticise it if it is not enough, but the recognition that we need a lot more money to catch up and then consistent increased growth to sustain the health service is welcome. The Minister knows the priorities. A health service cannot be run without staff. The right hon. Member for Wealden has made the point that we are desperately short of staff. We have to find incentives to people to train and stay with the health service.
We need capital to provide the buildings. I share the scepticism of the hon. Member for Blaenau Gwent about the private finance initiative, as do my colleagues. We need an information technology base to ensure that we make efficient use of our resources. I share the view of the hon. Member for Newport, West (Mr. Flynn) that far too many drugs are given to people, and that we depend on drugs far too much. If we can massively reduce the drugs bill and improve health in a drug-free way, we shall be doing the country a good service.
My pager—as well as warnings through the press—tells me that the Secretary of State has announced to the conference in Earls Court the Commission for Health Improvement. In our manifesto—the health section of which I drafted last year—we said that there should be an inspectorate of health and social care. I welcome the commission, on which I gather there will be consultation. I put it to the Minister that there should be—the consultation paper appears in the Minister's hands as if by magic—regular inspection similar to Office for Standards in Education inspections of schools. Any patient or health service professional should be able to telephone the commission and ask it to go in and inspect a GP, hospital or clinic if he does not think that they are doing the job properly. The stronger the commission is, the better. That is where we get a quality health service.
In the 50 years to come, the NHS will be coming home. In the next couple of years we shall, in effect, have four national health services in the four countries of the United Kingdom—one in Wales, one in Northern Ireland, one in Scotland and one in England. I welcome that. The respective services may take on a different style, but it will be no less a national health service. I hope that it will be the people's health service and not the professionals' health service, and that people will have a greater say.
The Secretary of State said yesterday that waiting lists were the supertanker that was turning round. We shall debate that later, but for today we need to say that the NHS is the flagship of the public service fleet. The higher the flag flies, the more contented and healthy the people are. We salute it and wish it a successful voyage in all the 50 years ahead.
12.5 pm
Ms Julie Morgan: I am pleased to speak in this historic debate on the national health service. I congratulate my hon. Friend the Member for Blaenau Gwent (Mr. Smith) on securing a debate this week on the anniversary of the NHS. I represent a Cardiff seat but, like my hon. Friend, I come from the south Wales valleys. I am proud of the fact that the NHS was born in Wales. I strongly support the principle behind it—that it should be free at the point of delivery—which has been covered in many of the speeches today.

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I want to focus briefly on some of the key issues that face the NHS today, all of which have arisen in my constituency. I represent a constituency in which there is an excessive number of hospitals. We have three major hospitals in Cardiff, North—Velindre, which is the major cancer hospital in Wales, the University Hospital of Wales, a major teaching hospital, and Whitchurch hospital, a psychiatric hospital. The nature of the first two hospitals means that many of the issues that are brought to me are of an acute nature, involving people who are very sick, their families, or their doctors. They are about treatment for very sick people. The Government's emphasis on public health, preventive care and the links with bad housing, poverty and the minimum wage—all those issues that have been raised today—is of tremendous importance, but we have to deal with, and debate in public, the provision of acute services. Some of those issues have been aired today.
Although some of the problems of the purchaser-provider split are being tackled, we probably still have to take further steps to reintegrate the NHS, especially in relation to acute services. Can the NHS operate properly with a split between commissioners and providers of very acute services when it is dealing with the advances in medical science that have been mentioned this morning? With advances in drug therapy for cancer, for example, is it reasonable to think that decisions about new drugs can be dealt with at a local commissioner-provider level? Will the health care commissioners have sufficient knowledge to decide which drugs to buy?
There has been much publicity lately about the improvement in cancer care in the United Kingdom, but also about how much it lags behind that in other countries. The figures are sometimes dramatic. Survival rates for different cancers vary enormously throughout the world. The publicity around cancer care raises public expectations. I believe that it is right that they are raised and that people should know about advances and treatments that might be available. However, that presents a dilemma about how to deal with that knowledge and deliver the service.
One problem, especially in relation to cancer treatment, is that much of the research is in the hands of the pharmaceutical companies, as my hon. Friend the Member for Newport, West (Mr. Flynn) said. It is a big issue—and a big debate, which we must have. We have to decide who is to have treatment and what treatment should be made available.
The other big issue that has come up in my constituency is acute heart surgery. The proposed heart transplant unit in Wales has been on then off, on then off, for the past three years. Before the Welsh Office and the University Hospital of Wales Healthcare NHS trust commit to it, the views of all the health areas in south Wales have to be taken.
In 1996, the right hon. Member for Wokingham (Mr. Redwood) changed the health authority boundaries and removed the central planning capacity of the NHS in Wales to take strategic decisions about the provision of services such as the heart transplant unit for Wales and the ability to top-slice health authorities. That meant that the planning mechanism for those acute services had gone. There have been about three years of discussion and
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waiting to see whether the heart transplant unit will be provided in Wales. Wales should have such a unit. There is much discussion about the rebranding of Wales, and a top heart transplant unit is one of the greatest services that could be provided: heart transplantation is becoming common and should be available locally.
In September, the paediatric heart surgeon at the University Hospital of Wales in my constituency, who has had tremendous success in treating children with severe heart problems and has built up the unit, is to return to Italy. He has an empty theatre in which to operate, but he does not have the nurses and the paediatric intensive care beds to do the amount of surgery that he wants to do. It is frustrating not to have the ability to develop that work at the hospital. At the same time as that surgeon is leaving for Italy, the cardiologist is leaving to go to Bristol. Bristol's gain is Wales's loss. The chair of cardiology in that same teaching hospital remains vacant while a decision is awaited on whether there will be transplant surgery in Wales. Everybody is waiting for everybody else, and the result is the loss of a first-class service in Wales. I appeal to the UHW and the Welsh Office to ensure that we can continue as before with paediatric cardiac work in Wales.
The same is true of other advanced treatments. The UHW has the capacity to develop advanced in vitro fertilisation treatments, but consultants have to visit health authorities to see whether people will buy their product. There must be a simpler way. The purchaser-provider split is not effective in such acute, expensive areas of medicine, but it is important to make them available.
There must be a debate on how to fund and decide health service priorities. Advanced developments must be examined strategically. The health service may face huge challenges, but this week we must celebrate 50 years of the NHS. I am proud that it was born in Wales. Health provision must continue to be free at the point of delivery, but we must find a way to make available to people the tremendous advances in health care.
12.13 pm
Mr. Elfyn Llwyd: I congratulate the hon. Member for Blaenau Gwent (Mr. Smith) on securing time to debate the important issue of the 50th anniversary of the NHS. The service is under great pressure, especially in Wales, and I hope that the Welsh assembly will formulate a policy to serve the needs of Wales. There are many reasons for differences in Wales, where there are more heart complaints and more premature deaths, and where a host of other problems are endemic. Those problems need to be addressed, and I hope that the assembly will do just that.
I have been brief, because I know that other hon. Members wish to contribute to the debate. I have jettisoned most of my speech but I am pleased, none the less, to take part in the debate.
12.14 pm
Mr. Philip Hammond: We welcome the debate and I congratulate the hon. Member for Blaenau Gwent (Mr. Smith) on securing it. I join other hon. Members in paying tribute to those who have built the health service over the past 50 years and who continue to give dedicated service. The service's 50th anniversary is the time to celebrate past

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achievements, to take stock of the present and to look forward to the future. The hon. Member for Blaenau Gwent ranged fairly widely in an attack on Government policy. He spoke about the minimum wage, the private finance initiative and education zones. We sympathise with what he said about the situation in Wales and I assure him that the Opposition will listen to what the people of Wales have to say over the next few months. Other hon. Members struck a more consensual tone. I was delighted to listen to my right hon. Friend the Member for Wealden (Sir G. Johnson Smith) and to the hon. Members for Newport, West (Mr. Flynn), for Southwark, North and Bermondsey (Mr. Hughes) and for Cardiff, North (Ms Morgan).
The national health service is a truly national institution. It enjoys universal public appeal and no party or faction can claim ownership of it. The Beveridge report was commissioned by the wartime coalition Government, and in the 1945 general election both main parties were committed to the introduction of a universal health service that was available to all. It fell to a Labour Government to introduce the NHS in 1948, and Labour is rightly proud of that achievement. We in the Conservative party had control of the NHS for 35 of the past 50 years and we are proud of our stewardship of the service.
The NHS has prospered and grown under Conservative Governments. In the period between 1979 and 1997, NHS spending grew by 3.1 per cent. in real terms on average. Treatments went up by 3 million and the number of nurses, doctors, dentists and midwives increased. Capital spending increased by 50 per cent. in real terms in that time. I hope that we shall not hear from Labour Members the old, tired mythology that the NHS is somehow a product of the Labour party and that only it holds the NHS dear.
There is broad, cross-party consensus on the objectives for the modern NHS. They are to provide cost-effective, state-of-the-art health care that is free at the point of delivery and based on clinical need. There is political debate on the NHS but it is not about the objectives of the service: it is about differences in view on how best to achieve those objectives. There is an urgent need for debate on innovative and imaginative ways of ensuring the provision of the extra resources that the NHS will need to flourish and prosper in future. As medical technology develops and demography changes, the demand for more resources will increase. New technologies will allow better prediction of genetic predisposition to diseases, and that will allow preventive medicine to be better targeted. That will lead to long-term savings but it will demand greater short-term investment.
It is important to begin that innovative debate about the means of ensuring the availability of resources that the service will need in future. If the debate is to be meaningful, it is important to determine the underlying core principles that are important to patients—the users of the service—and to distinguish them from the sacred cows. The principle of universal availability on the basis of clinical need, free at the point of delivery, should be inviolable. Beyond that, the resourcing of the service should be based not on political dogma but on the determination to deliver the best possible service to users within the constraints of prudent fiscal policy.
Hon. Members on both sides of the House are proud to join in the celebration of the 50th anniversary of the NHS. The best birthday present that we, as politicians, can give
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the NHS is to break out of the sterile debates of the past and launch a real debate on future resourcing of the service so that it can effectively deliver a modern national health service offering the level of service that the British people are entitled to expect in the new millennium. We need a debate that acknowledges the consensus on objectives that exists across the political divide, the commitment among hon. Members on both sides of the House to the future of the NHS and the real issues of escalating demand and finite tax-based resources; recognises the reality of rationing that exists now in the system; and does not shrink from hard questions in seeking to ensure the proper resourcing of our health service.
12.19 pm
The Minister of State, Department of Health (Mr. Alan Milburn): I am delighted to have the opportunity to respond to the debate, which has been initiated by my hon. Friend the Member for Blaenau Gwent (Mr. Smith). He has secured it at an appropriate time not just for his constituents, but for the whole nation. It is particularly appropriate that it should fall to my hon. Friend to open the debate on the 50th anniversary of the NHS as one of his predecessors, Aneurin Bevan, was the founding father of our NHS. I think all hon. Members would want to pay tribute to Nye Bevan for his work, in the 1940s and subsequently, in giving the nation the sort of NHS that we have now.
This has largely not been a party political occasion, but I must point out that the hon. Member for Runnymede and Weybridge (Mr. Hammond) seemed to be suffering from a slight case of selective amnesia. In 1946, when we debated this issue in the House, his party opposed the National Health Service Bill tooth and nail. It fought it throughout—on Second Reading, Third Reading, Report and subsequently.
Mr. Nicholas Soames: I am sorry that I was not here for the whole debate. Will the Minister acknowledge that the doctors opposed the establishment of the NHS, too? It is not a matter of pride for anyone that they should have opposed the creation of the NHS. The fact is that it is a truly wonderful service. All parties in the House should acknowledge that, and try to minimise, not maximise, the amount of politics involved.
Mr. Milburn: As the hon. Gentleman knows, I am all for keeping politics out of this place. I remind him that 90 per cent. of doctors voted in favour of the NHS in their ballot. There are interesting parallels with the situation today because, at their conference last week, 85 to 90 per cent. of general practitioners voted in favour of this Government's policy on NHS modernisation.
The NHS was founded on a simple principle: the best health services should be available to all—quality and equality. That appealed to the fair-minded people of our country then and it still appeals to them now. No one dares challenge those principles. No one says that the best health services should not be available to all. Indeed, the NHS embodies the principles in which the Government and my party believe.
We achieve more together than we do alone, and we have a duty to look after the weak as well as the strong. The NHS not only binds the nation's wounds, but binds

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the nation together. Each and every family in the land has a stake in the NHS and in its future. This Government were elected on the principle that the best health services should be available to all on the basis of need—not according to ability to pay or, indeed, who one's GP happens to be.
My right hon. Friend the Secretary of State recently had the honour to meet one of the first patients to be treated in the NHS, a lady called Sylvia Diggory, who summed it up far more eloquently than perhaps any hon. Member—including me—has been able to do in this debate. She said:
"Britain is one of the few countries where they feel your pulse before they feel your wallet if you collapse in the street".
That is a lasting testimony to the sort of national health service that Nye Bevan wanted to create.
It is a privilege to be a Minister with responsibility for health in the 50th year of the health service. As hon. Members will know, this Sunday, we celebrate the 50th anniversary of the founding of the NHS. My hon. Friend the Member for Blaenau Gwent reminded the House that, during the passage of the Bill, Nye Bevan talked of how the new NHS would lift the shadow from millions of homes. He was right. It is now impossible to imagine life in Britain without the NHS. Its achievements in those 50 years have been immense.
The NHS has banished the fear of being ill and becoming ill for millions of our fellow citizens. It is our country's greatest institution and it is my party's proudest achievement in government. It is living proof that public services can be both efficient and popular. Quite simply, the NHS has delivered the goods, as Nye Bevan promised it would.
I pay tribute in particular to all the people who work in the health service and who have given so much day in, day out over the past 50 years in the service of others. Without them, the achievements of the NHS simply would not happen.
Some people said in 1946, 1947 and 1948, and some people still say, that we cannot afford the best—that the principles of the NHS are not practicable, that they cannot be delivered. The past 50 years have proved those prophets of doom and gloom wrong because our NHS has served this country well for the vast majority of the time. The vast majority of patients over the vast majority of the country have received top-quality treatment and care, and the NHS has proved to be the cheapest and most cost-effective health care system in the developed world.
That is not despite the principles on which the NHS was based; it is because of those principles. Fairness and cost-effectiveness have gone together. They are two sides of the same coin. The basic financial principle of the NHS is that it is paid for out of taxation and free to people when they use it. That is a fine principle and, contrary to what the right hon. Member for Wealden (Sir G. Johnson Smith) said, it is also phenomenally efficient because it avoids the horrendous costs of paperwork that are inevitable in any system where patients have to pay for treatment.
That is the main reason why our system is so cost-effective. It puts a bigger proportion of resources into patient care, and a lower proportion into paperwork,
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than any other system. That is true even now, when we still suffer from the after-effects of the competitive internal market. It is one of the reasons why the Government are sweeping away the internal market, but it is not the only reason. The internal market introduced a new competitive ethos into the NHS that was anathema to the basic principles of the NHS. It was also deeply inefficient.
Our NHS is based on the basic common-sense idea that we achieve more together in partnership than if we compete. It is that idea of partnership and co-operation—helping each other out—that is at the heart of the NHS. Indeed, it is one of the reasons why my right hon. Friend the Secretary of State for Wales has proposed a series of trust mergers to cover the Principality.
I know that my hon. Friend the Member for Blaenau Gwent has concerns about those issues. My right hon. Friend has been here to listen to those concerns. He has listened to them in the past. My understanding is that what is taking place is a genuine consultation, where the views that my hon. Friend and his constituents have expressed will be taken into account when final decisions are taken.
Mr. Huw Edwards: On the issue of the trust merger in Gwent, may I assure my hon. Friend that all the Government's priorities and policies will be fulfilled if we have a separate trust for north Gwent?
Mr. Milburn: I am sure that my right hon. Friend the Secretary of State for Wales was listening to that intervention, and that those considerations will be taken into account when final decisions are taken.
As hon. Members have said, this is a great time for looking back and celebrating what we have achieved, but it is important also that we look forward and that, in particular, we look to build the sort of modern and dependable health service that people want. That is what the Government are committed to doing. That is why we are intent on cutting waiting lists, and are now achieving that. That is why we are intent on enshrining quality at the heart of the NHS; my right hon. Friend the Secretary of State for Health has launched a consultation on how we better ensure quality and transparency for all patients in the NHS. That is why we want a much more integrated form of care than was ever possible under the internal market. We want to break down barriers between services—between health care, social care and housing care—so that patients receive the benefit of all those services. The patient should be at the heart of the national health service.
We also realise, as my hon. Friend the Member for Blaenau Gwent asked us to do, that—if we are to improve the health of the nation, and, more important, if we are to improve the health of the poorest at a faster rate than the health of the overall population—we will have to tackle the root causes of ill health, which means tackling poverty, creating jobs, building homes and greening the environment.
The Government have embarked on the biggest anti-poverty, pro-health crusade that the United Kingdom has seen in two decades. To underpin that crusade, we shall annually invest more in the national health service, as we promised to do. We have embarked on the biggest new hospital building programme that the national health service has ever seen.

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On the private finance initiative, I remind my hon. Friend the Member for Blaenau Gwent that the Government were elected—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order.

Pedlars
12.30 pm
Dr. Peter Brand: I am grateful for the opportunity of raising the issue of pedlars. I have been supported on the issue in an early-day motion that has been signed by hon. Members on both sides of the House. We have also tabled questions on the issue to the Under-Secretary of State for the Home Department, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth). I am grateful that he will respond to this debate.
There are significant problems associated with people who trade on the streets, whether they are pedlars or street traders. I should like to concentrate particularly on the issue of pedlars. I believe that they create unfair competition, are poorly controlled, cause great problems for local police forces and are certainly a major headache for environmental health, trading standards and local government licensing officers.
I am sure that pedlars once served an extremely useful function in spreading goods round rural communities, such as my own. However, they used to work on foot within a local district, and the fact that they were licensed by a local police authority was entirely appropriate if they restricted their activity to within that authority. Unfortunately, now any pedlar can get a licence from his or her own local police force and operate anywhere within England and Wales. Although I am sure that the Pedlars Act 1871 was entirely relevant to its time, I am not quite sure whether it is entirely appropriate now, especially as we move towards the millennium.
I have received considerable representations on the issue. I am particularly grateful to my colleague, Alan Hersey, a local councillor on the Isle of Wight, who first brought it to my attention. Concern about the matter has been very strongly expressed by carnival committees, bonfire societies and other organisers of voluntary events.
Mr. David Heath: My hon. Friend mentioned carnival committees. He may be aware that we have a thriving carnival tradition in Somerset. Many of the carnival committees and other clubs in my constituency are concerned that the effect of the 1871 Act has been to divert funds from collections at carnivals and from charitable purposes to private hands. Those organisations look forward to a revision of the law that will deal with the situation.
Dr. Brand: I am grateful for that intervention, and shall touch on that issue as I develop my speech. My hon. Friend also provided a demonstration of the fact that the matter is one not purely for the Isle of Wight—although we probably have more carnival committees per head of population than anywhere else in the country.
Pedlars are a particular problem for areas that are dependent on seasonal trade. Established traders, who have to be in such areas the year round, are undercut and damaged severely by—dare one say it—fly-by-night pedlars dropping in, creaming off the profits and then disappearing again.
It might be helpful if I reminded the House of a few facts. Pedlars are supposed to trade only on foot, although they are allowed to push barrows. They are not supposed to be in the same place for more than an hour, but are

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supposed to move a bit each time that they make a sale. One can readily realise the impossibility of policing such regulations. I know that many local authority officers have spent many hours video-taping suspect traders in the hope of securing a prosecution, which is extremely hard to bring.
Pedlars are known only to their own local police authority. There is no obligation on their part to inform police in the place where they are operating. Although they have to show a pedlar's licence when apprehended, they are allowed to carry on the trade for which they have been licensed if they are on the public roads—which presents the problem for charity organisers who hold events on public land. It is not unusual for pedlars to move from one such event to the next, creaming off the take that really should be going to the societies organising the event.
Not only is it important for carnival committees or bonfire societies themselves to receive an income from the events that they organise—if they do not, they cannot continue operating, and it has been very difficult for some organisations to continue operating—but, when they are in surplus, they are big contributors to local charities. We should encourage such practices as a part of the great diversity and richness of the British tradition.
Pedlars pay only £12.50 annually for a licence. Street traders usually have to pay up to 100 times that amount to be licensed by a local authority. Again, it shows that there is an unfair competition.
Street traders, whose goods can be checked by local authorities, are often undercut by pedlars working in the same area. In my constituency, many street traders provide valuable employment by selling well-made, locally produced goods. Pedlars coming in undercut those street traders, very often with shoddy goods that are very difficult to return as the pedlars move off immediately once one discovers that a new watch has fallen to bits or that those new bright lights no longer shine.
Street traders are strictly controlled. Before they are given a licence, nuisance to local tenants and competition with other shops and cafes are carefully considered, and noise and smell nuisance are taken into account by local authorities, which find it extremely difficult to exercise the same types of control over the peddling fraternity.
There is some evidence that, because their goods are not controlled, pedlars can do harm to the general public. There have been cases of goods, especially toys, being sold that would not have been approved by local trading standards officers. However, in such cases—especially if there is no organisation sending pedlars out—it is extremely difficult to attribute blame if something happens. The idea of caveat emptor is a wonderful one. However, when in the middle of a charity event a child wants a specific teddy, it is very difficult to say no. Moreover, nowadays people expect goods on sale to be of a marketable quality. I am afraid that, because of the loophole in current legislation, we are failing in meeting such expectations.
As I said, it is difficult for police to take action if pedlars are not breaking a criminal law. It is also extraordinarily difficult and time consuming to have to establish that pedlars have not moved the appropriate number of times. Such exercises are extremely expensive for local authorities.
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I should like to return very briefly to the harm that peddling does to charitable organisations. It is important that we continue to support and enable community organisations—which very much are community-based organisations—to continue with activities such as providing carnival floats and organising local bonfires, fetes and other village green activities. It is not unreasonable to allow organisers of such events to recoup some of their expense, by licensing agreements with the local authority, to pay for the associated costs of the carnival, fireworks or bonfire. Many societies are on the brink of failure because their finances are being severely damaged by people coming from far away whose only purpose is to cream off some money and then disappear. These people make no contribution to the local community, unlike local shopkeepers, local street traders and, of course, the organisers of charitable events.
It is not in order for me to ask for a change to the legislation. I know that the Home Office has had the issue of pedlars and their licensing under review since 1994, so I hope that it is in order for me to ask the Minister when that review will be published and what the Government's plans are to deal with an extraordinarily anomalous situation.
12.40 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I am grateful to the hon. Member for Isle of Wight (Dr. Brand) for initiating this debate. This is not a subject that often gets an airing in the House, but I know from my correspondence with him, to which he referred, that it is one which in some areas gives rise to considerable concern.
Pedlars have long been a feature of life in this country, but many people are unclear about precisely what the term means today. To some it is an anachronism with little relevance to modern life. A quick glance at the Pedlars Act 1871—and, indeed, the subsequent legislation of 1881—supports the view that the hon. Gentleman expressed. For example, references to "caster of metals", "mender of chairs" and a person who "travels and trades" without any horse or other beast "bearing or drawing burden" certainly prompt questions about the continued relevance of the legislation.
However, there is no doubt that peddling continues to be a distinctive method of trading, even though the nature of the business may have changed. For example, certain door-to-door salesmen are classified as pedlars, although that by no means covers the wide range of people who conduct their business by calling at people's homes.
It is the type of pedlar who plies his trade in busy streets in the centres of towns and cities who is of particular concern to the hon. Gentleman and to the hon. Member for Somerton and Frome (Mr. Heath). As the hon. Member for Isle of Wight says, in law pedlars are not street traders and are subject to different regulations. Councils can designate streets for street trading, and street traders must obtain from the local authority a licence, or at least a consent, to trade in those streets, usually from a specific pitch. They must also pay the requisite fees and charges and observe various conditions.
On the other hand, a pedlar obtains a certificate from the police for only a modest fee. This allows the pedlar to conduct his or her trade anywhere in the

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United Kingdom. The hon. Gentleman referred to some of the difficulties to which that might give rise in that the certificate is issued in one area but can apply in other areas. I understand the hon. Gentleman's point very well.
The essential point is that pedlars are expected to move from place to place. Court judgments in recent years have tended to confirm this. The effect of those judgments is that a pedlar must keep on the move, apart from when conducting a sale. This gives a useful pointer to the type of trader we are talking about. We have all seen people wandering the streets with, typically, foil balloons, T-shirts or similar items for sale. Those traders are clearly pedlars.
The hon. Gentleman described the problems which he says are being caused by pedlars in his area. If he did not go so far as to say that the law favours pedlars, he suggested that it needed some adjustment and should be changed accordingly. I shall return to that issue shortly.
Perhaps I should comment on the rationale behind the present arrangements. Street trading is a more regulated and costly business than peddling because it is a more substantial operation. A street trader can establish a fixed pitch, which will inevitably involve the local authority in cleaning and other costs that we can fairly readily imagine.
Dr. Brand: In practice, it is often extremely difficult to spot the difference between a pedlar and a trader, other than the fact that the pedlar has to move on. Traders and pedlars leave the same amount of litter, but street traders are rather more responsible because they know that they risk losing their pitch.
Mr. Howarth: That is precisely the point that I was making. A street trader may leave a mess but the process is properly regulated. The difference is that he has the opportunity to sell a wide range of goods and to build up a regular turnover, customer recognition and, in some cases, customer loyalty. I say that, not in defence of pedlars, but merely to draw attention to the fact that there is a crucial distinction.
A pedlar who is genuinely operating as a pedlar has no fixed spot. He must keep on the move, which means that there are fewer associated costs. It also means that he is limited to selling only those goods he can carry. Pedlars are therefore offering a rather different service from that offered by street traders. That is reflected in the "lighter touch" regulation that they enjoy.
I understand how frustrating it must be for established traders to face competition from what are in effect opportunistic operators. It is clearly wrong that licensed street traders, who have responsibilities and expenses, lose business to fly-by-night, unlicensed competitors. It is not entirely clear how far the problems we have heard about today are caused, or exacerbated, by unlicensed street traders as opposed to genuine pedlars.
The fact is that anyone who simply sets up a pitch, or conducts business from a stationary position, in a designated street, is likely to be engaging in unlicensed trading. This attracts a maximum penalty of a £1,000 fine. This would be the case even if the person concerned produced a pedlar's certificate. The courts have made this clear. The question is whether a pedlar remained on one spot for any length of time, so effectively inviting customers to come to him. If so, he would be street trading without the necessary authority.
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Unauthorised traders can pose significant problems, particularly in town centres at busy times. I accept that, as the hon. Gentleman said, they can cause a real headache for local authorities in terms of enforcing the law, which can become a difficult and burdensome process. In some cases, there could be problems in establishing the point at which a pedlar—with or without a certificate—is actually engaged in unlicensed street trading. The fact remains, however, that in these circumstances remedies are available. Anyone who acts as a pedlar without a valid certificate is also liable to prosecution. In addition, he may be causing an obstruction under the Highways Act 1980.
There have been suggestions that the sentences available to the courts are inadequate. The hon. Gentleman referred to that implicitly, if not explicitly.
Dr. Brand: I am grateful to the Minister for trying to read my mind, but that is not the case. The problem is in securing a conviction. It is extremely difficult to get the evidence on which to convict. I hear what the Minister says, but as his speech progresses I hope that he will comment on whether it is still appropriate for someone who is supposed to trade on foot to travel in a car, or by coach or lorry, from the area in which he has been given his licence and then to walk but use the vehicle as a base.
Mr. Howarth: That is an interesting point and I shall reflect on it. I do not want to give a precipitate answer that would not necessarily be helpful to the hon. Gentleman, so I shall write to him and attempt to provide some sensible guidance as to how an authority should operate in those circumstances.
Mr. David Heath: I am most grateful to the Minister. Will he also touch on the competition with charitable collections, particularly in the context of carnivals, which by definition move around? The current position is perverse, as the Charities Act 1992 makes it more difficult to obtain a licence to collect money for charitable purposes than to obtain a pedlar's licence and extract money from the same crowd under what I consider to be a false pretext.
Mr. Howarth: I am grateful to the hon. Gentleman, who raised that point in an earlier intervention. I shall comment on it later in my speech.
Our general policy on sentencing levels is to ensure that they are proportionate to the degree of mischief caused. Before we make any decision to increase the penalties available, we need to look carefully at a number of factors, including the sentencing practice of magistrates within the existing scale. The information available suggests that the sentences imposed for street trading and peddling offences generally fall well short of the maximum. There must therefore be real doubts as to whether increasing the level of fine, for example, would make any appreciable difference. As the hon. Member for Isle of Wight said, there may be other ways of facilitating prosecution and I promise to look into that.
It is sometimes said that pedlar's certificates are used as a cover for unlicensed street trading. I know that some pedlars attempt to exploit the certificate in that way, but the number of pedlar's certificates issued—around 2,000 a year—appears to be declining. On the other hand,

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reports of unlicensed street trading are on the increase. It is a persistent problem in many areas. It is arguable whether the presence of pedlars makes matters a great deal worse. Many of those involved in unlicensed street trading are not pedlars and, what is more, make no claim to be so. I know from my own experience on Merseyside where there is a particular problem. I have had direct experience of it in the centre of Liverpool so I do not want to underplay it.
I understand why street traders and other businesses may feel that even genuine pedlars present unfair competition. After all, they are exempt from street trading controls and, as the hon. Gentleman rightly pointed out, their costs are lower. However, a bona fide pedlar has to be able to carry his wares. Given the more limited range of goods that he can sell, I am not sure how far he can be said to damage the business of street traders. It could be argued that the competition offered by pedlars is no more unfair than that between street traders and small shops—it is a matter of different considerations—or between small shops and out-of-town stores. Pedlars often quickly move on. Many people will therefore choose to buy goods from more established traders whom they will inevitably regard as more reliable.
Dr. Brand: I am sorry to ask your indulgence again, but there is a significant difference between the various groups that you have mentioned and pedlars.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I remind the hon. Gentleman that he should be using the third person.
Dr. Brand: Does the Minister agree that there is a substantial difference in that the list of activities that he mentioned are all either licensed by or governed by planning controls and are subject to the local authority and the anomaly is that there is absolutely no local control over pedlars?
Mr. Howarth: Of course, but planning controls invariably relate either to pitches in the case of street traders or fixed location properties and it would be difficult to apply them to somebody who, by definition, must keep moving. Of course I accept that additional controls apply to other traders.
As the hon. Gentleman has made clear, in the Isle of Wight there are particular worries about the practice and the standard of goods on offer. Unscrupulous operators are clearly a menace and the licensing of street traders and certification of pedlars is designed to reduce that risk. Consumer protection legislation applies just as much to goods bought from street traders or pedlars as to those purchased from other outlets. I recognise, of course, that
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such traders—particularly pedlars—may be rather more difficult to track down. However, a customer can, and should, ask to see a pedlar's certificate before buying from someone on that basis. Most people are fairly cautious about what they are prepared to hand over money for in the street, although particularly in places such as the Isle of Wight, and perhaps Somerset, many people are on holiday so their defences may be somewhat lowered.
The hon. Members for Isle of Wight and for Somerton and Frome mentioned charitable collections. I share their concern about the abuse of the pedlar's certificate for fraudulent charity collections. Where individuals collect money or sell goods on behalf of a named charity, the promoters are required to obtain a licence from the local authority. Part III of the Charities Act 1992, which has yet to be implemented, will simplify and strengthen the existing controls. However, the issues involved are indeed complex and the Government are considering when and how the measure might be implemented.
I accept that a pedlar's certificate may make life easier for those determined to mislead the public. Unfortunately, carnivals—to which both hon. Gentlemen referred—or similar large-scale events, will always attract such characters. I shall give further thought to the real and serious points that both hon. Gentlemen have raised and if there is anything that we can usefully do, I shall notify the House in a suitable manner.
As the hon. Member for Isle of Wight said, in 1994 the previous Government began reviews of pedlars and street trading legislation. I should make it clear that they did so in the context of their deregulation exercise. The aim of the reviews was to see whether the burdens imposed by the legislation could be reduced, but some complex issues were raised and the responses to both reviews were very mixed. In the case of the pedlars legislation they were fairly evenly divided, but a small majority favoured strengthening the controls.
The hon. Gentleman has argued for pedlars to be brought within street trading controls. That would require primary legislation and he realises the difficulty involved in that. We need to recognise that such an option is available, but be cautious about using it. Nevertheless, I shall certainly consider the points he has made about the problems posed by pedlars. Similar arguments were raised in some of the responses to the 1994 consultation paper and I accept that they are the subject of real concern.
At this stage I have reached no firm conclusions about the merits of further action in relation to either pedlars or street traders. Although I am not yet persuaded that increasing controls on pedlars would greatly alleviate the difficulties experienced by street traders and local authorities, I can assure the hon. Gentleman that I will look carefully at the issues in considering our future policy. In doing that, I shall reflect carefully on the points that he and the hon. Member for Somerton and Frome have raised during the debate.

Reefs
12.58 pm
Mr. Tam Dalyell: Only those who, like my hon. Friend the Minister and me, have had the good luck to swim in one can appreciate the full glory that is a coral reef. There are many reasons, medicinal and otherwise, why they are important as the cradle of fish. I thank the two young RAF officers who took me diving at an enforced stop at Gan in the Indian ocean while I was returning from an Inter-Parliamentary Union armed forces visit in 1965. I shall for ever be grateful for the opportunity to swim in the Indian ocean, which led to a lifelong interest.
The World Conservation Monitoring Centre in Cambridge, in particular Dr. Mark Spalding and the director Dr. Mark Collins, together with its associates in the United States and the Philippines, has produced an important report on the state of the world's coral reefs, called "Reefs at Risk". I should like to use my luck in securing this debate to bring the issue to the top of the Minister's in-tray. So many important reports get publicity and then gather dust.
"Reefs at Risk" highlights the crucial role of coral reefs in alleviating poverty—by supplying food and foreign tourist income—and as a natural coastal defence. Many of our fellow Commonwealth nations have coral reefs, including some of the poorest nations. Do the Government agree that the conservation of such natural resources is fundamental to their policies for poverty alleviation? I applaud my right hon. Friend the Secretary of State for International Development and my hon. Friend the Minister for putting poverty alleviation at the top of their agenda. What can the Government do to support integrated sustainable development and coastal conservation in such countries?
The UK is among the largest coral reef nations, with more than 6,000 sq km of coral reef located in our overseas territorial waters. "Reefs at Risk" says that many of those reefs, particularly in the Caribbean, are in areas of high risk from human damage. Praise is certainly due to territories that have set aside marine parks and the resources to manage those sites, but the majority of coral reefs in those territories remain without any form of legal protection. What further measures do the Government propose to protect and manage those precious resources?
Proposals exist for a massive development of condominiums and a deep water harbour in East Caicos, Turks and Caicos Islands, which will include building work and degradation in an existing national park. Similar destructive developments are planned on some of the small islets off Anguilla, including the development of a rocket launching station at Sombrero Cay. Will the Government give a complete assurance that they will not allow those developments to take place at the expense of coral reefs?
The Government's new British Indian ocean territory conservation policy, covering the UK's largest area of reefs, which includes some of the most pristine reefs in the Indian ocean, is an important step forward that deserves high praise. What progress is being made towards the designation of Ramsar sites and strict nature reserves in that area, as laid out in paragraph 19 of "Reefs at Risk"? Will the Government also give an assurance that
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they will continue to maintain a fisheries patrol to prevent further illegal fishing incursions into the region from neighbouring countries?
I am on delicate ground here. I believe—this is not a universal belief—that fisheries protection is essential. A naval presence is necessary to protect the reefs from the depredation of Taiwanese, South Korean and other massive fishing trawlers that hoover up the bottom of the sea. I point out to my hon. Friend the Minister with some shyness that there is a huge base at Diego Garcia, which is British territory, not American, albeit that the base there is the biggest outside the continental United States. It would not be impossible to have a naval presence. I am not asking for an answer on that delicate issue today, but at least the Department might reflect on it.
Noting the Government's continued support for biodiversity conservation through the Darwin initiative and this country's position in coral reef conservation and science, it is surprising that the Darwin initiative has selected few, if any, reef projects. Does the new report provide a useful basis on which to prioritise and support future projects?
Will the Government consider supporting similar analyses for other coastal ecosystems that are vital for the people who live there? I am thinking particularly of mangrove ecosystems and poorly known but equally important seagrass beds. Part of the problem is that the huge fish that are found in reefs are extremely valued in places such as Hong Kong. They are captured live and set out in stalls, fetching huge sums. There is also a great temptation to catch fish for aquariums. We human beings must make up our minds what we are going to do about the problem, because sooner rather than later the great glories that are the ecosystems of the coral reefs will be in danger.
It is my wont to be lucky in Adjournment debates. As many of those who will read the report of this debate are understandably more interested in what the Government have to say than in what I have to say, I shall give ample opportunity to my hon. Friend, who has taken a deep personal interest in the issue. I place on record my thanks to my right hon. Friend the Secretary of State and my hon. Friend the Minister and to their ever-helpful officials, who have also displayed a passionate interest.
1.5 pm
The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): I congratulate my hon. Friend the Member for Linlithgow (Mr. Dalyell) on his success in securing yet another Adjournment debate. When I was an Opposition Back Bencher, I knew how difficult it was. My hon. Friend has a talent that all Back Benchers should try to emulate. I also congratulate him on his interest in science, particularly this important issue. I understand that he is the parliamentary correspondent of the New Scientist and that he takes an interest in a range of issues in that capacity.
The Government also welcome the recent publication, "Reefs at Risk". We are glad for this opportunity to outline our response to this important environmental and development challenge. My hon. Friend has given me plenty of time to do so. In passing, I should like to point out that it is a great tribute to the House of Commons—readers of Hansard and visitors should note this—that we

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can move seamlessly from the problems of pedlars in the Isle of Wight to issues relating to coral reefs in oceans around the world.
The Government consider the publication of the report a timely wake-up call to the global community. This is the year of the oceans. As my hon. Friend will know, the G8 Environment Ministers agreed in April to promote greater and more co-ordinated action on marine biodiversity. We are at one with my hon. Friend in his concerns.
The coral reefs of tropical oceans are renowned for their beauty, as my hon. Friend and I have experienced from swimming in the oceans. I saw for myself in Belize and more recently in Nassau the beauty of the coral reefs, so I can underline what my hon. Friend said about that. They are also important as centres of biodiversity and a source of livelihood for many poor people. Television and tourism mean that even in our northern location—my hon. Friend and I live in relatively far northern locations—we are increasingly aware of the intrinsic values of the coral reef. We are often less aware of the threats to reefs, which the report brings out well.
The principal causes of decline are clear: there are five. The first is unmanaged coastal development where there is an inadequate institutional and legislative framework to ensure proper resource management. The second is over-exploitation of particular goods and services by destructive fishing or intensive tourism and the marine curio trade. The third is land-based pollution from domestic, industrial and agricultural sources. As tourism grows, such pollution increases. The fourth is sea-based pollution from mineral exploitation and cruise ships. The fifth and final cause is climate change and tropical storms, which physically damage the coral reefs. The challenge for us all is effectively to address those causes while, at the same time, meeting the legitimate development needs of increasing numbers of people and reducing the number of people living in absolute poverty.
I was grateful to my hon. Friend not just for mentioning the White Paper and the Government's commitment to poverty elimination but for his endorsement of it. The key aim of the Government's international development programme is the elimination of poverty. If he does not mind, I shall correct him slightly. He used the old term "alleviation". We are making it clear that we want not alleviation but elimination and eradication of poverty in poorer countries through the promotion of sustainable development. Our specific objectives are: policies and actions that promote sustainable livelihoods, better education, health and opportunities for poor people, and protection and better management of the natural and physical environment, which is what this debate is about.
The Government strongly support—indeed, they have been a leading proponent of—the international development targets to reduce by one half the proportion of people living in extreme poverty by 2015, and to implement national strategies for sustainable development in all countries by 2005, so that we can ensure that trends in the loss of environmental resources are effectively reduced at both global and national levels by 2015.
Concern in the United Kingdom over declining coral reef resources is not new. The Government and their predecessors have been aware of the issue for some time
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and have funded studies by some of the British scientific institutions, which have well-deserved international reputations for excellence in coral reef research.
I should emphasise that the degradation of the coral reef systems and other tropical coastal ecosystems, such as mangrove forests, which my hon. Friend mentioned in particular, can have a devastating impact on the livelihoods of very poor people in developing countries. I know that he is especially concerned about that. Such people, who often lack access to land or alternative forms of employment, are highly dependent on the resources and services that the reefs can offer. We must understand that, for poor coastal communities, degradation of reefs leads to loss of food security, destabilisation of the community structure and, often, migration to the urban centres, which creates increasing problems. If we are to protect coral reefs, we need to focus on the interests of local people to whom, quite understandably, global values may mean little given the grinding burden of poverty that they face. I shall offer just a few examples.
Astonishingly, coastal communities in the Maldives and Sri Lanka depend on reef fisheries for about 80 to 90 per cent. of the animal protein in their diet. In comparison, only 10 per cent. of the animal protein in the average UK diet is fish. That shows just how dependent such communities are. Furthermore, in the Maldives—a country of more than 1,000 coral islands—a recent study showed that some 17 per cent. of households have no source of income other than reef fishing, and that average household income varies between $25 and $77 a month. More than 60 per cent. of households in the coastal communities of Fiji, for example, are dependent on coral reef fisheries as a source of nutrition and income. Such dependence on the coral reef fishery is common in island states. Degradation of reefs that support the fishery can create poverty.
Other households in coastal areas are equally dependent on coral mining, which destroys reefs to manufacture lime and other building materials. In some coastal communities of east Africa, 85 per cent. of households are dependent on income from coral mining. More than 5,000 people earn a livelihood from coral mining in Sri Lanka. The ability of some coastal communities to build affordable housing depends on coral mining, yet their livelihood also depends on a healthy reef ecosystem. Such spirals of environmental degradation and poverty can be resolved only by sustainable development.
My hon. Friend raised the question of the theft of fish. Since the 1960s, Governments of south-east Asia have been concerned by the use of sodium cyanide solution to stun and capture coral reef fishes, as my hon. Friend described, which are exported for the aquarium trade. There is also some evidence of collateral damage to corals and other organisms. Regrettably, the use of sodium cyanide has become widespread, even though it is illegal in many countries. I am glad to say that the Government of the Philippines have taken a leading role in the fight against the users of sodium cyanide. In partnership with local environmental organisations, they provide training for fishermen in alternative catching techniques and have established laboratories to test live fish exports for traces of sodium cyanide. As a consequence, cyanide fishing has been reduced in the Philippines. We applaud that example of environmental management in action.

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Traditional community management systems have existed in some small island states for centuries and have controlled the sustainable use of resources of coral reefs. Pressures caused by increasing populations and inappropriate or badly planned development are breaking down the long-established systems, and community-based management alone may no longer be sufficient to contain the threats to reefs.
As "Reefs at Risk" makes clear, the causes of decline in coral reef health are in any case often beyond the traditional control of coastal communities. The origin of pollution and sedimentation is often far inland. For example, the recently documented decline of a coral reef system in the Philippines identified the cause as inland logging operations, which increased soil erosion and consequent sedimentation in coastal waters, killing corals and reducing fish populations. The main benefits of logging were obtained by commercial companies. The main costs to the environment, however, were felt by the poor in the coastal community. Analysis in the Philippines demonstrated that long-term revenue from tourism and fishing on a healthy reef system would have been $40 million greater than that generated by logging. Therefore, it would have been far better to go down the tourism and fishing route. We must encourage more of such analyses, as well as planning mechanisms that use the resulting information.
My hon. Friend put his finger on the key to the issue. An integrated approach to planning is essential if Governments are to protect the coral reefs and the livelihoods that depend on them. The Government are committed to such an approach in our development co-operation programme. There is a recognised planning framework to achieve it, which is known as integrated coastal management. That enables communities to participate with the Government in the identification and management of competition and conflict in the use of coastal resources. The Government have helped to introduce integrated coastal management, to address coastal resource use issues in coral reef and mangrove management on the island of Sumatra in Indonesia, and in South Africa. We are also funding research to resolve resource use conflicts in coastal areas of Sri Lanka and Vietnam. A great deal is being done by our Department in integrated coastal management.
Mr. Dalyell: I can confirm what the Minister has said. I attended the recent seminar at Canning house, which he will know well from the days before he was a Minister. When I asked about the reefs report, the Mexican ambassador, Mr. Ornate, confirmed the value of joint projects in the Caribbean, so it is not only the Government who say that such co-operation is good, but the Mexican ambassador speaking on behalf of the Latin American ambassadors.
Mr. Foulkes: I accept what my hon. Friend says. Other Governments are increasingly concerned about the matter. Canning house provides an excellent forum for such discussions.
My hon. Friend would agree that the basis of planning is knowledge, and the "Reefs at Risk" report makes it clear that it is based on indications of potential threat. My Department is engaged, with a number of international and national organisations, in developing a better understanding of the relationship, which we have been
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discussing, between protection of the coral reef and coastal environment and the eradication of poverty in coastal communities.
Assessment of change in reefs is the first step, and we have funded the development of cost-effective methods to assess the quality of coral reefs, and provided support to, for example, British Virgin Islands and Anguilla to map their coral reefs. We were able to help the Government of the Maldives to identify the effect on their reef fisheries of coral rock mining, and subsequently to develop a management system to accelerate the recovery rate of the ruined reef.
Our current programme of support to the Intergovernmental Oceanographic Commission of UNESCO includes funding and expertise to develop a regional component of the global coral reef monitoring network, which will implement a coral reef monitoring plan in south Asia. That has produced immediate benefits in defining the extent and impact of recent damage to coral in the Indian ocean because of high sea temperatures. We have also helped the Government of Anguilla to assess the impact of tropical storms on their coral reefs and supported research to assess the potential impact of global warming on coral reefs.
I hope that my hon. Friend will agree that the UK Government have been giving a great deal of help. He has been very effective in bringing the matter to the top of the ministerial agenda in the UK.
Mr. Dalyell: I agree that the Government have been effective, but the $64 million question is how one protects coral reefs against the depredation—that is not too strong a word—of trawlers from certain countries. That begs the question whether military force can be deployed in the form of fishery protection. I do not ask for an answer to that question in an Adjournment debate, but I hope at least that the Government will discuss with UNESCO and other international authorities how the policing is to take place. In particular, I hope that they will discuss with the Americans the critical issue of the British Indian ocean territories' coral reefs and whether there should be some coral reef fishery protection operating out of Diego Garcia.
Mr. Foulkes: I shall deal directly with that question. Until 1996, the territories' Administration chartered a fisheries patrol vessel during the tuna fishing season, and only from November 1996 to February 1998 was there continuous coverage. The local Administration considered that that was not a cost-effective solution to inshore fishery protection, and the vessel was withdrawn at the end of its charter, which is what my hon. Friend was alluding to. The territories' Administration now intend to have a patrol vessel in place for the start of the next tuna fishing season in November 1998, and in the longer term, they hope to be able to purchase a vessel to ensure all-year-round cover. The Administration are actively considering how best to take that forward.
I hesitate to venture on to the subject of naval protection, which my hon. Friend mentioned, but no doubt he will be able to raise it with some of my colleagues. I hope that he will be reassured by what I have already said about the fisheries protection vessel.
My hon. Friend mentioned the Darwin initiative, which is managed by my colleagues in the Department of the Environment, Transport and the Regions. The Darwin

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initiative for the survival of species is a Government-funded initiative that supports the efforts of British institutions to safeguard the world's biodiversity. Since the initiative commenced, about 5 per cent. of its funds—a substantial proportion—have been invested in six projects focused on coral reefs in Belize, Egypt, Kenya, Sri Lanka, Mozambique and St. Lucia. A particularly welcome project has been helping schools in the Caribbean to implement coral reef protection policies. I know that my hon. Friend was once a teacher on a cruise ship, so he will be aware of the importance of education on that matter.
The Government also actively enforce the protection given by the Convention on International Trade in Endangered Species to more than 250 species of corals used in the ornament and jewellery trades. In 1995 and 1996, customs seized more than 2,500 pieces of coral that were being imported without the necessary permits.
My hon. Friend will also welcome the fact that when the Under-Secretary of State for Foreign and Commonwealth Affairs and I attended the CARICOM conference at Nassau in February, we announced a British Government-sponsored regional workshop to consider the protection of marine biodiversity in the Caribbean region. We shall co-host that with the Government of Jamaica. The meeting will be held at the end of October at Montego Bay, which the "Reefs at Risk" report identifies as having some seriously degraded reefs. That will, we hope, concentrate the minds of the delegates at the workshop.
Mr. Dalyell: I should like to register the appreciation for the work of customs of those who are most concerned with this issue. Asking customs officers to identify coral reef is a pretty tall order, but they have done an excellent job.
Mr. Foulkes: I am grateful to my hon. Friend, and I am sure that his comment will be passed on to those concerned.
My hon. Friend mentioned overseas territories. We take seriously our responsibility to our overseas territories, and I am glad that we have been able to rename them, because overseas territories is a much more appropriate term than dependent territories. Our objective is to promote sustainable development. That requires that economic development proposals are appraised for their potential interactions with the environment.
Proposed developments in the Turks and Caicos Islands such as the East Caicos development project—which my hon. Friend mentioned—and the Grand Turk harbour
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development, are to be subjected to full environmental impact assessment before approval. Those assessments are to be carried out by consultants acceptable to the appropriate Government Department of the Turks and Caicos Islands. Similarly, the proposed development at Sombrero Island in Anguilla, to which my hon. Friend referred, is currently being subjected to a full environmental impact appraisal by an environmental consultancy firm, ICF Kaiser. UK Government officials have worked with ICF Kaiser to define the scope of the environmental assessment for that development, and the report will be a significant factor in deciding whether to allow the development to go ahead next year. I hope that that reassures my hon. Friend.
Given the dependence of some of the UK overseas territories on the quality and health of their coral reefs, the Government recognise that such assessments are important, and we shall offer support wherever possible. However, recent correspondence with staff at the World Conservation Monitoring Centre has suggested that the coral reefs in British overseas territories are in comparatively good condition, and we welcome that independent statement from such an authoritative source.
We greatly welcome my hon. Friend's initiative in raising the matter today. I was particularly pleased that he paid such a warm tribute to many of the members of staff of the Department, who do much to understand the issue and brief Ministers on it. The Government recognise the important role that coral reefs can and should continue to play in sustainable development. It is important not only to monitor what is happening but to develop—with the participation of local communities and using partnerships between Government, business and civil society—effective ways of managing and sustaining the goods and services that derive from coral reefs around the world. I assure the House and my hon. Friend that the British Government will, with the considerable expertise that is available in UK, continue to play a leading role.
I hope that my hon. Friend has been reassured not only on his specific points that I have dealt with, but on the general matter of our deep concern about the report. We are looking at the implications and taking serious account of it. We shall deal with all the points that arise from it.
Mr. Dalyell: Unlike my 14 Adjournment debates on Lockerbie, I should like to put it on record that I am extremely satisfied with the content and tone of my hon. Friend's reply.
Mr. Foulkes: I cannot comment on any other subject, but I thank my hon. Friend for his generous commendation.

Oxted and Limpsfield Hospital
1.29 pm
Mr. Peter Ainsworth: I am grateful for the opportunity to bring before the House a matter that has, for some years, been the subject of grave and almost continuous concern to the people of Oxted and the surrounding area. In doing so, I am acutely aware that I am touching on issues that have divided and continue to divide the local community, health care professionals and the district council.
Let me say at once that I have not come here today with a ready-made solution to the various problems, nor am I here to carry the flag for any particular group or faction. However, I should like to thank the many people who have taken the trouble to keep me informed of developments: the health authority; the community health council; the trust; the GPs in Oxted and elsewhere; Mr. Josh Cosnett of the Save Oxted Hospital action group, who has tirelessly advanced the cause supported by many petitions; Mr. Graeme Waller; Councillor Gordon Keymer; the Rev. Guy Bennett; and others to whom the future of this vital local resource is paramount.
I make no apology for having no tailor-made remedy of my own. I have brought the matter to the House today to enable the Minister, who has more cause than most to realise that being in government is not all fun, to set out clearly and unequivocally his position and that of the Government, so that we can achieve a rapid and satisfactory outcome to a set of problems that have persisted for too long.
Let me start with a statement on which, I hope, all can agree. Oxted and Limpsfield (War Memorial) hospital, although originally sited elsewhere, was opened in its present position in 1939, and building work was completed shortly after the second world war. It was funded by public appeal. The hospital has thus served the community of Oxted and the surrounding area for nearly 60 years, providing both out-patient services and in-patient care. Not surprisingly, it has come to be regarded as a jewel in the Oxted crown. My own family has had cause to use the out-patient services, and many friends have passed through its doors or stayed overnight through the years.
The sad modern history of the hospital began about five years ago, when East Surrey Healthcare NHS trust announced that the building was in a poor—indeed, terminal—state of repair. I know that some people dispute that, but most accept it as a working proposition. A suggestion that the hospital should close and its services be relocated to the nearest accident and emergency hospital in Redhill gave rise to public outcry.
In the face of that, the trust was forced to reconsider. It came forward with a hospital redevelopment proposal, using the existing site and an adjacent one and providing 20 NHS beds. That was to be funded partly by the NHS and partly by the development of housing on the hospital grounds. That appeared to be good news, but that is the point at which trouble started and things began to go badly wrong.
After months of preparation and NHS expenses running to hundreds of thousands of pounds, the local authority, Tandridge district council, first insisted that the new housing should include additional affordable homes,
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and then refused planning consent on grounds of excessive density. To that frankly perverse act, we owe much of the trouble that has ensued.
Various attempts were made to recast the proposals in a form acceptable to the local authority, but they came to nothing. There was even a march through the streets of Oxted—the only march I have attended in my constituency, and possibly the only one that has ever taken place there—under the banner "Save Oxted Hospital". It is ironic that the march was also attended by several councillors who had actively participated in the demise of the original redevelopment scheme.
In March 1997, the health authority issued a consultation paper, which, after minor alteration, formed the basis of a proposal published in June 1997. It envisaged the building of a new out-patient hospital on the existing site to include therapies and an X-ray unit; and 10 NHS beds would be provided in a private nursing home. The proposal was rejected by the CHC on a number of grounds, not least that it envisaged a reduction in the number of beds from 20 to 10. Although there is disagreement in the community about where the beds should be located, there is a strong feeling that halving the number of local beds is not acceptable. The 20 beds currently available are in great demand, for both geriatric and recuperative care.
Despite the CHC's objection, on 9 September the Minister wrote to me announcing his decision to close the hospital, and to endorse the health authority's proposal. Thus, Oxted joined the list of 25 war memorial hospitals currently threatened with closure. I understand that that is to be the subject of a mass lobby next week, and recently the issue was eloquently raised in the House by my hon. Friend the Member for North Norfolk (Mr. Prior).
The Minister added two provisos in his letter: first, that the 10 beds being removed from Oxted could realistically be provided in East Surrey hospital; and, secondly, that a suitable private sector partner could be found for the proposed nursing home development. The Minister will be aware that, earlier on, a possible private nursing home partner had dropped out. A deadline was set for March 1998, which was later extended, at the CHC's request, to May, primarily to accommodate discussions with a potential private sector benefactor. The second deadline has now passed: no new private sector nursing home provider has appeared, and continued bed blocking in East Surrey hospital casts doubt over whether the extra demand for beds there can be met.
Meanwhile, there have been several developments that are important to the context in which the struggle to maintain a hospital in Oxted is taking place. In no particular order, they are as follows. The East Surrey Healthcare NHS trust has merged with the Crawley Horsham NHS trust; the consequences of the merger are still being absorbed, and a new chief executive has been appointed to manage the combined trust. A new chairman will shortly take up position in the health authority.
A primary care group is being set up to embrace a huge area, from Limpsfield in the east to Reigate in the west. That is giving rise to extra bureaucracy, and it means that any decision affecting provision in Oxted must now be seen explicitly in the light of its implications for other parts of the area—for example, it is obviously important that developments at Oxted do not entail no developments in Horley.

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In addition, to no one's surprise, we are told that the financial position of the health authority has deteriorated since March 1997, which is clearly unhelpful; and that the merged East Surrey and Crawley trust has a deficit of £4 million, which is hardly a propitious context in which to be considering a major investment in Oxted. I understand that that might no longer be a problem, as the latest news is that responsibility for community health care in the Oxted area is to be transferred to a trust in Croydon. However, I am told that that trust, too, has recently suffered a cut in funding. While all that turmoil is going on, nothing has been achieved to address the problems in Oxted, where, understandably, staff recruitment has become more difficult, and general frustration has mounted.
I should be grateful if the Minister could clarify certain specific questions. First—I realise that this is something of a fast ball, so perhaps he can write to me—is it true that the financial model used by the health authority to date to assess the cost of providing beds at Oxted assumes that the running costs will be the same as those in the hi-tech accident and emergency hospital at Redhill? If so, is it not rather unusual, and does the Minister believe that it is appropriate?
Secondly, does the Minister accept the view of local GPs and others, that a minimum of 20 beds is required to meet the current and growing future need of people in the locality? Thirdly, how do matters now stand between the NHS and the local private benefactor, who has reportedly promised a substantial sum towards the provision and maintenance of extra beds in Oxted? What is the Government's position on other offers of private funding from the local community for rebuilding the hospital?
Fourthly, what progress has been made towards satisfying the two provisos set out in the hon. Gentleman's letter of 9 September? Fifthly, what will happen if those cannot be met, given that the chief executive of the health authority is reported to have said on 9 March:
"We can no longer fund the current level of services in Oxted"?
Sixthly, what will happen if the district council blocks the sale of the land necessary for the building of the nursing home? What powers have the Government to get their way, assuming that there is no change in direction? As I understand it, the district authority at present intends to block the sale of that land.
Mrs. Marlow of South Thames national health service executive has written that the Minister now regards the matter as one of local interest. I ask him not to wash his hands of the issue, but to work to ensure a successful outcome, based on the Secretary of State's words:
"I have made it clear that we would like to promote community hospitals because we want people throughout the country…to be able to turn to an efficient, effective, high-quality health service that is close to home."—[Official Report, 27 January 1998; Vol. 305, c. 142.]
The Minister's actions over Oxted and Limpsfield war memorial hospital will be a test of that commitment.
Bearing in mind the story on the front page of The Times today, which tells us that a children's ward in Greater Manchester has been reprieved from closure on the eve of a visit from the Secretary of State, would the hon. Gentleman extend to his right hon. Friend a cordial invitation to visit Oxted hospital at his earliest convenience?
1.41 pm
The Minister of State, Department of Health (Mr. Alan Milburn): It is always a pleasure to reply to the hon. Member for East Surrey (Mr. Ainsworth), on this and other issues. As he said, I get to deal with many fun issues in the House, but this is not one of them. It is a serious matter, which is of concern to him and his constituents.
As the hon. Gentleman rightly said, community hospitals are a valued part of the national health service in many parts of the country. Patients often value them because they tend to deliver services in a friendly and homely way, which makes change extremely difficult. Change is not peculiar to this Government, or to the previous Government; it is endemic in the national health service, and it affects community hospitals just as it affects other parts of the service.
The hon. Gentleman is a strong supporter of Oxted and Limpsfield community hospital in his constituency, and I understand his concerns, which have also been expressed to me by local people and organisations. He will recall that I met representatives of the East Surrey community health council and the Save Oxted Hospital action group some months ago. Perhaps it would be useful if I recount how we got to the present position, and where things stand in trying to answer the hon. Gentleman's six questions.
In the first place, changes were necessary in the area, because, as the hon. Gentleman rightly said, health needs were changing, and it is broadly agreed that the hospital is in a poor state of repair. The local health authority has a responsibility to ensure that it makes the best use of the public money that it receives. It decided that it would be more cost-effective and appropriate to modern health care facilities to consider a new building in Oxted, rather than upgrading the present building.
As the hon. Gentleman knows, the proposal was to provide out-patients, minor injuries, X-ray, diagnostic and physiotherapy services in a brand new NHS facility. Changes would also be made to the number of beds available—acute beds would be transferred to East Surrey hospital, and beds available for the less acutely ill would be purchased from a private nursing home and managed by local general practitioners.
As the hon. Gentleman said, following East Surrey community health council's objections to the health authority's recommendations following consultation, I considered those proposals late last year, bearing in mind all that had been said locally. When I made my decision to approve the proposals by East Surrey health authority for the re-provision of Oxted hospital, I did so on two firm conditions, and I expect those conditions to be fulfilled in full. The first was that a viable private sector nursing home partner could be found; the second that adequate provision should be made at East Surrey hospital in Redhill to absorb the likely number of elderly patients being admitted there from the Oxted area.
I asked for an implementation plan from East Surrey health authority, and I subsequently extended the deadline for the production of that plan by two months, to the end of May, to enable further local discussions to take place. The appearance on the scene of a potential local benefactor might be a help, but it has certainly also been a hindrance in delaying the implementation of the overall plan.

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I made my decision because the proposals will provide modern, high-quality health care for people living in south Tandridge. There would be flexibility, with local GPs managing the beds; and acutely ill elderly people, who need consultant care in the best possible modern setting, would have a full range of back-up facilities available, which might not always be available in that sort of setting.
With regard to the private sector partner, I understand that a number of expressions of interest have been received from nursing home providers by Surrey and Sussex Healthcare NHS trust, which are subject to further discussion, and those debates continue. To build a new nursing home on the existing hospital site, a land swap will be necessary, so that the existing hospital can stay open until the new facilities are ready. I understand that discussions are taking place with Tandridge district council about the land swap.
Alternatively, the existing hospital could be closed and demolished, and a nursing home built on the existing site. If that option were chosen, I understand that the health authority would purchase beds from existing nursing homes in the Oxted area, which would be used until the new nursing home was available on the Barnett Shaw site. I will say in a moment what I expect Tandridge district council to do to be helpful.
As the hon. Gentleman knows, at present GPs have access to six beds in Oxted hospital. As a result of local concerns expressed during the consultation exercise, the health authority helpfully increased its planned re-provision from six to 10 beds, giving the GPs an increase in access to local services. I hope that he also thinks that helpful. The use of a nursing home, which is likely to have around 40 beds in total, is designed to give maximum flexibility to accommodate local needs. Therefore, 10 GP beds in the nursing home is the minimum guaranteed future commitment. If the local primary care group can arrange treatment and care differently for its patients, it may be able to care for more patients in the new facilities in Oxted, subject, of course, to other demands, such as emergencies.
On the condition concerning capacity at East Surrey hospital—another important matter that the hon. Gentleman raised, and about which I am concerned—the regional office of the NHS executive is closely monitoring the plans by the Surrey and Sussex Healthcare NHS trust for the reconfiguration of services at the acute hospitals at Crawley and Redhill. The plans will now need to take full account of changes to service levels at Oxted and access for patients in their areas. Once finalised, those plans will be subject to full consultation.
Two further issues warrant a mention. First, the re-provision is being planned at the same time as a new, modern, primary health centre is being developed in Oxted. That will provide high-quality primary care facilities for patients in the centre of the town, and will complement the hospital re-provision. The GPs in the town will have access to a range of new, high-quality primary, community and nursing home facilities, all of them readily accessible to the local population. As the local practices develop into a primary care group, they will be able to have more say in the way in which those facilities are used for their patients. Frankly, it will be for
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GPs to take those decisions, not bureaucrats sitting in health authority offices; I hope that the hon. Gentleman welcomes that sort of development.
There will be more flexibility for patients to be supported in their own homes, with the back-up of local, low-tech beds, and barriers between health and social care will be overcome, which is crucial, particularly to deal with the complex problems that many elderly patients often face. They require the support not merely of NHS services, but of social and housing services. The new primary care groups and the facilities that are being provided in the area will all help to that end. The availability of nursing home beds in Oxted will support primary care, and will therefore be an important element in the development of services for local people.
Secondly, since making my decision at the end of last year, a possible benefactor has emerged to provide a donation towards the re-provision of services, as the hon. Gentleman said. That was discussed locally, but initially no consensus could be reached on what form alternatives might take—the health authority listened carefully to the benefactor's views, but declined the offer. Since then, the health authority and representatives of the benefactor have had further discussions to establish whether a donation could be used to augment the proposed NHS in-patient provision.
Irrespective of whether charitable funding is available, the hon. Gentleman should be reassured that the people of Oxted will continue to have access to high-quality NHS-funded health care. I know that negotiations are progressing in, I hope, the spirit of co-operation that we are striving to encourage in the NHS. The best solution for people in the area is for local agreement to be reached about the future of their local services. I cannot say when the negotiations will finish, as I am not party to them.
The hon. Gentleman's first question concerned the financial background. I do not have the information with me, so I hope that, as he suggested, he will allow me to write to him on that. I know the concern that has been expressed locally, and I shall be happy to address that directly.
I hope that the hon. Gentleman is reassured by the fact that the implementation plan that is now in place will result in new in-patient, out-patient and therapy facilities, as well as a minor injuries service, being available in Oxted by the summer of 2001. The time scale and detail of the re-provision depend crucially, as he rightly said, on the planning decisions taken by Tandridge district council. The local authority will no doubt be mindful of the need for a rapid decision to allay the concerns of local people about the future of health services in the town, and I hope that it has listened to what both the hon. Gentleman and I have said today.
I have had a significant number of representations about the matter, and I stress that the final form of the re-provision—which depends on a number of factors that I have outlined; the hon. Gentleman knows the background to them—will be for local people and organisations to agree, albeit within the caveats that I set out in my approval of the plan. I shall not be revisiting my original decision, which I expect to be implemented in full.

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I assure the hon. Gentleman that the South Thames regional office will be responsible for ensuring that the detail of the scheme accords with the terms of my approval of the Oxted and Limpsfield hospital re-provision scheme. The regional office is keeping a close eye on the matter, and I am sure that officials there will be helpful in answering any of his detailed concerns. If he has further difficulties,
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I should be happy to deal with them personally, but I hope that I have been able to deal with the majority of the concerns that he has raised today.
It being before Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  INTERNATIONAL DEVELOPMENT
  The Secretary of State was asked—
  INTERNATIONAL DEVELOPMENT

    Development Awareness
    Mr. Hugh Bayley: What steps she is taking to inform the public about her Department's work. [46864]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): As we made clear in our White Paper, the Government attach great importance to increasing development awareness in the United Kingdom. To that end, my right hon. Friend the Secretary of State and I have been visiting every corner of the country to publicise the commitments in the White Paper. My right hon. Friend will be in York next Wednesday. We are in the process of establishing our development forum, which will meet regionally and then nationally each year to discuss development strategy, and I am chairing the working group on development awareness so that we can strengthen our work in the field.
    Mr. Bayley: In the wake of the pain of last night's football game, does my hon. Friend agree that the world would be a much better and safer place if people in this and other countries took as much interest in world development as they do in the world cup? Will he discuss with ministerial colleagues in the Department for Education and Employment the importance of getting a world studies strand in the school curriculum?
    Dr. Norman A. Godman: A Hearts supporter.
    Mr. Foulkes: My hon. Friend is right to say that I support the team that won the Scottish cup this year. Although I am a Scotland supporter, I sympathise with all the England supporters over the tragedy that took place last night.
    A great deal is being done to ensure that development studies are included in the curriculum. I have an A-level geography examination paper from the London examination board, which includes questions about development. We have had discussions with the Department for Education and Employment about giving development a higher profile, and some members of our development awareness working group, including myself, had a meeting with Professor Bernard Crick, who chairs the working party on citizenship, to discuss including global citizenship in the curriculum. I hope that my hon. Friend agrees that we are already doing a great deal.
    Mr. Gary Streeter: Does the Minister recall his party's manifesto promise that, in government, Labour would increase the aid budget, and will he tell the British people why, in the first 12 months of the Labour Government, according to figures from the Organisation for Economic Co-operation and Development, the United Kingdom aid budget has been cut by 2.2 per cent?
    Mr. Foulkes: Let me make it clear that I remember all our manifesto commitments, each of which we are
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    implementing. This year, we have doubled the budget for development awareness. When the comprehensive spending review is published, the hon. Gentleman will know exactly what we intend to spend on international development, and it will be clear to the British public and to the Opposition that we will spend a great deal more over the next few years than the previous Government did.
    Mr. Streeter: The Minister has not answered the question. The Government have been in power for 14 months and have presided over a cut in the UK aid budget. They found extra money for schools and hospitals; why have they not found extra money for the aid budget? Is this not yet another new Labour broken promise?
    Mr. Foulkes: The hon. Gentleman is talking about the calendar year 1997, half of which was under the previous Government. That Government inherited an aid budget of 0.51 per cent. of gross national product and rising; it left us with 0.27 per cent. and falling. We are committed to turning that round in the course of this Parliament.
    Mr. Streeter: When?
    Mr. Foulkes: If the hon. Gentleman will have a little patience, he will see, when the comprehensive spending review is published, that the changes under Labour will start to reverse the decline.

    Good Governance
    Mr. Nicholas Winterton: What steps her Department has taken to encourage stable and democratic government as part of its aid programme. [46865]
    The Secretary of State for International Development (Clare Short): Good governance is essential to the achievement of sustainable economic growth, which is the only way to achieve a lasting reduction in poverty. It is clear from experience that conditions imposed on reluctant Governments in return for aid or loans tend to fail to secure reform, while Governments who are committed to poverty reduction use aid to invest in human development and economic progress. Good governance is therefore crucial to development, and it is the focus of much of our work. In 1997–98, we committed more than £70 million in efforts to promote good governance, including democratic reform.
    Mr. Winterton: I thank the right hon. Lady for that reply. I presume that she agrees that good governance is an essential factor in the determination of which states are best able to tackle both poverty and debt repayment. Does she accept that multi-party government is another essential element in ensuring that we can achieve more through United Kingdom aid, and reduce poverty and deprivation in countries to which we give aid?
    Clare Short: I entirely accept that, without good governance and the intention to promote poverty reduction and sustainable economic growth, no amount of conditionality or intervention will succeed. We need to back Governments who are determined to reduce poverty,

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    and to introduce optimistic models. When Governments are not determined, we must find ways—for instance, through non-governmental organizations—to assist people who are suffering; but sustained development will not be possible in those countries.
    In general, I agree with what the hon. Gentleman said about multi-party democracy. He may have had Uganda particularly in mind. I remind him that there is a commitment for the people of Uganda to decide in 2000 whether they want multi-partyism, or prefer to retain their present system of democracy. We say that that is for the people of Uganda, not us, to dictate; but the principles of democracy, and the ability to vote out a Government and local representatives, are key, and must be observed everywhere.
    Mrs. Alice Mahon: As my right hon. Friend will know, the NGOs in Afghanistan have now been moved into very unsuitable accommodation, and the persecution of women in that country by the odious Taliban continues. What, if anything, can the international community, and those who—obviously—are still giving aid to the persecuted in Afghanistan, do in the way of sanctions, or making the Taliban behave humanely towards women and children?
    Clare Short: My hon. Friend is absolutely right. The Taliban has, for example, attempted to prevent women in difficult labour from going to hospital, because women are not allowed to go to the same hospitals as men. That is a fundamental issue of human rights: it is crude apartheid, and is causing enormous suffering. We are trying to get the international community to agree on an absolute precondition of equal treatment if any help is to be given, and the Red Cross has bravely stood by that. As long as everyone stands together, I think that we can secure that position, but it is a constant battle.
    Mr. William Cash: Is not one of the best ways of ensuring democratic and stable government in many of those regimes—especially in the poorest countries—to ensure a proper reduction in debt, and the interest on debt? As chairman of the all-party parliamentary campaign for Jubilee 2000, may I ask the Secretary of State to give earnest consideration to ensuring that that debt is reduced by 2000, and that we are not given answers that really come from the Treasury? The right hon. Lady has specific responsibilities; will she use them to the utmost effect?
    Clare Short: I assure the hon. Gentleman that my right hon. Friend the Chancellor of the Exchequer and I are working together in absolute agreement. We are determined to secure more speedy implementation of the highly indebted poor countries initiative. I agree that countries that are saddled with massive unpayable debts are set up to fail, because they cannot secure the resources with which to promote education, health and other aspects of human development.
    We are strongly committed to backing good government. As I told the hon. Member for Macclesfield (Mr. Winterton), a Government who commit themselves to poverty reduction and improving health and education should then have the opportunity to have their debt written down to sustainable development, so that they can succeed and make progress. We are committed to securing the fastest possible progress.

    European Court (Freezing of Aid)
    Barbara Follett: If she will make a statement on her Department' s response to the European Court's freezing of some of the aid budget lines. [46866]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): My Treasury colleagues, who lead on this issue, have upheld the previous Government's decision to challenge European Union spending that had no legal base. The United Kingdom did not object to any budget line for assistance to developing countries, but the EU Commission decided to suspend future grants for those lines, while also reviewing the implications of the court's judgment. My hon. Friend the Economic Secretary to the Treasury agreed with the Commission and the European Parliament on 23 June that all new grants not disbarred by the judgment will proceed by mid-July.
    Barbara Follett: I thank my hon. Friend for that reply. Will he do all that he can to ensure that such matters are resolved with the minimum of delay, particularly as regards budget lines relating to land mines and human rights? Will he also ensure that the European Parliament has some discretion over awarding sums to smaller bodies?
    Mr. Foulkes: It was for that reason that my hon. Friend the Economic Secretary had her meeting. She wanted to ensure that those budget lines were reinstated, and that the money should be spent as quickly as possible. My hon. Friend the Member for Stevenage (Barbara Follett) will agree that the Government are right to ensure that effective control of public expenditure is treated as importantly in the European Union as it is in the United Kingdom.
    Mr. John Townend: Have there been any proposals to freeze European or British aid to India and Pakistan on the basis that, as they can afford to develop nuclear weapons, they do not need aid?
    Mr. Foulkes: We have given that point careful consideration. The Government have condemned the testing of nuclear weapons by India and Pakistan, but we are concerned that some of the poorest people in the world live in those two countries. We are working with non-governmental organisations, international organisations and state governments, as well as the two international Governments. Stopping our programmes would harm some of the poorest people in the world, and that is why we have decided to continue with bilateral assistance.

    EU Aid Programme (Accountability)
    Mrs. Teresa Gorman: What steps she will take to increase the accountability of the EU aid programme. [46868]
    The Secretary of State for International Development (Clare Short): We worked during our presidency, which has just ended, to try to improve the effectiveness of European Union development assistance; Austria also intends to make that one of the priorities of its presidency. We are encouraged that DGVIII—the

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    directorate responsible for development in the Lomé countries in Africa, the Caribbean and the Pacific—has plans for a programme of reform. We welcome the improvements that have been made, but it is clear that further improvements are needed.
    Mrs. Gorman: I thank the right hon. Lady for that reply. In September, the European Union will reopen negotiations with third-world countries on aid. The right hon. Lady will be aware of the Court of Auditors' report on the appalling waste of money that has been put into the third world, involving awful cock-ups over the dumping of EU produce. For example, the EU provided more than £2 million to improve Namibia's meat production and abattoirs, so that Namibia could supply South Africa. However, the EU was also dumping subsidised European beef on South African markets at half the price that Namibia could manage. In another South African example, 2,500 jobs were lost in canning factories in the Capetown area because of the dumping of subsidised European fruit. Given the right hon. Lady's frugal reputation regarding waste, displayed in her famous remark about "golden elephants", can she assure the House that she will ensure that such waste of our public funds will not be allowed to continue during her stewardship?
    Clare Short: The hon. Lady is absolutely right to say that the Court of Auditors has published damning reports on the performance of EU development assistance. She is also right on her wider question about the highly subsidised common agricultural policy and the dumping of food in ways that damage and undermine agricultural production in developing countries. We need reform of the CAP. The next World Trade Organisation round of talks on the general agreement on tariffs and trade will also consider agricultural subsidy.
    The September negotiations on the Lomé mandate relate to trade and development assistance for countries in Africa, the Caribbean and the Pacific. I assure the hon. Lady that the principles of efficiency in development, supporting good government and encouraging trade and self-reliance will be key to those negotiations.
    Dr. Norman A. Godman: In addition to questions of accountability in the EU' s aid programme, there are serious questions about its administration. In the middle east recently, I heard representatives of non-governmental organisations complaining bitterly about cumbersome Brussels procedures for paying out desperately needed funds. Can my right hon. Friend do something to speed up those procedures?
    Clare Short: My hon. Friend is right to say that the slowness is appalling. It is partly because of the exposure of misspent money which results in more and more checks being put into the system which becomes slower and more inefficient. That does not solve either problem. I assure him that we have made it a feature of our presidency to try to get improvements. We have secured some but there is much more to be done. We shall continue to work as hard as we can to get the biggest improvements that we can.
    Dr. Jenny Tonge: I appreciate, and know of, the right hon. Lady's concern about
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    accountability of European Union aid and I know that she has often spoken about it to the International Development Select Committee. I want to ask about the accountability and efficiency of European aid for AIDS in developing countries. She knows that one in four—sometimes a higher proportion—of the population in the Great Lakes region of Africa are suffering from the AIDS epidemic and are HIV positive. Over the past 10 years, the European Union has spent £160 million on various projects to do with AIDS but very little on an AIDS vaccine. The medical world believes that an AIDS vaccine is the only answer to the AIDS epidemic. Will she address the accountability of expenditure and do something about the EU encouraging research on an AIDS vaccine?
    Clare Short: I cannot tell the hon. Lady without notice about EU spending on AIDS and an AIDS vaccine. I shall write to her. I agree that the evidence is clear that an AIDS vaccine should be possible. We have contributed to that, as have other countries. It is an important thing to do and the long-term answer, but there are other answers. Prevention is working. In Uganda, a national education programme has slowed the rise in AIDS. In Tanzania, we did research that showed that, if venereal disease were treated early, the spread of AIDS was slowed. A lot can be done on prevention, but we must back the vaccine as well.
    Mr. Stephen Timms: Given the encouragement of the recent prisoner releases in Nigeria, what prospect does my right hon. Friend see for normalising aid links between Nigeria and the EU, and, indeed, her Department?
    Clare Short: My hon. Friend is right—there is a real opportunity in Nigeria. We must do all in our power to encourage the new Nigerian President to go for reform, democracy and proper protection of human rights. All of us are doing everything that we can to secure that aim. Up to now, aid spending has gone not through Government but through non-governmental organisations and local government. If Nigeria embraces reform, democracy and human rights, we shall be keen to work with the Nigerian Government to secure those reforms, which would be of enormous importance to the people of Nigeria and of the whole of Africa.
    Mrs. Cheryl Gillan: On accountability, in response to my written question last week about the election in Togo, the Foreign Office deplored the harassment of election monitors, the confiscation of ballot boxes by the military, problems with the voter lists and polling cards and many other irregularities in the electoral process. In fact, it issued a declaration last month expressing concern. As Togo receives EU multilateral aid, would the Secretary of State say whether she also responded and what action, if any, she took during the presidency to attach conditions to the provision of aid to Togo?
    Clare Short: I regret that I do not control EC spending on aid. I wish that I did, because I might then be able to bring about the improvements that the hon. Member for Billericay (Mrs. Gorman) called for. Without notice, I cannot speak with any authority on EC programmes in Togo. I shall find out what has been spent and write to the hon. Lady.

    Palestine
    Dr. Brian Iddon: If she will make a statement on the future budget of the UN Relief and Works Agency for Palestine Refugees in the Near East. [46869]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): Additional contributions announced recently, including an extra £1 million from the United Kingdom, substantially reduced the potential shortfall in funding for UNRWA's essential core budget this year. Donors have agreed with UNRWA to monitor the situation closely over the coming months, to support a process of financial and management reform in UNRWA and to work together to resolve longer-term funding problems.
    Dr. Iddon: When a group of us visited a Palestinian refugee camp on the Gaza strip a few weeks ago, we detected a rise in tensions due to rumours that services might have to be cut because UNRWA had a £12 million budget deficit while the population of the camps had grown by almost 30 per cent. UNRWA is a stabilising force in the region. I am sure that my hon. Friend agrees with that. I congratulate the Government on increasing the budget by £2 million, but will my hon. Friend continue to apply the pressure on other donors at least to maintain the present situation, if not to increase the funding?
    Mr. Foulkes: I was pleased to meet my hon. Friend and a number of our colleagues earlier this week to get a report on their visit. I was able to confirm to him and my colleagues, as I am able to confirm to the House, that we are fully committed to the work of UNRWA and the vital humanitarian role that it plays, but also to its reform and to making it more efficient. The United Kingdom has committed a total of £25 million to Palestine this year, including the Palestine Authority, and we are willing to consider what further we can do to help the people in Palestine.
    Mr. Nicholas Soames: I warmly support the Minister's reply. Does he agree that there are opportunities for the know-how fund and the way in which it operates to be applied to the Palestinians, who have suffered such appalling treatment at the hands of the Israelis and are deeply deserving of our help?
    Mr. Foulkes: What the hon. Gentleman says is wise. The know-how fund, as he knows, extends to the former Soviet Union and eastern Europe, but the methods are applicable elsewhere. We have considered helping Government institutions and the building up of capability in Palestine. I will certainly take further account of the recommendations and suggestions that the hon. Gentleman has made.

    Sanction
    Mr. Tam Dalyell: Pursuant to the answers of 10 December 1997, Official Report, column 615, and 16 March 1998, Official Report, column 454, what progress has been made in her plans to develop sanctions which hit elites rather than the mass of the people. [46870]
    The Secretary of State for International Development (Clare Short): Work is being undertaken within Whitehall and we are working with other countries in the UN to ensure that future sanctions are as closely targeted as possible on offending regimes and that, when sanctions are agreed, appropriate humanitarian exemptions are included. I will, as I have promised, write to my hon. Friend when our review is complete.
    Mr. Dalyell: Before there is another crisis in October or November in Iraq, will the Department and my right hon. Friend make inquiries about the behaviour of United Nations Special Commission personnel in Baghdad, information on which I have given to her Department?
    Clare Short: I am grateful to my hon. Friend for informing me earlier today of the allegations about UNSCOM staff. I have checked with my officials, and we have no knowledge of any such behaviour, so I should be grateful if my hon. Friend would let me have as much information as he has. We will most certainly check it out. However, I have to say that the real answer to the suffering of the people of Iraq is for Saddam Hussein to cease manufacturing weapons of mass destruction. We must all do all that we can to bring that about as rapidly as we can.
    Mr. John Bercow: Further to the hon. Gentleman's question, does the Secretary of State agree that, if a country's human rights record is bad, there is often a compelling case for shifting aid previously given to it to a neighbouring country in a similar income category in order conclusively to demonstrate that aid is linked to governance, respect for human rights and the concept of an ethical foreign policy?
    Clare Short: I agree, as I said to the hon. Member for Macclesfield (Mr. Winterton), and we are keen to back Governments who have serious good intent to reduce poverty, which requires good governance, respect for human rights and successful models of development. When Governments do the right thing, they succeed, and the international community gets behind them. Then there is sustained and successful development. We cannot turn our back on people who live under bad Governments. We have to find other ways of bringing relief to them through non-governmental organisations, not through Governments. The hon. Gentleman is right. We must back good Governments and achieve success in development. In the other cases, we can bring relief, but we shall not achieve development where there is not good Governance.
    Rev. Martin Smyth: I appreciate the concerns about looking after the poor. One of the arguments against the Jubilee 2000 campaign is that wiping out debt will increase the money for bad Governments, who will just take it. Are any steps being taken to mobilise world banking communities to watch out for money being invested in their banks that was sidetracked from aid by bad Governments?
    Clare Short: The hon. Gentleman is right. There are conditions on debt relief in the HIPC initiative that Governments must have a good track record. That means that good Governments get debt relief and not bad Governments, who might spend the relief on more arms

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    or more prestige projects. The hon. Gentleman is also right in that the OECD is calling for a great tightening up by all our Governments and institutions on corruption. It calls on all our Governments to make it an offence to offer a bribe overseas to a public official. Banks do not deal with corrupt regimes. We back successful Governments and freeze out the unsuccessful so that we get a better world order.

    Peace Corps
    Mr. Austin Mitchell: If she will assess the advantages of establishing a Government—sponsored peace corps of young people to assist with aid work. [46871]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): We are encouraged by the numbers of young people who already take a great interest in development and we are seeking ways of engaging them further in development co-operation issues. However, developing countries require access to know-how rather than inexperienced volunteers. We provide such help through our own programmes and through our support for the four volunteer sending agencies, which have more 2,000 qualified volunteers overseas.
    Mr. Mitchell: I hope that my hon. Friend will not rest satisfied with that answer but will look at the sustained success of the American peace corps, which every year sends abroad 6,500 young people with an average age of 29 to engage in English teaching, health, sanitation and development work in developing countries and even in eastern Europe. Could we not mobilise the commitment, enthusiasm and energy of our young people and perhaps even give them a remission on their student loans for going in exactly the same way and help developing countries at the same time?
    Mr. Nicholas Winterton: There is VSO.
    Mr. Foulkes: Voluntary Service Overseas, as the hon. Gentleman says, and the three other sending organisations already do that. I draw my hon. Friend's attention to another organisation, British Executive Service Overseas, BESO, which sends older, experienced volunteers overseas to offer their services. I am assured by the Government Chief Whip that, if my hon. Friend wishes to do that, he would not stand in his way.
    Mr. Nigel Evans: The Minister mentions four organisations that do much good work with young people. Can he ensure that publicity for those organisations is increased? Ultraframe, a private business in Clitheroe in my constituency, is investing much of its own money in providing food aid in Sudan. Many other private companies wish to assist in that way, and perhaps if we could get more links between business and charitable aid organisations such as the ones that the Minister mentions, more young people could be assisted to go abroad to help in aid projects.
    Mr. Foulkes: The hon. Gentleman makes a sensible suggestion. My right hon. Friend the Secretary of State
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    and I regularly meet the NGOs that are involved, and I specifically met the four volunteer sending organisations recently to discuss exactly the areas that the hon. Gentleman mentions, and also spoke about increasing the profile and participation of VSO and other voluntary service organisations.

    Russia
    Mr. David Watts: What assistance her Department is providing to Russia in the current financial year. [46872]
    The Secretary of State for International Development (Clare Short): The know-how fund is the primary source of the United Kingdom's help to Russia and the former Soviet bloc countries that are making the transition to democracy and a market economy. In Russia and elsewhere, the know-how fund has a good reputation for providing fast and flexible assistance in support of reform. Given the worrying continuing growth in poverty in Russia, greater emphasis in future will be placed on assistance for the social, environmental and governance aspects of reform.
    Mr. Watts: I thank the Minister for that reply. I agree that a great deal of benefit has been derived from the use of the know-how fund in helping Russia to reform its economy. However, is it not time to focus all our help in that area on dealing with poverty and the environmental problems that face the Russian people?
    Clare Short: I agree with my hon. Friend. Of course, dealing with poverty partly means having an efficient economy that generates the wealth to care for people. We shall continue that aspect of the work, but we are shifting the focus to social reform. Too many people are falling through the system and Russian men have lost nearly 10 years of life expectancy since the fall of the old system. We are about to publish our Russia country strategy paper and that will give details of the way in which we intend to make that change.
    Mr. David Atkinson: Will the right hon. Lady ensure that the aid and assistance to which she has just referred goes to the Russian people and does not end up being laundered by the Mafiosi, who are certainly part of the problem of the present Russian crisis?
    Clare Short: The hon. Gentleman is right. The problems of corruption are great. The know-how fund does not go through Government; it goes direct to projects. It is tightly monitored and has a reputation for not getting embroiled in corruption in the way in which many other programmes do. Corruption is part of Russia's problem and it is hurting poor people in Russia.

    Guatemala
    Mr. Ian Bruce: If she will make a statement on the Government's assistance to street children projects in Guatemala. [46873]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): Although we have no direct development programme in Guatemala, we provide assistance for street children through the joint funding scheme that supports NGOs that work with street children, and through our contributions to the European Commission's programme.
    Mr. Bruce: I thank the hon. Gentleman for that reply and remind him of the excellent work that my constituent Bruce Harris does with Casa Alianza in Guatemala. Will the hon. Gentleman's Department look particularly at indirect aid to try to get law and order sorted out in countries such as Guatemala, because street children are being persecuted by quasi-judicial organisations and people are not being punished by the courts there, and that causes even more problems?
    Mr. Foulkes: We do financially support Casa Alianza and our contribution to the European Commission's programme is £23 million, a not insubstantial amount. We are working in Brazil, Ecuador, Kenya, India, South Africa and many other countries with street children. I am sure that the hon. Gentleman will agree that that is a significant contribution by the British Government.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Mr. Lindsay Hoyle: If he will list his official engagements for Wednesday 1 July.
    The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others and will have further such meetings later today.
    Mr. Hoyle: Will my right hon. Friend congratulate Royal Ordnance's land mine clearance unit, which is in my constituency, on its good work and on all the good work that it has done in Angola, Mozambique, Kuwait and many other countries, especially with today being the birthday of the late Princess Diana? Would that not be the golden opportunity for us to ratify the Ottawa convention as quickly as possible?
    The Prime Minister: I am glad to pay tribute to the mine clearance team of Royal Ordnance, and I know that everyone in the House will agree with that. We have already achieved much in advance of ratification of the treaty. The export ban and moratorium on use were put in place within three weeks of taking office. The United Kingdom stockpiles have been destroyed—450,000 mines, almost half our stocks, have already been destroyed—and we have already announced the doubling of aid funding for de-mining activities overseas. However, I can announce today also that we intend to publish a Bill
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    next week to ratify the convention and, if legislation is completed in July, as we wish it to be, we will be among the first 40 nations to ratify, as indeed we promised to do.
    Mr. Peter Lilley: Will the Prime Minister overrule his Foreign Secretary and allow Foreign Office officials to answer questions from the Foreign Affairs Select Committee?
    The Prime Minister: No. I think that the Foreign Secretary is entirely right.
    Mr. Lilley: The Prime Minister may affect to be unconcerned by this, but it is not just the Opposition who are concerned. This morning, the Labour Chairman of the Foreign Affairs Select Committee said that the constitutional point is that
    "No Government should be able to set up a departmental inquiry and thereby hope to fend off any questioning."
    Is not the truth that that is precisely what his Government are attempting to do?
    The Prime Minister: No. I do not accept that that is what we are doing at all. The code of practice on access to Government information, which was published by the Conservative Government, says in respect of information that should remain confidential:
    "information whose disclosure could prejudice…the proceedings of any tribunal, public inquiry or other formal investigations…whose disclosure is…likely to be addressed in the context of such proceedings."
    Therefore, what we are doing is entirely in accordance with that code of practice and, as the inquiry is going to report within the next three or four weeks, I do not think that it is unreasonable to say that we should await its outcome.
    Mr. Lilley: Is this not just another example of the contempt that the Government have for the House? Are they not a Government who make announcements outside the House, bypassing Parliament; who change the rules of Prime Minister's questions without consultation; and who now want to use inquiries behind closed doors to block scrutiny by Select Committees? Why is the Prime Minister riding roughshod over the unanimous opinion of 21 Chairmen of Select Committees? Is it not time that he listened to them and allowed Parliament to do its job?
    The Prime Minister: No; and I am sure that the right hon. Gentleman would have read out that question irrespective of the answer that I gave him—[Interruption.] I read out the reasons for our decision from the code of practice on access to Government information. I do not think that it is at all unreasonable to say that we should wait three or four weeks. Furthermore, the right hon. Gentleman will know that the Foreign Secretary offered to allow the Foreign Affairs Select Committee to look at the telegrams, provided that confidentiality was respected. That offer was turned down. In those circumstances, I do not think that the Foreign Secretary or the Government have acted unreasonably.
    Mr. Steve McCabe: Will the Prime Minister comment on reports of the shooting of civilians by members of the Indonesian security services accompanying the British ambassador and European

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    Union envoys on their recent visit to East Timor? What implications might the shootings have for future British and European policy towards Indonesia and East Timor?
    The Prime Minister: We are pressing the Indonesian authorities to ensure that there is a full investigation of the incident. We obviously regret very much the death of the demonstrator. We have also said that we want to ensure that local leaders are involved fully in the investigation. The incident makes a search for a solution to the status of East Timor all the more urgent. Our ambassador, with his Austrian and Luxembourg counterparts, has just visited as part of the European Union troika visit. Moreover, the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leeds, Central (Mr. Fatchett), will shortly be meeting United Nations representatives in New York to re-emphasise our support for the UN process, which we hope will be successful.
    Mr. Paddy Ashdown: Does the Prime Minister agree that the crisis in Kosovo has deepened dangerously in the past few days and now threatens to widen? Does he also agree that what is now needed is firm international action—which, despite the robust attitude of Britain and the United States, so far has not been forthcoming—and that, once again, the world is in danger of doing too little, too late?
    The Prime Minister: I agree that that is a danger, which is precisely why we have been acting as we have. We hope that, over the next few days, there will be the right mixture of political and diplomatic initiatives. However, the North Atlantic Treaty Organisation continues to review all options for military action, which we have not ruled out. I go further than that and say that we are prepared to use those options should political and diplomatic efforts fail.
    Mr. Ashdown: Reviewing all options is what the Prime Minister was doing two weeks ago—three weeks ago. The situation has now become much worse. Will the Prime Minister agree now to two actions: first, that the international community—if we are to regain control of the situation—should put down its own firm plans for a solution in Kosovo, based on Kosovo' s autonomy within the Federal Republic of Yugoslavia; and, secondly, that, although a United Nations Security Council resolution on the use of force is of course desirable, the necessity of a resolution will depend on the urgency of the situation and circumstances on the ground?
    The Prime Minister: In respect of the plan, that is exactly what we are considering. The right hon. Gentleman is right to say that, two weeks ago, I told him that we were reviewing all options. However, it is not as if nothing has happened between then and today. There have been intensive efforts—particularly by the United States, but also by Britain as president of the European Union—to find the right type of political and diplomatic initiative that works. Everyone understands that, if we use military action, it will be in a situation that is fraught with great danger and difficulty. As a matter of common sense, we must therefore make every effort we can to reach a political solution.
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    In respect of the second point, we shall of course ensure that we have a proper legal base for any action that we take. However, all options remain available to us. I agree with the right hon. Gentleman that the situation is getting worse—which is why political and diplomatic efforts have, if anything, been redoubled in the past few days. Nevertheless, I do not think that we are wise to act until those political and diplomatic efforts have been exhausted. However, as I said, all military options remain available, and we will not hesitate to use them if it is necessary to do so.
    Helen Jackson: Will the Prime Minister join me in expressing concern about the extremely large bonuses that the directors of Yorkshire Water have recently awarded themselves? Does he agree that they and the regulators have a public responsibility, which obviously goes wider than their first job of providing us all with a good, clean water supply?
    The Prime Minister: They do have that responsibility, and I hope that they discharge it. One of the reasons why my right hon. Friend the Secretary of State for Trade and Industry published her Green Paper "A Fair Deal for Consumers" was precisely the public concern about these very large bonuses and pay increases. We are all happy if these things are earned, but, particularly when monopoly services are involved, it is important that the interests of the consumer and the public genuinely come first.
    Mr. Julian Brazier: Before the election, the Prime Minister said:
    "The values of a Decent Society are the values of a strong family unit".
    Does he believe that marriage is important for strong family units and, in particular, does he believe that the Government's tax and benefit policies have any role at all in promoting marriage?
    The Prime Minister: I would answer yes to both those questions. Yes, I certainly believe that marriage is an important part of any stable, well-functioning society. It is precisely because we believe that and believe in the importance of family life that we are trying to introduce tax and benefit reforms that help it. In particular, it is one of the reasons why we believe, for example, in the working families tax credit, which helps low-income families, and in parental leave, which helps families juggle the responsibilities of work and family life. I only wish that the hon. Gentleman's party supported both those measures.
    Mr. David Crausby: In 1998, we celebrate two important political anniversaries. The first, of course, is that of the national health service, founded 50 years ago by a Labour Government. The second is that of value added tax, established 25 years ago by a Conservative Government. Will my right hon. Friend consider setting up a focus group to determine which of those events commands the most affection?
    The Prime Minister: We have not yet received a request from the official Opposition for a celebration to mark the introduction of VAT, but we will give it a sympathetic hearing if such a request is made. Of course,

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    it is precisely because we believe in a fairer tax system that one of the first acts of this Government, as promised, was to cut VAT on fuel.
    Mr. Alan Duncan: Whenever a paedophile ex-offender is found somewhere to be housed and is then hounded out of town by a lynch mob, there is a very grave danger that such a person will exercise his technical freedom and end up doing unspeakable things to children in someone else's backyard. My constituents in Rutland have shown admirable restraint since learning that they might have Robert Oliver in their midst.
    This is not an easy decision for anyone, and I thank the Home Secretary and his Minister for the way in which they have handled this matter with me. I will not lead a lynch mob, whatever the personal or political cost to me, and nor would the right hon. Member for Yeovil (Mr. Ashdown). However, does the Prime Minister accept that the tolerance and trust of my constituents are near breaking point? Will he give me an assurance that, if they do what many other people in this country would not do, and exercise their civic duty by taking this man, the institution, Wing Grange, into which he is put could then revert to its former use as a rehabilitation centre for low-risk offenders only?
    The Prime Minister: I am grateful to the hon. Gentleman for the responsible attitude that he has taken in this matter and to his constituents for the restraint that they have shown. I fully understand, as do all hon. Members, the concern at the prospect of having a paedophile housed in the local community, especially in a rural area such as Rutland.
    On the future role of Wing Grange, the essential point is that no released offenders will at any time be housed at Wing Grange or anywhere else if they present a risk to the public that cannot be contained. Such arrangements will be kept under constant review. Much depends on the response of the individuals concerned, but perhaps I can give the hon. Gentleman the assurance that, in any event, there is no question of groups of paedophiles being housed together at Wing Grange, nor of any one paedophile being housed there indefinitely. I can further assure him that Wing Grange will take only offenders whose risk can be properly managed there now and in future.
    I thank the hon. Gentleman again for the attitude that he has taken. It is an immensely difficult situation because, wherever such people go, there is bound to be an outcry in the constituency concerned. The way in which the hon. Gentleman and his constituents have handled the matter does them great credit.
    Mr. John McDonnell: Has my right hon. Friend any last-minute appeal to those members of the Orange Order who are threatening to force their way along the Garvaghy road this weekend? If the march is part of an act of religious worship, surely the God they seek to worship would rather the march were in an isolated field than risk any further harm to a community that has endured so much.
    The Prime Minister: This is obviously an extremely fraught situation. We shall do everything we can to bring
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    it to a proper conclusion. Of course the rule of law must always be upheld. A whole series of procedures has to be gone through, but I very much hope that people on both sides can see that, in the new era that could happen in Northern Ireland, it is in their interests to make sure that it does and that all the problems and tensions are reduced so far as is humanly possible.
    Mr. Peter Lille: A week ago, the Prime Minister stood at the Dispatch Box and told the House that the number of English students applying to Scottish universities was up. Before tonight's debate on the subject, will he set the record straight and admit that what he said was the reverse of the truth?
    The Prime Minister: I will set the record straight. The number of English applicants as a proportion of the total has indeed risen, and indeed the number of English entrants to Scottish universities is also set to rise, but it is true that, overall, for all Scottish education, there has been a fall.
    Mr. Lilley: I asked the Prime Minister a straightforward question about the figures. Why could he not give a straightforward answer and admit that he was wrong? After all, the Prime Minister is not the Paymaster General. He cannot publish one figure in the official documents and then declare a different one to the House. Is it not time that he admitted that his policy has caused a decline and that what he said to the House last week was factually incorrect?
    The Prime Minister: I have actually corrected what I said to the House last week, but what the right hon. Gentleman is saying—that the reason for the fall is the Government's policy—is wrong, because the actual proportion of English applicants to the total has risen, not fallen. If the right hon. Gentleman were right and the policy had caused a fall, one would expect the opposite to be the case, but it is not.
    Mr. Lilley: The Prime Minister is reluctant to admit that he was misleading the House, but he got his facts wrong last week and he has got his policy wrong tonight. It is nonsense to make students from England, Wales and Northern Ireland applying to Scottish universities pay more in tuition fees than students from Germany, France and Spain. The universities have said that it is nonsense; the students have said that it is nonsense; all parties in the House have said that it is nonsense; the House of Lords has said that it is nonsense and the Prime Minister knows that the majority of Labour Members believe that it is nonsense. Is it not time that the Prime Minister was big enough to accept that he has made a mistake and change the policy before tonight's vote?
    The Prime Minister: No. The reason for the policy, as I have explained several times, is that in Scotland there are normally four-year courses because students have highers rather than A-levels, so students go to university earlier. In England, courses are three years.
    The right hon. Gentleman says that no one supports our policy. The Dearing committee recommendation was that Scottish students should not pay tuition fees in their fourth year at university because it is a different education system. If we did what the right hon. Gentleman and

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    others want and granted four-year courses all the exemption from tuition fees, we would have to do that for the whole United Kingdom. The bill for that would be £27 million. That money would have to be taken out of higher education.
    As a result of the changes that we are making in student finance, we shall get more students into university, we shall get more resources into front-line education and the cap on student numbers, which was introduced by the Conservative Government and means that no more than 30 per cent. of school leavers in the UK can ever go to university, can be lifted. That is why I accept that it is a tough and difficult decision, but it is the right one.
    Jane Griffiths: Does my right hon. Friend recall that the Tories campaigned in support of poverty pay by fighting to try to stop the Government's National Minimum Wage Bill? Does he hope, as I do, that the Tories will, for once, stick to their principles, and at the next election we shall campaign on having brought in a minimum wage—
    Madam Speaker: Order. I must remind the hon. Lady and the House that the Prime Minister is responsible only for his Government's policies, not for the activities of the Opposition. If she could rephrase her question in some way, of course I will hear it. I am sure that the Prime Minister is already forming an answer in which he will enunciate his responsibility in terms of policy on these matters.
    Ms Griffiths, this is your first question at Prime Minister's Question Time. Could you rephrase it in some way so that it is about matters for which the Prime Minister is responsible?
    Jane Griffiths: Thank you, Madam Speaker. I stand corrected.
    Does my right hon. Friend agree that if the Conservative party—[Interruption.] Will my right hon. Friend confirm that our policy is to support the poorest workers in this country?
    Madam Speaker: Well done, that girl. Well done.
    The Prime Minister: My hon. Friend is right. The Government will continue to support the minimum wage. We look forward to hearing a position from the Conservative party.
    Mr. Mark Oaten: Is the Prime Minister aware that his health advisory group has warned that, unless the number of medical students increases by about 1,000 a year, the national health service will be out of doctors by 2010? Is he concerned that the number of applications to study medicine is falling and that the number of doctors leaving the NHS is rising? What will he do about that?
    The Prime Minister: That is precisely one of the issues that is being addressed by the comprehensive spending review. We shall announce the results shortly. The hon. Gentleman will know that medical students are exempt from the new provisions on student finance. This is about how to get more resources into the national health
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    service. We have got more money in already, but I agree that we need to do more. That is what we shall be announcing in the next few weeks.
    Ms Margaret Moran: Will my right hon. Friend join me in congratulating all those who signed an innovative leasing deal this week which will bring £170 million of private investment and 4,500 jobs to Luton airport? The deal will keep the airport in public ownership, despite all the efforts of the previous Government to privatise it. Will my right hon. Friend look for ways of extending such public-private finance arrangements to other areas of the public sector that desperately need investment? When he is next asked whether he has wafted in from paradise, as I am sure that he often is, will he be able to answer honestly, "No, Luton airport"?
    The Prime Minister: I am delighted at the news that my hon. Friend has announced. I pay tribute to the work that she has done in promoting the deal. I believe that partnership between public and private sectors is far the best way to go for such institutions. It gives them a far better future than the dogma of privatisation on which the previous Government insisted.
    Mr. John Greenway: Will the Prime Minister find time to visit Kirkbymoorside in North Yorkshire to explain to the work force of Slingsby Aviation Ltd., many of whom have been made redundant this week, why the award-winning Firefly training aircraft, which is used by air forces throughout the world, including our own Royal Air Force and the United States of America air force, was not chosen to replace the aging Bulldog aircraft and lost out to an untried German alternative? We know that such decisions are not easy, but does he understand the anger of the local community, who question what sort of Government would put skilled British workers on the dole and export their jobs to Germany?
    The Prime Minister: In respect of the last part of the hon. Gentleman's question, I simply point out that the Government whom he supported put rather a lot of skilled workers on the dole. The hon. Gentleman is right in saying that such decisions are difficult. They are taken on objective commercial advice; we have to try to get the best deal. I shall write to him and set out in detail the reasons for the decision.
    I understand the concerns of the work force; of course we are worried about that. All such things were considered extremely carefully before the decision was made. We will do all that we can to help with the problems that the company is experiencing.
    Ms Beverley Hughes: Is my right hon. Friend aware that Aneurin Bevan launched the national health service from the now Trafford general hospital in my constituency and that, 50 years on, on 5 July, another Labour Secretary of State will visit the hospital and help to celebrate that achievement? Will my right hon. Friend join me in thanking the staff at that hospital and throughout the NHS for helping to sustain the NHS during those years, particularly the past 18 years of attacks by previous Governments? Will he assure my

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    constituents that this Government have a deep commitment to a modern, excellent health service, which is available freely to everyone?
    The Prime Minister: It was the proudest achievement of the Labour Government after the war to found the national health service in the teeth of Conservative party opposition. It will be our job as a new Labour Government to rebuild the NHS by securing both the investment and the reforms that it needs, so that we get a better service, delivered at good value for money, and maintain the principle of the NHS, opposed by the Conservatives, which allows people access to high-quality care, irrespective of their wealth.
    Sir Archie Hamilton: Why has the Prime Minister spent so much time trying to define the third way? Were not 18 years in opposition long enough for the Labour party to produce a new political philosophy?
    The Prime Minister: Actually, we did that. In case the right hon. Gentleman did not notice, it was quite successful last May.
    Mr. Peter L. Pike: The Prime Minister will know that, on 1 May last year, Burnley and towns throughout the country inherited major public and private sector housing problems as a result of 18 years of neglect by the previous Tory Government. The Labour Government have started to tackle those problems by allowing the use of capital receipts. What further steps do the Government propose to take to enable us to solve the problems and provide people with decent housing as we approach the 21st century?
    The Prime Minister: I pay tribute to my hon. Friend's work in this field. In defiance of the Conservatives, we have made available an extra £900 million through the release of capital receipts. More than 50,000 new social
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    lettings have been created in 1998–99. However, we want to do more, because it is important to provide investment, particularly for some of the worst aspects of the inner city, where we need better modern housing, jobs, better schools and better hospitals. That is precisely why we have embarked on an investment programme that will allow all areas of our country to have the future that they need and deserve.
    Mr. Andrew Lansley: Is the Prime Minister aware that, on Monday, a Dun and Bradstreet survey reported a 48 per cent. increase in the number of business failures in the eastern region of England compared to the last quarter? Does the Prime Minister understand that, while the Government sit complacently, the higher pound, higher interest rates and higher business taxes are hitting businesses and they are paying the price? He said that things could only get better, but they have got worse.
    The Prime Minister: I do not accept that at all. We have made the decisions necessary to control inflation, which is important, and to get rid of the large budget deficit that we inherited from the previous Government. We made those decisions because, the last time a Government were confronted with such a situation—in the late 1980s and early 1990s—they failed to make the right decisions.
    Mr. Lansley: Nonsense.
    The Prime Minister: The hon. Gentleman says that it is nonsense, but in the early 1990s, we had interest rates of 15 per cent. and record numbers of repossessions, we lost 1 million manufacturing jobs and manufacturing output fell by 7 per cent. Those were the days of Tory boom and bust. That was the legacy of the Government whom the hon. Gentleman supported. We shall not go back to those days. People remember them. They know what the Conservative Government did, they know what that meant to our public services, and they will never repeat that mistake.

Dawson International (Redundancies)
3.31 pm
Mr. Archy Kirkwood(by private notice): To ask the Secretary of State for Scotland if he will make a statement on the 720 redundancies announced yesterday by Dawson International Ltd. and the Government's plans to support the economy of the central Borders.
The Secretary of State for Scotland (Mr. Donald Dewar): I can well understand why the hon. Gentleman put down this private notice question. I have every sympathy with him and other hon. Members in the areas affected, and with their constituents. I recognise and understand the seriousness of the position. This is indeed bad news, although problems had been expected since Dawson announced its financial results some time ago. The news follows disappointing information about Viasystems, the printed circuit board manufacturers at Selkirk, where 200 redundancies were announced in May.
Although the unemployment rate in the Borders has been lower than that in the rest of Scotland for some years, there is no doubt that the Borders economy is heavily dependent on the textile industry, and these announcements have come as a particularly heavy blow.
I share the desire of many in the area to see the Borders economy diversify and modernise. The local enterprise company, Scottish Borders Enterprise, is at the heart of that effort, working with the local authority and other partners. Scottish Borders Enterprise has a budget of some £8.2 million in the current year, which, in per capita terms, is a comparatively generous allocation.
An extra £500,000 was added last year in recognition of problems in Hawick, which was appreciated in a tight and difficult year. The area was designated as a 5b area under European structural funds, with a programme worth around £21 million between 1994 and 1999. That makes it eligible for a whole range of grants to help to develop economic diversity.
I want to stress that the Government stand ready to play their part in further economic development plans for the area. My hon. Friend the Minister for Education and Industry, Scottish Office, has been discussing the situation in the Borders with the hon. Gentleman and others. He will visit the Borders tomorrow to continue those discussions with the economic development agencies, the local authority and, indeed, the public.
As the hon. Gentleman knows, my hon. Friend was especially anxious to have contact with the public, and he volunteered for what might be seen as quite a difficult engagement. He will listen carefully to what I hope and expect will be constructive proposals for the future of the Borders economy, but I am sure that the hon. Gentleman would not expect me to anticipate that at the moment.
I cannot pretend to the hon. Gentleman or to the House that problems such as these can be solved overnight—indeed, it would be irresponsible to do so. However, my hon. Friend the Minister of State and the Government will respond positively in the course of discussions tomorrow, and ensure that the House is informed of any further developments.
Mr. Kirkwood: I am grateful for that answer. I acknowledge the work that has already been done by
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the Minister for Education and Industry, and we look forward to his visit tomorrow. However, does the Secretary of State understand that the scale of the redundancies—720 job losses, in contrast with what the Prime Minister has just been saying, in prime manufacturing, full-time, knitwear jobs—is a shock to the whole economy of south-east Scotland? The most recent estimate I have been able to get, with the assistance of the Library of the House of Commons, is that £6.5 million of purchasing power will be taken out of the central Borders economy, starting in August. That is a severe blow, which needs an urgent response.
The Minister for Education and Industry has been doing what he can, and we look forward to what might flow from his visit tomorrow, but it will take more than the Scottish Office Education and Industry Department to attend to this matter. Will the Secretary of State give the House an undertaking that he will involve local government Ministers and farming Ministers at the Scottish Office, and take a broader look at the whole Borders economy after the Minister for Education and Industry returns from his visit?
This is far and away the biggest economic blow that the region has suffered in living memory, and, if the Secretary of State does not take urgent steps to stem the haemorrhage of economic activity, the future for the Scottish Borders economy is extremely bleak indeed.
Mr. Dewar: I very much hope that the future is not bleak—I think that the Borders region has many advantages and many strengths, and we want to build on them. I entirely accept that the decision by Dawson's to shed 720 jobs is a real and significant blow. As the hon. Gentleman knows, 280 are in Berwick, but the whole area will suffer from this sad event.
The firm has major trading links with the far east, and perhaps some instability has resulted from that, but it is clear there have been long-standing problems in the textile industry of the Borders for some time. Ministers have talked to Mr. Finlay, the chairman of Dawson's, about the situation. We have made clear our anxiety to help if specific requests and proposals are made, although they would have to be considered on their merits. Dawson's still employs 1,500 people in the Borders, so it is still an important employer. Its redevelopment and restructuring, and its future success, are matters in which we all have a stake, and we have that very much in mind.
I accept that we have to look in a broad way at the problems of the area, and that that does not involve only one department of the Scottish Office. I have made it clear that we want to play our part, and implicit in that is that we are prepared to look in a broad sense at what strategic advances can be made and what can be done to help. However, it will not be a matter of an instant solution to what is a serious problem.
Mr. Dennis Canavan: Is my right hon. Friend aware that concern about the redundancies is not confined to the Opposition Benches? I fully understand the deep concern felt within the Borders community and by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) about the devastating effect that the redundancies will have in the region.
Is my right hon. Friend aware that, only a few months ago, there were several hundred redundancies at the Wrangler jeans factory in Camelon in my constituency?

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There seems to be a common complaint in the textiles and clothing industries that part of the problem is the pound being too strong. Will my right hon. Friend have a word with the Chancellor of the Exchequer to try to bring about a situation in which the textile and clothing industries in Scotland can be more competitive?
Mr. Dewar: I accept that concern about the situation is widespread. I made it clear that it was shared by the Government, as I am sure it is by many of my right hon. and hon. Friends on the Benches behind me. I assure my hon. Friend that we take the matter seriously. Textiles is a particularly difficult sector at the moment. While other parts of the Scottish economy are doing well and flourishing, that sector certainly has its problems, which are not easy of solution, but we are prepared to consider anything that can be done.
On the pound, self-evidently a good deal of the increase in its value was completed more than a year ago, and, in fairness, a collapsing pound might be a more embarrassing problem than a strong one. For Scottish and, indeed, United Kingdom industry, above all we want stability, sustainable growth and low inflation. We want to ensure that we do not return to boom and bust and the stop-go cycles of the past. The Government are achieving all those aims to a fair measure, and they are important aspects of our economic policy.
Dr. Liam Fox: To understand the impact that the job losses will have in Hawick, Jedburgh, Galashiels and Selkirk, the House must understand how heavily reliant that area is on textiles. Also, it is worth noting that there are job losses on both sides of the border, and that any help will have to be on a United Kingdom-wide basis.
The greatest help that the Secretary of State could give, if he wants to help, would be to ask the Treasury to change its economic policy. We have an overvalued pound, rising interest rates, rising mortgage rates, a manufacturing recession, falling exports, a huge balance of payments deficit, and, now, rising unemployment. Are the Secretary of State and the Prime Minister living in some sort of economic wonderland—do they not understand the realities of what is going on out there? Under this Chancellor of the Exchequer and this Prime Minister, Labour is bad for business, and if the Secretary of State is correct and the Government are avoiding the boom and bust cycle, it is only because we are going to get the bust without the boom.
Mr. Dewar: That is a somewhat excitable summary from the Opposition—or I hope it is. Of course we recognise that there is a downside to the strong upside of stability and sustainable growth that we are trying to achieve. Dawson's has talked directly to the Treasury about the matter, and I think that my hon. Friend the Economic Secretary met the company recently to discuss it, so the Treasury is well aware of those points. The hon. Gentleman's line was a convenient one to take, particularly in these unfortunate circumstances. I do not think that the views he has expressed would be shared widely throughout industry—certainly not in the form in which he put them.
Ms Rachel Squire: First I must tell the hon. Member for Roxburgh and Berwickshire
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(Mr. Kirkwood) and the hundreds of men and women and their families who are facing redundancy that I am confident that they have the deep sympathy of the people of Dunfermline, where at one time 6,000 people were employed in the textile industry—now, it is only 120. As my hon. Friends will be aware, we have also lost thousands of jobs in other traditional industries in the past few years, and recently our hopes were dashed by Hyundai mothballing its development.
Does my right hon. Friend agree that, in such depressing circumstances, it is vital that all sections of the community work together, and that there is a strong public and private partnership at local and national level to overcome the problems and bring some hope to the community that things can improve?
Mr. Dewar: Of course I recognise that; it is a difficult situation, as I said. It is unusual, because the unemployment rate in the Borders is around or just under 4 per cent., so, superficially, it does not seem to be a particularly hard-hit area, but I recognise that the figures can be misleading. I mention that fact as a corrective against despair for the future.
I accept that all parts of the community must come together. I was, for totally unconnected reasons, in the Borders only a week or two ago, when I had the opportunity—very briefly—to meet some of the local political representatives and the local enterprise company. My Department has been in fairly constant touch with them over the past few worried weeks, and we want to play our part, as I said, and take account not only of a narrow spectrum of Borders opinion, but of the community as a whole.
Mr. Michael Moore: I welcome the Secretary of State's acknowledgment of the problems in the Borders, especially as yesterday's hammer blow to the local economy follows a series of grim announcements in the past few months and years. He mentioned an increase in funding for the local enterprise company, but will he acknowledge that that merely reinstated the previous year's cut, which was imposed by the previous Administration? Does he accept that the low unemployment rate is a result of the fact that, when there are so few opportunities for other jobs, people leave—they do not hang around to be unemployed in the Borders?
Does the Secretary of State seriously believe that the Government's economic policy, particularly on the exchange rate—I welcome the fact that the Economic Secretary to the Treasury is in the Chamber—is sustainable? If Government policy does not change, there will be more job losses, not only in the knitwear industry but across Scottish and, indeed, United Kingdom manufacturing.
Mr. Dewar: I understand the hon. Gentleman's points, and I do not want simply to repeat what I have said, but we believe that certainty and stability are extremely important, particularly for those who trade across exchange rates. We also believe that sustainable growth is a major prize, and that low inflation is enormously important not only to industry, but to the community as a whole. We would not follow our economic policy if we did not think it sustainable. I appreciate that, in almost all economic circumstances, there is likely to be a less easy outcome for some—a balance must always be struck.

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The £8.2 million given to Scottish Borders Enterprise is not, in per capita terms—I accept that that is only one measurement—out of line with moneys given in the rest of Scotland; indeed, it is probably above average. As I mentioned, we tried—modestly—with the additional £500,000 to recognise some of the problems that had arisen in Hawick. We are not inflexible, but obviously our budget is not unlimited—we must be certain that we are responding to practical aims, and solutions to what we accept are general problems. If such practical solutions and ways forward are charted in the discussions that I know will take place, we shall certainly do what we can to respond to them.
Mr. John Home Robertson: The news is indeed desperate for the Scottish Borders and all surrounding areas. Will my right hon. Friend do everything to ensure that Dawson's and public agencies take all possible steps to look after the people who are facing redundancy, and their communities? Will he take this opportunity to comment on the conspicuous failure of the industry to develop, let alone maintain, the market for high-quality knitwear products? Will he urge all agencies to concentrate on whatever scope there is for developing the potential of the high-quality, high-skill sector of the Scottish textile industry?
Mr. Dewar: I have made it clear that the Scottish Office believes, as I certainly do, that there is a future for textiles. We accept that things are difficult, and that there have been pressures both at the top and, for rather different reasons, at the bottom of the market. I am conscious of the difficulties that Dawson's has suffered, as anyone who has read the financial pages recently will be. The company is attempting to restructure and to refocus. As it is, even after these events, a very important employer in the Borders, it is obviously in our interests that it should succeed—and be helped if at all possible—in doing so.
It is also important—I think that there is unanimity on this—that we look beyond the one sector facing these problems, and try to diversify and broaden the range of economic activity in the Borders. It may be a small beginning, but BT's upgrading of its infrastructure in the area will, I hope, pay dividends in the longer term. We must look for such developments on which we can build and from which, we hope, we can get back the rather broader base that we all want.
Mr. Robert Maclennan: Does the Secretary of State recognise that the textile industry generally, and not only a particular company in the Borders, is facing a period not of stability, to which he would aspire, but of collapse, and that tens of thousands of jobs are threatened? People will take no comfort from reading today that the purchasers manufacturing index shows a record fall over two years. The Government's policy on exchange rates is widely considered to be a major contributory factor.
Will the Secretary of State exercise his influence in the Government to seek to rectify the problems that have arisen from their uncertainties about the future of sterling
364
and its relation to the euro, and recognise that it was a mistake to put taxation on businesses instead of on consumers?
Mr. Dewar: I do not accept that analysis, and I would dispute many of the right hon. Gentleman's assumptions. I remind him that the latest exports survey from the Scottish Council for Development and Industry shows a slightly improved performance in the textile sector for the first quarter of this year, which does not encourage total doom and gloom about the industry's future, although I freely concede that there are substantial difficulties.
We need to pursue an economic policy that is in the interests of the economy as a whole. We must recognise that the textile industry, with its heavy connection with the far east, has had a particularly difficult time. That is why we are talking about diversification, and considering a way forward. The right hon. Gentleman's criticisms are not justified and will not hold water.
Mr. Ian Davidson: As one of only a couple of Labour Members who were born and brought up in the Borders, I urge my right hon. Friend to take into account the enormous cultural and social impact of the textile and knitwear industry on that part of Scotland. It is a matter not only of jobs but of the way in which the area identifies itself to the outside world.
The Borders area is a relatively threatened habitat in cultural and social terms. I would certainly not want it to become merely a commuter suburb of Edinburgh, so I hope that my right hon. Friend can not only bring in other jobs but try to preserve the cultural habitat that is the Scottish textile industry.
Mr. Dewar: I am not sure that people would appreciate the term "cultural habitat"—it sounds somewhat off-putting—but I accept entirely the point about the individual character of the Borders. Perhaps I should confess, although that may not be the right word, that, when I was younger, I lived for a period in the Borders, just outside Hawick—but I do not want to blame Hawick for anything—and I greatly appreciate the charm and the quality of life offered by the area. We are trying to ensure that there is an economic infrastructure to support the communities and allow them to flourish. I think that everyone in the House is united on that.
Mr. Andrew Welsh: Has the Secretary of State read the latest Bank of Scotland survey of manufacturing and service industries, which shows that the problems experienced by Dawson International are being repeated throughout the 300 companies surveyed? What steps is he taking on interest rates and the strong pound, and to repair the damage done to the Borders and other regional economies?
Mr. Dewar: I have already tried to answer that question, but obviously not to the hon. Gentleman's satisfaction. It is important to have a stable economic framework within which industry and commerce can operate. Low inflation is certainly important, although there is a tendency for people to pick on one indicator and ignore all others, when there is often a trade-off for a change in policy.

365
Sustainable growth is also important, to allow people to plan ahead, whether they are selling overseas or in the British market, which is so important to most industries in Scotland. It is not helpful to pick one indicator in isolation and say that we should change it, without concentrating on the overall pattern of the outcome of economic policy.
Dr. Norman A. Godman: All Labour Members sympathise with the constituents of Members from the Borders, especially those who now face the breadline. May I remind them, however, that no Labour Member has been able to avoid this kind of thing? Thousands of jobs have slipped away from Inverclyde, because of the decline of the shipbuilding industry. My right hon. Friend the Secretary of State is right: there are no easy and quick solutions. That is why we can do without excitable outbursts from the so-called official Opposition spokesman.
May I tell my right hon. Friend, however, that Scottish Enterprise—and, indeed, local enterprise companies—must do much more to help indigenous industries and companies to prosper? Inward investment is important, but let us try to look after our own companies and industries, and let us try to avoid the traditional Scottish response to employment—migration, to which the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) referred.
Mr. Dewar: I think I can assure my hon. Friend—I suspect that I can speak for Scottish Borders Enterprise as well—that that organisation is extremely anxious to encourage the growth of small businesses, and existing businesses, in the area. I mentioned its own funding; I also mentioned European structural funds under heading 5b, which have generated significant additional money in the Borders. All these matters will be considered, but we are particularly anxious to see growth and stability within our boundaries as a result of our own efforts.
It is a cliché in debates of this kind, but it is often forgotten, that small firms supply the mass of employment opportunities. I imagine that that is as true in the Borders as it is in other parts of Scotland. We give a good deal of thought to trying to give people there the impetus, and the confidence, that will allow them to pursue their trade and commerce successfully.
Mr. Nicholas Winterton: As vice-chairman of the all-party parliamentary clothing and textile group, may I ask whether the Secretary of State is aware that Dawson International, and the clothing and textile industries, are strategic concerns that are important not just to the Borders and Scotland but to the United Kingdom as a whole? There is not always an alternative employer to put in their place if, because of unfair competition and the monetary policy that is being followed, they have to declare substantial redundancies and leave large sectors of manufacturing.
Does the Secretary of State accept that using monetary policy and interest rates affects the exchange rate? Does he accept that interest rates are themselves inflationary, and are making it more difficult for manufacturing industry not only to invest but to compete? Will he
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intercede with the Chancellor of the Exchequer, and ask him to review the high interest rate policy that his Government are following? It is inflationary in itself, and seeks to defeat the very policy that he wants to succeed.
Mr. Dewar: In a sense, I cannot charge the hon. Gentleman with the sins of the last Government, whom he would probably have criticised with similar vigour.
Mr. Winterton: I did.
Mr. Dewar: I thought that the hon. Gentleman had. I thought that I had heard familiar tones from the past.
Let me repeat that these are economic policies in the round. It is important to get the balance right. The hon. Gentleman knows full well the Chancellor's policy, and the present arrangements for managing interest rates, which were widely welcomed when they were introduced.
Of course the textile industry is an important sector of our economy, particularly—and still—in the Borders; but all British industry must cope with the present interest rates and the present circumstances. The textile industry has problems, possibly because of its connections with the far east, but also, perhaps, because marketing has not been as effective at the higher end of the market as it has been in other areas. It is certainly disappointing to note the number of redundancies at Pringle's, for example. It is sad that it has not been possible for the management of an up-market and respected brand name, given its product range, to compete as effectively as it might have done.
Mr. Ian Bruce: Will the right hon. Gentleman reflect on what he has said? Anyone who reads Hansard will assume that the Government's policy is to have a stable pound at DM3 or above. I once ran an electronics factory in Galashiels, at which a skilled and brilliant Borders work force of textile workers were trained as electronics workers. At the rate of DM3 to the pound, the electronics industry cannot expand, and it is losing jobs. The additional 1,500 jobs at Dawson International will not be sustainable at that exchange rate.
Will the right hon. Gentleman tell the Chancellor of that situation? Will he please not ask the Chancellor for a stable pound, as manufacturers who want to go into the euro tell me that they want to go in at a rate of DM2.40 or DM2.60, but certainly not at DM3?
Mr. Dewar: I recognise the hon. Gentleman's point; it has been made about 15 times in the past half hour. It may not surprise the hon. Gentleman to know that the Chancellor is aware of that argument. I am happy to emphasise, although I do not know that it will help the hon. Gentleman, that we believe in stability. We also believe that the economy should be competitive, and that we should be in a position to earn enough revenue to generate profits to reinvest for a successful economy in future.
Mr. Martin O'Neill rose—
Madam Speaker: It is my impression that the hon. Gentleman came into the Chamber after the statement. Is that correct?
Mr. O'Neill: Yes, it is.
Madam Speaker: Then I am sorry, but I cannot call him.

Local Government (Consultation With Young People)
4.1 pm
Dr. Ashok Kumar: I beg to move,
That leave be given to bring in a Bill to give local authorities powers to consult with minors on the provision of, and budgetary strategies for, services designed to benefit minors.
In the modern age, change is constant and fast. New institutions are constantly created to ensure that decision making harmonises with the people's will. However, decisions directly relevant to one group who make up a large part of the United Kingdom's population are often made without meaningful consultation. Children, and young people below the age of 16, are not given the right to be consulted over many decisions. Most legislation is framed in what can be termed a "protectionist" mode. The position for the child is that protection is on hand, but his or her innate ability to express his or her views is not always recognised. That is the basis of the Children Act 1989, and it was the starting point for the United Nations convention on the rights of the child.
I am aware that these matters are often defined by statute law. Under such legislation, the powers given to others to act for minors are in the best interests of children, and my Bill does not seek to amend or alter those arrangements. However, vast areas of local authority spending and decision making profoundly affect the life styles of young people. I submit that those areas fall under that part of the UN convention that states:
"each child should be consulted when his or her life is to be affected by a decision".
These are broad issues, and I am indebted to the hon. Member for Faversham and Mid-Kent (Mr. Rowe), who initiated a debate on 9 June in which he called for a youth parliament. The hon. Gentleman made many salient points, including one on children's right to make their voices heard. He said that a youth parliament should
"set its own agenda, centred on what the young wanted to discuss, not issues foisted on them by an older generation."—[Official Report, 9 June 1998; Vol. 313, c. 876–77.]
I concur totally. I hope that the apparent cross-party support for measures to involve the young in the setting of social policy will encourage Ministers to take these issues forward.
The hon. Member for Faversham and Mid-Kent dealt only with national issues, but such an agenda could also be set for local matters, which affect young children immensely. It is not only education, spending on schools or the new opportunities for post-16 training that are emerging, but the type and format of leisure provision, road safety, and crime and the fear of crime. All those things affect the young boy or girl as much as, or more than, the voting adult.
In support of the Bill, I cite some original research carried out in my constituency by the Children's Society, in close co-operation with Redcar and Cleveland council and local schools. It took the form of a survey of children's attitudes to local services in a number of small ex-mining villages in the rural east of the borough. It was carried out last late last year by a small dedicated team of researchers.
The findings were graphic. The survey was striking for the maturity of the views expressed, and for the positive way in which local children wanted to make concrete
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suggestions for bettering their home environment. They pointed to the need to ensure that parks and open spaces were well managed and, perhaps more importantly, provided the right facilities for the right age group. In that context, it is interesting to note that article 31 of the United Nations convention on the rights of the child calls for the right to play space for children within the community.
The children highlighted the problem of vandalism and their fears about bullying. They considered road safety on routes to and from school. We must get that right if we are to cut unnecessary use of private cars in home-to-school transport. Children are often the group out on the street the most. Their knowledge and suggestions could be directly useful as a factor in cutting road accidents. They noted that land use planning decisions often affected them the most deeply. After all, they will have to live with the results of bad or inappropriate planning decisions far longer than anyone else.
The study found that children were sometimes baffled by local authority decisions. For example, the local authority had recently had to dismantle some play equipment for health and safety reasons. The decision was never explained to local users of the facilities. When they found out the reason, the information came second hand, often from adults who knew about the issue only at second or third hand.
The children interviewed saw that as a cloak of secrecy laid over matters important to them. Why do we not ask children for their views on leisure and infrastructure? We consult designers, engineers and architects when we consider public provision for new buildings or other public facilities, and we often involve adult users, so why not young people too? Such consultation could help to change adults' views about children.
We are too often subject to moral panic in considering children's attitudes. Each year, there seems to be more legislation that seeks to deal with children within the confines of discipline or the framework of the criminal law. At the age of 13, a child can be put into a secure unit; at 14, sentenced for a serious crime; at 16, be expected either directly to work for a living or to make serious preparation for a career. All those activities are the concerns of adults, but we expect young people below voting age to bear the brunt of their effects and personal impacts.
Of course we are concerned about children's rights, but we do precious little to ensure that they can be exercised within the ambit of the democratic process. I am pressing for something modest that can be done easily.
I want local authorities to be formally requested and empowered to consult local children through recognised channels about their annual budgetary plans, in much the same way as they are required to consult local business interests. That is an integral part of article 12 of the UN convention on the rights of the child. I would expect the consultation to be directed primarily at secondary school age children, but there is no reason why the views of younger children should not be sought.
That could be done through adults who have responsibility for them, such as primary school teaching staff. However, we must ensure that it is the children's voice that is heard, and that the role of intermediaries is limited to that of facilitators. In my area, there are youth councils which are independent of, but supported by,

369
the local authorities and by schools and colleges. That network of youth councils needs to be extended to more meaningful discussions. With my Bill, we now have an opportunity to do that in more general areas of social expenditure and provision.
There are also broader and longer-term benefits to be gained. An increase in the active participation of young people in the democratic process and debate will ensure that room for structural conflict between young people and adults in society is reduced. The Bill will also increase the overall accountability of local authorities for the way in which expenditure decisions are made. Involving young people at an early stage will make them more conscious of the need to take greater responsibility for their environment, and help to build better citizens for tomorrow. I hope that the House will agree to give my Bill a Second Reading.
Question put and agreed to.
Bill ordered to be brought in by Dr. Ashok Kumar, Fiona Mactaggart, Mr. Lindsay Hoyle, Mr. Alan Campbell, Dr. Ian Gibson, Ms Jackie Lawrence, Dr. Phyllis Starkey, Mr. Barry Sheerman, Mr. David Chidgey, Mr. Peter Luff, Mr. David Prior and Mr. Andrew Rowe.

Local Government (Consultation With Young People)
  LOCAL GOVERNMENT (CONSULTATION WITH YOUNG PEOPLE)
  Dr. Ashok Kumar accordingly presented a Bill to give local authorities powers to consult with minors on the provision of, and budgetary strategies for, services designed to benefit minors: And the same was read the First time; and ordered to be read a Second time on Friday 3 July, and to be printed [Bill 218].

FINANCE (No. 2) BILL
Ordered,
That, notwithstanding the practice of the House as to the intervals between stages of Bills brought in upon Ways and Means Resolutions, more than one stage of the Finance (No. 2) Bill may be taken at any sitting of the House.—[Mr. Jamieson.]

Orders of the Day
  Finance (No. 2) Bill
  Not amended (in the Committee) and as amended (in the Standing Committee), further considered.
  Finance (No. 2) Bill
    Clause 7

      RATES OF DUTIES AND REBATES
      4.12 pm
      Mr. David Heathcoat-Amory: I beg to move amendment No. 48, in page 3, line 43, leave out £0.4499 and insert £0.4358'.
      It was noted at the time of the Budget that the Government were using road fuel tax simply as a way of raising extra revenue without any genuine environmental reasons. To do that, they increased the annual escalator, or rate of increase, to at least 6 per cent. above the rate of inflation. By bringing forward the increases by the earlier dates of their Budgets, the Government have further added to the burdens on the motorist. The House of Commons Library has confirmed that at the present rate an extra £9 billion will be extracted from motorists over the life of the Parliament. That is over and above the inherited pattern of increases from the previous Government.
      Most disturbing, the Government have singled out diesel for especially high increases. Diesel is the fuel of industry, so increasing the fuel tax in the way proposed is inflationary because the price of all goods is affected. It is also uncompetitive because it will widen the gap with the continent. It is anti-environmental because firms, especially small ones, will be less able to invest in new engines and fuel monitoring systems. After those two increases, which have already taken effect, under this Government, diesel in the United Kingdom is 70 per cent. more expensive than in the European Union on average. That gap is set to widen. The beneficiaries will be foreign haulage firms whose lorries will arrive in this country with cheap fuel in their tanks and take business from British haulage firms and jobs from British truck drivers. Another beneficiary will be the French Treasury, because British lorries travelling to the continent will fill their tanks with cheap French diesel.
      The amendment cuts the increase to the rate that applied until the election. We want the Government to revert to the previous increase rate, so that the £9 billion hit on British motorists will disappear. The Government's policy is short-sighted, damaging to employment and bad for business, and we should like them, even at this late stage, to change it.
      Mr. Christopher Leslie: I listened with interest to the right hon. Member for Wells (Mr. Heathcoat-Amory). I, too, consulted the Library and was told that the financial implications of his amendment would be £180 million-plus a year, especially for 1999–2000—indexed, of course.
      It is curious that the Conservatives again propose measures that they claim will be popular, but do not say where the money will come from to meet the loss to public revenue. The amendment would cut the price of diesel by 1.5p a litre, but the consequences for the public

      371
      services of losing £180 million a year would be significant. The Conservatives do not say whether they would add that amount to public sector borrowing; whether they would increase taxes, such as income tax, to compensate; or whether they would cut vital public services, such as the health service or education.
      Conservatives have not clarified their policy, but throughout proceedings on the Bill they have played the game of making rather profligate proposals that leave a black hole in the nation's finances, which so far totals about £5.9 billion. They have not said where that money is to come from. In the context of the amendment, it is important to note that the escalator principle was introduced by a Conservative Government, for environmental and anti-pollution reasons. The Government's measure may not have popular acclaim, but it probably has a degree of public acceptance because people appreciate why increases in the price of such fuels are necessary. They are to discourage excessive use of such fuels, to ensure that the tax base is protected and to force environmental concerns to the forefront of people's minds.
      The Government's proposal is a responsible measure, which helps to protect the integrity of public finances. I urge the Government not to accept the amendment. As I said, there is a gaping black hole in the Opposition's proposals.
      The Financial Secretary to the Treasury (Dawn Primarolo): I urge hon. Members to reject the amendment. The Government's commitment to raise road fuel duties by 6 per cent. a year above inflation has been clearly stated. It is only by increasing rates that the United Kingdom can make a sufficient contribution to placing the environment at the core of the Government's objectives for the tax system and further discourage environmental pollution by road users. That includes hauliers as much as private motorists or other road users whose vehicles run on diesel.
      I remind the right hon. Member for Wells (Mr. Heathcoat-Amory) of the damage from emissions from diesel, especially particulates. The Department of Health suggests that 8,000 deaths are triggered by particulates and that, nationally, road transport produces 26 per cent. of those particulates and 46 per cent. of nitrogen oxide. The figures are considerably higher in congested urban areas, where, as we know, the health consequences are all the greater.
      Unlike the previous Government, this Government are taking a lead internationally in promoting action to reduce greenhouse gases. The duty increase on diesel is a feature of that. Right hon. and hon. Members will be aware, although the Opposition constantly want to try to forget it, that the United Kingdom has now agreed to its share of the European Union target following Kyoto. That represents a 12.5 per cent. cut in emissions. Hon. Members claim that they want to reach that target and honour that commitment, and then do everything that they can in the House to undermine and vote against the very measures that will deliver it. Of the six greenhouse gases, diesel is a significant contributor to emissions of carbon dioxide and oxides of nitrogen.
      Sir Robert Smith: Does the hon. Lady recognise that there is
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      concern that the Government's motivation is not so clear cut when it comes to the environment, given the damage that they are doing to the North sea oil industry that produces gas, which reduces carbon dioxide emissions, and their threat to gas generation in the electricity industry? Thus the Government's arguments that they are motivated by environmental policy tend to be thin. They seem to be motivated far more by the desire to raise money, as a Back-Bench Labour Member admitted earlier.
      Dawn Primarolo: That demonstrates just how little the hon. Gentleman understands about the complexities of dealing with the carbon dioxide emission target and ensuring that we deliver national air quality targets, and ensuring that, in undertaking those activities, the Government have a balanced approach.
      The amendment would effectively remove the duty differential between diesel and unleaded petrol. Conventional diesel has a greater energy and carbon content relative to petrol, which gives diesel a litre for litre duty advantage. The higher duty increase for diesel was put in place to offset that advantage and because diesel is worse than petrol in respect of particulate and nitrous oxide emissions.
      Mr. Leslie: I should just like to ask my hon. Friend's opinion. A recent study was done in my constituency, where I have been recently advocating the completion of the Bingley relief road, because we are trying to achieve a reduction in pollutants and traffic emissions in town centre areas. One recent study showed that particulate levels were increasing at an exponential rate, particularly in areas of high congestion. If the amendment were passed, would not particulate levels be kept high, which would have significant consequences? Are there not great environmental benefits to her cause?
      Dawn Primarolo: My hon. Friend is correct about the impact of the amendment and the likely increase in particulate emissions, but of course the Opposition are not bothered about that. They want only to say that they are interested in the environment. They do not want to pursue the policies that would deliver that.
      The right hon. Member for Wells made the point that the proposal was damaging to the haulage industry, but he refuses to acknowledge the other measures that the Government have undertaken to assist the industry, including, in particular, concessions on vehicle excise duty of up to £500. He has refused also to acknowledge the Government's review of the current system for calculating vehicle excise duty rates for lorries; that, in this Budget, vehicle excise duty rates have again been frozen; that, overall, the Budget has cut the corporation tax rate for those businesses; and the introduction of quarterly payments for large companies, replacing advance corporation tax. The list goes on.
      When the Government's proposal—with the Government's strategy—is seen in the round, it is clear that it is fair to the haulage industry, to the environment and to our constituents. I ask the House to reject amendment No. 48.
      Mr. Heathcoat-Amory: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 11

      RATES OF GAMING DUTY
      Dawn Primarolo: I beg to move amendment No. 19, in page 5, leave out lines 35 to 40 and insert—

      'TABLE

      Part of gross gaming yield

      Rate

      The first £450,000

      2½ per cent.

      The next £1,000,000

      12½ per cent.

      The next £1,000,000

      20; per cent.

      The next £1,750,000

      30 per cent.

      The remainder

      40 per cent.'

      During an earlier debate on clause 11 on the Floor of the House, in response to points made by several hon. Members, particularly the hon. Member for Rochford and Southend, East (Sir T. Taylor), I undertook to re-examine the table in clause 11 and its specific impact on casinos outside London whose gross gaming yield was in the range of £5 million to £12 million annually. The hon. Gentleman said that the provision would have a damaging impact on casinos and cited the cases of casinos in his own constituency.
      Government amendment No. 19 will replace the table in clause 11—which will substitute for the table of gaming duty rates in section 11(2) of the Finance Act 1997—introduce new 20 per cent. and 30 per cent. duty rate bands, and revise the gross gaming yield thresholds set out in clause 11.
      I agreed to consider the matter further, and there have been discussions with the industry on how the objectives could be achieved. In the light of representations about the impact of the Budget changes on the casino industry, I have tabled the amendment. I should say that, unfortunately, the industry was itself unable to reach any consensus on the model that it would prefer. I suppose that I should not be surprised that a number of individual groups offered proposals that met their own objectives but not necessarily those of their competitors.
      Government amendment No. 19 will reduce the burden on casinos that are within the £5 million to £12 million gross gaming duty range. The Government's amendment deals with the specific point that was raised and will significantly reduce the burden on casinos in that range. I ask the House to agree to the amendment.
      Mr. Michael Fallon: Another day, another climbdown; we welcome it.
      Sir Teddy Taylor: From the Back Benches, I should like to pay tribute to the Minister for the detailed consideration that she gave to the case that we advanced, and to assure her that her detailed consideration and great understanding of the matter are greatly appreciated. I should like her to know that Back Benchers very much appreciate the Government amendment. It is greatly welcome in Southend-on-Sea, where we have many problems.
      Amendment agreed to.

    Clause 47

      GIFTS IN KIND FOR RELIEF IN POOR COUNTRIES
      Amendments made: No. 1, in page 26, line 25, leave out from 'used' to end of line 26 and insert
      'in a designated country or territory either for medical purposes or by an educational establishment in that country or territory.'.
      No. 2, in page 27, line 35, leave out 'and'.
      No. 3, in page 27, line 37, at end insert
      'and
      "medical purposes" includes medical research and the promotion of health.'—[Dawn Primarolo.]

    Clause 51

      CONVERTIBLE SHARES PROVIDED TO DIRECTORS AND EMPLOYEES
      The Economic Secretary to the Treasury (Mrs. Helen Liddell): I beg to move amendment No. 15, in page 35, line 27, leave out 'or securities'.
      This is a very simple amendment, the purpose of which is to remove from clause 51 two unnecessary words. Under the clause, employees who receive shares that subsequently convert to shares of another class pay income tax on the value of the new class of shares, less anything that they paid when they first received the shares. The amendment will simply ensure that employees who receive such shares are fairly taxed and closes a potential tax avoidance opportunity.
      Convertible securities do not present the same problems and are therefore excluded from the scope of the clause. However, there is a reference to convertible shares or securities in one subsection of the clause. Although the reference to securities does not in any way change the effect of the clause, it might lead to some confusion. We have therefore decided to remove the two unnecessary words.
      Amendment agreed to.

    Clause 73

      OTHER CHANGES TO REQUIREMENTS FOR VCTs
      Amendments made: No. 4, in page 60, line 12, leave out
      '(5) The preceding provisions of this section'
      and insert—
      '(4A) In paragraph 8(1) of Schedule 28B to that Act (requirement as to capital of the relevant company), for "£10 million" and "£11 million" there shall be substituted, respectively, "£15 million" and "£16 million".
      (5) Subsections (1) to (4) above'.
      No. 5, in page 60, line 14, at end insert
      '; and subsection (4A) above has effect in relation to relevant holdings issued on or after that date.'.—[Dawn Primarolo.]

    Clause 75

      USE OF PEPS POWERS TO PROVIDE FOR ACCOUNTS
      Amendments made: No. 20, in page 60, line 40, leave out from beginning to 'there' in line 41 and insert—
      '(3) In paragraph (b) of subsection (4) of that section (power to provide for persons to be liable to account for tax wrongly relieved)—

      375
      (a) after "Board" there shall be inserted "either—
      (i)";
      and
      (b) after "it" there shall be inserted "or
      (ii) for an amount determined in accordance with the regulations to be the amount which is to be taken to represent such tax;".
      (4) In paragraph (c) of that subsection (adaptation and modification of enactments to secure tax accounted for), in sub-paragraph (iii) after "tax" there shall be inserted "and other amounts".
      (5) After that paragraph'.
      No. 21, in page 61, line 6, after 'above;' insert—
      '(cc) that an investor under a plan or a plan manager is, in prescribed cases where relief has been given to which there was no entitlement, to be liable to a penalty of a prescribed amount, instead of to any obligation to account as mentioned in paragraph (b) or (cb) above;
      (cd) that liabilities equivalent to any of those which, by virtue of any of the preceding paragraphs of this subsection, may be imposed in cases where relief has been given to which there was no entitlement are to arise (in place of the liabilities to tax otherwise arising) in other cases where, in relation to any plan—

      (i) a prescribed contravention of, or failure to comply with, the regulations, or

      (ii) the existence of such other circumstances as may be prescribed,

      would have the effect (subject to the provision made by virtue of this paragraph) of excluding or limiting an entitlement to relief;'.
      No. 22, in page 61, line 6, at end insert—
      '(6) In section 151(2) of the Taxation of Chargeable Gains Act 1992 (application of subsections (2) to (5) of section 333 of the Taxes Act 1988 to relief from capital gains tax in respect of investments under plans), for "(2)" there shall be substituted "(1A)".'.—[Dawn Primarolo.]

    Clause 77

      THE INSURANCE ELEMENT ETC.
      Amendments made: No. 23, in page 63, line 9, leave out 'of the provisions of' and insert
      'provision made by or under'.
      No. 24, in page 63, line 13, at end insert—
      '(7A) Without prejudice to the generality of the powers conferred by subsection (7) above, the provision that may be made in connection with an exemption from tax conferred by virtue of subsection (1) above shall include provision for section 436 to apply (with any such modifications as may be prescribed) in relation to section 333 business as it applies in relation to pension business.'.—[Dawn Primarolo.]

    Clause 82

      CARRY FORWARD OF NON-TRADING DEFICIT ON LOAN RELATIONSHIPS
      Amendments made: No. 9, in page 67, line 7, at end insert—
      '(1A) Section 797 (limits on credit: corporation tax) and section 797A (foreign tax on interest brought into account as a non-trading credit) of the Taxes Act 1988 are amended as follows—

      (a) in section 797(3B)(b), omit "or in accordance with subsection (3) of that section";

      (b) in section 797A(5), at the end of paragraph (a) insert the word "and" and omit paragraph (c) and the word "and" preceding it;

      (c) at the end of section 797A(5), insert—

      376
      "An amount carried forward to the applicable accounting period under section 83(3) of that Act shall not be treated as a non-trading deficit for that period for the purposes of paragraphs (a) and (b).";
      (d) in section 797A(6) for "specified in subsection (5)(c) above" substitute "carried forward to the applicable accounting period in pursuance of a claim under section 83(2)(d) of that Act";
      (e) at the end of section 797A(7) insert—
      "An amount carried forward to the applicable accounting period under section 83(3) of the Finance Act 1996 shall be disregarded for the purposes of paragraphs (a) and (b).".'
      No. 10, in page 67, line 10, at end insert—
      '(aa) in paragraph 6(da), after "period" insert "(other than one within sub-paragraph (dc) below)";'.
      No. 11, in page 67, line 13, at end insert—
      '(ba) in paragraph 7(1)(b), for "debit" substitute "deficit";'.
      No. 12, in page 67, line 14, at end insert—
      '(ca) in paragraph 13(1)(ea), after "period" insert "(other than one within paragraph (ec) below)";'.
      No. 13, in page 67, line 18, at end insert—
      '(f) in paragraph 16(1)(b), for "debit" substitute "deficit".'.—[Dawn Primarolo.]

    Clause 83

      FIRST-YEAR ALLOWANCES FOR SMALL BUSINESSES ETC.
      Amendments made: No. 25, in page 67, line 26, leave out
      'subsection (3C) of that section'
      and insert
      'the subsection (3CC) of that section inserted by section (First-year allowances for investment in Northern Ireland) above.'.
      No. 26, in page 67, line 38, leave out from beginning to end of line 3 on page 68.—[Dawn Primarolo.]

    Clause 119

      TAPER RELIEF FOR CGT
      4.30 pm
      Mr. Malcolm Bruce: I beg to move amendment No. 42, in page 108, line 40, at end insert—
      '(4A) The total amount of taper relief which can be claimed in accordance with this section by any one taxpayer in any one tax year shall be limited to £5 million.'.
      My colleagues, like the Conservative Members, initiated an extensive debate in Committee on the impact of the taper relief on capital gains tax—
      Mr. Fallon: Where were you?
      Mr. Bruce: I was ably represented by some extremely talented colleagues. I notice that the shadow Chancellor did not even put in an appearance, so I need no comments from Conservative Members.
      There have been developments during the passage of the Bill which justify the amendment and with which the Government will need to deal. Even if the Government do not accept the amendment at this stage, their proposals, as they come into effect, will generate evidence that I suspect will make them wish to return to this matter in due course.

      377
      It has been suggested that, whether it was the intention or not, the capital gains taper will substantially reduce the capital gains burden for many of the very richest people in business, while it will increase the tax burden on smaller business people. I find it quite extraordinary that a Labour Government are deliberately altering the balance of capital gains tax in a way that seriously hits small businesses and enables a large number of extremely rich people to escape the full burden of the tax. The evidence has not been put forward by the Liberal Democrats; a number of independent tax consultants have said that the people who will make the most money out of the measure are tax consultants and, that being the case, they welcome anything that makes the tax system more complex. They believe that it substantially lets off the hook some people in business who are making substantial profits on the basis of the accumulation of the paper value of their shareholding.
      A case in point involves the partners of Goldman Sachs. It has been estimated that, under the Government's proposals, they could potentially realise an escape from capital gains tax valued at £500 million. That massive tax concession is being promoted by a Labour Government while, as my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) will wish to make clear, many small businesses will face an increased tax burden.
      The Financial Secretary to the Treasury will appreciate that the purpose of the amendment is perfectly reasonable: to put a limit on the amount by which anyone can secure relief in any one year.
      Dawn Primarolo indicated dissent.
      Mr. Bruce: When I see the Minister shaking her head, I am totally converted to the view that we are in the face of new Labour, which clearly believes that there should be no limit to the tax-free gain that people should be able to make. That differs greatly from the speeches that I heard from Labour Members during 14 of the 15 years that I have been in the House.
      As it has been clearly identified by independent tax consultants that the Government proposals will allow many individuals substantial relief from capital gains tax, a limit of £5 million seems pretty generous. The amendment proposes that anyone who makes gains of £5 million in a year will benefit, and the relief will be ended only if the gains exceed £5 million in a year. That seems very reasonable, and most people would regard a £5 million tax gain as more than enough to keep them even for two years. Therefore, in the circumstances, I hope that the Government will respond constructively to a real concern that has been identified, which I would expect a Labour Government to balance with fairness and justice, taxing the rich according to their means and ensuring that the less well-off in business are given a fair return instead of an increased tax burden.
      Mr. John Burnett: The changes that the Government are introducing on taper relief for capital gains tax raise a number of questions, but one is particularly significant.
      Hitherto, a gain of up to £250,000 by a small business man or woman would be completely exempt from capital gains tax. The Government's new proposals would bring
      378
      into charge that small gain, so that an individual gaining £100,000 would pay £10,000 in tax and an individual gaining £50,000 would pay £5,000 in tax. Under the old rules, such an individual paid nothing. Let me ask the House to concentrate on an individual gaining £10 million. When the full taper relief comes into force in 10 years' time, that individual will pay £1 million in tax. Hitherto, under the rules that prevailed before this year's legislation, that individual would have paid £3.15 million in capital gains tax. Under the new Labour rules, the tax bill will be £1 million. I have one simple question for the Minister, and I am sure that many hon. Members also wish to know the answer: why do the Government propose to penalise the small business man or woman and give such a bonanza to the very wealthiest?
      Dawn Primarolo: It is a shame that the hon. Member for Gordon (Mr. Bruce) was not able to be present in Committee to hear all the debates on the issue. It is also a shame that he seems to have forgotten that when we debated the issue in Committee of the whole House, the Conservatives moved an amendment that would have taken the taper to zero over 10 years, which would mean that after 10 years a gain would be untaxed. The Liberal Democrats voted to a person for that amendment. After that substantial debate—
      Mr. Burnett: Will the hon. Lady give way?
      Dawn Primarolo: No, I shall not give way. The hon. Gentleman will have plenty of time to explain to the House the apparent changes over such a short period in the Liberal Democrats' attitude—if we are not to assume that they are driven by opportunism rather than principled policy.
      After the Liberal Democrats had voted for the taper to go to zero, they moved an amendment that stated that they accepted the taper and the principles of the Government's reform, but they wanted the Government to delay the implementation of the reform for a year.
      Mr. Burnett: Will the hon. Lady give way?
      Dawn Primarolo: I will not give way to the hon. Gentleman until I have put my case to the House. He has spoken and he can put his case in his speaking time.
      The Liberal Democrats misunderstood—or deliberately failed to understand—the purpose of the Government's reform, which is to encourage long-term investment and reward entrepreneurs, while ensuring that everybody pays a proportion of tax, just as the Liberal Democrats say should happen with income tax. The amendment is driven more by newspaper reports than by principles of how capital gains should be taxed.
      The amendment is uncalled for and unnecessary. It would undermine the Government's principle that, regardless of gain, a proportion of tax will be paid. The Liberal Democrats have failed to understand the enormous incentives that the reforms give to entrepreneurial activity and growth. I suggest that the House votes against the amendment quickly and that we move on to the next debate.
      Mr. Malcolm Bruce: I appear to have touched a raw nerve. The fact that I was not present when the issue was

      379
      debated in Committee is not relevant. I am perfectly capable of reading the transcripts, discussing with my colleagues what went on and determining the argument for the development of policy.
      It is clear that even Labour Members were concerned about the implications of the changes and supported the argument—even if they did not vote for it—that there should have been consultation and that a year's delay for that consultation would have been sensible.
      Dawn Primarolo: So the hon. Gentleman is in favour.
      Mr. Bruce: Of course I am in favour of consultation on an issue of such major concern. It is well known that the Conservatives wanted the headlines for trying to abolish capital gains tax, but could not find a way of doing so without creating the most massive income tax loophole ever envisaged.
      Experienced practitioners—it is not a question of newspaper reports—pointed out that the Government had not fully considered the implications of their proposals. The Financial Secretary is digging her heels in to save face because she is not prepared to acknowledge that, had the Government consulted, the proposals might have taken a different shape. As I said in my opening remarks, it is quite unbelievable that a Labour Government are defending the right of fat cats to benefit from a massive tax reduction.
      Mr. Burnett rose—
      Mr. Bruce: Does my hon. Friend want me to give way?
      Mr. Burnett: No, I want to speak.
      Mr. Deputy Speaker (Mr. Michael J. Martin): Order.
      Mr. Bruce: I was only trying to help my hon. Friend to shorten the debate.
      We have put forward a perfectly reasonable proposal that would help the Government out of a potential embarrassment, and we certainly intend to pursue it.
      Mr. Burnett rose—
      4.45 pm
      Mr. Deputy Speaker: Order. The hon. Member cannot speak again except by leave of the House. Is it the will of the House that the hon. Member speaks again? [HON. MEMBERS: "No."] I hear an objection. The hon. Member for Torridge and West Devon (Mr. Burnett) cannot address the House again. The only reason why his hon. Friend the Member for Gordon (Mr. Bruce) was able to speak twice is that he moved the amendment and was therefore able to reply to the debate.
      Question, That the amendment be made, put and negatived.

    Schedule 3

      ADVANCE CORPORATION TAX
      Amendments made: No. 61, in page 156, line 7, at end insert—
      'Section 109 of the Taxes Management Act 1970
      5A.—(1) Section 109 of the Taxes Management Act 1970 (corporation tax on close company in connection with loans to participators etc) shall be amended as follows.
      (2) In subsection (3A) (interest under section 87A on so much of tax under section 419 of Taxes Act 1988 as is referable to amount of loan or advance repaid shall not be payable in respect of any period after repayment made)—
      (a) after "If' there shall be inserted "(a)";
      (b) after "principal Act," there shall be inserted "or
      (b) there is such a release or writing off of the whole or any part of the debt in respect of a loan or advance as is referred to in that subsection,";
      (c) after "amount repaid" there shall be inserted ", released or written off"; and
      (d) after "the repayment was made" there shall be inserted "or the release or writing off occurred".
      (3) This paragraph has effect in relation to the release or writing off of the whole or part of a debt on or after 6th April 1999.'.
      No. 62, in page 160, line 13, leave out second 'and'.
      No. 63, in page 160, line 16, at end insert
      'and
      (c) after "the repayment is made" there shall be inserted "or the release or writing off occurs".'.
      No. 64, in page 160, line 17, leave out from '(4))' to 'there' in line 18 and insert—
      '(a) after "Where" there shall be inserted "(a)";
      (b) after "that loan or advance," there shall be inserted "or
      (b) the release or writing off of the whole or any part of the debt in respect of a loan or advance occurs on or after the day on which tax by virtue of this section becomes due in relation to that loan or advance,"; and
      (c) after "repayment", in the second and third places where it occurs,'.—[Mr. Geoffrey Robinson.]

    Schedule 13

      CHANGES TO EIS ETC.
      Amendments made: No. 6, in page 216, line 25, leave out '£10 million' and insert '£l5 million'.
      No. 7, in page 216, line 27, leave out '£11 million' and insert '£16 million'.
      No. 8, in page 234, line 5, at end insert—
      '() provides a benefit or facility for the individual;'.—[Mr. Geoffrey Robinson.]

    Schedule 16

      TRANSFER PRICING ETC: NEW REGIME
      Amendments made: No. 16, in page 258, line 50, leave out
      'exemption from income tax or corporation tax in respect of the'
      and insert
      'any exemption from income tax or corporation tax in respect of, or of a part of, the income or'.
      No. 17, in page 259, line 1, leave out second 'the'.
      No. 18, in page 259, line 32, leave out
      'paragraph 5(3) above is satisfied'
      and insert
      'sub-paragraph (3) of paragraph 5 above either—

      (i) is satisfied, or

      (ii) were any such exemption as is mentioned in paragraph (b) of that sub-paragraph to be disregarded, would be satisfied.'.—[Mr. Geoffrey Robinson.]

    Schedule 18
      COMPANY TAX RETURNS, ASSESSMENTS AND RELATED MATTERS
      Amendments made: No. 29, in page 297, leave out lines 23 to 49 and insert—
      COMPANY TAX RETURNS, ASSESSMENTS AND RELATED MATTERS

        'Claims that cannot be made without a return
        9.—(1) No claim to which this paragraph applies may be made by a company before it delivers a company tax return for the period to which the claim relates.
        (2) This paragraph applies to a claim by a company for any repayment of income tax called for by virtue of—

        (a) section 6(2) of the Taxes Act 1988 (exclusion of income tax charge in case of UK resident company or income within chargeable profits for corporation tax), or

        (b) exemptions from income tax conferred by the Corporation Tax Acts.

        (3) This paragraph applies to a claim by a company for payment of a tax credit, unless—

        (a) the company is wholly exempt from corporation tax or is only not so exempt in respect of trading income, and

        (b) the tax credit is not one in respect of which a payment on account may be claimed by the company under Schedule 19AB to the Taxes Act 1988 (pension business).

        Other claims and elections to be included in return
        10.—(1) In Part VII of this Schedule (general provisions as to claims and elections) paragraphs 57 to 57B contain provisions as to the circumstances in which a claim or election may or must be made, or is to be treated as having been made, in a company tax return.
        (2) A claim to which Part VIII or IX of this Schedule applies (claims for group relief or capital allowances) can only be made by being included in a company tax return (see paragraphs 64 and 76).'.
        No. 30, in page 314, leave out lines 34 to 37, and insert—

        'Claims or elections affecting a single accounting period
        57.—(1) This paragraph applies to a claim or election for tax purposes which affects only one accounting period ("the relevant accounting period").
        (2) If notice has been given under paragraph 3 requiring a company to deliver a company tax return for the relevant accounting period, a claim or election by the company which can be made by being included in the return (as originally made or by amendment) must be so made.
        (3) If a company has delivered a company tax return for the relevant accounting period, a claim or election made by the company which could be made by amending the return is treated as an amendment of the return.
        The provisions of paragraph 15 (amendment of return by company) apply.
        (4) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in returns) applies to a claim or election made by a company which cannot be included in a company tax return for the relevant accounting period.
        This applies in particular to a claim or election made—

        (a) before any notice is given under paragraph 3 requiring a company tax return for the relevant accounting period, or

        (b) at a time when its return for the relevant accounting period cannot be amended.

        Claims or elections involving more than one accounting period
        57A.—(1) This paragraph applies to a claim or election for tax purposes if—

        (a) the event or occasion giving rise to it occurs in one accounting period (the period to which it "relates"), and

        (b) it affects one or more other accounting periods (whether or not it also affects the period to which it relates).

        (2) If a company makes a claim or election which—

        (a) relates to an accounting period for which the company has delivered a company tax return and could be made by amendment of the return, or

        (b) affects an accounting period for which the company has delivered a company tax return and could be given effect by amendment of the return,

        the claim or election is treated as an amendment of the return.
        The provisions of paragraph 15 (amendment of return by company) apply.
        (3) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in returns) applies to a claim or election made by a company if or to the extent that it is not—

        (a) made by being included (by amendment or otherwise) in the company tax return for the accounting period to which it relates, and

        (b) given effect by being included (by amendment or otherwise) in company tax returns for the accounting periods affected by it.

        Other claims and elections
        57B.—(1) Schedule 1A to the Taxes Management Act 1970 applies to a claim or election for tax purposes which is not within paragraph 57 or 57A, whether or not it is included (by amendment or otherwise) in a company tax return.
        (2) The provisions of this Schedule do not apply where or to the extent that the provisions of Schedule 1A apply.

        Provisions supplementary to paragraphs 57 to 57B
        57C.—(1) Paragraphs 57 to 57B have effect subject to any express provision to the contrary.
        (2) Nothing in those paragraphs affects the time limit or any other conditions for making a claim or election.
        (3) Where Schedule 1A to the Taxes Management Act 1970 applies by virtue of any of those paragraphs and the claim or election results in an increase in the amount of tax payable, all such adjustments by way of assessment or otherwise shall be made as are necessary to give effect to it.'.
        No. 31, in page 320, line 32, leave out 'which one person' and insert
        'which—

        (a) a claim for group relief may be made without being accompanied by a copy of the notice of consent to surrender given by the surrendering company, and

        (b) one company'.

        No. 32, in page 320, line 34, after first 'of' insert
        'claiming or surrendering group relief or'.
        No. 33, in page 322, leave out lines 37 to 41 and insert—
        '(5) A determination by the Inland Revenue under this paragraph is final and conclusive as to the basis of charge to be used for the accounting period concerned.'.
        No. 34, in page 324, line 2, at end insert—

        'Conclusiveness of amounts stated in return
        84A.—(1) This paragraph applies to an amount stated in a company tax return for an accounting period which is required to be included in the return and which affects or may affect—

        (a) the tax payable by the company making the return for another accounting period, or

        (b) the tax liability of another company for any accounting period.

        (2) If such an amount can no longer be altered it is taken to be conclusively determined for the purposes of the Corporation Tax Acts in relation to that other period or other company.
        Sub-paragraphs (3) to (5) explain what is meant by "can no longer be altered".
        (3) An amount is regarded as one that can no longer be altered if—

        (a) the period specified in paragraph 15(4) (general period for amendment by company) has ended,

        (b) any enquiry into the return has been completed and the period specified in paragraph 34(1) (period for amendment by company after enquiry) has ended,

        (c) if the Inland Revenue amend the return under paragraph 34(2), the period within which an appeal may be brought against that amendment has ended, and

        (d) if an appeal is brought, the appeal has been finally determined.

        (4) If the return is amended by the company under a provision that allows an amendment after the end of the period specified in paragraph 15(4), an amount affected by the amendment ceases to be regarded as one that can no longer be altered until after whichever is the last of the following—

        (a) the end of the period within which notice of enquiry into the return may be given in consequence of the amendment;

        (b) if such a notice is given, the end of the period specified in paragraph 34(1);

        (c) if the Inland Revenue amend the return under paragraph 34(2), the end of the period within which an appeal against that amendment may be brought;

        (d) if an appeal is brought, the date on which the appeal is finally determined.

        (5) If the return is amended by the Inland Revenue under paragraph 80(3) (consequential amendment of return where amount available by way of capital allowances is reduced), an amount affected by the amendment ceases to be regarded as one that can no longer be altered until after—

        (a) the end of the period within which an appeal against that amendment may be brought, or

        (b) if an appeal is brought, the date on which the appeal is finally determined.

        (6) For the purposes of this paragraph an amount carried forward from a period for which a return was made under section 11 of the Taxes Management Act 1970 is not regarded as one required to be included in a company tax return for a later period.
        (7) Nothing in this paragraph affects any power to make an assessment other than a self-assessment or the power to make a discovery determination.'.—[Mr. Geoffrey Robinson.]

    Schedule 19

      COMPANY TAX RETURNS, ETC.: MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 35, in page 335, line 35, leave out from '(4)' to end of line 40 and insert
      'omit "by discharge or repayment".'.
      No. 36, in page 335, line 40, at end insert—
      '(4) After subsection (4A) insert—
      "(4B) Schedule 1A to the Taxes Management Act 1970 (claims and elections not included in return) applies to a claim for relief under subsection (4) above unless—

      (a) the claim is included (by amendment or otherwise) in the return for the period in which the loan or advance was made, and

      (b) the relief may be given at the time the claim is made.".'.

      No. 37, in page 336, line 36, leave out from `Paragraphs' to 'do' in line 38 and insert
      '57 to 57C of Schedule 18 to the Finance Act 1998 (general provisions as to procedure on claims and elections)'.
      No. 38, in page 336, line 40, leave out '9(1)' and insert '9(2)'.
      No. 39, in page 337, line 24, leave out '9(1)' and insert '9(2)'.—[Mr. Geoffrey Robinson.]

    Schedule 27

      REPEALS
      Amendments made: No. 41, in page 385, line 27, column 3, leave out '589(9A)' and insert '589A(9A)'.
      No. 14, in page 392, line 12, in column 3 at the beginning insert—
      'In section 797(3B)(b), the words "or in accordance with subsection (3) of that section".
      In section 797A(5), paragraph (c) and the word "and" preceding it.'.
      No. 27, in page 392, line 20, at end insert—
      '1990 c. 1. The Capital Allowances Section 76(3).'. Act 1990.
      No. 28, in page 392, line 23, leave out 'This repeal' and insert—

      '1. The repeal of section 76(3) of the Capital Allowances Act 1990 has effect in relation to every chargeable period ending on or after 12th May 1998.

      2. The repeal of section 42(6) and (7) of the Finance (No. 2) Act 1997'.

      No. 40, in page 398, line 30, column 3, at end insert—
      'In section 419(4), the words "by discharge or repayment".'.
      —[Mr. Geoffrey Robinson.]
      Order for Third Reading read.
      4.53 pm
      Dawn Primarolo: I beg to move, That the Bill be now read the Third time.
      This is the second Finance Bill of the Parliament. It continues the process, which the Labour Government started on their election in 1997, of modernising the British economy, with the objective of raising the sustainable rate of long-term growth and ensuring that everyone has a share in rising prosperity. The Bill implements the second Budget of my right hon. Friend

      385
      the Chancellor of the Exchequer. The aim of the Budget is to turn ambition into achievement, encourage work, promote enterprise and support families.
      The Bill is all about a Government keeping their promises and, in it, we continue our manifesto pledges. We have kept our promise to hold the basic and top rates of income tax at their current rates, which is delivered in clause 25. We have kept our promise to cut value added tax on domestic fuel to 5 per cent., which was delivered in the first Finance Bill, and not to extend VAT to food, children's clothing, books, newspapers and public transport fares. We have kept our promise to examine the tax and benefits system and announced the working families tax credit. We have kept our promise to reduce VAT on energy-saving materials for those in receipt of grants through Government and local authority schemes.
      The Bill has sent the Opposition into confusion, especially the Liberal Democrats who, at times during the Bill's passage, were changing their policy positions as we progressed through the day, let alone the week. In Standing Committee on the Bill, the Opposition voted for amendments that would have cost at least £7 billion; in addition to which, they voted for amendments to the Social Security Bill worth £1.5 billion. The shadow Chancellor's view is that
      "There is no moral content in voting for more public spending",
      but that is not a view we share. Which public services should be cut to make good the £8.5 billion? That is the question that the Opposition have to answer this evening. Which taxes would they increase? Would they prefer to create another debt mountain, like the previous Government?
      Mr. Alex Salmond: On the subject of confusion, as the Bill has progressed through the Commons, has the Financial Secretary detected any change in economic indicators, for example, the exchange rate and the impact in terms of job losses, the upturn in interest rates and the unemployment figures? Has she detected any change in economic conditions and, if so, what is to be the Government's response?
      Dawn Primarolo: What I have detected at this late stage is that the hon. Gentleman has finally participated in our deliberations, having seen no trace of him during the many hours, weeks and months in which we have debated both the Budget and the Bill.
      The Bill introduces a number of measures to encourage work and to make work pay. Our reforms of the national insurance system will remove barriers to work that have faced many people in the past and will encourage employment. The new deal will be extended to provide new employment opportunities to the long-term unemployed, partners of the unemployed, the long-term sick, the disabled and disadvantaged communities. The working families tax credit will be a major reform of the tax system—necessary because the labour market has changed almost beyond recognition in the past 20 or 30 years—giving women the opportunity to combine family commitments with paid employment.
      Throughout the country, firms are reporting skills shortages. At the same time, there is a huge pool of unused talent and the Government intend to ensure that
      386
      we use that talent. People who want to work will be able to do so; they will be helped to find jobs and to stay in the labour market. We are determined to give them the skills and opportunities that they need, which is something the previous Government failed pitifully to do. The working families tax credit and the reform of the national insurance system, together with our increased investment in education, training and skills, will begin to ensure that we have a labour market that meets the needs of the 21st century. Those measures, taken together, will make it easier for people to get into work, especially families with children; they are about giving people a future and giving them the hope that they want for that future.
      Mr. Derek Twigg: I am pleased to hear what my hon. Friend has said. What does she think would have happened if Labour had not got in? What sort of future would those people have had?
      Dawn Primarolo: I am sure that the Opposition can explain for themselves how they would have continued to fail to invest in skills and to preside over chaos in the tax system, particularly in regard to families with children, and how they would not have increased child benefit or ensured that young people have an opportunity to gain skills and jobs through the new deal. As we know, the Opposition opposed this Government's windfall tax.
      Alongside all of that reform, the Government are promoting enterprise. We need to promote enterprise alongside labour market reform to create a dynamic business sector, which is an essential part of any economic policy. We have put in place a corporation tax regime to encourage long-term investment. We have the lowest rates ever and we are abolishing advance corporation tax. Business has widely welcomed those changes. We have cut the small business rate of corporation tax to 20 per cent. from next year. Both business corporation tax rates will be held at the new levels or lower for the lifetime of this Parliament—an undertaking that the previous Government never gave, which shows the confidence of this Government in their policy and in our firms.
      Dr. Nick Palmer: Is my hon. Friend aware that during questions to the Chancellor this week, the shadow Chancellor said that he did not realise that the gap between Britain and Europe was widening on corporation tax? He thought that we were getting closer to Europe and becoming less competitive. Does it worry her that we do not have an Opposition who are in command of their portfolio?
      Dawn Primarolo: I am sure that the shadow Chancellor will settle into his new position and will get up to speed on the relevant facts with regard to corporation tax.
      The Government have also undertaken long-overdue reforms of the capital gains tax system to promote enterprise, reward risk-taking and encourage long-term investment in place of a culture of short-termism and expediency. The Bill introduces tapers, which will reduce CGT on business and non-business assets held over the longer period. The effective rate of capital gains tax will be 10 per cent. for business assets held for 10 years. It is right in principle that everyone should pay a share of tax on their gains.
      Sir Robert Smith: Has the hon. Lady worked out the consequences of the Finance Bill, should the Government fail to control inflation? How much real tax will people pay, if one takes into account the inflation of assets?
      Dawn Primarolo: If the hon. Gentleman had been able to hear all the deliberations through the long consideration of the Bill, he would realise that the prudent approach to the economy being taken by my right hon. Friend the Chancellor will deliver stability, investment and the security and sustainable growth that the country badly needs.
      The Bill also introduces the new university challenge fund—a public-private partnership to provide £50 million in venture capital to help turn good research into good business, which is badly needed in this country.
      There will be a further boost to first-year capital allowances to help fund investment—remaining at 40 per cent., rather than 25 per cent., for a further year. That is another indication of the Government's determination to ensure that businesses can grow and that investment is created.
      The Government have also invested in the environment. We are committed to an annual increase in road fuel duties of at least 6 per cent. in real terms, which is slightly more than the previous Government's commitment of 5 per cent. The increase will help us to keep our commitment to greenhouse gas targets, which are crucial in meeting our Kyoto obligations. We will be consulting soon on measures to graduate vehicle excise duty to encourage the use of less environmentally damaging cars. The reduction, under clause 16, of up to £500 in vehicle excise duty for lorries and buses that meet the new low-emission standards and the changes in duties on diesel duties and road fuel gases will help to reduce the impact of transport emissions on local air quality. That is a vastly important measure.
      In addition to climate change and local air quality, we are dealing with land use and sustainable waste management. The landfill tax, which was introduced by the previous Government, was an important first step in environmental taxation. The increase in the standard rate from next year should encourage waste producers to reduce their waste and to seek more sustainable ways in which to deal with it.
      The Budget was about fairness. We inherited from the previous Government a situation in which one child in three grew up in poverty—this Government are determined to tackle that. We targeted support where it was most needed—on families. From next April, child benefit for the oldest child will increase by £2.50 a week, with an equivalent increase for poorer families through the family premium of income support and jobseeker's allowance—that is the largest ever increase. The new child care tax credit will pay 70 per cent. of the costs of child care—up to £100 a week for one child, and £150 a week for two or more children. To help fund the package to support children, we have reduced the married couple's allowance from 15 per cent. to 10 per cent. from April 1999.
      Fairness also means ensuring that people pay their proper share of tax. The Bill contains a number of anti-avoidance measures to close loopholes and to prevent abuse of the system. That is why we ensured that the foreign earnings deduction loophole was closed.
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      The Government will continue to ensure fairness in the rates at which people pay their tax and that people pay what they are required to pay.
      The Bill reforms inheritance tax to tighten up the rules on public access to inheritance tax-exempt assets. It is right in principle that exempt assets that are supposed to be open to the public are open to the public—that makes the system fairer.
      We are encouraging savings as an essential part of our strategy. The Bill introduces the new individual savings accounts, which make it easier for people to save. Extending the savings habit to more people is absolutely essential.
      The Bill reinforces our commitment to economic stability and to the promotion of enterprise. It shows our determination to modernise the tax and benefits system to make work pay. It is another step in delivering what we promised less than a year ago—long-term stability, with opportunity for the many, not only the few. The Bill is another milestone in the Labour Government's progress to those objectives, and I commend it to the House.
      5.7 pm
      Mr. Heathcoat-Amory: The Finance Bill—all two volumes and 400 pages of it—is one long exercise in tax raising, and Conservative Members make no apologies for having voted against its tax-raising measures.
      Mr. Andrew Love: The right hon. Gentleman talks about tax-raising measures, but would not the amendments that the Opposition tabled in Committee have imposed another £6 billion to £7 billion in taxes?
      Mr. Heathcoat-Amory: The hon. Gentleman cannot even understand his party's Bill. Although he was on the Standing Committee, he cannot have been alert—we voted and argued against the Labour Government's tax increases, which have already done so much damage to the economy. If he cannot understand the difference between taxation and expenditure, he should not have been on the Standing Committee.
      Last year, the Government targeted savings in their tax measures, and we are already seeing the damage that that caused. In this Finance Bill, they have targeted businesses. All businesses, which we try to represent, will suffer from an increase in corporation tax and from other measures—such as the increases in stamp duty and in road vehicle duties—that will damage the competitiveness of British industry in the wider world and hit the employment market in the United Kingdom.
      We have already had an economically illiterate intervention from the hon. Member for Broxtowe (Dr. Palmer), who clearly cannot understand the difference between a nominal tax rate and the actual tax paid by businesses. If he does not believe me, perhaps he should read the Red Book, where the extra £2 billion from corporation tax advance payments is clearly set out.
      Dr. Palmer: The shadow Chancellor, on one of his rare visits to the Chamber, said that the rates—not the total impact—of corporation tax and income tax were narrowing between Britain and other countries. That is the point that I was questioning.
      Mr. Heathcoat-Amory: The hon. Gentleman is wrong to say that my right hon. Friend is a rare visitor to the

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      Chamber, but he will have noticed that the Chancellor makes no visits here at all, preferring to address the European Parliament rather than to defend his policies here. He prefers addressing media conferences organised by Mr. Rupert Murdoch to dealing here with the fiasco that his economic policies have created. In our term of office, we cut the rate of corporation tax from 52 per cent. to 33 per cent., and the Government are now raising the effective rate by £2 billion a year, as is clearly shown on page 18, line 8 of the Red Book, which I commend to the hon. Gentleman.
      As only one example of their mean-minded measures and regressive taxation, the Government have ended the arrangement whereby those working overseas do not have to pay United Kingdom tax if they are abroad for 365 days. That will hit, not the tax avoiders and big earners, but the ordinary workers—nurses, engineers, aid workers—who cannot time their absences so that they can become non-UK tax residents. [Interruption.] The Government should be ashamed of that regressive measure.
      The Financial Secretary talked about child care measures, but they are not even in the Bill. The Bill will enact all the tax-raising measures, and we are still awaiting any of the benefits that are meant to flow from them.
      The new capital gains tax system is a fiasco, and I predict that we will need a rewrite. The system is far too complicated, and probably unworkable, and it is already backfiring on the Government. In a mean-minded way, the Government have withdrawn the retirement relief that benefited small businesses and replaced it with a tapering system that will give each Goldman Sachs partner an extra £16 million. Those are new Labour's priorities.
      We extracted one or two small concessions from the Government. Because of the opposition and arguments of Conservative Members, they climbed down on dividend tax credits for non-taxpayers; there is to be a gaming duty revision; and they signalled that they would in due course accept our proposals for the reform of stamp duty and of the corporation tax payments for businesses affected by seasonal variation.
      Labour Members were entirely silent in Committee and virtually silent on Report. As always, it is the Conservative party that defends the rights of taxpayers and businesses. The concessions may have been minor, but they were significant.
      The Budget confirmed all the broken pre-election promises of a Labour Government, and the electorate will not forget that. I invite my right hon. and hon. Friends to vote against Third Reading.
      5.13 pm
      Mr. Malcolm Bruce: There are some inherent unfairnesses in the Bill that the Government have not addressed. I give them credit for the fact that, on matters such as individual savings accounts and the tax credit for non-taxpayers, they have recognised the force of the arguments: they have changed the rules on ISAs and intend to amend the tax credit provisions as soon as they can find the right formula.
      That is welcome, but the fact remains that the Bill contains provisions that grow out of an unbalanced economic policy. It was interesting to see that Labour
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      Members simply did not believe that changes to the foreign earnings rules would hit people such as overseas aid workers. They will hit people from my constituency such as overseas construction workers and those in the oil and gas industry.
      It may be arguable that the package should involve a payment of taxation but, as we all know, many such people are on two or three-year contracts that were entered into on the clear understanding that the relief was part of the deal. This is effectively retrospective taxation on those people, and the Government should have taken some account of that.
      Sir Robert Smith: Will my hon. Friend give way?
      Mr. Bruce: No, I have only a short time.
      The Government failed to recognise that they have completely distorted the capital gains tax regime. Abolishing the 100 per cent. retirement relief will clearly hit hard the small business people, farmers and others for whom the business is effectively their pension. They will be clobbered by an increased tax rate while very high earners will get a massive tax bonanza. The tabloid headlines may be about the Rolling Stones, but they will be completely unaffected. They will make their own arrangements, thank you very much, but other people will not be able to do that.
      Mr. Fallon: Those points were made in Committee.
      Mr. Bruce: Those points were indeed ably made in Committee by Opposition Members, but it is important to summarise on Third Reading why we take the view that the Bill is flawed and unbalanced.
      The fundamental problem with the Bill is that it is based on an economic policy that is not delivering the Government's stated objectives. We do not have a stable exchange rate, or if we do, it is stable at a very high rate. We have rising interest rates and inflation, and it looks as though unemployment may be on the turn.
      The Bill imposes taxation on the hard-pressed business sector that should have been imposed on the consumer sector to take the heat out of the economy and deliver results on inflation.
      For all those reasons we, too, will vote against Third Reading.
      5.17 pm
      Mr. Derek Twigg: For several weeks, we have had to listen to a lot of nonsense from Opposition Members, usually in the guise of insults to individuals about what we were doing or not doing in Committee, to cover their own inadequacies and incompetence in tackling the Bill.
      I was on the previous Finance Bill Committee, and the performance of the Opposition was even worse this time, although, to be fair, there were one or two exceptions. The Opposition failed miserably to dent the Bill or the Government or to perform their task of opposition. For those who had to sit through the Committee, it was like Chinese torture, believe me.
      The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) played a significant role in Committee. We had a detailed debate about how the Bill would damage those who own pushing machines in the arcades of

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      Littlehampton and Bognor. I did not know what pushing machines were, as pushers usually have a different connotation where I come from. I am not sure whether the machines should pay at a 2p or a 10p rate.
      The hon. Member for Bognor Regis and Littlehampton also made an interesting contribution concerning tax relief on private health insurance. He tried to tell us, at about 2 o'clock one morning, that we should prevent people from using hospitals in Littlehampton or Bognor because they ought to take out insurance. He said that all the tourists who go to the area should carry health insurance and not bother using the hospitals. There seems to be a moratorium on visitors to his constituency using hospitals, which seems rather a good way of attracting people in.
      We heard an interesting speech from the hon. Member for Guildford (Mr. St. Aubyn), who told us that the average person in his constituency often went to local auctions with a £10,000 table or painting—
      Mr. Leslie: Or a carriage clock.
      Mr. Twigg: Yes, carriage clocks were also mentioned. That is normal behaviour for the hon. Gentleman's constituents. When we were discussing historic houses, the hon. Gentleman said that he opened his house every weekend to visitors, and that he thought that every other Member should do the same.
      Mr. Nick St. Aubyn: It is clear that, although he spent so much time in the Committee, the hon. Gentleman heard hardly a word of what was said to him.
      Mr. Twigg: If that is all that the hon. Gentleman wishes to say, I will continue my speech.
      Points have been made about foreign earnings. The Opposition were concerned about the Rolling Stones. Indeed, a point of order was raised at the beginning of one of our debates about the damage that the Bill could do to them. They have shown no loyalty to the country, have they? But that is what we have heard from the Opposition.
      Sir Robert Smith: The Rolling Stones are a classic example of the fact that the tax man does not hit the high payers. He hits people like my constituents, whose employment as contractors for the oil industry takes them all over the world. They have little other option, if they want to continue to support their families. The tax is applied unfairly to them.
      Mr. Twigg: The hon. Gentleman should talk to Conservative Members. I was a member of the Standing Committee, and I remember the reference to the Rolling Stones.
      It was often said that we were sitting on our hands and were not speaking, but it was the Opposition's role to speak against the Bill. It was for us to support it. Opposition Members have forgotten what their role is: they are not yet used to being in opposition. What Opposition Front Benchers said in response to questions was usually couched in the form of some insult. It was suggested that some measures did not need to be debated on the Floor of the House. During the passage of the previous Finance Bill, the right hon. Member for Wells
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      (Mr. Heathcoat-Amory) was involved in delegating a fair amount of legislation outside the Chamber. It seems that it was all right for the Conservative party to deal with legislation in that way, but it is not all right for us to do so. The right hon. Gentleman tried to twist the argument. In fact, the Opposition's performance was pretty lamentable. It is difficult to think of any Opposition arguments that made any sense.
      This is a tremendous Budget, which has been widely welcomed. The Chancellor has done an excellent job. As we learned from a fax that was sent to a Labour Member by mistake, the new shadow Chancellor had to speak to a Back Bencher to learn about economic policy before he was able to make a speech. How many shadow Chancellors have the Opposition got through so far? I wonder how long the shadow Financial Secretary will be in place. Perhaps he will be the next to move on, or perhaps it will be one of the other Front-Bench spokesmen.
      We are not sure who decides the Opposition's economic policy. We do not know whether the Euro-sceptics agree with the Europhiles. Economic policy seems to be all over the place. But this Budget, and this Finance Bill, set the scene for a shift of resources from the better off to the least well off. There have been many other important developments. As was announced yesterday, a massive amount has been injected into the national health service to cut waiting lists, and money has also been provided to reduce class sizes. Lower taxes are being imposed on businesses: the Government are backing small firms to create jobs. Unlike the Opposition, we have thought in terms of long-term stability and investment, rather than boom-and-bust economics. Their approach to past Budgets has been characterised by short-termism. Having been through two recessions—and Black Wednesday—Opposition Members should not lecture us on economic competence. They made an appalling mess of the economy when they were in government, displaying their incompetence in a range of ways. We are having to pick up the pieces and clear up the mess that they made, which is shameful.
      As was said earlier, many aspects of the Budget have not yet been mentioned, although they mean a good deal to ordinary people such as my constituents in Halton. They suffered massively from unemployment and poverty as a result of the last Government's policies. There are tax cuts for all employees who pay national insurance contributions; child benefit has been increased by £2.50 a week—£130 a year—which is the largest increase ever; and the Government have provided working families tax credit, child care tax credit and a cut in the business tax rate. The tax cuts for employees who pay national insurance contributions will give them more than £65 a year, and families with children will gain more than £250 a year.
      A question was asked about families at Prime Minister's Question Time today: what has the Conservative party ever done for families? Nothing at all. This Budget does much more for them. The poorest 20 per cent. of families with children will gain an average of £500 a year. A family with a full-time worker will now be guaranteed take-home pay of £180 a week, and a couple with two children and an income below £17,000 a year will receive 70 per cent. of the maximum entitlement to child care costs. This Government care about families

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      and will do something for them, unlike the Conservative party. Families earning up to £30,000 a year will benefit from child care tax credits. That is superb.
      Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. I am not an expert on the Bill, but even I know—and the Financial Secretary confirmed it to me—that none of these measures is included in it. Is it in order for the hon. Gentleman to mention them on Third Reading?
      Mr. Deputy Speaker: It is normal to have a reasonably wide debate on the Finance Bill.
      Mr. Twigg: Thank you, Mr. Deputy Speaker. Yesterday, you were generous to the right hon. Member for Wells, who, when we were discussing the narrow and specific issue of the retail industry, raised wide-ranging issues of economic policy. I accept your ruling entirely. The Conservatives are now complaining about us. The problem is that they do not like to hear what I am saying: it upsets them, because they realise that they have done nothing, that they are in disarray and that their economic policy is in a mess. They do not like hearing the good news that we have given the people of this country. I am surprised by the Opposition's reaction. It is typical of their reaction to the Finance Bill. I am sure you are glad that you did not have to sit through all the debates, Mr. Deputy Speaker; unfortunately, others did.
      What upsets the Conservatives is that they could not cut corporation tax to the level that we achieved. In Committee, they came up with some spurious excuse for the fact that it had taken them 18 years to get the tax down to the level that they managed; but the point is that they did not reduce it to our level. They missed the opportunity, which is their problem.
      The guaranteed income provided by working families tax credit is particularly important. It should be put in the proper economic context. [Interruption.]
      Mr. Deputy Speaker: Order. I keep hearing hon. Members saying that the hon. Member for Halton (Mr. Twigg) is out of order. No one knows better than I do when someone is out of order, and the hon. Gentleman is not out of order.
      Mr. Twigg: Opposition Members think that Labour Members are programmed to say certain things. It may surprise them that an awful lot of us actually agree with what the Government are doing. When I stood for Parliament on the basis of our manifesto, I supported that manifesto—unlike some who asked for help from various business men who are anti-Europe. We will not go into that, however. We are not sure what the Opposition support. Their economic policy is all over the place. Their spokespersons on education and on health say that not enough money is spent and there should be expenditure increases. Their Treasury spokesmen say that we should reduce expenditure, but they have produced initiatives that would cost £6 billion or £7 billion. They cannot say where the money would come from for that, which merely shows the economic incompetence that they displayed over 18 years. [Interruption.]
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      Perhaps national insurance reform is near enough the Finance Bill for Opposition Members. The burden is being reduced on employers in respect of most workers, who earn up to £440 a week. That is encouraging job creation. The Tories never encouraged job creation; they used to decimate employment. The current structure of national insurance contributions means that they bear particularly heavily on the low-paid, and we are trying to help them. Our policy is about getting people into work and making sure that they stay in it. [Interruption.] The Conservatives are not interested in the low-paid; poverty reached record levels when they were in power. Currently, £1 extra in weekly earnings can attract £1.28 in employee contributions. An extra 1p paid to a worker can add £6.30 to contributions. The system acts as a disincentive to both employers and employees.
      Welfare to work is crucial to the Finance Bill. The Conservatives opposed the windfall tax on the utilities, but at the weekend we heard that Yorkshire Water would be paying its directors massive amounts of money. The Conservatives said that the windfall tax would cripple utilities, but they can still afford appalling massive pay increases for their directors.
      Mr. Denis MacShane: As he is a customer of Yorkshire Water, is the hon. Gentleman aware that the company has increased bills by 8 per cent. for those who do not have meters, which is well above inflation?
      Mr. Deputy Speaker: Order. The hon. Gentleman is certainly going wide of the Third Reading debate.
      Mr. Twigg: My hon. Friend makes an important point about the whole economic system, how the utilities operate within it and the mess left by the Tories. Some of the Tories' chickens are coming home to roost, and we will have to deal with them. We have to pick up the mess. They expect us to do that in a year, but it took them 18 years, two recessions and Black Wednesday to make the mess. I do not want to repeat all that, but the Tories seem to forget it.
      In Halton, where the unemployment rates for the young and the long-term unemployed are high—the demise of the chemical industry means that middle-aged men have problems finding jobs—the new deal for both the young and the over-25s will be very important. I have been to several meetings on the new deal for lone parents, and I have been told that the biggest disincentive to work for lone parents is child care. That message has come over clearly every time I have talked to a range of lone parents. Without exception, lone parents welcome the Government's initiative and the extra resources that we are providing.
      Important points can be made about the new deal. We are giving help to employers, and introducing special measures for people over 50 and for partners of new dealers. All that is crucial to improving our economic development and economic growth.
      Child benefits are another crucial part of our economic strategy. [Interruption.] They are about helping families. Children will gain an average £250 a year from the Budget. In 20 per cent. of the poorest households, children will gain an average £500 a year. Child benefits increases and equivalent increases in income support and other

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      benefits will help all families with children who do not already receive a high rate of benefit. Poverty affects large families worst. [Interruption.]
      Mr. Deputy Speaker: Order. Hon. Members, who remain seated, keep saying that the matters raised are not in the Budget. Perhaps I should refer them to "Erskine May" so that they may be clear on what is happening. "Erskine May" says that on Third Reading of the Finance Bill
      "some degree of latitude is frequently permitted",
      although that is not allowed on Third Reading of other Bills.
      Mr. Twigg: Your ruling and advice are, as usual, excellent and on the ball, Mr. Deputy Speaker. You rightly rebuked me yesterday, and you have made the point clear to the Opposition. They do not like to hear good news coming from Labour. They want to go on living in their own little world, away from reality. They are worried about their seats; in that case, they should support us.
      Child benefit is important to millions of families in the United Kingdom. The Conservatives are saying that those families are not interested in having another £2.50. [Interruption.] That is what they seem to be saying; they do not want to hear the news of a welcome and popular measure. After the Chancellor made his Budget statement, my local newspaper, the Widnes and Runcorn Weekly News, an influential newspaper read by many people in my constituency, did a vox pop interview with several of my constituents. The only person who did not welcome the Budget was someone who was not from the constituency and who was just passing through. My constituents welcomed in particular our child benefit measures. On petrol duty, they understood what the Government were trying to do about improving the environment. The Budget was welcomed by almost all those interviewed in the street on that day. Those were cold interviews. I did not set them up. I was not even there. Ordinary people stopped in the street welcomed the Chancellor's excellent Budget.
      Sometimes, I wonder whether the Conservatives ever talk to their constituents. They tell me that they have had hundreds of letters about measures in the Budget. That may be so, but I must tell them that I had precisely two letters on the Finance Bill. The Conservatives told us that we would be inundated, and claimed that we were sitting on letters and hiding them away. In the real world, that was not so. The hon. Member for Bognor Regis and Littlehampton seemed to be the Member for the whole of Great Britain when he began to read letters from as far away as Yorkshire, Bristol and the south-east.
      Mr. Jim Murphy: Dundee.
      Mr. Twigg: I am not sure that he went as far as Scotland.
      Mr. Ross Cranston: Dudley.
      Mr. Twigg: Dudley was mentioned. My hon. Friend figured large in the Standing Committee, where he made some excellent points.
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      To hear the Opposition, one would think that the people were rising from the streets in revolution, and banging on the gates of Parliament to tell us how disgraceful the Finance Bill was. I seem to have missed that.
      Mr. Deputy Speaker: Order. I have been able to help the hon. Gentleman on a number of occasions during his speech, but the Opposition's behaviour has nothing to do with the Third Reading of the Finance Bill.
      Mr. Twigg: I appreciate that advice, Mr, Deputy Speaker. I merely wanted to make it clear that our debates in Committee may have given a false idea of the real state of public opinion.
      The Budget is about economic stability, low taxes on work, help with child care, lower taxes on business and more money for health and education. It is a people's Budget, which will help to ensure that our country is prosperous, and that our economy is based on sustainable investment which will allow it to grow.
      5.38 pm
      Mr. Salmond: The hon. Member for Halton (Mr. Twigg) should know that complaining about politicians talking to anti-European business people might be interpreted as a grave sign of disloyalty to the Chancellor. In the environment created by new Labour, he should be careful about the allegations that he makes.
      I was moved to speak by what I can only describe as the triviality of the Financial Secretary's response to serious questions on the economy. When she was a Labour Back Bencher, she used to ask the then Administration, and her Front-Bench colleagues, serious questions about the direction of our economic policy. To respond to questions about the Finance Bill on its Third Reading—which are basically about whether, as amended, it is capable of dealing with our economic circumstances—by engaging in a yah-boo discussion on whether the Liberal Democrat spokesman was present at a meeting of the Committee or who said what to whom in Committee is inadequate.
      This afternoon, there was a private notice question on the extent of redundancies in the Borders in Scotland. The question mirrored announcements the length and breadth of the country as the industrial economy bleeds as a result of the exchange rate and the Government's total reliance on monetary policy as a means of demand management. The hon. Member for Halton seemed to think that there was a huge contrast between this Budget and economic policy over the past 20 years. I have been in the House long enough to have seen two previous occasions when the Government relied solely on monetary policy as the means of economic management. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) described a Tory Chancellor as a one-club golfer. We are in the same circumstances with the same reliance on the same policy instruments, and it will have the same result for the industrial economy.
      The Government's mantra is that this will bring about economic stability. I suppose that an industrial desert could be described as stability, but is there no recognition among Labour Members of the importance of manufacturing, of the competitive position and of the seriousness of the announcements that are made daily about job after job in every area and sector of the economy? [Interruption.] If the hon. Member for

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      Eastwood (Mr. Murphy) is so incapable of defending the Government's economic policy that he has to engage in economics of the actualité with youngsters on the "Trial By Night" programme, he should think carefully before appearing in debates in the House.
      The bleeding of the industrial economy, the competitive position of United Kingdom manufacturing, the inability to use any policy instrument beyond monetary policy to control the economy, and the impact that that has in constituencies the length and breadth of the country are serious matters.
      Mr. Burnett: The hon. Gentleman raises an important point. Does he agree that, if taxes had been imposed on consumption a year or so ago, we would not have the problems that he is adumbrating to the House? I, too, have had a factory closure in my constituency. At lunchtime today, 49 jobs were lost at Inch's cider factory in Winkleigh.
      Mr. Salmond: In the imbalance between taxes on consumption and between taxes on investment lies one of the key weaknesses in the Finance Bill. That imbalance, as well as the uncertainty over the Government's exchange rate policy and their approach to the single currency, contributes to the high level of sterling and the inability of key sectors of our economy to deal with the consequences of the exchange rate position.
      The previous Conservative Government used to argue that the jobs that were being lost, the sectors that were disappearing and the companies that were being downsized were the weaker sections of the economy and that the UK economy would be leaner and fitter after the process was complete. It was the same as arguing that we could improve the average health of the population by getting rid of everyone who could not run a four-minute mile. That would certainly improve average health, but the resultant population would be small. The argument is now repeated by Labour Members, who say that the diminution of the industrial economy will result in a leaner, fitter, more competitive manufacturing sector. However, the key economies, which have grown their manufacturing base, have not taken the attitude that they can dispose of entire industries and companies; they have used critical growth path to build up their competitive position to compete on world markets.
      The central charge against the Finance Bill and the Financial Secretary is that they are incapable of addressing the different positions of key sectors of the economy: the consumption and service sector side and the manufacturing and export sector side. Is there any measure in the Bill that accepts that there is a manufacturing recession while the consumer part of the economy is still moving ahead? What are the Government going to do about it?
      There is also the charge that the Government, like their Conservative predecessors, are unable to lift their vision beyond the south of England economy and consider how the regional economies in England and the Scottish, Welsh and Northern Irish economies are performing. It is ludicrous to argue that Scotland needs to restrain demand because of inflationary pressures in the Scottish economy. Where are the inflationary pressures that the interest rate
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      medicine in Scotland is designed to combat? As a modest start, it would help if the Monetary Policy Committee of the Bank of England included in its membership some people with direct experience of the sectors and regions of England and the nations of Scotland and Wales, to give some awareness that there is an economy that is suffering beyond Potters Bar.
      Mr. Douglas Alexander: Will the hon. Gentleman give way?
      Mr. Salmond: I shall not give way, and I shall tell the hon. Gentleman exactly why. There is more than a suspicion among Opposition Members that Labour Members are anxious not to move on to the next debate on student loans. I make no comment about House of Commons tactics, because I have used them myself, but the hon. Gentleman will forgive me if I do not assist him in delaying an embarrassing debate on student finance which many Labour Members do not want. [Interruption.]
      Mr. Deputy Speaker: Order. The hon. Gentleman should be allowed to make his contribution without interruption.
      Mr. Salmond: The serious points raised have been totally unanswered by the Government. They are blind to the economic circumstances faced in the Renfrew-Paisley economy and in many other areas across Scotland. There is no recognition that there is a serious economic problem which mimics the economic disasters provoked by the Conservative Government over the past 20 years.
      Mr. Alexander rose—
      Mr. Salmond: This may be the new Labour party, but, for the manufacturing economy, it is the same old policy measures and the same old results: redundancies, downsizing and the diminution of the manufacturing base.
      5.46 pm
      Mr. Leslie: I am grateful for the opportunity to speak on Third Reading. It is a pity that I have to say this, but it is a shame that the hon. Member for Banff and Buchan (Mr. Salmond), in his criticisms of Government policy and in seeking to bait the Government, was afraid to listen to the voice of the Government and to give way.
      Mr. Alexander: Will my hon. Friend give way?
      Mr. Leslie: I happily give way to my hon. Friend.
      Mr. Alexander: Does my hon. Friend agree that the reason why the hon. Member for Banff and Buchan (Mr. Salmond) was frightened to give way might have been that, although he talked much about the service sector in Scotland, he did not mention the Scottish National party researcher who has recently recommended a boycott of a service sector company in the Edinburgh financial community?
      Mr. Leslie: That is illuminating. Perhaps we will hear more about the SNP. As a Yorkshire Member, I would not wish to tread on the toes of the hon. Member for

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      Banff and Buchan, especially when he is not listening. The House looks forward to a contribution from my hon. Friend later.
      The Finance Bill is a strong step forward on public sector finances and the economy. It ensures that provision is made for public services, that resources will be available to ensure they are of a standard befitting the 21st century, and that we can move forward into a climate in which Government and state services are high quality, accessible to many people, and provided at the most efficient and effective rate, giving good value to taxpayers.
      Mr. Derek Twigg: I was taken by my hon. Friend's excellent comments on the public service ethic and his support for public service. In addition to this excellent Budget, does not the Chancellor's recent fiscal statement add extra strength and put down a marker to show how committed the Labour party is to public services?
      Mr. Leslie: My hon. Friend is correct. I shall deal with "the code for fiscal stability" later in my remarks. It is important for us to set in context the fiscal situation that the country now faces. I am pleased to see that the nation's finances are now getting into a healthy state.
      We are all familiar with the ridiculous profligacy of the previous Conservative Administration who, year after year, consumed taxpayers' resources. The leviathan of state swallowed up money in welfare budgets and social security payments unnecessarily, when we should have been using taxpayers' money to invest in infrastructure and job creation mechanisms to get people off benefit and into work. That would have reduced consumption of public sector resources, and enabled us to move on to other more productive public services.
      Mr. Alexander: Can my hon. Friend give the House any explanation of why the previous Government were able to waste such huge levels of resources rather than investing in success?
      Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I hope that the hon. Gentleman will not respond to his hon. Friend's invitation, which would take us well beyond the scope of this Third Reading debate.
      Mr. Leslie: I am grateful, Mr. Deputy Speaker. I do not wish to stray from the matters before the House today.
      It is important that, when we look at the context of the provisions in the many clauses of the Bill and the revenue effect that they have on the Exchequer, we should consider why it is necessary for the Government to start to change the direction of this great oil tanker of state and move away from the old consuming tactics of the previous Administration. Each unemployed person cost £9,000 in benefit and revenue lost to the Exchequer. If we can reduce the number of people unemployed and claiming benefit, and simultaneously reduce social security budgets, we can use the money for more productive elements, such as education and the health service. We can then make provision for better services over the long term.
      The fiscal state of the nation is becoming very healthy, thanks to measures in the Budget and the prudent and careful measures drafted and proposed by my right hon.
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      Friend the Chancellor. I am especially glad that provisions in the Budget help to shift from consumption to investment and, more important, to capital infrastructure investment. For example, I should like to see some of the capital infrastructure moneys raised spent on an important scheme in my constituency. The Bingley relief road is an excellent scheme, and it would be very helpful. The new priority of shifting from consumption to investment will, I hope, one of these days mean that resources come the way of my constituency to improve the economy in that way.
      We are making sure that we use the nation's finances for capital purposes as a priority. That is what is called the golden rule of borrowing. We do not borrow to consume, but use the nation's resources to invest in more productive things—obtaining assets for the nation and making sure that items of infrastructure can be used for industry and create economic prosperity in the longer term. That is the right course of action. My right hon. Friend the Chancellor has set the ship of state on the right course, and I am pleased to support him.
      The Budget and the Finance Bill contain many measures that modernise the tax and benefits system and begin to make work pay. I am pleased to see a number of fiscal policy measures put in place that give people the incentive and motivation to work and eliminate the poverty trap. It no longer makes sense for people to sit at home and claim benefit when there are opportunities for them to work and contribute to society. The Finance Bill plays a strong part in making those proposals a reality.
      The Bill also helps to set the framework for economic stability throughout the country, ending the boom and bust years of Conservative administration. It is interesting to note the robust opposition to the Finance Bill put up this afternoon by the Conservatives. They seem to have given way and caved in so soon in the Third Reading debate. It is important to emphasise that boom and bust was not sustainable. It was the wrong policy for the Conservative Government to pursue. It is right for my right hon. Friend the Chancellor to put in place measures to plan for the longer term. We no longer have an economy based on short-term greed and profiteering, which can sometimes arise in companies that do not always take the longer-term interests of the country into account.
      When we discussed monetary policy and inflation earlier, we heard about the difficult impact that boardroom excesses of companies such as Yorkshire Water would have on inflation. The company paid a 30 per cent. increase to its directors and a 69 per cent. increase to Kevin Bond, the chief executive. That was an outrageous example to set the nation. I hope that Yorkshire Water will reconsider that payment, given the outrage across all walks of life and the boardrooms of this country. Boardrooms have to recognise that they have a responsibility to play their part in prudent economic policy and control of inflation.
      Mr. Derek Twigg: There are many tax changes in the Bill. They are designed to encourage people into work and give them an incentive to work. How does my hon. Friend think that that fits with the point that he has just made about pay? Pay is important in ensuring that the measures in the Bill work to regenerate the economy.
      Mr. Leslie: My hon. Friend is right. The Tories sought to remove the Finance Bill from the wider context of the

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      other policy measures that the Government are taking, but those policies are an important component, and a crucial piece of the jigsaw in the Government's overall strategy. By ensuring that work pays by means of, for example, the national minimum wage and other such policies, and that the tax system reflects that strategy, the Government are pursuing the right policy.
      Many of the provisions in the Bill relate to the national debt and public sector borrowing. On Report, the Opposition tabled amendments about the definition of national debt. It is important that we examine the state of the country's finances now and in the past, and consider where we would like to take them. The Conservative party left the country with a national debt of hundreds of billions of pounds. That is costing the taxpayer, year on year, £25 billion in interest payments alone. That money could and should be used on vital public services that people like, and on investment.
      Mr. Jim Murphy: Has my hon. Friend noticed that the hon. Member for Banff and Buchan (Mr. Salmond), the leader of the Scottish National party, who spoke directly before my hon. Friend, has chosen to leave the Chamber?
      Mr. Deputy Speaker: Order. I am having some difficulty understanding how that relates to the narrow discussion of the Third Reading of the Finance Bill.
      Mr. Murphy: My hon. Friend and my hon. Friend the Member for Paisley, South (Mr. Alexander) said that they would allude directly to the comments of the hon. Member for Banff and Buchan. He refused to give way to my hon. Friend the Member for Paisley, South, and he has since left.
      Mr. Deputy Speaker: Order. That is nothing to do with the content of the debate. If there is any matter that is out of order, I hope that the Chair will be equal to it.
      Mr. Leslie: I am grateful for that guidance, Mr. Deputy Speaker. I hope later to deal with the points made by the absent Member for Banff and Buchan, and perhaps other hon. Members will do so.
      I was talking about the national debt, and the £25 billion of interest charges that the taxpayers have to raise year on year just to stand still. That is a great weight and burden hanging around the neck of the public. That £25 billion could have been put to good use if the Conservative Government had not run up such debt by borrowing to finance their policies. They should have followed the policies that are in the Bill, and ought to have abided by a code for fiscal stability by which borrowing is used only to finance investment. From now on, the nation must practise good housekeeping: we must not borrow unnecessarily.
      The Bill contains interesting clauses on income tax. I was a member of the Committee that examined the Bill and sat through many hours of Conservative comments and speeches. However, the Opposition did not table many amendments. Conspicuous by its absence was any mention by Conservatives that Labour has kept its promises on income tax, and has not increased the basic rate or the top rate. When people talk about Labour
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      breaking its promises, we must remind them that that is nonsense. Many years ago, Conservatives raised the spectre of a Labour tax bombshell, but people can see from the Bill that a Labour Government can be trusted with the nation's finances. The Government have delivered on the crucial income tax component of Labour's manifesto.
      I am glad to say that the Bill provides for a scheme that will greatly benefit the poorest countries in the third world. The scheme is called millennium gift aid. According to the Library, many hundreds of millions of extra aid will be channelled to the third world. In co-operation with the Organisation for Economic Co-operation and Development, and, I think, the United Nations, a list of those countries has been prepared. We must make sure that we use not only monetary donations but donations in kind by the public and businesses to help those who are less fortunate than ourselves.
      Mr. MacShane: In that context, does my hon. Friend agree that the country felt proud of a Chancellor who took the lead on the international financial stage? Does he also agree that that is in complete contrast to the mean and continuing cuts in overseas aid by the Conservative Government? The Chancellor's song resonated around the world, and at long last Britain could be proud.
      Mr. Leslie: My hon. Friend is right: it was refreshing to read the Chancellor's comments in the Mauritius mandate. Through the millennium gift aid strategy and by other means, he took great steps to reduce the debt burden in third-world countries. I was pleased to note the Chancellor's generosity in the Bill. When we have the opportunity, we should shout about such achievements.
      The Bill contains provisions for savings and investment. The Government are implementing strong policies to encourage saving and to make sure that we continue to provide generous tax relief to TESSAs and PEPs. That will be continued in a broader savings vehicle, the individual savings account, which will contain a wider variety of products.
      Mr. Love: Does my hon. Friend agree that it was outrageous that, before Labour came to power, more than half our people had no savings, and that the previous Government did nothing to change that?
      Mr. Leslie: That important point needs to be underlined. Encouragement for people to make pension provision has been lamentable. The Conservatives did nothing about that, and the spectre of unfunded pension liability grew year by year. They made no provision for people who had not been encouraged to save.
      Thankfully, the Government's policies go a long way towards making savings more accessible, through a wider range of vehicles, and also more understandable. For example, there are welcome plans to make ISAs available in supermarkets and at other public interfaces. Ordinary people, not just those who can understand the fine print of TESSAs and PEPs, unit trusts and open-ended investment companies, will be able to save. It is a pity that there are not more OEICs.
      Mr. Derek Twigg: My hon. Friend deals with an important part of the Bill. We have been accused of

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      making U-turns. Does he agree that we engaged in extensive consultation on savings and listened to people, and that the Opposition criticised us for doing so?
      Mr. Leslie: That is correct—you're damned if you do and damned if you don't. Many people are cynical about politics, and that arises from the fact that 18 years of so-called consultations were completely hollow. The previous Government made up their mind before they consulted. They went through the motions and engaged in a mechanistic process every other day. It is refreshing that this Government listen to responses, reflect on them and incorporate them in their policies. The principles of ISAs have been carried through, and the detail reflects the views of those who responded to consultation. The Bill goes a long way towards making ISAs a reality.
      There has been discussion of inheritance tax and historic buildings. In Committee, Conservative Members sought in their old traditional way to defend the rights and privileges of the wealthy elite. They tabled amendments to preserve a loophole in the law that gave such people unnecessary benefits and denied the wider public access to objets d'art.
      The hon. Member for Guildford (Mr. St. Aubyn), who is not in his place, spoke about his contribution to the nation's history. He asked hon. Members to consider what a great philanthropic soul he was. He said that he opened his house, and that letting people "traipse" through the drawing room showed that "one was egalitarian".
      Mr. Deputy Speaker: Order. The hon. Gentleman is drifting.
      Mr. Leslie: I may be drifting, but the point I was seeking to make was the lack of reality forthcoming from the Opposition during the debate on the Bill in Standing Committee.
      Sir Robert Smith: While the hon. Gentleman is on that issue of the Bill, does he recognise that, while there might be concerns to tighten loopholes, any legislation must be careful not to be retrospective? If someone has entered into an agreement with the state to do something in return for a tax concession, to revisit it could be considered retrospective. The matter must be carefully considered, case by case and on its merits. We must ensure that abuses do not arise, but we must recognise that there are genuine individuals who have a contract with the state, which should not be abused.
      Mr. Leslie rose—
      Dr. Palmer: Will my hon. Friend give way on that point?
      Mr. Leslie: May I pursue the line of argument?
      This is not a private business agreement. This is the Government making decisions in the best interests of the overall economy. It is perfectly within the remit of the public sector and the Government to look at the varied effects of taxation, making sure that the best, most efficient and most effective deal can be got for the taxpayer. Clearly, throughout the passage of the Bill, the Liberal Democrats, making pledge after pledge and
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      spending commitment after spending commitment, never understood that they needed to raise some money to subsidise their giveaway bonanza.
      Dr. Palmer: Does not my hon. Friend agree that the Opposition are stretching the concept of retrospective taxation when they talk in those terms, because, on that basis, one could say that any Member of Parliament should be able to object if the taxation rate on the salary that we had been led to expect were to be different after a year or two? Surely that would be unreasonable. Any financial arrangement that one may make with one's employer is on the understanding that external events, such as inflation under a Conservative Government, higher taxation under the Conservative Government or other events in government or outside, could affect it.
      Mr. Deputy Speaker: Order. The hon. Gentleman is abusing the terms of the Third Reading debate, wide though they may be. As he has only just come into the Chamber, perhaps he should take the temperature first. Mr. Christopher Leslie.
      Mr. Leslie: Thank you, Mr. Deputy Speaker. The comments of my hon. Friend the Member for Broxtowe (Dr. Palmer) speak for themselves, and strongly bat down the ridiculous comments of the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith).
      Sir Robert Smith: Will the hon. Gentleman give way?
      Mr. Leslie: Well, just this once.
      Sir Robert Smith: The hon. Member for Broxtowe (Dr. Palmer) talked about events in the future, whereas I was talking about revisiting agreements that had already been entered into, where the state should tread carefully on the precedent that it sets on how it will behave in future. Agreements depend on both sides honouring them.
      Mr. Leslie rose—
      Mr. Deputy Speaker: Order. Perhaps the hon. Gentleman will revisit the Bill.
      Mr. Leslie: The Bill did indeed tread carefully, as the hon. Member for West Aberdeenshire and Kincardine suggests we should, in relation to this measure. It trod a steady course in ensuring that provisions were fair and equitable, in the spirit of the Government standing up for the many, not the few.
      Mr. Love: I echo that sentiment. When the intervention took place, my hon. Friend was talking about conditional access agreements. Does he agree that those had fallen into disrepute, to such an extent that the signatories to the agreements did not need to make access available to the public? Therefore, any talk of retrospection is an argument against honourable change.
      Mr. Leslie: Absolutely—an honourable change indeed. In fact, a Channel 4 programme, "The Mark Thomas Comedy Product", highlighted the abuse practised by some people exploiting this loophole in the law. The Bill

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      has now tidied up the loophole. It is good to see yet again the Government responding to the concerns of a variety of people, including comedians.
      I want to look at other clauses of the Bill, in particular other tax—
      Mr. Barry Gardiner: Before my hon. Friend moves on from that point, we had an important discussion during the Committee stage of the Bill, and I want to pick up the challenge that the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) has issued on retrospection. Clearly it is one thing for parties to a contract unilaterally to change that contract. It is another thing for the Government of the day to say that they will give certain reliefs to people who engage in certain behaviour, but it is, of course, always open to Government to say that that relief, or relief in that form, will no longer be available—
      Mr. Deputy Speaker: Order. This is not an intervention on the speech by the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith). It is the hon. Member for Shipley (Mr. Leslie) who is speaking at present. That is far too long. Mr. Christopher Leslie.
      Mr. Leslie: Thank you, Mr. Deputy Speaker. I think that the point made by my hon. Friend the Member for Brent, North (Mr. Gardiner) was enlightening and useful for me. I should be interested to hear his contribution later in the evening.
      We have referred to the hon. Member for Guildford and his drawing rooms, and perhaps Fallon and his salons, but the clause that closes the loophole for heritage buildings, and other abuses on historic objets d'art throughout the country that enjoy tax relief, is an important measure that will be met with wide public acclaim—almost delight.
      The foreign earnings deduction is one of the tax loopholes closed by the Bill. Throughout the Standing Committee, the Opposition made much play of the fact that somehow that is a great injustice. I cannot see how the deduction is fair for the good taxpayers of this country—the taxpayers who work day in, day out, paying their income tax and national insurance through pay-as-you-earn and other facilities. Why should they pay their taxes in full when so many people have the opportunity to exploit that deduction, by means of which they pay no tax in this country, and often no tax in the country where they work?
      I cannot understand why the Opposition feel that this is a great rallying cry with which to go into the next election. We have a loophole whereby the super-rich have been exploiting the previous Government's wholly inadequate financial regulations by not paying any tax in this country. They remain residents, and are happy to call themselves British citizens, but they do not contribute to this country's public services. That is the important thing.
      I do not mind paying my taxes. I can see the connection when I pay my tax, with the money going into the health service, schools, transport networks, and many other beneficial public services such as housing and social services. People need to recognise that it is not fair for
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      those people to earn sometimes many millions of pounds yet pay no tax, so that the burden lies on the shoulders of the rest of us who live and work in this country.
      Mr. Love: Does my hon. Friend agree that all the concern expressed by Opposition Members during discussion of this issue about charity workers and others whom they would consider to be badly paid employees working abroad, does not square well with the excess £80,000 limit? As that can be doubled over two tax years, people living in this country can earn more than £160,000 tax free.
      Mr. Leslie: Indeed. I have made a point about the revenue that we can gain by closing the loophole—£300 million will be raised by closing that loophole alone. I ask hon. Members to reflect on the uses to which that sum might be put in their constituencies, and the public service benefit that could be gained by removing the exploitation made possible by that loophole.
      Mr. Derek Twigg: My hon. Friend has so far made an excellent speech. The specific point that he was making was on the overseas foreign earnings deduction. Had the Opposition's amendments on the matter been passed without any explanation about where the revenue would be raised, would they not have created a black hole in the Finance Bill?
      Mr. Leslie: That has been the central focus of my work on the Finance Bill. Although Opposition Members may have thought that Government Members were not speaking to the Bill as much as we should have done, I was taking very careful notes on every one of the amendments that they tabled, to determine the possible effect on the Exchequer's revenue if they got their way in the Bill. I shall deal with that point a little later in my speech.
      Mr. Deputy Speaker: Order. I should tell the hon. Gentleman that he may discuss only what is in the Bill, not what might have been in it.
      Mr. Leslie: I am very grateful for that guidance, Mr. Deputy Speaker, and shall ensure that I bear it very much in mind throughout my speech.
      Mr. Jim Murphy: I have been listening with some interest to my hon. Friend. I wonder whether, in Committee, much consideration was given to some prominent individuals in the United Kingdom, such as Baron Vestey, who in one year paid only £10 on profits of £2.3 million? It is a very uncomfortable situation for a Baron in another place to be able to act in such a manner. May I encourage my hon. Friend to investigate—if not today, then in future consideration of financial regulations—that very issue?
      Mr. Leslie: The issue is very important. Closing such loopholes and ending exploitation of tax regulations by the rich and their accountants—who manage to examine the small print in all financial regulations—has been a success of the Government's approach to the issue. It is a pity that the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) is not in the Chamber. My hon. Friend the Member for Croydon, Central (Mr. Davies)

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      was very successful in comparing the accountancy profession with the bean-counting trade. Although I would never want to draw such a comparison, perhaps my hon. Friend will do so again later in this debate.
      Although it is small, clause 116 demonstrates the Government's open-government attitude—which has itself ensured that, even in the hallowed halls of the Treasury and the Inland Revenue, Labour has been making provisions to fling open the doors, clear out the cobwebs and open up those institutions to the wider public, so that there can be better information about taxes and revenue.
      Mr. Derek Twigg: It is the people's Treasury.
      Mr. Leslie: Yes.
      Clause 116 provides for people to claim tax relief from the Inland Revenue by telephone. Taxpayers across the country—including me—who are sometimes confused by their tax affairs, will now be able to pick up a telephone, speak to a friendly tax officer, explain their predicament, and, I hope, receive a very simple and common-sense solution. The facility will be available very shortly to most of the public.
      A pilot study—which the Bill provides should begin in Scotland—of telephone claims will be conducted for the Inland Revenue.
      Ms Helen Southworth: Does my hon. Friend agree that enabling claims to be made by telephone is one of the many measures that the Government are considering and starting to implement to reduce the burden on industry and business, and that reducing that burden is very important to industry and business? Does it not also once again demonstrate that the Government are not only listening but taking action?
      Mr. Leslie: That is right. One thing that businesses in my constituency complain about most to me is the endless number of hours they have to spend writing letters and filling forms, simply to run their business. Although we heard much from the previous Government about deregulation and cutting bureaucracy and red tape, they never did much about it. In a small but significant way, this Government are showing in clause 116 how we can cut red tape, and that, instead of having to write a letter, it is possible to pick up a telephone, call the Inland Revenue and begin to make a claim.
      One reason for locating the pilot study call centres in Scotland is that the Scots have a friendly, trustworthy accent. Across the country, focus groups and opinion polls on developing call centres have shown that the Yorkshire accent is also considered to be a very trustworthy, prudent and commendable one. I suggest to Ministers that, if they want to extend the pilot study to other areas, they should perhaps consider locating one call centre in Yorkshire—perhaps in my own constituency of Shipley, where we have many Inland Revenue employees and very large Inland Revenue offices. A centre would be more than welcome, and I am sure that it would be a very successful venture.
      The Finance Bill contained many other measures—not all of which I seek to speak to, of course. However, the provisions on landfill tax have to be mentioned. The tax was introduced by the previous Government, yet it has
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      required some of this Government's attention. Recently, under the ten-minute rule, I introduced the Drinks Container (Redemption) Bill, which would reduce landfill across the country. I hope that that Bill is successful. However, I am pleased to see that the Finance Bill makes provision to ensure that landfill is not an easy option.
      I have several quarries in my constituency—such as Manywells—that have been used for landfill, and have caused great concern to local residents. Currently, a planning application to establish another quarry in my constituency—at Buck Park quarry, in Denholme—is pending. Residents in Denholme—where I recently attended a residents' meeting—are very concerned that the site will be approved for landfill, simply because, as a nation, we throw away too much refuse and do not recycle as much as possible.
      We should be encouraging people—actually providing them with incentives—to recycle, while simultaneously moving waste management strategy from use of landfill sites towards a better solution. I am pleased that the Bill makes such positive provisions to deal with landfill.
      Mr. Love: Does my hon. Friend agree that, for the environmental reasons he has outlined, there is increasing resistance among our rural communities—which are represented mainly by Opposition Members—to increased use of landfill? Does he also agree that the landfill tax is one signal that the Government can use to try to deal with the problem?
      Mr. Leslie: My hon. Friend is quite right. However, not many Opposition Members represent rural communities; Labour Members represent most of them. We are the ones who will have to consider those issues.
      I conclude by contrasting the strategy chosen by Ministers in piloting the Finance Bill through the House with the amendments tabled and proposals made by the Opposition, and with the effects that those amendments and proposals would have on the nation's finances if they were ever to be implemented in future Finance Bills. I hope that they do not, which is why we need to give the Bill a Third Reading.
      The Conservative party tabled many amendments, which involved a total of £5.9 billion—
      Mr. Deputy Speaker: Order. I have already told the hon. Gentleman what he can and cannot do, but he may just have forgotten.
      Mr. Leslie: No, I had not forgotten, but I accept your guidance, Mr. Deputy Speaker.
      I was trying to contrast the Government's strategy as outlined in the Bill, which is to secure this country's financial and fiscal base and to make sure that sufficient revenues are raised and that fiscal tightening—
      Mr. Deputy Speaker: Order. Perhaps I can help the hon. Gentleman further. On Second Reading it is possible to talk about what is not in the Bill as well as what is in it; on Third Reading it is permissible to talk only about what is in the Bill.
      Mr. Leslie: Indeed. What is in the Bill is the strategy to secure the fiscal situation, a strategy that would not have been adopted by the Conservatives or the Liberal

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      Democrats. The Liberal Democrat party proposed amendments that would have cost £17.5 billion, and the Conservative party's proposals totalled £5.9 billion. Both parties left a black hole in their budgets. We do not know where they thought they were going to get the money from, and how they were going to pay for their commitments. I hope that my hon. Friends will tackle that important matter.
      6.30 pm
      Mr. Edward Davey: I am sure that members of the public sitting in the Gallery will be astonished by this debate, as they may not be used to the filibustering tactics sometimes in evidence in the House. The hon. Member for Shipley (Mr. Leslie) was clearly filibustering, although the occupant of the Chair did give some rulings about what is and what is not in order in a Third Reading debate. You, Mr. Deputy Speaker, have shown significant flexibility and tolerance to the hon. Members who have spoken so far.
      I shall refer specifically to an issue that was not debated fully in Committee—partly, I understand, because of a misunderstanding between the Whips at a late hour. It could not be debated on Report, because the relevant amendment to which I would have liked to speak—amendment No. 43—could not be selected. It is a key issue that the Bill does not cover properly. It relates to the proposals on insurance premium tax.
      The Bill contains some measures—
      Mr. Deputy Speaker: Order. Amendment No. 43 was outside the scope of the Bill, which is why it was not selected. I have to tell the hon. Gentleman, just as I told the hon. Member for Shipley (Mr. Leslie), that he must now talk principally about what is in the Bill. There is some latitude, but that is where the focus must be.
      Mr. Davey: Thank you, Mr. Deputy Speaker. That is why I want to raise the issue on Third Reading. The Bill tries to deal with what are called selective rates for insurance premium tax, but it does not do so properly. It is important that the House should recognise that, because the Bill's failings in this respect mean that the House should not give it a Third Reading.
      The matter was brought to the attention of the House by the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) on 27 January. His points were not answered properly in that Adjournment debate, although he made them succinctly and they could have been dealt with more effectively.
      For some time now, there has been disquiet about the effects of the higher rate of insurance premium tax introduced by the previous Government in the Finance Act 1997.
      Mrs. Liddell: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is speaking about insurance premium tax. This afternoon, an amendment relating to IPT, which had been tabled by his colleagues, appeared on the
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      amendment paper, yet at no point did they seek to move or speak to it. Is it appropriate for the hon. Gentleman to debate the matter now when he did not do so then?
      Mr. Deputy Speaker: That is not a point of order for the Chair. I have already given a ruling to the hon. Member for Kingston and Surbiton (Mr. Davey), and I shall be listening carefully to see that he sticks to it.
      Mr. Davey: Thank you, Mr. Deputy Speaker.
      The higher rate was introduced to tackle alleged avoidance of value added tax in the form of "value shifting" on a few goods and services relating to the travel, domestic appliance and motor vehicle industries. Many people feel that the case for this particular anti-avoidance legislation, which is referred to in the Bill, was never properly made, and that at the very least the previous Government were taking a sledgehammer to crack a nut. As the Financial Secretary herself asked on 6 February 1997:
      "Why have the Government taken a broad-brush approach that is likely to catch innocent commercial interests?"—[Official Report, Standing Committee B, 6 February 1997; c. 177.]
      Whether or not there was avoidance in the form of value shifting that needed to be tackled, there is no doubt about the damaging effect of the selective higher rate of insurance premium tax introduced by the previous Government. By distorting competition between direct insurers and retail companies that also provide insurance, it has hit several sectors very badly, not only hurting commercial concerns but reducing good consumer protection practices. Indeed, the Government admitted as much in the Budget, but with respect to the travel industry alone.
      In clause 144 the Government have chosen to level up the rate of insurance premium tax for all travel insurance, recognising the distortion to trade that the selective rate had caused. My contention is that the Government should have considered the other sectors affected by this selective tax—the domestic appliance and motor vehicle sectors—using the same rationale that convinced the Financial Secretary to review the impact on the travel industry, as she has done in clause 144. I believe that European Union law may soon force the Government to address the problem, whether they like it or not.
      Dawn Primarolo: If this issue is so important to Liberal Democrat Members, why were they not here this afternoon to move the relevant amendment?
      Mr. Davey: As I have already explained, I was disappointed to learn that amendment No. 43 was out of order. That is why I am now raising the wider issues involved.
      The recent victory of Lunn Poly against the original introduction of the selective premium tax is especially germane to my point. The European Court found that the higher rate of IPT was incompatible with Community law to the extent that it constituted state aid under article 92(1) of the relevant EC treaty, and that the United Kingdom Government had not notified the Commission of that as they were supposed to.
      As the Financial Secretary told the Standing Committee, Customs and Excise is appealing against that decision. It asserts that it has no implications outside the

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      travel industry, but many people outside the House do not share that opinion. Indeed, hon. Members may be interested to hear that the European Commission itself is not sure of the legality of the remaining selective rates. In answer to a question from the Liberal Democrat Member of the European Parliament, Graham Watson, Commissioner Monti said on 8 June:
      "the Commission has been in contact with the British authorities and is still assessing the compatibility of a selective IPT with Article 92".
      Although the Minister may not wish to comment in detail on the matter because it is sub judice, I hope that she will at least admit to the House that the European dimension is a factor that will have to be considered in any review of the remaining selective rates, in addition to issues of fair competition. It is to those issues that I now turn, as they are especially germane to the Bill.
      When the Financial Secretary replied to the debate initiated by the hon. Member for Galloway and Upper Nithsdale on 27 January, she did not reply to a large number of the substantive points that he made about the effect of the tax on the electrical retail industry and the motor retail industry. She was expansive in respect of the travel industry, and we can perhaps now see why, but I should like to draw her attention and that of the House back to the other affected sectors.
      The first is the electrical retail sector. There is a great deal of evidence to suggest that the value shifting that Customs and Excise suspects has been taking place in the sector has not been happening, and that the tax is therefore not necessary. Some of the evidence was cited by the Financial Secretary herself in a debate on the Finance Act 1997. Other evidence was put forward by the hon. Member for Galloway and Upper Nithsdale in his debate: he quoted the report of the Monopolies and Mergers Commission on the supply of domestic electrical goods, which is directly relevant, as it argues that, far from reducing the price of electrical retail goods, companies have been keeping prices artificially high.
      The Government cannot have it both ways. Either prices are being kept low to avoid tax, with value being shifted on to related insurance policies to avoid VAT, or prices are being kept high, as the President of the Board of Trade seems to accept.
      The Government collectively seem confused on the issue, but the result of that confusion as regards insurance premium tax is serious damage to United Kingdom companies in terms of lost business and lost jobs. Last year, the Financial Secretary herself cited the examples of Thorn and Granada, which, between them, have lost an estimated £20 million and around 800 jobs across the country.
      Ironically, the compliance costs to the sector have been exceedingly high. High-street television rental companies were forced to write to all customers explaining the change and to produce new contracts for customers wishing to renew. That exercise cost around £1 million, and the firms lost business. As a result, many electrical products are now sold without insurance cover. That diminishes the protection to the consumer, who may or may not go to a direct insurer. Of course, direct insurers are keen to step into the breach and are marketing themselves strongly to gain the business. However, many consumers will not have the same protection as before.
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      The Association of British Insurers has issued a general information sheet encouraging customers to buy insurance from direct insurers, as opposed to one-stop shopping. It poses the following question:
      "So how can I avoid paying the higher rate of IPT?"
      The response makes clear the intentions of the industry:
      "By not buying your insurance from the same place you buy your domestic appliance".
      What greater evidence does Customs and Excise need of how the higher rates of insurance premium tax are distorting the market? What right does Customs and Excise have to do that? I hope that the Minister will examine the way in which officials looked at the case of the high-street electrical sector, as she was prepared to do for the travel industry. It has been unfair and almost vendetta-like.
      Mr. Alasdair Morgan: Does the hon. Gentleman agree that many people outside the House who listened to Labour in opposition might have expected more from this year's Finance Bill? Unfortunately, it is yet another example of Labour saying one thing in opposition and doing something else in government.
      Mr. Davey: I am grateful to the hon. Gentleman for that intervention. He makes a telling point. However, the Government deserve some credit, as they have made some progress on the travel industry. We should not be churlish, as we welcome that. Unfortunately, however, they have missed two major sectors, and that is causing great problems.
      The second sector that the Government have failed to address is the motor vehicle retail sector, to which similar arguments about the problems of unfair competition and reduced consumer protection apply as a result of the failings of the Bill. I want to highlight consumer protection, as that aspect is particularly worrying.
      As a result of its insurance policies attracting the higher rate of tax, as much as 50 per cent. of the motor vehicle retail industry has switched from issuing insurance policies to issuing warranties with its cars. The significance for consumer protection of that trend can best be appreciated if we examine the distinction between an insurance policy and a warranty. In essence, a warranty is an undertaking by the seller as to the condition of the property, and an undertaking that future deterioration of that condition will not arise. On the other hand, an insurance contract indemnifies the insured against loss or liability if and when such deterioration occurs. So the cover is different. A warranty is less attractive because it is not usually provided by a third party. If the seller goes broke, the warranty becomes useless. The consumer is protected only in so far as his or her supplier does not go bankrupt.
      Dawn Primarolo: I am perplexed by the hon. Gentleman's concern about this subject. Will he say when he raised it in Committee and where were the relevant amendments? Third Reading is not the appropriate time to raise the issue. I do not remember his mentioning it in

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      Committee, and no amendment is mentioned in Hansard. Nor was the hon. Gentleman here to move his amendment earlier today.
      Mr. Davey: The Financial Secretary may recall that the clause in question was debated very late at night when the Whips failed to make a proper agreement, so the argument remains germane and it is important that it is heard.
      Dawn Primarolo: Is the hon. Gentleman saying that the issue is extremely important to his party except when he needs sleep or cannot get here in time for a debate?
      Mr. Davey: The Minister does not seem to want us to raise the matter, and that is unfortunate. She was happy to raise it when she was in opposition, but now that her party is in government she does not want to hear about it. The hypocrisy is on her side for not addressing the issues now that she is in power.
      The move away from insurance policies to warranties by many motor vehicle retailers—driven by this selective rate of tax—is seriously reducing consumer protection in this country. If the Minister is concerned about the state of the country's finances, she ought to listen. The Exchequer may lose even more money than it did from any previous tax avoidance—if such avoidance was occurring—because of the shift to warranties which fall outside the tax base. How ludicrous it is to have an anti-avoidance measure that reduces the revenue to the Treasury and exposes the ordinary citizen to greater risk.
      So what is the solution? I believe that levelling down to 4 per cent. is the best solution, mainly because I do not believe that there should be any selectivity in principle.
      Mrs. Liddell: Will the hon. Gentleman give way?
      Mr. Davey: I have given way several times and I am now coming to the end of my speech.
      Mrs. Liddell rose—
      Mr. Davey: I am not giving way—[Interruption.]
      Mr. Deputy Speaker: Order. We cannot have barracking from the Government Benches. The hon. Gentleman is entitled to be heard.
      Mr. Davey: I believe that levelling down would be the best approach and that, in practice, such a reduction, by ending the switch to warranties, would net more revenue for the Exchequer, for the reasons that I have outlined.
      I hope that the Financial Secretary will address the points that I have raised. She seems to think that it was somehow illegitimate to raise them, but they are extremely important because they affect jobs and businesses outside the House. Whether the Government like it or not, they must address the issues, and I hope that they will have the courtesy to do so tonight.
      6.47 pm
      Mr. MacShane: It is a pleasure to speak in tonight's Third Reading debate. For four years, I served on the Standing Committee considering the Finance Bill. In my view, it is the most interesting Standing Committee on which to serve because taxation represents the contract between the citizen and the state: it defines the relationship between the two and reaches into every corner of our existence. I regret that I have had to serve elsewhere for the last year, but no doubt one day my right hon. Friend the Prime Minister will release me from those duties, unpaid and unimportant as they are, so that I can return to my first love—tax and the Standing Committee.
      I pay tribute first to my right hon. Friend the Chancellor, who has shown himself to be a fiscal Clausewitz. Clausewitz was the man who advised Napoleon at Austerlitz and then told him not to go to Moscow, but the French do not always take good German advice. Clausewitz believed in the concentration of forces. The Budget is the first in many years to focus hard on the key problems of the economy.
      I should like to pay tribute to two personal friends—my hon. Friends the Financial Secretary and the Economic Secretary. Remarkably, having take a 450-page Bill through late-night sittings—we have heard from the hon. Member for Kingston and Surbiton (Mr. Davey) that the Liberal Democrats are the Horlicks party; once it gets late, off they go to bed—my two hon. Friends, unlike many of their fellow Ministers, appear, at the end of their dreadfully busy first year, to be younger than ever. That shows that Tory replacement therapy works. I look forward to many years of service from them on the Front Bench, and to their getting younger year by year.
      The hon. Member for Kingston and Surbiton spoke eloquently and in some detail. He was not present in Committee to vote against the clause to which he was referring, and was not here earlier to move his amendment. No doubt he was taking his Horlicks somewhere else. He is wrong on his narrow point about insurance premium tax. It used to be said before the last election that the Conservatives were the party of garage owners—I think that they were described as the garagiste tendency. The hon. Gentleman is speaking up for the garage owners of Britain because they cannot make a little extra on selling insurance. He should also explain whether he is now representing Dixons, because he was doing valiant battle for electrical retailers. That is all the more interesting, given that Sir Stanley Kalms, the boss of Dixons, is leading some ludicrous anti-European crusade. There we have the Liberal Democrats—all things to all men.
      Mr. Davey: The hon. Gentleman clearly was not listening to a word I was saying. I was speaking up for the ordinary consumer, who will lose out because of selective higher rates of insurance premium tax. The hon. Gentleman should be worried about that, because I am talking about his constituents.
      Mr. MacShane: The ordinary consumer—or those who shop in Dixons—would be better served by a boss of Dixons who cut his prices rather than spending all his money on a crusade against Europe. We have had enough from the Davey lamp for the time being. There is very little illumination from that source.

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      I should like to focus briefly on how the Budget has affected my constituents. Rotherham is a great manufacturing centre. It still has Europe's biggest and most productive engineering steel plant. New firms are being created there. During the years in which I had the honour to serve the people of Rotherham before the last election, I often heard their demand for stability in the economy. We talk about the Tory 18 years or 19 years or whatever it was, but even before then my constituents suffered on an endless rollercoaster of inflation rates, interest rates and, of particular importance to my constituency, exchange rates.
      The former Chancellor popped in for a brief chat—I see that his would-be successor, the right hon. Member for Wokingham (Mr. Redwood) has just appeared on the Front Bench. It is good to see him taking some time off from his new outside earnings. The Benches behind him are empty, because the Conservatives have given up on opposition. I thought that the constitutional duty of the Opposition was to oppose.
      Mr. Deputy Speaker: Order. The hon. Gentleman is indulging in a great deal of embroidery. He should come back to the Third Reading of the Finance Bill.
      Mr. MacShane: I do not want to plunge into the outside earnings of the Conservative party, Mr. Deputy Speaker.
      Steel exporters had problems because between May 1990 and May 1997, the exchange rate of sterling against the deutschmark changed no fewer than 87 times. No exporter or manufacturer buying goods from the continent could live with that endless change. I know that the cliché "boom and bust" irritates the Conservatives, but I am happy to repeat it, because an awful lot of mud has to be thrown against a wall—even the empty wall opposite me—before it begins to stick. My right hon. Friend the Chancellor is searching for stability. I hope that he keeps to that aim.
      There were disappointments for me in the Budget. I am a great believer in employee share ownership. I took a delegation to see my right hon. Friend and had an interesting meeting on the subject. There was nothing in the Budget on that, but I hope that the Government may come back to it. We must spread the fruits of people's work not just in wages, but in their share in the company for which they work.
      The search for stability is an obsession of the Treasury Front Bench. I admire that. It contrasts with the flippant ups and downs of Budgets that I scrutinised as an Opposition member of Standing Committees considering previous Finance Bills. The Budgets of the previous Chancellor were like a Christmas tree—I think that that was the metaphor of the hon. Member for Gordon (Mr. Bruce)—decorated with all sorts of funny baubles in an attempt to attract votes here, there and everywhere. The British people saw through that meretricious dishonesty and kicked him out. Since then, the Opposition have had considerable difficulty in deciding on their strategy. They have removed one shadow Chancellor, but we are still waiting for some impact from his successor.
      Mr. Deputy Speaker: Order. I am still waiting for the hon. Gentleman to come back to the Third Reading of the Finance Bill.
      Mr. MacShane: I am particularly impressed by the Bill's step-by-step approach. Making work pay affects my
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      constituents more than any other issue. Achieving that at the marginal rates of tax that we inherited from the Conservative party proved all but impossible. The Chancellor's two Budgets have shifted the burden of taxation, so that work is subject to less tax, and unearned income and capital takes a fairer share. The working families tax credit is a move towards lifting the burden of taxation from the lower-paid. In 1950, a married worker with two children had to earn 107 per cent. of average industrial earnings—about £20,000 in today's money—before he paid any tax; and we wonder why the Attlee Government were so popular. Until the end of the 1960s, the state took 30 or 35 per cent. of gross domestic product in tax. My right hon. Friend the Chancellor is taking us back to the golden years of stability, employment, growth and investment.
      Ms Sally Keeble: Will my hon. Friend give way?
      Mr. MacShane: My hon. Friend must be quick; I want to sit down.
      Ms Keeble: My hon. Friend has raised the point about making work pay. Does he agree that the £10 extra that the combined effects of the Finance Bill put into every average family's pocket in my constituency as a result of changes in tax structures will be extremely welcome, and is in complete contrast to the figures that Conservative Members have bandied about?
      Mr. MacShane: The Conservative party was the party of the rich. Labour is the party of middle England and working England, Scotland, Wales and Northern Ireland—people who seek to earn an honest living and to amass savings that guarantee their future.
      The step-by-step approach is sometimes so silent that one does not detect it happening. My right hon. Friend the Chancellor is a sort of stealth bomber, coming quietly over the horizon, taking as much money as is necessary, but not too much, and dropping his bombs on the irrelevant Opposition. I wish him well. I know that the Budget was welcomed by the business community, working families and the poor of my constituency.
      Mr. Gardiner: Will my hon. Friend give way?
      Mr. MacShane: If I may, I should like to finish. [Interruption.] Well, I could carry on. I wish the Finance Bill a handsome and solid majority on Third Reading.
      7 pm
      Mr. Malcolm Chisholm: As someone who served on several Committees that examined Finance Bills in the previous Parliament, it gives me great pleasure and pride to speak about this Bill, which is in such marked contrast to the Bills that we opposed over those years—contrary to the view given by the hon. Member for Banff and Buchan (Mr. Salmond), who has unfortunately fled the Chamber and the truth. Hon. Members who do not represent Scottish constituencies will not know that the Scottish National party's calculated core message is that Labour is the same as the Tories. That is arrant and demonstrable rubbish in the context of this Bill and, indeed, of other policies.

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      The primary objectives of the Government's economic policy, as seen in the Budget and the Finance Bill, are to raise the economy's sustainable rate of growth and to fight against poverty and social exclusion. They are the exact opposite to the objectives of the previous Government, who increased inequality over 18 years, and for many of those years, used unemployment as a deliberate instrument of policy.
      Throughout proceedings on the Bill, we have heard opportunistic carping on particular aspects of Government policy from both the SNP and the official Opposition. Some of those aspects are the unavoidable short-term results of correct long-term policies. We have never heard from either party any coherent alternative economic strategy. Throughout the economic debates this week, the Conservative party has also attempted to rewrite or, rather, airbrush history to try to persuade people that everything that happened before 1 May 1997 is irrelevant. That is economic illiteracy.
      The context of the Finance Bill is the inheritance of the previous Government. The salient features of that inheritance were a lack of stability and economic credibility and a serious structural Budget deficit, which the previous Government failed to address, in spite of 22 tax rises in their last Parliament. On top of that, we inherited problems of inflationary bottlenecks due to underinvestment and chronic shortages in human capital. There was a major productivity gap between ourselves and our main competitors. We inherited, too, the well-known fact that one in five families were without anyone in work. Those are the problems that the Finance Bill and the two Budgets have begun to address. Clearly, such problems cannot be turned around in a day, a month or a even a year.
      The Government are concerned to do three things: deliver macro-economic stability, tackle supply-side barriers to growth and promote economic and employment opportunities for all. I know that some of my colleagues who are impatient for more rapid change find the objective of macro-economic stability rather boring. It is very easy for the SNP and others to say that it is a Tory objective. It is also difficult to communicate some of the complex economic policies to the public at large. It must therefore be made clear time and again that delivering macro-economic stability is a means to an end. It is a necessary precondition for all the other objectives of growth and employment.
      There are many reasons for achieving macro-economic stability. One of great importance is that, without it, there is the threat of a return to boom and bust and, therefore, a disincentive for employers and others to invest. Investment is very much at the heart of what this Government are all about. That is why pension fund arrangements were changed in the first Budget last summer. We heard opportunistic carping about that, too—certainly from the Conservative party. The policy's clear purpose was to increase investment in the economy.
      Many other policies in the Finance Bill are directed towards the same end. We have a new rate of corporation tax, there have been changes to the capital gains tax regime and we have seen innovations such as the university challenge fund. Those are very important supply-side measures to deal with underinvestment.
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      The Finance Bill also contains measures on training. The flagship welfare-to-work policy was introduced in the first Budget.
      We must tell people that these are the objectives of Government policy; that this is what we are trying to achieve. By delivering macro-economic stability and tackling supply-side barriers to growth, we shall be able to raise growth. All that is a necessary precondition to our social objectives, on which we have already made significant progress. Most important, the working families tax credit, with its radical, innovative child care element, which we used to talk about endlessly in opposition and are beginning to deliver in government, clearly opens up employment opportunities and the rewards of employment to a much wider range of people.
      Other policies in the Bill include changes in national insurance contributions, which act as an important incentive to employers to take on employees who earn up to £440 a week. There is a range of measures to make economic and employment opportunities more widely available. That is at the heart of the Government's strategy for tackling poverty and social exclusion in our society. When people say, as they sometimes do, "Why do you put emphasis on stability? Why don't you just get ahead and do something about poverty, unemployment and social exclusion?" it is important to explain that they are two sides of the same coin. That should be the core message that we try to get across.
      Stability is not just about monetary policy—although that has been very important, and was dealt with in the separate Bank of England Bill. The purpose of that Bill should be explained, too. One of the reasons why the previous Government lacked any credibility was that they used interest rate policy politically. That was one of the problems that we inherited. They refused to put up interest rates before the election for political reasons, so inflation was heading for 4 per cent. and above. We had to address that problem; that is why interest rates have had to go up. The hon. Member for Banff and Buchan said that we were doing the same as the Tories. We are not; they tried to tackle inflation, but did not succeed. Their phoney monetary indicators in the early 1980s were not successful in dealing with inflation. We shall be successful. That is one side of the coin. It is, perhaps, more exciting to talk about the other side of the coin—the work opportunities and the attack on poverty—but without the precondition of stability, we shall not achieve those aims.
      The same is true of fiscal policy, and I welcome the code for fiscal stability in the Finance Bill. As the Chancellor's public expenditure statement in June made clear, that fiscal framework does not mean that we are unable to deliver significant increases in public expenditure. I understand those who want a big bang approach to public expenditure—perhaps Liberal Democrats come into that category—but there is no point in having a big bang approach that cannot be sustained. Within the rules set out by the Chancellor, which were in our manifesto, we are able to achieve a real growth rate of 2.75 per cent. If that is sustained for the next five years, it will be an achievement that has not been managed since the 1960s.
      The Government are also putting great emphasis on capital investment as part of the general drive for increased investment, which I referred to earlier, and we welcome that.

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      Clearly, the Government have the task of explaining their economic approach. It is very easy for the Opposition to caricature economic policy and dwell on short-term consequences, but this Government's economic objectives are absolutely contrary to those of the previous Government, and the results will also be contrary.
      Mr. Nicholas Soames: On a point of order, Mr. Deputy Speaker. Do you agree that we are witnessing a sustained and concerted filibuster on the Bill, and are not such practices to be deplored by the Chair?
      Mr. Deputy Speaker: Order. The Chair is aware only of speeches that are in order or not in order. The speeches that I have heard have been in order, except where I have chosen to correct hon. Members. It has been known for debates on the Third Reading of the Finance Bill to continue for several hours.
      7.11 pm
      Mr. Alexander: The broad themes of the Finance Bill, as well as the detail, emerged in Committee. In particular, as my hon. Friend the Member for Edinburgh, North and Leith (Mr. Chisholm) said, the Government have made it categorically clear that, unlike the previous Government, they are determined to encourage work. That aim has undoubtedly been welcomed by my constituents.
      For many years, my constituency has had a rate of unemployment higher than the national average, which is why welfare to work is not a slogan in Paisley, South, but a vital programme for many of my constituents. As the Chancellor made clear in his Budget statement, the welfare-to-work programme is now to be extended to provide wider employment opportunities particularly to groups such as the long-term sick and disabled. That matter is close to the heart of my constituents. Indeed, my predecessor, Gordon McMaster, was acknowledged on both sides of the House as a tireless campaigner on behalf of disabled citizens. Only two weeks ago, in Paisley town hall, I attended an awards ceremony for disabled people who have now found employment and gained greatly from that experience.
      In the previous Budget, £195 million was provided for voluntary advice and practical help to disabled citizens to move back into work. Pilots will begin this autumn, with a view to the programme being nationwide by April 2000.
      That approach reflects the Government's coherent strategy—that there is no contradiction between social justice and economic efficiency—which underpinned the detailed measures in the Budget. For years, under the previous Government, we were told that the price of a modern, dynamic economy was a divided society, but the individualism that characterised Thatcherite economics has been found wanting on major challenges such as tackling unemployment, which I mentioned, social exclusion and the environment.
      The understanding underpinning the Finance Bill is that the ingredients of a good society in a modern global economy are also the ingredients of a successful economy. The Budget made it clear that the foundation stone is encouraging and rewarding work. The working families tax credit announced in the Budget will help lower and middle-income Britain, particularly families with children, to keep more of what they earn. No family with
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      earnings of less than £220 a week will now pay any income tax at all. Any family with a full-time worker is now guaranteed take-home pay of at least £180 a week. When people ask what the difference is between Labour and the Conservatives, they need look no further than that measure to see the difference that a Labour Government are making.
      In keeping with the Government's recognition that good economics also makes for a good society, the Budget also addressed the needs of families in a modern economy. Child poverty has scarred this country for many years, as the work of organisations such as the Child Poverty Action Group has made clear. My hon. Friend the Member for Edinburgh, North and Leith mentioned that one family in five is raising children in poverty. That figure is all too well known after 18 years of Conservative government. That is why the announcement that child benefit for the eldest child is to be raised by £2.50 a week or £130 a year from April 1999 was particularly welcomed in constituencies such as my own. In addition, the new child care tax credit, which forms part of the working families tax credit announced in the Budget statement, will be welcomed by families throughout the country.
      A fortnight ago, I had the privilege of opening a new class at Auchenlodment nursery school in my constituency, when parent after parent told me about the importance of child care. What is fundamentally different about the Government's approach, as made clear in the Budget and the Finance Bill, is that child care is not some add-on to economic policy, but central to their economic strategy.
      The hon. Member for Banff and Buchan (Mr. Salmond), who was in the Chamber earlier, talked about the importance of the service sector of the economy and to that extent—perhaps only to that extent—I agree. Yet I would argue that if the hon. Gentleman is keen to assist the service sector of the British economy, he should support the child care measures announced in the Budget, as women in particular will benefit from them and, of course, the service sector provides employment for huge numbers of women.
      Another theme of the Finance Bill to which I shall address my remarks is the measures to promote enterprise. The Bill makes a further 1 per cent. cut in corporation tax to 30 per cent.—the lowest rate ever achieved in the United Kingdom. In the era of the global economy, such a measure sends a clear signal that the Labour Government want to secure investment and ensure that Britain is the home for dynamic, profitable companies. In the global economy, with increasing specialisation and diversity, new jobs will come from a large number of small companies, not a small number of large companies. That is why the Budget announced a comprehensive package of measures to create a more dynamic small business sector in the UK economy, including the 1 per cent. cut of the small business rate of tax to 20 per cent. from April 1999.
      Another element of the Finance Bill—a distinctively Labour element—has been fairness in taxation and spending. As a country in the modern global economy, the more we learn, the more we shall ultimately be able to earn. We cannot hope to succeed economically if we do not succeed educationally. That is why I welcome the Chancellor's announcement that an extra £250 million in 1998–99 will be committed to schools and skills.

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      To explain further the measures in the Budget, I point out that 80 per cent. of Britain's work force 10 years from now are already in the work force today. That is why, if we are serious about increasing workplace productivity in the United Kingdom economy, we must also direct our efforts towards raising skill levels of those already in work. I therefore particularly welcome the Chancellor's announcement of £10 million for the university for industry.
      The final theme of the Finance Bill that I wish to touch on is stability. The need for stability has been mentioned in the debate and, given our country's economic record of boom and bust, it almost goes without saying. As the Bill makes clear, the key to modern economic success is to find the appropriate balance between stability and dynamism. Stability is essential for high levels of investment and employment.
      The fiscal policy adopted by the Government adheres not only to the golden rule that over the economic cycle the Government will borrow only to invest, but to the rule that public debt will be held at a stable and prudent level over the economic cycle. The Finance Bill advances dynamism and stability, which is good economics, but it also advances measures on child care, child benefit and the working families tax credit, which is good politics and makes for a good society. The Bill ultimately nails the lie that the price of economic success is a divided society. That is why I commend it to the House.
      7.18 pm
      Dr. Palmer: We often criticise Ministers for departmentalitis and for focusing exclusively on their own area, but we, too, are somewhat guilty of that tonight. Typically, debates attract specialists in the subject, so today we have more finance nerds in the Chamber than would be seen in a month of Sundays anywhere else. It is said that the average man thinks about sex every 20 minutes during the day, but the population at large would be alarmed to learn that our little sub-population contains people who think more often than that about the public sector borrowing requirement.
      Mr. Leslie: Steady on.
      Dr. Palmer: I exempt my hon. Friend from my remark.
      I should like to consider three aspects of how the Finance Bill affects different parts of the Government's agenda. First, there is the working families tax credit, which was announced in the Budget and which is foreshadowed in some of the measures in the Bill. We are introducing the working families tax credit, which may be the most sweeping act of redistribution in any Budget for the past 50 years and is certainly an impressive step forward in helping the working poor, partly for reasons of justice and partly to encourage a return to work—to nail the lie that it is more profitable to stay on benefits than to work. Together with the minimum wage, which we also introduced, it means that we can say definitively to ordinary people who are out of work that it pays to retrain, it pays to work with the advisers in the new deal and it pays to get back to work.
      We have to recognise that there are people outside whom that message will not readily reach, because their daily lives are so desperate that they have no time to
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      listen. They think that the working families tax credit is just one more obscure piece of politicians' jargon that bears little relationship to them. During the election, I canvassed a council estate where there is a high proportion of single parents. I met more people there who were not planning to vote at all than I met anywhere else in Broxtowe. They were not planning to vote, not because they were indifferent to politics, nor because they disliked all the parties, but because their daily lives were so desperate that they did not have time to consider the issues that we were putting before them. In the same way, I predict that we shall have difficulty showing those groups in society how the measures in the Budget and the Bill will transform their lives.
      We have heard some unseemly gloating from Opposition Members about the fact that, in the initial reaction to the new deal, not everybody has taken up the offer with the alacrity for which we had hoped. One Opposition spokesman said, very cheerfully, that when they got the offer, many single parents threw it in the bin, as if that was good news of resistance to a tyrannical Government; but it is a tragedy when that sort of thing happens. My point is that the changes that we are making in the Finance Bill and foreshadowing to appear in next year's Finance Bill need to be followed up with publicity and information campaigns that reach people whom we do not normally reach—people who are indifferent to politics and who have given up the hope that the world of politics has any relevance to their world, or that anyone will come to their rescue. The Labour Government are determined to reach them and, through our efforts, we can make sure that such people benefit from the changes that we are making.
      Secondly, I should like to talk about the foreshadowed change to vehicle excise duty. Curiously enough, it is unique to Britain that all cars—from the Mercedes Benz to the Ka—are taxed at exactly the same rate, regardless of how much petrol they use, or how efficiently they process petrol, or whether they use petrol at all. Environmental groups all welcome as a first step the action that we have taken. I commend to the House the Parliamentary Office of Science and Technology technical report No. 116, which analyses the VED proposal in some detail and draws attention to the fact that the different ways in which the change could be introduced would have extremely varied impacts on the environment.
      Broadly summarised, POST says that if we do that in the optimal way for reducing fuel consumption, then administrative burden will be considerably heavier, because most of the information at the car registration centre—the Driver and Vehicle Licensing Agency—is not currently geared to that sort of information. Ideally, each car would be examined for its emissions at the time of its MOT test and taxed accordingly; but MOT centres are not geared to communicate their results to the central vehicle registration centre at the DVLA, so considerable investment in technology would be needed to achieve that. One step back would be to tax according to car type, as tested at the time when the type was introduced. The vehicle emissions from a Vauxhall Astra 1997 would differ greatly from those of a 1993 Astra—if there was such a beast. Therefore, one could reward manufacturers that wanted to invest in fuel-efficient technology by changing the rate of tax according to that standard. The drawback of that method is that some manufacturers would produce a car that was extremely efficient on day

      423
      one, but deteriorated rapidly. We want to support manufacturers that build energy-efficient motors to last and drivers who use their cars in a way that maintains that high level of energy efficiency.
      I would argue that we should opt for those versions of the approach to vehicle excise duty that, in the longer term, can be used to phase in the measurement of individual vehicle emissions. Information technology is at the stage where, in five years' time, it will seem a trivial task for testing centres to communicate such information to the centre. I do not believe that, when introducing such an important principle for the first time, we should do so in a way that skimps on the essential objective of the change, which is to improve the efficiency of engines, to reduce emissions and, ultimately, to achieve the goals that we have set out to achieve in 2010.
      Thirdly, I wish to highlight the generosity of the conditions for contributing to overseas development charities, which is a matter that has attracted relatively little comment—indeed, I know of overseas development activists who are still not totally aware of it. Although it has traditionally been said that overseas development is not an issue that the average member of the public finds fascinating, or attractive, or even welcome, that is certainly not what I have found in Broxtowe. Before the election, we published 15 policy papers on different issues—employment, health, education and so on—but it was the papers on the two more exotic subjects of overseas development and animal welfare that stimulated by far the greatest demand, with several hundred people requesting information on those subjects.
      People have come to believe that politics in Britain has become a little bit too efficient and too oriented to the maximum level of marginal advantage at every level of the economy—that government and politics in Britain are in danger of losing their soul. When they look at the three aspects to which I have referred—the reinforcement of help to the working poor to make work worth while and to show that group in society that we care about them and that we are the first Government in 20 years to care about them; and our demonstration that we mean what we say about our environmental commitments and about our support for the developing world—the cynicism and disappointment that we have seen among many of our constituents can be countered and they will once again be able to faith in the political process. I hope that the House will pass the Finance Bill. It is a worthy Bill, and I am proud to be associated with it.
      7.29 pm
      Mr. Ross Cranston: A number of my hon. Friends refuted the intervention by the hon. Member for Banff and Buchan (Mr. Salmond), who has wandered in and out of the Chamber at various times this afternoon and this evening, but has not stayed around to hear our responses. He asked what the Finance Bill does for manufacturing, which is important to my constituency. Historically, the black country has been a great manufacturing area and manufacturing is an important part of the economy, although I acknowledge that it accounts now for only about one fifth of national income.
      The Bill contains important measures to encourage manufacturing, industry and enterprise. First, it will reduce the rates of corporation tax. Secondly, it contains important provisions on capital allowances. Thirdly,
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      it will change the company tax regime, which was an important feature of this Government's first Finance Bill—this Bill will continue to put that change in place.
      Opposition Members raised all sorts of difficulties with the changes that we have made. Some of them still cannot accept the fact that we have put in place a corporation tax regime that will be more conducive to investment. Too often in the past people, institutions, pension funds and insurance companies tried to maximise the return on dividend income, to the detriment of investment in enterprises. Labour's two Finance Bills will put in place a corporation tax system that will encourage investment.
      The move from the old to the modern system, which, incidentally, is a feature of such countries as the United States, creates certain transitional problems, but the Government have tried to deal with them, for example, through the phasing-in provisions to benefit charities. I raised certain problems concerning pensioner non-taxpayers, who will lose their tax credits under the Bill, with my hon. Friend the Paymaster General, who took that matter to heart. He and my right hon. Friend the Chancellor will deal with that in the coming months. The important point, which seems to be lost on the Opposition, is that the new corporation tax regime will be more conducive to an enterprise economy.
      The fourth feature that the hon. Member for Banff and Buchan did not seem to take into account was the change in capital gains tax—the taper relief. Opposition Members raised a great deal of dust about the transitional problems that might arise due to the changes, but the taper relief system will encourage long-term investment holdings. The system works by reducing the proportion of capital gain that is liable to tax according to how long the asset is held. Different tapers will apply to business and non-business assets.
      Members of the official Opposition—[HON. MEMBERS: "They are not here."] Yes, as my hon. Friends remind me, there are not many Conservative Members in the Chamber at present. They did not acknowledge that the taper relief system would have any effect on investment. Unfortunately, they do not seem to know their own economic history. They do not seem to realise that when they introduced major changes in the 1980s, these had a significant impact on investment. The changes in 1984 resulted in a surge in investment, which fell off in 1986 when the changes were reversed.
      A study by Stephen Bond of Nuffield college reached the conclusion, based on that experience, that a tax system can affect investment. In considering the changes after 1986, Bond concluded that a tax system that leaves the cost of capital permanently higher by one to two percentage points is likely to depress the level of company investment by up to 5 per cent. Conversely, the changes in this Bill ought significantly to affect investment in time.
      Mr. Derek Twigg: My hon. Friend makes an excellent point. Labour Members have often been accused of not understanding business and investment, but is it not the case that the Government want to encourage long-term investment and sustainable help for business? If we had accepted the Opposition's arguments, the Bill would have

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      done nothing to help business. Their arguments were about short-termism and other matters, but had nothing to do with helping business.
      Mr. Cranston: I could not agree more with my hon. Friend. The Opposition focused on some specific points and did not seem to see the big picture.
      In a recent summary of some 10 studies that assessed the impact of corporation tax and capital gains tax on investment, Mr. Jack Mintz states
      "The overall conclusion one derives from recent studies is that taxes affect investment decisions".
      Conservative Members did not seem to acknowledge that important point. The changes in the Bill will have a beneficial effect on investment and manufacturing, particularly in the long term.
      Fairness is another feature of the Bill. My hon. Friends have mentioned the important inducement to altruism contained in the provisions on millennium relief. Another feature worthy of mention is the way in which we have closed provisions that were conducive to tax avoidance. In Committee, Conservative Members seemed to be in a world of large capital gains.
      Mr. James Plaskitt: And even larger houses.
      Mr. Cranston: Yes, as my hon. Friend reminds me, it was a world of great wealth—
      Mr. Plaskitt: Auctions.
      Mr. Cranston: Of auctions and large investments, and that is not the world of the average voter, who is more concerned with measures in the Bill aimed at introducing a fairer regime, which will benefit the average person.
      No Conservative Member mentioned the important provisions on transfer pricing as regards the activities of transnational companies and there was little mention of the provisions to deal with inheritance tax and closing some of the avoidance mechanisms there. We heard some squealing about the bed-and-breakfast provisions, as if those were a natural feature of any tax regime. In fact, they were an important avenue for tax avoidance.
      Mr. Love: Does my hon. Friend share my astonishment at the cynicism shown by Conservative members of the Standing Committee, who continually chided the Government for abandoning the poor, despite the fact that the Conservative Government created the greatest inequality since figures began? Does he agree that the Bill will help to heal society and to reduce the divisions that the Conservatives created?
      Mr. Cranston: I agree. The figures demonstrate that inequality grew more in this country than in any other Organisation for Economic Co-operation and Development country, apart from New Zealand, which was a scandal.
      In Committee, we heard a great deal from Conservative Members about the legislative process; they said that the Government did not listen. The Government do listen. There was extensive consultation about the changes in
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      capital gains tax, for example, as a result of which the taper relief system was developed. Similarly, the Government listened to representations about individual savings accounts. There were no U-turns, as we said from the outset that we would consult people—something the Conservative Government never did—about what regime would encourage more saving.
      Mr. Patrick Hall: On the Government's willingness to listen, I wonder whether my hon. Friend heard, earlier today, the hon. Member for Sevenoaks (Mr. Fallon) describe a Government amendment, which was tabled as a result of listening to people and which will improve the Bill, as a climbdown? Does not that show that the Conservative party's attitude to government is completely different from the Labour party's?
      Mr. Cranston: That is very good point. The Labour Government are responsible; they consult people and work with business. The Conservative Government did not do that—Conservative Members do not know what consultation is, which is why they cannot understand this Government.
      Also on legislative form, I want to deal with the canard that we have heard from the Opposition about retrospectivity. People have all sorts of expectations, but, historically, those expectations have often been disappointed because of taxation changes. When the rate of personal taxation increases, as it has in the past, I am disappointed. That is not retrospectivity, but Conservative Members do not understand that concept—they have misdirected their fire on that, as they have on so many other matters.
      We also heard a great deal from Conservative Members about the regulation-making powers in the Bill. As my hon. Friend the Paymaster General said in Committee, the Bill contains no more regulation-making provisions than were in the last two Finance Bills under the Conservative Government. Such provisions are a typical feature of legislation—that may be unfortunate, and it may be more desirable if everything were provided for in primary legislation, but, as Conservative Members have reminded us, the Bill already runs to 450 pages—[Interruption.]
      Mr. Deputy Speaker (Mr. Michael Lord): Order. Conversations are breaking out all over the Chamber. Hon. Members must listen to the hon. Gentleman who is addressing the House.
      Mr. Cranston: Thank you, Mr. Deputy Speaker.
      In creating regulation-making powers, we have been consulting. The draft regulations are available for several months, so that the business community and professional bodies that will be affected by them can give their comments.
      The Bill fosters enterprise; it introduces stability; it facilitates altruism in the way that I suggested; and it puts in place important measures to ensure fairness.
      7.44 pm
      Mrs. Louise Ellman: No one should be surprised at the token and transitory presence of Conservative Members during our discussion of this vital Bill. They must find it extremely distressing, I am

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      convinced, to see the beginning of the end of the work that they did over 18 years and to see the damage that they inflicted on so many members of our society being reversed.
      The Bill, indeed, starts to reverse major parts of the previous Government's policy. Eighteen years of Tory rule produced greater inequality than at any time since the second world war. The poorest 20 to 30 per cent. of the population failed to benefit from economic growth, and the poorest payed the highest marginal rates of tax. Moreover, unemployment—in terms of the number of households suffering unemployment—doubled so that one in five households had someone out of work. I represent the most deprived constituency in the most deprived city in the country, so, day after day, I see the evidence of what happened. I note that all but three Conservative Members find the debate too painful to listen to.
      The Bill will enact a Budget to start a new era. It will give more help to most members of our society, and it will give the most help to those who are the worst off. The poorest 20 per cent. of households with children will gain an average of £500 per year—that will assist 3.8 million children. That is in great contrast to Conservative Budgets, which inflicted the greatest hardships on the poorest and gave the greatest benefit to the best off. The Bill reduces the high marginal rates of tax on those in the lower income groups, which makes a significant start in ensuring equity.
      The Budget helps all families. It provides for the highest ever increase in child benefit—again, that is in stark contrast to what happened under the Conservative Government, who significantly reduced the value of child benefit. The Budget also extends the new deal, to give new hope of employment to younger people and older people alike. The official Opposition are still opposed to that measure.
      The Bill will direct most help to those who need it most. In doing so, it will develop and stimulate the economy as a whole. That is why I welcome the Budget's provision for significant capital investment, which will be implemented in such a way as to improve services for the community and to create relevant and important jobs. For example, the £250 million extra investment in education—making a total of £2.5 billion extra investment in education—will improve services and buildings and provide further essential jobs. The £500 million extra investment in the national health service—making a total of more than £2 billion extra—will improve services and employment.
      The £500 million extra for public transport will help us to secure better infrastructure to improve our environment; it will also develop the economy and produce more jobs.
      Mr. Patrick Hall: My hon. Friend mentioned extra money for education and health. Does she agree that it is ironic that the Opposition parties have criticised the Government for not spending enough extra on education and health when the Government have spent far more than the Conservatives or Liberal Democrats would have spent, according to their printed and announced programmes?
      Mrs. Ellman: Indeed. The Budget marks a decisive change. We are investing in the economy and in jobs.
      In addition to significant capital investment, the Budget makes special efforts to help small and medium enterprises: the backbone of our economy. The Budget
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      encourages that important sector by raising capital allowances and reducing taxes on those enterprises. Its encouragement for more innovative technologies promises more jobs, to the benefit of the whole economy.
      The Budget should be considered in the context of the Government's general policies. It is directed towards producing more social and economic fairness. The Government are intervening to ensure that its benefits are felt where they are most needed, which is why we are going ahead with regional development agencies that will bring together the public, private and voluntary sectors to invest in regional economies. I note that the official Opposition are opposed to regional development agencies, as they are opposed to anything constructive.
      The Budget promotes our efforts to deal with social exclusion, which is another inheritance of the 18 years of Tory rule. It also promotes communications. It took a Labour Government to rescue the shambles of the channel tunnel rail link deal left by the Tories. That will be important to the regions and the whole country.
      Mr. Derek Twigg: My hon. Friend will know that my constituency is only a few miles from hers. She hit on the important point that the Budget and the Government's general policies are designed to benefit not only the south-east but the whole country. We want the communication links to be in place and the economy of the whole country to be vibrant.
      Mrs. Ellman: My hon. Friend makes an important point. It is essential that the Budget should deal effectively with the macro-economic situation, but for that to be effective we also need mechanisms to deal with regional and local issues, to ensure that the benefits are enjoyed where they are most needed. I applaud the Government for all that they have done on macro, micro and regional levels.
      The Budget is the beginning of the creation of a new era. It is highly regrettable that the official Opposition cannot even bear to hear about it.
      Mr. Love: Does my hon. Friend note the fact that Her Majesty's official Opposition moved none of the amendments that they tabled today? The foreign earnings deduction amendments took a whole day in Committee, but no one from the official Opposition was here to move them today.
      Mrs. Ellman: My hon. Friend demonstrates effectively the official Opposition's ineffectiveness and irresponsibility. Their record speaks for itself. They created a divided society and record unemployment and showed a callous disregard for justice. The Budget is the beginning of a new era and I commend it to the House. I look forward to the Government developing policies that will bring social and economic justice to the country as a whole.
      Mr. Patrick Hall: On a point of order, Mr. Deputy Speaker. I am inspired by the hon. Member for Mid-Sussex (Mr. Soames) to seek your guidance on whether the absence of contributions from the official Opposition demonstrates a sustained abdication of responsibility.
      Mr. Deputy Speaker: Order. That is not a matter for the Chair.
      7.55 pm
      Mrs. Liddell: Several of my hon. Friends have drawn attention to the vast emptiness on the Opposition Benches. It would be useful if the House were aware of the fact that the official Opposition asked for two days to discuss the Finance Bill on the Floor of the House. As a Government who are committed to proper accountability and scrutiny, we were happy to arrange for those two days, but chaos has reigned on the Opposition Benches from day one.
      I thought that the high point—or perhaps the low point—had come when the right hon. Member for Wells (Mr. Heathcoat-Amory) had to be got out of his bed in the middle of the night and brought into the House to adjudicate in a fight between his Front-Bench and Back-Bench colleagues. The Whips had totally abdicated responsibility and had to send for the right hon. Gentleman to haud the jaikets, as we say in the west of Scotland. I am glad that he had the chance to change out of his jammies before coming to the House.
      We have had a good debate, and I commend my hon. Friends for some studied speeches that obviously took great preparation. We take the job of government extremely seriously. We regard the tasks of government and of representing our constituents as a privilege, which is why we have worked so hard on Third Reading. I am grateful to my hon. Friends on the Back Benches for the assistance that they have given to Ministers.
      I pay especial tribute to my hon. Friend the Financial Secretary, who has had the heaviest burden. This has been a lengthy and detailed Bill. Not all the work takes place in the House, because much preparation has to be done in advance.
      The debate has been remarkable in that we have had the rare privilege of a visit from the hon. Member for Banff and Buchan (Mr. Salmond). It is always a pleasure to see him at his work. I am sorry that he did not manage to stay in the Chamber terribly long, but he addressed us from his Olympian heights and I will respond to him with pleasure.
      Mr. Salmond rose—
      Mrs. Liddell: I have to consider whether I should give way to the hon. Gentleman, because, with characteristic arrogance, he refused to take interventions from my hon. Friends this evening. However, I will of course take his intervention, because it is so rare a pleasure to see him at his work.
      Mr. Salmond: That must be the longest preamble to giving way that I have ever heard. [HON. MEMBERS: "Get on with it."] Well, if the concession is so long, the intervention can be long as well.
      The Economic Secretary is building a case on the presence or absence of hon. Members in the Chamber. Where, then, are the Chancellor and the Prime Minister?
      Mrs. Liddell: Running the country.
      The hon. Gentleman made a number of points— [Interruption.] I wish my hon. Friends would stop making me laugh. [Interruption.]
      Mr. Deputy Speaker: Order. Perhaps we can now return to the contents of the Finance Bill.
      Mrs. Liddell: I am happy to do so, Mr. Deputy Speaker.
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      We have observed some interesting gyrations on the part of the Opposition Front Bench. I am not just talking about the fact that no Opposition Front Bencher managed to stay in the Chamber throughout the debate; during the Bill's passage, we have seen a radical reversal of the Opposition's views on capital gains tax. Moreover, as my hon. Friends have pointed out, the Opposition have tabled amendments whose cost would total around £7 billion, and have given no explanation of where they would find the money to finance them. Which taxes would they increase? Which public expenditure would they cut? As my right hon. Friend the Chief Secretary said the other night, the Conservatives are beginning to beat the Liberals Democrats in terms of imprudent economics.
      There has been a challenge to a number of our measures—important measures, aimed at making the tax system fairer. For example, Opposition Members tabled an amendment seeking to exempt from tax people working overseas and earning salaries of at least £87,000 a year. I recognise that that may not be a great deal of money for those with extensive outside interests, but, believe me, it is a lot of money from my constituents' point of view.
      There was an entirely spurious attempt to focus debate on the number and scope of regulation-making powers, rather than on the important measures in the Bill. Throughout our consideration of the Bill, spurious arguments have been advanced, often on behalf of "special interest" groups. That, I think, is a measure of how ineffective the Opposition were in the task of opposing: they ran out of steam before we could even complete Third Reading.
      I contend that one reason for the exodus from the Chamber this evening is the fact that the scale of revulsion in the country at the economic policies that the Conservatives pursued in opposition is beginning to dawn on them. The last time I saw the Opposition Benches so empty, Conservative Members were off looking for another leader. Perhaps that is what is happening now. [Interruption.] As my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth) has just pointed out, perhaps they are off looking for work. A number of Conservatives had to do that after 1 May last year.
      Let me now deal with what was said by the hon. Member for Banff and Buchan. The other day, his party's Treasury spokesman was interviewed on BBC Radio Scotland. When asked about his party's economic policies, he said that industry would have to hope for the best. That is the "fingers crossed" school of economics: the emblem of the Scottish National party should be a lucky bunch of white heather.
      In one of the interventions to which we have become so used during our debates on the Bill—an intervention of great erudition—my hon. Friend the Member for Dudley, North (Mr. Cranston) took the hon. Gentleman's arguments on manufacturing apart—but, predictably, the hon. Gentleman was not present to hear him. Nor, having referred to the importance of the service industries in Scotland, was he present to hear my hon. Friend the Member for Paisley, South (Mr. Alexander) draw attention to the attack on those industries—especially the financial services industry—that had been launched by the Scottish National party in the past fortnight. Fortunately, Labour Members do not go in for that kind of behaviour.

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      My hon. Friend the Member for Paisley, South made a good point about the money that the Government have set aside for the university for industry. May I also remind the House of the £50 million that has been made available in the Budget for the university challenge fund? My hon. Friend's constituency contains the university of Paisley, which is known for its ability to convert research ideas into development projects that make a considerable amount of money for the Scottish economy. I am sure that he and his constituents will benefit greatly from that.
      We heard some interesting contributions from the Liberal Democrats. The Liberal Democrats were a constant source of entertainment to us in Committee. In Committee, we had an opportunity to congratulate the hon. Member for Gordon (Mr. Bruce) on his wedding and his honeymoon, but I am not sure that the hon. Member for Kingston and Surbiton (Mr. Davey) had the same excuse for not being present. Tonight he raised the issue of insurance premium tax, although earlier he had had the opportunity to speak to an amendment on the subject but was not present to do so. In Committee, he failed to vote against a measure that he has described as reprehensible. He has also sought, at this late stage, to introduce a measure that would undermine an important anti-avoidance provision in the Bill. Labour Members do not find that acceptable. The insurance premium tax rate is designed to ensure that there is neither the incentive nor the scope for VAT avoidance.
      It is unfortunate that the hon. Gentleman and his hon. Friends did not get their act together sufficiently to allow debate on these matters. It would have been illuminating for people outside to see the extent to which the Liberal Democrats are not prepared to pursue anti-avoidance measures. Like many of their proposals, the proposal of which the hon. Gentleman spoke tonight would have cost the country a good deal of money—more than £400 million. It is a case of spend, spend, spend—and at no point are we given any indication of how the Liberal Democrats would put the economy on to the stable basis that is required for long-term good. [Interruption.]
      The hon. and learned Member for Orkney and Shetland (Mr. Wallace) who has not taken enough interest in the Bill to participate in the debate—we are becoming accustomed to such behaviour from Liberal Democrat Members—refers, from a sedentary position, to closures and redundancies in the economy. The hon. Gentleman would be better placed to make such remarks if he were prepared to engage in coherent economic argument about how we can improve our economy. The Bill is another step towards ensuring that the country moves into a climate of economic stability that will provide sustainable growth, and allow businesses and households to plan for the future.
      We have had 18 years of boom and bust. We have had 18 years of economic incompetence. Anyone who wants to see the scale of that incompetence need only read the Hansard reports of debates on past Finance Bills, which will reveal some of the weakest and most spurious arguments ever advanced in the House.
      The Budget that we have introduced is a Budget for fairness. At last we have a Government who are committed to fairness for all. As a consequence of this Budget, the least advantaged members of society will be given extra assistance. Those who seek to create wealth will find themselves in a climate that will allow them,
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      not just to develop their own businesses, but to bring about an atmosphere that will enable our economy to thrive.
      This is a Budget from a Government who look forward rather than back. I repeat that it is a Budget for the many, not the few. That is the sea change that has been created; that is the difference between this Government and the Government who went before.
      I am proud of what was done by my hon. Friends in Committee, and am grateful for the support that they have given the Financial Secretary, the Paymaster General and me. I am also grateful to all who the Member for Halton (Mr. Twigg) have taken the message of this Budget to men and women the Member for Halton (Mr. Twigg) throughout the country. Earlier, my hon. Friend the Member for Halton (Mr. Twigg) said that people had stopped him in the street to congratulate the Government on the Budget. That happened to me, too. [Interruption.] The cackles of the Opposition prove that their arrogance is undiminished. Their lack of understanding of the ordinary people of the United Kingdom has not advanced at all. Tonight sees the completion of an important stage in the Government's programme. I commend the Bill to the House with great pride.
      Question put, That the Bill be now read the Third time:-
      The House divided: Ayes 308, Noes 171.

      Division No. 322]

      [8.9 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Cawsey, Ian

      Ainger, Nick

      Chapman, Ben (Wirral S)

      Ainsworth, Robert (Cov'try NE)

      Chaytor, David

      Alexander, Douglas

      Chisholm, Malcolm

      Allen, Graham

      Church, Ms Judith

      Anderson, Donald (Swansea E)

      Clapham, Michael

      Anderson, Janet (Rossendale)

      Clark, Rt Hon Dr David (S Shields)

      Armstrong, Ms Hilary

      Clark, Dr Lynda (Edinburgh Pentlands)

      Ashton, Joe

      Atkins. Charlotte

      Clark, Paul (Gillingham)

      Austin, John

      Clarke, Charles (Norwich S)

      Banks, Tony

      Clarke. Tony (Northampton S)

      Battle, John

      Clelland, David

      Bayley, Hugh

      Clwyd, Ann

      Beard, Nigel

      Coffey, Ms Ann

      Beckett, Rt Hon Mrs Margaret

      Cohen, Harry

      Benn, Rt Hon Tony

      Coleman, Iain

      Bennett, Andrew F

      Colman, Tony

      Bermingham, Gerald

      Connarty, Michael

      Berry, Roger

      Cook, Frank (Stockton N)

      Betts, Clive

      Corbyn, Jeremy

      Blackman, Liz

      Corston, Ms Jean

      Blears, Ms Hazel

      Cousins, Jim

      Blizzard, Bob

      Cranston, Ross

      Blunkett, Rt Hon David

      Crausby, David

      Boateng, Paul

      Cummings, John

      Borrow, David

      Cunningham, Jim (Cov'try S)

      Bradley, Keith (Withington)

      Dalyell, Tam

      Bradley, Peter (The Wrekin)

      Darling, Rt Hon Alistair

      Brinton, Mrs Helen

      Darvill, Keith

      Brown, Rt Hon Nick (Newcastle E)

      Davey, Valerie (Bristol W)

      Brown, Russell (Dumfries)

      Davidson, Ian

      Browne, Desmond

      Davies, Rt Hon Denzil (Llanelli)

      Buck, Ms Karen

      Davies, Rt Hon Ron (Caerphilly)

      Burden, Richard

      Davis, Terry (B'ham Hodge H)

      Burgon, Colin

      Dawson, Hilton

      Byers, Stephen

      Dean, Mrs Janet

      Campbell, Alan (Tynemouth)

      Denham, John

      Campbell, Mrs Anne (C'bridge)

      Dewar, Rt Hon Donald

      Canavan, Dennis

      Dobbin, Jim

      Cann, Jamie

      Dobson, Rt Hon Frank

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      Donohoe, Brian H

      Kidney, David

      Doran, Frank

      Kilfoyle, Peter

      Dowd, Jim

      King, Andy (Rugby & Kenilworth)

      Drew, David

      King, Ms Oona (Bethnal Green)

      Edwards, Huw

      Ladyman, Dr Stephen

      Ellman, Mrs Louise

      Lawrence, Ms Jackie

      Ennis, Jeff

      Laxton, Bob

      Etherington, Bill

      Lepper, David

      Field, Rt Hon Frank

      Leslie, Christopher

      Fisher, Mark

      Lewis, Terry (Worsley)

      Flint, Caroline

      Liddell, Mrs Helen

      Flynn, Paul

      Linton, Martin

      Follett, Barbara

      Livingstone, Ken

      Foster, Rt Hon Derek

      Lloyd, Tony (Manchester C)

      Foster, Michael Jabez (Hastings)

      Lock, David

      Foster, Michael J (Worcester)

      Love, Andrew

      Galbraith, Sam

      McAllion, John

      Galloway, George

      McAvoy, Thomas

      Gardiner, Barry

      McCabe, Steve

      George, Bruce (Walsall S)

      McCafferty, Ms Chris

      Gibson, Dr Ian

      McCartney, Ian (Makerfield)

      Gilroy, Mrs Linda

      McDonagh, Siobhain

      Godman, Dr Norman A

      Macdonald, Calum

      Goggins, Paul

      McDonnell, John

      Golding, Mrs Llin

      McGuire, Mrs Anne

      Gordon, Mrs Eileen

      McIsaac, Shona

      Griffiths, Jane (Reading E)

      McKenna, Mrs Rosemary

      Griffiths, Nigel (Edinburgh S)

      Mackinlay, Andrew

      Griffiths, Win (Bridgend)

      McLeish, Henry

      Grocott, Bruce

      McNulty, Tony

      Grogan, John

      MacShane, Denis

      Gunnell, John

      Mactaggart, Fiona

      Hain, Peter

      Mahon, Mrs Alice

      Hall, Mike (Weaver Vale)

      Mallaber, Judy

      Hall, Patrick (Bedford)

      Mandelson, Peter

      Hamilton, Fabian (Leeds NE)

      Marsden, Gordon (Blackpool S)

      Hanson, David

      Marsden, Paul (Shrewsbury)

      Harman, Rt Hon Ms Harriet

      Marshall, David (Shettleston)

      Heal, Mrs Sylvia

      Marshall-Andrews, Robert

      Henderson, Doug (Newcastle N)

      Martlew, Eric

      Heppell, John

      Meale, Alan

      Hewitt, Ms Patricia

      Merron, Gillian

      Hill, Keith

      Michael, Alun

      Hinchliffe, David

      Milburn, Alan

      Hodge, Ms Margaret

      Miller, Andrew

      Hoey, Kate

      Mitchell, Austin

      Home Robertson, John

      Moffatt, Laura

      Hoon, Geoffrey

      Moran, Ms Margaret

      Hope, Phil

      Morgan, Ms Julie (Cardiff N)

      Howarth, Alan (Newport E)

      Morgan, Rhodri (Cardiff W)

      Howarth, George (Knowsley N)

      Morris, Ms Estelle (B'ham Yardley)

      Hoyle, Lindsay

      Morris, Rt Hon John (Aberavon)

      Hughes, Ms Beverley (Stretford)

      Mowlam, Rt Hon Marjorie

      Hughes, Kevin (Doncaster N)

      Mudie, George

      Humble, Mrs Joan

      Mullin, Chris

      Hutton, John

      Murphy, Jim (Eastwood)

      Iddon, Dr Brian

      Naysmith, Dr Doug

      Illsley, Eric

      O'Brien, Bill (Normanton)

      Jackson, Ms Glenda (Hampstead)

      O'Brien, Mike (N Warks)

      Jackson, Helen (Hillsborough)

      Olner, Bill

      Jamieson, David

      O'Neill, Martin

      Jenkins, Brian

      Organ, Mrs Diana

      Johnson, Miss Melanie (Welwyn Hatfield)

      Osborne, Ms Sandra

      Palmer, Dr Nick

      Jones, Mrs Fiona (Newark)

      Pearson, Ian

      Jones, Helen (Warrington N)

      Pendry, Tom

      Jones, Jon Owen (Cardiff C)

      Pickthall, Colin

      Jones, Dr Lynne (Selly Oak)

      Pike, Peter L

      Jones, Martyn (Clwyd S)

      Plaskitt, James

      Jowell, Ms Tessa

      Pollard, Kerry

      Kaufman, Rt Hon Gerald

      Powell, Sir Raymond

      Keeble, Ms Sally

      Prentice, Ms Bridget (Lewisham E)

      Keen, Alan (Feltham & Heston)

      Prentice, Gordon (Pendle)

      Keen, Ann (Brentford & Isleworth)

      Primarolo, Dawn

      Kennedy, Jane (Wavertree)

      Prosser, Gwyn

      Khabra, Piara S

      Purchase, Ken

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      Quin, Ms Joyce

      Strang, Rt Hon Dr Gavin

      Quinn, Lawrie

      Straw, Rt Hon Jack

      Radice, Giles

      Stringer, Graham

      Rammell, Bill

      Stuart, Ms Gisela

      Rapson, Syd

      Sutcliffe, Gerry

      Reed, Andrew (Loughborough)

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Reid, Dr John (Hamilton N)

      Robertson, Rt Hon George (Hamilton S)

      Taylor, Ms Dari (Stockton S)

      Taylor, David (NW Leics)

      Robinson, Geoffrey (Cov'try NW)

      Thomas, Gareth R (Harrow W)

      Roche, Mrs Barbara

      Timms, Stephen

      Rooney, Terry

      Tipping, Paddy

      Ross, Ernie (Dundee W)

      Todd, Mark

      Rowlands, Ted

      Touhig, Don

      Roy, Frank

      Trickett, Jon

      Ruddock, Ms Joan

      Truswell, Paul

      Russell, Ms Christine (Chester)

      Turner, Dennis (Wolverh'ton SE)

      Ryan, Ms Joan

      Turner, Dr Desmond (Kemptown)

      Salter, Martin

      Turner, Dr George (NW Norfolk)

      Savidge, Malcolm

      Twigg, Derek (Halton)

      Sawford, Phil

      Vis, Dr Rudi

      Sedgemore, Brian

      Walley, Ms Joan

      Shaw, Jonathan

      Ward, Ms Claire

      Sheerman, Barry

      Wareing, Robert N

      Sheldon, Rt Hon Robert

      Watts, David

      Short, Rt Hon Clare

      White, Brian

      Simpson, Alan (Nottingham S)

      Whitehead, Dr Alan

      Singh, Marsha

      Wicks, Malcolm

      Skinner, Dennis

      Williams, Rt Hon Alan (Swansea W)

      Smith, Rt Hon Andrew (Oxford E)

      Smith, Angela (Basildon)

      Williams, Alan W (E Carmarthen)

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Wills, Michael

      Wilson, Brian

      Smith, Llew (Blaenau Gwent)

      Winterton, Ms Rosie (Doncaster C)

      Southworth, Ms Helen

      Wood, Mike

      Spellar, John

      Worthington, Tony

      Squire, Ms Rachel

      Wright, Anthony D (Gt Yarmouth)

      Stevenson, George

      Wyatt, Derek

      Stewart, Ian (Eccles)

      Stinchcombe, Paul

      Tellers for the Ayes:

      Stoate, Dr Howard

      Mr. John McFall and

      Stott, Roger

      Mr. Greg Pope.

      NOES

      Allan, Richard

      Collins, Tim

      Amess, David

      Cotter, Brian

      Ancram, Rt Hon Michael

      Cran, James

      Arbuthnot, James

      Dafis, Cynog

      Ashdown, Rt Hon Paddy

      Davey, Edward (Kingston)

      Atkinson, David (Bour'mth E)

      Davis, Rt Hon David (Haltemprice)

      Atkinson, Peter (Hexham)

      Donaldson, Jeffrey

      Baker, Norman

      Dorrell, Rt Hon Stephen

      Ballard, Jackie

      Duncan Smith, Iain

      Beggs, Roy

      Evans, Nigel

      Bercow, John

      Ewing, Mrs Margaret

      Beresford, Sir Paul

      Faber, David

      Body, Sir Richard

      Fallon, Michael

      Boswell, Tim

      Fearn, Ronnie

      Bottomley, Peter (Worthing W)

      Flight, Howard

      Brady, Graham

      Forth, Rt Hon Eric

      Brake, Tom

      Foster, Don (Bath)

      Brand, Dr Peter

      Fox, Dr Liam

      Brazier, Julian

      Fraser, Christopher

      Brooke, Rt Hon Peter

      Garnier, Edward

      Browning, Mrs Angela

      George, Andrew (St Ives)

      Bruce, Ian (S Dorset)

      Gibb, Nick

      Bruce, Malcolm (Gordon)

      Gill, Christopher

      Burnett, John

      Gorman, Mrs Teresa

      Burns, Simon

      Gorrie, Donald

      Burstow, Paul

      Gray, James

      Campbell, Menzies (NE Fife)

      Green, Damian

      Chapman, Sir Sydney (Chipping Barnet)

      Greenway, John

      Grieve, Dominic

      Clappison, James

      Hamilton, Rt Hon Sir Archie

      Clark, Rt Hon Alan (Kensington)

      Hancock, Mike

      Clifton-Brown, Geoffrey

      Harris, Dr Evan

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      Harvey, Nick

      Paterson, Owen

      Hawkins, Nick

      Pickles, Eric

      Hayes, John

      Prior, David

      Heald, Oliver

      Randall, John

      Heath, David (Somerton & Frome)

      Redwood, Rt Hon John

      Heathcoat-Amory, Rt Hon David

      Rendel, David

      Hogg, Rt Hon Douglas

      Robathan, Andrew

      Horam, John

      Robertson, Laurence (Tewk'b'ry)

      Hughes, Simon (Southwark N)

      Roe, Mrs Marion (Broxbourne)

      Hunter, Andrew

      Ross, William (E Lond'y)

      Jack, Rt Hon Michael

      Rowe, Andrew (Faversham)

      Jackson, Robert (Wantage)

      Ruffley, David

      Jenkin, Bernard

      Russell, Bob (Colchester)

      Johnson Smith, Rt Hon Sir Geoffrey

      St Aubyn, Nick

      Salmond, Alex

      Jones, Ieuan Wyn (Ynys Môn)

      Sanders, Adrian

      Jones, Nigel (Cheltenham)

      Shephard, Rt Hon Mrs Gillian

      Keetch, Paul

      Shepherd, Richard

      Kennedy, Charles (Ross Skye)

      Simpson, Keith (Mid-Norfolk)

      Key, Robert

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

      Kirkbride, Miss Julie

      Soames, Nicholas

      Kirkwood, Archy

      Spelman, Mrs Caroline

      Laing, Mrs Eleanor

      Spicer, Sir Michael

      Lait, Mrs Jacqui

      Stanley, Rt Hon Sir John

      Lansley, Andrew

      Streeter, Gary

      Leigh, Edward

      Stunell, Andrew

      Letwin, Oliver

      Swayne, Desmond

      Lewis, Dr Julian (New Forest E)

      Syms, Robert

      Lidington, David

      Tapsell, Sir Peter

      Livsey, Richard

      Taylor, John M (Solihull)

      Lloyd, Rt Hon Sir Peter (Fareham)

      Taylor, Matthew (Truro)

      Llwyd, Elfyn

      Taylor, Sir Teddy

      Loughton, Tim

      Thompson, William

      Luff, Peter

      Tonge, Dr Jenny

      MacGregor, Rt Hon John

      Townend, John

      Mackay Andrew

      Trend, Michael

      Maclean, Rt Hon David

      Tyler, Paul

      Maclennan, Rt Hon Robert

      Tyrie, Andrew

      McLoughlin, Patrick

      Wallace, James

      Madel, Sir David

      Walter, Robert

      Malin, Humfrey

      Wardle, Charles

      Maples, John

      Webb, Steve

      Maude, Rt Hon Francis

      Wells, Bowen

      Mawhinney, Rt Hon Sir Brian

      Welsh, Andrew

      May, Mrs Theresa

      Whittingdale, John

      Michie, Mrs Ray (Argyll & Bute)

      Wilkinson, John

      Moore, Michael

      Willetts, David

      Morgan, Alasdair (Galloway)

      Willis, Phil

      Moss, Malcolm

      Wilshire, David

      Nicholls, Patrick

      Winterton, Mrs Ann (Congleton)

      Norman, Archie

      Winterton, Nicholas (Macclesfield)

      Oaten, Mark

      Woodward, Shaun

      Öpik, Lembit

      Yeo, Tim

      Ottaway, Richard

      Page, Richard

      Tellers for the Noes:

      Paice, James

      Mr. Nigel Waterson and

      Mr. Stephen Day.

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

  Teaching and Higher Education Bill [Lords]
  Lords amendment considered.
  Teaching and Higher Education Bill [Lords]
    Clause 19

      NEW ARRANGEMENTS FOR GIVING FINANCIAL SUPPORT TO STUDENTS
      8.23 pm
      The Minister for Education and Industry, Scottish Office (Mr. Brian Wilson): I beg to move,
      That this House insists on its amendment in page 14, to leave out lines 31 to 49, to which the Lords have disagreed and disagrees to the amendment proposed by the Lords in lieu of that amendment.
      Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss motion No. 2:-
      That this House insists on its amendment in page 22, to leave out lines 31 to 39, to which the Lords have disagreed.
      I inform the House that the Lords disagreement to the two Commons amendments and the Lords amendment in lieu involve privilege.
      Mr. Wilson: The motions invite the House to insist on two amendments that it made earlier, thereby deleting two amendments carried in another place.
      I return to this subject with enthusiasm. I am delighted again to have the opportunity to state the purposes of the funding changes for higher education, which are simply to widen access to it and get more money into it. As I have acknowledged at the Dispatch Box before, the Tories were good at getting the numbers in. No one criticises them for that, although they might be criticised for their motives or the haphazard way it was done. They substantially increased the numbers in higher education, but they did not put the money in to follow the students and thereby maintain the standards of higher education and research on which this country depends for its economic future. That is the inheritance which the Government are addressing. We are determined not to be distracted from it.
      We invite the House to reverse the Lords amendments, because we are not going to accept changes to the legislation, under any guise or subterfuge, that will eat away at the considerable sums of money that will be available to higher education as a result of the Bill and the Government's courage in facing up to the funding shortfall in higher education.
      Whatever the reservations of principals, or anyone else, on the issues that we are discussing, they, too, recognise the need for the reforms to get additional money into their universities. Faced with the chaos that the Opposition parties seek to visit on the legislation or the certainty of additional funding as a result of the Bill, there is not the slightest doubt that anyone in the academic community would accept that the Bill is good for higher education. Any dilution of the funds available to it as a result of the Lords amendments would be bad news for them, for their institutions and, most important, for the next generation of students in higher education.
      On consideration of the amendments, the Lords insisted on their original amendments returning to this House. The proposed alternative to the original amendment No. 64 is

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      in a slightly different form, but that does not make it any more acceptable. I repeat what my hon. Friends and I have said many times before. We oppose such amendments not only because of the financial arguments that I have adduced but because they aim to prevent the Government from making provision for financial assistance with fees that takes into account the indisputable diversity of the education systems in different parts of the United Kingdom.
      Mr. Tam Dalyell: What legal advice in relation to a case that may be tested in the European Court has either the Secretary of State for Education and Employment, whose presence we welcome, or Scottish Office Ministers had on their proposals? Are they absolutely sure that it is legally watertight?
      Mr. Wilson: As an honorary graduate in science of Edinburgh university, my hon. Friend will understand the dangers of the words "absolute" and "certainty". Within those parameters, it is self-evident that we would not have promoted the legislation if the legal advice was not firmly in favour of it in all its aspects.
      Mr. Ian Bruce: Will the Minister give way?
      Mr. Wilson: No.
      The central charge of our critics in this matter is that the Bill creates an inequity in the United Kingdom. I want at the outset to say that the precise opposite is the truth. By following to the letter the recommendations of the Dearing and Garrick committees—I remind the Conservatives that they established them—we have created equality of opportunity for every student to study for an honours degree while contributing no more than £3,000 in tuition fees, if they are liable at all for them. That is the equity that Dearing and Garrick asked for and what we have delivered.
      Mr. David WillettsDoes the Minister accept that the Dearing report said that maintenance grants could stay? If Ministers are to claim the Dearing report in aid why do they not implement it?
      Mr. Wilson: If we implemented Dearing, every student would pay £1,000 a year in tuition fees. [Interruption.] Barracking will not win this argument, I assure hon. Members. We accepted the principle, as I believe everyone does, that in order to have a well-funded higher education system, it was necessary that those who benefited from it directly made some contribution to it. We decided that it was right to exempt those from households on below average incomes from tuition fees. We did that to protect those from less well-off backgrounds in accordance with our central aim of widening access to higher education.
      As the hon. Member for Havant (Mr. Willetts) is well aware, this debate is not a reopening of the debate on funding. It is specifically on the Lords amendments. The unpalatable truth which I have offered him is that the Dearing and Garrick committees set up by the previous Administration made a specific recommendation. We
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      looked at the issue of fairness and we have come up with exactly what Dearing and Garrick came up with. If the hon. Gentleman looks at the Division lists from the Lords debate last week, it may interest him to see where the name of Lord Dearing is positioned. Lord Dearing understands the arguments with which we are dealing tonight and is not interested in the political argy-bargy. The specific point about fairness is addressed in the amendments.
      Mr. Andrew Welsh: Will the Minister give way?
      Mr. Wilson: In a little while.
      The Dearing committee recommended that we address fully what some people rather improbably describe as the Scottish anomaly, but I describe as the distinctive character of the Scottish education system, which we shall defend. It is not, need never be and should never be identical to the English one. It is based on different school qualifications. It is a different higher education system, and that is exactly what we intend to maintain.
      The point of fairness with which the House should be concerned tonight is simple. The normal Scottish route to an honours degree at a Scottish university is a four-year course. It is a broadly based higher education system which fits a broadly based school system. The qualifications and the time scale for achieving them flow from the school system. The Dearing-Garrick recommendation has been met in full. Scottish students should not pay more for their normal route to an honours degree than students in other parts of the United Kingdom. That is the central point of fairness, and it has been addressed.
      Mr. Welsh: I heard the Minister say that he was following the Dearing report to the letter. Had he done so, he would have maintained student grants. Just in case Hansard magically gets altered, can the Minister explain that? Or is he cherry-picking? He rightly praises the Scottish four-year degree, but in this House he called it a bogus tradition. He seems to be all over the place on this. Why does he not restore fairness by abolishing the anomaly and getting rid of the discretion against English students? If he followed Dearing to the letter, he would not have abolished grants.
      Mr. Wilson: The hon. Gentleman should not talk about cherry-picking, unless he is following Dearing to the letter, in which case he will advocate that every student, irrespective of family income, should pay £1,000 a year in tuition fees. If that is the new policy of the Scottish National party, he is welcome to tell us, but if he is not telling us that, why is he talking about cherry-picking? The hon. Gentleman is revisiting the general point.
      I have said clearly that we did not accept the idea of £1,000 per student per year, irrespective of income. We think that that would be inequitable. The hon. Gentleman may disagree with us, but we want to widen access and ensure that people from less well-off backgrounds do not pay tuition fees. As I pointed out to the hon. Member for Havant, the specific point is the Lords amendment and the question of fourth-year tuition fees. On that point, we are following Dearing and Garrick to the letter.
      Several hon. Members rose—
      Mr. Wilson: I will not give way.

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      Dearing and Garrick said nothing about the same concession for students from other parts of the United Kingdom who opt for the longer Scottish honours courses, with which their qualifications do not easily interface. Such students have always chosen to accept higher costs by choosing, as is their perfect right, the longer Scottish honours degree courses. They accept the additional maintenance costs that are obviously entailed in a four-year, as opposed to a three-year, course. They also choose to forgo a year of earnings. They are welcome to make that choice. They are an extremely valuable part of the Scottish higher education system, but they make their choice in the full knowledge that they are going into a longer course which entails higher cost.
      Mr. Graham Brady: Does the Minister accept that, over the years, English students in many parts of the country have made a choice to opt for a more expensive form of study by going to London, and that the state has properly recognised the additional cost and helped them to study in London? That is different from the example that he is setting forward, in which the state penalises students who choose a more expensive form of study.
      Mr. Wilson: If the hon. Gentleman is referring to maintenance costs for students in London, I think that is an interesting issue, but not the one that we are discussing tonight. [Laughter.] With respect, we are not discussing a principle. We are not having an academic debate. We are discussing specific Lords amendments that deal with the one issue of the four-year degree in Scotland and—I shall come to this in a moment—the rest of the United Kingdom.
      Mr. Ian Bruce: Will the Minister give way?
      Mr. Wilson: I will not give way. Perhaps if things are dull later, we can have some fun, but for the moment I will not give way.
      If people went for a four-year honours degree course, they were of course going to be involved in greater costs than if they studied in other parts of the United Kingdom and did a three-year course. It is simply not credible—this is where the dishonesty lies in the argument—that the levying of fourth-year tuition fees on a means-tested basis will be a decisive factor in determining whether students go to a Scottish university.
      Judy Mallaber: Do the figures on take-up which we have so far show any evidence that English and Welsh students have been disproportionately put off applying to Scottish universities? What are the proportionate changes for Scottish, England and Welsh student applications and for applications from the European Union?
      Mr. Wilson: I can give my hon. Friend all the figures, but she makes the point in her question. There is not a shred of statistical evidence to suggest that the effect that has been predicted or wished for by Opposition Members is happening. To take one statistic, there are 33,000 applications from the rest of the United Kingdom to Scottish universities, compared to 27,000 from within Scotland. There is a proportionate increase in applications to Scottish universities from England and a numerical and
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      proportionate increase in applications from Wales. Where is the evidence in any of that of the effect that hon. Members suggest?
      Mr. Dennis Canavan: Perhaps I can be of assistance to my hon. Friend by giving him statistics that come straight from the Universities and Colleges Admission Service. Applications to Scottish universities are down 4.5 per cent. from last year. Applications to Scottish universities from England are down 4.1 per cent. and those from Northern Ireland are down 5.5 per cent.
      Mr. Wilson: Characteristically, my hon. Friend quotes helpful figures. They show that the very modest increase from England is substantially less than the cross-border flow. We have said that there is a proportionate increase in applications from Scotland of people wishing to go to England, and a numerical increase in applications from Wales. There is a decrease in the number of people going from Scotland to English universities. If the logic of the Opposition's argument has anything to commend it, they will have to explain why there is a decrease, rather greater in numerical terms, in the number going from Scotland to England. People are clearly not deterred by fourth-year tuition fees, and it is nonsense to suggest that they will deter people. All the statistics refute the Opposition's case.
      Mr. Simon Hughes: Perhaps I could put a specific case. My dad and my granddad were brewers, and at one time the only United Kingdom university offering a brewing degree was Heriot-Watt. If a specific degree course is available only in a Scottish university, as may happen now or in future, why should an English, Welsh or Northern Irish student who wants to follow a perfectly proper degree course have to pay more than if the same course were on offer in an English, Welsh or Northern Irish university?
      Mr. Wilson: It is all part of choice. The hon. Gentleman's grandfather chose to be a brewer. That was commendable, but it was a choice. I do not know the hon. Gentleman's antecedents but, given his mode of transport today, I assume that he has fairly humble origins. Some 40 per cent. of students in Scottish universities, from whichever part of the United Kingdom they come, will pay nothing at all in tuition fees. Perhaps the family brewing empire would have been able to start unhindered under these arrangements.
      Mr. Ian Bruce: The Minister opened the debate on a note on which we could all agree when he said that Government policy should always be to get more people into university. The Minister has had a long plane trip from Scotland and I am sure that the House is grateful to him for turning up. Surely he knows that, next year, the number of people who will go to university will be down for the first time. Surely he realises that Government policy is wrong. He should correct it by accepting the Lords amendments.
      Mr. Wilson: Rarely has a man waited so long to say so little, and the hon. Gentleman is wrong. We have applications, but we do not have admissions. Scottish universities could be filled several times over with current applicants, and there are more applications from the rest

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      of the United Kingdom than from Scotland. We think that we have the right policy to get more money into higher education, and the next part of our job in overcoming Opposition misinformation is to make sure that potential students have access to accurate information and that applications are turned into admissions. We shall do exactly that.
      Let us look at the figures and put the issue in perspective. There are many problems and challenges in education. There is a need to get more money in, to open up opportunities and to ensure that the 11 per cent. of people from lower-income backgrounds in higher education is brought nearer to the 80-plus per cent. of the top two social groups. Those are important issues, and I should have liked to hear the other place discuss them. It did not. It has not sent us a demand for more egalitarianism or more opportunity in education. There is not a word about that. The narrow issue affects a small number of people and has an influential pressure group made up of a small number—I might say a minority—of university principals who have the ear of some people in the House of Lords and in the Opposition. That is why the issue has been elevated to a high point of principle, which it is not.
      On the basis of last year's admissions, about 6,000 students will come from the rest of the United Kingdom to Scottish universities. I have no doubt that there were 6,000 last year, and that there will be 6,000 next year when all the got-up excitement will be forgotten. The numbers will not change significantly, and between a third and 40 per cent. of those students will pay nothing in tuition fees and will be completely unaffected by the argument, except in the sense that they might be misled by Opposition Members into believing that they will pay tuition fees.
      Mr. John Randall rose—
      Mr. Wilson: I am trying to give a breakdown of the figures, but if the hon. Gentleman cannot contain himself I shall give way.
      Mr. Randall: I am grateful to the Minister for his courtesy.
      The Minister says that a small number of people discussed the issue in the other place. Why were there no Scottish Members on the Standing Committee from the Labour party, the Liberal Democrat party or the Scottish National party? I agree that Conservative Members are at a disadvantage. However, it would have been nice if some Scottish Members had debated these issues.
      Mr. Wilson: The Committee's make-up is a matter for the Committee of Selection. I have no wish to cast aspersions on the minor parties. They can speak for themselves if they want. Although, in many ways, this issue affects the Department for Education and Employment more than us, whenever it has come here, it has focused on Scotland, so I have taken responsibility for answering at the Dispatch Box on the Floor of the House, and I do not shirk from that.
      Several hon. Members rose—
      8.45 pm
      Mr. Wilson: I want to finish the breakdown.
      A third of those students will pay nothing at all over the four years, so there is no impact. Some will pay very small amounts, because it is a means-tested system. Again, I go back to the point that anyone who thinks that that will be the decisive factor in determining whether students go to Edinburgh, St. Andrews or a university in England is not living in the real world. Many students take an honours degree and they are not affected either. There are others who enter in the second year and they are not affected either. When we take all those categories out, at most, we are talking about 1,200 students from England, who will be asked to pay £1,000 extra over the four years.
      It is of interest to know where those students come from—what backgrounds they come from and whether this is likely to be a burden on their shoulders, which will be crucial in determining the outcome—so I made some inquiries into the top four schools supplying students to Edinburgh and St. Andrews universities. My hon. Friends should listen to this point, because they will get some idea. They will be listening anxiously for schools in their constituency to find out if it is their constituents who will be affected.
      The pecking order of schools supplying students from England to Edinburgh and St. Andrews universities is: No. 1, Eton college; No. 2, Wellington college; No. 3, Charterhouse; and, No. 4, Westminster school. That tells us something about the wonderful, egalitarian education system that we have in Scotland. There is only one school in Scotland that sends more pupils to Edinburgh and St. Andrews universities combined than Eton college: George Watson's college in Edinburgh. If that is an egalitarian system, which we have to defend in the Division Lobby tonight, I want no part of that defence.
      Mr. Alex Salmond: Presumably, the Minister would not apply those questions on social class to students from Northern Ireland, who will be discriminated against on his position.
      The Minister said earlier that he wanted to defend the four-year degree, except that, at column 794 on 8 June, he described it as a "bogus tradition", so will he tell the House: what is it? Is he intent on defending the four-year honours degree, or does he still regard it as a "bogus tradition", as he did last month?
      Mr. Wilson: That is a characteristic sleight of syntax, because I did not describe the four-year degree as bogus. I know exactly what I said because I saw the glow of excitement on the hon. Gentleman's face when I said it. I will recap what I said—it goes back into the general debate, but I am happy to recap.
      When I and, I suspect, the hon. Gentleman went to university, a relatively small minority of Scottish school leavers who went to university did honours degrees. If I remember rightly, roughly 30 per cent. did four-year honours degrees and 70 per cent. did ordinary degrees. In the interim, that has turned around, so that 70 per cent. do honours degrees over four years and a small minority do ordinary degrees, which are then, by inference, regarded as inferior to the norm of the four-year honours degree.

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      What I said and stand by is that something that grows up over that relatively short period is not a tradition. It is bogus to call it a tradition, because a tradition goes back centuries, not 30 years. It is the norm of the four-year honours degree in Scotland that is not a tradition. It has grown up very recently.
      Let us return to the top four schools supplying pupils to the Scottish universities: Eton college, Wellington college, Charterhouse and Westminster school. I say gently to my old and honourable Friend the Member for Linlithgow (Mr. Dalyell) that the amendments that he declared publicly that he will support tonight will help students in Eton but not in Elgin, in Wellington but not in Wallacetown, in Charterhouse but not in Chapelhall, and in Westminster but not in West Lothian. That fact should be borne in mind as the debate proceeds.
      Mr. Roy Beggs: Does the Minister accept that the perception—which is held both domestically and internationally—that there is fairness and non-discrimination in the United Kingdom is not bogus? If so, how can the Government justify requiring students from Northern Ireland, England and Wales to pay £1,000 more than students from Europe? How can they justify requiring students from Northern Ireland to expend £1,000 more than students from the Irish Republic? Although I take account of the fact that there is provision for those on the lowest incomes, I am concerned that those who are just outside those bands will be greatly disadvantaged.
      Mr. Wilson: In a moment, I shall deal with the European point—which, superficially, seems to be anomalous—and seek to address it.
      First, however, I point out to the hon. Member for East Antrim (Mr. Beggs) that it is not only the poorest who will pay no fees. As a rule of thumb, as a norm, fees will not be paid by those with household incomes below £23,000. Moreover, for those who pay, the fees required will not leap suddenly from nothing to £1,000 a year. There will be a graduated scale, and one will have to be fairly far up in the earnings league before having to pay the full £1,000.
      I stress again that anyone from Northern Ireland, like those from elsewhere, who has made the choice of doing a Scottish honours degree course—many do, and they are all extremely welcome—will take fees into account as one of a range of factors. I repeat also that people will not automatically be required to pay an additional £1,000 a year; it is a £1,000 maximum over a period of four years.
      As I said—I think it was before the hon. Member for East Antrim joined the debate, but I make no point of that—there have always been extra costs. Any student from Northern Ireland who decides to do a four-year honours degree in Scotland instead of a three-year honours degree elsewhere knows that there will be an extra year of maintenance costs and a year of income forgone. He or she will take all those factors into account in making a decision.
      I should like to point out one aspect of the Lords amendments that all hon. Members should understand. It is quite true that it would cost £2 million annually to meet the fees of all fourth-year students on Scottish courses from England, Wales and Northern Ireland. The sum can be dismissed as a relatively small one—although the
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      principle, rather than the sum, is important. However, I hope that hon. Members on both sides of the House understand that the Lords amendments would go much further and make the same provision for all United Kingdom students on four-year degree courses at institutions across the United Kingdom. Such provision would cost more than 10 times as much—about £27 million annually.
      We would not have that £27 million available to put into higher education. Any hon. Member planning to vote today for the Lords amendments should do so in the full knowledge that £27 million would be taken from higher education. Where would that money go instead? It would, by definition, go to the best-off people, who would be the only ones who were required to contribute towards their children's tuition fees at the full £1,000 level. That subsidy would mean that, each and every year, there would be £27 million less in public funds for universities and colleges. The cost is significant.
      Mr. Phil Willis: The Minister is dealing with an important issue. He has admitted that the £2 million that it would cost to exempt students attending Scottish universities is a moderate sum. The basis of his argument—which has changed very rapidly, and was made clear last week by the Prime Minister at Prime Minister's questions—is that the sum required to exempt more students from fees for four-year courses would cost the Government £27 million. The analysis that we have had done by the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom, which I think the Minister will agree is a reliable body and not one that panders to the Liberal Democrats, is that it would cost around £12 million, and that the Government have not discounted the tuition fees at all but presume that every student will pay £1,000 and the Government will meet that cost. That clearly is not the case, so will the Minister give an analysis of where the £27 million has suddenly come from?
      Mr. Wilson: The £27 million comes proportionately from the number of students in England who are doing four-year degree courses. I have tried to break down the number affected in Scotland, and that is what would be covered by roughly £2 million, but incrementally there is a far larger number. As I understand it—this is not within my territory, but it is something that has grown up over the years—there is a much more substantial number of students doing four-year degree courses in England than perhaps had been widely appreciated, and certainly many more than are doing them in Scotland.
      Mr. Willis: There are 50,000.
      Mr. Wilson: I am not quite sure how the hon. Gentleman gets a multiplier that takes him to 250,000. As I said, it is 10 times more in England than in Scotland in terms of cost.
      Mr. Willis rose—
      Mr. Wilson: I am happy to correspond with the hon. Gentleman if he wants to pursue the point of detail. Incidentally—
      Mr. Willis: This is a serious point.
      Mr. Wilson: I recognise that it is a serious point, and I shall perhaps answer it when I wind up the debate. I do

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      not dismiss it. I point out in passing that the Committee of Vice-Chancellors and Principals was among those who supported the introduction of tuition fees as a necessary method of getting extra money into higher education.
      This debate has been largely about Scottish courses. If it were self-contained, it would be an interesting debate, but different from the one that we are having tonight. The secretary of the Committee of Scottish Higher Education Principals wrote a letter to The Scotsman last week. He was totally dismissive of and not interested in the £27 million argument—that is for someone else to worry about. He wrote:
      "Why does it requite comment by the English Department for Education and Employment to defend a decision which palpably discriminates against the Scottish way of doing things?"
      He went on to dismiss with an airy wave of the hand four-year degree courses in England which, he said:
      "cannot be regarded as authentic higher education at all and certainly not comparable with the first year of Scotland's distinctive four-year degree with honours."
      I do not have the luxury of saying that I do not care about these folk in England doing four-year degree courses because the degrees are not worth anything. That is a ridiculous thing to say. The Government are obliged to take account of the fact that there is a UK-wide effect from the cost of this, and that the argument that prevails in Scotland is exactly the one that should prevail in the rest of the United Kingdom. In other words, it is a Unionist argument again, as opposed to a divisive one.
      Mr. James Wallace: The Minister suggested that, if the issue were the £2 million that it would cost to allow English, Welsh and Northern Ireland students to study a four-year honours course at a Scottish university, therefore providing comparability, that would be a different argument. If the House accepts the Government motion, and the other place were then to vote for an amendment that would restrict it to the change that cost £2 million, what would the Government's attitude be?
      Mr. Wilson: I think that I was entitled to draw it to the attention of the House that that is not what the amendment says. Anyone who is going to vote for the amendment had better understand what it says. Hypothesising about what the Lords might do is not particularly productive.
      It is important to get this clear on the record: I did not say that it would be a different argument. I said that it would be an interesting debate; but it is not the one that we are having, because we are debating the amendments before us. The case for the Scottish £2 million, if you like, is founded on an educational argument as well as a financial one, which is, quite simply, that there is not a neatly interlocking set of school qualifications from England and the other parts of the United Kingdom which fit into the four-year honours degree system in Scotland. That is an educational argument; it is an argument recognised by Dearing; and it is the argument on which we found our case tonight.
      Mr. Desmond Swayne: The Minister implies that the Scottish first-year course is little more than a remedial year to bring Scottish highers students up to A-level standard. That is an outrageous argument.
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      Mr. Wilson: If it were a remedial year, the hon. Gentleman could probably benefit from it. Perhaps the hon. Gentleman should be left to his own devices, as I said no such thing. I quoted the secretary of the Committee of Scottish Higher Education Principals saying that the first year of a course in England could not be regarded as higher education. He was referring to England, not Scotland. I said nothing remotely resembling what the hon. Gentleman has attributed to me. The cost is significant, but the principle is equally important.
      I now turn to the European dimension. Given my history on the issue, I found it surprising to have to explain to some unlikely people what devolution and subsidiarity are about and the consequences that flow from having different systems in respect of health, education and so on in different parts of the United Kingdom. Long before political devolution, Scotland has had a distinctive and different education system. In other parts of Europe, there are variations between Lander, regions and provinces, and it is clear that differences can develop within states on the basis of devolved government and administration. The simple principle that, in my view, rightly operates within the European Union is that, if citizens of other EU countries come to a part of a fellow member state—be it a region or a devolved territory—they benefit from whatever system applies within that area. However, for exactly the reasons that I have explained, EU law does not provide that internal concessions must be granted throughout the state.
      Mr. Tim Boswell: On the basis of equity, will the Minister advise the House of the position of a German national who has a parental home in or whose normal place of residence is in England in relation to attendance at a Scottish university? Will he be expected to pay the extra year's tuition fees; if so, can the Minister explain to the House whether he should be treated on the same basis as an English student?
      Mr. Wilson: We have all had such constituency cases at one time or another. They have to be dealt with according to their individual circumstances. It would depend on how long the individual had been resident in England and a range of other circumstances. I encounter such cases fairly frequently, as I am sure my ministerial colleagues do in England. If the hon. Gentleman wishes to draw a specific case to their attention, I am sure that my ministerial colleagues will be pleased to give him an answer.
      Although the European position sounds anomalous, it is not. It applies throughout the European Union. It is the product of a union of states within which there are various forms of government and different legislatures.
      Mr. Beggs: I am grateful to the Minister for giving way to me again.
      The Minister will be aware that, today, the New Northern Ireland Assembly has had its first meeting; arising from it will be cross-border bodies, and much co-operation is expected. Nevertheless, there will be discrimination between students from Northern Ireland and from the Irish Republic should they be studying at Scottish universities. There will also be the council of the isles; should it make a representation to the Minister

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      asking for equity of treatment for students from all regions within the United Kingdom, would he accept and honour such a recommendation?
      Mr. Wilson: I shall not prejudge what the council of the isles might discuss. However, before anyone recommends the system in the Republic of Ireland, they should check on the availability of student grants to the great majority of students. They should also check on the availability of student loans, which do not exist at all there. As a result, the majority of students within the Republic of Ireland have access to neither grants nor loans from the state, and that is not a desirable system for Scotland or Northern Ireland to copy.
      Mrs. Angela Browning: Will the Minister clarify the means-testing of the fee for students from other parts of the European Union? What mechanisms has he arranged with other member states and what are the administrative costs likely to be?
      Mr. Wilson: Those students do not have access to maintenance grants or loans.
      Mrs. Browning: I am asking about fees.
      Mr. Wilson: If I misunderstood the hon. Lady's point, I shall deal with it later.
      The spectre of hordes of European Union students coming in while the English are deprived is held up as the great problem. Students from the rest of the European Union will not benefit from the subsidised maintenance loans which will be available to students from England, Wales, Northern Ireland and Scotland.
      Mr. Willetts rose—
      Mr. Wilson: I shall not give way because I am coming to a conclusion.
      The idea that European Union students will flock to Scottish universities in place of UK students is absurd. In 1995–96, there were just 350 other EU students in the fourth year of a Scottish course. This year there has been a 17 per cent. fall on last year's number of EU applicants, which is greater than the percentage fall in the overall number of applicants. The EU treaty requires member states not to discriminate on the ground of nationality against nationals of other member states on matters in the scope of the treaty, but it does not require each member state to treat all its nationals in the same way. That is what devolution and subsidiarity are about. I find it odd that the principles should be attacked by people who otherwise support them.
      I do not want to detain the House further. This is an interesting debate, but it is peripheral to the main issues.
      Mr. Wallace: There are two motions for debate. The second says:
      "That this House insists on its amendment in page 22, to leave out lines 31 to 39, to which the Lords have disagreed."
      That specifically relates to English, Welsh and Northern Ireland students attending Scottish higher education institutions. The Minister said that that might be a
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      different debate, but it is relevant to the amendments. What will be the Government's policy if there is a separate vote on that motion?
      Mr. Wilson: I may be dreaming, but I think that I answered that question five minutes ago. I said that it was a different debate, but the same principle. We have made it clear from the start that we oppose extending the provision to students from the rest of the United Kingdom, not primarily—or not entirely—on financial grounds. There is an educational argument. We believe that it is not right to extend that benefit to students who have chosen a degree course in Scotland against the many other options open to them. We do not believe that it will have any impact on the number of English students in Scottish universities. I reiterate the point that, if any Scottish university is worried about not having enough students from England, it need only take a few students from less well-off backgrounds. That will keep the numbers and the quality up.
      Mr. Beggs: Will the Minister give way?
      Mr. Wilson: No. I have given way twice to the hon. Gentleman.
      We are debating a peripheral aspect of the Bill. The Bill is about getting more money into higher education, putting £140 million extra a year into Scottish higher and further education alone. That is a big aim. The quality of our education system depends on it. If we are frustrated or diverted from our aim, it will not be this House that pays the penalty, but the students of the next generation, the research base of the Scottish universities and, in particular, those universities that depend on the widest possible range of students and the widest range of access to their ranks. For all those reasons, I ask my hon. Friends and Opposition Members who think about the issues to vote to overturn the Lords amendments. As we would expect from the House of Lords, the amendments are in the interests of an elite and do not address the needs of higher education.
      Mr. Willetts: The longer the Minister's speech went on, the feebler his arguments became. It was a completely unnecessary speech, on a completely unnecessary measure. The Government have got what they asked for when the Secretary of State for Education and Employment made his statement on higher education almost a year ago. In every essential respect, the Bill before the House delivers what he announced. It is not the purpose of this debate to go into the strong disagreements in Committee—suffice it to say that the Secretary of State has got what he announced last July.
      This debate is about something that was not announced in July. To be honest, I do not believe that Ministers ever intended to get themselves into such a position. I do not believe that any of the Ministers sitting on the Front Bench said in a Whitehall ministerial meeting, "I've had a bright idea. Why don't we charge more for students from England, Wales and Northern Ireland if they go to Scotland than we charge those who live in Scotland?" No Minister came up with such an idea. Whatever I may think of the ministerial team, I do not believe that they would be quite that daft.
      I do not believe that a second Minister then chipped in, saying: "I've an even better idea. Why don't we exempt students from fourth-year fees if they come from the rest

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      of Europe but not if they come from England, Wales or Northern Ireland?" We are debating not a policy, but an accident as a result of the failure of Ministers in the Scottish Office and the Department for Education and Employment to get their act together as they were developing higher education policy.
      Dr. George Turner: Will the hon. Gentleman explain why the policy is an accident, given that the exemption for four-year degree courses was part of the Denning recommendations, and that that noble Lord still supports what he recommended?
      Mr. Willetts: That noble Lord is dead. The hon. Gentleman may be referring to Lord Dearing. I am, of course, familiar with the arguments in the Dearing report. Following comments on exemption for tuition fees, the very final sentence of the Dearing report on this subject states:
      "Beyond that, this would be a matter for consideration by the Secretary of State for Scotland."
      That was an open invitation to the Secretary of State for Scotland to consider making arrangements so that we would not get into the anomalous position in which Ministers have landed themselves. I should be interested in whether the Minister wished to deny at the Dispatch Box that, as I believe, Scottish Office Ministers have prepared in their budget a contingency plan for the £2 million that will be necessary to deal with the anomaly. That is what Lord Dearing invited them to do.
      Let us consider briefly in turn—I shall certainly not speak for the same length of time as the Minister—some of the unbelievably convoluted and complicated arguments that have been put before the House in this debate, and earlier today, by the Prime Minister in Prime Minister's Question Time. First, let us turn to the figures on university applications.
      Last week, the Prime Minister told us in Prime Minister's Question Time:
      "the number of English students applying to Scottish universities is up, not down. It is actually 33,000."—[Official Report, 24 June 1998; Vol. 314, c. 1047]
      Unusually, the Prime Minister apologised in today's Question Time for getting that wrong. It was simply incorrect; the figures clearly show that applications to Scottish universities from English students are down by 4.1 per cent.
      Then we heard an even more ingenious argument. We were told that, although applications to Scottish universities from English students have fallen, it does not matter, because overall applications to Scottish universities have fallen by even more. I should not have thought that that is something that anyone would want to celebrate. In racing down to the bottom, which is the best that Ministers can come up with, they tell us that such a fall does not matter, because the overall figure has fallen by 5.4 per cent.
      The statement by the Universities and Colleges Admission Service of 12 June gives its figures. They indeed show a fall of 4.1 per cent. in applications to Scottish universities from English students, and an overall fall—in students from Scotland, the rest of the United Kingdom and the rest of the European Union—of 4.5 per
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      cent. Why is that? A fall of 30.3 per cent. in applications to Scottish universities from students in Eire has brought down the average.
      The Prime Minister said that such wider changes were irrelevant to the policy; they are not. Applications from Eire have fallen by 30 per cent. because it has just got rid of tuition fees, and more students in the Republic of Ireland are staying at Irish universities. To claim that phenomenon as the explanation or defence of what the Government are trying to do is to pile distortion on distortion.
      Miss Melanie Johnson: The hon. Gentleman neglected to mention the figures for Wales, which show a 4.5 per cent. increase in applications. I invite his comments on the point, which was made by the Minister, that the figures are for applications, which fill places many times over. All we are arguing about is the massive over-subscription for places. Spending more money on those limited places for the few people occupying them, rather than on a larger number of students, will only increase the number of unsuccessful applicants and reduce the number of those who are able to attend universities and complete the degree courses.
      9.15 pm
      Mr. Willetts: That was equal to about three interventions. The figure for Wales, which I have here, of an increase of about 40 in applications, is trivial compared with the problem of a fall in applications from England and, as Northern Ireland Members have mentioned, from Northern Ireland.
      Mr. Beggs: Does the hon. Gentleman agree that the position with applications from Northern Ireland is even more serious, because of the absence of adequate university provision within Northern Ireland? Many of our able youngsters, who could compete favourably with others at Scottish universities, may lose completely.
      Mr. Willetts: The hon. Gentleman is correct, and, although the Minister seemed rather uncertain about this idea, he is talking about a well-established tradition, under which many students from Northern Ireland have gone to Scottish universities, partly because of historic links between the two countries. As the hon. Gentleman pointed out—
      Mr. Jim Murphy: Will the hon. Gentleman give way?
      Mr. Willetts: I want to make more progress. I shall finish this point.
      The tradition is attributable also to the absence of sufficient higher education provision in Northern Ireland.
      In the text surrounding its figures, UCAS said:
      "Institutions in Scotland, where honours degrees are traditionally four years long, continue to be affected by the introduction of tuition fees."
      That is a perfectly obvious and comprehensible point, and I do not understand the attempts to create ever more confusion about it.
      Mr. Murphy: Will the hon. Gentleman give way?
      Mr. Willetts: No, I want to move on to a different point. I shall not speak for as long as the Minister did.

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      The other argument we hear is about the treatment of European students. Whatever ingenious arguments the Minister tries to put before the House tonight, he does not have a reasonable prospect of sustaining this policy through the European courts in the months and years ahead. The idea that the European Court of Justice will not interfere in a manifestly discriminatory policy comes from cloud cuckoo land. He would be much better off finding the £2 million necessary to concede the point now, rather than being hauled through the courts in future.
      Mr. David Jamieson: The figure is £27 million.
      Mr. Willetts: I am grateful to the hon. Gentleman for that remark, which is the next point that I should like briefly to consider. When the Minister has run out of all the ingenious and intricate claims he has made tonight, the one argument that remains is that we are on a slippery slope, that this is the thin end of the wedge—we all know the Whitehall arguments—and that the cost would be not £2 million, but £27 million.
      The figures from the House of Commons Library—and, indeed, from Ministers themselves in written answers—are absolutely clear. The cost of exempting students from England from fourth-year tuition fees in Scotland would be £1.5 million; for students from Wales the cost would be £45,000, and for students from Northern Ireland it would be £550,000. That is the cost of dealing with the anomaly that we are debating tonight. The anomaly is one in which two students born in different countries of the United Kingdom, going to the same Scottish university, will face different levels of tuition fees simply because of where they were born. What we are talking about is what goes on within a Scottish university. That is the point at issue tonight.
      Mr. Wilson: From what the hon. Gentleman says, am I right to conclude that he would not support the extension of the same concession to four-year degree courses in England; and, if so, will he vote for the Lords amendment, which envisages exactly that happening?
      Mr. Willetts: The Lords amendments are permissive—[HON. MEMBERS: "Ah."]—they put no obligation on Ministers in either the Department for Education and Employment or the Scottish Office to spend £27 million. All they require is that, at any given university, students who come from different parts of the United Kingdom should be treated on the same basis for tuition fees.
      I quite accept that at St. Andrews and at Edinburgh university there is an historic different way of delivering higher education from that at English universities. We are not saying that students at English universities should be exempt from fourth-year tuition fees—we accept that, at £27 million, that would be too expensive. All we are asking is that students from different parts of the United Kingdom going to the same university should be treated on the same basis. That is why dealing with the anomaly would cost only £2 million, not £27 million.
      Mr. Willis: There are two amendments for debate tonight, and we would hope to have two separate votes, if that is necessary. The second of the amendments, which refers to page 22, lines 31 to 39, is very specific. It deals specifically with students from England, Wales and
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      Northern Ireland going to Scottish universities. It is bogus of the Minister to claim otherwise. That debate is at the heart of our deliberations this evening.
      Mr. Willetts: The hon. Gentleman is quite correct. What we are talking about is the regime in Scottish universities, which is what the amendment tabled in another place to which he refers is all about.
      Mr. Wilson: Will the hon. Gentleman give way?
      Mr. Willetts: Yes, although the Minister did not accept my second intervention, so I am treating him better than he treated me.
      Mr. Wilson: I had more competition facing me than the hon. Gentleman has. He makes a fundamental point and it seems to me that we could abandon proceedings now. He is simply wrong when he says that the amendments are permissive—they are not. The Lords amendment in lieu of Commons amendment No. 64 states clearly:
      "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",
      and so on and so forth. It is not permissive. As the hon. Gentleman appears to have renounced the meaning and the spirit of the amendment on which we shall vote later, I wonder what we are debating.
      Mr. Willetts: This is very interesting. If the Minister is going to tell the House that he will accept the motion that specifically covers students from England, Wales and Northern Ireland in Scottish universities for a cost of £2 million, the Opposition will happily accept that. That is the anomaly about which my hon. Friends and I are complaining. There is not a complaint in Bristol—
      Mr. Wilson: On a point of order, Mr. Deputy Speaker. It is essential for the House to know whether the hon. Member for Havant (Mr. Willetts) is moving the Lords amendment in lieu of Commons amendment No. 64, given that he has renounced its content.
      Mr. Deputy Speaker: The motion before the House has been properly moved. That is a debating point, not a point of order.
      Mr. Willetts: It is the Minister who is moving the motions to tonight. My point is that we are not imagining, claiming or demanding that students in English universities should be exempted from fourth-year tuition fees; we are saying simply that, when students from different parts of the United Kingdom are studying side by side at Scottish universities, they should all be treated on the same basis. That is the point, that is the anomaly and that is what the argument is about. There have not been protests in England about this matter; it concerns the Scottish universities.
      Mr. Jim Murphy: Will the hon. Gentleman give way?
      Mr. Willetts: No, I must conclude now.

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      The motion is about establishing that there should be equal treatment of English, Northern Irish and Welsh students at a university in Scotland. If all that the Minister can do is to offer us evermore ingenious and intricate arguments for something that no reasonable man would defend, that is the beginnings of the decay of a Government when Whitehall arguments triumph over practical common sense.
      Mr. Dalyell: On a point of order, Mr. Deputy Speaker. Perhaps it was inadvertent, but the Opposition Front-Bench spokesman seemed to kill off the noble Lord Denning, who I am told is in fact alive and flourishing.
      Mr. Deputy Speaker: I am sure that the House will be glad to hear that.
      Mr. Donald Gorrie: On a point of order, Mr. Deputy Speaker. The Public Bill Office agrees with my interpretation of the Lords amendment that the House is seeking to overturn, which is different from the Minister's understanding. The hon. Gentleman was trying to say that the Lords amendment—
      Mr. Deputy Speaker: Order. That is not a point of order for the Chair. The hon. Gentleman is extending the debate.
      Mr. Willetts: On a point of order, Mr. Deputy Speaker. I wish to extend my gratitude for the correction, and my apologies to Lord Denning.
      Mr. Deputy Speaker: I am sure that the hon. Gentleman's apology will be noted.
      Dr. George Turner: The slip of my tongue was certainly outdone by the slip of the dagger on the Opposition Benches. First, I must briefly remind the House that among Sassenachs, because of Scottish ancestry, I have a warm spot in my heart for a number of Scottish traditions.
      Mr. Willis: On a point of order, Mr. Deputy Speaker. I apologise to the hon. Member for North-West Norfolk (Dr. Turner) for interrupting, but this matter is germane to the whole debate. There is a difference of opinion between the Government and both Opposition Front-Bench spokesmen about interpretation. Can you ask for an official interpretation of the amendment?
      Mr. Deputy Speaker: It is for Ministers to explain to the House the motion that is before it.
      Dr. Turner: When the House last discussed the issue, I at least understood the emotional content of some of the debate. If I did not understand where the arguments appeared to have come from, certainly the politics seemed straightforward. The politics of the Opposition are that they will lay their hands on anything, even if it means abandoning the principles that they have argued elsewhere on the Bill, to find something that can be represented as the Government being unfair.
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      As the noble Lord Dearing explained last week that equity was the motivation behind his committee proposing the exemption for Scottish students attending Scottish universities, I find it difficult to understand why a party that says that it wants to implement the Dearing proposals will argue against them when it suits their political purposes.
      After many years spent as a university teacher and admissions officer, and in being involved with course design work, particularly for courses that allowed students to join in different years and which tried to encourage applications from Europe and further afield, I know that one must face many issues when considering the merits of three and four-year courses.
      When I first joined the university system many years ago, the word "elitist" could rightly have been used to describe the attitude of many in higher education who believed that they had some right to a level of funding and support that was but a dream for those in further education, particularly those at our schools. I know from my political experience of the changes that took place in the universities. In the name of efficiency, they were forced to impose unacceptably low unit costs to meet what I believe was the admirable objective of an increase in the numbers of students.
      However, as a member of a local education committee, I saw that that had to be balanced against the many funding needs of the local education authority, which were unmet almost every year—in my county of Norfolk, three and four-year-old nursery provision was non-existent, and almost all sixth-form provision received inadequate funding.
      Mr. John Hayes: Like the hon. Gentleman, I was a member of a local education authority for many years. He seems to be saying that there was an imbalance between the resources for higher education and those for schools and nurseries, so is he arguing that, for 18 years, the previous Government funded universities too generously?
      9.30 pm
      Dr. Turner: I said that I saw an inequity. There was an elitist attitude in the universities—when I joined the university system, only a tiny minority of people were able to go to universities, which meant that there was less funding to support those who were unable to go to them. The nation faces a challenge in trying to strike the right balance between supporting those who are unable to go to university because they have failed at an earlier stage and the aspirations of those who are already at university.
      I spent many years in university circles, and I know that many people in English universities want the four-year course to be the norm. Indeed, it would be good to think that, in the next millennium, the nation could afford a standard honours course that lasted four years, as that would allow for a relaxation in what can be an intense pace of study.
      I have to ask myself whether that is the priority that I want to support as a Member of Parliament. I believe that better funding for—not the extension and relaxation of—what we already do should be our highest priority; we cannot afford the luxury of four-year courses as the norm in these isles before we have improved the quality of three-year courses and opened the doors of our

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      universities and further education institutions to larger numbers of pupils. If hon. Members do not recognise that the argument is about priorities, they are missing the point.
      Mr. Dalyell: Will my hon. Friend clarify whether his argument is that the Scottish four-year course should be ended, or have I misunderstood?
      Dr. Turner: My hon. Friend misunderstands me. As I said at the outset, to avoid misunderstanding, I have an automatic, even genetic, sympathy with the Scottish system. However, that system is fundamentally different from the English system. One may regard it as superior or inferior, but the truth is that it is fundamentally different. People can create false anomalies only because we are trying to match the needs of two different systems and of those who want to transfer between them.
      Mr. Randall: Will the hon. Gentleman give way?
      Dr. Turner: I must make some progress, as I know that other hon. Members want to speak.
      The fundamental question that Dearing and the Government have had to face is why four-year courses in Scotland are treated differently from the four-year courses that exist in England. If that had been the subject of this debate, I could have understood that those who represent the Scottish interest had an argument. I know enough about Scotland to be aware that significant numbers—it used to be the majority—of pupils move from school to university after one year of post-compulsory school education.
      I know that the pattern has shifted and that many now do a further round of highers, but a large number of pupils in Scotland start their four-year degree course after only one year at highers, as opposed to the two years at A-level enjoyed by the vast majority of English pupils as the standard—although by no means the only—route into English universities.
      A comparison between the number who flow north of the border and the number who come south shows that the real difficulties arise in transferring into England after one year post-16 in Scotland. Some of the English four-year courses allow that transition, because they are structured for those who want to change subjects.
      The Dearing inquiry had to consider whether an exception should be made for Scottish universities' four-year courses because of the significant number of students who would be seen to be treated inequitably if they were required to pay for all four years. Because the inquiry saw that that would be unfair to that majority, or large minority, of students in Scotland, it recommended an exclusion for Scottish students, who would have only the same number of years of post-compulsory schooling as their English counterparts, who had two years at A-level and three for a standard university course.
      Mrs. Browning: If what the hon. Gentleman says about the situation in Scotland, England, Wales and Northern Ireland is the case, what is the justification for the exemption for Holland, Germany, Italy, Belgium, France, Portugal, Spain and all the other European Union countries? Are they all being exempted for exactly the
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      same reason, or have the Government received rather different advice about their actions in relation to those countries?
      Dr. Turner: I know that the Conservative party is obsessed with all matters European, and I believe that that was an arid debating point, with which the Minister has already dealt completely adequately. The hon. Lady may tempt me to speak for longer than I had intended. That dreadful nationalistic approach, which does not recognise the difference between this country and Europe, has divided her party and done it no good whatever.
      It is important to realise—I hope that Scottish Members are listening carefully—that the Government erred on the side of generosity to Scotland. I was tempted to raise this issue when these measures last came to the House, and I will resist no longer. The Government have taken a principled exemption, designed to allow those students in Scotland who had done only one year of post-compulsory education at school to pay for only three years of fees, and extended it to all students in Scotland, so that those students who take two years and do a further round of highers are also exempt.
      Sir Robert Smith: It is important to realise that it is not only a matter of the number of years at school and university, because often the first year of the subject that you study at university will be crucial to your degree and not relevant to what you studied in your two years in the sixth form. Say you studied law, medicine or—
      Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman should know that it is highly unlikely that I will be studying law or any other subject.
      Dr. Turner: It would be nice if we could afford to allow everyone to do whatever they wanted and to have unco-ordinated career patterns, switching to any course at any time. Some time in the next millennium, we will no doubt be able to have perpetual students who never make up their mind about what they want to do. My question is whether the Government can afford to give greater priority—
      Mr. Willis: Will the hon. Gentleman give way?
      Dr. Turner: I need to make some progress with my argument. I want to make sure that the House clearly understands that the Government have erred in favour of Scottish students and Scottish universities. Will the Minister explain why the Government have been so generous to Scottish universities?
      Mr. Willis: Will the hon. Gentleman give way?
      Dr. Turner: I will, as the hon. Gentleman is so insistent.
      Mr. Willis: I am grateful to the hon. Gentleman. I know that he was in full flow, but I am trying to help him. He seems to be saying that, because students in Scotland leave school a year earlier than their English counterparts, they deserve an additional year's exemption.

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      Can he tell me why a domiciled Scottish student who wants to study medicine or veterinary science will receive no exemption?
      Dr. Turner: As I said, the trouble with exemptions is that, once those in authority embark on them, they have to justify not going one step further. The Government need to be pinned down on why they have made the exemption at all. That is the real question that needs to be answered, and I hope to hear a clear answer from the Minister.
      The Minister has said—I believe that the figures given by his counterpart in the House of Lords bear this out—that the extra cost is about 5 per cent. of the total that might be involved. Supporting a four-year course will involve many costs to the state. As I said at the outset, I believe that, when fundamentally different systems are operating, an element of judgment must feature in the granting of exemptions to take account of those fundamental differences.
      I think it reasonable to exempt Scottish students, because of the fundamentally different system under which they are educated in and after school; but I see no reason why someone from northern England, for example, should be able to cross the border to do a four-year course and benefit from an exemption from which he or she could not benefit at the university at which I studied in England. The Opposition want to create an anomaly: they want an English student taking a four-year course in Scotland to be treated differently from an English student taking a four-year course in England. I see no reason for that, and I think that the Government should stick firmly to the opposite principle.
      I have read the report of the debate in the other place. The Opposition there seemed not to be learned and erudite, or to know what they were talking about; their views seemed to be based on the same party political principles as the views that we are hearing tonight. I hope that the amendments will be thrown out.
      Mr. Wallace: I hope that I will be forgiven if I do not follow the hon. Member for North-West Norfolk (Dr. Turner) down all the byways of his speech, since I was not entirely sure where he was going.
      The Minister's introductory speech astounded me. I had already thought that the Government's arguments were pretty threadbare, but the longer the Minister went on, the more threadbare they became. That has been the character of the Government's position throughout the debate. The hollowness of their arguments has been matched only by their obstinate unwillingness to admit that they are wrong, and that the simplest thing to do would be to accept the Lords amendments, particularly the one dealing specifically with Scottish institutions.
      9.45 pm
      I mentioned the Government's arguments. No great battery of arguments has been fired against us, however; instead, the Government have had to put up successive arguments, because almost every argument that they have made has been shot down. When the policy was first announced, the Minister thought that he could destroy his critics and win the day by sheer bluster. He described
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      his critics as indulging in "hyperbolic nonsense". He criticised those who defended extra fees for defending the "rich English". The Minister likes to pride himself on being the scourge of the Nats, but if that remark had come from the Scottish National party, I can just imagine his outcry against such a nationalistic act. There were further echoes of that statement in the Minister's attempted defence of the Government's position tonight.
      Having failed with that argument, the Government attempted to use misleading figures. I would be ruled out of order, and would not argue, Mr. Deputy Speaker, if I said that the Minister had used lies or damned lies, but "Erskine May" allows me to say that he used statistics. As the hon. Member for Havant (Mr. Willetts) has pointed out, it was totally misleading to say that the proportion of students applying to Scottish universities from England was down by less than the total drop in applications. The point being made was about the substantial reduction in student applications from the Republic of Ireland, whose students are not coming to Scotland because Irish tuition fees have been abolished. The Minister also ignored important points about students who come to Scotland from Northern Ireland for long-standing traditional reasons. The number coming from Northern Ireland is down about 5.5 per cent. The overall figure is 4.5 per cent. As the hon. Member for Havant said, the Universities and Colleges Admission Service explained that with reference to the introduction of tuition fees.
      Mr. Jim Murphy: I have listened with interest to the point made by both the hon. Gentleman and the hon. Member for Havant (Mr. Willetts) about students from Northern Ireland. Applications to Scottish and other United Kingdom universities from Northern Ireland have gone down. The hon. Gentleman claims that that was caused by tuition fees. If that is so, how can he explain the 15 per cent. reduction in the number of Northern Irish students going to colleges and universities in the Republic of Ireland over a two-year period? His figures do not add up. There has been a drop of 4 to 5 per cent. in applications from Northern Ireland to the UK, but a drop of 15 per cent. of applications from Northern Ireland to the Republic, despite its abolition of fees.
      Mr. Wallace: I will not explain why students have not gone to the Republic of Ireland, although they would not get loans if they did so. However, almost 380 fewer students have applied from Northern Ireland to Scottish universities, which is a significant drop over last year's figure. The hon. Gentleman cannot just wish that away by making comparisons with applications to the Republic of Ireland.
      Mr. Hayes: Of the Northern Irish students who go to Scottish universities, more than three quarters are from state schools. We heard no description from the Minister of the schools in Northern Ireland when he gave his sociological breakdown; he chose to dwell solely on England in his analysis.
      Mr. Wallace: I noted that point. The Minister was keen to read out Eton, Wellington and dear knows where else, but he failed significantly to respond to queries on the schools attended by Northern Irish students who went to Scottish universities.

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      Other arguments have been used. In the other place, Lord Sewel said that the Bill compensated Scottish students who went to university aged 17 after only one year of post-statutory school age education. That is simply factually wrong. It is a long time since I was at school but only two of my fellow pupils left at the end of fifth year. The rest of us went to university at the end of sixth year. When I heard that argument from the Government, I thought that there had been a sea change but in fact only 7.4 per cent. of 17-year-olds in Scotland were in higher education institutions in 1995. The argument does not stack up.
      Lord Sewel advanced another argument. He tried to say that the first year at Scottish university was there to make up for the alleged lack of depth achieved with a one-year or two-term higher. Apart from being patronising to the Scottish education system, that ignores the fact that the distinctiveness of the Scottish education system lies in its breadth and quality. That point has been used to justify another weak prop of the Government's argument.
      The Government say that students from England, Wales and Northern Ireland can skip the first year of Scottish degree courses and go straight into the second year, thereby avoiding a year's worth of fees. That does not meet the test of critical examination. Less than 12 per cent. of students from England, Wales and Northern Ireland go straight into the second year of courses in Scottish universities. It was previously only 6 per cent. for England and 7 per cent. each for Wales and Northern Ireland. The numbers were decreasing. The Government's argument ignores the fact that many subjects, such as law, engineering and psychology cannot be done at school, so the first year is necessary. That argument does not stack up either. Second-year entrants miss out on the opportunity to study the extra subjects that they could have studied in the first year.
      Shona McIsaac: Does the hon. and learned Gentleman accept that applications from England for entry in the second year of Scottish university courses have doubled, which totally destroys his argument?
      Mr. Wallace: That makes rather than destroys my argument, because the trend was down. It is under the pressure of the Government's policy that the figure has tumbled. Unfortunately, the hon. Lady cannot see it.
      The fear is that linked to these measures is the systematic undermining of the Scottish four-year degree course. The Minister, who is no longer with us, has said that he wants the advanced higher to be on a par with A-levels. In a letter to me this week he said that he looks forward to similar advanced entry for Scottish pupils who had taken the advanced higher. He wrote:
      "Where institutions make offers of credit or advanced standing for holders of A levels, Advanced Higher students should be given similar recognition."
      Mr. Swayne: Will the hon. and learned Gentleman give way?
      Mr. Wallace: I want to make progress. There is widespread concern that what underlies the proposal is the systematic undermining of the traditional, broad-based, four-year Scottish honours course.
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      The Government's most ludicrous argument is that they are acting in this way because it helps to emphasise the distinctiveness of the Scottish education system.
      Mr. Welsh: I am amazed at what the hon. and learned Gentleman says. He makes an important point by illustrating what a mess the Government's policy is in. They cannot even implement "higher still", never mind the advanced higher. They have got their education policy, both at schools and universities, into a complete mess.
      Mr. Wallace: The hon. Gentleman knows that we agree. "Higher still" implementation has been appalling. When the advanced higher was first mooted, the understanding was that it would proceed on a broad base, but now we are talking of people taking only two or three advanced highers, making the examinations similar to A-levels—just when people in English education have been looking at the breadth of the Scottish education system.
      For the Minister to argue that what the Government are doing emphasises the distinctiveness of the Scottish system, and that we will have such so-called anomalies with devolution, misses the point. The distinctiveness will not be based on the system but on domicile, and a limited domicile at that because the arrangements apply only to people living in England, Wales or Northern Ireland. The proposals are nothing to do with the system. The problem is made worse by the fact that students from Umbria are exempted whereas students from Cumbria are not. The Under-Secretary of State for Education and Employment, the hon. Member for Pontypridd (Dr. Howells), may groan, but he will have cause to groan even more. [Interruption.]
      Mr. Deputy Speaker: Order. There is too much noise in the House.
      Mr. Wallace: As my hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis) said, there could be a legal challenge to the Government. My noble Friend Earl Russell was told in another place that the Government were confident that they were right. This evening, the Minister told us that he had taken legal advice. Of course, we know that the Government take legal advice. The Labour party in Scotland took legal advice when it tried to remove the lord provost of Glasgow, and look what happened then. So we know the quality of advice—
      Mr. Jim Murphy rose—
      Mr. Wallace: I am not going to take any advice from the hon. Gentleman. It is probably no better than the last lot he gave me and probably no better than the advice that the Government were given on this matter.
      Some distinguished professors of educational law have raised a serious point. Under the European convention on human rights, there may well be challenges to the Government's position on this matter.
      My final point relates to cost. The point has been made tonight that the amendments would cost some £27 million. The first amendment makes no such commitment. All that it says is that there cannot be discrimination between

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      Scottish and Northern Irish students who attend English and Welsh institutions. The second amendment relates only to making a level playing field for English, Welsh and Northern Irish residents who come to Scottish universities. The Minister has accepted that the cost of that is only £2 million. That is £2 million that will not kick in until 2001—the fourth year of courses starting this year under the present system. I do not believe that the Government could not find £2 million in the next three years.
      Dr. George Turner: Will the hon. Gentleman give way?
      Mr. Wallace: No, the hon. Gentleman had a fair say.
      In his report, Garrick referred to comparable qualifications elsewhere in the United Kingdom.
      Mr. John McAllion: I did not realise, until the hon. and learned Gentleman said it a few moments ago, that the requirement to find £2 million would not apply until 2001—the fourth year of honours courses starting this year. By that time, there will be a Scottish Parliament, which will be responsible for the funding of higher education. It could be that the Scottish Parliament will overturn the decision of the House tonight when it really matters.
      Mr. Wallace: That is obviously the case. Perhaps people will be sufficiently enlightened to find the £2 million.
      Mr. Jim Murphy: I thank the hon. and learned Gentleman for giving way. If I have the opportunity to speak, I will give way to him. On the issue of the Scottish Parliament, the hon. and learned Member for North-East Fife (Mr. Campbell), writing in the alumni association magazine of St. Andrews university, said:
      "There will never be unlimited resources for Higher Education. The Scottish Parliament won't change this. It is also unlikely that the proportion of expenditure on Higher Education within the total education budget will increase."
      Those are the words of his hon. and learned Friend, in whose constituency the university is. Does the hon. and learned Gentleman disagree with his hon. and learned Friend on that point?
      Mr. Wallace: It is self-evident that the Scottish Parliament will not suddenly be able to make unlimited funds available for higher education. No one has pretended otherwise. However, the hon. Member for Dundee, East (Mr. McAllion) pointed out that the Scottish Parliament might well be able to find £2 million to ensure that English, Welsh and Northern Irish students can still come to Scottish universities and study on an equal basis for an honours degree. That is something that the hon. Gentleman and his party are not willing to do because they have such a mean-minded attitude. They realised early on that they had it wrong, and they do not have the guts or the courage to admit it. Perhaps in the remaining minutes and hours of this debate, they can see the light. There is joy in heaven over sinners that repent.
      Mr. Canavan: I wish to make it clear at the outset that I am against all tuition fees. There was no mention of
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      them in the Labour party manifesto, and during the general election campaign, the Prime Minister specifically said that Labour had no plans to introduce tuition fees. Whatever justification the Government may try to come up with for tuition fees in general, there surely can be no justification for the anomaly whereby one student at a Scottish university has to pay £3,000 in tuition fees, whereas another student in the same class doing the same course at the same university with the same parental financial circumstances has to pay £1,000 more. Ministers try to justify the unjustifiable when they say that there is some justice and equity in that. The net result will be a disincentive for many students from England, Wales and Northern Ireland to go to Scottish universities.
      When the matter was previously debated, we were repeatedly told that there was no evidence for that. There is evidence—UCAS produced statistics, unfortunately just a few days after the previous debate on the subject. They clearly show that applications to Scottish universities are down by 4.5 per cent., that applications from England to Scottish universities are down by 4.1 per cent. and that those from Northern Ireland are down by 5.5 per cent.
      It being Ten o'clock, the debate stood adjourned.
      Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
      That, at this day's sitting, the Teaching and Higher Education Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Jamieson.]
      Question agreed to.
      Lords amendment again considered.
      Mr. Canavan: For some universities, the situation is even bleaker. In the past week, my capable researcher telephoned some universities and has produced some interesting statistics. For example, applications to Aberdeen university from England are down by 6 per cent. Applications from England and Wales to Dundee university are down by 13 per cent. and those from Northern Ireland are down by 22 per cent. Applications to Glasgow Caledonian from England are down by 13 per cent. Applications to Robert Gordon university from England are down by 39.4 per cent. Those from Wales are down by 47.6 per cent. and those from Northern Ireland are down by 5.45 per cent. At Strathclyde university, applications from England are down by 14 per cent.
      If that trend continues, there is a genuine and justifiable fear for the viability of some of the four-year honours courses and the Scottish tradition of a broad-based education.
      Mr. Swayne: Can the hon. Gentleman not see that there is an agenda here? The statement that A-level students and advanced students from England can enter at the second year contains the inevitable implication that the first year is remedial. That is the death knell for the distinctive Scottish four-year degree system.
      Mr. Canavan: I would never describe the first year of a four-year honours degree course as remedial, but Scottish universities fear that if the trends in the statistics that I have quoted continue, there could be a long-term threat to the viability of the four-year honours course.
      Mr. Jim Murphy: I should like to query two of my hon. Friend's points. I do not in any way wish to cast

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      aspersions on the ability of his researcher. However, the Minister gave figures that are not in dispute when he spoke about a drop of 4 to 5 per cent. in applications from England to Scottish institutions. My hon. Friend has spoken about drops of 12 to 25 per cent. In which institutions have applications gone up, and do my hon. Friend's figures add up? His aggregate seems to be 12 to 25 per cent., but the actual figure is 5 per cent.
      Mr. Canavan: My hon. Friend can get his own research team to prepare his speeches. I have quoted the work of my researcher, whom I trust very much.
      The fear for the future of the four-year honours course at Scottish universities was exacerbated by the Minister in the previous debate on the issue. He said:
      "For some people, three-year degrees are right, and they are wasting their time doing six years at school and four years at university. I do not accept the idea that to maintain some bogus tradition, it is inherently better to spend 10 years at that stage of one's life in education than eight or nine years."—[Official Report, 8 June 1998; Vol. 313, c. 794.]
      I appreciate that the Minister of State re-explained his remarks tonight, and that may be helpful. However, his use of the phrase "bogus tradition" in the previous debate caused deep offence in many Scottish universities.
      I heard Ministers and hon. Members saying that students from England can go straight into the second year. That may be possible in some cases, for some individuals and for some courses, but it is not universally applicable. I have also heard Ministers say that Scots students go to university a year earlier than their English counterparts.
      I heard the Prime Minister insinuating that this afternoon. He, of course, has some experience of Scottish education. He was educated at Fettes college, which is not exactly a typical Scottish comprehensive school; it is more like an English public school. He was nevertheless correct to draw a distinction between Scottish highers and English A-levels. Because Scottish pupils normally sit their highers in the fifth year, some have university entrance qualifications after five years' secondary education. Therefore, it is true that many Scottish students have university entrance qualifications at an earlier age than their English counterparts, but that does not necessarily mean that they go to university a year earlier.
      I think of my experience, for example, both as a pupil and as a teacher. I left school at the age of 15 with university entrance qualifications. I was not particularly bright; it was just that I was kicked out of primary school a year early because the teachers were probably fed up with me asking too many awkward questions. I left school at 15, but I did not immediately go to university and, in retrospect, I am glad that I did not.
      Later, when I was a teacher, many pupils—not just a few—aged 16 and 17 had university entrance qualifications after five years of study at secondary school, but, in general, my advice to them was to stay on at school for a further year and to do the certificate of sixth-year studies before going to university, because that sixth year would give them the chance to mature, to develop a habit of independent study and to do all the other things that help young people to make a success at university and in later life. However, my fear now is that the financial implications of the abolition of maintenance grants and the imposition of tuition fees will mean that
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      some potential students may not go to university at all, and that others may, because of financial circumstances, go too early for their own good.
      I come to the cost of the amendment. During the debate in the other place, the Minister seemed to pluck out of thin air this figure of £27 million. I do not think that it was mentioned in this House during the previous debate. Obviously, the civil servants have been working hard to try to justify the Government's stance in the other place, and that figure of £27 million was repeated by the Prime Minister last week—it is the amount required to meet the fees for all United Kingdom students on the fourth year of degree courses, at all universities throughout the UK.
      That is not, with respect, comparing like with like. In England, a four-year degree course is exceptional, but in Scotland the four-year honours degree is the norm, rather than the exception. Besides, the Government's proposal will not cause a situation in any college or university in England, Wales or Northern Ireland whereby students from some parts of the UK have to pay more than students from another part, so the Scottish anomaly is unique. I understand that there is some difference of opinion about the technicality of the amendments and so on, but there would be a broad welcome if the Government were to give a signal that they would consider the uniqueness of the Scottish anomaly and think again.
      About 3,500 non-Scottish UK students are in the final year of four-year honours courses at Scottish universities. If they were all paying full fees, the cost to the Treasury of getting rid of the anomaly would be £3.5 million. However, if we assume that, as the Government keep telling us, 30 or 40 per cent. of students are exempt from fees, and that another 30 per cent. pay only partial fees, the total cost would be about £2 million—as I said in the previous debate. I am pleased that the Government have since confirmed that figure as a fair estimate.
      The cost would of course be split between three Departments—the Department for Education and Employment, the Welsh Office and the Northern Ireland Office. I fail to understand why my hon. Friend the Minister of State has drawn the short straw, by being lumbered with the responsibility of trying to explain the Government's policy. It would have been more appropriate for Ministers from the Department for Education and Employment, the Welsh Office and the Northern Ireland Office to try to justify the policy. My hon. Friend—to give him his due—said fairly early, even before the Bill was published, that he would ensure that the Scottish Office paid the final-year fees for students domiciled in Scotland. I do not know why his counterparts in the other Departments cannot do the same for students from south of the border, Wales and Northern Ireland.
      Miss Melanie Johnson: This is a very interesting argument, and I should be interested to hear my hon. Friend's comments on this. If he is arguing that English students should have their fourth year at a Scottish university paid for—I understand that argument very well—what does he say about Scottish students attending English universities? Does he believe that they, too, should have their fourth year paid for—even if they are doing a three-year course? Whichever way one looks at the matter, in either direction, is there not an anomaly?
      Mr. Canavan: I thought that I had already dealt with that point. I said that the four-year honours course in

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      Scotland is the norm rather than the exception, whereas four-year honours courses in England are not the norm. A Scottish student who attends university in England—whether it is for four years or whatever—will pay exactly the same fees as his or her counterpart from England, Wales or Northern Ireland, whereas a student from England attending a Scottish university will have to pay more than his or her Scottish counterpart. That inequity creates the—
      Miss Johnson: Will my hon. Friend give way?
      Mr. Canavan: No. I have dealt with the point twice already, and I shall not go on repeating myself.
      The Minister seemed to argue that the main beneficiaries of the Lords amendment will be students from well-off backgrounds. He came out with some alleged facts about students from places such as Eton, Harrow, Winchester and Wellington at Edinburgh university. I wondered about that. I certainly do not recall that, while I was at Edinburgh university in the 1960s, there were huge numbers of public school boys or public school girls in my class. I got the impression that there were more working-class students with wellington boots than upper-class wallies from Wellington school. I should have thought that, in this day and age, Edinburgh university and St. Andrews university would be even more egalitarian.
      Mr. Jim Murphy: Will my hon. Friend give way?
      Mr. Canavan: No, I have already given way to my hon. Friend.
      Even if it is true that well-off students will benefit most from a Government concession, that is equally true of the original concession—on students domiciled in Scotland—which was announced so generously by my hon. Friend the Minister.
      Mr. Murphy: It is not true.
      Mr. Canavan: We are asking only for equity. It is true.
      Mr. Murphy: It is not true.
      Mr. Canavan: It is true. If the hon. Gentleman cannot see that, he should go back to school—[Interruption.]
      Mr. Deputy Speaker: Order. The hon. Member for Eastwood (Mr. Murphy) must be quiet. He does not stand a very good chance of being called to speak in the debate if he continues with sedentary interventions.
      Mr. Canavan: It is a nonsense to claim that only rich students, or students from rich families, will be paying fees. Most students will have to pay fees in whole or in part. Anyone with a residual income of £16,000 per annum or more will have to pay some fees—and £16,000 per annum is not exactly filthy rich. I fail to understand the argument that it is only students from rich backgrounds who will benefit from the Lords amendment.
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      I cannot understand why the Government are behaving in such an intransigent and apparently arrogant way. It is not good enough for Ministers to say that the House of Lords is in favour of the amendment and the Tory party is in favour of the amendment, so we ought to be against it. That is knee-jerk reaction politics at its worst.
      10.15 pm
      Let us look at the merits of the amendment, rather than the source of the amendment. [Interruption.] I am glad that my hon. Friend the Minister agrees with me. I can remember that not all that long ago, my hon. Friend was on the same side as the Tory party and the House of Lords when he helped to destroy the last Labour Government's proposals to set up a Scottish Parliament. Anyway, I do not want to go into that at this time of night—and I want to abolish the House of Lords completely and have no second Chamber at all, whether through heredity or patronage. In fact, I believe that the abuse of patronage might be even worse than heredity, but I do not want to go into that.
      Mr. Deputy Speaker: Order. It does not matter whether the hon. Gentleman wants to go into that, because we have a different motion before us.
      Mr. Canavan: In conclusion, it is rather ironic that on this issue even the reactionary House of Lords takes a more enlightened view than the Government. I am sure that if we were given a free vote in this House, this House would be like minded. I therefore appeal to hon. Members to consider the merits of the case.
      If the House accepted the Lords amendment, we would be doing the Government a great favour, by saving them from the embarrassment of an almost certain defeat in the European Court of Justice. I have been informed that a Member of the European Parliament has already complained to the European Commission and has demanded that the Commission look into this discriminatory matter of tuition fees to see whether any European directives have been contravened. Even if the existing European directives have not been contravened in the opinion of the Commission, it would of course be open to any individual to take a test case to the European Court of Justice.
      I appeal to my hon. Friend the Minister: surely it should not require court action to convince the Government to think again. The previous Government suffered the humiliation of one court defeat after another, and we do not want to have to go through that, either in the courts in this country or in the courts of the European Union.
      Mrs. Margaret Ewing: I shared many teaching experiences with the hon. Gentleman. Does he agree that the Government might find themselves having to pay legal bills amounting to more than the £2 million that he mentioned earlier?
      Mr. Canavan: I am grateful to my hon.—I almost said "my hon. Friend". I mean my former honourable teaching colleague, but she is my honourable friend in the sense of the teaching profession because she and I taught in the same very good school. I am grateful to her for her intervention. The £2 million is surely a very modest sum in the context of total Government expenditure.

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      If a student from France, Germany or Italy pays the same as a Scottish student because France, Germany and Italy are in the European Union, surely students from England, Wales and Northern Ireland are entitled to the same treatment because they are also in the European Union. It is a simple matter of equity and justice. I urge the Government, even at the 11th hour, to do the honourable thing and ensure a fairer deal for all students who choose to study at Scottish universities.
      Mr. Boswell: Perhaps for the first time in my political experience, I very much endorse the remarks of the hon. Member for Falkirk, West (Mr. Canavan). I speak as a former Minister responsible for higher education, with a residual and somewhat obsolescent knowledge of the regulations. I concentrate on those rather than the wider issues of justice, as I believe that the Government are skating on very thin legal ice. I have no precise legal expertise in these matters, but I am convinced by my experience that they should reconsider their decision.
      Like their predecessors since the 1980s, the Government are constrained by the Gravier judgment, which prohibits discrimination against students from the European Union or the European economic area in respect of tuition fees. In other words, if most UK domestic students are currently exempted from tuition fees by mandatory awards, the same facility must be available to European students.
      I am interested in the argument that I believe the Government are deploying—that the judgment applies only in a single-market sense, in that it prevents artificial distinctions between citizens of different member states, but is silent on whether a Government may discriminate between citizens of their own state, as is happening tonight.
      I am slightly surprised that the Government have not fallen back on the argument that universities are private institutions that are not formally or strictly absolutely obliged to charge fees, although of course the system is set up so that they must do so. Perhaps it is arguable that universities discriminating in their fees policies might themselves risk legal challenge. Beyond that, it is extremely unlikely that any court would not look beneath the surface at the reality behind the legislation. It is legal thin ice indeed.
      Even if Gravier applies only at the macro level, between citizens of member states, it is arguable whether the Government can sustain discrimination between citizens of different parts of the United Kingdom. It is one thing to charge fees on the basis of the institution and to require that all those studying there should be subject to the same regime, just as those who live in a particular place are liable to the taxes that apply there. In this case however, the question whether fees are charged will be determined by an entirely contingent factor—where the student happens to live. There is no basis within a single state—the United Kingdom—for discrimination along those lines. I suspect that such discrimination would be under direct attack through the European convention on human rights and probably also through the European Court of Justice, in respect of any British citizen who happened to live south of the border.
      The Minister of State conspicuously failed to answer the point that I put to him in an intervention, in respect of the position of a student who is a national of another
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      EU country, but happens to have a parental home or a normal place of residence in England, Wales or Northern Ireland. The Minister said that it was a normal administrative matter and that it would be a matter of determining whether that student would be exempt from Scottish fees or treated as an English student for that purpose. Either way, the Government would be in severe difficulty. If they decided that a German student resident in Carlisle or Bolton should be treated as a Scottish student as he was attending a Scottish university, and exempted him from fourth-year fees, it would then be arguable that an English student attending a Scottish university should also benefit from that decision. If they decided that such a person were an honorary Englishman although he was a German national, how would they reconcile that decision with the Gravier judgment? I do not think that they could do it. They have either to act in a hybrid manner in English law, by treating two residents of England in different ways, or they have to break the principles of the European Union.
      Mr. Ian Bruce: Will my hon. Friend give way?
      Mr. Boswell: I fear that I shall not, as I want to conclude in two minutes' time.
      The Minister said that he was relatively unconcerned about this minor matter, which he sought to minimise. I do not believe that he would claim to have come into politics to allow discrimination or unfairness on the grounds that it was peripheral or minor. One case of discrimination or unfairness would be not only a legal affront, but politically unacceptable.
      I am also concerned that if the anomaly persists, it will drive a wedge between the English and Scottish university systems, to their mutual detriment. Before that happens, if the Government persist in their petty little proposals and if the House is not prepared to reject them, the Government will go down in the courts and even the petty little saving that they seek will not be available. The whole matter will be swept up in legal fees and recriminations, which they could easily have avoided.
      Mr. Jim Murphy: I am pleased to participate in the debate. I believe that I am the most recent scholar of a Scottish university in the House, although I am happy to be corrected if another hon. Member has different information.
      Ms Sandra Osborne: Me.
      Mr. Murphy: My hon. Friend suggests that she might beat my record, but until half-past 2 in the morning of 2 May last year, I was a student at Strathclyde university. Only my election to this place interrupted that study.
      Ms Osborne: I stand corrected.
      Mr. Murphy: I understand that I have only a few moments, but I shall allow the hon. and learned Member for Orkney and Shetland (Mr. Wallace) to intervene if he wants, as I said earlier.
      Claims have been made by hon. Members on both sides that supporting the Lords amendment would in some way challenge elitism. I do not believe that the votes of hereditary peers in the House of Lords represent a move

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      towards the end of elitism. I fail to understand why such a significant number of hereditary Tory peers got so excited over a small number of students. I guess that if we were dealing with 2,000 or 3,000 students who were not from better-off backgrounds in the greater public schools of England, the hereditary peers in the House of Lords would not be so overly exercised. I am not comfortable with that.
      My hon. Friend the Member for Falkirk, West (Mr. Canavan) suggested that there was no difference between the social make-up of Scottish students at Scottish universities and those from England. That is not correct. Some 48 per cent. of students from Scotland studying in Scottish universities are from skilled backgrounds, whereas 73 per cent. of English students studying at Scottish universities are. I am not proud of the additional fact that only 1 per cent. of English students studying at Scottish universities come from unskilled working-class backgrounds. I have nothing against that 1 per cent. The figure should be higher, but we need to reform our education system lower down to achieve that. I do not believe that the Government, with their emphasis on providing opportunities for many more people, should provide a subsidy to the 1 per cent. who want to study at Scottish universities.
      Mr. Hayes rose—
      Mr. Murphy: I apologise to the hon. Gentleman, but time is not an ally.
      There are income thresholds throughout the system. If English students wants to study in a Scottish university, good luck to them. I wish them well. I shared that experience with many colleagues and friends at Strathclyde university. We are saying simply that there should be an income test and an examination of an individual's ability to pay
      Between 5,000 and 6,000 English students studied at Scottish universities in 1996. When one discounts the 10 per cent. who will not study an honours degree, the one third who will not have to pay any fees whatever and the many other facts and figures, one is left with about 2,000 students paying £1,000 over four years. That works out to be less than 69p for each day's study at a Scottish university. If the individual comes from a family earning £35,000 a year or more, I think that they can afford the price of a can of Irn Bru and a Daily Record.
      10.30 pm
      Mr. Donald Gorrie: I would like the Minister to clarify one or two points. Does he agree that the Lords amendments in no way suggest removing fourth-year fees from all universities in England? If so, his argument about the £28 million is totally irrelevant. Will he clarify whether the Lords amendments propose a level playing field in Scotland, so that the English, Welsh and Irish will not pay more than the Scots, and propose a level playing field in England, so that the Scots will not benefit and will pay fourth-year fees like anyone else?
      Will the Minister clarify whether the fees will at all help the universities financially? As I understand it, grants to universities fall commensurately as the fees go up. So, there will be no increase in the universities' revenues,
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      merely assistance to the Treasury. Will the Minister favour us with his knowledge of which Scottish university principals are in favour of the Labour proposal, as he implied? [Interruption.]
      Mr. Deputy Speaker: Order. I appeal to the House once again to come to order. It is bad manners to conduct private conversations while an hon. Member is addressing the House. The hon. Member for Bromsgrove (Miss Kirkbride) is having a conversation just now. She should not be doing that.
      Mr. Gorrie: The Minister pleads in support of his argument the whole cause of devolution. Devolution and diversity represent the right and the excellence of different systems in different parts of the United Kingdom; a Scottish course may be different from an English, Welsh or Irish course. The Minister is not proposing such diversity. He is proposing that students from different parts of the United Kingdom, who are in the same lecture hall, taking the same course, be treated differently. That is not diversity; that is gross unfairness.
      The Minister tried to defend his line on bogus tradition by the fact that there had been a recent increase in the number of students taking honours as opposed to ordinary degrees. Does he agree that there is a long Scottish tradition—of 250 or 300 years—of a breadth of education which has been developed in different ways in different courses?
      The first year of the four-year degree is an absolutely critical part of that strong tradition. People who went straight into the second year would miss that. In addition, most Scottish courses do not allow people to enter in the second year. There is much evidence from universities that students who do so go back to the first year because they cannot make it, or give up altogether. Often, going straight into the second year is not clever.
      The Minister delivered his litany about how we would not help students in Elgin or West Lothian if we pursued the amendment—but we would. It is in the interests of students from Elgin, West Lothian and other parts of the Scotland that there are viable first-year courses in Scottish universities. His measures will undermine that. We would be supporting future opportunities in Scottish universities.
      The Minister is busy promoting a cause of "higher still", which will mean that more Scottish students stay on to the sixth form. My hon. and learned Friend the Member for Orkney and Shetland (Mr. Wallace) made it clear that the argument that all Scots go from the fifth year into university is complete rubbish. The Minister's arguments are totally flawed, and he should give way gracefully.
      Mr. Welsh: I congratulate the hon. Member for Falkirk, West (Mr. Canavan) on his speech in which we heard the true, honest voice of what used to be the Labour party. He read out the early statistical effects of the policy—a very damning educational ragman's roll—which was created and implemented by the Government and will have cumulative effects on Scottish education.
      Tonight the House again has an opportunity to resolve the anomaly whereby Scottish and European Union students at Scottish universities will have their fourth-year tuition fees paid, but non-Scottish resident UK students will not. The Scottish National party has from the start

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      highlighted that flaw, among others, in the Government's higher education policy. After asking a series of parliamentary questions, I secured an Adjournment debate on the subject in January. Since then, hon. Members from all parties and a majority in another place have joined me in my opposition to the Government's policy.
      The Government's proposal is nothing short of discrimination against English, Welsh and Northern Irish students for no other reason than nationality. In The Scotsman newspaper today, it was again suggested that this policy contravenes the European convention on human rights and that the Government could be challenged under European law.
      In a written answer, the Under-Secretary of State for Education and Employment, the hon. Member for Pontypridd (Dr. Howells), said:
      "The EC Treaty requires Member States not to discriminate on grounds of nationality against nationals of other Member States, on matters within the scope of the Treaty. However, EC law does not intervene in internal matters and requires each Member State to treat all its own nationals in exactly the same way."—[Official Report, 1 December 1997; Vol. 302, c. 10.]
      In other words, because European law does not prevent the Government from discriminating against their own citizens on the ground of nationality, the Government can do as they please. Following that logic, the Government could justify apartheid to themselves, if to no one else.
      The policy is not only unfair to students from other parts of the United Kingdom; it will have adverse effects on Scottish institutions, Scottish education and the wider Scottish economy. English, Welsh and Northern Irish students will be deterred from coming to Scotland. Already, applications from the rest of the UK are down by 4.5 per cent. Some Scottish universities, such as Dundee and Abertay, have seen a substantial drop in applications, particularly from Northern Ireland. The final result of the Government's policy will not be known until the autumn when the more important admissions figures will be released.
      Any drop in numbers of students from other parts of the United Kingdom will force Scottish institutions to downsize their diverse range of courses. There is also the danger that Scottish universities will be forced to consider abandoning the four-year honours degree and replacing it with a three-year course, so as to compete on a level playing field to attract non-Scottish resident UK students. Universities are being forced to redesign courses to suit second-year entrants for financial, not educational or academic, reasons.
      The broad-based four-year degree is gaining admiration and popularity in other countries. Yet the Minister for Education and Industry has disgracefully described it as a bogus tradition. University is not and should never be a case of simply rushing people through and giving them a certificate at the end. It is a learning process and should be treated as such.
      The policy will have economic repercussions, causing a reduction in the £210 million spent in Scotland each year by students from other parts of the UK.
      Through written questions, I have secured pledges from the Scottish Office, the Department for Education and Employment and the Northern Ireland Office that they will monitor the effects of tuition fees and this anomaly on student numbers. I ask the Minister for an assurance that if there is any substantial drop in the number of
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      English, Welsh or Northern Irish entrants to Scottish institutions this autumn, fourth-year fees for such students will be at least immediately reviewed and at best waived. I seek guarantees that the Government will monitor their policy and take action if it proves to be deleterious, as many of us fear it will be.
      The Government must listen, not only to the views expressed tonight by hon. Members on both sides, but to the voice of students, lecturers and principals. The Government's policy is opposed by the Association of University Teachers, the National Union of Students, the Scottish Ancients, the Committee of Scottish Higher Education Principals and the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom. The Government are on their own. The new Labour Government think that they know better, but if they are so confident of the wisdom of their policy and the strength of their argument, why will they not trust their own Members of Parliament to support them and allow a free vote tonight? We can be sure that they will not do that.
      The Scottish Minister is left without credibility on this issue. He says that he is widening choice, but he is, in fact, restricting student choice. He says that he wants to follow the Dearing report, in his own words, "to the letter", but he is not so doing. Tonight, he praises the four-year honours degree, having previously called it a "bogus tradition". Faced with a 4.5 per cent. drop in non-Scottish UK students, he is reduced to semantics about percentages. All we have heard from the Minister is debating tricks and vitriol, which cannot disguise the weakness of his DFEE colleagues who have let him down in respect of their policy. The tuition fees policy is simply discriminatory. It is unnecessary and it could easily be remedied if there were any willingness in other Government Departments to do something about it.
      The Labour Government have got it wrong. For a limited cost, the English, Welsh and Northern Irish education departments could sort out the anomaly, restore fairness and end this blatant discrimination against English, Welsh and Northern Irish students at Scottish universities. The Government should do that and, for their failure to act, they will rightly be judged.
      Mr. Dalyell: May we hark back to the persistent, pertinent, but unanswered questions put by the hon. Member for East Antrim (Mr. Beggs)? It is part of the business of the House of Commons to think policies through, and I want, first, to ask a direct question of my hon. Friend the Minister. What happens in court when a student from Belfast—they are a litigious lot there—decides to take court action in relation to that student from Dublin who is paying £1,000 less? That is not a possibility whipped out of the air; as certain as certain can be, there will be legal action. When I interrupted his opening speech, my hon. Friend the Minister said, "I would not be at the Dispatch Box unless all those things had been taken care of," but I fear that I have experience of too many Ministers of different parties going to the Dispatch Box and saying, "Yes, we are legally watertight—all is well," and, some time later—usually sooner rather than later—coming back, with the proverbial egg on their face. I repeat the question: what is the legal advice?
      The hon. Member for Daventry (Mr. Boswell), a former Minister with responsibility for higher education, knows very well that there is massive Government lawyer legal

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      advice available to any Minister. Are we to take it that that advice has not been forthcoming? Either it has not been forthcoming, or the House of Commons deserves to be told tonight what that advice is. Many of us, from different angles, think that we are going to get into great difficulty with the European, and possibly the UK, courts. Will the Minister say something about that?
      Secondly, on the question of elitism, 30 per cent. of the students at Heriot-Watt come from England. That is not elitism—it is a very real problem for the Scottish universities. Thirdly, among many letters that I have received is one from a Labour party member in Kirkby Lonsdale, Mrs. Rodd, who says:
      "What infuriates many people is the obvious injustice of someone from Bordeaux or Brussels paying the Scottish rate, but those from Berwick or beyond to the south on this island, being alienated by this discriminatory fee practice. This is to say nothing of the effect on the universities themselves and the stoking up of the separatist movement that this sort of action is fuelling."
      That is the view of a prominent Labour party member from the north of England. How are we supposed to answer that?
      The hon. Member for Angus (Mr. Welsh) alluded to a number of organisations, including the Association of University Teachers. The last paragraph of a letter that it sent to all Scottish Members of Parliament states:
      "Scotland will be the poorer if English, Welsh and Northern Irish students are discouraged from attending our traditionally culturally diverse universities. It cannot be right that a student from Carlisle should be treated significantly worse than a student from Cologne when studying in Scotland and we ask that Scottish MPs reconsider this issue and vote against the Government amendment, which we hope, even at this late stage, may be withdrawn."
      That is the considered view of the AUT.
      10.45 pm
      Finally, as I see the Whip looking at his watch, I should like to say that I was taught by the late Aneurin Bevan, as were many of my generation, that one should always take the strongest argument against one. In this case, it is the figure of £27 million. I put that case to Stewart Sutherland, vice-chancellor of the university of Edinburgh, for a considered opinion, which was this:
      "The main counter-argument to parity of treatment for all UK students studying in Scotland is that the cost would be far greater than the estimated £2 million. It is argued that the thin end of the Scottish wedge would lead to an increase in the number of students on four-year courses in England. This surely is a matter on which the Secretary of State's advice and—"
      Mr. Deputy Speaker: Order. I have told the hon. Gentleman on previous occasions that I do not want him to read letters from outside organisations in full. He knows how to paraphrase a letter better than I do, so I hope that he will not get into the practice of reading them into the record.
      Mr. Dalyell: I would disagree with you on only one thing, Mr. Deputy Speaker, and that is that I could do that better than you. I am sure that you would do it better.
      The gist of the letter is that the vice-chancellor of the university of Edinburgh, who has some say in the matter, is convinced, along with his colleagues—I think that he is speaking for the vice-chancellors—that we should reflect carefully before going ahead.
      Mr. Damian Green: At the end of this debate, there is only one real question left: what was the
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      exact mixture of incompetence, malice and pig-headedness that put the Government in their current hole? Just look at the coalition that is assembled against them. It is not merely my right hon. and hon. Friends, but the Liberal Democrats, the nationalists, the Cross-Bench peers and men and women of principle on the Labour Benches.
      Outside this House, the Committee of Vice-Chancellors and Principals, the Scottish universities and the National Union of Students are all lined up against the Government. Outside the Government ranks, no one thinks that their policy is fair and right.
      The reason for such an all-embracing coalition opposing the Government is richly illustrated by the appalling mess that the Prime Minister and other Ministers have got themselves into when trying to argue that the measure is not making Scottish universities less attractive. First, the Minister says that applications are down; secondly, the Prime Minister says that they are up; thirdly, the Prime Minister says that, when he said up, he meant down, but not down as much as other applications. Truly, that is Orwellian; it is "Nineteen Eighty-Four", new Labour newspeak—up means down and black means white.
      Behind that—whether one believes what the Minister said last week, what the Prime Minister said last week, or what the Prime Minister said this week—there is even greater confusion. When I asked the Department for Education and Employment for its projected application figures, the Under-Secretary of State, the hon. Member for Pontypridd (Dr. Howells), said that the Department did not publish them. When asked a straight question, the Government answers "Yes," "No," and "We do not know." Any student applying to a Scottish university will have to do better than that.
      It is important to nail some myths that the Government have propagated this evening. The first is that their policy is having no effect on applications. The Universities and Colleges Admission Service has said that applications from England to Scottish universities are 4.1 per cent. down on last year. The trend has been steadily rising, but it is now going down because of the Government's policy.
      Let me nail another myth—that English students can easily, after A-levels, pick up a Scottish course in the second year. There are various problems with that, not least the fact that they do not and cannot. Last year, 8 per cent. of English students at Scottish universities started their courses in the second year. The Association of University Teachers has said that, even at that manageable level, anecdotal evidence from its members and from students shows that many students find the transition too difficult and either drop down into the first year or have to retake the second year. The idea that English students are sufficiently capable to swan in in the second year without needing the four-year course is completely at variance with the facts.
      Even if it were true that English students could easily begin the course in the second year, that assumes that English students will all have done A-levels. From a Government who are supposed to be encouraging vocational qualifications and different types of learning, that assumption is particularly perverse. What about students from other European countries, many of which also have completely different education systems? Why are those students entitled to privileges that students from England, Wales and Northern Ireland do not have?

      475
      The Minister was reduced to complete absurdity when he tried to defend the policy on the "World At One". He was asked why a youngster from France would pay £3,000 when a youngster from England would pay £4,000. "Ah," said the Minister, "it's because France is in the European Union"—to which the interviewer responded: "Isn't England?" That sums up the Government's confusion as well as anything.
      Among the opposition that is clear, concise and principled is that from the National Union of Students. I pay tribute to the current leadership, because it consists of that increasingly rare breed—independent-minded Labour politicians. I dare say that many of them are ambitious to sit in the House with their Labour colleagues. Indeed, the principled Labour Members who will vote against the Government tonight should include former presidents of the NUS, of whom there are five on the Labour Benches. I ask them which way they will vote. Will the hon. Member for Eastwood (Mr. Murphy), for example, defend the interests of students or the interests of his career?
      I contrast how I suspect many of the ex-presidents of the NUS will vote with the principled stance taken by the hon. Member for Falkirk, West (Mr. Canavan). I do not want to embarrass him by complimenting him too much; I merely observe that, in return for his principles, it has been decided that he is unfit to be a Labour candidate for the Scottish Parliament. The Labour party is right in that—men and women of principle are not what it requires on its benches in the Scottish Parliament.
      The Minister said that he is acting on the best legal advice. He should consider the European convention on human rights; the Human Rights Bill has not yet been enacted but, when it is, it will have a serious effect on the Government's policy.
      In The Scotsman today, Dr. Dennis Farrington, a law lecturer at Stirling university and the author of "The Law of Higher Education", said that a student would be able to challenge the Government's policy through the British courts. If the lawyers are telling the Minister that everything is okay, my friendly advice to him is to go and find some new lawyers. One can always find lawyers to give a new opinion, and the advice from Government lawyers is probably wrong.
      The Minister made palpable his dislike of many of the most distinguished Scottish universities. He had gone to the trouble of researching where the students came from so that he could sneer at them. It is a matter for him whether he dislikes English public schools so much that he wants to denigrate them and the students they send to Scottish universities, but if he sneers at English public schools he may end up sneering at Scottish public schools such as Fettes, which might prove disadvantageous to his career.
      It is ill advised to sneer at well-off students from England but to assume that well-off students from all other countries are okay. The Minister had a go at alliteration. Why is his policy okay in Motherwell or Munich, but not in Manchester? The hon. Member for North-West Norfolk (Dr. Turner) presented an extraordinary argument on Europe. He was right to say that the Scottish system is fundamentally different. That is why the Government's argument that the change would cost them £27 million, rather than the £2 million for the purely Scottish exemption, is completely spurious. The Government picked that figure of £27 million out of the air and cannot justify it in any way.
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      The heart of our argument is not statistical: it concerns fairness. Students from North Berwick and from Berwick-upon-Tweed should be treated on the same basis in the same universities, be they in England, Scotland, Wales or Northern Ireland. Both the changes that the Lords want to make would achieve that equality—the first for students at English and Welsh universities and the second for those at Scottish universities—and would not commit the Government to that spurious £27 million.
      The Government have made no case at all. Hon. Members can vote against the Government, safe in the knowledge that they are on the side of both justice and rational argument. If they have a spark of decency and a sense of fairness—whether they are old Labour, new Labour, Liberal Democrat, nationalist or Conservative—hon. Members will vote against the Government's mean-spirited little proposals.
      Mr. Deputy Speaker: I call Mr. Brian Wilson.
      Mr. Wilson rose—
      Mr. Swayne: On a point of order, Mr. Deputy Speaker. The House has already endured more than 45 minutes from the Minister. We would have expected the Secretary of State to explain this farrago. My point of order—
      Mr. Deputy Speaker: Order. I called the Minister, and the hon. Gentleman is challenging my judgment.
      Mr. Wilson: The more perceptive among my colleagues may have heard generous tributes paid by Opposition spokesmen to men and women of principle on the Government Benches who will join the great coalition of Tories and nationalists in support of the House of Lords. [Interruption.] A briefing sent out by the hon. Member for Havant (Mr. Willetts) to Tory Back Benchers says—[Interruption.]
      Mr. Deputy Speaker: Order. It is not a good thing for the Chair to have to intervene, but hon. Members must be quiet when an hon. Member is addressing the House.
      Mr. Wilson: Thank you, Mr. Deputy Speaker.
      My hon. Friend the Member for Falkirk, West (Mr. Canavan) was held up as a paragon of principle by the hon. Member for Ashford (Mr. Green). The Tory briefing says:
      "Our immediate tactics tonight are to encourage as many Labour MPs as possible to rebel against the Government. This is good politics."
      Government Members are talking not about playing political games but about the proper funding of higher education, reversing the damage done by 18 years of Tory rule, and widening access to higher education. We will not be diverted by little ploys by Conservative Members.
      My hon. Friend the Member for Linlithgow (Mr. Dalyell) asked about the legal advice. I always think that, when people's arguments are in trouble, they send for the lawyers, so let me give the legal advice precisely. It is not contrary to EC law for Scottish legislation to treat students from England, Wales and Northern Ireland

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      differently from Scottish students. That is a purely internal situation concerning United Kingdom nationals, and EC law is not concerned with such matters.
      Mrs. Browning rose—
      Mr. Deputy Speaker: Order. The Minister is not giving way.
      Mr. Wilson: I am defending the distinctiveness of the Scottish education system. I am also defending the principle of subsidiarity.
      My hon. Friend the Member for Falkirk, West said that people with a residual income of £16,000 would pay fees, and that that was not filthy rich. I ask my hon. Friend, and other hon. Members who try to give the impression that people who cannot afford to pay fees will be asked to pay them, why they are misleading people. In the case referred to by my hon. Friend, the fees would be £50. Does my hon. Friend, or any other Member, believe that £50 over a period of four years will be the decisive factor for someone who, having taken every other factor into consideration, opts for a four-year degree course in Scotland rather than a three-year degree course elsewhere? I do not think that my hon. Friend was suggesting that, but he should not convey misleading messages about what is proposed. Indeed, no one should do so.
      I know many pupils whom my hon. Friend taught. Some of them are my best friends, some went on to be very good footballers, and one is now rector of Edinburgh university. I think that my hon. Friend and I should unite on this point. In his inaugural address, the rector of Edinburgh university—my hon. Friend's former pupil, John Colquhoun—pointed to the school that, although it is within a stone's throw of the university, has never sent a single pupil to the university. Let us redress that inequality, and let us worry about access to universities.
      Mr. Canavan: During our last debate on the Bill, we addressed that injustice through my amendment, which aimed to maintain grants for students from low-income families, but the Minister—and every other Minister—voted against it.
      Mr. Wilson: Let me finish on that point. [HON. MEMBERS: "Answer."] I will answer. [Interruption.]
      Mr. Deputy Speaker: Order. Mr. MacKay, I expect better from the Front Bench.
      Mr. Wilson: Let me answer directly.
      The problem for the Opposition is that every statistic works against them, rather than for them. Since the introduction of student loans as a better way—in the last Government's view—of financing student maintenance, the number of students coming from England to Scotland has not decreased; it has greatly increased.
      We must all review our past positions. We must all accept that numbers have risen, and that giving more money to higher education is the way to reverse the damage of 18 Tory years.
      Question put:—
      The House divided: Ayes 327, Noes 183.

      Division No. 323]

      [11.3 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Cunningham, Rt Hon Dr John (Copeland)

      Ainger, Nick

      Alexander, Douglas

      Cunningham, Jim (Cov'try S)

      Allen, Graham

      Dalyell, Tam

      Anderson, Donald (Swansea E)

      Darling, Rt Hon Alistair

      Anderson, Janet (Rossendale)

      Darvill, Keith

      Armstrong, Ms Hilary

      Davey, Valerie (Bristol W)

      Ashton, Joe

      Davidson, Ian

      Atkins, Charlotte

      Davies, Rt Hon Denzil (Llanelli)

      Austin, John

      Davies, Geraint (Croydon C)

      Banks, Tony

      Davies, Rt Hon Ron (Caerphilly)

      Battle, John

      Dawson, Hilton

      Bayley, Hugh

      Dean, Mrs Janet

      Beard, Nigel

      Denham, John

      Beckett, Rt Hon Mrs Margaret

      Dewar, Rt Hon Donald

      Bell, Stuart (Middlesbrough)

      Dismore, Andrew

      Bennett, Andrew F

      Dobbin, Jim

      Bermingham, Gerald

      Dobson, Rt Hon Frank

      Berry, Roger

      Donohoe, Brian H

      Betts, Clive

      Doran, Frank

      Blackman, Liz

      Drew, David

      Blears, Ms Hazel

      Eagle, Angela (Wallasey)

      Blizzard, Bob

      Eagle, Maria (L'pool Garston)

      Blunkett, Rt Hon David

      Edwards, Huw

      Boateng, Paul

      Efford, Clive

      Borrow, David

      Ellman, Mrs Louise

      Bradley, Keith (Withington)

      Ennis, Jeff

      Bradley, Peter (The Wrekin)

      Etherington, Bill

      Bradshaw, Ben

      Field, Rt Hon Frank

      Brinton, Mrs Helen

      Fisher, Mark

      Brown, Rt Hon Gordon (Dunfermline E)

      Fitzsimons, Lorna

      Flint, Caroline

      Brown, Rt Hon Nick (Newcastle E)

      Flynn, Paul

      Brown, Russell (Dumfries)

      Follett, Barbara

      Browne, Desmond

      Foster, Rt Hon Derek

      Buck, Ms Karen

      Foster, Michael Jabez (Hastings)

      Burden, Richard

      Foster, Michael J (Worcester)

      Burgon, Colin

      Galbraith, Sam

      Butler, Mrs Christine

      Galloway, George

      Byers, Stephen

      Gapes, Mike

      Campbell, Alan (Tynemouth)

      Gardiner, Barry

      Campbell, Mrs Anne (C'bridge)

      George, Bruce (Walsall S)

      Cann, Jamie

      Gibson, Dr Ian

      Caplin, Ivor

      Gilroy, Mrs Linda

      Casale, Roger

      Godsiff, Roger

      Cawsey, Ian

      Goggins, Paul

      Chapman, Ben (Wirral S)

      Golding, Mrs Llin

      Chaytor, David

      Gordon, Mrs Eileen

      Chisholm, Malcolm

      Griffiths, Jane (Reading E)

      Church, Ms Judith

      Griffiths, Nigel (Edinburgh S)

      Clark, Rt Hon Dr David (S Shields)

      Griffiths, Win (Bridgend)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Grocott, Bruce

      Grogan, John

      Clark, Paul (Gillingham)

      Gunnell, John

      Clarke, Charles (Norwich S)

      Hain, Peter

      Clarke, Tony (Northampton S)

      Hall, Mike (Weaver Vale)

      Clelland, David

      Hall, Patrick (Bedford)

      Clwyd, Ann

      Hamilton, Fabian (Leeds NE)

      Coaker, Vernon

      Hanson, David

      Coffey, Ms Ann

      Harman, Rt Hon Ms Harriet

      Cohen, Harry

      Heal, Mrs Sylvia

      Coleman, Iain

      Healey, John

      Colman, Tony

      Henderson, Doug (Newcastle N)

      Connarty, Michael

      Hepburn, Stephen

      Cook, Rt Hon Robin (Livingston)

      Heppell, John

      Corston, Ms Jean

      Hewitt, Ms Patricia

      Cousins, Jim

      Hill, Keith

      Cranston, Ross

      Hinchliffe, David

      Crausby, David

      Hodge, Ms Margaret

      Cummings, John

      Home Robertson, John

      Cunliffe, Lawrence

      Hoon, Geoffrey

      479

      Hope, Phil

      Morley, Elliot

      Howarth, Alan (Newport E)

      Morris, Ms Estelle (B'ham Yardley)

      Howarth, George (Knowsley N)

      Morris, Rt Hon John (Aberavon)

      Howells, Dr Kim

      Mowlam, Rt Hon Marjorie

      Hoyle, Lindsay

      Mudie, George

      Hughes, Ms Beverley (Stretford)

      Mullin, Chris

      Hughes, Kevin (Doncaster N)

      Murphy, Denis (Wansbeck)

      Humble, Mrs Joan

      Murphy, Jim (Eastwood)

      Hurst, Alan

      Naysmith, Dr Doug

      Hutton, John

      Norris, Dan

      Iddon, Dr Brian

      O'Brien, Bill (Normanton)

      Illsley, Eric

      O'Brien, Mike (N Warks)

      Jackson, Ms Glenda (Hampstead)

      O'Hara, Eddie

      Jackson, Helen (Hillsborough)

      Olner, Bill

      Jamieson, David

      O'Neill, Martin

      Jenkins, Brian

      Organ, Mrs Diana

      Johnson, Miss Melanie (Welwyn Hatfield)

      Osborne, Ms Sandra

      Palmer, Dr Nick

      Jones, Mrs Fiona (Newark)

      Pearson, Ian

      Jones, Helen (Warrington N)

      Pendry, Tom

      Jones, Jon Owen (Cardiff C)

      Perham, Ms Linda

      Jones, Martyn (Clwyd S)

      Pickthall, Colin

      Jowell, Ms Tessa

      Pike, Peter L

      Kaufman, Rt Hon Gerald

      Plaskitt, James

      Keeble, Ms Sally

      Pollard, Kerry

      Keen, Alan (Feltham & Heston)

      Pond, Chris

      Keen, Ann (Brentford & Isleworth)

      Pope, Greg

      Kennedy, Jane (Wavertree)

      Pound, Stephen

      Khabra, Piara S

      Prentice, Ms Bridget (Lewisham E)

      Kidney, David

      Prentice, Gordon (Pendle)

      Kilfoyle, Peter

      Primarolo, Dawn

      King, Andy (Rugby & Kenilworth)

      Prosser, Gwyn

      King, Ms Oona (Bethnal Green)

      Purchase, Ken

      Kumar, Dr Ashok

      Quin, Ms Joyce

      Ladyman, Dr Stephen

      Quinn, Lawrie

      Lawrence, Ms Jackie

      Radice, Giles

      Laxton, Bob

      Rammell, Bill

      Lepper, David

      Rapson, Syd

      Leslie, Christopher

      Reed, Andrew (Loughborough)

      Lewis, Ivan (Bury S)

      Reid, Dr John (Hamilton N)

      Liddell, Mrs Helen

      Robertson, Rt Hon George (Hamilton S)

      Linton, Martin

      Lloyd, Tony (Manchester C)

      Roche, Mrs Barbara

      Lock, David

      Rooker, Jeff

      Love, Andrew

      Rooney, Terry

      McAvoy, Thomas

      Ross, Ernie (Dundee W)

      McCabe, Steve

      Rowlands, Ted

      McCafferty, Ms Chris

      Roy, Frank

      McCartney, Ian (Makerfield)

      Ruddock, Ms Joan

      McDonagh, Siobhain

      Russell, Ms Christine (Chester)

      Macdonald, Calum

      Ryan, Ms Joan

      McFall, John

      Salter, Martin

      McGuire, Mrs Anne

      Savidge, Malcolm

      McIsaac, Shona

      Sawford, Phil

      McKenna, Mrs Rosemary

      Sedgemore, Brian

      Mackinlay, Andrew

      Shaw, Jonathan

      McLeish, Henry

      Sheerman, Barry

      McNulty, Tony

      Sheldon, Rt Hon Robert

      MacShane, Denis

      Short, Rt Hon Clare

      Mactaggart, Fiona

      Singh, Marsha

      Mallaber, Judy

      Smith, Rt Hon Andrew (Oxford E)

      Mandelson, Peter

      Smith, Angela (Basildon)

      Marsden, Gordon (Blackpool S)

      Smith, Rt Hon Chris (Islington S)

      Marsden, Paul (Shrewsbury)

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Marshall, David (Shettleston)

      Martlew, Eric

      Soley, Clive

      Meacher, Rt Hon Michael

      Southworth, Ms Helen

      Meale, Alan

      Spellar, John

      Merron, Gillian

      Squire, Ms Rachel

      Michael, Alun

      Starkey, Dr Phyllis

      Milburn, Alan

      Stevenson, George

      Miller, Andrew

      Stewart, David (Inverness E)

      Moffatt, Laura

      Stewart, Ian (Eccles)

      Moran, Ms Margaret

      Stinchcombe, Paul

      Morgan, Ms Julie (Cardiff N)

      Stoate, Dr Howard

      Morgan, Rhodri (Cardiff W)

      Stott, Roger

      480

      Strang, Rt Hon Dr Gavin

      Walley, Ms Joan

      Straw, Rt Hon Jack

      Ward, Ms Claire

      Stringer, Graham

      Watts, David

      Stuart, Ms Gisela

      White, Brian

      Sutcliffe, Gerry

      Whitehead, Dr Alan

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Wicks, Malcolm

      Williams, Rt Hon Alan (Swansea W)

      Taylor, Ms Dari (Stockton S)

      Thomas, Gareth (Clwyd W)

      Williams, Alan W (E Carmarthen)

      Thomas, Gareth R (Harrow W)

      Wills, Michael

      Timms, Stephen

      Wilson, Brian

      Tipping, Paddy

      Winnick, David

      Todd, Mark

      Winterton, Ms Rosie (Doncaster C)

      Touhig, Don

      Wood, Mike

      Trickett, Jon

      Woolas, Phil

      Truswell, Paul

      Worthington, Tony

      Turner, Dennis (Wolverh'ton SE)

      Wright, Anthony D (Gt Yarmouth)

      Turner, Dr Desmond (Kemptown)

      Wright, Dr Tony (Cannock)

      Turner, Dr George (NW Norfolk)

      Wyatt, Derek

      Twigg, Derek (Halton)

      Vaz, Keith

      Tellers for the Ayes:

      Vis, Dr Rudi

      Mr. Jim Dowd and

      Mr. Robert Ainsworth.

      NOES

      Ainsworth, Peter (E Surrey)

      Fabricant, Michael

      Allan, Richard

      Fearn, Ronnie

      Amess, David

      Flight, Howard

      Ancram, Rt Hon Michael

      Forth, Rt Hon Eric

      Arbuthnot, James

      Foster, Don (Bath)

      Ashdown, Rt Hon Paddy

      Fowler, Rt Hon Sir Norman

      Atkinson, David (Bour'mth E)

      Fox, Dr Liam

      Atkinson, Peter (Hexham)

      Fraser, Christopher

      Ballard, Jackie

      Garnier, Edward

      Beggs, Roy

      George, Andrew (St Ives)

      Bell, Martin (Tatton)

      Gibb, Nick

      Bercow, John

      Gill, Christopher

      Beresford, Sir Paul

      Gillen, Mrs Cheryl

      Body, Sir Richard

      Gorman, Mrs Teresa

      Boswell, Tim

      Gorrie, Donald

      Bottomley, Peter (Worthing W)

      Gray, James

      Brady, Graham

      Green, Damian

      Brake, Tom

      Greenway, John

      Brand, Dr Peter

      Grieve, Dominic

      Brazier, Julian

      Hamilton, Rt Hon Sir Archie

      Brooke, Rt Hon Peter

      Hammond, Philip

      Browning, Mrs Angela

      Hancock, Mike

      Bruce, Ian (S Dorset)

      Harris, Dr Evan

      Bruce, Malcolm (Gordon)

      Harvey, Nick

      Burnett, John

      Hawkins, Nick

      Burns, Simon

      Hayes, John

      Burstow, Paul

      Heald, Oliver

      Butterfill, John

      Heath, David (Somerton & Frome)

      Campbell, Menzies (NE Fife)

      Heathcoat-Amory, Rt Hon David

      Chapman, Sir Sydney (Chipping Barnet)

      Hogg, Rt Hon Douglas

      Horam, John

      Chidgey, David

      Howarth, Gerald (Aldershot)

      Clappison, James

      Hughes, Simon (Southwark N)

      Clark, Rt Hon Alan (Kensington)

      Hunter, Andrew

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Jack, Rt Hon Michael

      Jackson, Robert (Wantage)

      Clifton-Brown, Geoffrey

      Jenkin, Bernard

      Collins, Tim

      Johnson Smith, Rt Hon Sir Geoffrey

      Cormack, Sir Patrick

      Cotter, Brian

      Jones, Nigel (Cheltenham)

      Cran, James

      Keetch, Paul

      Curry, Rt Hon David

      Kennedy, Charles (Ross Skye)

      Davey, Edward (Kingston)

      Key, Robert

      Davis, Rt Hon David (Haltemprice)

      Kirkbride, Miss Julie

      Donaldson, Jeffrey

      Kirkwood, Archy

      Dorrell, Rt Hon Stephen

      Laing, Mrs Eleanor

      Duncan, Alan

      Lait, Mrs Jacqui

      Duncan Smith, Iain

      Lansley, Andrew

      Evans, Nigel

      Leigh, Edward

      Ewing, Mrs Margaret

      Letwin, Oliver

      Faber, David

      Lewis, Dr Julian (New Forest E)

      481

      Lidington, David

      Shepherd, Richard

      Livsey, Richard

      Simpson, Keith (Mid-Norfolk)

      Lloyd, Rt Hon Sir Peter (Fareham)

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

      Loughton, Tim

      Soames, Nicholas

      Luff, Peter

      Spelman, Mrs Caroline

      MacGregor, Rt Hon John

      Spicer, Sir Michael

      MacKay, Andrew

      Stanley, Rt Hon Sir John

      Maclean, Rt Hon David

      Steen, Anthony

      Maclennan, Rt Hon Robert

      Streeter, Gary

      McLoughlin, Patrick

      Stunell, Andrew

      Madel, Sir David

      Swayne, Desmond

      Malins, Humfrey

      Syms, Robert

      Maples, John

      Tapsell, Sir Peter

      Maude, Rt Hon Francis

      Taylor, Ian (Esher & Walton)

      Mawhinney, Rt Hon Sir Brian

      Taylor, John M (Solihull)

      May, Mrs Theresa

      Taylor, Matthew (Truro)

      Michie, Mrs Ray (Argyll & Bute)

      Taylor, Sir Teddy

      Moore, Michael

      Tonge, Dr Jenny

      Morgan, Alasdair (Galloway)

      Townend, John

      Moss, Malcolm

      Trend, Michael

      Nicholls, Patrick

      Tyler, Paul

      Norman, Archie

      Tyrie, Andrew

      Oaten, Mark

      Wallace, James

      Öpik, Lembit

      Walter, Robert

      Ottaway, Richard

      Wardle, Charles

      Page, Richard

      Webb, Steve

      Paice, James

      Wells, Bowen

      Paterson, Owen

      Welsh, Andrew

      Pickles, Eric

      Whittingdale, John

      Prior, David

      Widdecombe, Rt Hon Miss Ann

      Randall, John

      Wigley, Rt Hon Dafydd

      Redwood, Rt Hon John

      Wilkinson, John

      Rendel, David

      Willetts, David

      Robathan, Andrew

      Willis, Phil

      Robertson, Laurence (Tewk'b'ry)

      Wilshire, David

      Roe, Mrs Marion (Broxbourne)

      Winterton, Mrs Ann (Congleton)

      Ross, William (E Lond'y)

      Winterton, Nicholas (Macclesfield)

      Rowe, Andrew (Faversham)

      Woodward, Shaun

      Ruffley, David

      Yeo, Tim

      Russell, Bob (Colchester)

      Young, Rt Hon Sir George

      St Aubyn, Nick

      Salmond, Alex

      Tellers for the Noes:

      Sanders, Adrian

      Mr. Stephen Day and

      Shephard, Rt Hon Mrs Gillian

      Mr. Nigel Waterson.

      Question accordingly agreed to.
      Resolved,
      That this House insists on its amendment in page 14, to leave out lines 31 to 49, to which the Lords have disagreed and disagrees to the amendment proposed by the Lords in lieu of that amendment.
      Motion made, and Question put,
      That this House insists on its amendment in page 22, to leave out lines 31 to 39, to which the Lords have disagreed.—[Mr. Wilson.]
      The House divided: Ayes 325, Noes 185.

      Division No. 324]

      [11.16 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Bell, Stuart (Middlesbrough)

      Ainger, Nick

      Bennett, Andrew F

      Alexander, Douglas

      Bermingham, Gerald

      Allen, Graham

      Berry, Roger

      Anderson, Donald (Swansea E)

      Betts, Clive

      Anderson, Janet (Rossendale)

      Blackman, Liz

      Armstrong, Ms Hilary

      Blears, Ms Hazel

      Ashton, Joe

      Blizzard, Bob

      Atkins, Charlotte

      Blunkett, Rt Hon David

      Austin, John

      Boateng, Paul

      Banks, Tony

      Borrow, David

      Battle, John

      Bradley, Keith (Withington)

      Bayley, Hugh

      Bradley, Peter (The Wrekin)

      Beard, Nigel

      Bradshaw, Ben

      Beckett, Rt Hon Mrs Margaret

      Brinton, Mrs Helen

      482

      Brown, Rt Hon Gordon (Dunfermline E)

      Foster, Michael Jabez (Hastings)

      Foster, Michael J (Worcester)

      Brown, Rt Hon Nick (Newcastle E)

      Galbraith, Sam

      Brown, Russell (Dumfries)

      Galloway, George

      Browne, Desmond

      Gapes, Mike

      Buck, Ms Karen

      Gardiner, Barry

      Burden, Richard

      George, Bruce (Walsall S)

      Burgon, Colin

      Gibson, Dr Ian

      Butler, Mrs Christine

      Gilroy, Mrs Linda

      Byers, Stephen

      Godsiff, Roger

      Campbell, Alan (Tynemouth)

      Goggins, Paul

      Campbell, Mrs Anne (C'bridge)

      Golding, Mrs Llin

      Cann, Jamie

      Gordon, Mrs Eileen

      Caplin, Ivor

      Griffiths, Jane (Reading E)

      Casale, Roger

      Griffiths, Nigel (Edinburgh S)

      Cawsey, Ian

      Griffiths, Win (Bridgend)

      Chapman, Ben (Wirral S)

      Grocott, Bruce

      Chaytor, David

      Grogan, John

      Chisholm, Malcolm

      Gunnell, John

      Church, Ms Judith

      Hain, Peter

      Clark, Rt Hon Dr David (S Shields)

      Hall, Mike (Weaver Vale)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hall, Patrick (Bedford)

      Hamilton, Fabian (Leeds NE)

      Clark, Paul (Gillingham)

      Hanson, David

      Clarke, Charles (Norwich S)

      Harman, Rt Hon Ms Harriet

      Clarke, Tony (Northampton S)

      Heal, Mrs Sylvia

      Clelland, David

      Healey, John

      Clwyd, Ann

      Henderson, Doug (Newcastle N)

      Coaker, Vernon

      Hepburn, Stephen

      Coffey, Ms Ann

      Heppell, John

      Cohen, Harry

      Hewitt, Ms Patricia

      Coleman, Iain

      Hill, Keith

      Colman, Tony

      Hinchliffe, David

      Connarty, Michael

      Hodge, Ms Margaret

      Cook, Rt Hon Robin (Livingston)

      Home Robertson, John

      Corston, Ms Jean

      Hoon, Geoffrey

      Cousins, Jim

      Hope, Phil

      Cranston, Ross

      Howarth, Alan (Newport E)

      Crausby, David

      Howarth, George (Knowsley N)

      Cummings, John

      Howells, Dr Kim

      Cunliffe, Lawrence

      Hoyle, Lindsay

      Cunningham, Rt Hon Dr John (Copeland)

      Hughes, Ms Beverley (Stretford)

      Hughes, Kevin (Doncaster N)

      Cunningham, Jim (Cov'try S)

      Humble, Mrs Joan

      Dalyell, Tam

      Hurst, Alan

      Darling, Rt Hon Alistair

      Hutton, John

      Darvill, Keith

      Iddon, Dr Brian

      Davey, Valerie (Bristol W)

      Illsley, Eric

      Davidson, Ian

      Jackson, Ms Glenda (Hampstead)

      Davies, Rt Hon Denzil (Llanelli)

      Jackson, Helen (Hillsborough)

      Davies, Geraint (Croydon C)

      Jamieson, David

      Davies, Rt Hon Ron (Caerphilly)

      Jenkins, Brian

      Dawson, Hilton

      Johnson, Miss Melanie (Welwyn Hatfield)

      Dean, Mrs Janet

      Denham, John

      Jones, Mrs Fiona (Newark)

      Dewar, Rt Hon Donald

      Jones, Helen (Warrington N)

      Dismore, Andrew

      Jones, Jon Owen (Cardiff C)

      Dobbin, Jim

      Jones, Martyn (Clwyd S)

      Dobson, Rt Hon Frank

      Jowell, Ms Tessa

      Donohoe, Brian H

      Kaufman, Rt Hon Gerald

      Doran, Frank

      Keeble, Ms Sally

      Drew, David

      Keen, Alan (Feltham & Heston)

      Eagle, Angela (Wallasey)

      Keen, Ann (Brentford & Isleworth)

      Eagle, Maria (L'pool Garston)

      Kennedy, Jane (Wavertree)

      Edwards, Huw

      Khabra, Piara S

      Efford, Clive

      Kidney, David

      Ellman, Mrs Louise

      Kilfoyle, Peter

      Ennis, Jeff

      King, Andy (Rugby & Kenilworth)

      Etherington, Bill

      King, Ms Oona (Bethnal Green)

      Field, Rt Hon Frank

      Kumar, Dr Ashok

      Fisher, Mark

      Ladyman, Dr Stephen

      Fitzsimons, Lorna

      Lawrence, Ms Jackie

      Flint, Caroline

      Laxton, Bob

      Flynn, Paul

      Lepper, David

      Follett, Barbara

      Leslie, Christopher

      Foster, Rt Hon Derek

      Lewis, Ivan (Bury S)

      483

      Liddell, Mrs Helen

      Radice, Giles

      Linton, Martin

      Rammell, Bill

      Lloyd, Tony (Manchester C)

      Rapson, Syd

      Lock, David

      Reed, Andrew (Loughborough)

      Love, Andrew

      Reid, Dr John (Hamilton N)

      McAvoy, Thomas

      Robertson, Rt Hon George (Hamilton S)

      McCabe, Steve

      McCafferty, Ms Chris

      Roche, Mrs Barbara

      McCartney, Ian (Makerfield)

      Rooker, Jeff

      McDonagh, Siobhain

      Rooney, Terry

      Macdonald, Calum

      Ross, Ernie (Dundee W)

      McFall, John

      Rowlands, Ted

      McGuire, Mrs Anne

      Roy, Frank

      McIsaac, Shona

      Ruddock, Ms Joan

      McKenna, Mrs Rosemary

      Russell, Ms Christine (Chester)

      Mackinlay, Andrew

      Ryan, Ms Joan

      McLeish, Henry

      Savidge, Malcolm

      McNulty, Tony

      Sawford, Phil

      MacShane, Denis

      Sedgemore, Brian

      Mactaggart, Fiona

      Shaw, Jonathan

      Mallaber, Judy

      Sheerman, Barry

      Mandelson, Peter

      Sheldon, Rt Hon Robert

      Marsden, Gordon (Blackpool S)

      Short, Rt Hon Clare

      Marsden, Paul (Shrewsbury)

      Singh, Marsha

      Marshall, David (Shettleston)

      Smith, Rt Hon Andrew (Oxford E)

      Martlew, Eric

      Smith, Angela (Basildon)

      Meacher, Rt Hon Michael

      Smith, Rt Hon Chris (Islington S)

      Meale, Alan

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Merron, Gillian

      Michael, Alan

      Soley, Clive

      Milburn, Alan

      Southworth, Ms Helen

      Miller, Andrew

      Spellar, John

      Moffatt, Laura

      Squire, Ms Rachel

      Moran, Ms Margaret

      Starkey, Dr Phyllis

      Morgan, Ms Julie (Cardiff N)

      Stevenson, George

      Morgan, Rhodri (Cardiff W)

      Stewart, David (Inverness E)

      Morley, Elliot

      Stewart, Ian (Eccles)

      Morris, Ms Estelle (B'ham Yardley)

      Stinchcombe, Paul

      Morris, Rt Hon John (Aberavon)

      Stoate, Dr Howard

      Mowlam, Rt Hon Marjorie

      Strang, Rt Hon Dr Gavin

      Mudie, George

      Straw, Rt Hon Jack

      Mullin, Chris

      Stringer, Graham

      Murphy, Denis (Wansbeck)

      Stuart, Ms Gisela

      Murphy, Jim (Eastwood)

      Sutcliffe, Gerry

      Naysmith, Dr Doug

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Norris, Dan

      O'Brien, Bill (Normanton)

      Taylor, Ms Dari (Stockton S)

      O'Brien, Mike (N Warks)

      Thomas, Gareth (Clwyd W)

      O'Hara, Eddie

      Thomas, Gareth R (Harrow W)

      Olner, Bill

      Timms, Stephen

      O'Neill, Martin

      Tipping, Paddy

      Organ, Mrs Diana

      Todd, Mark

      Osborne, Ms Sandra

      Touhig, Don

      Palmer, Dr Nick

      Trickett, Jon

      Pearson, Ian

      Truswell, Paul

      Pendry, Tom

      Turner, Dennis (Wolverh'ton SE)

      Perham, Ms Linda

      Turner, Dr Desmond (Kemptown)

      Pickthall, Colin

      Turner, Dr George (NW Norfolk)

      Pike, Peter L

      Twigg, Derek (Halton)

      Plaskitt, James

      Vaz, Keith

      Pollard, Kerry

      Vis, Dr Rudi

      Pond, Chris

      Walley, Ms Joan

      Pope, Greg

      Ward, Ms Claire

      Pound, Stephen

      Watts, David

      Prentice, Ms Bridget (Lewisham E)

      White, Brian

      Prentice, Gordon (Pendle)

      Whitehead, Dr Alan

      Primarolo, Dawn

      Wicks, Malcolm

      Prosser, Gwyn

      Williams, Rt Hon Alan (Swansea W)

      Purchase, Ken

      Quin, Ms Joyce

      Williams, Alan W (E Carmarthen)

      Quinn, Lawrie

      Wills, Michael

      Wilson, Brian

      Winnick, David

      Winterton, Ms Rosie (Doncaster C)

      Wood, Mike

      Woolas, Phil

      484

      Worthington, Tony

      Tellers for the Ayes:

      Wright, Anthony D (Gt Yarmouth)

      Mr. Robert Ainsworth and

      Wright, Dr Tony (Cannock)

      Mr. Jim Dowd.

      Wyatt, Derek

      NOES

      Ainsworth, Peter (E Surrey)

      Greenway, John

      Allan, Richard

      Grieve, Dominic

      Amess, David

      Hamilton, Rt Hon Sir Archie

      Ancram, Rt Hon Michael

      Hammond, Philip

      Arbuthnot, James

      Hancock, Mike

      Ashdown, Rt Hon Paddy

      Harris, Dr Evan

      Atkinson, David (Bour'mth E)

      Harvey, Nick

      Atkinson, Peter (Hexham)

      Hawkins, Nick

      Ballard, Jackie

      Hayes, John

      Beggs, Roy

      Heald, Oliver

      Bell, Martin (Tatton)

      Heath, David (Somerton & Frome)

      Bercow, John

      Heathcoat-Amory, Rt Hon David

      Beresford, Sir Paul

      Hogg, Rt Hon Douglas

      Body, Sir Richard

      Horam, John

      Boswell, Tim

      Howarth, Gerald (Aldershot)

      Bottomley, Peter (Worthing W)

      Hughes, Simon (Southwark N)

      Brady, Graham

      Hunter, Andrew

      Brake, Tom

      Jack, Rt Hon Michael

      Brand, Dr Peter

      Jackson, Robert (Wantage)

      Brazier, Julian

      Jenkin, Bernard

      Brooke, Rt Hon Peter

      Johnson Smith, Rt Hon Sir Geoffrey

      Browning, Mrs Angela

      Bruce, Ian (S Dorset)

      Jones, Nigel (Cheltenham)

      Bruce, Malcolm (Gordon)

      Keetch, Paul

      Burnett, John

      Kennedy, Charles (Ross Skye)

      Burns, Simon

      Key, Robert

      Burstow, Paul

      Kirkbride, Miss Julie

      Butterfill, John

      Kirkwood, Archy

      Campbell, Menzies (NE Fife)

      Laing, Mrs Eleanor

      Canavan, Dennis

      Lait, Mrs Jacqui

      Chapman, Sir Sydney (Chipping Barnet)

      Lansley, Andrew

      Leigh, Edward

      Chidgey, David

      Letwin, Oliver

      Clappison, James

      Lewis, Dr Julian (New Forest E)

      Clark, Rt Hon Alan (Kensington)

      Lidington, David

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Livsey, Richard

      Lloyd, Rt Hon Sir Peter (Fareham)

      Clifton-Brown, Geoffrey

      Loughton, Tim

      Collins, Tim

      Luff, Peter

      Cormack, Sir Patrick

      MacGregor, Rt Hon John

      Cotter, Brian

      MacKay, Andrew

      Cran, James

      Maclean, Rt Hon David

      Curry, Rt Hon David

      Maclennan, Rt Hon Robert

      Davey, Edward (Kingston)

      McLoughlin, Patrick

      Davis, Rt Hon David (Haltemprice)

      Madel, Sir David

      Donaldson, Jeffrey

      Malins, Humfrey

      Dorrell, Rt Hon Stephen

      Maples, John

      Duncan, Alan

      Maude, Rt Hon Francis

      Duncan Smith, Iain

      Mawhinney, Rt Hon Sir Brian

      Evans, Nigel

      May, Mrs Theresa

      Ewing, Mrs Margaret

      Michie, Mrs Ray (Argyll & Bute)

      Faber, David

      Moore, Michael

      Fabricant, Michael

      Morgan, Alasdair (Galloway)

      Fallon, Michael

      Moss, Malcolm

      Fearn, Ronnie

      Nicholls, Patrick

      Flight, Howard

      Norman, Archie

      Forth, Rt Hon Eric

      Oaten, Mark

      Foster, Don (Bath)

      Öpik, Lembit

      Fowler, Rt Hon Sir Norman

      Ottaway, Richard

      Fox, Dr Liam

      Page, Richard

      Fraser, Christopher

      Paice, James

      Garnier, Edward

      Paterson, Owen

      George, Andrew (St Ives)

      Pickles, Eric

      Gibb, Nick

      Prior, David

      Gill, Christopher

      Randall, John

      Gillan, Mrs Cheryl

      Redwood, Rt Hon John

      Gorman, Mrs Teresa

      Rendel, David

      Gorrie, Donald

      Robathan, Andrew

      Gray, James

      Robertson, Laurence (Tewk'b'ry)

      Green, Damian

      Roe, Mrs Marion (Broxbourne)

      485

      Ross, William (E Lond'y)

      Townend, John

      Rowe, Andrew (Faversham)

      Trend, Michael

      Ruffley, David

      Tyler, Paul

      Russell, Bob (Colchester)

      Tyrie, Andrew

      St Aubyn, Nick

      Wallace, James

      Salmond, Alex

      Walter, Robert

      Sanders, Adrian

      Wardle, Charles

      Shephard, Rt Hon Mrs Gillian

      Webb, Steve

      Shepherd, Richard

      Wells, Bowen

      Simpson, Keith (Mid-Norfolk)

      Welsh, Andrew

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

      Whittingdale, John

      Soames, Nicholas

      Widdecombe, Rt Hon Miss Ann

      Spelman, Mrs Caroline

      Wigley, Rt Hon Dafydd

      Spicer, Sir Michael

      Wilkinson, John

      Stanley, Rt Hon Sir John

      Willetts, David

      Steen, Anthony

      Willis, Phil

      Streeter, Gary

      Wilshire, David

      Stunell, Andrew

      Winterton, Mrs Ann (Congleton)

      Swayne, Desmond

      Winterton, Nicholas (Macclesfield)

      Syms, Robert

      Woodward, Shaun

      Tapsell, Sir Peter

      Yeo, Tim

      Taylor, Ian (Esher & Walton)

      Young, Rt Hon Sir George

      Taylor, John M (Solihull)

      Taylor, Matthew (Truro)

      Tellers for the Noes:

      Taylor, Sir Teddy

      Mr. Stephen Day and

      Tonge, Dr Jenny

      Mr. Nigel Waterson.

      Question accordingly agreed to.
      Motion made, and Question proposed,
      That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to the amendment proposed by the Lords in lieu of the amendment in page 14, to leave out lines 31 to 49, and insisting on the amendments in page 14, to leave out lines 31 to 49, and page 22, to leave out lines 31 to 39.
      That Mr. Damian Green, Mr. David Jamieson, Mr. Tony McNulty, Mr. Phil Willis and Mr. Brian Wilson be members of the Committee; that Mr. Brian Wilson be the Chairman of the Committee; that three be the quorum of the Committee; and that the Committee do withdraw immediately.—[Mr. Jamieson.]
      11.30 pm
      Mr. Eric Forth: Mr. Deputy Speaker—
      Mr. Deputy Speaker: Order. Before the right hon. Gentleman speaks, I should say that I shall be very firm in insisting that the rules of debate are observed. He may speak purely to this motion, and to this motion alone. If he deviates from the rules, I shall quickly be on my feet to remind him of them.
      Mr. Forth: I would expect no less, Mr. Deputy Speaker. I assume that you would not always assume that the House would wish to nod through any motion, no matter how routine it may seem. It would therefore be useful to the House if we were to hear just a little bit more from the Government not only about the rationale for establishing the Committee—it is, after all, a debatable motion—but about the qualifications of the Committee membership, and, perhaps more specifically, about why the person suggested in the motion to serve as the Committee Chairman should be considered to be the ideal person to serve in that capacity.
      It is possible that someone who might be thought to be more neutral should be appointed to serve as Chairman of the Committee, so that it might discharge its very important responsibilities in the most even-handed manner. Some reasoning for the proposed Committee membership and nomination of Chairman would be helpful to the House.
      486
      The other matter that would be worth clarifying in establishing the Committee is when the Committee might sit. In the past such Committees may well have sat immediately; I think that that is my recollection of such Committees.
      Mr. Deputy Speaker: Order. The right hon. Gentleman does not have to discuss that matter—the motion says "immediately".
      Mr. Forth: I have a concern about that, Mr. Deputy Speaker. We have heard quite a lot recently about the need for the House to sit reduced hours. Some anxiety has been expressed—by no less a person than the Leader of the House herself—that late-hours sitting is good neither for the House nor for the quality of our deliberations.
      Mr. Deputy Speaker: Order. That has absolutely nothing to do with the motion. It is another matter, which has been put before the Leader of the House.
      Mr. Forth: Mr. Deputy Speaker, you have said that the motion says that the Committee should sit immediately. I am querying that—I want to debate it—because the motion is debatable. I am seeking to enter into a debate on the advisability of the Committee meeting at this late hour, as I should be worried about the quality of the Committee's decision making if it meets at this late hour. I am setting that worry in the context of the remarks made recently by the Leader of the House. She has apparently said that she believes that the House should not sit at late hours. I assume that part of her reasoning—although we have not yet heard it in any detail—is that the House's quality of decision making might well be prejudiced if such decisions are made so late and if such Committees meet at such a late hour.
      Mrs. Browning: My right hon. Friend will be aware that this debate started extremely late, as we were waiting upon the attendance of the Minister for Education and Industry, Scottish Office—
      Mr. Deputy Speaker: Order. I have already stated that what has gone before has nothing to do with the motion. I will not have a discussion entered into about previous business that has been decided.
      Mr. Forth: Indeed, Mr. Deputy Speaker, I am looking very much to the future and to the quality of decision making in the future. Looking at the clock, I see that it is a moderately late hour, so the House may wish to consider deferring the decision or deferring the setting up of the Committee until it can deliberate in a more reasoned way at a more respectable hour. These are perfectly rational points. I raise them because, from time to time, we find that apparently innocuous motions are brought before the House—perhaps not always at an hour such as this, but at a more reasonable hour—and there is an expectation that they should simply be nodded through.
      Increasingly, I find that the concept of nodding motions through is a denial of the role of the House of Commons. It would be better if we were to hear more of a case put in favour of such motions. The Government Whip told the House what he was proposing in respect of the membership of the Committee, its chairmanship and so on, but we are entitled to a more in-depth explanation.
      Mr. Nick St. Aubyn: Is my right hon. Friend worried that if we simply nod through such

      487
      motions, the credibility of the Committee's decisions will in some way be undermined in another place, and that unless we give due deliberation to the points that he has raised, in another place the Committee's decisions will not have the effect and persuasiveness that this House requires?
      Mr. Forth: I am grateful to my hon. Friend for making those points. He might wish to elaborate on them if he were to catch your eye, Mr. Deputy Speaker. He raises those points in the context of our not having had a full explanation of the Committee's role. It would be useful if a member of the Government were to give us more of an explanation of the role envisaged for the Committee, and how it would provide a link between the proceedings of this House and the other place. Surely, that is vital to the proper progress of the business in hand.
      Mr. Deputy Speaker (Mr. Michael Lord): Order. The role of the Committee is clearly stated in the motion.
      Mr. Forth: The Order Paper refers to
      "Consideration of a Lords Amendment in lieu of a Commons Amendment and of a Reason for disagreeing to a Commons Amendment."
      That does not explain to me the role of the Committee. I should have thought that those words meant that we were considering the words spoken by the Government Whip in explaining the background to the Committee, but he did not elaborate on the nature of the role of the Committee, were it to be set up at this late hour and with the membership and Chairman that he proposed.
      Mrs. Eleanor Laing rose—
      Mr. Forth: I shall give way to my hon. Friend the Member for Epping Forest (Mrs. Laing); then I want to conclude my remarks.
      Mrs. Laing: On the point about the proposed Chairman of the Committee, given that the Reasons Committee is a Select Committee of the House, does my right hon. Friend agree that it would be more reasonable if the Chairman whom the House is about to appoint had some impartiality on the subject before the Committee? The proposed Chairman—the Minister for Education and Industry, Scottish Office—has shown himself to be anything but impartial.
      Mr. Forth: Again, that is a very important point. It is perhaps not for me to elaborate on it at this stage. I see that my hon. Friends have given much thought to the motion—more perhaps than I have been able to. Perhaps they will want to expand on these points if they catch your eye, Mr. Deputy Speaker.
      The House might want to reconsider the chairmanship of the Committee, to which I alluded briefly when I began, for exactly the reason that my hon. Friend the Member for Epping Forest has given. I am grateful to her for bringing to my attention and to that of the House the fact that the Committee would have the status of a Select Committee. That is an important new fact. Given that a
      488
      number of Select Committees are chaired by people other than Labour Members or Ministers, there must surely be a strong case—
      Mr. Deputy Speaker: Order. The hon. Gentleman must not embark on a dissertation on Select Committees. The motion before the House is very specific, and I would be grateful if he would address it.
      Mr. Forth: I am grateful for your guidance, Mr. Deputy Speaker, but the Whip read out the proposed members of the Committee, including the proposed Chairman—the Minister for Education and Industry, Scottish Office—who took part in the debate and can hardly be described as impartial. It is just possible that, for the sake of giving the fullest credibility to the Committee, which forms a key bridge between the proceedings of the House and those of another place, the House may want to consider a different candidate for its chairmanship.
      Mr. Geoffrey Clifton-Brown: Is my right hon. Friend aware that until his present appointment, and particularly in opposition, the Minister for Education and Industry, Scottish Office had no educational appointments whatever—
      Mr. Deputy Speaker: Order. Mr. Forth.
      Mr. Forth: I might have guessed that the Minister had no previous educational experience, but I am grateful to my hon. Friend for confirming that.
      In conclusion, the House must consider the matter seriously. We cannot take such decisions on the nod at this late hour. I am asking the Government for further elaboration—
      Mr. Gerald Bermingham: On a point of order, Mr. Deputy Speaker. The right hon. Gentleman has been a Minister—albeit a bad one—and knows the rules. He knows full well that it is normal procedure to appoint a Committee of the House. It has always been that way, so why is he delaying the Bill's progress?
      Mr. Deputy Speaker: That is not a point of order for the Chair.
      Mr. Forth: Indeed. I hope that the House will not accept the arrogance shown by that point, which assumes that a matter which is properly debatable can be swept to one side and taken as read and that we can proceed with business. Surely the point is that the motion is properly debatable in the House. I wish to initiate a short debate on it so that the Government can elaborate on the points that I have sought to raise. I hope that at least I will have succeeded in that.
      11.41 pm
      Mr. St. Aubyn: I wish to elaborate on the point on which my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) asked me to comment.
      I understand that, as the Bill started in another place, if the amendments that we are asking Members of another place to consider are rejected by them and they are

      489
      minded to refuse the will of this House, it could fail entirely in the current Session. It is particularly important that the constitution and credibility of the Committee is beyond reproach. If it is not, and if in another place many independent minds address themselves to the points that have been raised, the will of the House, as expressed tonight, will fail. Therefore, the points that my right hon. Friend raised are not delaying tactics; they go to the heart of the matter—whether or not the House is serious about the arguments put forward this evening; whether it is serious about trying to influence another place; and whether it seriously cares whether the Bill, which started in another place, is completed this Session.
      You will advise me, Mr. Deputy Speaker, but I believe that we should consider whether it is material that the Bill should be completed this Session.
      Mr. Deputy Speaker: That is not what we are debating now.
      Mr. St. Aubyn: I am grateful for your guidance, Mr. Deputy Speaker.
      My right hon. Friend has made the important point that we do not have an impartial Chairman and, given the independence of mind of those in another place, that will not help the passage of the Bill.
      11.44 pm
      Mr. Wilson: The right hon. Member for Bromley and Chislehurst (Mr. Forth) asked why the Reasons Committee was being set up. The House has twice voted overwhelmingly to reverse Lords amendments and send business back to the Lords. As he may have gleaned during his years in the House, that is done by referring the issue to the Reasons Committee. It is the norm that the Minister who has spoken in the debate chairs the Committee. The issue is as simple as that. I do not think that the right hon. Gentleman suffers from any particular problems of comprehension. His behaviour is entirely up to him, but I suggest that the charade that he has initiated is not in anyone's interests and that we should now get on with the business of the House and appoint the Reasons Committee.
      11.46 pm
      Mr. David Wilshire rose—
      Mr. Deputy Speaker: The Question is—
      Mr. Wilshire: On a point of order, Mr. Deputy Speaker. I was trying to catch your eye—
      Mr. Deputy Speaker: We have moved on from that.
      Mr. Forth: On a point of order, Mr. Deputy Speaker. My reading of the Order Paper suggests that the matter can be debated until any hour. Although the Minister has spoken early in the debate, it should be quite proper for
      490
      other hon. Members to seek to catch your eye. There is no time limit on the debate. The fact that the Minister has spoken surely cannot bring the debate to an end.
      Mr. Deputy Speaker: I call Mr. David Wilshire.
      Mr. Wilshire: Are your calling me on a point of order, Mr. Deputy Speaker, or are you calling me to speak?
      Mr. Deputy Speaker: I am calling the hon. Member to speak.
      Mr. Wilshire: Thank you, Mr. Deputy Speaker. I am most grateful to you for giving me the opportunity to speak.
      Labour Members should not believe that we are not prepared to have a constructive debate on an important matter. We have had a contribution from the Minister, but I was not clear whether he was intervening on my hon. Friend the Member for Guildford (Mr. St. Aubyn) or whether my hon. Friend had finished and the Minister was making his speech. Will the Minister answer the legitimate questions that my right hon. and hon. Friends have asked and the questions that I would like to ask? I shall be happy to give way if someone would like to give me an assurance that we shall hear a constructive contribution from the Government in response to the points that have been made.
      The Minister did not tell us why the particular names have been proposed. I understand why my hon. Friend the Member for Ashford (Mr. Green) is to be on the Committee, if the House approves it, but I do not understand the reasons for the selection of the other names. I should be most grateful if someone could explain why each of those hon. Members has been selected and why they are considered the experts who can draw up a list of reasons on behalf of the whole House that we can send to the other place.
      I am also interested to know not only why those hon. Members have been chosen, but why others have been rejected. Many Labour Members have great knowledge of the issues that have been debated. It is important for us to be told whether those who have been chosen represent a balanced ticket.
      Mr. St. Aubyn: Does my hon. Friend agree that the Minister's cursory remarks will undermine the credibility of the Committee in the eyes of another place? We are seeking a more detailed response and analysis—
      Mr. Deputy Speaker: Order. The hon. Gentleman has already made that point more than once.
      Mr. Wilshire: My hon. Friend the Member for Guildford is absolutely right. It is important that, when justification is given for the names that the Government have put forward, it is explained whether the names constitute a balanced ticket. We have heard members of all parties express substantial reservations about the arguments advanced by the Government Front-Bench team. It is important that somebody like the hon. Member for Falkirk, West (Mr. Canavan) should be on that Committee, because he seems to have a much stronger grasp of the problems than the Minister or, as far as I can see, any of the other Labour Members proposed.
      Mrs. Browning: My hon. Friend will be aware that I sat in the Chamber throughout the previous debates,

      491
      although I did not speak. Does he believe that the hon. Members on the Committee should at the very minimum have heard tonight's debate?
      Mr. Wilshire: I am sure that my hon. Friend is absolutely right. Perhaps I should add that to the list of questions, so that we may make absolutely certain that everyone who serves on the Committee has sat through the entire debate and knows about all the issues that must be addressed. I should be very grateful for an explanation about the names.
      There is one other issue with which we need to deal: the Chairman. It has been asked whether the Minister for Education and Industry is the right person for the job, because he is tired. Is he tired? The poor hon. Gentlemen has been dragged all the way back from Inverness. He was late getting here, he has been under a great deal of stress, and I worry for his health. I worry that he might be clapped out and, therefore, somebody else should be chosen.
      Mr. Deputy Speaker: Order. I remind the hon. Gentleman that the procedures that we are adopting are routine for such an issue. The reasons that he is giving for not agreeing with the motion are, as far as I can see, rather thin.
      Mr. Wilshire: I understand exactly your point, Mr. Deputy Speaker. Although the matter can very easily be seen as routine, it is far from it when the person proposed to chair the Committee has been dragged back from Inverness. I suspect that this might even be a unique occasion. The matter needs some consideration. I hope that someone on the Government Front Bench will be able to assure us that a Minister who has had a tiring day and has worked hard can, just before midnight, chair a Committee that must do a responsible job. I look forward to the answer to that.
      We must also be told what issues the Committee intends to address. All sorts of issues have been raised tonight. We know what the two motions and the decisions were; the Committee has to draw up reasons. We need to be reassured that the Committee members have a grasp of every issue that was raised tonight—
      Mr. Deputy Speaker: Order. That is not what we are talking about. The hon. Member is straying very wide of the point, and I should be grateful if he returned to the precise motion before the House.
      Mr. Wilshire: I entirely understand your point, Mr. Deputy Speaker. May I therefore ask just one other question? We need to be told what will happen if the Committee gets it wrong. If its members have not grasped the issues, and they draw up a list of reasons—
      Mr. Deputy Speaker: Order. That does not concern the motion before the House, to which the hon. Member must return precisely.
      Mr. Wilshire: I thought—
      Mrs. Laing: Will my hon. Friend give way?
      Mr. Wilshire: Of course.
      Mrs. Laing: Might my hon. Friend consider proposing—[HON. MEMBERS: "Face the Chair."] Might he
      492
      consider proposing that, rather than the Chairman of the Committee being the Minister for Education and Industry—
      Mr. Deputy Speaker: Order. No, he may not. It is not possible for the hon. Member for Spelthorne (Mr. Wilshire) to make such decisions.
      Mr. Wilshire: I again understand your point, Mr. Deputy Speaker. I wish to co-operate not only with you but with the entire House. My hon. Friends have asked a list of questions, to which I have added. I hope that, in the spirit of constructive debate, which we Opposition Members have observed, we shall not witness the Government ignoring the sensible points, rolling out their majority and hoping that the matter will go away. These are serious and important points and legitimate questions that the Government need to answer. I look forward to hearing what they have to say.
      The Parliamentary Secretary to the Treasury (Mr. Nick Brown)rose in his place and claimed to move, That the Question be now put.
      Question put, That the Question be now put:—
      The House proceeded to a Division—
      Mr. Deputy Speaker: There seems to be some delay in the No Lobby. I would be grateful if the Serjeant at Arms would investigate.
      The House having divided: Ayes 269, Noes 11.

      Division No. 325]

      [11.54 pm

      AYES

      Alexander, Douglas

      Chaytor, David

      Allan, Richard

      Chisholm, Malcolm

      Allen, Graham

      Clapham, Michael

      Anderson, Janet (Rossendale)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Armstrong, Ms Hilary

      Atkins, Charlotte

      Clark, Paul (Gillingham)

      Banks, Tony

      Clarke, Charles (Norwich S)

      Battle, John

      Clarke, Tony (Northampton S)

      Bayley, Hugh

      Clelland, David

      Bermingham, Gerald

      Coaker, Vernon

      Betts, Clive

      Coffey, Ms Ann

      Blears, Ms Hazel

      Coleman, Iain

      Blizzard, Bob

      Colman, Tony

      Borrow, David

      Connarty, Michael

      Bradley, Keith (Withington)

      Corston, Ms Jean

      Bradley, Peter (The Wrekin)

      Cotter, Brian

      Bradshaw, Ben

      Cousins, Jim

      Brown, Rt Hon Nick (Newcastle E)

      Cranston, Ross

      Brown, Russell (Dumfries)

      Crausby, David

      Browne, Desmond

      Cummings, John

      Bruce, Malcolm (Gordon)

      Cunliffe, Lawrence

      Buck, Ms Karen

      Cunningham, Jim (Cov'try S)

      Burden, Richard

      Dalyell, Tam

      Burgon, Colin

      Darvill, Keith

      Burnett, John

      Davey, Valerie (Bristol W)

      Butler, Mrs Christine

      Davidson, Ian

      Byers, Stephen

      Davies, Geraint (Croydon C)

      Caborn, Richard

      Davies, Rt Hon Ron (Caerphilly)

      Campbell, Alan (Tynemouth)

      Dean, Mrs Janet

      Campbell, Mrs Anne (C'bridge)

      Dismore, Andrew

      Campbell, Menzies (NE Fife)

      Dobbin, Jim

      Canavan, Dennis

      Dobson, Rt Hon Frank

      Caplin, Ivor

      Donohoe, Brian H

      Casale, Roger

      Drew, David

      Cawsey, Ian

      Eagle, Angela (Wallasey)

      Chapman, Ben (Wirral S)

      Eagle, Maria (L'pool Garston)

      493

      Ellman, Mrs Louise

      Kirkwood, Archy

      Ennis, Jeff

      Kumar, Dr Ashok

      Ewing, Mrs Margaret

      Ladyman, Dr Stephen

      Fearn, Ronnie

      Lepper, David

      Fisher, Mark

      Leslie, Christopher

      Fitzsimons, Lorna

      Lewis, Ivan (Bury S)

      Follett, Barbara

      Lewis, Terry (Worsley)

      Foster, Don (Bath)

      Liddell, Mrs Helen

      Foster, Michael Jabez (Hastings)

      Linton, Martin

      Foster, Michael J (Worcester)

      Lloyd, Tony (Manchester C)

      Gapes, Mike

      Lock, David

      Gardiner, Barry

      Love, Andrew

      George, Andrew (St Ives)

      McAllion, John

      Gibson, Dr Ian

      McAvoy, Thomas

      Gilroy, Mrs Linda

      McCabe, Steve

      Godman, Dr Norman A

      McCafferty, Ms Chris

      Goggins, Paul

      McCartney, Ian (Makerfield)

      Golding, Mrs Llin

      McDonnell, John

      Gordon, Mrs Eileen

      McFall, John

      Gorrie, Donald

      McGuire, Mrs Anne

      Griffiths, Jane (Reading E)

      McIsaac, Shona

      Griffiths, Win (Bridgend)

      McKenna, Mrs Rosemary

      Grocott, Bruce

      Mackinlay, Andrew

      Grogan, John

      McNulty, Tony

      Gunnell, John

      MacShane, Denis

      Hain, Peter

      Mactaggart, Fiona

      Hall, Mike (Weaver Vale)

      Mallaber, Judy

      Hall, Patrick (Bedford)

      Marsden, Paul (Shrewsbury)

      Hamilton, Fabian (Leeds NE)

      Marshall-Andrews, Robert

      Hanson, David

      Meacher, Rt Hon Michael

      Harris, Dr Evan

      Meale, Alan

      Heal, Mrs Sylvia

      Merron, Gillian

      Healey, John

      Michael, Alun

      Heath, David (Somerton & Frome)

      Milburn, Alan

      Henderson, Doug (Newcastle N)

      Miller, Andrew

      Hepburn, Stephen

      Moffatt, Laura

      Heppell, John

      Moore, Michael

      Hill, Keith

      Moran, Ms Margaret

      Hodge, Ms Margaret

      Morgan, Alasdair (Galloway)

      Hoon, Geoffrey

      Morgan, Ms Julie (Cardiff N)

      Hope, Phil

      Morgan, Rhodri (Cardiff W)

      Howells, Dr Kim

      Morley, Elliot

      Hoyle, Lindsay

      Morris, Ms Estelle (B'ham Yardley)

      Hughes, Ms Beverley (Stretford)

      Murphy, Denis (Wansbeck)

      Hughes, Kevin (Doncaster N)

      Murphy, Jim (Eastwood)

      Hughes, Simon (Southwark N)

      Norris, Dan

      Humble, Mrs Joan

      O'Brien, Bill (Normanton)

      Hurst, Alan

      O'Hara, Eddie

      Iddon, Dr Brian

      Olner, Bill

      Illsley, Eric

      O'Neill, Martin

      Jackson, Ms Glenda (Hampstead)

      Öpik, Lembit

      Jackson, Helen (Hillsborough)

      Osborne, Ms Sandra

      Jamieson, David

      Palmer, Dr Nick

      Jenkins, Brian

      Pearson, Ian

      Johnson, Miss Melanie (Welwyn Hatfield)

      Perham, Ms Linda

      Pickthall, Colin

      Jones, Mrs Fiona (Newark)

      Pike, Peter L

      Jones, Martyn (Clwyd S)

      Plaskitt, James

      Jowell, Ms Tessa

      Pond, Chris

      Keeble, Ms Sally

      Pope, Greg

      Keen, Alan (Feltham & Heston)

      Pound, Stephen

      Keen, Ann (Brentford & Isleworth)

      Prentice, Ms Bridget (Lewisham E)

      Kennedy, Charles (Ross Skye)

      Prentice, Gordon (Pendle)

      Kennedy, Jane (Wavertree)

      Primarolo, Dawn

      Kidney, David

      Prosser, Gwyn

      King, Andy (Rugby & Kenilworth)

      Purchase, Ken

      494

      Quin, Ms Joyce

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Quinn, Lawrie

      Rammell, Bill

      Taylor, Ms Dari (Stockton S)

      Rapson, Syd

      Thomas, Gareth (Clwyd W)

      Reed, Andrew (Loughborough)

      Thomas, Gareth R (Harrow W)

      Reid, Dr John (Hamilton N)

      Timms, Stephen

      Rendel, David

      Tipping, Paddy

      Robertson, Rt Hon George (Hamilton S)

      Todd, Mark

      Touhig, Don

      Roche, Mrs Barbara

      Truswell, Paul

      Rooker, Jeff

      Turner, Dr Desmond (Kemptown)

      Rooney, Terry

      Turner, Dr George (NW Norfolk)

      Ross, Ernie (Dundee W)

      Twigg, Derek (Halton)

      Roy, Frank

      Tyler, Paul

      Russell, Bob (Colchester)

      Vaz, Keith

      Russell, Ms Christine (Chester)

      Vis, Dr Rudi

      Ryan, Ms Joan

      Wallace, James

      Salmond, Alex

      Ward, Ms Claire

      Savidge, Malcolm

      Wareing, Robert N

      Sawford, Phil

      Watts, David

      Singh, Marsha

      Webb, Steve

      Smith, Rt Hon Andrew (Oxford E)

      Welsh, Andrew

      Smith, Angela (Basildon)

      White, Brian

      Smith, Rt Hon Chris (Islington S)

      Whitehead, Dr Alan

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Wicks, Malcolm

      Willis, Phil

      Smith, Llew (Blaenau Gwent)

      Wills, Michael

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

      Wilson, Brian

      Southworth, Ms Helen

      Winnick, David

      Spellar, John

      Winterton, Ms Rosie (Doncaster C)

      Squire, Ms Rachel

      Woolas, Phil

      Stewart, David (Inverness E)

      Wright, Anthony D (Gt Yarmouth)

      Stewart, Ian (Eccles)

      Wright, Dr Tony (Cannock)

      Stringer, Graham

      Stuart, Ms Gisela

      Tellers for the Ayes:

      Stunell, Andrew

      Mr. Jim Dowd and

      Sutcliffe, Gerry

      Mr. Robert Ainsworth.

      NOES

      Amess, David

      Robertson, Laurence (Tewk'b'ry)

      Clifton-Brown, Geoffrey

      Ross, William (E Lond'y)

      Howarth, Gerald (Aldershot)

      St Aubyn, Nick

      Johnson Smith, Rt Hon Sir Geoffrey

      Widdecombe, Rt Hon Miss Ann

      Laing, Mrs Eleanor

      Tellers for the Noes:

      Lewis, Dr Julian (New Forest E)

      Mr. Eric Forth and

      Maclean, Rt Hon David

      Mr. David Wilshire.

      Question accordingly agreed to.
      Main Question put accordingly, and agreed to.
      Reasons for disagreeing to a Lords amendment and insisting on certain Commons amendments reported, and agreed to; to be communicated to the Lords.

  ESTIMATES
  Motion made, and Question put forthwith, pursuant to Standing Order No. 145 (Liaison Committee),
  That this House agrees with the Report [25th June] of the Liaison Committee.—[Mr. Pope.]
  Question agreed to.

  Housing Costs (Welfare Benefits)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]
  12.9 am
  Mr. David Kidney: I am pleased to start this short debate on housing costs and the reform of welfare benefits. The Government's review of housing benefit has been on-going for some time, and I want tonight to tease out of the Minister some suggestion of the review's likely conclusions.
  My starting point is the Treasury Select Committee's report into this year's Budget. It said:
  "We are concerned about the number of families remaining on a high marginal rate of tax, and hope that reviews of housing benefit and Council Tax benefit will contribute to a reduction in the incidence of high marginal rates".
  That was said in the context of the new working families tax credit, which makes a significant contribution to the Budget's redistributive nature. It is a far superior benefit to the existing family credit, as it gives a greater allowance—£2.50 more than currently—for children under 11, it generously helps with child care costs and credit begins to be withdrawn at £90 rather than £79. Moreover, the rate of withdrawal of the credit for every extra £1 of net income—the so-called taper—is at 55p, rather than 70p, in the pound.
  Those on housing benefit still have an overlap, whereby they face an effective rate of tax of 89 per cent. If they also receive council tax benefit, the rate is as high as 95.3 per cent. Some 260,000 families still face marginal rates of tax of more than 70 per cent., and more than 1 million families face a marginal rate of more than 60 per cent.
  I welcome the Government's response—published today—to the Select Committee report. It said:
  "The Government will continue to take work incentives into account in the comprehensive spending and welfare reform reviews."
  It has taken the Labour Government to end marginal rates of tax of more than 100 per cent., which were shameful and endured for far too long.
  I recognise that the review of housing benefit, the new working families tax credit and the comprehensive spending review will have to interact to reach a whole and satisfactory outcome. I am hopeful that, when the results of the comprehensive spending review are announced, housing will be a major beneficiary, and that there will be a welcome boost to investment in the building of more social housing and the renovation of housing of all tenures.
  This debate on housing benefit reform is timely, as it falls in the shadow of the announcement of the review's results. Moreover, two significant reports have been issued this week: first, Steve Wilcox's report for the National Housing Federation, whose title is, I believe, "Unfinished Business"; and secondly, Peter Kemp's report for the Joseph Rowntree Foundation, which is called "Housing Benefit: Time for Reform".
  I believe that the key objectives in housing benefit reform should be: first, to reinforce the Government's message that work pays; secondly, to support the excellent new working families tax credit; and thirdly, to avoid
  496
  unrealistic demands on public spending. On the first objective, 50,000 families will be floated off housing benefit altogether through the very generous working families tax credit, which will remove them from the pernicious poverty trap—indeed, 70,000 people will also be floated off council tax benefit. Working families tax credit will help low-paid owner-occupiers as well as tenants. However, for tenants, the overlap of housing benefit still means that families are caught by high marginal tax rates—the generosity of the working families tax credit means that it will catch more people higher up the income scale. It could be said that the poverty trap becomes slightly less deep but much wider.
  Working families tax credit is an exciting new support for working families, but if changes are not made to housing benefit, the two systems will continue to overlap, with high marginal tax rates well up the income scale. That confusing overlap and the high marginal rates will distort the Government's message that work pays. A harmonised system offers opportunities to deliver that message clearly, and could create savings in administration costs and reduce the scope for fraud.
  Housing benefit already costs this country £12 billion a year; within a budget of that size there is scope for radical reform without extra expenditure. Helping people back to work means fewer benefit claimants and greater income tax and national insurance receipts. Helping people in work to earn higher wages means lower benefit payments and, again, greater income tax and national insurance receipts. It would be a tremendous additional benefit if a new scheme could bring help across housing tenures and end the system of poor council tenants paying what is now a total of £1.3 billion a year to help the poorest tenants with their rents.
  The previous Government's shift in support from bricks and mortar to personal benefit payments went too far: so far that cuts had to be made. The local reference rent was introduced, restricting the amount of rent that was eligible for housing benefit support, as were the single room rent for under-25s, and a tight means test that hit pensioners with modest savings.
  The local reference rent has already caused a 12 per cent. reduction in the number of housing benefit claimants: 130,000 people and their families with private sector tenancies no longer claim. Without reform, there is a danger that more and more people will be let down, with social exclusion increasing instead of decreasing.
  There is scope for action to stem the steep rise in rents that has gone alongside the increase in the use of housing benefit to take the strain. Social housing grant rates for housing associations could be used, there could be better support for local authorities, and we could rein in the private sector consumption of public money, especially in the area of fraudulent claims.
  Since 1990, the grant to housing associations for new build has reduced from 75 per cent. to 54 per cent. Rents have, of course, risen in consequence. Three quarters of all new housing association lettings of two-bedroom properties in England are at rents of more than £50 a week, and 45 per cent. are at more than £60. Seven out of every eight lettings of three-bedroom houses are at rents of more than £50 a week, and 70 per cent. at more than £60.

  497
  The Minister for Local Government and Housing wrote to the Housing Corporation in August 1997:
  "I am looking for a reduction in the average level of rent charged over a 3 year period of about 4% in real terms. Rents on new schemes have now reached a level where it is questionable whether they are affordable to those in low-paid employment without assistance from HB."
  The Government will have to contribute to such a commendable strategy through their decisions on social housing grant rate. If they hold it at the present 54 per cent., it could benefit tenants by £5 a week. They should especially bear in mind the argument about interest rates, which have risen over the past year, whereas they argued that the last reduction in housing association grant was partly because the rates had fallen.
  An answer to a parliamentary question earlier this Session showed that the net cost of a 10 per cent. reduction in council rents was estimated at £100 million a year. That is surely a modest cost for a rent restraint that would bear directly on family concerns about moving from benefit to work. There might also be a case for trying over time to achieve a more coherent structure for council and housing association rents.
  As for private lettings, I accept that there is no prospect of direct rent controls in the future, but the Government are spending a good deal of public money on buying private rented accommodation for families. Surely there ought to be some scope for using that buying power to secure localised standards in such areas as health and safety, safeguards against fraud and, perhaps, rent levels that housing benefit will support.
  There are currently some good examples of public-private partnerships in housing, partly owing to the good work done by the Empty Homes Agency in prompting councils and private landlords to work together. Stafford borough council, for instance, now has very good arrangements for co-operation with all housing stakeholders. That council, along with the university accommodation office and private landlords, has a scheme for agreed standards on safety, energy efficiency and inspections of properties. For tenants who cannot afford to pay deposits, there is a rent assistance scheme, as well as fast-tracking of housing benefit applications.
  Important decisions are about to be made about housing benefit. I hope that we can remove the messy overlap of scheme tapers that currently produces the worst-case poverty trap. There is a strong case for combining policies on rent restraint and benefit harmonisation. I believe that any changes should ensure that the system of support with housing costs helps those in need, eliminates fraud as far as possible, makes work pay, and supports the Government's new working families tax credit.
  I hope that I have contributed to an important debate about housing costs and welfare benefit in the future.
  12.21 am
  Mr. Steve Webb: I congratulate the hon. Member for Stafford (Mr. Kidney) on obtaining the debate, and thank him for allowing me to speak briefly.
  So far, housing has not been integrated into the new working families tax credit. The hon. Gentleman made a number of sensible and perceptive points about rent
  498
  levels, and about the importance of such integration. I think that part of the reason why the tax and benefit system for low-paid workers is in such a mess is that it has developed in a piecemeal way over decades. It would be regrettable if the Government made the same mistake—if they introduced a tax credit, and then dealt with housing quite separately.
  In the spirit of what the hon. Gentleman said, the Liberal Democrats—and I personally—would welcome the inclusion of rent in the working families tax credit system. For example, a £20 credit would knock £20 off the amount of rent giving eligibility for housing benefit, would reduce the number of people on housing benefit and would reduce the overlapping tapers to which the hon. Gentleman referred. It would be interesting to hear from the Minister whether the Government are thinking of such action.
  The hon. Gentleman rightly said that low-paid owner-occupiers would benefit from the tax credit, but nothing in the tax credit relates explicitly to their mortgage interest costs. Earlier this week, I heard the Minister for Local Government and Housing say on the radio that she wanted building societies to provide mortgage insurance for times when such people are unemployed. That may well be laudable, and appropriate for some; but it underlines the fact that such people, when they take a job, should not suddenly lose all assistance with their mortgage costs.
  If the Housing Minister is successful and unemployed people's mortgage costs are paid in full, they could amount to £400 or £500 a month. If those people then benefited from a tax credit that involves no allowance—because they are buying, and buying is the majority tenure—that would constitute a serious gap in the benefits system, and one that survey evidence suggests is a barrier to moving out of welfare and into work.
  I would be grateful if the Minister could tell us whether a rental credit is likely to be included in the working families tax credit, and, more important, whether he would consider introducing an owner-occupiers' mortgage interest credit.
  12.23 am
  The Parliamentary Under-Secretary of State for Social Security (Mr. Keith Bradley): I congratulate my hon. Friend the Member for Stafford (Mr. Kidney) on obtaining the debate. It is clear from his speech that he takes a keen interest in the issues, and his speech raised a number of important matters—as did that of the hon. Member for Northavon (Mr. Webb).
  The easy response to the rapidly escalating housing benefit bill of recent years would be to embark on a series of piecemeal cuts, as did the last Administration. My hon. Friend clearly identified those cuts.
  That has not been our response. Instead, we have recognised the need for joined-up solutions to joined-up problems. We recognise the key interrelationship between housing benefit and the housing policy that it underpins. That is why we have embarked on a joint review with the Department of the Environment, Transport and the Regions. The first stage of that review was to put the existing scheme under the microscope to identify where the faults lay. In fact, the microscope analogy is not a good one as many of the problems are all too clear to the naked eye.

  499
  I shall concentrate my response on four main problems, but I shall carefully consider other points raised in the debate and shall respond more fully if I do not cover them tonight. First, instead of easing the transition from welfare into work, housing benefit frequently acts as an insurmountable barrier to people taking up job opportunities. Secondly, benefit recipients rarely have any shopping incentive to choose the most appropriately sized property, or to find better value housing. Thirdly, there are stark inequalities between the treatment of private and social tenants. In recent years, private sector recipients have borne the brunt of measures introduced to make savings in the escalating housing benefit bill. Finally, while some local authorities administer the benefit well, others perform badly. The resulting inconsistencies and delays compound the work incentive problem, and cause difficulties for tenants and landlords alike.
  I described those as the main problems, which implies that there are others. I want to mention two: the estimated £1 billion of housing benefit lost to fraudsters every year, and widespread misunderstanding of the housing benefit system.
  First, widespread fraud deflects money from the people who really need it and contributes towards the poor image that most people associate with the scheme. There can be no doubt that the present hotch-potch of rules, combined with inefficient links between the Benefits Agency and local authorities, provides a fertile breeding ground for fraud.
  Secondly, the widespread misunderstanding surrounding the details of the benefit means that many claimants are simply unaware that housing benefit is payable to people in low-paid work, and that contributes to the work incentive problem that so many commentators have highlighted.
  These problems are not new, but it would be wrong to continue our analysis without pausing to reflect on the good points of housing benefit. It offers a high degree of security for individuals and families. Although the British scheme has operated primarily as an instrument of income maintenance, it also enables most people to afford acceptable accommodation. Overall, however, it is easier to criticise the current scheme than to find ways of overcoming all its difficulties while still retaining the good points.
  I attended the launch yesterday of "Housing Benefit: Time for Reform", a report written by Professor Peter Kemp, and of Steve Wilcox's report "Unfinished Business", both of which were mentioned by my hon. Friend the Member for Stafford. I was particularly impressed by Professor Kemp's exploration not just of the problems of the current scheme but of a comprehensive range of possible solutions. His analysis of alternatives to the current scheme ranged refreshingly wide, and went beyond the deceptively simple solution of simply reducing rents.
  My hon. Friend drew attention to the importance of work incentives and the part that housing benefit can play in improving them. This must be a linchpin for any reforms. We have already begun the task of changing expectations, to make sure that a welfare pension for life is not an option for those who can work.
  Secondly, we have started to address the ignorance of housing benefit that prevents some people from taking up work because they are unaware of the in-work help that
  500
  is available. One of the speakers at yesterday's conference highlighted the need to give tailored advice if we are ever to deal with ignorance.
  The new deal has replaced the old, mass-produced benefit delivery with a more flexible, personally tailored service. Participants are given help and advice on the full range of benefits that they could claim and how much they will get when they move into employment. We have recently launched a comprehensive advertising campaign targeted at lone parents and other low-income families to highlight the full range of benefits and assistance available to people in work.
  My hon. Friend the Member for Stafford is right to draw attention to the importance of the new working families tax credit, which was also mentioned by the hon. Member for Northavon. This, combined with other measures announced in the Budget, will increase the rewards of work. The changes already announced mean that the number of people on deduction rates of more than 90 per cent. will reduce from 130,000 to 26,000. However, a small number of tenants in receipt of housing benefit, council tax benefit and the new tax credit could still lose up to 95p in the pound of any additional earnings. There is clearly scope for improving the part that housing benefit plays in supporting low-income workers.
  Some commentators suggest that integrating housing support with the new housing tax credit would
  "create clear water between benefit and work".
  They also point out the danger of making it harder for claimants to leap between the worlds of welfare and work. It is certainly a very interesting proposal and one that has already been put to the review team, but we must strike a note of caution about creating different systems of support for tenants in and out of work. Even if a housing credit was anchored to both tenure and place of residence, it might still make life on benefits seem more secure compared with a credit that cannot be guaranteed to meet individual rent liabilities.
  Giving tenants a direct stake in the cost of their housing, either through a gap scheme such as those operated in many other countries or through a notional rent contribution for council tenants, could be one way to tackle the gulf between welfare and work. As my hon. Friend the Member for Stafford made clear, the key message must be that work pays. All those matters will be given careful consideration.
  There are finely balanced sets of pros and cons for the different schemes, and we must consider them as our reforms come forward, but reform aimed at giving tenants an interest in their rent would not take place in a vacuum. One aspect of the background canvas painted by Professor Kemp in his report is that basic social security benefits are unusual internationally in making no provision for housing cost. That is a problem that we have to continue to grapple with. We must also recognise that some vulnerable tenants may be unable to shop around or haggle with their landlords. Alternatively, the costs of giving tenants some slack to make up any rent shortfall could be substantial. There is also the danger that a gap scheme would prove to be equally complicated to run and even more opaque for claimants to understand than the current system.
  That brings me to improved administration. There can be no doubt that standards of administration are patchy across local authorities. Numerous changes have been

  501
  bolted on to the original scheme, leaving us with a benefit confusing even for the best local authorities to administer, let alone for claimants to understand. As my hon. Friend the Member for Stafford rightly said, the Public Accounts Committee report majored on the complexity of housing benefit, referring several times to the
  "60 deductions, premiums, allowances and disregards"
  involved in calculating entitlement. They relate largely to the structure that housing benefit shares with income support and overlook probably the biggest headache in housing benefit administration—the way that rent is assessed.
  Again there is no easy solution; the complexity in the system has mostly been built in to save money, to protect tenants in vulnerable circumstances, such as young people who have been in care, or to prevent fraud and abuse. Nevertheless, the case for reducing some of the worst complexities is extremely robust. We will also continue to build on the verification framework and the findings of the benefit fraud inspectorate to disseminate good practice and to raise standards.
  I should also like to address the issue of cost. Many commentators assume a backdrop of cost-cutting or restraint. If savings are to be squeezed out of the social security budget, housing benefit initially looks like a prime candidate. After all, it has shown the second fastest rate of growth after sickness and disability benefits in recent years.
  Despite spending on housing remaining broadly constant, benefit spending has rocketed, from around £5.3 billion in 1988 to around £11.4 billion today. While we are aiming to restrain growth in the longer term, the review is not a cost-driven exercise. I made the same point yesterday morning at the launch of Professor Kemp's report, and a number of people in the audience immediately assumed that that was a politician's
  502
  doublespeak and that I was actually on the verge of announcing cuts in housing benefit. Let me reiterate that the review is not about cuts. For the immediate future, we are more interested in streamlining the rules and in making the benefit more work-friendly.
  Finally, my hon. Friend mentioned the balance between bricks and mortar and personal subsidy. I can see that this approach has its attractions, but lowering rents in the social housing sector is no panacea in itself. Rent reductions do not, for instance, increase the supply of accommodation or improve the quality and maintenance of the existing stock.
  In conclusion, some of the general points are worth reiterating. There are features of the current system that go against the grain of the Government's determination to refashion a modern welfare state. In particular, housing benefit can undermine work incentives and prevent tenants from taking responsibility for housing consumption. Any changes must be designed to simplify the benefit rules, to ensure that the benefit acts in concert with other in-work support and to design out fraud wherever possible. We must always remember that many people rely on benefit for their security, and that any change will not be brought in without sensitivity, in order to ensure that existing claimants have what I call a soft landing.
  I warmly congratulate my hon. Friend and the hon. Member for Northavon again on their contributions to the debate. The points raised will be considered carefully as the review progresses. I hope that we can build support both for the principles of general welfare reform and for tackling the specific design faults of the housing benefit system that have been so clearly identified tonight. I am sure that, if we work together in that way, we can produce a better housing support system than the one with which we are currently grappling.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes to One o'clock.

TREASURY

  Correspondence
  Mr. McLoughlin
  To ask the Chancellor of the Exchequer when he will reply to the letter from the hon. Member for West Derbyshire of 10 March about his constituent, Mr. Eric Pugh, on the subject of tax relief on resuscitation training materials. [48214]

  Dawn Primarolo
  I have been considering this matter carefully and expect to be able to write to the hon. Member in a few days' time.

  Individual Savings Account
  Mr. Loughton
  To ask the Chancellor of the Exchequer what research he has commissioned to determine whether the new individual savings account will achieve its objective of encouraging more people to save. [47083]

  Mr. Geoffrey Robinson
  [holding answer 23 June 1998]: As stated in the answer I gave to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) on 19 May 1998, Official Report, column 304, information was obtained from three surveys from the March Budget. Details of the survey specifications and a summary of the main findings have been placed in the Library.

  Since the Budget, the Inland Revenue has taken part in a syndicate to commission research from NOP, which included questions about the public's awareness of, and initial reactions to, aspects of the ISA proposals. The results of this research cannot be published for contractual reasons.

  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will list those circumstances in which a lower rate or basic rate taxpayer would benefit from holding equity shares through an individual savings account after 2004. [45997]

  Mr. Geoffrey Robinson
  [holding answer 15 June 1998]: The Individual Savings Account offers savers the certainty that they will be able to save completely free of all tax, including capital gains tax, for at least ten years, irrespective of any change in their circumstances,

  Sustainable Development and Environmental Protection
  Mr. Baker
  To ask the Chancellor of the Exchequer in what ways the Comprehensive Spending Review has taken account of sustainable development and environmental protection issues. [47776]

  Mr. Darling
  [holding answer 29 June 1998]: Under the Greening Government initiative, we are committed to taking proper account of environmental considerations
  182
  across all areas of policy making. The Comprehensive Spending Review's findings will be reported before the Summer Recess.

  Foreign Earnings Deduction
  Mr. Cousins
  To ask the Chancellor of the Exchequer what estimate he has made of the number of North East resident employees currently with foreign earnings who will be affected by the withdrawal of the foreign earnings deduction. [47600]

  Dawn Primarolo
  [holding answer 29 June 1998]: I regret that the information requested is not available.

  Mr. Cousins
  To ask the Chancellor of the Exchequer (1) if he will estimate the number of employees currently receiving the foreign earnings deduction, the ranges of their foreign income, and the revenue benefit estimated in a full financial year from the withdrawal of foreign earnings deductions for employees; [47599]

  (2) what is the total estimated revenue benefit in a full financial year of the withdrawal of the foreign earnings deductions. [47601]

  Dawn Primarolo
  [holding answer 29 June 1998]: In 1996–97, the last year for which data are available, about 35,000 employees received the foreign earnings deduction. Of this total, about 15,000 seafarers will be unaffected by the changes. Reliable estimates by the range of foreign earnings are not available. Abolition of the foreign earnings deduction for all employees except seafarers will yield about £250 million in a full year.

  Taxation (Tourism)
  Mr. Fearn
  To ask the Chancellor of the Exchequer what research his Department has(a) commissioned and (b) evaluated on the impact of levels of taxation on tourism products and services, on tourism levels. [47696]

  Dawn Primarolo
  I have recently received a comprehensive report from the British Tourist Authority regarding the impact of VAT on the UK tourist industry. This is currently being analysed by Customs.

  Financial Services Ombudsmen
  Mr. Healey
  To ask the Chancellor of the Exchequer what representations he has received, and from whom, on incorporation of the functions of the Building Society Ombudsman into the proposed new single Ombudsman scheme within the proposed Financial Services Authority. [48067]

  Mrs. Liddell
  A number of representations have been received about the scope of the new single ombudsman scheme from ombudsman schemes, consumer groups, trade bodies and individuals.

  Mr. Healey
  To ask the Chancellor of the Exchequer what representations he has received on extending the remit of the Building Society Ombudsman to allow him to deal with the complaints he receives connected to building society conversions. [48065]

  Mrs. Liddell
  I have received a number of suggestions that the scheme be extended in this area, although the Ombudsman can already consider cases where a member of a converting society misses out on a share allocation or payment because of alleged mishandling of an account.
  183
  Mr. Healey
  To ask the Chancellor of the Exchequer if he will list the members of the Steering Group to set up the proposed new single Ombudsman scheme separately identifying its specialist advisers. [48068]

  Mrs. Liddell
  The Steering Group has been set up by the Financial Services Authority to advise it on the formation of the new scheme. I understand that its members are: Laurie Slade (Chairman), Peter Dean (Investment Ombudsman), Tony Holland (Personal Investment Authority Ombudsman), Walter Merricks (Insurance Ombudsman), Brian Murphy (Building Societies Ombudsman), David Thomas (Banking Ombudsman), Nick Walker (Financial Services Authority Head of Complaints Oversight and Policy) and Clare Boyle (Financial Services Authority Complaints Oversight and Policy Department). This committee is not a matter for Government.

  Mr. Healey
  To ask the Chancellor of the Exchequer when he last reviewed the operation of the Office of the Building Society Ombudsman and the extent of his remit. [48066]

  Mrs. Liddell
  The Office of the Building Society Ombudsman is a private body, recognised by the Building Societies Commission as complying with the requirements of a compensation scheme set out in the Building Societies Act 1986. Its remit was widened by the Building Societies Act 1997.

  Duty Free
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer when he expects to have in place the new tax and duty regime which will follow the abolition of duty-free; and if he will make a statement. [47980]

  Dawn Primarolo
  In accordance with Community Legislation, duty and tax free sales to intra-EU travellers will cease on 30 June 1999. The details for the successor regime are under discussion at official expert level in the EU Excise Committee. Once agreement is reached, any required changes to UK legislation will be implemented.

  Low Pay
  Mr. Woolas
  To ask the Chancellor of the Exchequer if he will estimate how many people in the constituency of Oldham, East and Saddleworth earn less than the proposed national minimum wage, broken down by(a) gender, (b) age, (c) full or part-time employment and (d) ethnic origin. [48187]

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

  Letter from Tim Holt to Mr. Phil Woolas, dated 1 July 1998:
  As the Director of the Office for National Statistics (ONS), I have been asked to reply to your parliamentary question on earnings in the constituency of Oldham East and Saddleworth.
  The national minimum wage will become effective in April 1999 and has been set at £3.60 for employees aged over 21 and £3.00 for those aged 18 to 21, although there are a number of qualifications to this general observation.
  184
  The Low Pay Commission, in arriving at their recommendations, had to adjust 1999 pay rates to 1997 values. Their methodology produces £2.80 and £3.40 as the 1997 values of the government's preferred rates and I have provided supplementary data for these levels.
  The New Earnings Survey (NES) does not collect information on the ethnic origin of employees, therefore figures for this element of the question cannot be given. I cannot provide data for those aged 18–21 years who would earn below the proposed minimum wage since there were only 7 individuals in the NES sample for Oldham East and Saddleworth. Also, reliable estimates by gender of full-time/part-time status for those employees aged over 21 years cannot be provided, because the associated statistical standard errors are too high.
  The overall percentage of employees aged over 21 years in Oldham East and Saddleworth earning under £3.40 per hour excluding overtime and shift payments at April 1997 was 4.4 per cent. Similarly, 5.9 per cent. of employees aged over 21 earned below £3.60 per hour excluding overtime and shift payments at April 1997.
  The NES is based on a one percent sample of employees in the PAYE system and is therefore likely to under-represent relatively low paid staff earning below the tax threshold and in particular those who work part-time.
  The extent of this bias may be estimated for the North West by using data from the NES augmented by data from the Labour Force Survey (LFS). This suggests that the estimate of the overall proportion of employees aged over 21 years earning below £3.60 could understate the true position by as much as 3 percentage points. However, it is unlikely that the occurrence of lower paid jobs is uniform across the region. and so it would be wise to treat this figure as broadly indicative rather than a precise estimate.

  National Minimum Wage
  Ms Julie Morgan
  To ask the Chancellor of the Exchequer how many women in Wales he estimates will benefit from the national minimum wage. [47846]

  Mrs. Liddell
  [holding answer 29 June 1998]: The information requested falls within the responsibility of the Chief Executive of the Office for National Statistics. I have asked him to reply.

  Letter from Tim Holt to Ms Julie Morgan, dated 1 July 1998:
  As the Director of the Office for National Statistics (ONS), I have been asked to reply to your parliamentary question on the effect of the national minimum wage in Wales.
  The national minimum wage will become effective in April 1999 and has been set at £3.60 for employees aged over 21 and £3.00 for those aged 18 to 21, although there are a number of qualifications to this general observation.
  The Low Pay Commission, in arriving at their recommendations, had to adjust 1999 pay rates to 1997 values. Their methodology produces £2.80 and £3.40 as the 1997 values of the government's preferred rates and I have provided supplementary data for these levels.
  The attached table presents adjusted New Earnings Survey (NES) and Labour Force Survey (LFS) data for the number of women aged over 212 years in Wales earning less than £3.40 and £3.60. These estimates are based on the preferred method for assessing the coverage of the proposed national minimum wage. This method reflects the fact that the NES is based on a one percent sample of employees in the PAYE system and is therefore likely to under-represent relatively low paid staff, earning below the tax-threshold, and in particular those who work part-time. The extent of this bias may be estimated for Wales by using data from the NES augmented by data from the LFS.
  There are too few women in our sample for us to use this preferred method for those aged 18 to 21 in Wales, so we have provided information solely from the NES. At the UK level adjusted

  185
  NES and LFS data show that the NES understates the percentage of 18 to 21 year olds earning less than £3.00 by around 6 per cent. This gives an indication of the likely degree of bias in the NES estimate.

  Adjusted New Earnings Survey and Labour Force Survey estimates—Wales—Spring 1997

  Number (thousand)

  Percentage

  Women aged over 21 years earning less than:

  £3.40

  82–98

  17.3–20.8

  £3.60

  101–119

  21.5–25.2

  New Earnings Survey—April 1997—Wales1

  Percentage of employees with hourly earnings excluding overtime and shift payments less than:

  £2.80

  £3.00

  Employees aged 18–21 on all rates of pay

  All women

  7.1

  9.5

  1Employees whose pay for the survey pay-period was unaffected by absence

PRIME MINISTER

  Chief Surveillance Commissioner
  Mr. Corbett
  To ask the Prime Minister if he will make an announcement about arrangements made to appoint the Chief Surveillance Commissioner under Part III of the Police Act 1997. [48812]

  The Prime Minister
  In accordance with section 91 of the Police Act 1997 I have decided to appoint Sir Andrew Leggatt as Chief Surveillance Commissioner for a period of 3 years.

  I attach considerable importance to this appointment and to the implementation of the intrusive surveillance provisions, which form a key component of the Government's response to organised and serious crime. It is important that we ensure that the police and Customs have access to these operationally important techniques, but we must ensure that adequate procedures and protections are in place. I am delighted that Sir Andrew has accepted this appointment. I have no doubt that his skills and experience will prove invaluable.

  The Chief Surveillance Commissioner will be responsible for keeping under review the authorisation of police and Customs intrusive surveillance operations under Part III of the Police Act 1997. Sir Andrew will be the first Chief Surveillance Commissioner appointed under these provisions, and will assist the establishment and development of the intrusive surveillance authorisation processes required under the Police Act 1997. His appointment is a key component of the work under way to implement the intrusive surveillance provisions, a process which should be completed later this year. The responsibilities of the Chief Commissioner will include:

  Overseeing and reviewing the authorisation system and the work of Commissioners to be appointed under the Act;

  Considering appeals by authorising officers and members of the public against decisions of the Commissioners;

  Making an annual report to the Prime Minister and reporting to the Prime Minister at any time regarding the performance of functions under the Act.

  Parliamentary Questions
  Mr. Butterfill
  To ask the Prime Minister when he will answer the question from the hon. Member for Bournemouth, West for answer on 9 June regarding reports to 10 Downing Street (44556). [48019]

  The Prime Minister
  I refer the hon. Member to the reply I gave to him on 25 June 1998,Official Report, column 596.

  Engagements
  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Wednesday 1 July. [47849]

  The Prime Minister
  This morning I had meetings with Ministerial colleagues and others and will have further such meetings later today.

HOME DEPARTMENT

  Immigration and Nationality Directorate
  Mr. Stephen Twigg
  To ask the Secretary of State for the Home Department if he has received the annual report for 1997 of the Complaints Audit Committee of the Immigration and Nationality Directorate; and if he will make a statement. [41217]

  Mr. Straw
  A copy of the report has been placed in the Library. It is a wide-ranging and informative document and I am grateful to the Committee for its comments and its recommendation. The Committee's comments about asylum interviewing are being brought to the attention of staff and interview training will be reviewed in the light of the recommendation.

  Prisons (Illegal Drugs)
  Sir Norman Fowler
  To ask the Secretary of State for the Home Department (1) what assessment he has made of the advantages of introducing drug detecting devices into prisons in accordance with the proposal of the Chief Inspector of Prisons in his recent annual report; and if he will make a statement; [48175]

  (2) what assessment he has made of the advantages of using dogs in prisons to detect illegal drugs in accordance with the proposal of the Chief Inspector of Prisons in his recent annual report; and if he will make a statement. [48174]

  Ms Quin
  [holding answer 30 June 1998]: Her Majesty's Chief Inspector of Prisons, Sir David Ramsbotham, recommends that every prison is provided with a passive drug detector dog to screen visitors and to patrol landings. The Prison Service believes that use of drug dogs is helpful in detecting drugs and deterring some prisoners and their visitors from using or smuggling them. So far the Prison Service has about 30 passive detector dogs, capable of screening visitors, and this number is increasing rapidly. The Prison Service is considering options for providing wider cover. The same dogs could not be used to screen cells from the outside at night, as Sir David suggests. However, about half of prisons have active drug dogs trained to detect drugs during a cell search, and such dogs are available to all other prisons from a central pool.
  187
  The Prison Service has a continuing programme of research into contraband detection technology. A field trial of two pieces of trace detection equipment is now being evaluated by the Police Scientific Development Branch on behalf of the Prison Service.

  Sir Norman Fowler
  To ask the Secretary of State for the Home Department if, in the new trials announced by his Department for providing disinfecting tablets for prisoners who inject drugs, inmates will be allowed to remain anonymous; and if he will make a statement. [48168]

  Mr. George Howarth
  [holding answer 30 June 1998]: The trials are being planned so that prisoners may obtain disinfecting tablets under conditions of anonymity. The prison governors of the 11 establishments involved are being asked to put in place arrangements so that disinfecting tablets are easily available and that those prisoners who use them are not targeted as injecting drugs users.

  The arrangements for ensuring anonymity may have to vary from prison to prison to take account of security requirements, regime and physical layout. This is one aspect of the trials which will be closely examined by the London School of Hygiene and Tropical Medicine, who will independently evaluate the scheme.

  Probation Officers
  Mr. Beith
  To ask the Secretary of State for the Home Department how many full-time probation officers were in post(a) during 1994 and (b) for the latest date for which figures are available. [47829]

  Ms Quin
  At the end of 1994, there were 7,359 probation officers of all grades in full-time employment. This figure appears in table 8.5 of Probation Statistics England and Wales 1996, a copy of which is in the Library. The equivalent figure for the end of 1997, the most recent date for which figures are available, is 6,653.

  Mr. Beith
  To ask the Secretary of State for the Home Department how many full-time probation officers are expected to be in post during the financial years 1999–2000 and 2000–01. [47827]

  Ms Quin
  After my right hon. Friend has announced how much specific current grant is available to each of the 54 probation services in England and Wales in future financial years, it will be for the responsible probation committees to determine staffing levels within their services.

  Juveniles (Police Custody)
  Mr. Clappison
  To ask the Secretary of State for the Home Department what assessment he has made of the impact of the implementation of the provisions of the Crime and Disorder Bill [Lords] on the number of juveniles held in police custody. [47580]

  Mr. Michael
  The Crime and Disorder Bill [Lords] does not affect the relevant powers of the police in respect of juveniles or adults. A person is defined as being in police detention by section 118 of the Police and Criminal Evidence Act 1984, as subsequently amended. This section states that a person is in police detention if
  "…he has been taken to a police station after being arrested for an offence… or,…he is arrested at a police station after attending voluntarily…".
  188
  The Bill introduces a range of measures which will have an impact across the whole spectrum of juvenile justice issues. These measures are designed to speed up the justice process, and encourage multi-agency co-operation in the youth offending teams. As a result, juvenile justice will undergo radical reform intended to cut reoffending. The key youth justice changes will be piloted and the impact of these changes assessed through evaluation of the pilot project, but there is no basis for estimating the effect on the way the police use their powers of detention.

  Road Policing
  Mr. Kidney
  To ask the Secretary of State for the Home Department what assessment he has made of the relative effectiveness of the different ways police resources are spent on road policing in England and Wales. [48154]

  Mr. Michael
  Her Majesty's Inspectorate of Constabulary is conducting a thematic inspection of the policing of road users and traffic. It will include an analysis of the key issues and identify good practice. The report on the inspection will be published later this year.

  Our Police Research Group has published a study. "Cost Benefit Analysis of Traffic Light and Speed Cameras", which shows the effectiveness and efficiency of those technologies.

  We are working closely with colleagues at the Department of the Environment, Transport and the Regions and with the Association of Chief Police Officers on ways to improve road policing and action to tackle vehicle crime.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Sustainable Development
  Mr. Bennett
  To ask the Secretary of State for the Environment, Transport and the Regions what proposals the United Kingdom Government have to prepare for a world-wide conference 10 years after the Rio Conference to discuss progress on sustainability. [47989]

  Mr. Meacher
  The United Kingdom's priority is to ensure that the agreements reached at Rio and thereafter are fully and effectively implemented. At the United Nations General Assembly Special Session in 1997, which reviewed progress on implementing Agenda 21 since Rio, all parties committed themselves to ensuring that the next review in 2002 demonstrates greater measurable progress in achieving sustainable development. The United Kingdom strongly endorsed this approach. In working towards the review we will promote sustainable development in our bilateral negotiations and in multilateral forums, working closely with all interested parties.

  United Nations Environment Programme
  Mr. Bennett
  To ask the Secretary of State for the Environment, Transport and the Regions what discussions the United Kingdom Government have had about improving co-ordination in respect of the United Nations Environment Programme and(a) the Montreal Protocol,

  189
  (b) the Basel Agreement, (c) the Kyoto climate change negotiations, (d) CITES and (e) other individual environmental agreements. [48030]

  Mr. Meacher
  A tendency towards fragmentation has reduced the effectiveness of some environmental agreements. The Government believe this should be addressed. The Executive Director of the United Nations Environment Programme, Mr. Klaus Toepfer, has been mandated to bring forward proposals on improving co-ordination between the environmental conventions to the Twentieth Governing Council next February. The United Kingdom, acting as the Presidency of the European Union, was instrumental in negotiating agreement to this mandate at the Fifth Special Session of the Governing Council on 20–22 May. I also expect the report of the United Nations Task Force on Environment and Human Settlements, chaired by Klaus Toepfer, to make recommendations on this area.

  Public Participation Convention
  Mr. Bennett
  To ask the Secretary of State for the Environment, Transport and the Regions how and when he expects the Convention on Public Participation, Access to Information and Access to Justice agreed at the Aarhus Environmental Conference to be incorporated into United Kingdom law. [47990]

  Mr. Meacher
  I refer my hon. Friend to the reply I gave to the hon. Member for Lewes (Mr. Baker) on 29 June 1998,Official Report, column 89.

  Solvents (Trichlorotrifluroethane)
  Mr. Cotter
  To ask the Secretary of State for the Environment, Transport and the Regions what risk assessments have been carried out into the inhalation of trichlorotrifluroethane vapours; and how many accidents involving this chemical have been reported to her Department in each of the last three years. [48007]

  Angela Eagle
  Trichlorotrifluroethane was reviewed in 1990 by the International Programme on Chemical Safety of the World Health Organisation. This covered hazard identification and qualitative risk assessment of the chemical for the general population, workers and the environment. The Health and Safety Executive (HSE) is also aware of reviews of trichlorotrifluroethane by the German MAK Commission and the USA American Conference of Industrial Governmental Hygienists.

  Occupational exposure to trichlorotrifluroethane is controlled under the Control of Substances Hazardous to Health Regulations 1994. There are occupational exposure standards for this solvent of 1000 ppm (8-hour Time Weighted Average) and 1250 ppm Short Term Exposure Limit (15-minute reference period).

  In the period 1 April 1995 to 31 March 1998 there were no cases of injury caused by trichlorotrifluroethane reported under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations.

  Planning Inquiries
  Mr. Dismore
  To ask the Secretary of State for the Environment, Transport and the Regions what advice his 190
  Department gives to those appearing at lengthy planning inquiries, concerning their liability for costs in the event of the inquiry not proceeding as planned. [47985]

  Mr. Caborn
  No specific advice is given by the Department or the Planning Inspectorate on this matter. All parties are expected to meet their own inquiry expenses regardless of the length of the inquiry and whether or not the inquiry proceeds as planned.

  Swanwick Air Traffic Centre
  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions (1) when work started on the construction of the new Swanwick air traffic centre at Fareham; [48135]

  (2) how much has been spent to date on the new Swanwick air traffic centre at Fareham; [48138]

  (3) what is the current estimate for the cost of completion of the new Swanwick air traffic centre at Fareham; [48136]

  (4) what is the estimated time for completion of the new Swanwick air traffic centre at Fareham. [48163]

  Ms Glenda Jackson
  Construction of the Swanwick centre began in 1991, and the systems contractors were appointed in 1992. The acceptance of the operational computer system from Lockheed Martin took place in April this year, and the project has now been closed within budget at a total capital cost of £350.1m.

  National Air Traffic Services Ltd estimate that the earliest opportunity for bringing the Swanwick centre into operation is the winter of 1999–2000.

  Extraction Industries
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions if he will introduce into the planning system stipulations concerning the end use of minerals, aggregates and other products of the extraction industries. [48032]

  Mr. Caborn
  There are no plans to introduce any such measures. The planning system exists to regulate the development and use of land, rather than the end-uses of minerals and other industrial products. Any planning controls over the use of materials away from a production site would be difficult to enforce in practice. However, my Department's minerals planning guidance encourages the adoption of other measures by planning authorities and the minerals industry, including the efficient use of materials, appropriate uses made of high-quality materials, and the recycling of wastes as sustainable objectives for minerals planning.

  Bus Employees Superannuation Trust
  Mr. Bob Russell
  To ask the Secretary of State for the Environment, Transport and the Regions if it is his policy that the surplus of the Bus Employees Superannuation Trust should be returned to the BEST pensioners. [48036]

  Ms Glenda Jackson
  I refer the hon. Member to the answer that I gave to him on 8 April 1998,Official Report, columns 291–95.

  Traffic Calming Schemes
  Mr. Bob Russell
  To ask the Secretary of State for the Environment, Transport and the Regions if additional finance will be allocated to local authorities for traffic calming schemes. [48037]

  Ms Glenda Jackson
  Allocations to local highway authorities for capital expenditure on their transport infrastructure in 1999–2000, including traffic calming schemes, are due to be announced in December.

  Health and Safety at Work
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to review the operation of section 28 of the Health and Safety at Work etc. Act 1974. [47875]

  Angela Eagle
  The Freedom of Information White Paper Your Right to Know has promised the reduction of the complexities and duplication in existing statutory and non-statutory access requirements. A review of all existing provisions, including Section 28 of the Health and Safety at Work etc. Act 1974, is underway.

  Hauliers (Road User Charges)
  Mr. Todd
  To ask the Secretary of State for the Environment, Transport and the Regions what progress has been made towards reaching agreement on a common European Union set of road user charges for hauliers; and if he will make a statement. [48077]

  Ms Glenda Jackson
  European legislation is already in place which allows Member States to impose user charges on heavy goods vehicles over 12 tonnes, if they wish to do so. However the Directive in question, Council Directive 93/89 EEC, was annulled by the European Court of Justice in 1995, although its provisions remain in force. Agreement has yet to be reached on a replacement, despite considerable effort during the UK's Presidency of the EU and previous Presidencies.

  Coalfields Task Force
  Mr. Wigley
  To ask the Secretary of State for the Environment, Transport and the Regions how many public meetings have been held by the Coalfields Task Force in(a) England, (b)Scotland and (c) Wales. [48178]

  Angela Eagle
  The Task Force held five public hearings in England. There were none in Scotland or Wales because the remit of the Task Force was to develop a programme for action for former mining communities in England only.

  Mr. Wigley
  To ask the Secretary of State for the Environment, Transport and the Regions what is the budget for(a) the current year and (b) future years for the Coalfields Task Force. [48151]

  Angela Eagle
  The Task Force's Report 'Making the Difference' was published on 18 June, and its work is now complete. There was no programme budget for the Coalfields Task Force; its members were not remunerated, and incidental expenses were met from my Department's administrative budgets.

  University College Stockton
  Ms Dari Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions if he has approved the £0.8 million commitment from the Teeside Development Corporation towards the establishment of a new Chair and Research Centre in Urban Regeneration and Change at University College Stockton and a further commitment of £0.5 million towards staff and student amenities. [48270]

  Mr. Caborn
  No decision has been taken yet. The board of the Teesside Development Corporation approved both grants at a meeting on 20 March 1998. A conditional grant agreement was signed on 27 March 1998 with the University College Stockton for the Chair in Urban Regeneration and Change, but no grant agreement was signed in relation to staff and student amenities. Both grants need the approval of the Secretary of State and they are now being considered on their merits. A decision will be issued shortly.

  Local Government Commission for England
  Mr. Watts
  To ask the Secretary of State for the Environment, Transport and the Regions when he intends to announce the outcome of the prior options study of the Local Government Commission for England; and if he will make a statement. [48435]

  Ms Armstrong
  I am today publishing the Report on the "prior options" study of the Local Government Commission for England (LGC). This is Stage 1 of the Financial Management and Policy Review of the Commission which I announced on 17 November 1997,Official Report, column 9. I have arranged for copies to be placed in the Library of the House.

  The Report concludes that the core function of the LGC, to review periodically the electoral arrangements of every local authority in England to reduce electoral imbalances, is essential and that the LGC is the right and most cost-effective body to carry this out. It also concludes that the LGC is well placed to undertake individual structural and boundary reviews of local government.

  Other key findings of the Report are that:

  The LGC should not be asked to undertake nationwide structural reviews in future;

  the Secretary of State should be able to direct the types of review the LGC undertakes;

  electoral reviews should be undertaken on a rolling basis and not on the basis of the current 10–15 year programme;

  better coordination is needed between the local Government Commission and the Parliamentary Boundary Commission (PBC);

  the two Commissions should be merged.

  Under current legislation, the LGC, in planning its review programme, is obliged to follow a review cycle of 10–15 years which allows it neither to prioritise those areas where electoral imbalance is worst nor to have regard to the needs of the PBC. The PBC is, therefore, faced with conducting its reviews using ward data which are often very much out of date.
  193
  The Report recommends the longer term option of a merger of the LGC and the PBC. It also makes a number of more detailed recommendations about the role of the LGC.

  We agree that it is important for there to be as effective co-ordination as possible between the two Commissions and my right hon. Friend the Home Secretary, and I will be considering what steps can now be taken to achieve this.

  We are also minded, at the next legislative opportunity, to amend the 10–15 year periodic requirement to enable the LGC to plan their programme better, addressing the worst electoral imbalances first and having regard to the work of the PBC.

  As to a merger of the two Commissions, we recognise that there is a case for this. We also recognise that such a merger could raise important constitutional issues and have wider implications for the administration of our electoral arrangements. Accordingly, we are proposing now to consult widely on this proposal for merger before taking any final decisions.

  I have arranged for Stage II of the Financial Management and Policy Review to take place over the coming months. It will look at the detailed operation of the LGC, in particular its management structures, financial controls and arrangements for undertaking its reviews.

  Road Traffic Pollution
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the extent of air pollution resulting from road traffic and its effect on numbers of premature deaths and hospital admissions. [48052]

  Angela Eagle
  Road traffic is a significant source of emissions of airborne pollutants. Figures for the United Kingdom in 1996 show that traffic accounted for 71 per cent. of national emissions of carbon monoxide, 47 per cent. of nitrogen oxides, 30 per cent. of volatile organic compounds and 25 per cent. of particulate matter. These proportions are likely to be higher in urban areas.

  The Department of Health Committee on the Medical Effects of Air Pollution has published a report entitled Quantification of the Effects of Air Pollution on Health in the United Kingdom, in January this year. In this report, the Committee estimates that each year between 12,000 and 24,000 deaths are brought forward by short-term exposure to air pollution (sulphur dioxide, particulate matter and ozone) from all sources, including traffic, mainly in urban areas of Great Britain. The range for hospital admissions and readmissions was 14,000–24,000. Some uncertainties remain. It is, at present, not possible to say by how much lives are shortened. It is also not possible to attribute a proportion of these effects to traffic alone. Research is already under way to address some of the issues highlighted in the Committee's report.

  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the impact of the forecast 194
  growth in road traffic over the next 20 years on the attainment of the Government's targets for the reduction in carbon emissions by 2010. [48051]

  Angela Eagle
  Road traffic CO2 emissions can increase as a result of a number of factors, which include changes in the distance travelled, vehicle speeds, and the fuel efficiency of vehicles. Energy projections published in 1995 by the Department of Trade and Industry forecast that CO2 emissions from road transport would grow by around twenty percent. between 1995 and 2010. Revised energy forecasts will be published later this year.

  Interim estimates based on the 1997 National Road Traffic Forecasts (NRTF) point to significantly lower growth in emissions over the period compared to the 1995 forecasts. The NRTF incorporates the impact of the Government's policy of increasing fuel duty by six percent. per year in real terms, and the improvements which this is expected to produce in the fuel efficiency of the vehicle stock.

  The Government plan to publish a consultation paper later this summer on policy options for delivering our climate change targets. This will focus on measures to deliver our legally binding target from Kyoto to reduce emissions by 12.5 per cent. below 1990 levels over the period 2008–2012, as well as discussing how we might move beyond that towards our domestic aim of reducing Co2 emissions by 20 per cent. on 1990 levels by 2010. This document will cover the options available to reduce emissions from the transport sector.

  Car Transport
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions what percentage of people travel to work by car. [48275]

  Ms Glenda Jackson
  In Great Britain in 1997, 71 per cent. of people travelled to work by car.

  Integrated Transport White Paper
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions if the Integrated Transport White Paper will include a cost benefit analysis of the proposals. [48276]

  Ms Glenda Jackson
  In our manifesto, we promised to develop an integrated transport policy to fight congestion and pollution. Our forthcoming White Paper will set out how we plan to deliver on this promise, in the interests of a healthier, cleaner and more prosperous nation, to the benefit of all.

  Petroleum Products
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions what percentage of petroleum products are carried annually in the United Kingdom(a) by water, (b) by rail and (c) by road. [48274]

  Ms Glenda Jackson
  The percentage of petroleum products carried annually in the United Kingdom is: 9 per cent. by road, 2 per cent. by rail, and 70 per cent. by water. The remaining 20 per cent. is carried by pipeline.

WALES

  Textile Industry
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his estimate of the number of jobs in the textile industry in Wales; and if he will make a statement. [47416]

  Mr. Hain
  According to provisional estimates from the Annual Employment Survey, there were 7,400 employees in the textile industry in Wales in September 1996; of which 4,900 were in manufacturing and 2,500 in sales (1992 Standard Industrial Classification, Classes 17.10–17.70, 51.41 and 52.41).

  Automotive Industry
  Mr. Barry Jones
  To ask the Secretary of State for Wales what estimate he has made of the number of jobs in Wales in the automotive industry; and if he will make a statement. [47437]

  Mr. Hain
  According to provisional estimates from the Annual Employment Survey, there were 36,800 employees in the automotive industry in Wales in September 1996; of which 5,200 were in manufacturing and 21,600 in sales and maintenance and repair of motor vehicles (1992 Standard Industrial Classification, Divisions 34 and 50 respectively).

  Deeside Stadium
  Mr. Barry Jones
  To ask the Secretary of State for Wales when he proposes to open the new Deeside Stadium at the Deeside College; and if he will make a statement. [47909]

  Mr. Ron Davies
  I have accepted an invitation to perform the official opening of Deeside College Stadium on 6 October.

  Higher Education
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many applications there were to Welsh university institutions in each of the last five years; and if he will make a statement. [47903]

  Mr. Hain
  The information is given in the table.

  All applications to higher education institutions in Wales1

  Year of entry2

  Applications3

  1994

  119,128

  1995

  116,455

  1996

  88,131

  1997

  91,173

  19984

  87,294

  1Applications are for full time first degree, Diploma or Higher Education, and HND courses. Some university diploma and full-time HNC courses also recruit through UCAS

  2For 1994 and 1995, each applicant was allowed up to 8 applications. From 1996 onwards this reduced to 6

  3Applicants to institutions in Wales may also be applicants to institutions elsewhere in the United Kingdom

  4Data incomplete. Figures as at 8 May 1998 are shown

  Source:

  Universities and Colleges Admissions Service (UCAS)

  Class Sizes
  Mr. Öpik
  To ask the Secretary of State for Wales if he will ensure that information is collected centrally about class sizes in secondary schools; and if he will make a statement. [48196]

  Mr. Hain
  Class size is more difficult to measure in secondary schools than in primary schools where teaching groups are generally based on classes as registered. Information is collected centrally which gives the overall average size of teaching groups in secondary schools but no information is available centrally about the number of classes, or pupils in class, by size of class.

  Classes as taught in maintained secondary schools, by year group1

  January 1997

  Year group 7:

  Number of classes

  1,546

  Number of pupils

  36,534

  Average class size2

  23.6

  Year group 8:

  Number of classes

  1,518

  Number of pupils

  35,131

  Average class size2

  23.1

  Year group 9:

  Number of classes

  1,544

  Number of pupils

  34,966

  Average class size2

  22.6

  Year group 10:

  Number of classes

  1,695

  Number of pupils

  34,892

  Average class size2

  20.6

  Year group 11:

  Number of classes

  1,718

  Number of pupils

  34,365

  Average class size2

  20

  Year groups 12/13:

  Number of classes

  1,508

  Number of pupils

  19,952

  Average class size2

  13.2

  All year groups:

  Number of classes

  9,529

  Number of pupils

  195,840

  Average class size2

  20.6

  1At third period of the timetable on 14 January 1997

  2Number of pupils divided by number of classes

  Millennium
  Mr. Barry Jones
  To ask the Secretary of State for Wales what moneys he has earmarked for projects to celebrate the millennium; and if he will make a statement. [47916]

  Mr. Ron Davies
  My Department does not provide direct financial support for projects to celebrate the millennium. However, in order to encourage festival events, Wales will receive £6.3 million from the Millennium Festival Fund which is supported by the Lottery distributors and New Millennium Experience Company. This is in addition to the £134.5 million which has already been allocated by the Millennium Commission towards millennium projects in Wales.

SCOTLAND

  Multiple Births
  Mr. Wigley
  To ask the Secretary of State for Scotland how many sets of(a) twins, (b) triplets, (c) quadruplets, (d) quintuplets and (e) sextuplets were born in Scotland in

  Table 1

  Type of birth

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  19971

  Twins:

  2 live births

  711

  682

  790

  751

  762

  780

  775

  774

  1 live birth, 1 stillbirth

  15

  22

  11

  25

  13

  31

  22

  13

  2 stillbirths

  5

  5

  6

  4

  3

  5

  3

  4

  Triplets:

  3 live births

  14

  18

  15

  10

  16

  27

  27

  17

  2 live births, 1 stillbirth

  2

  4

  —

  —

  —

  1

  2

  3

  1 live birth, 2 stillbirths

  —

  2

  —

  —

  —

  1

  —

  —

  Quadruplets:

  4 live births

  1

  1

  —

  —

  —

  1

  —

  1

  3 live births, 1 stillbirth

  —

  1

  —

  —

  1

  —

  —

  —

  Number of maternities

  65,556

  66,630

  65,307

  62,946

  61,224

  59,271

  58,831

  58,925

  11997 figures are still provisional

  Table 2 presents data not previously available on the numbers of multiple births following in-vitro fertilisation and donor insemination at licensed clinics in Scotland. Data were not collected before 1 August 1991 and information for gamete intra-fallopian transfer and other forms of assisted conception is not available.

  Table 2

  Donor insemination

  In-vitro fertilisation

  Twins

  Triplets

  Twins

  Triplets

  1991

  1

  0

  24

  3

  1992

  2

  0

  35

  2

  1993

  4

  0

  45

  2

  1994

  5

  1

  51

  7

  1995

  8

  1

  76

  8

  1996

  6

  0

  23

  2

  Notes:

  1. The figures are based upon the latest verified data, covering treatments carried out from the start of the HFEA register (1 August 1991)

  2. Data for 1991 are for 1 August 1991 to 31 December 1991 only

  3. Data for 1996 are for 1 January 1996 to 31 March 1996 only

  4. No quadruplets, or higher murtiple briths, have been recorded

  Source:

  Human Fertilisation and Embryology Authority (HFEA)

  Parliamentary constituency

  (a) Estimate of population aged 17 and over plus 63 per cent. of 16 year olds (as at 30 June 1997)

  (b) Parliamentary electors on the 1997 electoral registers (qualifying date 10 October 1997)

  (b) as a percentage of (a)

  Aberdeen Central

  55,600

  53,713

  96.6

  Aberdeen North

  57,000

  55,009

  96.5

  Aberdeen South

  63,200

  60,968

  96.5

  Airdrie & Shotts

  60,400

  58,534

  96.9

  Angus

  61,600

  60,427

  98.1

  Argyll & Bute

  51,000

  50,271

  98.6

  198
  each year from 1990 to 1997; and how many multiple births of each type in each year were conceived as a result of (i) in-vitro fertilisation, (ii) gamete intra-fallopian transfer and (iii) other forms of assisted conception. [46931]

  Mr. Galbraith
  [holding answer 29 June 1998]: The information on multiple births is given in Table 1.

  Scottish Parliament
  Mr. Corbett
  To ask the Secretary of State for Scotland what educational publicity campaign he plans to undertake, at what estimated cost, to inform electors of the new proportional voting system to be used for the election of the Scottish Parliament. [47139]

  Mr. McLeish
  [holding answer 23 June 1998]: The Government are currently considering what publicity arrangements are needed to inform electors of the new voting system for the Scottish Parliament. It is not possible at this stage to provide details of these arrangements or estimated costs.

  Electoral Registration
  Mr. Barnes
  To ask the Secretary of State for Scotland if he will list the latest available estimates of those aged 17 years and over, plus 63 per cent. of those aged 16 years, for each parliamentary constituency in Scotland together, in each case, with the equivalent electoral registration figures expressed as a percentage of these figures. [47709]

  Mr. McLeish
  The information requested is given in the table. The population figures have been prepared by a method that involves a certain degree of approximation and therefore should be treated with some caution.
  199

  Parliamentary constituency

  (a) Estimate of population aged 17 and over plus 63 per cent. of 16 year olds (as at 30 June 1997)

  (b) Parliamentary electors on the 1997 electoral registers (qualifying date 10 October 1997)

  (b) as a percentage of (a)

  Ayr

  57,700

  57,000

  98.8

  Banff & Buchan

  60,200

  58,949

  97.9

  Caithness, Sutherland & Easter Ross

  41,400

  41,902

  101.2

  Carrick, Cumnock & Doon Valley

  67,200

  66,588

  99.1

  Central Fife

  58,900

  59,123

  100.4

  Clydebank & Milngavie

  54,300

  52,963

  97.5

  Clydesdale

  66,100

  64,548

  97.7

  Coatbridge & Chryston

  54,300

  52,501

  96.7

  Cumbernauld & Kilsyth

  50,700

  49,201

  97.0

  Cunninghame North

  57,700

  56,374

  97.7

  Cunninghame South

  52,000

  50,727

  97.6

  Dumbarton

  60,200

  57,013

  94.7

  Dumfries

  64,500

  63,513

  98.5

  Dundee East

  60,200

  58,629

  97.4

  Dundee West

  58,500

  56,937

  97.3

  Dunfermline East

  51,900

  52,200

  100.6

  Dunfermline West

  53,000

  53,361

  100.7

  East Kilbride

  67,000

  66,479

  99.2

  East Lothian

  58,800

  58,577

  99.6

  Eastwood

  69,100

  68,021

  98.4

  Edinburgh Central

  65,800

  64,051

  97.3

  Edinburgh East and Musselburgh

  61,700

  60,364

  97.8

  Edinburgh North and Leith

  63,400

  61,786

  97.5

  Edinburgh Pentlands

  62,400

  60,729

  97.3

  Edinburgh South

  65,500

  63,775

  97.4

  Edinburgh West

  63,600

  61,988

  97.5

  Falkirk East

  59,300

  57,629

  97.2

  Falkirk West

  54,900

  53,427

  97.3

  Galloway & Upper Nithsdale

  53,300

  53,406

  100.2

  Glasgow Anniesland

  55,200

  53,397

  96.7

  Glasgow Baillieston

  50,800

  49,062

  96.6

  Glasgow Cathcart

  52,200

  50,429

  96.6

  Glasgow Govan

  52,600

  50,870

  96.7

  Glasgow Kelvin

  59,000

  57,058

  96.7

  Glasgow Maryhill

  55,400

  53,506

  96.6

  Glasgow Pollok

  50,000

  48,303

  96.6

  Glasgow Rutherglen

  52,800

  51,059

  96.7

  Glasgow Shettleston

  49,900

  48,209

  96.6

  Glasgow Springburn

  55,300

  53,427

  96.6

  Gordon

  60,800

  59,621

  98.1

  Greenock & Inverclyde

  49,900

  49,400

  99.0

  Hamilton North & Bellshill

  56,500

  54,403

  96.3

  Hamilton South

  48,800

  47,145

  96.6

  Inverness East, Nairn & Lochaber

  66,000

  66,531

  100.8

  Kilmarnock & Loudoun

  63,700

  62,171

  97.6

  Kirkcaldy

  51,900

  52,079

  100.3

  Linlithgow

  55,600

  54,728

  98.4

  Livingston

  62,800

  61,800

  98.4

  Midlothian

  50,100

  48,772

  97.3

  Moray

  60,900

  58,845

  96.6

  Motherwell & Wishaw

  55,100

  53,004

  96.2

  North East Fife

  60,400

  59,820

  99.0

  North Tayside

  63,200

  62,230

  98.5

  Ochil

  53,600

  57,715

  107.7

  Orkney and Shetland

  33,100

  32,761

  99.0

  Paisley North

  50,800

  49,915

  98.3

  Paisley South

  55,400

  54,436

  98.3

  Perth

  62,300

  61,457

  98.6

  Ross, Skye & Inverness West

  56,900

  56,448

  99.2

  Roxburgh & Berwickshire

  47,400

  47,907

  101.1

  Stirling

  54,400

  53,452

  98.3

  Strathkelvin & Bearsden

  66,400

  64,016

  96.4

  Tweeddale, Ettrick & Lauderdale

  51,900

  51,811

  99.8

  West Aberdeenshire & Kincardine

  61,800

  60,270

  97.5

  West Renfrewshire

  54,000

  53,223

  98.6

  Western Isles

  22,400

  22,539

  100.6

  200

  Argyll and Clyde Health Board
  Mr. Alexander
  To ask the Secretary of State for Scotland if he will estimate the amount of additional funding which will be allocated to Argyll and Clyde Health Board in 1998–99. [48488]

  Mr. Galbraith
  Argyll and Clyde Health Board received a base general revenue allocation in October 1997 of £270.827 million and a capital allocation of £0.009 million for 1998–99. Subsequent revenue allocations totalling £14.458 million have since issued of which £1.743 million is attributable to the extra resources made available for tackling waiting lists. Further allocations will issue in-year as appropriate.

DUCHY OF LANCASTER

  Civil Service (Exchanges)
  Mr. Boswell
  To ask the Chancellor of the Duchy of Lancaster what action he is taking to stimulate interest in exchanges of Civil Service personnel. [48181]

  Dr. David Clark
  The Government believe that broadening the experience of civil servants is vital in developing skills and offering fresh insights. That experience may be gained from a period in a different Government Department, as well as in the private or wider public sector.

  An Interchange Unit has been established in Cabinet Office to encourage the exchange of staff between Government Departments and other sectors of the economy, including businesses, local authorities, health service, small businesses and academia. My officials are working with representatives from these sectors to promote greater interchange.

  Recent measures for encouraging exchanges of Senior Civil Service staff between Government Departments include the establishment of 'mobility clubs' between Departments with common interests. My Department is also consulting other Departments about what more can be done to promote and facilitate a greater degree of mobility, including for staff below Senior Civil Service level.

  Fast Stream Recruitment
  Mr. Singh
  To ask the Chancellor of the Duchy of Lancaster when he expects to publish the Third Annual Civil Service Fast Stream Recruitment report. [48813]

  Dr. David Clark
  The annual Civil Service Fast Stream Recruitment Report was placed in the Library of the House earlier today. It covers the year to 31 March 1998, reporting the results of Fast Stream competitions completed during that period and action undertaken for future competitions.

  The report shows that the specialist recruitment in the Civil Service faces increasingly strong competition in the graduate market, especially for those with scientific and numerical skills. However, in line with the experience of other major employers, the generalist schemes have attracted applicant fields which are smaller but of high quality, reflecting the improvements made to the Fast Stream information available to graduates.

MINISTER WITHOUT PORTFOLIO

  Millennium Dome
  Mr. Peter Ainsworth
  To ask the Minister without Portfolio how much car parking will be available at the Millennium Dome; and to whom it will be available.[48169]

  Mr. Mandelson
  [holding answer 30 June 1998]: I refer the hon. Member to the answer I gave the hon. Member for Lewes (Mr. Baker) on 5 May 1998, Official Report, column 305.

  Mr. Mitchell
  To ask the Minister without Portfolio if currencies other than sterling will be accepted for admission to the Millennium Dome. [45134]

  Mr. Mandelson
  Millennium Experience tickets will be available worldwide on a pre-booked basis and many outlets will handle transactions in currencies other than sterling.

FOREIGN AND COMMONWEALTH AFFAIRS

  Gender Impact Assessments
  Jackie Ballard
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library copies of gender impact assessments which have been undertaken in respect of legislation introduced in this Parliament; if he will make it his policy to do so in respect of future legislation; and if he will make a statement. [47026]

  Mr. Tony Lloyd
  I refer the hon. Member to the answer given by my hon. Friend the Parliamentary Under-Secretary of State for Women on 24 June 1998,Official Report, columns 557–58.

  Belarus
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Belarus concerning the treatment of the diplomatic corps based in Minsk. [48209]

  Mr. Doug Henderson
  [holding answer 30 June 1998]: The British Ambassador in Minsk, on behalf of the EU, made frequent representations to the Belarusian authorities since they announced on 23 April their intention to exclude a number of Ambassadors from their residences at Drozdy. In addition, the Belarusian Ambassador was summoned to the Foreign and Commonwealth Office on 4 June and 12 June to be told that the EU found the actions of the Belarusian authorities unacceptable. He was again summoned on 22 June and was asked to return to Minsk in order to convey to his Government the seriousness of the situation with which the EU viewed the actions taken by the Belarusian authorities. He left London on 24 June.

  Organisation of African Unity
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance Her Majesty's Government have offered the Organisation of African Unity to carry out peace-keeping and peace-making activities. [47329]
  203
  Mr. Tony Lloyd
  The UK is committed to helping the Organisation of African Unity (OAU) build its capacity for peacekeeping and conflict prevention. We have been working with other donors, particularly France and the US, to co-ordinate more closely our peace-keeping training. In March 1996 the UK and the OAU jointly organised a conflict management seminar in Addis Ababa. In April 1997 the UK funded the attendance of four participants from the OAU at a role playing peacekeeping seminar, with a conflict prevention element, in Camberley. The UK is planning a Command Post Exercise in the Conflict Management Division of the OAU designed to follow-up a US-run exercise held earlier this year. In Addis Ababa a British Military Liaison Officer works with the OAU on conflict prevention and peacekeeping. In addition, the UK contributed to an EU project worth ecu 860,000 designed to improve communications between the OAU's Centre for Conflict Prevention, Management and Resolution in Addis Ababa and its offices in the field.

  Tanzania
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's policy towards constitutional reform in Tanzania. [47333]

  Mr. Tony Lloyd
  The terms of the Tanzanian Constitution are a matter for the Tanzanian people and their elected representatives. We understand the Government of Tanzania intend to publish a White Paper by the end of June, to be followed by a process of wide consultation. We will welcome proposals for a transparent process, and stand ready to provide appropriate support if requested. We recently sponsored a visit to Tanzania by a British expert on Constitutional reform, who participated in a high profile televised debate on the issue.

  Arms Sales
  Mr. Wilkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what Ministerial directions he has issued relating to the issue of export licences for the sale of British manufactured goods to Taiwan since 2 May 1997. [47570]

  Mr. Fatchett
  I refer the hon. Member to the answer I gave to my hon. Friend the Member for St. Albans (Mr. Pollard) on 4 June 1998,Official Report, column 349

NORTHERN IRELAND

  Mater Hospital, Belfast
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what extension plans have been(a) prepared for the Mater Hospital, Belfast and (b) approved by the Department of Health. [47869]

  Mr. Worthington
  The Trust has developed plans for the construction of a new three storey block containing wards, a day procedures unit and a pharmacy. This will be funded by the Mater Hospital Trustees and does not require Departmental funding. The Trust also plans for the refurbishment and upgrading of the original building. These have not yet been submitted for Departmental 204
  approval. A business case for a 50 bed acute psychiatric unit, based within the Mater Hospital, was approved by the Health and Social Services Executive in January 1998.

HOUSE OF COMMONS

  Refreshment Department
  Mr. Syms
  To ask the hon. Member for Roxburgh and Berwickshire, representing the House of Commons Commission, if he will make a statement on Phase F of the Refreshment Department modernisation programme. [48334]

  Mr. Kirkwood
  A project to modernise the 30-year-old main kitchens in the House of Commons (Phase F) has been approved by the House of Commons Commission. The project, which is the final phase of a six year modernisation programme agreed in debate by the House on 12 July 1994,Official Report, columns 940–62, involves the total refurbishment of the Refreshment Department's two main kitchens and the construction of new areas for the safe handling of food deliveries and storage.

  The work on the kitchens is necessary for compliance with food hygiene, health and safety and fire regulations. During the debate in 1994, the House accepted the evidence of two separate firms of consultants, both of whose reports concluded that the substantial rise in the production demands on the kitchens over the past 30 years, and the changes in food hygiene legislation over that period, had led to the situation whereby the Refreshment Department could not longer continue to operate the existing premises in their present form and condition safely.

  Since then, a team of experts and officials has developed detailed proposals for a modernisation scheme which will require demolition of the existing kitchens, the incorporation of additional space and the construction of new kitchens and support areas. The extensive structural alterations which are essential to achieve a well ordered layout and production workflow, are such that the scheme is programmed to take up to 8 months to complete, commencing in August 1999. The estimated cost of the project is £9.5 million, which is on target with the inflation adjusted bid agreed by the House in 1994.

  The Commission has since been advised by Dr. Lisa Ackerley (a food hygiene expert who has recently given evidence at the E. coli Fatal Accident Inquiry in Scotland) that statutory requirements would be met only through a total redesign and refurbishment programme which addresses the fundamental problems of poor layout, lack of space and lack of temperature controlled storage. In the face of advice that the failings in the existing, antiquated kitchens
  "amount to serious breaches of food safety legislation",
  the House of Commons Commission considered that any further delay would be imprudent and would in any case by likely to lead to further cost increases.

  The House of Commons Commission approved the detailed scheme for the modernisation of the main kitchens at their meeting on Monday 15 June.

INTERNATIONAL DEVELOPMENT

  Tibet
  Mr. Baker
  To ask the Secretary of State for International Development what steps she is taking to help the people of Tibet. [46874]

  Clare Short
  We are supporting non-governmental organisations, who are working directly with Tibetan people within the autonomous region and neighbouring provinces of China, as well as refugee settlements in India. We are currently supporting projects in the fields of education, environmental health and income generation worth nearly £1 million. We are also supporting a £5 million EU programme which is about to be launched which will provide support to poor Tibetan farmers.

  Humanitarian Action
  Mr. Touhig
  To ask the Secretary of State for International Development what steps her Department has taken to improve the effectiveness of humanitarian action. [46875]

  Clare Short
  During the UK Presidency we hosted a joint Conference with the European Commission Humanitarian Office to discuss the principles that should govern humanitarian assistance. At this Conference I launched DFID'S 10 key principles to guide humanitarian operations in conflict areas in order to better integrate respect for human rights and humanitarian law within assistance programmes. A process of consultation is now underway with member states and EU countries are looking at establishing a humanitarian ombudsman. NGOs are also working to agree improved standards of assistance.

  Child Workers
  Mr. MacShane
  To ask the Secretary of State for International Development what estimate she has made of the number of children working for a wage worldwide; and if she will make a statement. [46876]

  Clare Short
  There are some 250 million child labourers world wide. There are no exact figures, but probably only a minority are in waged employment. Most are beggars, child prostitutes, domestic servants or unpaid workers on their family land. Some are bonded workers who are virtually slaves. Last month at the International Labour Organisation a convention was agreed—strongly supported by the UK Government—immediately to outlaw the worst forms of child labour. At the Oslo Conference in November 1997, we agreed that plans should be put in place in each country to phase out the abuse of child labour and to work to get child labourers into education and to improve their family income.

  Desertification
  Mr. Boswell
  To ask the Secretary of State for International Development what action Her Majesty's Government are taking to combat the spread of desertification. [46877]

  Clare Short
  There are close links between poverty and the problems of desertification and land degradation as poor people are forced to try to eke a living on marginal lands. Actions to address desertification and land 206
  degradation are a priority for the UK as part of our aim to create sustainable livelihoods for poor people. We are also working for implementation of the Convention to Combat Desertification. In 1997–98, the UK committed over £27 million to projects to address desertification and land degradation.

  Sudan
  Mr. Canavan
  To ask the Secretary of State for International Development if she will make a statement about Government policy on aid to Sudan. [46878]

  Clare Short
  The civil war is the main cause of continuing humanitarian crises in Sudan. Our policy is to promote the peace efforts sponsored by Sudan's neighbours under the Inter-governmental Authority on Development (IGAD). We strongly supported the meeting of the IGAD Partners Forum for Sudan which was held in The Hague on 17/18 June. The Forum agreed to send a delegation to Nairobi and Khartoum to try and broker a short cease-fire in the areas most affected by the current crisis in Southern Sudan so that food and seeds can reach all severely affected people.

  Mr. Connarty
  To ask the Secretary of State for International Development what is her assessment of the present level of food shortage in Sudan; and what policies she is adopting in the light of that assessment. [46882]

  Clare Short
  The United Nations World Food Programme now estimates that nearly 10,000 tonnes per month of food will need to be delivered between July and September to support 1.2 million vulnerable people in southern Sudan, including 700,000 in the Bahr El Ghazal region. £16 million of the £25 million that I have approved since February for humanitarian assistance to Sudan has been allocated to the WFP to help it meet these targets. I stand ready to approve further sums as new needs emerge. We are also currently working to try to secure a temporary truce so that larger amounts of food can be provided to those in need.

  Palestine
  Dr. Starkey
  To ask the Secretary of State for International Development what funding is being given by her Department to UNRWA for the care of Palestinian refugees. [46879]

  Clare Short
  This year we have contributed £7 million, an increase of £1 million over last year, to United Nations Relief and Works Agency for Palestine Refugees in the Near East's (UNRWA) core budget. In addition we fund a number of projects in the various refugee camps, and plan to provide substantial technical assistance to help support UNRWA' s management and financial reform process.

  Montserrat
  Mr. Hoyle
  To ask the Secretary of State for International Development what support her Department will provide for a sustainable development plan for Montserrat; and if she will make a statement on its implementation. [46881]

  Clare Short
  Agreement has been reached between Her Majesty's Government and the Government of Montserrat on a draft text which is now being made available for
  207
  public consultation. A copy has been placed in the Library of the House. I hope that agreement can be reached on the final version by August. My Department will make available up to a further £75 million over the next three years to support the Plan. The scale of this pledge reflects the devastation to the island and the constraints imposed on the private sector by the continuing uncertainty about the volcano. If the volcano enters a permanent state of repose many of these constraints would be lifted, enabling the people of Montserrat to take greater responsibility for their livelihoods, and the private sector to take a greater role in rebuilding the island.

  Mr. Paterson
  To ask the Secretary of State for International Development if she will make a statement on her Department's responsibility for Montserrat. [46890]

  Clare Short
  My Department is responsible for delivering the Government's emergency and development assistance programmes to Montserrat. The Foreign and Commonwealth Office is responsible for co-ordinating the Government's overall relations with Montserrat.

  India and Pakistan
  Mr. Flight
  To ask the Secretary of State for International Development what proportion of total government aid is represented by UK Government aid to India in the current financial year; and what changes to this allocation have been planned. [46883]

  Clare Short
  Provisional figures in respect of 1997/98 indicate that our country programme to India was 7 per cent. of total UK bilateral development assistance. Current estimates suggest a similar figure for this year. In addition to bilateral assistance, UK development assistance is channelled through multilateral organisations.

  We have made clear that we will review all our programmes following India's nuclear tests but that we will not take action which hurts poor people who are in no way responsible for the tests.

  Mr. Jim Cunningham
  To ask the Secretary of State for International Development what recent discussions she has had with other Governments regarding aid to India and Pakistan; and if she will make a statement. [46886]

  Clare Short
  The UK has participated in the UN Permanent 5, European Union and G8 discussions on aid to India and Pakistan, all of which have resulted in published communiqués. Our bilateral programmes to both countries are poverty focused and we do not propose to take actions which will hurt the poor. But we are in the process of preparing new Country Strategy Papers for India and Pakistan which will consider carefully the implications, including the economic and financial implications, of the nuclear tests when assessing prospects for partnerships and poverty reduction.

  Debt Relief
  Mr. Blunt
  To ask the Secretary of State for International Development if she will make a statement on the provision of debt relief to the poorest countries. [46884]

  Clare Short
  Debt relief can play an important part in the eradication of poverty in the poorest countries. The Government's Mauritius Mandate, launched last 208
  September, presses for the speedy and flexible implementation of the Heavily Indebted Poor Countries (HIPC) debt Initiative. But debt relief on its own will not lead to the attainment of international development targets. It must be accompanied by a commitment to the pursuit of economic and social policies which favour the poor, and root out corruption and the mismanagement of resources. In such cases debt cancellation and increased resource flows from donors and the private sector will lead to sustainable development and the reduction of poverty.

  Sir Sydney Chapman
  To ask the Secretary of State for International Development what is her estimate of the progress that will have been made on debt reduction of the poorest countries by 1 January 2000. [46888]

  Clare Short
  The Mauritius Mandate, launched last September by my right hon. Friend the Chancellor of the Exchequer, sets out the Government's aims for progress under the Heavily Indebted Poor Countries (HIPC) debt Initiative. By the year 2000, we expect all countries eligible for debt relief under the Initiative to at least have embarked on the process that will lead to debt relief by putting in place the necessary policy measures. This aim was endorsed by G8 leaders at their recent Summit in Birmingham.

  Sierra Leone
  Mr. Swayne
  To ask the Secretary of State for International Development what NGO projects her Department is currently supporting in Sierra Leone; and if she will make a statement. [46885]

  Clare Short
  My Department is currently providing seeds and tools, building materials for shelter, and medical supplies through the following NGO projects:

  Care International: Seeds and tools

  Children's Aid Direct: Seeds and tools

  Concern Universal: Seeds and tools

  Adventist Development and Relief Agency (ADRA): Reconstruction and rehabilitation

  Primary Health Care: Medical Research Centre, Bo.

  We are considering other proposals and keeping the situation under close review, in consultation with Sierra Leone Government and other donors.

  Commonwealth Development Corporation
  Ms Stuart
  To ask the Secretary of State for International Development if the proceeds from introducing private capital to the Commonwealth Development Corporation will be added to her Department's budget. [46887]

  Clare Short
  Proceeds from introducing private capital to the Commonwealth Development Corporation will be ploughed back into the development programme.

  Iraq
  Mr. Timms
  To ask the Secretary of State for International Development what steps she is taking to provide medical assistance to organisations working in Iraq. [46889]
  209
  Clare Short
  In March 1998 I announced a new £7 million bilateral aid programme for central and southern Iraq in addition to some £3 million provided annually mainly for the north. £2.7 million of the new funds have been committed, including the provision of medicines direct to children's hospitals and water and sanitation projects to improve environmental health. My officials are working closely with specialist medical NGOs to develop project proposals, especially those benefiting children. In the last two years DFID has funded medical projects worth £4.1 million, of which £2.6 million was for the centre and south of Iraq.

  Famine Relief (Public Donations)
  Mr. Evans
  To ask the Secretary of State for International Development what support her Department has given to public appeals for donations towards famine relief work since 1 May 1997. [46891]

  Clare Short
  The Department for International Development has a contingency reserve which can be drawn on to respond to emergencies. Funds may also be allocated from country programme budgets. A high priority is given to ensuring that adequate resources are made available very quickly for humanitarian emergencies, whatever their nature and whatever the source of the appeal.

  Since 1 May 1997 my Department has provided over £42 million in response to specific appeals in support of famine relief. These appeals, and DFID's contribution in each case, are listed:

  £million

  UN 1998 Consolidated Appeal for Sudan

  25.23

  World Food Programme in support of the International Emergency Food Reserve programmes and Protracted Relief Operation

  6.4

  World Food Programme

  2.99

  World Food Programme, Malawi

  1.0

  UNICEF, Kenya

  0.4

  Action Aid, Kenya

  0.05

  Christian Aid, Kenya

  0.09

  GOAL, Kenya

  0.08

  Oxfam, Kenya

  2.24

  World Food Programme, Kenya

  1.96

  Action Contre La Famin, Uganda

  0.1

  Christian Aid, Tanzania

  0.22

  Cafod/Caritas, Tanzania

  0.17

  Norwegian People's Aid, Tanzania

  0.21

  SCF, Tanzania

  0.1

  Oxfam, Tanzania

  0.18

  World Food Programme, Tanzania

  0.18

  Action Aid, Haiti

  0.09

  Save the Children, Haiti

  0.02

  Action Aid, Vietnam

  0.01

  International Federation of the Red Cross, North Korea

  0.08

  International Federation of the Red Cross, Nicaragua

  0.05

  UN Development Programme, Guyana

  0.16

  International Federation of the Red Cross, Guyana

  0.03

  Cash through Post, Micronesia

  0.01

  Cash through Post, Solomon Islands

  0.01

  Cash through Post, Papua New Guinea

  0.05

  Salvation Army, Papua New Guinea

  0.1

  World Vision, Papua New Guinea

  0.09

  UK Foundation for the South Pacific, Papua New Guinea

  0.04

  Christian Aid, Papua New Guinea

  0.12

  Environmental Protection
  Helen Jackson
  To ask the Secretary of State for International Development what percentage of her budget goes towards projects which have a beneficial impact in terms of environmental protection. [46892]

  Clare Short
  Final expenditure figures for financial year 1997/98 are not yet available. We estimate that the Department for International Development (DFID) spent £194 million on bilateral projects which contributed to conservation of the environment. This represents about 20 per cent. of estimated bilateral aid expenditure in that year. It is not possible to calculate the corresponding proportion of expenditure through multilateral channels. Finalised expenditure figures for 1997/98 will be published in "British Aid Statistics" in December this year.

  Since 1991, the UK has committed £215 million to the Global Environment Facility to assist in the protection of the global environment. These commitments are separate from those under the aid programme.

  Non-governmental Organisations
  Mr. Luff
  To ask the Secretary of State for International Development what representations she has received from NGOs concerning the future of her Department's aid programme and its effectiveness relating to their own activities in the developing world. [46893]

  Clare Short
  I have had a number of meetings with NGOs, individually and collectively, at which we have discussed my Department's work and the role of NGOs in development.

  We have recently published a consultation document on ways of working more effectively with organisations of civil society, including NGOs, both in the UK and in developing countries.

  Russia
  Mr. Spring
  To ask the Secretary of State for International Development if she will make a statement on know-how fund aid to Russia. [46867]

  Clare Short
  The know-how fund is the primary conduit for the UK's programme providing know how to help Russia and the former Soviet bloc countries make the transition to democracy and a market economy. In Russia, and elsewhere, it has a good reputation for providing fast and flexible assistance in support of reform. Given the continuing growth in poverty in Russia, greater emphasis in future will be placed on assistance for the social, environmental and governance aspects of reform.

  The programme provides technical assistance rather than resource transfers and will spend £30 million per year over the next two years. Our strategy paper for Russia will be published shortly and I will ensure a copy is placed in the Library.

CULTURE, MEDIA AND SPORT

  Film Industry
  Mr. Amess
  To ask the Secretary of State for Culture, Media and Sport if he will publish the invitation to tender
  211
  for a cost benefit analysis of the All Industry Fund, approved by the Action Committee of the Film Policy Review Group, indicating the consultants invited to tender. [47693]

  Mr. Tom Clarke
  A copy of the invitation to tender has been placed in the Library of the House. The consultants invited to tender were Bridge Media, KPMG, London Economics, Olsberg/SPI and Spectrum Strategy Consultants. The contract has been awarded to London Economics.

TRADE AND INDUSTRY

  Uranium
  Mr. Jim Cunningham
  To ask the President of the Board of Trade if she will publish the figures for the United Kingdom's national holdings of civil high enriched uranium as at 31 December 1997. [48478]

  Mr. Battle
  I have today placed in the Library of the House figures for the United Kingdom's national holdings of civil high enriched uranium as at 31 December 1997. These follow a similar format to that for civil plutonium, details of which I announced to the House on 2 June 1998,Official Report, column 162

  The House will recall that I announced on 2 December 1997, Official Report, columns 163–64, the publication of a document agreed among an informal group of nine countries (the United Kingdom, the United States, China, Russia, France, Germany, Japan, Belgium and Switzerland) entitled "Guidelines for the Management of Plutonium". That document recognised the sensitivity of high enriched uranium and the need to manage stocks of such material with the same sense of responsibility as the plutonium covered by the Guidelines. In addition, the Note Verbale associated with those Guidelines referred to the Government's belief that the management of high enriched uranium should be subject to similar guidelines.

  In keeping with their commitment to improve transparency and public confidence in the management of nuclear materials, the Government have decided to publish information on national holdings of civil high enriched uranium. I have today sent a copy of these figures to the Director-General of the International Atomic Agency, requesting that they be circulated to Member States in due course.

  I can confirm that, as of 31 December 1997, 84,000 tonnes of depleted, natural and low enriched uranium in both nuclear and non-nuclear uses in the United Kingdom were reported to the Euratom Safeguards Directorate. DTI will, in future, publish annual figures both for high enriched uranium and for the total of depleted, natural and low enriched uranium in the United Kingdom civil nuclear fuel cycle.

  Scott Report
  Mr. Ronnie Campbell
  To ask the President of the Board of Trade when the Government will publish its response to the recommendations on strategic export controls contained in Sir Richard Scott's report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions. [48811]
  212
  Mrs. Beckett
  I have today published a White Paper on Strategic Export Controls [Cm 3989]. This sets out the Government's response to the recommendations on strategic export controls contained in Sir Richard Scott's Report.

  Its main proposal is the introduction of new primary legislation to update the Government's strategic export control powers and to provide for Parliamentary scrutiny of these powers. It also proposes improvements in export licensing procedures.

  It is important in a modern democracy for Government to be accountable to Parliament for the way they use their strategic export control powers. We also need to ensure that we have up-to-date powers to enable us to deal with modern means of trading, such as transferring information via the Internet, and brokering deals involving the transfer of goods between overseas countries. Exporters need export licensing procedures that are both clear and consistent.

  New primary legislation would:
  Provide for Parliamentary scrutiny of secondary legislation on strategic export controls and for the purposes for which export controls can be imposed to be set out in secondary legislation. This will answer one of the main criticisms made in the Scott Report that the Government have
  "an unfettered power to impose whatever export controls it wishes and to use those controls for any purpose it thinks fit".
  Strengthen the Government's powers to take action against the proliferation of weapons of mass destruction, in part by bringing controls on biological and nuclear weapons into line with those already covering chemical weapons.
  Introduce controls on the transfer of technology by intangible means.
  Introduce additional controls on trafficking in, or brokering of deals in, certain goods between overseas countries. At present the Government have the power to control such activity only where this is necessary to implement a binding UN decision. We believe the Government should be able to impose controls in relation to the involvement of UK persons or companies, or other persons in the UK in supplying arms to any country on which we have imposed an arms embargo. We also propose to prohibit trafficking and brokering in equipment whose export we have already banned because of evidence that goods of the same type have been used for torture; and
  Provide powers to require exporters to report the information necessary to enable us to meet our reporting obligations to international bodies.

  We also propose some important changes to procedures to make the export licensing process clearer, fairer and more efficient:
  The basic elements of the licensing process will be set out in primary legislation, with detailed procedures included either in secondary legislation or in guidance material as at present.
  The system for appealing against licence refusals will be put on a more formal basis.
  The export licensing authority should remain within the DTI. Most licence applications are circulated to FCO, MOD and, where appropriate DfID, for their advice and licensing decisions are, and will be, taken on the basis of the advice received from these Departments.

  We believe our proposals should provide the right framework for strategic export controls that are both effective and accountable. The White Paper is a consultative document and we would welcome comments from industry, NGOs and others by 30 September. Copies

  213
  have been placed in the Libraries of both Houses, and are available from The Stationery Office and on the Department's website.

  Internet
  Dr. Cable
  To ask the President of the Board of Trade what proposals she has to ensure that children do not view unsuitable material on the Internet. [47889]

  Mrs. Roche
  We are determined to ensure that children can access the many benefits the Internet brings without fear of encountering harmful material. We support the work of the Internet Watch Foundation (IWF) to uphold the law on-line through its hotline and notification service, and to lead development of an international approach to rating and filtering of content. But we are not complacent, and I have announced a review of IWF to assess its progress to date and to help us establish its future priorities. IWF is now providing a model for action internationally and, during our EU Presidency, we reached broad agreement on a common position for a European Action Plan for Safe Use of the Internet, to promote the safe use of the Internet and protect children from harmful material.

  Joint Links Oil and Gas Consortium
  Mr. Dafis
  To ask the President of the Board of Trade what plans she has to respond to the policy from the Joint Links Oil and Gas Consortium which she received in May 1997; if she will meet representatives of the consortium; and if she will make a statement. [46863]

  Mr. Battle
  I wrote to the Consortium on 30 July 1997 setting out the Government's approach to environmental assessment of offshore oil and gas activity. The need for this was the main thrust of the policy proposals they had first sent to me in preliminary form in May. The Consortium subsequently sent me a copy of their published policy paper on 24 October, to which I sent a substantive reply on 27 November.

  My letter described the important steps the Government had been taking to implement the Environmental Impact Assessment Directives 85/337/EEC and 97/11/EU offshore. The Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations, which were then in draft but came into effect on 30 April 1998, implement the 1985 Directive as it applies to oil and gas activity across the whole of the United Kingdom continental shelf (UKCS). These Regulations require an environmental assessment (including public consultation) for all relevant projects likely to have significant effects on the environment before such projects can be consented to. I also ensured that they introduced the production and pipeline project thresholds in the 1997 amending Directive, which must be implemented in full by 14 March 1999. These thresholds—which the United Kingdom was the first member State to transpose into domestic legislation—mean that approval of most such projects on the UKCS will in future be subject to environmental assessment.
  214
  I also explained that there is no statutory requirement in UK or EU law for strategic environmental assessment of offshore activity in advance of offshore licensing, as advocated by the Consortium, but that the potential impact of such activity on the environment in or adjacent to areas of interest for licensing is reviewed by the Joint Nature Conservation Committee (JNCC) and advice is taken from other Departments with environmental, fisheries and other marine interests before areas are offered for licensing. Comments have also been sought from the Consortium (among other non-government organisations) before recent licence offers, and my letter confirmed that the introduction of the 1998 Regulations would give it and similar bodies a further opportunity to contribute to decision making on relevant offshore projects in future.

  I have no present plans to meet representatives of the Consortium.

  Bulldog Trainer Aircraft
  Mr. Hancock
  To ask the President of the Board of Trade, pursuant to her answer of 3 June 1998,Official Report, columns 227–28, (1) what assessment she offered to the MOD concerning the employment and industrial implications of the contract award for the replacement of the Bulldog trainer aircraft; [48045]

  (2) what assessment she has made of the costs to public funds of the employment and industrial consequences of the award of the contract for the replacement of the Bulldog trainer aircraft to Bombardier Services; [48044]

  (3) what assessment she has made of the employment and trade impact of the award of the contract for the replacement of the Bulldog trainer aircraft to Bombardier Services. [48046]

  Mr. Battle
  My Department has considered carefully the employment, industrial, and trade implications of MOD's competition to replace the Bulldog trainer aircraft. The assessments produced contain commercially confidential information from the companies involved. Both DTI and MOD will continue to offer advice to the companies who bid for this contract.

  Toys
  Mr. Hoyle
  To ask the President of the Board of Trade (1) if she will make a statement on the presence of allegedly carcinogenic chemicals in children's toys sold in the UK, with particular reference to the use of phthalates; [47408]

  (2) if she will ban the sale of toys in the UK which contain phthalates. [47409]

  Mr. Nigel Griffiths
  [holding answer 25 June 1998]: Children's toys sold in the UK do not contain chemicals that are known or suspected human carcinogens. Some toys do contain phthalate compounds which at high doses have been shown to produce liver tumours in rodents, but the significance of this to humans is doubtful.

  215
  Furthermore, I am advised by the Department of Health that any resulting exposure is likely to be below the tolerable daily intake, based on this rodent data and incorporating large safety margins, and does not present risk to human health.

  In its recently published report the EU Scientific Committee on Toxicity, Ecotoxicity, and Environment concluded that it is acceptable to set safe exposure levels for phthalates that are used in PVC. The Committee did not call for a ban on phthalates in PVC toys, but recommended safe limits for their release and that a single test procedure should be developed for use across the Community.

  Following my instructions last year, UK safety experts have been leading the research into the release of phthalates. They are working with experts from other Member States in developing an acceptable and validated test method, and the outcome of this collaboration is expected to be available in August.

  None of the evidence available has convinced me that a ban on the use of phthalates is necessary. However, I regard the safety of children as paramount and I will give careful consideration to any fresh evidence which shows a cause for concern.

  Milk Development Council
  Mr. Jack
  To ask the President of the Board of Trade for what reasons no decision has been made public on how her review of section 508 of the Corporation Taxes Act 1988 will affect the Milk Development Council; and when she expects the review to be(a) completed and (b) published. [47813]

  Mr. Battle
  [holding answer 29 June 1998]: I refer the right hon. Member to the reply I gave to the hon. Member for Brecon and Radnorshire (Mr. Livsey) on 1 June 1998, Official Report, column 124. Until the revised guidance notes have been published, we cannot ask applicants under section 508 to provide the information needed to judge their eligibility for approval. Even then, I will not be able to disclose how any particular body's tax position will be affected, as this information is confidential.

  Insider Dealing
  Mr. Gordon Prentice
  To ask the President of the Board of Trade, pursuant to her answer of 25 June 1998,Official Report, column 572 if she will list the penalties imposed by the courts for insider trading in each of the 20 successful prosecutions brought under the Financial Services Act 1986. [48248]

  Mr. Nigel Griffiths
  Prosecutions for insider dealing have been brought under the Companies Act 1980, the Company Securities (Insider Dealing) Act 1985, and the Criminal Justice Act 1993. Twelve defendants have been successfully prosecuted following inquiries under section 177 of the Financial Services Act 1986, one following an inquiry commencing in 1986. My previous answer to my hon. Friend, on 25 June 1998,Official Report, column 572, referred to nine further successful prosecutions (of eleven individuals) where a section 177
  216
  investigation did not take place. These nine further prosecutions date from 1981. The schedule lists the penalties imposed against all those convicted of insider dealing:

  Date of conviction of defendant

  Sentence

  Costs(£)

  22 August 1981

  No fine

  No costs

  11 May 1982

  6 months imprisonment, suspended for 2 years

  100

  17 December 1982

  2 defendants, each fined £4,000

  500

  28 April 1986

  Fine£800

  150

  1 July 1987

  12 months imprisonment, suspended for 2 years£25,000 fine

  7,000

  17 July 1987

  £10,000 fine

  2,000

  16 March 1988

  £3,000 fine

  2,000

  26 April 1989

  £1,000 fine

  500

  10 October 1989

  £2,000 fine

  750

  8 December 1989

  £15,000 fine

  1,000

  1 March 1990

  120 hours community service

  500

  7 November 1990

  First defendant fined£750

  432

  Second defendant fined £500

  290

  30 April 1991

  18 months imprisonment, 9 months suspended

  —

  Disqualified under Company Directors Disqualification Act 1996 for 10 years

  26 July 1991

  £5,000 fine

  500

  28 October 1991

  £24,000 fine

  5,000

  17 January 1994

  2 defendants each fined£1,500

  1,500

  29 July 1994

  6 months imprisonment, suspended for 2 years

  1500

  24 July 1995

  £1,300 fine

  200

  1 November 1996

  2 defendants, each given 120 hours community service

  7,500

  1following appeal

  Multilateral Agreement on Investment
  Ms Walley
  To ask the President of the Board of Trade if the Government will seek to renegotiate the Multilateral Agreement on Investment to take more account of environmental and labour standards. [48050]

  Mrs. Roche
  The negotiations on the Multilateral Agreement on Investment (MAI) have not yet been concluded. In the negotiations the Government will continue to work for strong provisions on environmental and labour standards.

  Ms Walley
  To ask the President of the Board of Trade what will be Parliament's role in ratification of the proposed Multilateral Agreement on Investment; on what time scale; and if she will make a statement. [48049]

  Mrs. Roche
  Standard Parliamentary practice for treaties will be observed. In addition, the Multilateral Agreement on Investment (MAI) is the subject of scrutiny by the Select Committee on European Legislation, as the European Community will also sign the Agreement. It is too early to say what the timetable for ratification will be.

  Ms Walley
  To ask the President of the Board of Trade if she will publish the future schedule of negotiations on the proposed Multilateral Agreement on Investment, including informal and technical meetings. [48057]

  Mrs. Roche
  Formal negotiations on the Multilateral Agreement on Investment (MAI) are intended to re-commence in October, and regular meetings are likely to occur up to the next OECD ministerial meeting in May 1999, accompanied by technical and informal meetings.
  217
  No schedule is yet available. European Community meetings are a matter for the incoming Austrian Presidency which plans to hold them in July, September, and before each OECD meeting. The Department is planning an informal meeting of MAI negotiating partners on the relationship between the MAI and developing countries in London in July.

  Aerospace Industry
  Mr. Nicholas Winterton
  To ask the President of the Board of Trade what steps her Department has taken to ensure the future technology base of the UK aerospace industry. [48195]

  Mr. Battle
  My Department has undertaken a wide range of activities to ensure the future technology base of the UK aerospace industry, ranging from financial support for research, product development and manufacturing technology, to the work of officials to organise a cost-effective national infrastructure for technology development. We spent £24.6 million in the year to 31 March 1998 in support of civil aeronautics research activities in the industry and at the Defence Evaluation and Research Agency, including £1.7 million to complete the establishment of a major new European testing facility. In November 1997 and February 1998, we announced long-term investments of up to £323 million in total to Rolls-Royce and British Aerospace for product development. We are also providing financial support for programmes such as the Society of British Aerospace Companies "Competitiveness Challenge", a major part of which is aimed at improving manufacturing technology throughout the supply chain. Officials in my Department have actively encouraged and facilitated UK participation in the aeronautics research activities of the European Union Framework Programme and these efforts have been rewarded with high levels of UK participation. Officials are also heavily involved in the work of the Defence and Aerospace Foresight initiative. Under these auspices they have established improved national consultative arrangements for research in aerodynamics and in materials and are now working to create novel research partnerships between the industry and the universities.

HEALTH

  Asthma
  Mr. Burstow
  To ask the Secretary of State for Health what was the net ingredient cost for preparations used in the treatment of asthma(a) in total, (b) per health authority and (c) per head of population per health authority in each of the last five years. [43642]

  Ms Jowell
  I refer the hon. Member to the reply given to the right hon. Member for East Devon (Sir P. Emery) on 22 July 1997,Official Report, column 569. This gave the available information on the costs of drugs dispensed for the treatment of asthma in England by Family Health Services Authorities for the years 1993 to 1995 and by health authority for 1996. Copies of the information by health authority for 1997 are available in the Library.

  The net ingredient cost of drugs dispensed in the community in England for the period 1993 to 1997 is shown in the table. Information on the use of drugs in hospitals is not available.
  218

  Net ingredient cost of drugs dispensed in the community for the treatment of asthma, 1993 to 1997

  England

  £million

  year

  Net ingredient cost

  1993

  346.5

  1994

  378.9

  1995

  410.9

  1996

  437.5

  1997

  466.2

  Notes:

  1. The data cover all prescriptions dispensed by community pharmacists, appliance contractors and dispensing doctors, and prescriptions submitted by prescribing doctors for items personally administered in England. The information was obtained from the Prescription Cost Analysis system for drugs used in the treatment of asthma contained in British National Formulary sections 3.1 (bronchodilators), 3.2 (corticosteroids) and 3.3 (Cromoglycate and related therapy). Some of the drugs may be used for the treatment of other conditions.

  2. The net ingredient cost is the basic price of a drug before discounts and the addition of dispensing costs or fees. It does not include any adjustment for income obtained where a prescription charge is paid at the time the prescription is dispensed or where the patient has purchased a pre-payment certificate.

AGRICULTURE, FISHERIES AND FOOD

  Bovine TB
  Mr. Drew
  To ask the Minister of Agriculture, Fisheries and Food what proposals he has to increase understanding of the risk factors underlying outbreaks of TB in cattle in the light of recommendations in the Krebs report. [48531]

  Mr. Rooker
  In order better to understand the relative importance of badgers and other factors contributing to TB incidents in herds, Professor Krebs recommended that high priority should be given to a multivariate analysis of risk factors. Research proposals to assess correlates of risk, to be financed from April next year, were invited in the Ministry's research requirements document published on 20 April, copies of which have been placed in the Library of the House.

  However, in view of the importance which both Professor Kreb's group and the Ministry attach to research in this area, we are also inviting proposals for a retrospective analysis of data collected during previous investigations. This will start this autumn, in advance of the main research programme. Notices calling for proposals will appear in the relevant scientific journals shortly.

  Milk
  Charlotte Atkins
  To ask the Minister of Agriculture, Fisheries and Food how much milk was imported from France during the years(a) 1993–94, (b) 1994–95, (c) 1995–96 and (d) 1996–97; and how much of the milk was (i) UHT, (ii) raw and (iii) pasteurised. [48259]

  Mr. Rooker
  Imports of milk from France are shown in the table. Overseas Trade Statistics do not distinguish between UHT, raw or pasteurised milk.
  219

  Year: April-March

  Tonnes

  1993–94

  4,624

  1994–95

  9,079

  1995–96

  26,789

  1996–97

  16,990

  Charlotte Atkins
  To ask the Minister of Agriculture, Fisheries and Food how much milk was imported from the Irish Republic during(a) 1993–94, (b) 1994–95, (c) 1995–96 and (d) 1996–97; and how much of the milk was (i) UHT, (ii) raw and (iii) pasteurised. [48258]

  Mr. Rooker
  Imports of milk from the Irish Republic are shown in the table. Overseas Trade Statistics do not distinguish between UHT, raw or pasteurised milk.

  Year: April–March

  Tonnes

  1993–94

  51,219

  1995–95

  106,182

  1995–96

  77,075

  1996–97

  67,843

  Beef Labelling Scheme
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food what the implementation date is of the beef labelling scheme. [47853]

  Dr. John Cunningham
  EU rules on beef labelling come into force on 1 July 1998.

  BSE
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the economic impact on the UK livestock industry of BSE, excluding the effect of public funds deployed during the BSE crisis to compensate farmers for its effects. [47852]

  Dr. John Cunningham
  In March 1997, UK Agriculture Departments and HM Treasury commissioned an independent study from DTZ Pieda Consulting to assess the economic impact of BSE on the UK economy. The study was completed in March of this year and a copy of the published report has been placed in the Library of the House.

EDUCATION AND EMPLOYMENT

  Schools (Division of Responsibilities)
  Mr. Laurence Robertson
  To ask the Secretary of State for Education and Employment if he will publish information in similar format to that in "School Governors: A Guide to the Law", showing for each type of school proposed by the School Standards and Framework Bill the division of responsibilities between the local education authority, the head teacher and the governing body, assuming the implementation of the proposals in the Bill. [47859]

  Mr. Byers
  My right hon. Friend the Secretary of State for Education and Employment plans to issue guidance on the new provisions set out in the School Standards and Framework Bill. Guidance on individual aspects of the 220
  Bill will take care to explain what actions need to be taken by the various parties. Revised versions of "School Governors: A Guide to the Law" will be issued in 1999 to reflect the new school framework which will apply from 1 September 1999.

  Post-16 Education
  Mr. Levitt
  To ask the Secretary of State for Education and Employment what new initiatives he is taking to promote the delivery of post-16 education in rural areas. [48257]

  Dr. Howells
  We aim to maximise the participation and achievement of 16 to 18 year olds in all areas through our Investing in Young People strategy. All providers of post-16 education and training will contribute towards these goals. In addition my right hon. Friend the Chancellor of the Exchequer announced in his Budget statement on 17 March 1998,Official Report, columns 1097–1112, an extra £50 million of funding for rural transport services—mainly additional bus services—which will enable more young people in rural communities to access post-16 provision.

  University Research (West Midlands)
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what research funding was allocated in each of the last five years to(a) Warwick University, (b) Coventry University and (c) United Kingdom universities. [48015]

  Dr. Howells
  The figures for research funding allocated in each of the last five years to Warwick University, Coventry University and United Kingdom universities by the higher education funding bodies are set out in the table.

  Research funding 1994–95 to 1998–991

  £000

  Academic year

  Coventry University

  University of Warwick

  Total for UK

  1994–95

  2,462

  14,460

  802,091

  1995–96

  2,614

  14,618

  814,250

  1996–97

  2,701

  14,565

  814,540

  1997–98

  1,287

  15,575

  866,002

  1998–99

  1,471

  17,222

  1,025,517

  1Changes have been made in the basis of allocations from year to year, and so figures may not be strictly comparable between years

  These figures do not include research allocated by the Research Councils, which are the responsibility of my right hon. Friend the President of the Board of Trade and Secretary of State for Trade and Industry.

  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment what research contracts his Department has awarded to Warwick University in the past three years. [48016]

  Dr. Howells
  The Department has awarded nine research contracts, with a total value of £379,282, to the University of Warwick in the past three years. It has also provided £31,665 to a project commissioned by the Government Office for the West Midlands, entitled Partnership Degree in Engineering technology with Engineering Business Management.
  221
  The Employment Service have also awarded one contract, to the Institute for Employment Research, to identify and review the available evidence concerning the factors associated with becoming long-term unemployed. The total cost of this study was £3,000.

  Details of the projects directly commissioned by the Department are listed:
  University of Warwick, Centre for Educational Development Appraisal and Research (CEDAR);
  Evaluation of Development projects for the University for Industry (Stage 1): £44,191.00
  University of Warwick, Institute for Employment Research, International Baseline Project Part 2: £54,079.09
  Evaluation of Modern Apprenticeships—The Effect On Employers' Training
  Practices and The Availability of NVQ Training: £96,731.70
  Research To Compare Funding For Providers Of Youth Training And Further Education: £27,217.00
  Employers' Net Costs of Training to NVQ Level 2: £63,081.00
  Assessing the size and nature of the demand for HE in England: £40,438.00
  A Review of Recent Literature on Intermediate Labour Markets: £10,894.00
  University of Warwick, Industrial Relations Research Unit
  Mentoring and School Students Attainment: £10,001.00
  University of Warwick, Professor Robinson
  Assistance for the National Advisory Committee on Creative and Cultural Education (NACCCE): £32,650.

  Details of all the projects funded by the Department's central research budget are available in the Annual Report on Research. The next edition is due for publication in July 1998, priced at £4.95.

  New Deal
  Mr. Laurence Robertson
  To ask the Secretary of State for Education and Employment what services are provided under the New Deal to(a) those over the age of 25 years and (b) those who have been unemployed for (i) under two years and (ii) over two years; and if he will make a statement [47856]

  Mr. Andrew Smith
  The New Deal for long-term unemployed people aged over 25 provides a much better deal for this age group. People who have been unemployed for two years or more will:receive tailored guidance from an ES New Deal Personal Adviser to help them get a job;
  have the chance, where it is appropriate to them, to benefit from a subsidised job with an employer or to improve their skills and employability through a period of full time education and training;
  benefit from further individual advice to build on the progress they have made during their time on the New Deal.

  Some unemployed people who have been claiming JSA continuously for a year or more will also be able to enter the New Deal early at the discretion of the ES New Deal adviser. These include people:

  who have problems with reading, writing or numeracy;

  who are disabled;

  whose first language is not English, Welsh or Gaelic.

  222
  For those who do not enter early and have been unemployed for less than two years a full range of existing ES and TEC services will continue to be available. These include:

  Travel to Interview

  Training for Work

  Work Trials

  Starting your own business.

  Schools Funding
  Mr. Laurence Robertson
  To ask the Secretary of State for Education and Employment if he will publish information showing the effect in(a) Gloucestershire, (b) Hackney, (c) the Isle of Wight and (d) Surrey, in the most recent year for which the information is available, of the implementation of the proposals in his consultation document, "Fair Funding: Improving Delegation to Schools" stating per pupil (i) education standard spending assessment, (ii) education spending, (iii) the general schools budget, (iv) spending on service strategy and regulation, (v) grant maintained related expenditure, (vi) the potential schools budget, (vii) the aggregate schools budget under the current arrangements, (viii) the local schools budget and (ix) the individual schools budget under the proposed arrangements. [47891]

  Mr. Byers
  The effect of the proposals set out in the consultation paper cannot be quantified in the manner envisaged by the hon. Member, because the budget and outturn information currently provided by LEAs is not categorised in a way which enables the local and individual schools budgets to be estimated with sufficient accuracy.

  University for Industry
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Employment in what ways the University for Industry will complement the role of(a) training and enterprise councils and (b) other existing training agencies. [48054]

  Dr. Howells
  While the University for Industry will not deliver training directly, it will connect potential learners with a wide range of relevant high quality learning opportunities, taking advantage of developments in information and communication technologies. It will work in partnership with Training and Enterprise Councils and suppliers of education, training and related services to help stimulate demand for lifelong learning and improve accessibility and flexibility of provision.

  Access Courses
  Mr. Levitt
  To ask the Secretary of State for Education and Employment if he will make a statement on the Government's policy on access courses for mature students for higher education. [48256]

  Dr. Howells
  The Government's policy is to ensure that adults with the necessary qualities to benefit from higher education should not be denied places solely on the grounds that they do not have the conventional qualifications for entry. Access Courses provide a recognised route into higher education for such students.

SOCIAL SECURITY

  Main Streaming
  Jackie Ballard
  To ask the Secretary of State for Social Security what plans she has to present an annual report to Parliament on progress on main streaming. [45795]

  Ms Ruddock
  The Government have launched a new initiative on mainstreaming which will ensure that the needs of all groups, including women, are taken fully into account in the development of policies and the delivery of services.

  The Ministers for Women intend to publish an annual report to Parliament setting out progress on mainstreaming the women's perspective into Government policy-making. The first report will be published after the end of this financial year.

  Farmers
  Mr. Charles Kennedy
  To ask the Secretary of State for Social Security (1) how many registered farmers claimed social security benefits in each financial year since May 1997; and if he will make a statement; [46943]

  (2) what estimate she has made of the number of farmers who have begun drawing social security benefits since May 1997; and if she will make a statement. [46941]

  Mr. Keith Bradley
  The only available source of data about the number of farmers in receipt of Social Security benefits is the Family Resources Survey (FRS) which asks self-employed respondents whether their job or business includes any commercial farming activity. The latest year for which FRS information is available is 1996–97. For that year, in around half of the cases that responded positively to the question, the individual, or their partner (if they had one), was in receipt of at least one Social Security benefit.

  The total number of farmers, partners and directors and members of their family who were working on agricultural and horticultural holdings on 1 June 1997 was 354,406.
  Notes:

  1. Commercial farming is defined as self employment which involves the commercial production of crops and crop products, and animals and animal products.

  2. The answer refers to cases where the benefit unit to which the respondent belongs is in receipt of at least one Social Security benefit. It is based on unadjusted sample counts and is subject to sampling error and variability in non response.

  3. The total number of farmers was derived from the June 1997 Agricultural and Horticultural census of the Ministry of Agriculture, Fisheries and Food and is not directly comparable with FRS data.

  Child Support
  Ms Stuart
  To ask the Secretary of State for Social Security how many children are affected by the fact that their absent father is not making any maintenance payment. [47226]

  Mr. Keith Bradley
  There are approximately 1.8 million children in lone parent families in receipt of Income Support or Family Credit who have no maintenance paid by their non-resident parent. It is not possible to estimate the numbers of children who are in 224
  other lone parent families for whom no maintenance is paid since there is no requirement that such parents with care apply for child support.
  Note:
  This represents a snapshot based on data taken from the August 1997 Income Support and CSA Quarterly Statistical Inquiries, and from August 1997 Family Credit Data. Excludes widowed lone parents who are assumed to form 5 per cent. of the lone parent caseload.

  State Pension
  Mr. Rendel
  To ask the Secretary of State for Social Security if she will estimate the consequent savings in means-tested and other benefit expenditure if all pensioners were entitled to the basic retirement pension regardless of their contribution record. [46961]

  Mr. Denham
  [holding answer 22 June 1998]: The information is set out in the table.

  Savings in other benefits from giving full basic state pension of £64.70 to Great Britain residents aged over state pension age

  £billion

  National Insurance (contributory) benefit offsets

  0.8

  Means-tested benefit offsets

  1.1

  Gross additional Retirement Pension costs

  6.2

  Notes:

  1. Amounts are in 1998/99 prices and are rounded to the nearest £0.1 billion.

  2. National Insurance benefit costs and savings have been provided by the Government Actuary's Department.

  3. Behavioural changes have not been allowed for, other than moves between National Insurance benefits.

  4. Means-tested benefit offsets were calculated using the 1995/96 Family Resources Survey, and the May 1996 Quarterly Statistical Inquiry. Both models are uprated to 1998/99 prices, benefits and earnings levels, and calibrated to the forecasts underlying the 1998 Departmental Report.

  Income Support (Take-up)
  Mr. Webb
  To ask the Secretary of State for Social Security if the current research into non-take up of income support by pensioners will attempt to assess the impact of non-take up on the standard of living of the pensioners concerned. [48071]

  Mr. Denham
  The Department has commissioned research among pensioners to explore their attitudes to claiming Income Support. The research aims to provide a fuller picture of why pensioners apparently entitled to Income Support do not claim it.

  The research will collect information on indicators of hardship which will be used to assess whether different groups of pensioner non-claimants experience different living standards. These indicators include material measures relating to food, clothing, heating and consumer durables and details of finances, including savings, debts and loans.

  In addition to the research, we are taking immediate practical steps to assist the poorest pensioners by piloting new ways of identifying potential Income Support beneficiaries and then testing how best to encourage them to claim.

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

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I will be hosting a luncheon on behalf of Her Majesty's Government for the President of Peru on Wednesday 8th July. Accordingly, I trust that the House will grant me leave of absence.

Development Grants and Unemployment
Lord Steel of Aikwood Lord Steel of Aikwood asked Her Majesty's Government:
Whether, following the payment of industrial development grants to the American firm of Viasystems Ltd. for a new factory in north east England, they are aware of the redundancies created in the same firm's factories at Galashiels and Selkirk, and whether they will review the effects of their present policy on unemployment.
The Minister of State, Department of Trade and Industry (Lord Clinton-Davis): My Lords, I am aware of the redundancies which have been announced at Galashiels and Selkirk. I regret hearing of any job losses. It is not the Government's policy to offer grants to businesses merely to transfer jobs from one part of the country to another.
Lord Steel of Aikwood: My Lords, I am very pleased to hear the last part of the Minister's Answer. However, he will be aware that Viasystems Ltd. was acquired a few months ago by a US venture capital organisation which has been promised £15 million worth of land and premises in north Tyneside to make printed circuits. Naturally, unit costs will be cheaper in those circumstances. It is subsidising the 210 redundancies which have, as a consequence, been created in the Scottish Borders. Does the Minister agree that there is something wrong with the transfer of this publicly subsidised unemployment?
Lord Clinton-Davis: My Lords, a full assessment is made of the situation before RSA is applied. The situation in this particular instance is not, in my judgment, attributable to the causes to which the noble Lord referred. However, I am aware of the deep concerns in Scotland, especially in this area. My honourable friend, one of the Ministers of State for Scotland, will in fact be visiting the area tomorrow.
Lord Evans of Parkside: My Lords, is my noble friend the Minister aware that the noble Lord, Lord Steel
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of Aikwood, has raised an issue which has caused considerable concern in Merseyside? For example, I refer to the ability of the well-funded Scottish and Welsh development agencies to attract industry to their areas, often to the detriment of Merseyside and other English regions. Therefore, does my noble friend agree with me that, in view of the advent of English regional development agencies, it is imperative for Her Majesty's Government to put in place regulations which will ensure that the Scottish, Welsh and English development agencies do not involve themselves in an auction at public expense to try to attract industries to their area at the expense of other areas?
Lord Clinton-Davis: My Lords, that is certainly not the Government's intention. We do not want to see such an auction develop. We shall use our endeavours and our influence to prevent that from happening.
Lord Monro of Langholm: My Lords, does the Minister realise the seriousness of the unemployment situation in the Scottish Borders and in the south of Scotland due to serious problems in the textile industry enhanced, unfortunately, by the value of the green pound? I appreciate that a Minister is, somewhat belatedly, visiting the area tomorrow, but how soon can we expect some action to deal with that and indeed with the situation in agriculture, which is also undergoing a particularly rough time and is one of the two stable industries for the south of Scotland?
Lord Clinton-Davis: My Lords, I appreciate that there are sectoral problems in the area. However, it is fair to point out that unemployment overall stands at 4 per cent. in the area, which is among the lowest percentages in Scotland. Only yesterday I met a deputation from the GMB union regarding the textile industry. I am aware of the situation and shall be replying to those concerns in due course.
Lord Fraser of Carmyllie: My Lords, the Minister referred to 4 per cent. unemployment. Can he tell us whether that includes the 720 people whose job losses were announced yesterday by Dawsons as a consequence of the strong pound? More generally, on the question that has been raised, does the Minister and his right honourable friend the President of the Board of Trade appreciate that the issue of regional aid is one of the rawest issues to be encountered outside London? Does the Minister consider that the Government have given sufficient thought to how this is to be handled once we have a Scottish parliament and a Welsh assembly in place?
Clearly those bodies concerned feel very strongly about the matter, both in Wales and in Scotland. They have lost jobs and they need every possible support. Does the Minister also recognise the fact that many of his noble friends from the regions of England feel equally strongly that Scotland and Wales have been securing an unfair advantage? As has been suggested,

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some mechanism needs to be established to ensure that there is not unfair competition between different parts of the United Kingdom.
Lord Clinton-Davis: My Lords, with the greatest respect, I find it a little thick for someone who was a Minister in the previous government to charge us with neglecting our responsibilities in terms of regional policy. The fact is that they totally neglected that responsibility. The noble and learned Lord referred to the strong pound as the source of all the problems. Of course, that merely over-simplifies the issue. It is a problem and one which, incidentally, we inherited from the previous government in very substantial measure. The pound had been accelerating in value very considerably under the noble and learned Lord's government.
On the question of Dawsons, that matter is being raised this afternoon in another place by way of a Private Notice Question. I am aware of the problem. I am sure that my colleagues in the Scottish Office are giving the matter the attention that it properly deserves.
Lord Fraser of Carmyllie: My Lords—
Lord Steel of Aikwood: My Lords, I return to my original Question. I quite agree with the noble Lord, Lord Evans of Parkside, but what we are talking about here is not public subsidy to encourage new employment but the risk that we are simply paying for employment to be transferred from one area to another. It does not matter on which side of the Border the employment is being transferred, it is equally bad. Does the Minister also recognise that Viasystems Ltd. was a company which developed and expanded to provide employment other than in textiles in the late 1960s under the policies of the then Labour government? It is most unfortunate that that firm is being run down now just at a time when Dawson International is experiencing difficulties in the textile trade.
Lord Clinton-Davis: My Lords, it is not the responsibility of the Government that the firm is being run down. Commercial decisions are being taken. I cannot, on behalf of the Government, carry out a full investigation into those. I have tried to assert that regional selective assistance is not designed to promote the consequences to which the noble Lord has referred; the opposite is the case. I do not think that the running down of this company and the unemployment which has resulted can fairly be attributed to the way in which regional selective assistance was given to the Tyneside companies. I believe that the noble and learned Lord, Lord Fraser, is dissatisfied with my previous answer. I am amazed at that.
Lord Fraser of Carmyllie: My Lords, will the noble Lord answer the central question which I put to him? Even if he will not listen to me, he might listen to the noble Lord, Lord Steel, or some of his noble friends who have indicated that there are real concerns and rivalries in different parts of the United Kingdom with
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regard to the way in which this regional aid is distributed. There are real suspicions that some people are securing an unfair advantage. I asked the noble Lord to consider whether, with the establishment of the Scottish parliament and the Welsh assembly, he is satisfied that the risk of such jealousies and such suspicions will be increased or diminished. My concern, judging from the questions which have been asked, is that the risk will increase rather than decrease.
Lord Clinton-Davis: My Lords, the noble and learned Lord is entitled to his opinions. I think he has overstated the case here. What he wants now is a debate on devolution, which I shall not enter into. I am aware that these concerns exist but I think that they are somewhat misplaced. The value of RSA has been considerable. I believe that the noble and learned Lord is exacerbating the suspicions that he has mentioned. They are suspicions but, interestingly enough, there is no firm evidence behind them.

British Museum: Bernard Shaw Bequest
2.45 p.m.
Lord Skidelsky Lord Skidelsky asked Her Majesty's Government:
In view of the assurance given by the British Museum trustees to the House of Commons on 17th December 1959 that the bequest of Bernard Shaw to the British Museum would be "used primarily for the benefit of the Library", what steps they intend to take to ensure that this assurance is honoured.
Lord McIntosh of Haringey: My Lords, I must tell the noble Lord that I took tea with George Bernard Shaw in the summer of 1940. He did not vouchsafe his intentions to me, partly because he had not finalised his will but partly because I was only seven years old at the time.
The formal position is that George Bernard Shaw's bequest to the trustees of the British Museum is unrestricted. The trustees therefore have discretion over the use to which such funds are put. They have decided that the immediate priority for the Shaw Fund should be to underwrite the refurbishment of, and provision of access to, the Reading Room as part of the British Museum's Great Court project. The Reading Room, recently vacated by the British Library, will contain, after refurbishment, an information centre for the public and a public reference library.
We consider that this is an appropriate use of the Shaw Fund which is wholly consistent with George Bernard Shaw's intentions. However, we expect that once the Great Court project has been completed, the British Museum trustees will honour the decision of the trustees in 1959, reported to the House of Commons by Sir Edward Boyle, that the fund would in due course be used primarily for the use of the Library.
Lord Skidelsky: My Lords, I thank the Minister for that reply, and in particular for his encouraging words

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in the latter part of it. But the noble Lord will know that over the years the trustees of the British Museum have—shall we say?—been rather niggardly in honouring Bernard Shaw's manifest intentions, despite the promise that was given to Sir Edward Boyle in 1959, as reported to another place. What steps do the Government propose to take if this situation were allowed to continue?
Lord McIntosh of Haringey: My Lords, the noble Lord is quite right. Over the period since 1973, and the British Library Act, Library acquisitions have gained only £23,000 a year from the Shaw Fund. I can assure the noble Lord that if the trustees were to renege on the decision of 1959 we would not shrink from legislative action.
Lord Strabolgi: My Lords, what is the total amount of funds now standing in the Shaw bequest?
Lord McIntosh of Haringey: My Lords, the total figure is just under £7 million, although of course there is a substantial commitment of guarantee towards the Great Court scheme. Fortunately the European Union has encouraged us, indeed forced us, to extend the period of copyright for 70 years. Therefore there are 22 years still to run.
Lord Quirk: My Lords, may I raise a question as one who serves on the governing body of the Royal Academy of Dramatic Art, which is one of the three residuary legatees that Shaw intended to benefit equally from his will? Is the Minister aware that the RADA annual reports show that we, one of the three residuary legatees, received £2.1 million just since 1993 from this source? Surely the amount at £23,000 a year that is currently going to the British Library, even given the expression "in due course", is rather niggardly in comparison?
Lord McIntosh of Haringey: My Lords, I am of course aware, as I have George Bernard Shaw's will in front of me, that the Royal Academy of Dramatic Art was one of the three residuary legatees. However, I am not aware of the use which it has made of its funds. The British Museum trustees from an early stage built up an endowment rather than spending the money on an annual basis.
Lord Annan: My Lords, can the Minister say precisely what is the present value of the Shaw Fund, and what income it will receive each year from the Shaw estate? The noble Lord will no doubt recollect that, several years ago, when the British Library asked for funds to purchase Ellen Terry's letters to Shaw, it was met with a prevaricating answer. Any attempt to ascertain the precise state of the Shaw Fund became impossible because the trustees of the British Museum had merged that trust fund with all other trust funds from the point of view of investment. Is the Minister aware that refurbishment of the Reading Room could take a very long time and cost whatever the British Museum cares to charge against that particular account?
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Therefore I share the doubts expressed by the noble Lord, Lord Skidelsky, as to whether the assurance given at the end of the Minister's statement is of great value.
Lord McIntosh of Haringey: My Lords, I am sorry that the noble Lord should think that. I believed that I was unequivocal in expressing for the first time the Government's views about what should happen to the Shaw Fund. I have already said that there is almost £7 million in the Shaw Fund. I do not know what will accrue to the fund in the future. Nobody knows. There could be a revival of "My Fair Lady" or another musical based on a Shaw play.
As to the cost and timing of the Great Court scheme, it is planned that the scheme will be completed in about 18 months' time. Most of the funding has already been obtained from other sources. So the guarantee that has been given from the Shaw Fund is a minor part of the total funding. We hope that as little of it as possible will need to be used.
Lord Campbell of Croy: My Lords, for those of us who are not familiar with the details of this bequest, will the Minister clarify whether continuing royalties for recent or future productions of Shaw's plays will accrue to the fund? Also, will they accrue from general sales of his work, and from musicals?
Lord McIntosh of Haringey: My Lords, the answer to both questions is yes.

Pensioners: Income Entitlement Claims
2.52 p.m.
Lord Islwyn Lord Islwyn asked Her Majesty's Government:
Whether they have any new plans to assist the poorest pensioners.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, an estimated 1 million pensioners do not take up the income support they are entitled to. Around 60 per cent. of those are over 75, and 70 per cent. of them are single women. These are the poorest pensioners who are missing out on an average of nearly £17 per week. From this April, we started pilot projects in nine areas of the country to find the best way of encouraging pensioners to make a claim for income support. We are also experimenting with ways of making the delivery mechanism more automatic to help pensioners claim their entitlement in future.
Lord Islwyn: My Lords, I appreciate that poorer pensioners have benefited from the Chancellor's concessions over fuel and from other improvements. However, does my noble friend agree that poorer pensioners were done a grave disservice by the previous government who removed the linkage between pensions and average earnings? Is it not therefore understandable that a key demand of the recent pensioners' convention was for a return to that linkage? Does my noble friend

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agree that under a government dedicated to the principle of social justice poorer pensioners should be given a high priority?
Baroness Hollis of Heigham: My Lords, I entirely agree with my noble friend's last point; namely, that the poorest pensioners should be a priority for this Government—as indeed they are. That is precisely why we have developed pilot schemes to ensure that the poorest pensioners take up their entitlement, as they should and as we believe they ought to. Seventeen pounds a week would make a substantial difference to them. We are well aware of the agenda of the National Pensions Convention. My honourable friend in another place, Mr. John Denham, has had regular, helpful and useful meetings with Jack Jones and the convention. I believe there have been five meetings altogether in which the issue of pensions uprating was discussed.
It is true that had pensions retained their link with earnings as compared to prices since 1979 a single pensioner would be better off by an average of £20 per week. That said, the real way to help pensioners have a prosperous old age is to ensure that they have a secure, decent and good second-tier pension. Pensions linking is one thing, but the main way of springing pensioners into prosperity is to ensure a good, secure second pension. That depends on good jobs and a sound economy.
Lord Higgins: My Lords, the noble Baroness has not really answered the Question, which refers to new plans. She referred to plans that are already known. Are we to understand that we must await a Green Paper before knowing of any new plans? In that context, is she in a position to tell the House when that is likely to be published?
On her point about the take-up of income support, of which all of us are in favour, will the noble Baroness explain why the Government's expenditure plans indicate that the number of elderly claiming income support is expected to fall in 1998–99? Does the noble Baroness agree that the position of second pensions was seriously damaged by the action taken regarding income tax by the Chancellor of the Exchequer in his Budget? That action seriously affected the position of second pensioners. We cannot have confidence if that is the case.
Baroness Hollis of Heigham: My Lords, my noble friends tell me that the noble Lord asked five questions. I have noted at least three and if I miss any points I will write to the noble Lord. The welfare reform Green Paper published a couple of months ago made clear that the Green Paper on pensions will be published later this year. I cannot add to that answer.
The noble Lord's second question related to new schemes. The Question raised by my noble friend was about the schemes for the poorest pensioners. It is worth emphasising information that I have already given to the House; namely, that the best way to help the poorest pensioners now is to ensure take-up of the income support to which they are entitled. We are now
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beginning to receive the findings from our pilot schemes as to what discourages poorer pensioners and how we attempt to overcome those barriers.
The noble Lord's third substantive question related to the change in the last Budget in relation to income tax. I think the noble Lord meant advanced corporation tax. There was a slip of the tongue. We have debated that matter several times in this House. The Government's position is clear. The health of pension schemes depends on a sound economy. We believe that a sound economy and the health and prosperity of firms were ensured by a reduction in corporation tax, which is now among the lowest in the OECD. We do not believe that the health of pension funds should depend on the distortion offered by tax changes or tax shapes in the Budget.
Lord Goodhart: My Lords, the oldest pensioners are also the poorest. Are the Government prepared to consider the suggestion made by my honourable friend in another place, Professor Steve Webb, that the additional pension for those who are over 80 should be increased from the present farcical amount of 25p a week to £5, and that an additional £3 a week should be paid to those between 75 and 80? That would be an effective way of targeting additional pensions spending on those who are most in need without the need for a means test.
Baroness Hollis of Heigham: My Lords, those proposals have been put to us. We welcome any further evidence or information that the noble Lord has to offer. It is part of a consideration of the pensions review. When the Green Paper is published, that may address some of the concerns.
Lord Molloy: My Lords, in addition to the valuable points submitted to my noble friend from all sides of the House, will she consider those voluntary organisations dealing specifically with the problems of old age pensioners—like the Royal British Legion. Noble Lords laugh, but it is a wonderful organisation. Stand up anyone on the other side who says that that is not so! I ask noble Lords not to be so deceptive. They take the mick one moment and then, when challenged, remain strangely silent. Perhaps I may proceed and say to my noble friend that there are many ex-service people who are old age pensioners living in difficult circumstances.
There are many voluntary organisations doing great work to try to improve the situation. Will my noble friend consider contacting those organisations to see whether they can give her assistance in improving the conditions of pensioners and increasing the amounts on which they have to live?
Baroness Hollis of Heigham: My Lords, I am sure that the entire House joins my noble friend in recognising the important and valuable contribution made by the Royal British Legion and the Royal British Legion (Scotland) to the well-being of our older people, particularly those who served in the forces. My noble friend will be pleased to learn that I had a meeting with

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the Royal Pensions Organisations, including the RBL, around two weeks ago when I had the pleasure of welcoming Mr. Champ, the new chairman of RBL, to the War Pensions Group. As my noble friend is aware, they are never backward in bringing the case forward of older people, particularly war pensioners, in relation to the rights and supports to which they believe they are entitled.

Serbia: OSCE Obligations
3.1 p.m.
Lord Avebury Lord Avebury asked Her Majesty's Government:
What action they took, as holders of the presidency of the European Union, to persuade the Serbian authorities to honour their international obligations under the Code of Conduct on Politico-Military Aspects of Security of the Organisation for Security and Co-operation in Europe.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the Federal Republic of Yugoslavia is not a participating state in the OSCE. As presidency of the EU, the UK has therefore not specifically raised compliance with the Code of Conduct on Politico-Military Aspects of Security with the Federal Republic of Yugoslavia. However, we have frequently reminded the Yugoslav authorities of their need to show commitment to the process of democratisation, respect for human rights and the rule of law.
Lord Avebury: My Lords, is not the code simply a restatement of customary international law? Is it not a gross breach of customary international law to kill several hundred civilians and forcibly displace 60,000 people from their homes? Does the Minister agree with the five-point plan announced by the German Foreign Minister this morning as the basis for discussion at the Contact Group meeting which is to take place in Bonn on 8th July? Are we, like the German Foreign Minister, having intensive discussions with the Russians to see whether they can be persuaded to come round to this sort of action, including the possibility of military intervention as a last resort?
Baroness Symons of Vernham Dean: My Lords, the noble Lord often poses important questions and I shall try to deal with them. The Code of Conduct on Politico-Military Aspects of Security is politically binding. It enshrines a number of international agreements and conventions, mainly concerning the democratic control of armed forces. Since the Fry suspension from the OSCE, there is no mechanism available to ensure compliance with the code.
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The noble Lord raised specific points made by Mr. Kinkel this morning. I have seen only scant reference to those in papers which I received immediately before I came into the Chamber. As I understand it, Mr. Kinkel suggests that the political solution is the one that should be pursued; and that the best opportunity for so doing will be at the next meeting of the Contact Group in Bonn on 8th July. That will consider to what degree President Milosevic met the demands set out by the Contact Group when it met in London on 12th June.
Without detaining the House too long, perhaps I may state four aims in that regard: first, a ceasing of all action by the security forces which affect the civilian population; secondly, enabling effective and continuous international monitoring; thirdly, facilitating the full return to their homes of refugees and displaced persons; and, fourthly, making rapid progress in the dialogue with the Kosovar-Albanian leadership.
Earl Russell: My Lords, does the Minister agree that we must either make it easier for the inhabitants of Kosovo to live in their own country or make it easier for them to claim asylum in other countries, including their own? Can Her Majesty's Government promise that if they fail to do the first, they will do the second?
Baroness Symons of Vernham Dean: My Lords, the right way to approach this is as I outlined in the supplementary answer that I gave to the noble Lord, Lord Avebury: that this must be allowed to go forward on the basis of the Contact Group's next meeting in Bonn and on the basis I outlined to your Lordships. We all understand that the situation is increasingly tense as both sides show evidence of preparing for increased fighting over the summer months. Indeed, we learnt from reports coming in this morning about Serbian forces having taken a mine at Belecevac. The important point at the moment is to urge restraint on all sides and to look to a political dialogue to remedy these difficult problems.
Lord Rea: My Lords, can my noble friend say what the Government are doing to put pressure on President Milosevic to allow human rights monitors to be set up in all parts of Kosovo? Also, what pressure are they putting on him, together with the Russians rather than apart from them, to restore the autonomy that he took away from Kosovo in 1989?
Baroness Symons of Vernham Dean: My Lords, we welcome the undertakings which President Milosevic made in Moscow on 16th June to allow unimpeded access to international monitors and humanitarian organisations. We are currently seeking alternative ways to establish an increased European monitoring presence in Kosovo by bringing in six extra monitoring teams—two in each team—to supplement the existing five monitors who are already in the Federal Republic.

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In relation to the ambitions of the various parties, I am afraid that I must remind the House that we want to pursue political dialogue and that will next have an opportunity of being aired when the Contact Group meets on 8th July.

Scotland Bill
3.6 p.m.
Baroness Ramsay of Cartvale: My Lords, on behalf of my noble friend Lord Sewel, I beg to move the Motion standing in his name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Scotland Bill has been committed that they consider the Bill in the following order:

Clause 1,

Schedule 1,

Clauses 2 to 20,

Schedule 2,

Clause 21,

Schedule 3,

Clauses 22 to 28,

Schedule 4,

Clause 29,

Schedule 5,

Clauses 30 to 91,

Schedule 6,

Clauses 92 to 111,

Schedules 7 and 8,

Clauses 112 to 117.—(Baroness Ramsay of Cartvale.)

On Question, Motion agreed to.

Road Traffic Reduction (National Targets) Bill
Read a third time, and passed.

Government of Wales Bill
3.8 p.m.
Report received.
Clause 2 [Membership]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 1:
Page 2, line 14, leave out subsection (7).
The noble and learned Lord said: My Lords, in moving Amendment No. 1, perhaps I may speak also to Amendment No. 24 which is grouped with it and raises a similar point.
Amendment No. 1 seeks to leave out subsection (7) of Clause 2. I move to leave it out because it is unnecessary. It merely states what the existing law would do without it. All the amendments I ventured to put on the Marshalled List have the same object of eliminating unnecessary provisions and thus shortening
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an already unwieldy Bill. That being so, perhaps I may give, as a background to all those amendments, what has been happening to the statute book.
In 1975, when the Renton Committee on the preparation of legislation considered the state of the statute book—I am pleased that the noble Lord, Lord Renton, has put his name to the amendment—it drew attention to the prolixity of the statute book. It then ran to three volumes of Public and General Acts. Within 10 years that had increased to five volumes, despite what the Renton Committee had said. There was then the ingenious idea of making fewer volumes by putting them in a bigger format. That was extremely inconvenient for those who had bookcases to fit the smaller format. However, that was done and it reduced the number of volumes from five smaller ones to three larger ones. That was in 1987. But the matter did not stop there. By the following year there were not merely three but five larger ones and since then there have been four or five in each year. So I think your Lordships will agree that, as an amending Chamber, your Lordships have a parliamentary responsibility to do all you can to eliminate unnecessary provisions which merely go to swell the statute book.
Perhaps I may add this. That is only the Public and General Acts—primary legislation. Secondary legislation runs to twice as much as the primary. In fact, such is the volume that the Stationery Office has not managed to publish all the volumes of any year since 1995. For 1996 the first part of the year has been published. That is six volumes, so there are likely to be a dozen volumes in that year. Nothing has been published since.
This amendment turns on a point of law—I hope your Lordships will bear with that—and, I am afraid, a rather recondite point of law concerning corporations aggregate. I do not think that in the end your Lordships will be concerned with the point of law, which in any case is not really a suitable subject for Division in the House. Indeed, I have taken it up with the noble Lord, Lord Williams, who has dealt with it with his usual courtesy and promptness. However, I think that your Lordships will not, as a result of his latest letter, be concerned with an argument that the provision which is sought to be excluded does other than state the existing law. I see the noble Lord nodding and so I shall proceed on that basis. I know that he has an alternative argument with which I shall deal in due course.
Clause 1(2) states:
"The Assembly shall be a body corporate".
Since it is more than a one-member assembly, that constitutes a corporation aggregate. It is a quality of corporations aggregate that the decision of a majority binds the minority. Perhaps I ought to try to make that good by reading from the classic book on the subject, Grant on Corporations. The chapter is headed "Majority". It states:
"The principle has been already laid down, that a corporation acts by the majority, or that the will of the majority is the will of the corporation, and binds the minority".

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It expands on that. The next paragraph states:
"The rule of acting by the majority is so fully established as a principle of corporation law".
It goes on to state:
"Subject, then, to the foregoing remarks, and to the further restriction … the will of the majority binds the whole body, such will being in all cases collected at a corporate assembly duly constituted, and not from the aggregate of the assents of the corporators obtained separately and apart, for that would not be a corporate act".
Since the will of the majority expressed in a meeting binds the minority, there is no need at all to say that a vacancy does not invalidate the proceedings; nor, what is sought to be removed by Amendment No. 24, that a disqualification does anything different. It follows that the provision is unnecessary as a matter of law. If it were not there, the law would do itself what the subsection does.
However, when I took the matter up with the noble Lord the Minister his first reaction—an evading action—was that we were concerned with powers, vires, not with existence. That had always of course been the point. He went on to say that there were precedents for such a provision. That is the usual argument when you have unnecessary provisions in a statute. He went on to say—I think it was in a later letter—that there was a danger, therefore, if it were left out, that someone would argue that that was significant and it meant that the normal law would not apply. Well, of course, you cannot prevent people arguing that black is white and white is black. Indeed, Jonathan Swift said that lawyers were a race of people who were employed to argue black was white and white was black, according as they were paid. I need not tell your Lordships that Swift had recently lost a law suit. It is not true of course. We cannot really stuff the statute book full of anticipation of every silly argument that might be adduced. I believe that that is the position which the noble Lord finally adopted. We are not bound to go on perpetrating an unnecessary nonsense, and there is every reason why we should not do so.
The argument could be put the other way. There are hundreds and hundreds of corporations, both in common law and statutory law. It could well be argued that the presence of this provision in one or two statutes means that the normal law does not apply in all the other corporate bodies.
Finally, if there were any doubt about it, and if a silly argument were put forward, the courts now have the power under certain circumstances to look at what was said in Parliament. That was the decision of your Lordships' House in Pepper v. Hart. I welcome the support of the noble Lord, Lord Renton. I welcome the support of my noble and learned friend Lord Brightman since he is the leading authority on what is the most important class of corporation aggregate today; namely, commercial companies which are incorporated. The
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time has come to bring this nonsense to an end, and this is the time to do so. It will enure for the future. I beg to move.
The Chairman of Committees (Lord Boston of Faversham): My Lords, I must point out to your Lordships that if Amendment No. 1 is agreed to, I cannot call Amendment No. 2.
Lord Brightman: My Lords, I wish to support the amendment. In my submission there is no valid reason for the existence of subsection (7) of Clause 2, which this amendment seeks to strike out. The subsection reads,
"The validity of proceedings of the Assembly is not affected by any vacancy in its membership".
It is inconceivable that the proceedings of a body exercising ministerial functions could be brought to a standstill because a member of that body has died or chooses to resign. That is particularly so when one considers that under Clause 8(6) the vacancy so arising could not be filled during the final three months of the statutory lifetime of the then assembly. The argument would mean that if, for example, a member resigned his seat or died in the second week of February in year four, no election could take place to fill the vacancy. The assembly would be hamstrung until after the election three months later. In my respectful submission it is a bad policy to build unnecessary clauses into parliamentary drafting for the avoidance of untenable doubts.
Lord Renton: My Lords, the arguments in favour of Amendment No. 1 have been so clearly and forcefully put already that I can make my speech very short. I do not wish to repeat those arguments, but, daringly, because this is Report stage, I shall attempt to anticipate the reply which may be given.
The noble and learned Lord the Solicitor-General, may well rely on previous occasions when a similar phrase has been used, and a similar precedent. The circumstances of the Bill are different from those which have arisen in the past when such a phrase has been used. It would be absurd and wrong for us to perpetuate what the noble and learned Lord might claim is a precedent when it does not need to apply in this case, as has been mentioned by the two noble and learned Lords.
The Government should reconsider the matter. I believe that this Session of Parliament is likely to be the longest since the Second World War. Parliament is being asked to get through an immense amount of legislation, which goes into a vast amount of detail, much of which some of us consider to be quite unnecessary. Therefore, if there is a doubt I suggest that it should be resolved in terms of brevity. That is a good point in itself. But here we really must avoid creating an unnecessary precedent for the years to come.
Lord Hooson: My Lords, from these Benches I do not wish to sound repetitive. Having heard the arguments of the noble and learned Lords in particular, it seems to us that the onus has shifted on to the Government to satisfy the House that subsection (7) of

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Clause 2 and subsection (5) of Clause 14 are not superfluous to requirements. If they are, why have them in the Bill?
The Earl of Balfour: My Lords, I am grateful that this amendment has been tabled. I apologise to your Lordships. I am always slow in thinking. Clause 2(7) states:
"The validity of proceedings of the Assembly is not affected by any vacancy in its membership".
There is no provision for a quorum either in this Bill or in the Scotland Bill. For example, in this House, as I understand it, 30 Members form a quorum. The provision for a quorum should be firmly established on the face of the Bill. I am somewhat surprised that nothing to that effect is in the Bill. I wonder why.
Lord Monkswell: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, said in effect that a body of law stated that a simple majority of a body corporate meeting together was enough to determine the outcome. I believe that later in the Bill there is provision that the standing orders of the assembly can be altered only if there is a two-thirds majority.
If the existing law on the decisions of a body corporate made by a simple majority can be varied by later provisions in the Bill, the implication is that the decisions of the body corporate could be invalidated by there not being a full number of that body, unless that is specifically written into the Bill. As a layman and non-lawyer, while I would argue that there could be a simple majority for the determination of standing orders, I appreciate that that is not on the face of the Bill at present. As we are not at Committee stage it is difficult to have a debate. When the noble and learned Lord, Lord Simon, winds up, perhaps he can give me some advice on the relevance of the two-thirds majority to the decisions of the body corporate which, as he pointed out, should be on the basis of a simple majority.
3.30 p.m.
Lord Roberts of Conwy: My Lords, we are all grateful to the noble and learned Lord, Lord Simon of Glaisdale, for introducing these two amendments. I am particularly grateful to him for the simple reason that I have been taking some pride in the abilities of your Lordships' House as a revising Chamber because since this Bill has been with us it has grown in size considerably. Although I have on all occasions welcomed such growth, particularly since it has resulted for the most part from amendments and changes introduced by the Government, I would nevertheless not like to think that any of the augmentation was not fully justified. The noble and learned Lord has drawn our attention to the possible unnecessary aspects of the two subsections.
The Solicitor-General (Lord Falconer of Thoroton): My Lords, I think that we would all agree that there should not be any unnecessary prolixity in Acts of Parliament. I am sure that we would all share the views expressed by the noble and learned Lord,
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Lord Simon of Glaisdale, in that respect. I am sure that we would all also agree that we should, if possible, try to get legislation right without reference to Pepper v. Hart. We should try to make legislation explicable in the terms in which it is put on to the statute book. It is an unhappy result if those seeking to construe the legislation have to read the debate in order to determine what the legislation means.
I respectfully suggest that the two provisions which the noble and learned Lord seeks to remove are justified—and they are justified in order to avoid debates. Similar provisions have been included in a number of Acts stretching back well over 100 years. I refer to the Public Health Act 1875, the Municipal Corporations Act 1882, the Local Government Act 1894 and, more recently, the Local Government Act 1972. The fact that it has been done before does not mean that it has to be done again, but the fact that such provisions are there in previous Acts means that lawyers, no matter how regrettably, will seek to draw an inference from their absence from this Bill to say that there must be some significance in it. It may well be—indeed, I think it more likely than not—that any court confronted with the point would go along with the argument so eloquently put by the noble and learned Lords, Lord Simon of Glaisdale and Lord Brightman, but we must think of the uncertainty that would exist while that point was being resolved: one vacancy in the membership, leading to somebody taking this point, thereby providing a cloud over the proceedings of the assembly until the point has been resolved.
A sensible view must be taken of where the balance has to be struck. Should one take the view that one should strike the balance in a place where one gets rid of the point altogether or does one simply leave it out and recognise that the point might be taken and lead to uncertainty for a period of time? We think that the balance is struck by getting rid of the point once and for all. In relation—
Lord Renton: My Lords, before the noble and learned Lord sits down, could he say whether in any of the previous legislation that he has mentioned the clauses which he says form a precedent have turned out to be decisive and necessary?
Lord Falconer of Thoroton: My Lords, I cannot answer that question, but I can quote from a former Lord Chancellor, Lord Birkenhead, in 1919 when dealing with a similar clause. He said:
"A moment's reflection will show how many cases might arise in which great annoyance, inconvenience and expense might be entailed by a controversy of this kind without any gain of any kind to the public interest. I think therefore that Parliament, in order to avoid such actions and objections determined to use language of a similar wideness".
Lord Ackner: My Lords, I am grateful to the noble and learned Lord for giving way, but as one of the six Law Lords responsible for Pepper v. Hart, perhaps I may ask whether the quotation that he has just given

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has not been totally cancelled by that decision? Pepper v. Hart would put an end to this point, if the point were taken.
Lord Falconer of Thoroton: My Lords, first, that quotation from Lord Birkenhead does not cancel out the point. The point is that if that provision is not in this statute, people might take the point. Secondly, I am sure that I am right when I say that it is much better for statutes to be construed by reading them rather than the debates that led to them. For all of those reasons and with the greatest diffidence, I respectfully suggest that the judgment that the Government have made is correct and that to avoid doubt we should leave in those provisions.
Viscount Bledisloe: My Lords, before the noble and learned Lord sits down, he has cited certain statutes in which this provision appears. Is he suggesting that there is a similar provision in every statute that has been passed in which Parliament has set up a corporation aggregate? If not, is there not already an anomaly, and are not the Government merely seeking to perpetuate that anomaly? If the noble and learned Lord can assure us that there is a similar provision in every case where a corporation aggregate has been set up, I see the strength of his point.
Lord Falconer of Thoroton: My Lords, I am afraid that I cannot give the noble Viscount that assurance because I have not looked at every statute which sets up a corporation aggregate. However, all the statutes on which I have relied look like statutes setting up semi-public bodies where the point is obviously of great importance that there should not be a shadow over their proceedings when there is a vacancy.
Lord Simon of Glaisdale: My Lords, I am most grateful to those who have contributed to this debate. We have now heard from two of my noble and learned friends, from the noble Lord, Lord Renton, and from two eminent Queen's Counsel, the noble Lord, Lord Hooson, and the noble Viscount, Lord Bledisloe. That is a formidable body. I know that it does not intimidate the noble and learned Lord the Solicitor-General, but I am entitled to say that five Members of your Lordships' House are supporting me, with only the noble and learned Lord the Solicitor-General against me.
The noble and learned Lord used his favourite phrase, "We think the Government have got the balance right". That really will not do. The noble and learned Lord must answer the argument. He did not refer at all to the argument that these statutory provisions are equally liable to give rise to an argument that where they are not in the provisions of any statutory or non-statutory corporation, a vacancy invalidates the proceedings; nor did the noble and learned Lord answer the point about Pepper v. Hart.
In the end it comes down to this: the Government's argument is that because something unnecessary has been done four or five times in the past 130 years, we must go on doing unnecessary things to the inflation of
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the statute book. That simply will not do. Your Lordships are, I think, likely to say, "Enough is more than enough".
I must answer the noble Lord, Lord Monkswell, who valuably, with his eagle eye, spotted the provision for an entrenched majority in relation to the standing orders. They are perfectly reconcilable. The general rule applies to all corporations, in the absence of other statutory stipulation, that a decision of the majority binds the minority. I imagine that it is the same in Scotland too—I now see the noble and learned Lord the Lord Advocate in his place—but that is subject to statutory exception. Parliament can always say that on one particular matter more than a mere majority is required, and that is the position here. A majority binds the minority except when it comes to alteration of the standing orders where there must not be merely a simple majority but a two-thirds majority. That does not invalidate these amendments.
I respectfully agree with my noble and learned friend Lord Brightman that the argument put forward by the noble and learned Lord the Solicitor-General is simply untenable. It is quite wrong to believe that counsel will put forward any ridiculous argument that may be suggested to them. They owe a duty to the court not to put forward absurdities. The argument that without this statutory provision a vacancy or a disqualification invalidates would be a complete absurdity.
This issue is not a matter on which to divide the House if it can be avoided. I do not despair that the Government having gone so far may not reflect further and see wisdom. At this stage I shall seek to withdraw the amendment so that I may still have it in hand at Third Reading if the Government adhere obstinately to the position that they have adopted. I beg leave to withdraw the amendment.
Lord Callaghan of Cardiff: No!
The Chairman of Committees: My Lords, is it your Lordships' pleasure that the amendment be withdrawn?
Noble Lords: No!
On Question, amendment negatived.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 2:
Page 2, line 14, leave out ("proceedings of") and insert ("anything done by").
The noble and learned Lord said: My Lords, Amendments Nos. 2, 25 and 29 are grouped together. These amendments are essentially drafting amendments consequential upon changes agreed in Committee about the provisions relating to defamation now set out in Clause 77. As the Bill is currently drafted, the term "proceedings" has a narrow interpretation: it is limited to the business that is formally transacted in sessions of the assembly or in its committees and sub-committees. For this reason

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the term "proceedings" in Clauses 2, 14 and 20 is now ambiguous. The purpose of the amendments is to bring clarity to the drafting. I beg to move.
Lord Simon of Glaisdale: My Lords, as the noble and learned Lord has said, these are drafting amendments. They do not affect the point made on the previous amendment. It was most unfortunate that your Lordships were manoeuvred into the Question being put on the previous amendment. I do not believe that the Government will be proud when this matter is considered by public and constitutional lawyers. It is a most extraordinary procedural line to take for a government who claim to be a modernising government. We are saddled with a nonsense purely because a nonsense has been perpetrated in the past. Is that the act of a modernising government?
Lord Callaghan of Cardiff: My Lords, it was not the act of the Government. I called "No" when the noble and learned Lord begged leave to withdraw the amendment. The noble and learned Lord spent 35 minutes telling noble Lords what should happen and described what was proposed as an absolute nonsense. He said that the matter should be withdrawn from the Marshalled List and then refused to vote. I wished to vote upon it and record my disagreement with the noble and learned Lord. That is not a manoeuvre but a proper procedure of the House. I hope that next time the noble and learned Lord expresses his views in no uncertain language he will pursue the matter to the end.
Lord Simon of Glaisdale: My Lords, after all these years I am not disposed to quarrel with the noble Lord, Lord Callaghan of Cardiff. I stand by what I said. I do not believe that what has happened today will reflect any credit on the Government.
Lord Falconer of Thoroton: My Lords, I am grateful to my noble friend Lord Callaghan of Cardiff for making clear that it was not the Government who called for the Question to be put on the previous amendment. The point made by the noble and learned Lord has nothing to do with the amendment that I now move and I say nothing more about it at this stage.
On Question, amendment agreed to.
3.45 p.m.
Clause 3 [Time of ordinary elections]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 3:
Page 2, line 32, leave out from ("may") to first ("the") in line 37 and insert ("make provision for—

(a) any provision of, or made under, the Representation of the People Acts, or

(b) any other enactment relating to elections of community councillors,

to have effect with such modifications or exceptions as").
The noble and learned Lord said: My Lords, Amendment No. 3 arises from your Lordships' approval at Committee stage of an amendment enabling the
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Secretary of State to make modifications to the statutory procedures relating to community council elections. The power to make modifications could be exercised only when it had been necessary to postpone the date of the community council elections and then only where modifications were appropriate for the proper and effective conduct of those elections. At that time, I explained that the need for the modification had come to light as we considered the practicalities of moving the community council elections in Wales from 6th May next year and combining them with the European parliamentary elections to be held on 10th June. Amendment No. 3 refines that power so as to allow the Secretary of State to modify or except procedures which, in the circumstances of postponement, would hinder the ability of returning officers to conduct the elections in a proper and effective manner.
Some concerns were expressed in Committee about whether the Secretary of State would be able to manipulate the staging of the community elections to his party's advantage. I believe that it would be helpful if I outlined the developments which led the Government to propose Amendment No. 3 and thus reassure your Lordships of the intent behind the new provision. If the community council elections in 1999 are held on the same day as the European parliamentary election the two polls will be combined by virtue of Section 15(1)(c) of the Representation of the People Act 1985. Section 15(4) of the 1985 Act requires that the cost of taking the combined polls, excluding any cost solely attributable to one election, and any cost attributable to their combination shall be apportioned equally among the elections. Under Section 36(5A) of the Representation of the People Act 1983 the expenditure incurred by the returning officer in relation to the holding of a community election is, subject to the provisions of that section, paid by the principal council in which the community is situated. In Wales the principal council is the unitary council. That council in turn may seek reimbursement from the community council concerned.
In the circumstances of the proposed combination in June next year the conduct of the European elections will be the responsibility of the Home Office. By virtue of Section 15(4) of the 1985 Act the Home Office would be obliged to seek reimbursement of 50 per cent. of the costs of the combined elements of the two elections from the principal councils. Those councils in turn would almost certainly seek reimbursement from their community councils for the costs attributable to the community council elections. This would be a considerable financial burden on the community councils and we wish to avoid that.
Amendment No. 3 therefore enables the Secretary of State, when making an order under Clause 3(4) of the Bill, to modify or omit provisions of Section 15(4) of the 1985 Act to the extent that where otherwise a cost is to be apportioned equally between elections the order may specify that the apportionment may be different but only to the advantage of a community election. The modifying provision could not re-order the apportionment which fell to the local authorities to be any more than the existing 50 per cent. It could however specify that the apportionment should be set as low as

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nil. The precise level of the apportionment would have to be agreed by the Secretary of State and the other interested authority (the Home Office or assembly if the community council elections were combined with assembly elections) in advance of the order being made. Amendment No. 3 ensures that the Secretary of State is able to take action as appropriate. I repeat that this provision can be used only in circumstances where the Secretary of State has decided to postpone the community council elections and any changes must be appropriate in connection with the postponement. He may not decide to change any provision simply because he may have a mind to. The order-making power will not enable him to re-write the rules governing the conduct of the community council elections. Once the assembly has been established the Secretary of State will be able to exercise that power only if he has first consulted the assembly so that it too would be a party to any proposal to make consequential changes to any related statute procedure.
I apologise for the length of this explanation. I beg to move.
On Question, amendment agreed to.
Clause 4 [Voting at ordinary elections]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 4:
Page 3, leave out lines 5 to 7.
The noble Lord said: My Lords, in moving Amendment No. 4 I shall speak also to Amendments Nos. 13, 14 and 15. Taken together these amendments change the part of the Bill which deals with the electoral system. As the Bill stands—along with the European Parliamentary Elections Bill and the Scotland Bill—the list which is to be used in order to decide the additional members is to be submitted by the political parties and drawn up by the political parties. It is therefore a closed list. The electorate, as such, has no opportunity to indicate whether it prefers one of a party's candidates as opposed to another of its candidates.
We discussed these matters in some detail on the European Parliamentary Elections Bill, and I do not want to go over the ground again. I recognise that a number of your Lordships are taking an interest in the Welsh Bill and not in the European Parliamentary Elections Bill. If I cover ground that we have already discussed, then I apologise to those who, like myself, are debating all three Bills. It is necessary to explain why it is important that there should be an open list.
There are a number of ways of tackling the question. We have discussed what is called the Belgian system. In this people can vote either for the party or for the individual. I do not wish to explain why I do not approve of the Belgian system. I recommend a speech I made in Committee on the European Parliamentary Elections Bill to those of your Lordships who wish to know why I am suspicious of it.
The point about the Belgian system is that one has the option of voting for a party or an individual. The amendments I have tabled remove the chance to vote for the party. For example, if one wishes to vote for Conservative candidates one must vote for a Conservative candidate and not for the Conservative
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Party as such. After the votes are cast the first action of the returning officer would be to add up all the votes cast for the candidates of each party, and the total vote would then be the total vote for the party. These total party votes would then be used, via the d'Hondt system, to calculate the number of additional members that each party receives.
There are four additional members in the Welsh system, of which one party might receive two and the other two parties one each. The returning officer would then go, for example, to the party with the two additional seats, go to its list, and select the candidates who had the largest vote of the electorate.
The system in the Bill would have the returning officer simply selecting the party apparatchiks' first choice. My system would have the returning officer selecting the most popular candidate in that party, the candidate who had received the largest vote. It would therefore be a matter for the supporters of each party to decide which individual candidate would be elected. That is why it is called the open list.
As we have seen in both Wales and Scotland the danger of the Government's proposition in selecting the lists is that there is an effort at cleansing the list of those people who the governing party might think are part of the awkward squad, especially by the Labour Party. I am told that they are called loyalty test questions. That is very much up to the party opposite. The electoral system would be brought into disrepute if the electorate felt that it had to vote for a party and had absolutely no say about the choice of the individual candidates who should rank in first, second, third or fourth place in the Welsh system.
The open list is fair, clear and gives the electorate not only the opportunity to indicate which party they wish to support but the candidate within that party. A number of your Lordships who have intervened in debates on other issues, especially the European Parliament issue, may feel moved to intervene today. We can see if there is a measure of support in your Lordships' House to move from the closed list system—which is fundamentally anti-democratic—to the open list system. In case anyone chides me, my decision to table amendments to the additional member system in no way negates my feeling that we would be far better off with a system of first past the post. I beg to move.
Lord Thomas of Gresford: My Lords, we on these Benches commend the noble Lord, Lord Mackay of Ardbrecknish, for his deep study of the proportional representation systems and for the enthusiasm with which he advances the proposals of an open list. These are arguments which we have advanced over many years and we enjoy seeing any convert. However, we take the view that it is important that this Bill gets on the statute book as soon as possible and we do not propose to hold up Government business by supporting this amendment.
Lord Falconer of Thoroton: My Lords, as the noble Lord, Lord Mackay of Ardbrecknish, made clear, this group of amendments would introduce "pure" open lists for the electoral region element of the additional member system to be used for the assembly elections. We believe

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that open lists in the context of that system constitute a complexity which would serve only to confuse the electorate and the electoral process. Voters would have to cast their vote either for a named candidate of one of the political parties which had put forward a list, or for an independent who was standing in the electoral region. There would be no opportunity to vote for a party list as submitted by the party. That is what the noble Lord, Lord Mackay of Ardbrecknish, intends with these amendments.
Under the Government's proposals, voters will be asked to make two decisions in the polling booth: to vote for a constituency member and to vote for the additional members for the electoral region in which the constituency is located. The election of the constituency member will be by the same process as applies for the election of MPs to another place, but the additional members' election is a completely new procedure. There will be new duties for electors to perform and new terminology for them to assimilate. In this context there is considerable virtue in making the additional member selection simple and straightforward. This is why we have decided that the selection should be by a method whereby voters are given a straightforward opportunity to vote for the party whose list they wish to support or for an independent who may be standing for the electoral region.
An open list consisting of candidates' names only could well give rise to results which were inconsistent with the votes cast by voters for individuals on the party lists. The process of allocating the additional member seats is dependent upon the total number of party list votes each party wins, having regard to the number of individual constituency seats also won by that party. In a pure open list system, the total number of party list votes is the sum of the votes cast for each of the individual candidates on the list.
An example will help illustrate my point about inconsistencies. Take two parties, neither having won any constituency seats in a particular region. It is conceivable that the total vote for party list 1 although high may rely very heavily upon the votes cast for one individual on that list; the other candidates on the list may have polled very lightly. Party 2 may not have had such a large total list vote, but that total might not be so heavily dependent upon one individual and two candidates may have received more votes than all but the first candidate of party 1. Party 1, on the strength of the total votes cast for its candidates, is entitled to two of the additional member seats. The first seat would be allocated to the candidate with the very high personal vote; the second would be won by the second highest poling candidate on the list, who has actually polled very low. Party 2, however, is entitled to only one additional member seat, which would be allocated to its highest polling candidate. The second highest polling candidate for party 2 would not be entitled to a seat, despite the fact that he or she had received a personal vote higher than that achieved by the second candidate of party 1, who had won a seat.
The proposal made by the noble Lord, Lord Mackay of Ardbrecknish, leads to the electorate choosing Mr. A from party 1 and Mr. B and Mr. C from party 2, and it gets Mr. A and Mr. D from party 1. That apparent
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inconsistency between the wish of the voters as expressed in their votes for individuals on the party list and the subsequent allocation of seats would be very difficult and embarrassing to explain to voters and would appear to be a negation of democracy. The successful second candidate for party 1, who had been elected in this example, would also have great difficulty, I suspect, in establishing himself as a credible representative of the area from which he had come.
There is a possible further inconsistency in the example given by the noble Lord, Lord Mackay of Ardbrecknish. It will be open to candidates to stand for the constituency and for the electoral region. However, if the candidate wins election for a constituency then his or her name is discounted from the party list for the purposes of allocating the additional member seats. What if that person was the one who had attracted the greatest number of individual votes on the list? Should the party be entitled to the additional member seats allocated to it on the strength of votes cast for someone who, following his constituency success, is no longer on that list, particularly if the other candidates had been much less favoured by the electors?
The ballot paper for an open list election is detailed and complex. The names of all candidates for a party list would have to be listed on the ballot paper. Party lists may comprise up to 12 names. Voters would have to decide between placing their mark either beside the name of one candidate on a party list, or for an independent. I believe that there would be considerable scope for voter confusion.
Returning to our proposal, voters will not be asked to make their selection for the electoral region in the absence of information about the candidates on each party list or their order of priority on the list. We are proposing that notices will be prominently displayed in every polling station, listing each party's list candidates in the correct order. It will also be open to the parties to distribute details of their lists to the electorate beforehand. The choice will be an informed one and voters will know when casting their vote for the additional members exactly who is most likely to be elected from each party.
Our essential objection to open lists in AMS elections is our interest in keeping the procedure as simple as possible. We do not believe that the closed list procedure represents any diminution in voters' powers of choice. Voters will have a clear idea of whom they are voting for on a list and the order in which the candidates from that list will be elected. If a voter disagrees with the list of names he or she can vote for another party list or for an independent.
I note that no noble Lord spoke in support of the amendment moved by the noble Lord, Lord Mackay of Ardbrecknish. That was no doubt because they were aware that it would lead to anomalies of the sort to which I have referred and would make extremely complicated that which should be sensible. In all the circumstances, I invite the House to reject the amendment.
Lord Callaghan of Cardiff: My Lords, before my noble and learned friend sits down, and with the leave of the House, I cannot pretend that I followed everything

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that he said. If anyone can make a difficult subject clear, it is the Solicitor-General. If he made one thing clear to me—if he will allow me to say so—it is that I am absolutely confirmed in my position that first-past-the-post is easily the best system.
Lord Mackay of Ardbrecknish: My Lords, I am glad that the noble Lord, Lord Callaghan of Cardiff, intervened there, because if the noble and learned Lord the Solicitor-General did anything, he illustrated the complexities of the proportional representation system. He also suggested that the electorate might not be able to understand my system. Dare I say that he underestimates the intelligence of the electorate? It will be able to understand my system every bit as well as it will be able to understand the Government's system, or any other system brought forward under proportional representation.
I hope that the noble Lord, Lord Thomas of Gresford, does not become too excited by what he sees as my conversion to proportional representation. I can assure him that it is not a conversion at all; I am just trying to improve what I think is a bad lot. I, like the noble Lord, Lord Callaghan, would prefer to stick to first-past-the-post.
I do not believe that my system is all that much more complex. For example, I noticed that the noble and learned Lord made much of the fact that the electorate might find that someone with a lesser vote would be elected when someone with a greater vote might not be. He pointed out that a popular person might be elected for a constituency, and might be at the head of the list and receive a great number of votes over the region, which would pull other people through on his or her coat tails.
That could happen already, because unless the Government intend to keep the list secret, there may well be someone at the head of the list who is popular and who would be elected for a constituency, and who would pull in a lot of votes on the second vote of people thinking that they are voting for the person at the head of the list. That person is elected for a constituency and, lo and behold, the electorate finds that its votes have been used to elect No. 2 or No. 3 on the list, when they really voted for that list because of No. 1 on the list.
Whether it is my system, or that of the noble and learned Lord, his objection is an objection to both systems, and not specifically to mine. I believe that the electorate will find it easy to understand the principle. The basic point is the additional member seats—the additional members for the party. The electorate should be given a choice of the parties' candidates for those additional member seats. It is straightforward. I have no trouble in understanding it. One could explain it relatively easily to the electorate.
The electorate will not like being presented with a list where it knows that candidates that it would prefer have been knocked out, or put in a low position, because the
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rulers of the party—whichever the party—at a particular moment do not want a particular wing of the party to be represented. That could be true of all political parties now and in the future. An open list would be a considerable improvement on a closed list, and I think that I would like to take the view of the House.
4.8 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 106; Not-Contents, 120.

Division No. 1

CONTENTS

Aberdare, L.

Kintore, E.

Ailsa, M.

Kitchener, E.

Aldington, L.

Layton, L.

Alexander of Tunis, E.

Leigh, L.

Alton of Liverpool, L.

Lucas of Chilworth, L.

Ampthill, L.

McColl of Dulwich, L.

Anelay of St. Johns, B. [Teller.]

McConnell, L.

Ashbourne, L.

Mackay of Ardbrecknish, L.

Balfour, E.

Mackay of Drumadoon, L.

Balfour of Inchrye, L.

Mersey, V.

Beloff, L.

Milverton, L.

Berners, B.

Monro of Langholm, L.

Bethell, L.

Mottistone, L.

Biffen, L.

Mountevans, L.

Blatch, B.

Mowbray and Stourton, L.

Bledisloe, V.

Moyne, L.

Boardman, L.

Munster, E.

Brabazon of Tara, L.

Naseby, L.

Braine of Wheatley, L.

Newton of Braintree, L.

Bridges, L.

Northesk, E.

Broadbridge, L.

Norton, L.

Brougham and Vaux, L.

Onslow of Woking, L.

Byford, B. [Teller.]

Oxford, Bp.

Cadman, L.

Oxfuird, V.

Carnegy of Lour, B.

Palmer, L.

Carrick, E.

Pender, L.

Chorley, L.

Peyton of Yeovil, L.

Clanwilliam, E.

Pilkington of Oxenford, L.

Courtown, E.

Rees, L.

Cranbrook, E.

Roberts of Conwy, L.

Crickhowell, L.

Rotherwick, L.

Cross, V.

Rowallan, L.

Cumberlege, B.

Russell, E.

Dacre of Glanton, L.

St. John of Bletso, L.

Davidson, V.

Savile, L.

Dean of Harptree, L.

Sharples, B.

Denton of Wakefield, B.

Simon of Glaisdale, L.

Dixon-Smith, L.

Skidelsky, L.

Dunleath, L.

Stanley of Alderley, L.

Ellenborough, L.

Sudeley, L.

Elton, L.

Swansea, L.

Erroll, E.

Swinfen, L.

Foley, L.

Tebbit, L.

Fraser of Carmyllie, L.

Tenby, V.

Freyberg, L.

Teviot, L.

Gainford, L.

Teynham, L.

Halsbury, E.

Thomas of Gwydir, L.

Harmar-Nicholls, L.

Trumpington, B.

Holderness, L.

Vivian, L.

Hood, V.

Warnock, B.

Hylton-Foster, B.

Weatherill, L.

Ilchester, E.

Ironside, L.

Jopling, L.

Kenyon, L.

687

NOT-CONTENTS

Acton, L.

Judd, L.

Addington, L.

Kennet, L.

Avebury, L.

Kilbracken, L.

Barnett, L.

Kirkhill, L.

Beaumont of Whitley, L.

Lockwood, B.

Berkeley, L.

Lofthouse of Pontefract, L.

Blackstone, B.

Ludford, B.

Blease, L.

McIntosh of Haringey, L. [Teller.]

Borrie, L.

Brooks of Tremorfa, L.

McNair, L.

Bruce of Donington, L.

McNally, L.

Burlison, L.

Mallalieu, B.

Calverley, L.

Mar and Kellie, E.

Carlisle, E.

Merlyn-Rees, L.

Carmichael of Kelvingrove, L.

Mishcon, L.

Carter, L. [Teller.]

Molloy, L.

Castle of Blackburn, B.

Monkswell, L.

Cledwyn of Penrhos, L.

Montague of Oxford, L.

Clinton-Davis, L.

Morris of Manchester, L.

Cocks of Hartcliffe, L.

Ogmore, L.

David, B.

Orme, L.

Davies of Oldham, L.

Peston, L.

Dean of Beswick, L.

Plant of Highfield, L.

Desai, L.

Prys-Davies, L.

Dholakia, L.

Ramsay of Cartvale, B.

Dixon, L.

Randall of St. Budeaux, L.

Donoughue, L.

Razzall, L.

Dormand of Easington, L.

Rea, L.

Dubs, L.

Redesdale, L.

Eatwell, L.

Rendell of Babergh, B.

Elis-Thomas, L.

Richard, L. [Lord Privy Seal.]

Evans of Parkside, L.

Rochester, L.

Ezra, L.

Rodgers of Quarry Bank, L.

Falconer of Thoroton, L.

Sainsbury, L.

Farrington of Ribbleton, B.

St. Davids, V.

Gallacher, L.

Serota, B.

Geraint, L.

Sewel, L.

Gladwin of Clee, L.

Shepherd, L.

Glenamara, L.

Simon, V.

Goodhart, L.

Simon of Highbury, L.

Graham of Edmonton, L.

Smith of Gilmorehill, B.

Gregson, L.

Stallard, L.

Grenfell, L.

Steel of Aikwood, L.

Hacking, L.

Strabolgi, L.

Hardie, L.

Symons of Vernham Dean, B.

Hardy of Wath, L.

Taverne, L.

Harris of Greenwich, L.

Taylor of Blackburn, L.

Haskel, L.

Thomas of Gresford, L.

Hayman, B.

Thomas of Macclesfield, L.

Hollis of Heigham, B.

Thomas of Walliswood, B.

Holme of Cheltenham, L.

Thurso, V.

Hooson, L.

Tope, L.

Howie of Troon, L.

Tordoff, L.

Hoyle, L.

Turner of Camden, B.

Hughes, L.

Watson of Invergowrie, L.

Hunt of Kings Heath, L.

Whitty, L.

Irvine of Lairg, L. [Lord Chancellor.]

Wigoder, L.

Williams of Elvel, L.

Islwyn, L.

Williams of Mostyn, L.

Janner of Braunstone, L.

Winchilsea and Nottingham, E.

Jenkins of Putney, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 5 [Party lists and individual candidates]:
4.17 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 5:
Page 3, line 24, at end insert (", provided that there is a candidate of the party in each Assembly constituency included in that Assembly electoral region.
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(1A) A registered political party shall submit a list of candidates to be Assembly members for each Assembly electoral region in which there is a candidate of the party in at least one of the Assembly constituencies included in that Assembly electoral region.").
The noble Lord said: My Lords, if your Lordships thought that the previous argument was complicated I regret to say that this is even more so. However, that is the problem with proportional representation in its various forms. In moving Amendment No. 5, I shall speak also to Amendments Nos. 6, 7, 8 and 9. All are variations of a way of dealing with a matter which all Members who spoke in Committee agreed was a problem. I apologise to noble Lords who were present in Committee for repeating the argument, but I do so for the sake of those who were not present and in order to remind ourselves of the problem.
In the system of additional member seats there are two votes. One is for the constituency and the other is for the list for the region. Calculations are made following the d'Hondt system (named after the mathematician who devised it) to determine how many of the four seats additionally available each party should receive. Those seats are then given to the appropriate party and thus an attempt is made—although not a good attempt in the case of four additional member seats—to introduce proportionality into the total system. The additional member proposal in the Welsh and Scottish systems leads to the proportionality.
I can best illustrate the problem by sharing with your Lordships a little trick which the Conservative Party could have played in the Wales North Euro seat in the 1992 elections. On the first-past-the-post wins in that seat, the Labour Party gained four, the Conservatives gained two, the Liberal Democrats none and Plaid Cymru two. If one assumes that the first and second votes are the same—that may not turn out to be true but one must make that assumption for the sake of the illustration—when the d'Hondt system is calculated, the Labour Party gets one additional member, the Conservatives two, the Liberal Democrats one and Plaid Cymru none. So the total is five for Labour, four for the Conservatives, one for the Liberal Democrats and two for Plaid Cymru.
However, if the Conservatives decided to stand as Conservatives in the constituency ballot but to register another party called, for example, the Welsh unionist party—and under the Registration of Political Parties Bill that is possible—and in the second ballot the Welsh Conservative Party does not stand at all but the Welsh unionist party does, Conservatives, being intelligent people, would understand that they should vote unionist in that second ballot and proceed to do so. When the d'Hondt system is then applied, the Labour Party wins no additional seats; the unionists win three additional seats; the Liberal Democrats win one; and Plaid Cymru wins none. Therefore, the Conservatives and unionists together in the Welsh Assembly, instead of having four seats under the system which I mentioned first, would gain an extra seat and win five seats. There would be considerable advantage to the Conservative Party in doing so.
If one takes the last election and still uses the Wales North Euro seat and splits the Labour Party into the Labour Party for the first ballot and the co-operative party for the other ballot, this is what would happen. At the last election the Labour Party gained six first-past-the-post seats; the Conservative Party gained none; the Liberal Democrats none; and Plaid Cymru gained two. On the additional member system seat without split parties, the Labour Party would gain no more seats; the Conservatives would gain three; the Liberal Democrats would gain one and Plaid Cymru would gain none. Therefore, Labour would end up with six seats all from first-past-the-post while the Conservatives would win three seats, all from the additional member system; the Liberal Democrats would win one seat from the additional member system; and Plaid Cymru would have the two that it won from the first-past-the-post.
However, the Labour Party may decide to register the co-operative party as a separate party, which in my view is perfectly possible under the Registration of Political Parties Bill, and stand in the second ballot. The electorate would understand perfectly well what was happening and would probably approve because it gives advantage to one's own party. When the d'Hondt system was used, the co-operative party would gain three additional member seats; the Conservatives would gain one; the Liberal Democrats would gain none; and Plaid Cymru would gain none. Therefore, the Labour Party would end up with nine seats for that area, the Conservatives one, Plaid Cymru two and the Liberal Democrats none, as opposed to six, three, two and one if the system were carried out fairly and properly.
As I said in Committee, that is not something which has been devised by me. This is a suggestion first brought to the attention of the political parties by Dr. Dyer of Aberdeen University who did the calculations and put out the suggestion in the Scottish context with regard to the Labour Party and the Co-operative Party. But in the other place on the Welsh Bill the question was raised and Mr. Win Griffiths said:
"I concede that there may be scope for collusion between and within parties to exploit the two-ballot structure of the additional member system in the manner that he described. Such cynical manipulation of the system would be an affront to the electorate and would undermine the democratic credibility of the elected body".—[Official Report, 2/3/98: col. 804.]
I am not sure that I totally agree with him as regards that last sentence.
In Committee, all noble Lords who spoke accepted that the scenario which I painted could come about. I had cast-iron assurances, which I accept, from the noble Lord, Lord Williams of Mostyn, that the Labour Party would not do anything like that. The noble Lord, Lord Thomas of Gresford, gave assurances that the Liberal Democrats would not do anything like that, as did the noble Lord, Lord Elis-Thomas, on behalf of Plaid Cymru. I gave assurances that the Conservative Party would not do that. But the blunt fact of the matter is that four honest gentlemen as we may be, we shall not be there for ever and somebody in the future may decide to overturn our pledges and to use that trick.
What I have suggested is a way to link the first and second ballot together so that parties can stand in one and not in the other. I have put forward various different methods. The first is what I shall describe as the hardest method, which is that you can only stand in the list if you stand in every constituency that makes up the Euro seat, and if you stand in one constituency in the Euro seat you must put forward a list. Therefore, it links both ways: it links the first vote to the second vote; and links the second vote back to the first. That is the hardest test.
I have then made an alternative suggestion because I recognise that the Greens may not wish to contest all the first-past-the-post constituencies yet may want to be on the list. Therefore, I have provided that any party which is on the list must contest at least one. Conversely, if a party contests at least one, it must put forward a list.
In Amendments Nos. 6, 7 and 8, I have suggested that if one stands in one-quarter of the constituencies, one must put forward a list and if one puts forward a list, one must stand in one-quarter. I have then provided the same in relation to one-half and three-quarters. I have done that in a genuine attempt to find a way to prevent that ever happening in future. I look forward to hearing what the Government think about that.
If the Government are unable to accept any of those variations, I hope that between now and Third Reading they will turn their attention to finding a solution to that problem which goes somewhat beyond guarantees given by the three noble Lords whom I mentioned and myself. It is not good enough to introduce a new electoral system which is capable of being manipulated and not do something to prevent that manipulation. I beg to move.
Lord Falconer of Thoroton: My Lords, as the noble Lord, Lord Mackay, has said in introducing his amendments, they deal with the issue of potential collusion under the additional member scheme. In essence, what the noble Lord means by that is a situation where one group stands in the constituencies under the name of a party and then produces another apparent party to stand in the electoral regions when they are all part of the same party.
Everybody recognises that in theory that is possible. The noble Lord, Lord Mackay of Ardbrecknish, has rightly pointed out that the Liberal Democrats, the Labour Party, the Conservative Party and the Welsh Nationalist Party have all indicated that they would not do such a thing. Moreover, it presumes a lot of quite unparalleled cynicism and duplicity among any political party that did that, supported by indifference and naïvety on the part of the voters and of the media.
I submit that the noble Lord's approach throughout this debate and the earlier debate on this issue has been decidedly alarmist. He grossly exaggerates the likelihood of those hypothetical scenarios becoming a reality. No electoral system is without its potential for manipulation, not even first-past-the-post. I remind the noble Lord that it has long been common practice in local government elections in parts of Wales for members of political parties to stand for the council as

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independents, even though they are nothing of the kind. They do so because they know full well that if they stood under their party banner they would not have a hope of being elected. Nothing in the law prevents such deception. It is left to the good sense of the electorate to figure out who is really who, and they have proved able to do so.
The options offered to us by the noble Lord are not new. They are variations on an earlier proposal which has already been considered at length by Ministers in the departments responsible for organising party list elections.
All five options impose restrictions on and requirements from political parties which wish to participate in the elections for the national assembly for Wales. All the options would require a party wanting to put forward a party list for an electoral region to mount at least some degree of challenge in the constituencies within that region. All the options would oblige a party which was contesting a certain number of constituencies within an electoral region also to put forward a party list in that region. Those impositions—it is the price the noble Lord says we have to pay for the theoretical possibility he identifies—are fundamentally undemocratic and imperiously draconian.
In a democracy, is it proper for the state to exercise such authority over where a political party mounts its electoral campaigns and targets its resources? I do not think so. The parties which would suffer most from the provisions, whichever of the five options is adopted, are the smaller parties which do not have the resources or the electoral appeal to engage in many contests or to mount campaigns over large areas. For tactical or economic reasons they would want to concentrate their activities on a small area or in a limited number of contests. Concentration of resources, to my mind, is a perfectly legitimate electoral strategy. The Greens, for example, contested only four out of 40 constituencies in the 1997 general election in Wales. I imagine that parties like theirs will be focusing on the electoral regions for the assembly elections, quite legitimately. It would be wrong if we were to oblige parties to engage in what were "token" contests in some areas simply to allow them to pursue their real intent in another.
I do not exaggerate when I refer to "token" contests. These provisions would have the effect of requiring candidatures to be mounted in a specified number of constituencies simply as a qualifying condition for submitting a party list. The other element of the various couplets—they all come in twos—obliges parties which ran candidates in a specified number of constituencies in a region to put forward a party list for that region, whether or not they wanted to. Why should those token contests be inflicted on the electorate? Why should a party have to stand in an electoral region when all it wished to do was to stand in a specified number of constituencies? What intrinsic democratic purpose would this extraordinarily directive election serve?
We would have constituency candidatures which were no more than qualification criteria for party lists; and party lists which were no more than penalties imposed for exceeding the approved threshold for the
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number of constituency candidates in a region. In my view, this scenario is far worse than the ones described by the noble Lord in moving the amendment. The effect of any of these amendments would be to set up a system which placed a virtual obligation on parties to run bogus candidatures in several areas. That would be a cynical disregard of the electoral process and a gross deception of the electorate.
All the major political parties have given solemn undertakings in this House and in another place not to indulge in blatant manipulation of electoral machinery. I do not believe that we shall see the nefarious activities envisaged by the noble Lord. I have more faith in the good sense of the electorate and the political parties. I am afraid that he does not appear to share that good faith, even in respect of his own party. Whatever may happen, I believe strongly that the so-called solutions put forward by the noble Lord are more undemocratic and duplicitous than any of the unlikely circumstances that he described today.
4.30 p.m.
Lord Onslow of Woking: My Lords, before the noble and learned Lord sits down, perhaps I may say this. He will be familiar with a law which states that if something can happen, sooner or later it will. By his own admission, under this legislation as we have it now, it would be perfectly possible for what my noble friend has suggested to occur. It has to happen only once to invalidate the whole system. We have the opportunity now to make sure that it cannot happen. Much faith though I have in all those who have given solemn undertakings that their party would never do any such thing, I remember being in the House of Commons when a Labour Home Secretary felt obliged, to lay an order amending the constituency boundaries as the law provided, and to whip his party to vote against it. I do not suppose the noble and learned Lord would accuse me of being naïve if I said that that sort of thing has happened once and it can happen again. I support strongly what my noble friend said.
Lord Falconer of Thoroton: My Lords, I have accepted, as the noble Lord pointed out, that it could happen. But the point I am making is that the solution proposed—as any solution proposed would have to be—is much worse than the consequences the noble Lord proposes. What the noble Lord proposes, is that parties be compelled to place people in constituencies and to place lists in electoral regions simply as the price to be paid for standing where they wish to stand. That is not fair and it is not democratic; and it is unnecessary, having regard to the level of the risk of untoward events occurring. That is at the heart of our objection to the amendment proposed by the noble Lord. In those circumstances I invite the noble Lord to withdraw his amendment.
Before I conclude, I say this in relation to four out of his five couplets. Although this is a drafting point, they are mutually contradictory in the way they operate. For example, the first one says that one can put forward a list in an electoral region provided that one has somebody standing in each assembly constituency. Then

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new Section (1A) states that one is obliged to put forward a list in the electoral region where one has one or more candidates standing in a constituency. On the one hand it is said that it is optional; and, on the other, that it is compulsory. I fully understand what the noble Lord is getting at with his amendments, but as they are drafted at the moment they appear to be contradictory.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble and learned Lord for the last point. I shall study it with interest and see what I can do to improve the amendments—or one of them. I have listened to the noble and learned Lord. My noble friend Lord Onslow of Woking made a telling point in his intervention. If I had stood before your Lordships all those years ago and said that it was possible that a government might obey the law, lay the orders regarding electoral boundaries before the House, and then proceed to vote them down, I am sure that I would have received much the same answer from the government minister of the day. He would have told me that I was grossly exaggerating, that people would not do that, and so on. But, lo and behold, in the fullness of time they did so.
It is exactly the same with this provision. I do not believe that I am grossly exaggerating. As I mentioned to your Lordships, the original idea is contained in an article by Dr. Dyer, who I believe is a lecturer in politics at Aberdeen University. It was taken up by a Member of the other place, Mr. Ian Davidson, the Member for one of the Glasgow seats, who advocated it in exactly the same way that I illustrated for the Scottish parliament. I shall bring forward similar amendments in relation to Scotland, but the position is exactly the same in Wales. The potential is there.
Lord Elis-Thomas: My Lords, will the noble Lord give way? I am grateful. Will he indicate which parties or candidates in Wales have indicated publicly that they might adopt this course; or which political commentator who is read seriously in Wales has suggested that this might happen?
Lord Mackay of Ardbrecknish: My Lords, when I introduced these amendments, I indicated that three noble Lords, including the noble Lord, Lord Elis-Thomas, on behalf of their parties gave assurances that it would not happen; and I gave assurances on behalf of mine. However, as I pointed out, those assurances do not bind our parties for all time. I regret to say that the example given by my noble friend Lord Onslow of Woking is a reminder to us that we should make legislation as tight as we can achieve against any eventualities. Therefore while I fully accept that nobody suggests that it would be done in Wales at the moment, the fact of the matter is that at some future time some party could decide to do that. The electorate would quite understand, especially the electorate which supported the party in question. The electorate would be perfectly capable, in the words of the noble and learned Lord, of having the good sense to work out who is who, and to see the advantage that it would bring to their own party. I do not think that many of the supporters of that party would disapprove if in extreme circumstances it stood between them and losing the election.
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Some of the arguments of the noble and learned Lord about how unfair and undemocratic it was for smaller parties could equally be applied to deposits and to the need to get above certain thresholds in order to get the deposit back. It seems to me that one could argue in exactly the same way that having deposits before one stands for election is anti-democratic and unfair on small parties which may not be able to achieve the 2.5 per cent. threshold now laid down.
I do not think that it is a terribly good argument for the Government to say that any of my proposals are unfair. As I said originally, I accept that my hardest proposal, which demands that every seat be contested, would be unfair. However, my softest proposal—if I may call it that—would simply stipulate that a party would have to contest one seat. If it contested one or more, then it would have to submit a list. I do not think that that is a huge obligation for even a very small party if it is serious about standing and if it is likely actually to gain support.
I fully accept that my amendments may not be the best way forward, but I should have liked to hear some sort of commitment from the Government as regards finding a way, by using all the skills at their disposal—for example, draftsmen and so on—to prevent this eventuality happening. However, it seems that I am not going to get that. The five amendments that we are discussing are mutually exclusive. I should like to have the opportunity to read what the noble and learned Lord said to see whether I can come forward with another suggestion which might help to alleviate what I believe could be a serious problem. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 to 9 not moved.]
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 10:
Page 3, line 25, at end insert (", who shall publish the list at the earliest opportunity").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 11 and 12. The Minister will recall an amendment I moved in Committee which proposed that the regional returning officer should publish the party list of candidates as soon as he received it, or as soon as possible thereafter. We suggested that for the simple reason that we believe electors are entitled to know who is on the party list. I went further and asked for a display of the lists at polling stations. However, that is a slightly separate issue.
On the first point, the noble Lord, Lord Williams of Mostyn, thought my idea a very sensible one, and said:
"As regards publishing the lists as soon as possible after their having been submitted, I am bound to say that, in principle, that seems a thoroughly sensible idea".—[Official Report, 11/5/98; col. 883.]
The noble Lord went on to talk about an elections procedure order which will be subject to the affirmative resolution procedure. Do we have to wait for that order before the principle of publication is accepted? Should the principle of publication not be written into the Bill as we suggested?
Coupled with this amendment are Amendments Nos. 11 and 12 which propose that the order of names on the list shall be determined by the party and that the list shall appear on the ballot paper. That is consistent with our amendments in favour of the open list system. I thought that I heard the noble and learned Lord refer to the fact that those points have already been conceded; namely, publication of the lists, plus the order of the lists, and their use on ballot papers. We also suggest in our amendment that the list should be rotated, as it were, in order to try to ensure that candidates receive equal exposure to the electors. I am told that that system is in use abroad.
The thrust of our amendments is that electors must know—surely they have a right to know—who they are voting for as well as the party; in other words, who is to represent the party. Again, although I should like some clarification, I understand that the principles of what we are talking about have been agreed for the European Parliamentary Elections Bill. I beg to move.
4.45 p.m.
Lord Falconer of Thoroton: My Lords, I shall speak to Amendments Nos. 10, 11 and 12. Amendment No. 10 raises an issue which we touched upon in Committee. It was stated then by the Government that we fully supported the principle of making available to voters information about the composition of party lists and that we would look at the means of achieving that intention.
At parliamentary elections, the acting returning officer is required to publish a statement of the persons nominated once the time for making objections to nominations has expired. We shall need to make similar provision for the publication of a statement of persons nominated for the assembly elections. In the case of party lists, we will propose that that statement should include the names of all candidates on the list. However, that is a detail about electoral procedure.
As already mentioned, we are currently in the process of drawing up an assembly elections procedure order which will lay down the rules and regulations for the conduct of the assembly elections. The order is the appropriate vehicle for making provision of this type. Further, the order will be subject to the affirmative resolution procedure and your Lordships will have the opportunity to examine the detail when the order is presented to Parliament—which, on current plans, will be before the end of this year.
We cannot support Amendments Nos. 11 and 12 which call for the inclusion of the names of list candidates on ballot papers. Party lists submitted for assembly electoral regions may include up to 12 names. A ballot paper which included the names of every party list candidate would be unmanageably large and have a mass of confusing detail. With that amount of information on the ballot paper, many electors could well be deceived into thinking that they could in fact vote for an individual candidate on the list. Indeed, I mentioned that aspect during the course of our debate regarding the choice between the open and the closed list.
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Mention was made in Committee that we are considering the means by which the composition of party lists can be publicised and made widely available. I explained then that one of our favoured options would be to make it a requirement to have notices placed in all polling stations displaying the names of party list candidates in that region. We are still considering with elections administrators the practicalities of the various options. Some of the possible complications were alluded to in Committee—notably, the need to make provision to give equal treatment to all other candidates and the need to ensure that there was sufficient wall space in polling stations to accommodate all those notices. I am confident that any difficulties can be overcome. I fully anticipate that the elections procedure order will include adequate provision for publicising the names of all party list candidates.
Finally, I do not believe that the second element of Amendment No. 12 would be at all helpful—not to voters, and certainly not to the regional returning officers. The proposal is that there should be, as it were, a revolving list; in other words, you put the list of regional candidates on each ballot paper but you change the order for various chunks of the ballot papers. Noble Lords need only imagine the administrative exercise and expense of ensuring that a certain proportion of ballot papers had a party list arranged in different ways. How would you cope with several party lists with different numbers of candidates? The prospect of arranging every ballot paper to meet the full requirements of this amendment in respect of every party list would be a nightmare. Indeed, for what purpose? Many of the ballot papers will never be used by voters. Turnouts do not reach 100 per cent. even in the best of years.
I hope that the assurances about provision being made in the elections procedure order for publicising party lists will persuade the noble Lord to withdraw the amendment.
Lord Roberts of Conwy: My Lords, I am grateful to the noble and learned Lord the Solicitor-General for his remarks. I am glad to hear that all the candidates' names on the list will be published and that further progress will be made when we have the electoral procedure order which we can discuss in the course of the affirmative procedure. At the same time I was disappointed to hear that the names will not appear on the ballot paper and that individual electors will not be able to vote for their chosen candidate. It seems to me a great pity that that will not be allowed because there is a tradition in this country among the electorate that they like to know for whom they are voting. I am surprised that the noble and learned Lord the Solicitor-General thinks there would be a difficulty with what we are suggesting. The system that we recommend is certainly practised on the Continent and people do not seem to have undue difficulties with the system there. Therefore it is with some regret, and yet with some relief at the anticipated contents of the electoral procedure order, that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 and 12 not moved.]
Clause 6 [Calculation of electoral region figures]:
[Amendment No. 13 not moved.]
Clause 7 [Return of electoral region members]:
[Amendments Nos. 14 and 15 not moved.]
Lord Elis-Thomas Lord Elis-Thomas moved Amendment No. 16:
After Clause 7, insert the following new clause—

SELECTION OF CANDIDATES FOR ASSEMBLY
(" .—(1) The Sex Discrimination Act 1975 shall be amended as follows.
(2) After section 49 of the 1975 Act there shall be inserted—
"Candidatures for National Assembly for Wales.
49A. Nothing in Parts II to IV shall render unlawful any act done by or on behalf of a registered political party within the meaning of the Government of Wales Act 1998 if it is an act done for the purpose of, or in connection with—

(a) selecting female candidates only, or male candidates only, for election to the National Assembly for Wales ("the Assembly"), or

(b) taking any steps preliminary to, or in connection with, such selection which either favour or subject to a detriment either female or male candidates,

provided that in the opinion of the party concerned the act in question is in the circumstances necessary to attempt to secure an equal number of members of the sex favoured as there are of the other sex as candidates of that party for election to the Assembly.".
The noble Lord said: My Lords, when we debated the issues of sexual discrimination and the selection of candidates for the national assembly in Committee we did not have the benefit of Clause 120. That should set the whole context of this debate for we now have a Bill which commits the assembly to make appropriate arrangements to have due regard to,
"equality of opportunity for all people"
in the exercise of its functions, and to make a report upon that. I begin with the following simple question. How can an assembly which has equality of opportunity for all people as one of its legal duties consist of an imbalanced gender, cultural and ethnic mix which does not reflect the population of the country for which it is a national assembly?
When he responded, in his usual sharp, intelligent and all encompassing way—there are more adjectives, should they be required—to our debate in Committee, my noble and learned friend the Solicitor-General said that the Government's view was that the initiative on this matter,
"lies with the political parties themselves to improve the balance of women and men in their selection procedures".—[Official Report, 11/5/98; col. 914.]
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I am therefore pleased to congratulate the Liberal Democrats on selecting Kirsty Williams, an intelligent, lively and sharp young member of the national advisory group, as their candidate in a constituency which they hold in the House of Commons.
Lord Hooson: My Lords, does the noble Lord agree that she won the nomination in the face of open competition? There was no positive discrimination in her favour.
Lord Elis-Thomas: My Lords, I am not aware that the Liberal Democrats adopted any procedures. I am certain that she would benefit from whatever procedures might be put in place because she is a talented candidate. I wish her well. I say that on an entirely non-partisan basis. I also wish to announce the successful nomination of Elin Jones—the previous mayor of Aberystwyth—for the Party of Wales, Plaid Cymru, in a constituency held by the party in the House of Commons, that of Ceredigion. Therefore, we are doing our bit.
However, I now invite my noble friend and companion in the Conwy Valley, the noble Lord, Lord Roberts of Conwy, to list the gender balance of selected Conservative members for the National Assembly for Wales. I also invite him to list, by gender balance, the members of the Conservative Party selected for the Welsh constituency of the European Parliament. I had the great privilege of meeting one of them last night. I congratulated him in person. He is Mr. Jonathan Evans, a good friend. He is to the left of the Conservative Party, and perhaps not a Eurosceptic. Therefore he may be a positive addition under the existing electoral system to the European Parliament. I wish him well. Apparently he is on the top of the list, to be followed by Mr. Chris Butler. I understand he is second on the list. I greatly admire that gentleman. He was an active researcher for the Conservative Party in Wales. However, I believe him to be of the same gender, and indeed of the same party tendency, as Mr. Jonathan Evans. I could go on, but it is not my place in this House to embarrass the Conservative Party.
Lord Roberts of Conwy: My Lords, perhaps I can put the noble Lord out of his misery immediately by saying that of the 19 candidates who have been nominated to contest the assembly, four are Conservative women.
Lord Elis-Thomas: My Lords, I did not do too well at mathematics because there was no national curriculum in the days when I attended Llanrwst grammar school. However, four out of 19 is hardly a gender balance. Therefore I suggest that the noble Lord should return to the Conwy Valley and start to count sheep again to see how that works out. It seems to me that there is a gross failure on the part of the Conservative Party to fulfil the suggestions of my noble and learned friend the Solicitor-General. The amendment I move is not proposed in the interests of the Labour Party, the Party of Wales or of the Liberal

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Democrats, but in the interests of the Conservative Party to ensure that it is now able to attempt to obtain some form of equality in the selection procedures.
My noble and learned friend the Solicitor-General may not be able to reply immediately to my next question. If he cannot do so, I hope that he will write to me on the subject before we reach Third Reading as this is an issue we may wish to return to for a further progress report on the success or otherwise of the Conservative Party in achieving equality of opportunity in these matters. I give notice of that. I hope my noble and learned friend will be able to indicate what stage we have reached in terms of the consultation undertaken by the Equal Opportunities Commission earlier this year on the relevance of sex discrimination legislation at both UK and European level to the selection of candidates. I believe that both in Scotland and in Wales the Labour Party has taken measures along the lines of positive discrimination which seem to be working. Certainly the Party of Wales intends to adopt not the same procedure but another one in relation to ensuring a balance of representation through the topping up of the regional list system, should that be required, following the first-past-the-posts elections. I say all this because it was put to us fairly clearly that the Government took the view that this was a matter for political parties. I suggest that some political parties at least have failed in that respect.
A related issue which also concerns me deeply is linked to the question of equality of opportunity; namely, ethnic balance between various communities within Wales as reflected within the assembly. I believe we must address not only the issue of gender balance but also that of the ethnic balance in terms of equality of opportunity. This is a serious matter which we must address, although it is not immediately relevant to this amendment. I hope that all parties in Wales will take into account the need to ensure that all diverse communities within the nation have representation and feel that the national assembly belongs to all of us. Otherwise, we shall be failing in our duty of inclusivity in that regard. For all those reasons and others, I beg to move the amendment.
5 p.m.
Viscount St. Davids: My Lords, I have considerable sympathy for the amendment. I hope that the Government will share that sympathy. If not, much of their rhetoric goes for nothing. I remind the Government that they have used the word "inclusive" over and over again in their proposals. If our national assembly is to be truly inclusive, it must also be gender inclusive. To achieve that may well require the use of artificial mechanisms subject to legal challenge. Until such time as the position of women in Welsh politics is greatly improved, we must be able to use such mechanisms without the fear of intervention by the courts.
Lord Roberts of Conwy: My Lords, if I am not wildly mistaken, the noble Lord, Lord Elis-Thomas, is being altruistic. Surely he is trying to be helpful to the Labour Party in Wales which got itself into an unholy
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mess with its so-called twinning arrangements. The noble and learned Lord the Lord Chancellor has, according to the press, told the Labour Party in Wales that its scheme is illegal. It is indeed contrary to the Sex Discrimination Act 1975. It may contravene the European Union equal treatment directive. That is my understanding of the position. We on these Benches are not into this business at all. We will take lectures from prominent members of Plaid Cymru when that party is led by a woman, as our party was so nobly led for 18 years by the noble Baroness, Lady Thatcher.
Is it right to drive a coach and horses through the 1975 Act simply to try to legitimise what is after all a curious scheme devised by the Labour Party in Wales to favour Labour women candidates for the assembly in Wales? I am not aware that the scheme is required for any other political party elsewhere. As I say, we are not into the business of selecting women simply because they are women. I am proud to say that those women selected as Conservative candidates for the assembly have been selected on merit.
Lord Falconer of Thoroton: My Lords, we considered this very same amendment in Committee when I made clear the Government's view that any change to the Sex Discrimination Act 1975 could be open to challenge as being in contravention of European employment law and of the equal treatment directive in particular. Unfortunately, Clause 120 of the Bill changes the position, whatever it may be, in relation to European law.
That said, I also wish to make it clear that the Government attach very great importance to seeing more participation by women in the political processes of this country. For far too long there have been far too few women in our elected chambers. The assembly will be a new start for Wales and we hope that women will be to the fore in helping to make sure that the new start is a successful one.
The amendment proposes that we should amend the Sex Discrimination Act to remove the selection procedures for assembly candidates from its scope. For the reasons already mentioned, we cannot accept it. Our view remains that the initiative lies with the political parties themselves. It would be possible for parties to achieve a real impact simply by introducing elements of what is now widely accepted as best practice in terms of equal opportunities.
The Equal Opportunities Commission has offered to advise political parties on how they can put equal opportunities into practice in their activities and candidate selection procedures. The Government urge all parties to take up that generous offer. Among the suggestions put forward are the need for parties to make a strong statement at a national level of their commitment to encouraging women to come forward as candidates for selection. Once more I have no hesitation in giving that commitment on behalf of the Labour Party: more training for women who are interested in putting themselves forward as candidates; training for local selection committees; promotional literature to

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encourage women party members to stand for selection; and giving applicants and selectors long notice of meetings to allow for domestic arrangements.
The White Paper made clear that we are committed to equal opportunities for all—a commitment which extends to women and men, members of the ethnic minority communities, the disabled and others. We urge all the political parties to have regard to the principle of equal opportunities in drawing up their procedures for the selection of candidates for the assembly elections. Against that background, I urge the noble Lord to withdraw the amendment.
Lord Elis-Thomas: My Lords, I am grateful to the Minister for his response and for his clear statement on the issue of discrimination generally and the need for inclusivity. On that basis, I shall withdraw the amendment. However, I may well return to the issue at Third Reading so that we may keep up with the progress of the Conservative Party in achieving equality of opportunity. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [Constituency seats]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 17:
Page 6, line 6, after ("section") insert ("and section 9").
The noble and learned Lord said: My Lords, I had not proposed to move this amendment because it is incorrect. I hope that the noble Lord, Lord Williams, got the message that it was incorrect and that he was not to waste time puzzling out what it meant. It goes with Amendment No. 19 and is another attempt, in the face of the obduracy of the noble and learned Lord the Solicitor-General, to economise on statutory language.
An amendment that I shall table at Third Reading will relate to subsection (9) of Clause 8, so that the subsection would read: "References in this section and in section 9 to the presiding officer include references, etc.". That would permit subsection (8) of Clause 9 to be removed. I mention the real intention in the hope that the amendment will commend itself to the Government pending Third Reading. In the meantime, I shall not move this amendment.
The Deputy Speaker (Lord Strabolgi): My Lords, I am afraid the noble and learned Lord must move the amendment if he wants it to be considered by the House. I shall therefore put it to the House.
Lord Simon of Glaisdale: My Lords, I hope that the noble and learned Lord rising to reply has made more sense of the amendment than I have.
Lord Falconer of Thoroton: My Lords, the point is plainly a good one. There is no point in including the same reference twice. The matter can be dealt with by including in Clause 8 a reference to Clause 9. If the noble and learned Lord will withdraw his amendment, we will bring forward an appropriate amendment at Third Reading.
Lord Mackay of Ardbrecknish: My Lords, before the noble and learned Lord sits down, I thought the
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noble and learned Lord, Lord Simon of Glaisdale, was being even more clever than normal; I could not understand his first amendment. However, my attention has now been drawn to the wording of the two subsections. We all exercise the function that we excise "for the time being", unless we are immortal. It seems to me to be the most amazing piece of legal mumbo-jumbo and perhaps when we return to the matter the noble and learned Lord will try to explain why we need to say "for the time being" when we all hold our various posts for the time being.
Lord Simon of Glaisdale: My Lords, I am absolutely delighted by the response of the noble and learned Lord. It makes me feel rather ashamed that I referred to his "obduracy". I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 18:
After Clause 8, insert the following new clause—

SEAT OF MEMBER CEASING TO BE MEMBER OF PARTY TO BE VACANT
(" . If an Assembly member returned for an Assembly electoral region as a candidate for a registered political party ceases to be a member of that party, his seat shall be regarded as vacant for the purposes of this Act.").
The noble Lord said: My Lords, there is no question but that the assembly member who secures his seat through the PR system proposed in the Bill obtains it by virtue of his membership of his party. Unlike the constituency assembly member, the electoral region member owes his election above all else to membership of his party. The vote is cast for that party.
The electoral region member therefore is clearly a party representative and his constituency representation is secondary to that; indeed, he is one of four representing his electoral region. It is arguable therefore that, if the assembly member for an electoral region ceases to be a member of his party—the party in whose name he was elected—then he ceases to be a member of the assembly and the seat becomes vacant.
Cessation of party membership could easily arise in a number of ways. First, there is always the possibility of expulsion for wrongdoing; secondly, there is the possibility that the member may simply change his politics, cross the floor of the assembly and join another party, and so forth. But such events could have serious repercussions within the assembly where the composition of the committees is closely allied to the balance of the parties. It is for that reason that we tabled Amendment No. 18. I beg to move.
Lord Falconer of Thoroton: My Lords, Amendment No. 18 proposes that if a person elected on a regional list changes party, leaves the party or is expelled by his party, then he must cease to be a member of the assembly. That is an extremely centralising power which is expected to be taken into the Bill.
As the noble Lord, Lord Roberts, knows, there is a long tradition in British politics of tolerating Members who cross the Floor. It will not be in the interest of anyone if we seek to expel an elected party list member simply for moving from one allegiance to another. If the

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noble Lord, Lord Roberts of Conwy, strongly believes in the principle expounded by the amendment, I wonder why he has not found it equally valid for other members of the assembly—independents elected for an electoral region and all those elected from the assembly constituencies. The British political tradition is one that extols the virtues and advantages of the representative rather than the delegate and we should be loath to depart from that principle.
Lord Mackay of Ardbrecknish: My Lords, I have been following the argument of the noble and learned Lord with some care. Is it not inconsistent with the argument he was putting forward earlier this afternoon in relation to the open list, when he indicated that members of the electorate would not be voting for an individual on the list; they would only vote for the party? We are now being told that they are voting for an individual. The noble and learned Lord must make up his mind.
Lord Falconer of Thoroton: My Lords, there is no inconsistency. The electorate is given the choice to elect specific people, whether by voting for a specific party in the regional list or for a constituency member in the constituencies. Once those people are elected then, in accordance with British political tradition, they are entitled to stay until the end of their electoral mandate. We on this side of the House should be loath to depart from that principle in respect of membership of the assembly.
In voting for a party list, voters express a degree of approval of the candidates put forward on that list. That endorsement should hold good for any member for the duration of the term for which he has been elected. That is a principle which has long been applied under the British electoral system and should be extended to all members of the assembly. In those circumstances, I respectfully urge the noble Lord to withdraw his amendment.
5.15 p.m.
Lord Roberts of Conwy: My Lords, I disagree strongly with some of the remarks of the noble and learned Lord the Solicitor-General. He has not reflected the true situation and the difference that clearly exists between the constituency member and the electoral region member. The first is elected by virtue of standing in his own name; he may have a party label attached to him, but his name is clearly there. If he is elected in the traditional way, on the first-past-the-post basis, as Members of the other Chamber are elected, no one would deny that the votes given to him have a personal attribution.
The noble and learned Lord conceded that, when it came to the electoral regional representative—in Wales it would be one of four in each region and there are five regions altogether—he said that there would be a degree of personal association with his success in the election. But the election is primarily won by votes cast for his party. It is known that the name of the winning candidate is on the list; nevertheless, the order of
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preference is not clear to the electors and the votes are cast in that additional member system for the party, rather than for the individual.
It seems to me to be quite logical therefore that, if there is a change of party on the part of an electoral region candidate who succeeds, in view of the fact that he is there by virtue of his membership of the party and the success of the party in the election, and as such a change on his part affects the workings of the assembly and its committees, a vacancy will in effect have occurred and there should be another election. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Electoral region seats]:
[Amendment No. 19 not moved.]
Clause 11 [Power to make provision about elections etc.]:
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 20:
Page 7, line 26, at end insert—
("( ) No order made under subsection (1)(a) shall provide for the limitation of the election expenses of registered political parties where such expenses were not incurred in relation to a particular Assembly constituency or Assembly electoral region.").
The noble Lord said: My Lords, the Secretary of State's order-making powers under Clause 11 can provide for the limitation of election expenses of candidates and registered political parties. Clause 11(2)(c) covers that situation and, indeed, criminal offences can be created in connection with that specific limitation.
We believe that that is right. But, as our amendment suggests, we do not believe that such limitation by order should extend beyond the individual constituencies or electoral regions to the general activities of parties in Wales and elsewhere. If there is to be any such curtailment of the general activities of parties beyond the individual constituencies or electoral regions, the Bill is certainly not the place for such limitations to be imposed. I beg to move.
Lord Falconer of Thoroton: My Lords, Amendment No. 20 proposes that whereas limits may be set for election expenses relating to assembly constituencies and the electoral regions, no limit should apply on an all-Wales basis.
The introduction of the additional member system for elections to the assembly will bring with it a new form of political campaigning. Alongside the familiar constituency contests focusing on individual candidates we shall have the contests in the electoral regions. The latter will be conducted on the basis of party lists and, inevitably, much of the campaigning in the electoral region contests will be party-focused. Election literature will exhort voters to vote for the Labour Party list, the Conservative Party list, the Liberal Democrats, Plaid Cymru, and so on.
In those circumstances the Government believe that some form of limit On the expenses of political parties is essential and appropriate. We need to ensure that all party list candidates are treated fairly and equally. It is only by imposing a limit on the expenses of the political parties that we can achieve that goal.

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As I have said, we believe that it is a matter of intellectual consistency and electoral propriety to impose expenses' limits on the parties in the same way that there are limitations on the election expenses of individual constituency candidates. However, I stress that no decisions have yet been taken on the mechanics of applying limits on party expenditure above the constituency level. We are awaiting the report and recommendations of the committee chaired by the noble and learned Lord, Lord Neill. What is clear is that some form of limit is both necessary and appropriate. Indeed, the tenor of Amendment No. 20 shows that the noble Lord opposite shares that view.
The order providing for the limitation of election expenses would be subject to the affirmative resolution procedure in both Houses of Parliament and will present the opportunity for your Lordships to examine the detail of the proposals. When we have absorbed the findings of the Neill Committee report, we shall come forward with our proposals and, again, both Houses will have ample opportunity for scrutiny and comment. In view of my explanation, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Roberts of Conwy: My Lords, I am grateful to the Minister for that reply. Clearly, we are somewhat in advance of other things that are to happen, including future proposals after consultation and advice from the noble and learned Lord, Lord Neill. I reiterate my original point. We hope that the limitation on expenses can be confined to the electoral constituency or electoral region and will not go wider than that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Disqualification from being Assembly member]:
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn) moved Amendment No. 21:
Page 8, line 15, after ("Wales") insert ("or the office of Welsh Administration Ombudsman").
The noble Lord said: My Lords, originally grouped with Amendment No. 21 were Amendments Nos. 22, 23, 70 and 73. I understand it is now desired that Amendment No. 23 should be decoupled. It is probably convenient therefore to your Lordships if I deal with Amendment No. 21, and then the noble Lord, Lord Crickhowell, deals with his amendments because they are positive amendments in the sense that they are assertive amendments. Then there is the variant which has been put forward by the Liberal Democrats and is slightly different again. I understand that the Liberal Democrats wanted the decoupling which I have indicated.
I shall speak briefly to Amendment No. 21. This is to make good the notice I gave at the Committee stage that if your Lordships agreed to the amendments establishing the office of Welsh administration ombudsman, which were agreed to, we should have to bring back an amendment at Report to disqualify the holder of that office from membership of the assembly, just as we have disqualified the Auditor-General for Wales, whose
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office is also created by the Bill. This amendment is designed to produce that effect only. Accordingly, I beg to move.
On Question, amendment agreed to.
Lord Crickhowell Lord Crickhowell moved Amendment No. 22:
Page 8, line 20, at end insert (", or

(e) he is a Minister of the Crown.").

The noble Lord said: My Lords, I rise to move Amendment No. 22, which would prevent a Minister of the Crown also being a member of the assembly. I intend to speak to my amendment, Amendment No. 70, which would prevent any Minister of the United Kingdom Government being an assembly first secretary or an assembly secretary; and to the amendment of my noble friend Lord Roberts, Amendment No. 73, which would have the same effect and would prevent any Minister of the Crown being a member of the executive committee.
When, earlier during the Committee stage, I referred to the fact that the Secretary of State for Wales is apparently determined to serve both as Secretary of State in the United Kingdom Government and first secretary in the Welsh assembly the noble Lord, Lord Elis-Thomas, accused me of having an obsession on the subject. I certainly believe that the proposal is extraordinary, improper, and should not be permitted, which is why I shall ask the House to accept my amendment and shall press the issue to a vote.
There are three powerful reasons for objecting to the idea that Ministers of the United Kingdom Government can also serve as members of the executive of the Welsh assembly. The first is political, the second practical and the third constitutional. I shall deal with them in that order.
In political terms I regard the proposal as offensive and insulting to the people of Wales. Having promised Wales an assembly and independent management of its domestic affairs, it now transpires that the Government are not prepared to let go, but instead intend to put nanny in the nursery to make sure that the children do not do anything naughty. There has been strong support across party lines for the proposition that, following the yes vote in the referendum, the verdict should be accepted and that the assembly should be made strong and effective. I find it hard to believe that those who voted in the belief that the Bill represented a fresh start could ever have imagined that Mr. Davies would be sent from London to ensure that New Labour rules were applied as ruthlessly in Cardiff as they are at Westminster.
If press reports are accurate, there is to be some kind of electoral process to decide who is to lead the Labour Party in Cardiff Bay. Far be it from me to forecast the results of such an election, but as an interested observer, I would have guessed that if Mr. Ron Davies had announced his intention to stand down as Secretary of State and put his name forward for election he would have stood a pretty good chance against the likes of Mr. Rhodri Morgan and Mr. Russell Goodway. But whatever the result, it would have been primarily because of the opinions of party members about the

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candidates. If, on the other hand, Mr. Davies goes down to Cardiff as a member of the Cabinet, it is inconceivable that the full weight of Mr. Blair's powerful machine will not be put behind him, that the spin doctors will not spin with feverish energy, and that there will not be hints of threats and sweeteners. All this will happen because it would be a humiliation for the whole Government if Mr. Davies, as a member of the Cabinet, were to be defeated.
Assuming that with this degree of assistance Mr. Davies wins, and with the majority party behind him he becomes first secretary, he will be obliged to take every possible step needed to ensure that the new executive toes the Cabinet line. He will hold office not as the representative of the Welsh people but as the minion, the servile agent, of his Cabinet colleagues and his master's voice in Cardiff. Incidentally, there is nothing in the Bill to prevent the other Welsh Office Ministers (with nothing left to do at Westminster) joining the Secretary of State in Cardiff—and why not the Welsh Whip and a PPS or two as well, just to make sure that control is absolute?
The assumption up to now during our debates has been that the Secretary of State would listen to the assembly and carry back its views to Westminster; and that he would explain and justify government policy to the assembly, while leaving it free to administer Welsh affairs within the constraints imposed by the law and finance. Under the arrangement that we are now considering he would be bound to use all the instruments available to him to silence dissent because of the personal and political embarrassment that would be caused by policy decisions in conflict with those taken in Downing Street. We are told that it may only be for a transitional period when it will be useful to have the experience of a Cabinet Minister to guide the new assembly. I say to those who advance that argument: come off it! If any Secretary of State was to gain the leadership of the assembly, staffed by the civil servants at present in the Welsh Office, there would be no shortage of experience; and once again the suggestion that nanny is needed to hold hands is insulting to those like the noble Lord, Lord Elis-Thomas, who will be seeking election to the assembly.
I was puzzled at first as to why in Committee the Government received encouragement from the noble Lord, Lord Elis-Thomas, on this proposition; but perhaps we have been too easily seduced by the moderation and good sense with which in this, the autumnal period of his public life, he so often beguiles the House. I still remember the fiery young radical I first knew in another place who is still active politically and an adopted candidate of his party. My suspicion is that he knows full well that the proposal is insulting; that it will provoke fury when its implications are fully understood in Wales; and that the noble Lord will then exploit the political opportunity to the full.
If there are strong political grounds for objecting to what is proposed, there are also practical objections. Already concerns are being expressed in Wales about the time that members of the assembly will have, under the proposed arrangements, to carry out their varied
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tasks but, curiously, nobody seems to have inquired how the Secretary of State would be able to find the time to do both jobs effectively. Thursdays would be out for a start as far as concerns the assembly. Surely he will still attend Cabinet; and even if there are no Cabinet committees on Thursday afternoon and his presence is not required in another place, he could hardly be in Cardiff Bay before the early evening. Presumably, he will attend Cabinet committees on other days, and even in a situation where the Government have a large majority he will be required, on occasions, to carry out his parliamentary duties. The other day he and I were both on a train from Cardiff which was more than half an hour late—a not uncommon event—but even when the Great Western does better than that, each return journey from Cardiff Bay to Westminster will take five hours out of the time available for the leadership of the assembly. Wales is being offered a part-timer to run its affairs.
I turn now to the constitutional issues which are profoundly important. To be a member of two governments simultaneously is bound to create intolerable conflicts of interest. All those noble Lords who have been Ministers will have gone through the experience of having advanced an argument on behalf of their department that has not gained the support of colleagues, and then of having to defend the collective decision. How can an individual do that when a member simultaneously of administrations that may, for perfectly good reasons, come to diametrically opposed decisions?
On the one hand the Government at Westminster may take a decision that is justified in the interests of the United Kingdom as a whole—perhaps on regional or agricultural policy—which appears damaging to the particular interests of Wales. In Cabinet the Secretary of State does his best but loses the battle. On the other hand, down in Cardiff his colleagues resolve that the assembly should come out in vigorous opposition to what is proposed; but its leader has his hands tied behind his back; or—like a version of that splendid animal the push-me-pull-you—he has to express different thoughts through two mouths.
We are also about to pass a Bill that gives the Secretary of State important duties to perform in relation to the assembly. The Bill has not been debated, let alone justified by Ministers, on the basis that he is to perform a dual role. I note that there are more than two dozen clauses that impose responsibilities on the Secretary of State. I shall pick on only a few of them. Clause 31(1) states,
"The Secretary of State shall undertake with the Assembly such consultation about the government's legislative programme … as appears to him to be appropriate".
On my future journeys on the 125 to Cardiff I shall look forward to overhearing Mr. Davies consulting himself about the legislative programme. Clause 56(6) states,
"The Assembly First Secretary is accountable to the Assembly … for the exercise of functions by the executive committee".
That is all right. But he is also accountable to Parliament. Perhaps Members of Parliament are going to have greater opportunities than we had thought so far for questioning the Secretary of State about devolved responsibilities.
Clauses 83 to 88 are all concerned with the making of payments or loans to the assembly and accounting for them. The Official Report quotes me as using the words "good government" in this connection at Committee stage. I actually said "good governance" in the sense that those words are applied to business and financial institutions in the rules imposed by regulators and the Stock Exchange. Any company coming to the market with a prospectus that included potential conflicts of interest of the kind implicit in these clauses if the Secretary of State is also first secretary, would rightly be halted in its tracks. Even if in practice propriety is observed, it is not seen to be observed and therefore what is proposed is not acceptable.
Clause 108 gives the Secretary of State important duties if he considers actions proposed by the assembly incompatible with international obligations. There are other noble Lords much better qualified than I to comment about the legal proprieties of the Secretary of State giving directions to himself on these important matters, just as they may have views about his exercising Henry VIII powers to amend enactments contained in Clause 151. I simply say that it seems to me to be a thoroughly bad principle.
Let me make it absolutely clear that I have no objection at all to the fact that Mr. Ron Davies aspires to be leader of the assembly and to occupy the office in the splendid Pier Head Building from which he may look out over the new developments that I had some hand in creating around the Bay. Nor would I have the smallest objection if he decided instead that he wished to remain Secretary of State occupying what is perhaps the most beautiful office in Whitehall. I hope that I will not do him great harm if I say that I rather admire the skill and determination with which he has carried forward the devolution programme; and that he seems likely to be a better leader than others who have so far declared themselves. However, I believe very strongly that the political, practical and constitutional objections to him or to any other Minister performing both roles, are overwhelming, which is why I shall ask the House to support my amendment. I beg to move.
Lord Elis-Thomas: My Lords, as the noble Lord, Lord Crickhowell, kindly referred to me, I feel that I should respond, even as "an autumnal radical". I believe that that is the description that the noble Lord wants me to take. Of course, the phrase sounds even better in Welsh, radical hydrefol. The noble Lord cited three reasons why Mr. Ron Davies should not be a candidate for the leadership of the Labour Party in the national assembly and possibly its first secretary—those positions do not necessarily follow on from each other; it depends on the electorate—while still being Secretary of State. The reasons were political, practical and constitutional. I shall consider all three, encompassing them in the one word "political".
We are dealing with a unique political process in the history of the United Kingdom and of Wales. That is why those of us who have been concerned about devolutionary processes within this kingdom, the balance of forces between nationalities in this kingdom, and the economic and regional inequalities within this
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kingdom, are so keen on the development of this process. There is none more keen than Mr. Ron Davies, who, as the noble Lord said, has led the devolution and referendum campaign and his party's role in that campaign with integrity, clarity, tremendous determination and energy since he assumed the role of shadow Secretary of State for Wales.
That is why I personally and, indeed, politically see it as essential that if Mr. Ron Davies wishes to take a political decision to make a leap in the dark, as it were, or even a leap into Cardiff Bay, that should be his political decision. Indeed, it should be left to him and to the processes of party politics and the electorate to determine such matters. It is not for Parliament to start legislating on whether politicians should be allowed to stand for public office at different levels of government within this kingdom.
I feel this personally because—the noble Lord kindly advertised this fact—I have recently been selected as a candidate for the assembly. I am grateful to the noble Lord for his support in these matters. Clearly, Parliament could have legislated in this Bill to debar Peers from standing for election. What then would have happened to me or to any other noble Lord of any party in this House wishing to be a candidate for the Scottish parliament, for the Northern Ireland assembly, which has already been established, or for the national assembly for Wales? These are not matters for Parliament to decide in that way. They are matters on which politicians should make their own difficult judgments, their own decisions, with the support of their parties and the electorate.
As regards the alleged constitutional difficulties, as I said in Committee, the ability of politicians to move between different levels of government is part of normal life on mainland Europe. In the United Kingdom, we are suffering the legacy of a unitary state—of a union state operating as a unitary state rather than as a devolved state. Where it is operating as a devolved state, it should not be unusual that politicians might decide at certain stages of their careers to opt for different levels of government. It is not for Members of this House or of another place to debar politicians from so doing.
As regards the proposals in the amendment, what about the alternative? Let us imagine that there was a major crisis in the United Kingdom—indeed, that there was a crisis within the current hegemony of new Labour, a deep division inside the United Kingdom Labour Party. Let us imagine that the call went up from the United Kingdom Labour Party, "Send for Ron!". The first secretary of the national assembly for Wales might be summoned to Downing Street, if not to the Palace, to save the Union. That may sound rather fanciful to the noble Lord, Lord Crickhowell, but his amendment would debar that from happening. It would debar a person serving simultaneously as a Minister of the Crown of the United Kingdom Parliament and Government and within the national assembly. That applies particularly to the position of other Ministers. I see no objection to a Minister of the Crown who is serving as a Minister of State or as a Parliamentary Under-Secretary of State in a Whitehall department also being a member of the national assembly—and an active

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member of it. Surely, that again provides for the synergy across levels of government which is part of a quasi-federal structure. This House is trying to encourage dual membership of other parliaments, such as the European Parliament, and the improvement of links between parliaments.
I come now to the most fanciful point of all. I refer to the noble Lord's analysis of the internal affairs of the Labour Party. It is well known that I have a self-denying ordinance. I never comment in public on the internal affairs of the Labour Party. However, I find it absolutely amazing that the noble Lord should suggest that my right honourable friend in another place, Mr. Ron Davies, is somehow new Labour. I have engaged in political debate with Ron on these issues over many years. Mr. Ron Davies is certainly new Wales Labour but new Wales Labour is not the same as new Labour, Islington variety. Ron Davies represents a combination of the national aspirations of Wales and what used to be called socialism. He is committed to what I would describe as community socialism—if that makes both of us radicals, so be it—but that is not in any sense the same as new Labour. If Mr. Ron Davies has been successful in securing the support of Cabinet colleagues for his application for, and nomination and election to, the post of first secretary, good luck to him.
I want to see an effective leader of the national assembly, from any party. Obviously, as I have done throughout my political life, I stand by my colleague, the right honourable Dafydd Wigley to lead the Party of Wales in the assembly. He may well yet lead us to be a party in governance in one form or another in that assembly. These are matters for the electorate. I also want to see effective leadership of the Labour Party in Wales, and Mr. Ron Davies is the person to deliver that. I also want to see effective leadership of the Liberal Party in Wales. I should like to see Green and Independent members—and even some Conservatives—in order to reflect diversity in the national assembly.
However, it is entirely inappropriate for us in this House to take it upon ourselves to debar Mr. Ron Davies from taking that political risk for himself. I am surprised that that suggestion comes from a former Secretary of State for Wales who understands the politics of these issues. To suggest that I have ulterior motives and that I intend to denounce Mr. Ron Davies is to fail to understand the nature of the alliance that established the assembly. The national assembly was established by a consensus between the Labour Party of Wales or from Wales, the Liberal Party of Wales, and Plaid Cymru as the Party of Wales. It was endorsed by the electorate by a small majority. Our intention is to make it work—and if Ron is the man to lead us and to make it work, we shall support him, if the electorate so decides. If it is to be Mr. Wigley, so much the better. If it is to be whoever leads the Welsh Liberal Party—it might even be the noble Lord, Lord Thomas of Gresford—that is also fine by me.
Trying to debar people from actively participating in this great moment of national liberation for the people of Wales because a former Secretary of State does not like it would be a political disaster on the part of this
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House. Surely this House has learned that its historic role should be to allow devolved nationalities in this kingdom to progress and that it should not try to interfere in a legitimate political process within Wales.
5.45 p.m.
Lord Roberts of Conwy: My Lords, the noble Lord, Lord Elis-Thomas, totally fails to distinguish between the position of a Member of Parliament—of this House or of the other House—and the position of a Minister in the United Kingdom Government, and their relationship with the assembly. There seems to be very little objection generally to the dual mandate idea for assembly members. The Bill provides for their election. Similar provision is made in the Scotland Bill. There are also provisions governing consequential adjustments in salary and so on.
There are obvious advantages and, indeed, disadvantages to dual membership of, say, this Parliament and the Welsh assembly, or of this Parliament and the Scottish parliament—or, indeed, any other body. The advantage is clear. A Member of the European Parliament, for example, would bring much experience to the assembly. The disadvantage is the question raised by my noble friend Lord Crickhowell. I refer to whether a person has enough time to do both jobs properly. However, that is not the issue here.
In this amendment we are concerned with a Minister of the Crown—a member of the United Kingdom Government whose first allegiance is to that Government—becoming a member of the assembly. In general Ministers are required to give up outside interests of all kinds that may conflict with their ministerial duties. I have heard of Members of Parliament with dual mandates in that they are members of other directly elected bodies, such as local authorities, regional parliaments like Stormont, the European Parliament and so on, but I have never heard of Ministers being members of such bodies. I am sure that somehow the guidelines to Ministers must apply.
There are also practical difficulties of dual membership for Ministers who may be seeking election to the assembly. Ordinary Members of Parliament of either House may cope, but I do not believe that Ministers are capable of performing both functions adequately because of the difficulties of time and the practicalities. If one looks at this from a practical standpoint, it is a reasonable assumption that if a Minister—
Lord Wallace of Saltaire: My Lords, perhaps the noble Lord will permit me to pose a question. I am puzzled by the noble Lord's absolutist position that a person can hold allegiance to only one level of government. Yesterday marked the end of a six-month period during which British Ministers were loyal to the British Crown and at the same time also represented the European Union by holding the presidency of the EU. Does the noble Lord adopt the same logic that those two functions are themselves incompatible, or is it possible

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for Ministers to take different levels of loyalty and responsibility into account above the level of the nation state, possibly not below it?
Lord Roberts of Conwy: My Lords, I do not believe that the question of loyalty arises. We belong to the European Union. Every six months the leadership of the Union changes. We have taken the chair of different committees and have had leadership of the Union for that period. It is possible to have dual loyalty but those two loyalties are ultimately reconcilable, particularly in the case referred to by the noble Lord. Here we have an entirely different situation. We are talking about a Minister of the United Kingdom Government who seeks office as an executive of the assembly and the conflict of interest that inevitably arises. I am not sure whether the noble Lord was in the Chamber to hear the speech of my noble friend Lord Crickhowell. My noble friend spoke about the various duties and responsibilities of a Secretary of State under the Bill and the duties and responsibilities of a first secretary in the Welsh assembly. If noble Lords study the relationship between those two sets of responsibilities they will agree that it is extremely difficult for the same person to perform both.
It is reasonable to assume that if a Minister of the Crown becomes a member of the assembly he will seek membership of the executive. He may not necessarily be elected to the position of first secretary but he may be appointed to an assembly secretary's position. That situation has been anticipated by the Government. The noble and learned Lord the Solicitor-General when winding up the Second Reading debate said:
"The Bill does not prevent one person being both assembly first secretary and Secretary of State for Wales. Whether one person would fill both posts is a matter for the political parties in selecting candidates, for the electorate at the ballot box, for the assembly in choosing who is to lead it and for the Prime Minister of the day. The Secretary of State will be chosen by the Prime Minister and will be bound by Cabinet collective responsibilities while the first secretary will depend on the confidence of the assembly".—[Official Report, 21/4/98; col. 1134.]
As the Minister has said, there will be a role for the Secretary of State in Cabinet in the United Kingdom Government and he can also be first secretary subject to the views of the assembly and the Prime Minister.
It is quite clear that this situation has been anticipated. It is questionable whether the holding of both positions by the same person can be reconciled. There are enough examples within the Bill of the Secretary of State having duties relating to the first secretary and the reverse. It is questionable whether both jobs can be done by the same person. The idea that they should be done by the same person was certainly not in the minds of those who first drew up the Bill. It is clear that that idea has developed recently. The Secretary of State has powers which are to be transferred to the assembly. Why transfer those powers if they are to be exercised in effect by the same person? Rather than power being devolved to the assembly and the person being elected by the assembly, the Secretary of State—the governor-general, as it were—becomes the choice of the assembly and the first secretary. It is questionable because he has to be elected to that position by the assembly.
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To give an example, the Secretary of State has power to intervene if international treaty obligations are infringed or cross-border issues arise. Why does he need such powers to act against himself if he is to become first secretary? I do not believe that that was envisaged originally. The possibility arises now as the assembly's advent draws near and the problems of implementing the Bill and the possibility of conflict become more apparent. For example, the location of the assembly is still not decided. The Secretary of State has arrived at a certain decision but when the assembly is elected next May his decision may be changed. The assembly may be in an altogether different location.
I can understand and sympathise with the argument that there may be a need for a transitional period in which the assembly beds down, but surely the Bill allows for that. There is no real need to hasten the process. The transfer of functions can be gradual. It is curious that while there is a prospect of the Secretary of State for Wales becoming first secretary of the assembly no similar proposal has been canvassed for Scotland. One is told that the Secretary of State for Scotland might have considered the possibility of becoming chief executive of the parliament but he very soon dismissed the idea as a nonsense. As to the need for a transitional period, I believe that that is an argument of convenience. It can never outweigh the arguments of principle, which are all against this combination of offices and powers.
The Secretary of State cannot serve two masters with any degree of conviction. There is bound to be a conflict of loyalties between the United Kingdom Cabinet and the Welsh executive, between Westminster and the assembly. We appreciate the difficulties that will arise if the Secretary of State and the first secretary are one and the same. It is because we appreciate the difficulties that we should anticipate them and prevent this strange union from taking place.
6 p.m.
Lord Dixon-Smith: My Lords, I should like, if a mere Englishman may intervene in this Welsh family squabble for a brief moment, to support my noble friend's amendment.
The European parallel drawn by the noble Lord is incorrect. The comparison that should be made is if a Minister of the Crown were at the same time attempting to be a commissioner in Brussels. That would be a much more problematical situation than the one the amendment seeks to prevent.
I have limited experience of dual mandates. I accept the principle and welcome the possibility of dual mandates—but at the ordinary member level only. Even then, you would need an exceedingly robust constitution to survive the dual pressure. I have seen very good men torn to shreds by it.
I am a proud member of a county council. When a predecessor of mine, my noble friend Lady Platt of Writtle, was vice-chairman of the council, she came to this place and then went off to the Equal Opportunities Commission, of all interesting posts. There arose a question as to whether she could in that situation carry a dual mandate and be chairman of the county council.

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The view of the council was absolutely clear: she could not do both jobs because both jobs were too important. That is at a much lower level than the situation we are considering here.
The conflict of interests between being a Minister of the Crown and the head of the Welsh national assembly is such that it would impose intolerable burdens on any individual. It would be wise if that situation were prevented.
Lord Onslow of Woking: My Lords, I support my noble friends Lord Crickhowell and Lord Roberts of Conwy. There must be a conflict of interest which could arise not only from the dual mandate but from holding dual offices in the assembly and in the Cabinet. If such a conflict arose it could cause grave damage to the assembly itself.
If the holder of these two offices comes wearing both his hats to the Royal Welsh Show and there encounters evidence that a great number of farmers in Wales are discontented and unhappy about the position in which they find themselves and are looking to the Government to put that right, or if in going down the streets of Builth he encounters people who are very concerned about the proposed reorganisation of local health services in Powys and Ceredigion, he will find himself in a difficult position.
If he holds only one office he will have no difficulty in saying, "I will see that the best that can be done for you is done according to the position in which I find myself". Should he find himself the first secretary of an assembly which shares the view of the local residents who are anxious on these subjects and which presses it to the point where it is almost prepared to vote against the government of the day—of which he is a member—the assembly may feel inhibited by the fact that it would create a political crisis by forcing a situation in which the wearer of two hats would be obliged to take one of them off and resign one or other of his offices. That might inhibit the freedom of the assembly to stand up for the interests of the people of Wales.
I am not saying that that will necessarily happen next year when the assembly is created, but these are not entirely fanciful possibilities. It would do grave damage to the perception of the assembly in Wales if it were thought by the electorate that there was some inhibition which prevented it from operating in a way which was truly representative of that electorate's best interests.
Lord Simon of Glaisdale: My Lords, from the outset I have been a devolutionist. I am in general sympathy with the thrust of this Bill, as I have been from the outset. I have taken that view from the very moment we discussed the Welsh Referendum Bill.
At this stage, having listened to the argument, I find myself absolutely persuaded by the noble Lord, Lord Crickhowell, and the noble Lords who have spoken in his support. It goes against the very spirit of devolution if a member of the Cabinet—particularly if he be Secretary of State for Wales—can take his place in the assembly.
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Apart from that, over and over again potential conflicts of interest have been pointed out, which we should avoid. From the Cross-Benches, as a devolutionist, if the House is divided I shall have no hesitation in following the noble Lord, Lord Crickhowell.
Lord Williams of Mostyn: My Lords, the first thrust of the propositions that the noble Lord, Lord Crickhowell, put forward was that we ought to avoid the appearance of nannying, that in some way the Labour Party would be able to use spin doctors to impose their nannyish will upon the assembly in Cardiff. Nannies can impose: "Eat up your greens and/or rice pudding". Nannies can also prohibit: "You must not watch television after nine o'clock. You must not be able of your own free choice, as a devolved assembly, to choose who shall be your first secretary". That is what it comes to.
Many of your Lordships conceive there to be principled objections to these matters. Those principled objections substantially and significantly derive from the past history of our constitutional arrangements. As the noble Lord, Lord Elis-Thomas, said today, not for the first time, and as noble Lords on the Liberal Democrat Benches have said on prior occasions, we are dealing with new arrangements which cannot necessarily be circumscribed or constrained by past political or historical experience.
Amendment No. 22 would put an absolute legislative veto, an absolute prohibition, upon any Minister of the Crown becoming a member of the assembly. These amendments are not entirely the same. The prohibition in Amendment No. 22 would disqualify a Minister of the Crown, whatever his ministry were, whatever his occupation in government were—for instance a Law Officer—from being a member of the assembly. There might be some circumstances in which it would be entirely appropriate for a Law Officer to be a member of the assembly, particularly in the early months and years of the assembly's work. It is not for me to determine, nor for your Lordships to exclude, what would be the decision of the electorate in Wales. When it came to the first secretary or the leaders of committees or secretaries of committees, it would then be a decision of the assembly. The Labour Party presently has many virtues, but omniscience is not one of them so far as I perceive. Power is not one of them.
We are to have a freely elected assembly in Wales on a deliberately inclusive proportional representational scheme specifically devised and put in the Bill to ensure that the Conservative Party will have a fair proportion of representation. That is a generous view. It is undoubtedly objectively generous. It is much more generous than would have been the case if devised by any other party. There is likely to be a significant Plaid representation and a significant Liberal Democrat representation. This is the moment when we say, "We shall devolve to you." Why? "Because, without presumption or being patronising, we trust you to attend to your own affairs." Despite that, there seems to be the belief that says, "small infant, you cannot crawl. You will not be allowed to totter. Nanny will be there to stop

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you." So it is not just a question of blunt principle, dimly remembered, from constitutional arrangements which formerly existed which are utterly overtaken in many ways by the new assembly.
Amendment No. 22 does not prohibit a Member of Parliament in another place from being a member of the assembly, or a Member of the European Parliament, or a Member of this House. There might well be conflicts there, but the point about conflicts is that, when detected—not when presumed, conjured up from the fevered imagination—someone has to come to a particular conclusion. I am most grateful to the noble Lord, Lord Dixon-Smith, for the illustration that he proffered because it underlines the point I seek to make.
The noble Baroness in question was offered the opportunity of two co-existent, though not coterminous, positions of authority: one on the county council and one as the chairperson of the organisation the noble Lord specified. What happened? Questions were legitimately raised. The conclusion was arrived at. By whom? By the local authority, not by absolute prohibition by any Act of Parliament. The local authority came to the conclusion that that was inappropriate. The county council is trusted therefore to detect and gently chide the noble Baroness, or gently raise the question: "Is this appropriate?" It came to its own independent conclusion. But this assembly is not allowed to have that.
Devolution? Hobbled discretion is not, I think, what we were about. It is said that no one of the 50.6 per cent. majority considered the possibility of a Minister of the Crown being a member of the assembly. But did they reject it? Was it the pressing question of the day in any of the discussions? I rather doubt it. The whole point about devolution is that one devolves. One is not washing one's hands of the issue. One is saying to the new infant, "We shall trust you to mature in your own way. New arrangements for different times are for your informed discretion, not for nanny's prohibition on the face of the Bill."
The later amendments focus more distinctly on what, I hope I say without presumption, has been the significant question in the mind of the noble Lord, Lord Crickhowell, because he ventilated these questions at earlier stages. Amendments Nos. 70 and 73 are intended to disqualify the Secretary of State for Wales, or any other Minister of the Crown, whatever his ministry—I repeat in parenthesis—from being an assembly first secretary or even an assembly secretary.
We forget two things in language, which I say gently and politely is somewhat over-extravagant for our present situation. No one can be first secretary of the assembly or any form of secretary in the assembly without the assembly wanting that to be the consequence. In other words, we are devolving choice—that is, power—to the assembly to choose the first secretary and any other secretary it might think appropriate. I emphasise the words "it might think appropriate." And that at a time in the first nine months of the assembly's life or at some time in the future when a person might be the free, unfettered choice of a freely elected assembly on a proportional basis.
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If that person happened to be a Minister of the Crown or a Secretary of State for Wales, why should the assembly not have that choice? Because the checks and balances are there all inbuilt. There is no diktat; there is no governor general. This is not the raj. Governors general in the great raj were not, so far as my historical knowledge goes, ever subject to dismissal by a locally elected house of parliament. They were imposed by a government in Westminster, thousands of miles away.
It is not a governor general who is to be imposed on a assembly. It is moderately insulting to an assembly to think that it would be susceptible to such an imposition. The first check is that we have an election. The second check is that the elected persons—whether we think the choice of the electorate is right, wrong, or indifferent—then have a block, if they wish, because they can vote down the first secretary at any time. They can dismiss secretaries at any time. It may be a rather more powerful assembly in Cardiff Bay than one sometimes finds in another place in this building.
The other safeguard is that it is for the Prime Minister to propose to his Cabinet, subject to the endorsement of another place, who should be Secretary of State, who should be his Minister. If the Prime Minister—whoever it might be at whatever time in the future—comes to the conclusion that the person best suited for public service—that is important—as Secretary of State for Wales, or in any other ministry of the Crown, happened to be someone who had the democratic mandate of the electors in Wales, why should he not have the option open at least to put it to his Cabinet colleagues, for the approval of another place—or, I concede, the majority in another place?
I recognise the principles behind the amendments. I give them, I hope, a decent regard, because I honour the motive that engenders them. I believe that they are fainthearted in the end; that they approach the assembly with a feeling of infinite mistrust; and that they are in fact quintessentially nannyish in the sense of, "We can stop you doing this. We are more powerful than you. We shall use our power."
Lord Crickhowell: My Lords, I need not detain the House for long. The Minister is a distinguished advocate. He did his best, but his case was pretty thin. The real case was advanced by the noble Lord, Lord Elis-Thomas. It was that Mr. Ron Davies wishes to do it, and therefore it is a matter for him. He suggested that it was desirable that people should be able to opt for different levels of government. Yes, but they should have to opt; they should have to make a choice. We are not trying to deter anyone from taking part in the assembly's work, but any Minister who wishes to should choose in which parliament and administration he wishes to serve.
We were told that if it were necessary for Mr. Ron Davies to return to save the nation from his post in the assembly, having abandoned the British Cabinet, he could not do so. That is wrong. He could perfectly well be appointed by Her Majesty to lead an administration, and do what Ministers always had to do in this country

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for many decades—then to seek election as a Member of Parliament. It was the practice for Ministers to have to resign before taking up office. I am thankful to say that in my time the practice had been abandoned and I did not have to go through that performance. However, it would be perfectly open to Mr. Davies to do so if he wished.
The noble Lord on the Liberal Democrat Benches asked about Europe. The situation there is different. The administration takes collective decisions about our position in Europe; it is not a question of one individual with a different set of interests having to take decisions which may be in conflict with the government of which he is a member.
We were told by the Minister—it was the only case that he advanced—that the proposal would interfere with the free choice of the electorate. I do not believe that that is true because, as I have said, it is open for Mr. Davies and any other Minister to decide to stand for the assembly, to opt for that level of government, and to offer themselves to the electorate of Wales. I wish to test the opinion of the House.
6.20 p.m.
On Question, Whether the said amendment (No. 22) shall be agreed to?
Their Lordships divided: Contents, 113; Not-Contents, 94.

Division No. 2

CONTENTS

Aberdare, L.

Denton of Wakefield, B.

Ailsa, M.

Dixon-Smith, L.

Anelay of St. Johns. B. [Teller.]

Ellenborough, L.

Attlee, E.

Elliott of Morpeth, L.

Belhaven and Stenton, L.

Elton, L.

Bethell, L.

Erroll, E.

Biddulph, L.

Flather, B.

Biffen, L.

Fraser of Carmyllie, L.

Blatch, B.

Glentoran, L.

Bledisloe, V.

Harmar-Nicholls, L.

Bowness, L.

Harrowby, E.

Brabazon of Tara, L.

Haslam, L.

Braine of Wheatley, L.

Hayhoe, L.

Brougham and Vaux, L.

Higgins, L.

Burnham, L. [Teller.]

HolmPatrick, L.

Byford, B.

Home, E.

Cadman, L.

Hunt of Wirral, L.

Caithness, E.

Inglewood, L.

Carnegy of Lour, B.

Ironside, L.

Carnock, L.

Jopling, L.

Chalfont, L.

Kenyon, L.

Chesham, L.

Kimball, L.

Clark of Kempston, L.

Kinloss, Ly.

Colwyn, L.

Kintore, E.

Cope of Berkeley, L.

Lawrence, L.

Courtown, E.

Liverpool, E.

Cowdrey of Tonbridge, L.

Lucas of Chilworth, L.

Cranborne, V.

Luke, L.

Crickhowell, L.

McColl of Dulwich, L.

Cross, V.

Mackay of Ardbrecknish, L.

Dacre of Glanton, L.

Mackay of Drumadoon, L.

Darcy de Knayth, B.

Mancroft, L.

Dartmouth, E.

Massereene and Ferrard, V.

Dean of Harptree, L.

Milverton, L.

Denham, L.

Monro of Langholm, L.

720

Montgomery of Alamein, V.

Renton, L.

Mountevans, L.

Roberts of Conwy, L.

Mowbray and Stourton, L.

Rotherwick, L.

Moynihan, L.

Rowallan, L.

Munster, E.

Savile, L.

Naseby, L.

Sharples, B.

Norfolk, D.

Simon of Glaisdale, L.

Northesk, E.

Stanley of Alderley, L.

Norton, L.

Stodart of Leaston, L.

O'Cathain, B.

Strathclyde, L.

Onslow of Woking, L.

Swansea, L.

Oxfuird, V.

Tebbit, L.

Park of Monmouth, B.

Teviot, L.

Peel, E.

Thomas of Gwydir, L.

Pender, L.

Trefgarne, L.

Pilkington of Oxenford, L.

Trumpington, B.

Plummer of St. Marylebone, L.

Tugendhat, L.

Prior, L.

Vivian, L.

Rankeillour, L.

Waddington, L.

Rawlings, B.

Weatherill, L.

Rees, L.

Wilcox, B.

Wise, L.

NOT-CONTENTS

Acton, L.

Jeger, B.

Ashley of Stoke, L.

Jenkins of Putney, L.

Barnett, L.

Judd, L.

Berkeley, L.

Kennedy of The Shaws, B.

Blackstone, B.

Kennet, L.

Blease, L.

Kilbracken, L.

Borrie, L.

Kirkhill, L.

Brooke of Alverthorpe, L.

Lockwood, B.

Brooks of Tremorfa, L.

Lofthouse of Pontefract, L.

Bruce of Donington, L.

Longford, E.

Burlison, L.

McIntosh of Haringey, L. [Teller.]

Carmichael of Kelvingrove, L.

Mallalieu, B.

Carter, L. [Teller.]

Merlyn-Rees, L.

Chandos, V.

Milner of Leeds, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Clinton-Davis, L.

Molloy, L.

Cocks of Hartcliffe, L.

Montague of Oxford, L.

David, B.

Morris of Manchester, L.

Davies of Oldham, L.

Perry of Walton, L.

Dean of Beswick, L.

Peston, L.

Dean of Thornton-le-Fylde, B.

Pitkeathley, B.

Desai, L.

Prys-Davies, L.

Dixon, L.

Ramsay of Cartvale, B.

Donoughue, L.

Randall of St. Budeaux, L.

Dormand of Easington, L.

Rea, L.

Dubs, L.

Rendell of Babergh, B.

Elis-Thomas, L.

Richard, L. [Lord Privy Seal.]

Evans of Parkside, L.

Runcie, L.

Falconer of Thoroton, L.

St. Davids, V.

Farrington of Ribbleton, B.

Sefton of Garston, L.

Gallacher, L.

Sewel, L.

Gladwin of Clee, L.

Shepherd, L.

Glenamara, L.

Shore of Stepney, L.

Graham of Edmonton, L.

Simon, V.

Grenfell, L.

Simon of Highbury, L.

Hardie, L.

Smith of Gilmorehill, B.

Hardy of Wath, L.

Stoddart of Swindon, L.

Haskel, L.

Stone of Blackheath, L.

Hayman, B.

Strabolgi, L.

Hollis of Heigham, B.

Symons of Vernham Dean, B.

Howie of Troon, L.

Taylor of Blackburn, L.

Hoyle, L.

Thomas of Macclesfield, L.

Hughes, L.

Turner of Camden, B.

Hunt of Kings Heath, L.

Walker of Doncaster, L.

Irvine of Lairg, L. [Lord Chancellor.]

Watson of Invergowrie, L.

Whitty, L.

Williams of Mostyn, L.

Islwyn, L.

Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
6.28 p.m.
Lord Hooson Lord Hooson moved Amendment No. 23:
Page 8, line 46, at end insert—
("( ) A person who is a member of—

(a) the House of Commons,

(b) the European Parliament, or

(c) any unitary authority in Wales,

is disqualified from being an Assembly member, unless he is an Assembly member returned at the first ordinary election for the Assembly during his term of office as a member of a body mentioned in paragraphs (a) to (c), in which case such disqualification shall not apply until the next subsequent ordinary election.").
The noble Lord said: My Lords, as the Minister said in discussing the previous amendment, I wish to uncouple this amendment because it deals with the broader issue. I wish to challenge the idea that one can have a dual mandate; one to an elected assembly for Wales and, say, to the House of Commons, the European Parliament or even the unitary authority for Wales.
The noble Lord, Lord Williams of Mostyn, rightly observed that we are experiencing an innovative period in the history of our country with devolution in many areas, and it is time that we had a proper debate on the desirability of a dual mandate.
I believe that during the first four-year session of the Welsh assembly it will be highly desirable to have members who are or have been Members of the House of Commons or the European Parliament or who are in local government, because they will bring great experience to bear on the affairs of the assembly. The advantage of having members from the House of Commons or from the European Parliament is that they will have dealt with affairs at a higher level than people in local government. Furthermore, people in local government are often closer to the electorate and know what affects their everyday lives. As the assembly will be concerned with the overall distribution of the budget for Wales, it is important that during its early stages there is a fusion of different experiences and skills.
I wish to take your Lordships for a moment to the period thereafter. Surely the assembly will have set its own standards and by that time will have succeeded—we all hope that it will—in establishing its own style, loyalties, and so on, and its own level of debate. Thereafter, it is highly undesirable that a person should take upon himself to be an elected member of the assembly, chairman of a local authority and a Member of Parliament in the House of Commons at one and the same time. That is highly undesirable.
I have always been basically a federalist. The great advantage of a federal constitution eventually is that it has a clear division of powers. I understand that in the United States, for example, one cannot be a member of the state assembly and a member of Congress. In the German federal system, one can be elected by the Länder to the upper house but one cannot be a member of the lower house and a member of the Länder.
In this country, we should face the real issue of the future under a devolved system of government: we shall have an assembly in Northern Ireland, a parliament in
722
Scotland and some kind of assembly in London. We must face up to the question of whether it is right that people should take upon themselves, as it were, the carrying of a number of mandates.
I believe—and it is the view I wish to put to your Lordships—that it is highly undesirable. Eventually, there is the question of duality; and students of Edmund Burke will be aware of his views on the dangers of duality. I know that the Secretary of State for Wales takes that view at the moment as he invited informal discussions on the Bill which were extremely helpful. We have had across-the-table discussions with him informally, and I am disclosing no secrets. I raised this matter on the address on the Queen's Speech and on the Referendums Bill. He was good enough to tell me that he appreciated entirely the point that I was making but thought that it should be dealt with at party level; that is, that it should be a question for the internal discipline of the party. It might be highly undesirable to have a person who was both a Member of the House of Commons and a member of the assembly, with different loyalties and different priorities. Where will he be on a given day? Will he be in Westminster or Cardiff? That may be a problem in view of what we were told earlier by the noble Lord, Lord Crickhowell, about the train services between the two.
I was amazed by the views put forward by my noble friend Lord Elis-Thomas. He adopted the description of him by the noble Lord, Lord Crickhowell, as being an autumnal radical. As I listened to him, I thought, "Dear Dafydd, as he gets older he becomes more autumnal than radical". My noble friend put forward the proposition for the acceptance of any number of responsibilities, and an acceptance of the principle of duality or even more.
I reject that. For the first four years of the Welsh assembly, Scottish parliament and the Northern Ireland assembly, there is a good deal to be said for the expertise being spread around. But thereafter, we must face up to this problem, especially if we are to have more and more devolution. How unfortunate it was to have Members of the House of Commons being also members of the European Parliament. They were not doing justice to either establishment. That is likely to be the result in the future.
It is not a matter of claiming expenses, two salaries, or anything like that. The Secretary of State is well aware of the matter—if I am not mistaken, the Bill deals with it or it will be dealt with—that people cannot draw two salaries, two sets of expenses, and so on. I am not concerned with that aspect of the matter, although given the experience of the noble Lord, Lord Williams of Mostyn, and myself in previous years with various matters concerning local government in Wales, it is just as well to bear that aspect in mind too.
However, I believe that it is necessary for this House and the public generally to consider whether in future they want to have people who are members of the assembly but who remain Members of the House of Commons; whether they want people who will give their first priority to the assembly—and I am dealing now specifically with Wales but the issue has a much broader

723
input—who are loyal to the it, and who will make it their first obligation, their real interest; or whether we shall allow that duality to take place.
I move this amendment in the hope that it will provoke a real debate on the issue as a preliminary to a broader debate on the future development of the devolutionary process in our country. I beg to move.
Lord Crickhowell: My Lords, the noble Lord, Lord Hooson, has made a powerful speech in support of the arguments which I put forward on the last amendment as regards Ministers. I am only sorry that he and his colleagues stayed on their Benches and did not vote on the issue.
However, on this matter, I do not agree with the noble Lord. I want to make it perfectly clear that while I was opposed to a dual mandate among Ministers because I thought there were intolerable conflicts, I do not see that the same conflict occurs in relation to representatives of the assembly sitting as Members of Parliament. Indeed, I remember a number of colleagues when I was in the other place, who served with distinction in both places and made an important contribution to the work of both places.
On the last amendment, the noble Lord, Lord Elis-Thomas, and the Minister spoke about choice: about people making choices and the assembly taking choices. Here I really do think that there is a situation where people can make choices. I do not understand why the noble Lord, Lord Hooson, should feel that this restriction should be imposed. Indeed, I do not really see the logic of saying that it may be all right for the first four years but not thereafter. Actually, the first four years may be the most difficult ones when the burden is greatest and when the difficulty of reconciling conflicting interests, and so on, will be at their most extreme. So I hope that on this occasion the amendment will be rejected and I find myself supporting the arguments that I think will be put forward by the noble Lord the Minister. That is perhaps a rare event in our proceedings. I think it is the first time it has happened since we began our consideration of this Bill.
Lord Elis-Thomas: My Lords, I want to put on record my entire agreement with the speech of the noble Lord, Lord Crickhowell and, for once, my entire disagreement with the noble Lord, Lord Hooson. I just do not understand what this is all about, because it is not about people taking upon themselves a mandate, as I think was the phrase used by the noble Lord, Lord Hooson. Surely you cannot take upon yourself a mandate. The mandate is confirmed by the electorate or not confirmed, as the case may be.
I would argue for a federal European-type approach to this issue, namely, that people are able to move between different levels of government. Indeed, there is a positive advantage in having the same people, or some of them, simultaneously being members of bodies at different levels, depending on the kind of debate that develops. That provides the cross-fertilisation which a number of us are concerned about in the relations between the European Parliament, the member-state
724
parliaments and the autonomous parliaments of regions and nations at another level, and indeed local authorities. I do not understand why this exclusion should take place or why it should be legislated that there should be a kind of designer-assembly person who is excluded from certain categories.
I would emphasise that in my view it is not for this House, in this case or indeed in the previous case, to lay down the law in these matters. I do say to the Liberal Benches that I think they will regret their decision on the last Division.
Lord Merlyn-Rees: My Lords, a remark of the noble Lord, Lord Hooson, has provoked me to speak on this matter. He equated the situation with Northern Ireland. I believe that it is of the greatest advantage in Northern Ireland that not only is Mr. John Hume a Member of the Parliament down the corridor, he is a Member of the new assembly and also of the European Parliament. Long may he remain so. Whether he is going to be the number two to Mr. Trimble, we shall see. Seamus Mallon is a Member not only of the European Parliament but of the Parliament down the corridor and also of the new Assembly. Long may it be so. Dr. Paisley is a Member of the European Parliament and a Member of this Parliament as well as a Member of the Assembly. He will be on the new executive, and so he should be. I am worried that it may be said that a certain type of person cannot hold other representative offices and be a member of the Welsh assembly. It is of great advantage that they should be, and to lay it down that they should not be is, I believe, a great mistake, from my own experience.
Lord Hooson: My Lords, before the noble Lord sits down, would he not agree that in Northern Ireland a concentration of power in so few hands has been one of the problems facing that Province?
Lord Merlyn-Rees: My Lords, I do not actually believe that. The concentration of power is on the ground, because they have just had elections and 71 per cent. of the electorate voted in a certain way, and now over in Drumcree there is going to be a great crisis. It will be hard to resolve it because of the strong feeling on the ground, but the power does not lie with the number of people who are involved in politics at—I had better not call it regional level because it would be offensive to use that word in this context—Northern Ireland level. The power rests somewhere else, and until that dichotomy is dealt with we are not going to get very far. I believe it is a great mistake to do as this amendment suggests.
Lord Hooson: My Lords, it seems to me in any case that there is a defect in this amendment, although I shall probably be proved wrong. That is because the elections to the unitary authorities in Wales and the election to the assembly are going to be on the same day, so that the period of office for any member of the assembly or any member of the unitary authority ceases at the end of the day before the poll, and on the day of the poll they will be a member neither of the assembly nor of

725
the authority. Since the count for the members of the local authority will take place before those for the national assembly, the declaration will have been made. The wording of this amendment would mean that a member of a unitary authority would always be a member of the national assembly.
6.45 p.m.
Lord Mackay of Ardbrecknish: My Lords, this amendment is very different from the one that your Lordships have just passed: the one in the name of my noble friend Lord Crickhowell, which actually narrowed down the angle, so to speak, entirely to Ministers in the Government of the United Kingdom. Obviously I agree with my noble friend and I am delighted that the Division was successful. I very much hope that the Ministers will consider this carefully and will not simply be marched into a negative position by the Prime Minister, who seems to have decided to take decisions about Scotland and Wales very much on the hoof and without giving his Ministers too much chance to talk about these matters. So I hope that we will see a reflective view about the narrow amendment which we have just passed.
We now come to a much broader amendment and I must say that I agree with all the noble Lords who have spoken after the noble Lord, Lord Hooson. I do not agree with the amendment at all. I thought that the speech of the noble Lord, Lord Elis-Thomas, on the last amendment was more appropriate to this amendment. In fact, I agree with a great deal of what he said. The interesting point is that the Liberal Democrats did not vote for the narrow amendment, and now they are asking us to consider this very much wider amendment. I am just a little puzzled about that. There does not seem to be any contradiction in voting for the amendment of my noble friend Lord Crickhowell and then proposing their much wider amendment—but far be it from me to try to puzzle out the position of the Liberal Democrat Party.
I think it is important in these new arrangements that we do allow people to stand at different levels. I can see no great problem about it. It is very much a tradition in many parts of the Continent that people stand, or sit, if I may call it that, at a number of levels. It does not seem to do them any harm. This is an entirely new form of government that we are instituting in this country, and it seems to me that it is up to the political parties, and then up to the electorate, to decide. I hope that the political parties will not be narrow minded about this. I have certainly played my part in preventing the Conservative Party in Scotland from taking any negative view about dual mandates, and I am pleased to say that I was successful there. I agree with what other noble Lords have said, especially in regard to Northern Ireland. It would be absolutely disastrous in a Northern Ireland context if people like David Trimble and John Hume had to decide between the other place and the new Assembly for Northern Ireland. Therefore I am going to find myself in complete agreement with the noble Lord, Lord Williams of Mostyn, on this occasion.
Lord Mishcon: My Lords, is not an odd constitutional position created by the amendment put
726
forward by the noble Lord, Lord Hooson, in that a Member of the House of Commons will be disqualified? What about Membership of your Lordships' House?
Lord Hooson: My Lords, the distinction between the two is this: a Member of the House of Commons is elected and a Member of the House of Lords is not. He is either an hereditary Peer or he is nominated to be here and so he does not represent a constituency.
Lord Thomas of Gresford: My Lords, the thrust behind the amendment that my noble friend has moved is really this. We are concerned that there should not be in Wales part-time members of the new assembly. There are 60 of them: that is all. We at Committee stage endeavoured to expand that number because we appreciate the huge amount of business that has to be done by the assembly, with all the committees that have to be manned, as well as the full plenary sessions which have to take place.
In our view, as we put it before your Lordships, it is quite impossible for a person to be a full-time member of the national assembly for Wales and at the same time to play an effective part in representing his constituents in the House of Commons. It may not even be for a Welsh constituency: it could be for another constituency. I see that the noble Lord, Lord Crickhowell, wishes to intervene. I give way.
Lord Crickhowell: My Lords, I am much obliged. Can the noble Lord explain why he thinks that one could be a Minister—that is, both a Member of the House of Commons and a Minister in the UK Government—and also a member of the executive of the assembly? The noble Lord did not find it necessary to vote for my amendment; indeed, he sat in his place. It seems to me that the argument that he has put forward is a compelling one for supporting my amendment.
Lord Thomas of Gresford: My Lords, the noble Lord will also have noticed that we did not vote for the Government. The distinction between our amendment and that of the noble Lord is that we can see the value in the early days, during the setting up of the assembly, in having experienced politicians play their part in that assembly business and thereby creating, through their experience, a new method of operation which will carry on into the future. We do not want to see individuals in Wales becoming—if I may say this in this House—"barons" in particular areas; in other words, taking over the political life of an area at all levels.
The noble Lord referred to Northern Ireland and to the immense contribution of individuals there. However, I sometimes wonder whether it might not be better, in the interests of Northern Ireland, if power were spread among individuals; that is to say, if other people, as well as those well-known leaders who are forever hitting the newspaper headlines, had powers and responsibilities to fulfil at the different levels of government envisaged in Northern Ireland. That is essentially the argument that we are putting forward.

727
It is said that no man can serve two masters. But here it is envisaged that a man or woman can perhaps serve three masters. Given today's political climate, it is not possible for an individual to fulfil the responsibilities of a Member of Parliament, a member of the assembly and, indeed, a member of a unitary authority, unless he is a person of the most exceptional ability with the most exceptional support from the people below him. It is not a matter entirely for parties; indeed, we think that it is a matter for legislation.
Lord Williams of Mostyn: My Lords, I must congratulate the noble Lord, Lord Crickhowell, on the way that he marshalled both his arguments and his troops on the previous amendment. I therefore congratulate him on his present victory. However, I am quite troubled. The noble Lord, Lord Elis-Thomas, has been described as an "autumnal radical", and now I am basking in the spring of the approval of both the noble Lord, Lord Crickhowell, and the noble Lord, Lord Mackay of Ardbrecknish. I wonder what I have done to deserve that.
Lord Thomas of Gresford: My Lords, is the Minister aware that the "autumnal" Peer was seen jogging in St. James's Park this morning in shorts and a T-shirt?
Lord Williams of Mostyn: My Lords, not a pretty sight I am sure. I have always found that joggers are normally of the elderly tendency.
The noble Lord, Lord Crickhowell, is, of course, an example of the "sea-green incorruptible". He put his logic to one proposition, which he persuaded your Lordships to support, but now says that this position is quite different. It is, it seems to me. There is no answer to the question put by my noble friend Lord Mishcon. The mere fact that one sits in this House unelected does not make the duties any more or less onerous than they are just along the corridor in another place where Members have been elected. Indeed, perhaps we will discover later this evening that our duties are a good deal more onerous than elsewhere. I give way to the noble Lord.
Lord Hooson: My Lords, surely the difference is the fact that we do not have a mandate here. Members of the House of Commons have a mandate as, indeed, do Members of the European Parliament.
Lord Williams of Mostyn: No, my Lords. With respect, that is not a good argument. The noble Lord, Lord Thomas of Gresford, said that we do not want a part-time assembly. But, mandate or not, I suggest that most of your Lordships who congregated here both this afternoon and this evening actually work a good deal harder than many people who have been elected, whether in another place or elsewhere.
The amendment would mean that a Member of Parliament, an MEP or even a member of a local unitary authority could not serve in the assembly after the first four-year period. The noble Lord, Lord Thomas, said
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that it had to be a full-time job. However, I echo the remarks made by the noble Lord, Lord Crickhowell: namely, what happens after those difficult first four years? There is an internal inconsistency which I spy with my little eye. There is no reason at all why the electorate should not make a choice if they wish—and this is most important. No one can take upon themselves the mantle of being an assembly member; he or she has to be elected. If the voters wish to vote for an MEP or a Member of Parliament—for example, someone of the quality of John Hume or Seamus Mallon—why should they not be able to do so if their immediate political circumstances and desires would be reflected by that outcome? The amendment is unduly prescriptive. There is no sense in limiting this to four years. Therefore, I invite noble Lords to reject the amendment.
Lord Hooson: My Lords, I made it clear in my introductory remarks that I did not really intend to press the matter to a vote. However, I thought that it was a matter which ought to be debated. I am sure that it will be debated more and more, both in this country and in Europe generally, in the years to come. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 14 [Effect of disqualification]:
[Amendment No. 24 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 25:
Page 9, line 45, leave out ("any proceedings of") and insert ("anything done by").
On Question, amendment agreed to.
Clause 16 [Salaries and allowances]:
Lord Simon of Glaisdale Lord Simon of Glaisdale moved Amendment No. 26:
Page 11, line 3, leave out subsection (4).
The noble and learned Lord said: My Lords, this amendment is grouped with Amendment No. 27, which raises much the same point. Exhilarated, almost intoxicated, by the acceptance by the noble and learned Lord the Solicitor-General of an amendment that I did not move, I hasten now with confidence to move an amendment designed to get rid of yet another unnecessary provision. That provision is to be found on page 11 of the Bill in Clause 16(4), and says:
"A determination or direction under this section may provide for different allowances for different cases".
Subsection (1) of the clause states that the assembly shall pay to its members,
"salaries at such levels—
(a) as the Assembly from time to time determines".
Subsection (3) provides that:
"A determination or direction under this section may provide—
(a) for higher levels of salaries to be paid to Assembly members holding any of the offices specified in Part III".
In other words, one receives a higher salary if one is in an executive position in the assembly; in effect, a member of the Cabinet system within the assembly. All that is entirely sensible and reasonable.
However, subsection (4) of the clause says:
"A determination or direction under this section may provide for different allowances for different cases".
The "different cases" of those who have executive responsibility in the assembly have already been dealt with. Therefore, what does this subsection do? In fact, it is one of those provisions which pops up on the computer in the office of parliamentary draftsmen, in one form or another. If this provision were omitted, it would make not the smallest difference. In any case, does anyone really suppose that the same determination or direction must make the same allowances for different cases? That being so, we can get rid of a provision that merely swells this statute. I hope that will get rid of a similar provision which occurs in almost every Bill that comes before your Lordships.
The second amendment relates to a similar provision with regard to pensions, not allowances. Clause 18(3) states,
"Different provision may be made under this section for different cases".
Of course they may. Why should the same provision be made for all the different cases? It is absolutely unnecessary to state this. I beg to move.
7 p.m.
Viscount Bledisloe: My Lords, it seems to me that the noble and learned Lord, Lord Simon, has made for this amendment an even more powerful case than he made earlier. Indeed any provision where you could not make different allowances for different cases would surely need express legislation the other way. If you could make only one allowance for different cases, you would have to award the same expenses allowance for the man who has travelled five miles as for the man who has travelled 50. Not only is this unnecessary but it is totally fatuous. The sooner it is removed from the Government computer, the better.
Lord Mackay of Ardbrecknish: My Lords, I have some sympathy with the noble and learned Lord the Solicitor-General because on a number of occasions the noble and learned Lord, Lord Simon of Glaisdale, chided me about unnecessary provisions in some of the legislation for which I was responsible. Having had to respond to a debate on writing legislation in layman's terms, so to speak, I have much sympathy with what the noble and learned Lord and the noble Viscount have just said. Far be it from me to add much in the way of legal points to the points that have been made by the other two speakers. However, as an ordinary reader of legislation, as it were, it is subsections such as Clause 16(4) and Clause 18(3) that make the eyes glaze over. One wonders if, as a mere layman, one has missed something entirely. The noble and learned Lord makes a good case for omitting these provisions from the Bill.
Lord Williams of Mostyn: My Lords, the noble and learned Lord, Lord Simon of Glaisdale, has a point which is well worth considering. I promise to do that without guarantee.
Lord Simon of Glaisdale: My Lords, in those circumstances, all that remains for me is to thank my noble friend Lord Bledisloe who is, after all, a famous Queen's Counsel and particularly renowned on matters of statutory construction. I must also thank the noble Lord, Lord Mackay, for his late conversion to the view that I take of unnecessary provisions. I must also thank once again the Minister. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 [Pensions etc.]:
[Amendment No. 27 not moved.]
Clause 19 [Publication of information about remuneration paid]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 28:
Page 12, line 32, leave out ("of the Assembly").
The noble Lord said: My Lords, this group contains a vast number of amendments. The group starts with Amendment No. 28 and finishes with Amendment No. 236. They are drafting amendments and are intended to bring clarity to the drafting in the Bill and to simplify aspects of accounting provisions for the assembly, Her Majesty's Chief Inspector of Schools and the Forestry Commission during the assembly's first year. Some consequential amendments follow. Amendment No. 125 stands on its own. It is intended to correct a drafting error in Clause 93(8) which otherwise would have required the Auditor General for Wales to produce accounts for each financial year of the assembly.
Without these amendments it would be necessary for the Chief Inspector of Schools and the Forestry Commission to prepare one full set of accounts for the period from 1st April 1999 to the date on which the assembly is set up and another from that date to the end of the 1999–2000 financial year. This is because for the first few months of the financial year, OHMCI would receive its funding direct from Parliament, and for the remainder of the year from the assembly.
I hope that your Lordships will consider that the effect of the amendments is sensible. Their effect would be that for the whole of the financial year 1999–2000 a single set of accounts would be prepared for each body for the whole year and audited by the Auditor General for Wales. The Secretary of State would take decisions on funding for 1999–2000 and would make the payments for the first few months, with the assembly taking over thereafter. A number of the amendments delete the words "of the Assembly" or insert the word "financial". In respect of the former, the words are otiose. I hope that we have improved the drafting, not least by being more economical.
Finally, the Bill in Clauses 91 and 93 makes it clear that the Secretary of State will provide funding for the Auditor General before the assembly is established. As currently drafted, the Bill stipulates that the Auditor General must prepare accounts for each financial year of the assembly. However, the office of the Auditor General for Wales will be established before the assembly. Amendment No. 125 ensures that the

731
requirement to prepare accounts should apply from the date of his appointment. I hope that this simplified drafting will commend itself to the House. I beg to move.
On Question, amendment agreed to.
Clause 20 [Oath or affirmation of allegiance]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 29:
Page 12, line 41, leave out from ("not") to ("at") in line 42 and insert ("do anything as an Assembly member (other than take part in proceedings of the Assembly").
The noble and learned Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 22 [Transfer of Ministerial functions]:
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 30:
Page 13, line 24, after ("function") insert ("in the fields specified in Schedule 2").
The noble Lord said: My Lords, the amendments in this group deal with the transfer of functions. As we know, the transfer of functions clause is almost limitless in its scope as regards governmental functions exercised in Wales. We seek to limit the transfer of functions to those related to the 18 fields noted in Schedule 2. These are the fields where the Secretary of State currently has functions which are to be transferred by order under subsection (2) of Clause 22. In short, Schedule 2 denotes the extent of the initial tranche of transferred functions.
The question that our amendment poses is whether the scope for the transfer of functions to the assembly should be extended beyond the fields where the Secretary of State for Wales has exercised functions hitherto. It can be argued that the Bill's provisions are right as they stand and that they simply reflect the historical situation regarding transfers in Wales. The functions of the Secretary of State for Wales and the role of the Welsh Office have grown, like Topsy, over the years, as I know from personal experience.
I hope your Lordships will allow me a minor personal reminiscence. When I resigned from my post at the Welsh Office in 1994 I realised that I had served in that department for half its lifetime. The department was established only in 1964, and I joined it in 1979 under the auspices of my noble friend Lord Crickhowell. During my time there I saw the responsibility of the office extend, in education for example from primary to secondary, and to further and higher education. It was a tremendously impressive march as regards functions, and it secured many advances and benefits for young people in Wales.
There are other fields where similar progress has been, and can be, made and where there is scope for further progress. The field of health is one example. I saw many developments in that field and I am sure there will be more in time to come.
The question is whether new fields should be added to those listed in Schedule 2. The 18 fields listed in the schedule where the Secretary of State currently has functions involve the expenditure of some £7 billion. But total government expenditure in Wales is almost
732
twice that amount. The key question is whether the assembly's functions are to be limited or extended beyond the Schedule 2 fields to other areas such as social security, defence, and so on—to what might be called the reserved matters.
We are always aware of the Secretary of State's view that devolution is an ongoing process. The question is: how far should it go without further parliamentary consideration? Surely we must put a brake on this roller-coaster sooner or later. We must put a brake on the extension of functions beyond the areas referred to in Schedule 2.
The Scotland Bill has a whole schedule of reserved matters. The Bill before the House is based on a different principle. Even so, we should not abandon control by this Parliament. I believe in a "tight lines" policy. I am sure that my noble friend Lord Mackay of Ardbrecknish would approve of such a policy too. So would others who are devoted to the fine art of angling. It is a sound policy for devolution as well. I believe that we shall live to regret it if we do not set limits for further consideration and review on the devolution of functions. It will be the citizens who will suffer.
Amendment No. 36 refers to Schedule 3. It makes clear that an Order in Council under Clause 22 can extend to,
"any function of a Minister of the Crown".
It is as open-ended as it could be. Does it mean that a function of a Prime Minister, Foreign Secretary or Chancellor of the Exchequer can be transferred by order? I might tell my noble friends that even the Scottish executive is not safe from having a function transferred by order if I read paragraph 10 of Part III of the schedule correctly.
Our aim in Amendments Nos. 31 and 32 is clear. It is to ensure the possibility of transferring functions from, as well as to, the assembly. At present, it is all one way. There is what has been referred to in the past as a ratchet effect. The assembly appears only to be able to gain functions.
The Government already acknowledge in the Bill that they may make mistakes and that an order may have to be laid varying or revoking a previous order. All kinds of circumstances may arise where functions that it may now be thought appropriate for the assembly to exercise may in fact prove inappropriate over time. The clause appears to cover every possible kind of transfer except that described in our amendment. It seems odd that the Government have not included it and made sure that the Bill contains the safeguard provided by the amendment.
As matters stand, should circumstances arise where a transfer back from the assembly to a Minister is necessary, there will have to be special primary legislation. That is the position, as I understand it. That should not be necessary when we can make the transfer of functions asymmetrical by including a useful amendment in the Bill. I beg to move.
7.15 p.m.
Lord Williams of Mostyn: My Lords, if it is convenient for the House, I shall also speak to Amendments Nos. 30 to 33 and 36, since the noble Lord dealt with them all.
Essentially these amendments seek to alter the mechanism under Clause 22 for transferring functions. We debated this matter at length on an earlier occasion. I shall deal as shortly as I can, first, with Amendments Nos. 30 and 33. What we have here is the proposition that the assembly should acquire functions only in the fields specified in Schedule 2—that is, areas where the Secretary of State for Wales exercises functions now.
We intend to transfer to the assembly the functions of the Secretary of State for Wales by means of the initial Order in Council under Clause 22. However, as the noble Lord indicated, the process of devolution, administratively, has been cumulative. The Welsh Office acquired new functions on a regular basis on many occasions when the noble Lord was the appropriate Minister and via subordinate legislation such as is proposed in Clause 22. I therefore suggest that there is no great issue of constitutional principle. We think that that approach should continue.
If in the future the Government of the day, having the permission of Parliament, find it expedient, then functions should continue to be devolved to Wales by order. We have no plans to bring forward further orders. We simply believe it right to maintain a flexible mechanism should the opportunity be required. That is why we have introduced the transfer order process which the noble Lord's amendments would remove.
Clause 22 gives ample opportunity for parliamentary debate through the affirmative resolution procedure if any future government wished to transfer further functions. If these amendments were accepted, it would mean fresh primary legislation, even in relation to the most modest additional functions, where everyone judged that to be appropriate and sensible. I recognise the noble Lord's concern. However, I reiterate that we have no plans to bring forward further orders. We simply think that the mechanism should be available.
Amendments Nos. 30 and 33 could also prevent the transfer order making provision in respect of functions which do not fall neatly into one or other of the fields in Schedule 2. The Government have decided, for instance, that one of the appointments to each of the Equal Opportunities Commission, the Commission for Racial Equality and the National Disability Council should be made with the assembly's agreement. Those functions could be said to relate to all the fields in Schedule 2 but do not relate to any one of them in particular. There is no reason why the assembly should not have the powers I have indicated, but the noble Lord's amendments might prevent that.
We look to a stable constitutional settlement. Amendments Nos. 31 and 32 are a recipe for instability. Functions could be removed from the assembly or made subject to ministerial control almost at the behest of the Government of the day. We think that that is wrong.
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The Bill is drafted so that the power to transfer functions by order cannot be used to remove functions from the assembly unless the assembly itself—that is important—agrees to it. Clause 102 of the Scotland Bill has a similar effect, so that changes to the list of reserved matters in Schedule 5 to that Bill can be made by order only if the Scottish parliament agrees to it. We believe therefore that Amendments Nos. 31 and 32 will bring about uncertainty and instability.
If there is to be an assembly, which everyone now accepts, powers could be whittled away. That is a recipe for severe conflict. This Bill cannot affect the right of Parliament to pass fresh primary legislation that reduces the assembly's responsibilities. Clause 22 does not therefore affect the ultimate sovereignty of Parliament. But fresh primary legislation would be the proper way to proceed if it were decided to cut away the settlement that this Bill puts in place.
The Government placed limited provisions in paragraph 8 of Schedule 3 to the Bill for the assembly's functions to be subject to ministerial control—for example, in respect of cross-order bodies and functions in an English border area. There are strictly confined powers to override the assembly; for example, those in Clause 108. Amendment No. 32 heads in entirely the opposite direction and holds out the prospect—potentially—of every assembly decision being made subject to consultation with, or the agreement of, a Minister of the Crown. That undermines the very point of the Bill, the very principle which underlies this legislation: that certain decisions should be taken by an assembly elected by the people of Wales.
Amendment No. 36 would leave out paragraph 1 of Schedule 3 to the Bill. That would leave a degree of uncertainty as to whether functions in Acts passed after this Bill is enacted could be transferred to the assembly by order under Clause 22. I have already indicated that we wish to leave a structure available which can bring about the possibility of additional functions being transferred in due time.
The amendment seems to us also to make it possible for any ministerial function in the Bill to be transferred to the assembly. We do not believe that to be right. I hope that my explanation of our approach to these amendments, recognising the legitimate anxieties of the noble Lord, will satisfy him and induce him either not to move those amendments or to withdraw the one under consideration.
Lord Roberts of Conwy: My Lords, I am grateful to the Minister for his comments on these amendments. We realise that Clause 22 is pivotal in this Bill and that a mechanism has to be provided for transferring those functions which are currently exercised by the Secretary of State. Nevertheless, we are concerned about the point at which the transfers cease, so that Parliament can take a look at the situation and consider matters further. But we have been over this ground before and are familiar with this territory. I am satisfied with the Minister's reply and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 to 33 not moved.]
Schedule 2 [Fields in which functions are to be transferred by first Order in Council]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 34:
Page 82, line 18, after ("Agriculture") insert ("(except functions relating to the Common Agricultural Policy)").
The noble Lord said: My Lords, Amendments Nos. 34 and 35 return us to the difficult question of the relationship between the assembly, the Government in Westminster and the European Union. Of all the subjects laid out in Schedule 2, agriculture and fisheries are the ones that concern me most when it comes to the devolved position. If we had not been members of the European Union, if we had not had a common agriculture and a common fisheries policy, then I would not have these anxieties. However, we have those policies and therefore I have those anxieties.
At Committee stage I explained the current situation; how agriculture and fisheries Ministers—I shall make the argument for agriculture to save me doubling up on terms each time, though the same argument applies to fishing—the MAFF Minister, the Welsh, the Northern Irish and the Scottish Ministers (or their officials) discuss between the departments the various issues that will arise at Council meetings. Often agreement can be reached between officials as to the British position of what the so-called "wish list" might be, with Ministers being copied the papers.
Occasionally, and perhaps more often than not, Ministers themselves meet fairly informally and make the final decisions and agreements. Then, rarely but it happens, Cabinet sub-committees are convened in order to resolve any major differences that arise between MAFF and what are called the territorial departments. The MAFF team then goes to Brussels and, currently, Ministers from Wales, Northern Ireland and Scotland can be part of the delegations because they are Ministers of the United Kingdom Government.
As I explained to your Lordships on a number of occasions, when I was the fisheries Minister at the Scottish Office I went to Brussels and on at least one occasion I can recall that I led for the United Kingdom on United Kingdom matters, not just on Scottish matters. I underline that point because I felt it was being missed in Committee by Government Ministers: that is, that I was there as a member of the United Kingdom Government, not as a member of any other government.
The situation will be different once devolution takes place. I fully accept that officials of the Welsh assembly involved in agriculture will be able to have discussions with their colleagues in MAFF to agree positions. I fully accept also that the agriculture secretary—I imagine that there will be one—will have discussions with his opposite numbers in MAFF and, because they will all be reasonable men and women of good will, they will probably be able to come to an agreed position. Sometimes it may be difficult to come to such an agreed position. I believe I am right in thinking that, if they cannot come to an agreed position, the position of MAFF will prevail. The Welsh agriculture secretary will
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have to agree with the MAFF position and in any debates in the Welsh assembly he will have to toe the line as agreed by the MAFF team.
The MAFF team then goes to Brussels. Very often issues are decided in the night on the basis of compromises—one gives a little and one takes a little. The wish list is not always ticked off. Though the last government, like this one, always managed to come back with great triumphs, the truth was that more often than not we had not obtained everything on which we set out minds. We had to make compromises; and that is part of the whole point of being members of the European Union—everyone has to make compromises to obtain agreement. They cannot leave without agreement because people depend on the decisions made under the common agricultural policy and the common fisheries policy. Unlike almost every other policy, those policies are absolutely vital to the two industries.
While the Welsh agriculture secretary may be allowed to go to Brussels and may—I say "may" because I am not entirely sure about this—be able to get into the outer rooms and the room of the British delegation, and may be able to take part in the discussions during the night, the one place where he will not be able to go is to the table representing the United Kingdom. He will not be able to represent the United Kingdom; and I doubt that he will be able to represent issues which are wider than Wales but involve the whole of the United Kingdom.
At the end of all that, currently the agricultural Minister reports to Parliament and answers questions from Scotland, Wales and Northern Ireland as well as England. I should like to know (because it will help me to think through how all this will work) whether, in the new system, when the MAFF Minister comes back from a Council meeting—let us assume that the Council meeting is important enough for him to make a Statement in the other place—Welsh Members will be able to question him about Welsh aspects or whether the speaker will simply say, "These are matters which have been devolved and are the responsibility of the Welsh assembly". It would certainly help me if I could get a clear indication of how the Government think these matters will be discussed, both in the other place and here. If they are allowed for debate in the other place, I presume that they will be allowed here. If I am told that they will be allowed, it seems to me that almost any issue will therefore be allowed in the other place and that we are simply backtracking on what I understood to be the point of devolution—that these issues go to the assembly.
At the end of our previous debate on this matter I pleaded with the Minister to give me some examples of when ministers representing subsidiary governments, if I may so call them, were able to represent their countries at the Council of Ministers. I am grateful to the noble Lord, Lord Williams of Mostyn, for sending me a letter, which he placed in the Library. At the risk of taking just a few moments, I should like to read it out. It states:
"The more obvious instances which have been identified relate to the German Länder. Because of its particular expertise, Bavaria, for example, has represented the German government at EU meetings where cultural issues have been the main agenda item. Similarly, members of the Catalan autonomous government have attended

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meetings on behalf of the Spanish, where language issues were under consideration. I trust this information goes some way to removing your scepticism that in practice it would not be possible for an assembly member to be part of a UK government delegation, nor indeed to lead such a delegation, if that was the view reached by the UK government".
With all due respect—I hope that the noble Lord, Lord Elis-Thomas, will not be too irritated if I suggest this—I really do not think that cultural and language issues are the stuff of which the European Union is made up.
7.30 p.m.
Lord Crickhowell: My Lords, I am grateful to my noble friend for giving way. As I understand it, on the occasions to which he referred—certainly, this was the information given in another place—although Länder ministers attended the Council meetings on four occasions, they were never the sole representatives of the German Government; and they certainly were not the lead ministers.
Lord Mackay of Ardbrecknish: My Lords, my noble friend's information clearly underlines my reservations, reservations which the letter and the information my noble friend has given me in no way allay. In the letter the examples given are cultural and language issues. Those are a long way from the very serious issues of agriculture and fisheries which are conducted in Brussels and make up the very policy which determines the way farmers and fishermen work and live in this country. While I am grateful to the noble Lord, Lord Williams of Mostyn, for his letter, his examples confirm my concern on behalf of agriculture and fisheries. I am in no way satisfied that agricultural and fishing interests in Wales will be properly represented. My suspicions and fears are in no way allayed.
What I have done in my amendments is to say, "Yes, let's devolve agriculture except functions relating to the CAP and except functions relating to the CFP". I fully accept that the great bulk of the serious and major decisions will therefore not go to the Welsh assembly. They will stay here so that they can be properly represented in Brussels. I make no apology for that. My interest is not to puff up the assembly's position; it is to ensure that the position of Welsh agriculture and Welsh fishing is properly represented at the meetings which count. The meetings which count are not held in Cardiff and are no longer held in London; they are held in Brussels.
I am still full of reservations about handing over agriculture and fisheries to the Welsh assembly when the Welsh secretaries for these subjects will not be members of the United Kingdom Government and, in my view, despite the two examples given, will not get anywhere near the Council of Ministers to represent the UK when these serious matters, which inevitably cross the barriers inside our country, are discussed. The issues discussed are usually complex. They range from Welsh interests, Scottish interests, English interests and Northern Irish interests to whole-UK interests. The only time the Welsh position seems to be capable of being
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preserved will be when there is no difference between the needs of agriculture in Wales and the needs of agriculture in the rest of the United Kingdom.
My reservations remain. I offer my amendment in a positive spirit. I am interested in making sure that as much as possible is devolved. There are issues in agriculture and fisheries which can easily be devolved because they are not included in the CAP and the CFP. But when it comes to the CAP and the CFP, these issues should be reserved for the United Kingdom Government so that they can properly represent them in the Council of Ministers. I beg to move.
Lord Crickhowell: My Lords, I rise only to make one brief point, although I intend to return in a later amendment to the general issue of Europe and to some of the points on which my noble friend has touched. However, because I believe he is absolutely right that there is no way an assembly secretary will be allowed to represent the United Kingdom on crucial questions of agricultural policy, I should like to reinforce and reiterate the question posed by my noble friend about the ability of Members of Parliament to question Ministers when they return from Europe on what has happened in European negotiations.
I hope there is no question of their being told, "It is not a matter for Members of Parliament because agriculture has been devolved to the assembly". It is clear that the negotiations on behalf of the United Kingdom, including Wales, will still have to be led—the Government admit that they will have to be led—by a UK Minister. In practice, the negotiations will have to be carried out by a UK Minister. We need reassurance that Parliament will be able to cross-examine Ministers about their performance in Europe.
Lord Stanley of Alderley: My Lords, I have put my name to this amendment. I am sorry that it has come up at this time because it is rather important. But perhaps noble Lords think that agriculture does not matter as far as the assembly is concerned.
Following the explanation of the noble Lord, Lord Williams, I accept that Schedule 2 is not specific and that more matters could be placed in the schedule or indeed taken out. In my words, that translates into the phrase "Schedule 2 is not worth the paper it is written on". However, assuming that the noble Lord, Lord Williams, persuades me that, as far as concerns agriculture, Schedule 2 means what it says and agriculture will be devolved, I have, like my noble friend, some reservations.
I am sorry to say that the letter which the noble Lord, Lord Williams, kindly wrote to me in answer to my questions in Committee on 2nd June (at col. 288 of the Official Report) does not greatly clarify the matter as to how Welsh farmers will proceed; to whom they must make obeisance; and which aspects of agriculture will be directed from Brussels, Whitehall or the assembly. The noble Lord was specific in answering my Amendments Nos. 60 to 63 when he stated that health and safety and pesticides would not be transferred to the assembly. As far as concerns animal health, welfare and

739
food safety, I gather that, as they are today a joint responsibility of the Secretaries of State, a role will be played by the assembly. I hope I am correct in that.
I did not quite understand how that will work in practice. I presume that the assembly, or rather the assembly's civil servants, will merely initial or approve anything coming from Westminster or Brussels. If that is not to be the case, perhaps the noble Lord, Lord Williams, will enlighten me, and, for simplicity's sake, give me an example of what alterations or additions the assembly could make, and how.
Turning to European Union grants, I gather from the noble Lord's letter that the assembly—and I believe I quote his words—"will have very little discretion". I shall be interested to hear if it has any discretion at all at the moment. As to the future—and the noble Lord quotes Agenda 2000—surely it would be wise to leave things as they are until that occurs, if it ever does, and then to take a decision to transfer powers to the assembly if that seems to be correct. That seems to me to be a fairly easy thing to do. That seems to be the case as regards HLCA and BSP payments and the less favoured areas.
I was interested to read that the assembly will control agri-environmental schemes probably through the Countryside Council for Wales. I am pleased to note that funding for such schemes will be ring-fenced and not come out of the Welsh budget. I hope that the noble Lord, Lord Williams, will confirm that. Therefore, it appears that the great majority of funding and influence on Welsh farmers will not be in the assembly's jurisdiction. So, like my noble friend Lord Mackay, I find it hard to understand how the assembly can produce a meaningful, long-term agricultural plan, much as I should like to see one.
So far as Welsh farmers are concerned, the crux of the matter lies, as my noble friend said, in what deal can be done for them in Brussels. That is where I find myself in total agreement with the explanation of my noble friend Lord Mackay of the problem so well explained that even I could understand it, at Committee stage (cols. 305 to 308 of the Official Report) and again this evening. I shall not repeat my noble friend's case, but I hope that the noble Lord, Lord Williams, will address his points very carefully indeed. I fear, too, that the assembly will be able to exert little influence on the proceedings in the CAP barter wrangle. That is what concerns me most because, needless to say, I want the best deal for the Welsh farmer.
Lord Williams of Mostyn: My Lords, I believe that the noble Lord, Lord Crickhowell, hinted at something which I am about to say; namely, that some of the questions asked by the noble Lord, Lord Mackay of Ardbrecknish, relate to Amendment No. 43 in the name of the noble Lord, Lord Crickhowell, which is related to Clause 29. That deals specifically with representation in Europe. It is probably more sensible if I deal with those matters when I deal with the observations on the amendment by the noble Lord, Lord Crickhowell.
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I shall reply to the present amendments because otherwise one is going to become hopelessly confused. They are specific and seek to exclude functions relating to CAP and the common fisheries policy from Schedule 2. That proceeds on a misapprehension about what Schedule 2 can do and therefore what might be brought about by these amendments.
Schedule 2 simply lists the areas where the Secretary of State for Wales now has functions. Where he does not have them now, they are not listed in that schedule. Where a particular area is listed in Schedule 2, the Secretary of State has to consider transferring functions in that field to the assembly but—and this is the heart of it—excluding a field from Schedule 2 does not prevent the transfer of functions order relating to it because the schedule itself does not and cannot limit the scope of the transfer order under Clause 22.
I understand and sympathise with the concerns of the noble Lord, Lord Mackay of Ardbrecknish, but these amendments cannot prevent the assembly acquiring functions as regards the common fisheries policy or the common agricultural policy. That is the short answer to these particular amendments.
I have written on a number of occasions to various of your Lordships. The noble Lord, Lord Mackay, referred to the letter of 24th June. It echoes what the noble Lord, Lord Crickhowell, said. I simply said,
"I trust that this information will go some way to removing your scepticism that … it would not be possible for an assembly member to be part of a UK Government delegation nor indeed to lead such a delegation if that was the view reached by the UK Government".
I do not believe that the noble Lord, Lord Crickhowell, and I are in disagreement there. But that makes no change from the present position.
Lord Crickhowell: My Lords, before too many assumptions are made of that kind, the noble Lord had better await the discussion that we are going to have on Amendment No. 43. I am going to have some very strong reservations about the way in which representation can take place.
Lord Williams of Mostyn: My Lords, I should have kept to the advice that I gave myself; namely, to try to deal with things in their appropriate place. But I did not want to appear discourteous either to the noble Lord, Lord Mackay, or the noble Lord, Lord Stanley, when they had deviated from the point of the present amendments. Therefore, I shall obey with gratitude what the noble Lord said. I shall not overlook the points that have been raised. However, this is a particularly limited amendment. It tries to say, "Limit Schedule 2 by excluding the transfer of CAP or the CFP". The short answer is that that would not have the result the noble Lord, Lord Mackay, wants for the reasons that I have given, because Schedule 2 cannot limit the transfer order powers in Clause 22. I shall return to the other questions in due time and in their appropriate place.
7.45 p.m.
Lord Mackay of Ardbrecknish: My Lords, I believe that I did not deviate from the amendments, because the argument in favour of exempting the CAP and the CFP from devolution is exactly the argument about who represents them in Brussels and how that is reported back to either the other place, the Welsh assembly and therefore to the representatives of the Welsh people. I may be particularly stupid, but if Schedule 2 says,
"Fields in which functions are to be transferred by first order in council—agriculture except functions relating to the Common Agricultural Policy"
that seems to me self-evidently clear; namely, that functions cannot be transferred relating to the CAP policy. If it does not mean that, then I suggest that the legislation is very badly drafted in some way. Ordinary people reading it ought to be able at least to get a glimmer of the meaning. I believe that the meaning in my amendment is absolutely clear. I am promised that later on my fears may be addressed. I am really torn—
Lord Elis-Thomas: My Lords, I am very grateful to the noble Lord for giving way. Can he specify how he distinguishes between agricultural policy and the common agricultural policy when the whole of agriculture, in terms of financial support, measures and regulations, are held within the common agricultural policy?
Lord Mackay of Ardbrecknish: My Lords, as I believe I said in my opening speech, the fact is that most of the issues involving agriculture and fisheries are tied up in the policy. But there are some agricultural policies which are entirely member-state oriented. There are payments to farmers which are member-state oriented and payments to bodies such as agricultural colleges and certain services which are entirely UK oriented. One could make the distinction. But the bulk of the matters are for Brussels and I do not see any pretence about that. I am trying to find some sort of accommodation which allows me and my noble friends to feel that agriculture and fisheries—especially agriculture in Wales—will be properly dealt with.
I was very tempted to seek your Lordships' opinion, but as I have had what amounts to only half an answer and I am invited to wait until later on when my noble friend's amendment is addressed, I cannot in all justice ask the opinion of the House yet. But I shall have to be better convinced than I have been in the past five minutes before I can resist the temptation to return to this issue either later tonight or at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 35 not moved.]
Lord Whitty: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that the House returns no earlier than 8.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Indebted Poor Countries
7.49 p.m.
Viscount Brentford Viscount Brentford rose to ask Her Majesty's Government how many of the heavily indebted poor countries are likely to experience substantial cancellation of debt in the next three years.
The noble Viscount said: My Lords, at the outset I should like to express my gratitude to all those noble Lords who are to speak in this short debate. It gives me enormous pleasure that the right reverend Prelate the Bishop of Manchester has opted to make his maiden speech in this debate. I am sure that we all look forward to his remarks, as well as to those of all other noble Lords. I wonder whether other noble Lords had the same problem as I did when preparing for this debate, which I did yesterday evening with half an ear and half an eye open to a certain football match that was being played. I hope that I concentrated enough to be reasonably coherent this evening. We may have lost that game, but it was at least good to know that at Wimbledon today Mr. Henman managed to get comfortably through another round.
I am glad that the present Government, like their predecessors, are taking an international lead on this subject. They clearly view it as very important. However, it involves a complex tangle of issues, with some of which I should like to deal when putting this Unstarred Question to Her Majesty's Government. We in the developed countries of the West must bear some responsibility for the present predicament. We, for instance, have lent money to dictators—money which has often been badly misspent. We have also, on the other hand, benefited from the low price of the raw materials of the heavily indebted poor countries (the HIPCs). Another problem is that we should not forget the thrifty countries, such as Botswana, which have not piled up debt but have lived within their means.
The first particular problem that I should like to address is the question of the creditor's balance sheet if the debt is to be written off. In the UK, we have a much smaller problem than do most other G8 countries. We are owed only about one-eighth of what is owed to Japan and one-quarter of what is owed to Germany. Most debt (some 58 per cent.) is owed to specific countries, largely for providing export credit. Another 22 per cent. is owed to the World Bank, IMF and associates, and 20 per cent. is owed to commercial banks. When the UK writes off any debt in this matter, how will that be shown in the creditor's balance sheet? Is that a problem?
I have some suggestions on this issue. First, when loans have been made for specific projects, could they now be turned into equity so that perhaps the UK Government take a 50 per cent. shareholding in a specific project? That was done with Eurotunnel and it turned loan into equity. Capital repayments and interest payments from the HIPCs would cease immediately. If the project became profitable, perhaps dividends on 50 per cent. of the share would become payable to the UK, so there would be a benefit. Secondly, will it otherwise be necessary to increase the PSBR or taxes,

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or is there no worry about the UK's balance sheet in this matter? Thirdly, the lending banks have written down loans. Will the Government consider buying such loans, at low value, and writing them off so that they are cleared from the HIPCs' debt? My fourth suggestion relates to the World Bank and the IMF. Would they consider selling a small part of their gold reserves (perhaps 15 per cent.) to repay debt and at the same time, and in addition, write off a similar amount of debt, which I believe that they could perfectly well do without harming their future capacity to lend?
My second point relates to the debt sustainability analysis procedure. Debt sustainability analysis is the assessment of each country made by outside people with a view to a decision about whether such a country qualifies for debt relief and, if so, how much will be given. Do Her Majesty's Government consider that such provisions today are too difficult to enable the most needy countries to qualify for adequate debt relief so as to lead to real poverty reduction? Do not the proposals look only at macro-economic indicators and not sufficiently at real poverty levels?
Perhaps I may take Tanzania as an example, although it is probably not one of the countries which the noble Lord, Lord McIntosh of Haringey, will cite in his answer. Its decision point is to be pushed back to 1999 and its completion point to 2002. Its current budget allows for 10 dollars per head for debt service and about 2 dollars per head for health and 4 dollars per head for education. That is a pretty disastrous situation. In 1996 the World Bank carried out an assessment of poverty in Tanzania and concluded that over 50 per cent. of its people lived below a poverty line of 1 dollar per day. To achieve the OECD poverty reduction target of halving poverty by 2015, the Tanzanian economy would have to double its growth rate to some 8 per cent. per annum. The current external debt of 8 billion dollars is also a big deterrent to investors. Perhaps an immediate halving of the debt is needed. What steps are Her Majesty's Government now taking to ensure that other bilateral and multilateral creditors commit themselves to the necessary poverty reduction targets?
My third point is to ask Her Majesty's Government what plans they have to ensure that savings made for HIPCs would in practice be transferred into poverty reduction programmes. Perhaps I may quote the words of the Lord Privy Seal in our debate on the G8 summit. I fully agree with the noble Lord, who said:
"it is important that whatever steps are taken, the benefits go to the poor in the country, and that the institutions in the relieved countries are capable of handling it".—[Official Report, 20/5/98; col. 1690.]
That is a very important point.
Vital money saved must be seen both nationally and internationally to be spent on the reduction of poverty, not on commissions to government or on prestige projects as in the past. One way would be for binding guarantees on this expenditure to be given, with programmes being discussed and agreed in advance by government, creditors and donors. There must also be opportunities for external liaison as each programme
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continues. Would Her Majesty's Government consider such a system with a view to suggesting it to the IMF and the World Bank?
I believe that this subject is crucially important—in the UK for our own integrity and international respect, but much more so for the HIPCs. They are really struggling today and it is very important that we help them. Can we please ensure that a substantial start in actual debt reduction has been made by the end of the year 2000, a suitable year of jubilee for the forgiveness of totally irrecoverable debt?
7.58 p.m.
The Lord Bishop of Manchester: My Lords, I am sure that we are all grateful to the noble Viscount, Lord Brentford, for introducing this subject tonight. A long time ago, my mum told me never to speak to anyone until I was spoken to, so it is only after six months of listening and watching, sometimes patiently and sometimes rather impatiently, that I now close my ears, shut my eyes and give voice.
The subject we are considering tonight is not debt while others dine, but the unrepayable debts of the poorest countries of the world—unrepayable because of their huge scale in relation to the sources of the debtors, although not so large in relation to the sources of their creditors.
The magnitude of the problem is illustrated by the fact that between 1990 and 1993, the countries of sub-Saharan Africa transferred 13.4 billion dollars annually to their external creditors, considerably more than their combined spending on health and education. That annual figure of 13.4 billion dollars was prevented from being higher only because much of these debts had been rescheduled, to use the technical language of the World Bank, thereby increasing the long-term burden on people and nations who remain extremely unlikely to be able to pay in future more than they can pay at present. Today, Africa owes the richest countries more than three times the figure that she initially borrowed. The total indebtedness of the poorer countries of the world is of the order of 2,000 billion dollars, according to World Bank figures.
During this decade I have seen for myself some of the problems not as a tourist or as a businessman seeking trade but as a Church leader identifying with local Christian communities. I have camped in the bush in Uganda and stayed in bustees in Pakistan and in the townships of Namibia. I have experience of lack of clean water and sanitation and of direct access to healthcare and education. That is the daily lot of millions of people in the countries about which we are speaking tonight. I have seen the tremendous progress that is being made but also the devastating effects of continued indebtedness on the poor.
When the Secretary of State for International Development visited Manchester last March I and many others were encouraged by her strong endorsement of the Government's White Paper Eliminating World Poverty whose central objective is the sustainable development of the planet, and, most importantly, the single greatest challenge that the world faces: the

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elimination of poverty. I believe that that objective is still at the top of Her Majesty's Government's agenda. Like the noble Viscount, Lord Brentford, tonight I shall be interested to hear the targets. How many countries now face unrepayable debts and are likely to have those debts remitted by the year 2000, the year 2005 and the year 2010?
Can anything be done immediately? I believe that it can. Essentially, the governments of the world's 50 poorest nations need to be accepted as bankrupts and to have their debts written off. The poorer some parts of the world become the greater the instability of the world as a whole—multinational companies who control the terms of world trade are very familiar with that and are anxious about it—and the more difficult it becomes to cope globally with environmental, health and population issues that affect us all. In the long term it is impossible to have a stable Europe and an unstable Africa and to have an environmentally safe Europe and an environmentally unsafe Africa. I ask Her Majesty's Government whether the urgency of the situation is recognised.
As the noble Viscount indicated, there must be some conditionality to the relief of unrepayable debts. It is fair to test a country's probity, economic management, social policies and human rights record before relieving debt or increasing aid. But it would be improper to impose on poorer countries the kind of exactitude that we were unable to attain in the early phases of our development that stretches back nearly 2,000 years. I remind the House that it is only this century that women were given the vote in England. We should not be too pleased about our progress in democracy.
The problem has a social and moral dimension. I am not sure whether I am allowed to mention God in this House. God takes the world seriously. It was out of love for the world that God came among us. He commanded us to love our neighbours as we love ourselves—and we love ourselves quite a lot. We need to do the same for our neighbours and also to love our enemies.
Yesterday I was reminded that Shakespeare put into the mouth of John of Gaunt a description of England as
"this sceptered isle … This precious stone set in the silver sea".
I doubt whether the waters around Britain can be described as silver. We are an island but are we "sceptered"? A scepter is a sign of authority and sovereignty. True, authority comes from the willingness to serve and to offer oneself in generous self-giving above and beyond the call of duty. Thomas Aquinas said that peace was indirectly the work of justice which removes the obstacles but directly it was the work of friendship. Poor countries saddled with unrepayable debts look for our friendship. They long for those nations that call themselves great—we among them—to help them find a way out of their bondage. A very heavy responsibility rests on us all.
8.4 p.m.
Lord Grenfell: My Lords, I am very grateful to the noble Viscount, Lord Brentford, for tabling this important Question tonight. I am also very grateful for the opportunity that it accords me to congratulate the
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right reverend Prelate the Bishop of Manchester on his exceptionally fine maiden speech. This is one of those occasions when one much regrets the severe time strictures placed on speakers in a dinner-hour debate in your Lordships' House. I would have liked to hear the right reverend Prelate speak at greater length on a subject in which he is clearly very knowledgeable and which he approaches with such wisdom, compassion and a great deal of common sense. We look forward to his future interventions in your Lordships' House with keen anticipation.
I should declare a past interest, in that I spent 30 years at the World Bank before retiring from the agency in 1995. Therefore I am somewhat familiar with the developments that led to the eventual establishment of the heavily indebted poor countries initiative (HIPC). However, I can claim no measure of authorship and can therefore speak with a certain amount of objectivity about it. While debt relief is a strong anti-poverty weapon, it must be seen as a component of a much wider and deeper development strategy. Debt relief never has and never can guarantee higher living standards by itself. What it can and must do is help remove the obstacles that prevent a country from fully focusing upon those strategies, policies and measures that are essential to achieving sustainable economic and social development and the eradication of poverty.
As noble Lords will be aware, the purpose of the HIPC initiative is to help these 40 or so countries achieve overall debt sustainability, thereby enabling them to exit from the debt rescheduling process. It engages the international community, including all creditors, in a concerted and co-ordinated exercise to reduce a country's debt to a sustainable level. The concept of "sustainable debt" is an important one, not least because the often promoted total debt forgiveness—the "big bang"—is so fraught with difficulties and dangers for debtors and creditors alike. The problem about a one-off total write-off is that it assumes the creditors will continue to be available if and when needed to maintain any necessary flows of capital to the original debtor countries. That may not be the case.
Furthermore, international institutions may find themselves down-rated in the capital markets as the result of a total write-off, which adds to the cost of their own borrowings, the higher cost being passed on to the new borrowers. With official aid levels sinking steadily and with serious uncertainties about the sustainability of the high levels of private capital flows, to lose access to official flows on reasonable terms would be unfortunate to say the least.
Having said that in favour of the HIPC framework for debt relief over the big bang approach, improvements in the HIPC initiative are clearly needed. I greatly welcome Jubilee 2000's campaign to keep up the pressure on this matter, even though I take issue with some of its proposals. I take issue with some but by no means all because the coalition supports a number of principles that underpin the HIPC initiative, in particular the objective of debt sustainability and the acceptance finally by multilateral financial institutions of relief for their own debtors.

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The Jubilee 2000 coalition is right to call for a speeding up of the HIPC process. It is certainly none too encouraging that at present, after Uganda, only Bolivia, Guyana, Burkina Faso and Mozambique are set to obtain relief by the end of the century. The six-year performance period needs to be cut, even though some flexibility is already built into the process. I agree with Oxfam and others that we need to lower the threshold at which debt is deemed unsustainable. The rule of thumb that a nation's debt is unpayable when it totals more than two and a half times its export receipts was appropriate to the case of middle-income countries of Latin America but not, in my view, to the weaker economies of sub-Saharan Africa, where infrastructure and social expenditure needs to be a substantially higher proportion of GDP.
I very much welcome Her Majesty's Government's efforts at the G8 Birmingham Summit which led to the G8 signing up to an albeit rather less ambitious Mauritius mandate target than originally proposed by the Chancellor of the Exchequer last September. But it was a step in the right direction. I also applaud the British-inspired decision to facilitate debt relief for some seven post-conflict countries. However, the G8 could and should have gone further in modifying the HIPC initiative. Japan, a country for whom debt forgiveness is not a happy concept, is of course in a major crisis and Germany has borne and still bears the huge financial burden of reunification. But Japan's crisis will end and Germany's reservations over further debt forgiveness sit a little uncomfortably with memories of the extensive debt forgiveness afforded to her in 1953.
One further issue to which the noble Viscount, Lord Brentford, referred needs to be addressed. It is the deep and regrettable reluctance of some G8 countries to allow the IMF to sell gold to help finance the debt initiative. Perhaps my noble friend the Minister will tell us whether Her Majesty's Government still feel that this is a path worth pursuing.
To sum up, the HIPC initiative provides a reasonable framework for achieving sustainable debt levels but it needs reforming in order to match the urgency and scale of the debt crisis plaguing so many poor countries. It will, I believe, serve them better than a risky one-off write-off with all its uncertain consequences. An HIPC initiative revamped to do the job faster and less painfully will require consensus amongst creditor nations. That is what we should be striving for.
As my right honourable friend the Prime Minister said when he reported back to Parliament on the debt discussions at the G8 Summit:
"This is a vast and complex issue which cannot be solved overnight. And we have to mix realism with our idealism".
8.11 p.m.
Lord Hardinge of Penshurst: My Lords, I thank the noble Viscount, Lord Brentford, for introducing this important subject and I congratulate the right reverend Prelate the Bishop of Manchester on his eloquent and notable contribution.
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I am the businessman to whom he referred, who goes seeking trade. I would like to look a little beyond the immediate horizon. Let us assume that things go reasonably well with the current debt relief plans. These are basically an essential damage limitation exercise, but what do we do next?
The history of lending to poorer nations is not particularly encouraging. At present sub-Saharan Africa has accumulated nearly a quarter of a trillion dollars' debt. According to my back-of-the-envelope calculation, this has increased by about 30 times, after taking account of inflation, in the last 30 years. Unforeseen circumstances such as wars and natural disasters have clearly had an impact. However, leaving these aside, it is fair to say that in many cases the assumptions made about the borrowers' ability to service this debt were optimistic or even heroic.
It is clear that over the coming decades resource flows will be necessary on a substantially greater scale than in the past if there is to be any prospect of achieving the targets set out by the Government and others. This will inevitably be a mixture of public and private funding, aid and loans. Whatever their nature, future transfers will have to perform considerably better than past ones.
The HIPC initiative sets out a framework designed to achieve this but some concerns remain. In particular the levels of debt deemed to be sustainable have been set too high and the debt relief provisions have been drawn too narrowly. I appreciate that both this Government and the last have been on the side of the angels in this matter—they have also been on the side of the Bishops—and I make these comments to encourage more of the same, not to criticise. This is an area where realism and generosity pull in the same direction.
The main issue that I want to address is that of wealth creation. Anyone who visits poor countries—even not very poor countries—becomes aware of the desperate ingenuity and entrepreneurial energy displayed there, usually crippled by a terrifying lack of resources and often by bureaucratic obstacles as well. These energies are sometimes necessarily, on a microscopic scale. My daughter found that someone had started to clean out her ears when she was not looking. This is funny in a way but it is also sad. The entrepreneur would probably have found a more productive outlet for his ingenuity if his capital resources had stretched beyond a cotton bud.
However, even if they had, he might still have found an army of people apparently dedicated to preventing wealth generation. Anyone doing business with developing countries will be familiar with the kind of bureaucratic hurdles that often exist there and which, whatever their immediate justification, divert and distort productive effort. There have been improvements in some of the poorest countries—Mozambique, for example—but there is still a long way to go. This is a key policy area in ensuring debt sustainability.
So, wherever the quarter of a trillion dollars went, it does not seem to have had much effect on the productive sector of the local economies. It would not be quite true to say it had vanished. Crumbling monuments to it can be seen here and there, dotted around amid the little markets, farms and workshops on which the future of the peoples concerned ultimately depends.

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This lack of impact is not inevitable although correcting it will require detailed persistence over many years. The process arising from the present relief measures will need to be continued and refined. New frameworks for transfers will need to be developed. I think we need to do much more in the future than in the past to monitor the effectiveness of programmes and to establish best practice, by quantitative studies where possible.
G.K. Chesterton referred to
"Lending the poor that funny cash
That makes them poorer still".
Creditor nations have done quite a lot of that over the years. The HIPC initiative lays most emphasis on the debtors achieving conditions for sustainable development, but the creditors have quite a lot of work to do as well.
8.17 p.m.
The Earl of Sandwich: My Lords, the profile of international debt has risen considerably in the past year and it is to the credit of the British presidency that it was so high on the agenda at Birmingham. The positive role of the Jubilee 2000 campaign, thanks to a broad spectrum of churches, trade unions and other interests, is well known. Equally remarkable has been its effect on government and its ability to keep Ministers up to the mark.
Rarely has a lobby on overseas development received such all-party support, truly reflecting the strength of public feeling. There is a paradox. Many support aid and overseas development in principle but it seems that many more people are appalled by the spectre of debt on top of poverty, of a country already on its knees required to repay its loans. As we try to visualise the condition of people struggling to meet daily needs, it is not just an academic discussion; we are experiencing a human story of Dickensian character but on an international scale.
For many in the aid agencies the paradox goes even further. Debt relief is being paraded as a solution, a new form of overseas development substitute, another generous gesture from the high table. We would like to do more, the official argument runs, but sustainability means greater conditionality, democracy and accountability. These days we have to be more hard-headed. We must not throw good money after bad. We cannot help a man when he is down, only when he is trying to stand up.
These arguments may sound good around the boardroom table and they certainly apply to regular concessional lending. They are not appropriate to the most indebted, post-conflict countries, many of which have passed through tragedies not of their own making, presided over by tyrants whom we in Europe often supported with arms and inappropriate prestige projects. Others accumulated debts through borrowing after the unforeseen collapse of commodity prices in the 1970s. Have we sunk so far as aid donors that we now even describe relief of unpayable debt as a new form of aid?
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These economic crises have also been major human catastrophes and there is, unfortunately, no Marshall Plan to deal with them. I am one of those who would like to see a much greater effort by DAC countries well beyond debt relief. Nowadays governments like to see beneficiaries as business partners. They are our business partners—they supply our needs and we supply theirs. Is it not time that we treated them as equals and traded more fairly with them, helping them to a more stable government, instead of blaming them for disasters which are often beyond their control? The Brandt Report was all about interdependence, but I fear that we have not come up to Herr Willy Brandt's expectations.
Mozambique is a particularly frail democracy which has tremendous economic potential. Its debt relief is minimal, amounting to less than 50p per head per annum. Through the HIPC initiative we are merely papering over the cracks, to lay a few small paving stones, not the foundations needed over many years, not providing development aid on the scale which is really required. Forty-one countries are classified as heavily indebted. Most have a 1993 present value of debt to exports higher than 220 per cent.
The thresholds are much too high, as has been said. Because of the stiff criteria only half a dozen of those countries are due to receive relief, and of those only Uganda has reached completion point. The G8 said last month that all eligible countries would enter the process by 2000, but it is a painfully slow process. Uganda will owe 190 million dollars in debt service this year alone, of which HIPC will pay only 20 million dollars—less than one dollar per Ugandan.
I hope to visit Uganda in two months' time to see the benefits of debt relief for myself. They will not help the million primary school children still not in school. Some countries will have to wait several more years. Others have to cling to the hope that they will qualify for relief in the future.
It is true that this Government are trying to move things along. Under the Commonwealth umbrella, donors are to accelerate the process, especially for post-conflict countries whose completion point is 2003, which may now qualify for faster relief for exceptional needs.
I have studied the factsheets and I understand that some countries qualify for additional assistance for social needs such as health and education. However, this is linked to the ESAF process, which is far from having been proved to be effective as a visible benefit for the poor.
Finally, there is no point in our complaining about the stinginess of other DAC members. As the noble Lord, Lord Grenfell, put it during a recent Question, we are on rather shaky ground when we seek to persuade other countries to increase their debt relief. The noble Lord, Lord McIntosh, who is to reply, seemed to concur when he said:
"It is necessary for us to pay our share in the aid programme ".—[Official Report, 18/6/98; col. 1681.]
If we pay our share of the aid programme, that is encouraging news, because we are even using our aid funds now to support debt relief, which normally comes

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out of Treasury funds. The famous expenditure review is nearly upon us. Can the Minister, who is sympathetic to these problems, whisper to us the date when we can take our place at the DAC top table and return to a real aid programme?
8.22 p.m.
Lord Redesdale: My Lords, the noble Earl concluded on a tricky point for the Government to answer in a debate such as this. I thank the noble Viscount, Lord Brentford, for initiating the debate. A small and happy band of us raise this subject regularly. I welcome the right reverend Prelate to these debates. I hope that he will be a regular participant. Although the noble Lord, Lord McIntosh, has his Treasury cap on tonight, this is not an issue that should be answered only in an economic framework; it has moral and religious connotations.
I was surprised by the number of noble Lords who wanted to speak in the debate. One or two removed their names so as to give us six minutes in which to speak. The six minutes that I have this evening bear a close correlation to the amount of time the members of the G8 spent during their weekend in Birmingham studying the subject of international debt, there being so many other issues on the agenda.
Many of us had high hopes for that weekend. I went to the Jubilee 2000 Debt Coalition's chain around Birmingham, as did 50,000 plus other people. It bolstered my confidence in the fact that this is a political issue when so many people were willing to take part, especially from the Churches. Some good speeches were made at St. Martins in the Bullring. I was not asked to speak. My contribution was to help my noble friend Lady Williams to her place in the chain. I was asked whether I was a member of Special Branch. It was incredible to see the many people forming an enormous chain around Birmingham to illustrate that this is an issue which must be raised on the political agenda.
I was tempted this evening to go through many of the figures that are often quoted, but I thought that because the time was so short I should avoid doing so. I know that the Government have taken a leading role by putting forward the Mauritius mandate. The previous government and this Government have tried hard. I heard many arguments at Birmingham about why debt forgiveness is impossible. It occurred to me to ask: is it possible to reduce the debt by 2000? The Asian financial crisis has shown that the international community can mobilise billions of dollars at short notice if the event is seen as a crisis. If it is seen as a financial crisis that could affect our own economic well being, the money can be found. It could suddenly pour into Africa. However, at the moment that is not seen as a crisis, and I find that depressing.
The Minister will mention HIPC. The countries that are eligible for HIPC will not benefit in the immediate future. It will be a number of years down the line. Only six countries have entered HIPC: Uganda, Bolivia, Guyana, Burkina Faso, Cote d'Ivoire and Mozambique. Only the first three of those will reach their completion
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points and receive debt relief this year. Mozambique and Côte d'Ivoire and Burkina Faso will not benefit until 1999 and 2000 respectively. Mali is still under consideration, with a possibility of a 1999 or 2000 completion point. To stress the point made by the noble Lord, Lord Grenfell, we look further into the distance. In 2001, Zambia, Ethiopia, Guinea Bissau and Mauritania can look at joining the club.
In 2002, Madagascar, Niger, Nicaragua, Tanzania and Sao Tome could do so. In 2003, or beyond, Congo, Burundi, and the most depressing of all, Rwanda, could join. Is it not possible that there might be genocide before that because of the unsustainable debt and the economic crisis taking place in Rwanda? How can we talk about conditionality? If we were to introduce some of the structural adjustment reformed conditionality that is placed on many African countries, most western governments would immediately fall.
I have been in African countries where people are suffering. I have seen the effects of malnutrition. That is something one sees all too often and to which one almost becomes immune. The highly indebted poor countries initiative needs to be reformed. I shall leave the Minister with some suggestions. When the Government look again at the HIPC perhaps they can provide earlier debt relief, deeper debt reduction, push for new measures for determining debt sustainability, and consider the possibility of delinking eligibility for benefit under the HIPC from compliance with IMF reform packet programmes. Perhaps they can look at establishing a new poverty reduction window in the HIPC framework. That could state that the reduction of poverty would lead to debt relief of greater restraint. That has to be in line with the Government's White Paper.
I conclude with one question. Has further progress been made in respect of Rwanda? That country is teetering on the brink and debt relief might pull it back from the edge.
8.30 p.m.
Baroness Rawlings: My Lords, I, too, should like to thank the noble Viscount, Lord Brentford, for initiating this most interesting and informative debate on a topic of great moral significance. It is a fine example of your Lordships' House at its best and—dare I mention it?—all the Peers who have spoken so far, save for the right reverend Prelate, are hereditary Peers.
Basil Hume, the Archbishop of Westminster, made a moral point clearly in an article in The Times:
"Unpayable debt has become directly linked with terrible suffering".
That was stressed clearly in the maiden speech of the right reverend Prelate the Bishop of Manchester. From these Benches, we share the moral concern of the Jubilee 2000 campaign. By calling for a one-off cancellation of the sustainable debt owed by the world's poorest countries, it followed biblical tradition. Is not cancelling debt an appropriate way to celebrate the second millennium since the birth of Christ? Certainly it is a more fitting memorial than the advertisement operation to which the Millennium Experience is being reduced.

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We share the aspirations that fire the campaigners. We do have an outstanding record on debt relief. We wrote off £1.2 billion overseas development assistance loans by converting them to grants. The previous government gave the lead in bringing about international agreement on debt relief. On the initiative first of my noble friend Lord Lawson and later of my right honourable friend John Major, agreement was reached within the Paris Club on terms allowing the reduction of debt by two-thirds. Following again a British initiative, the IMF and the World Bank launched the HIPC initiative. As Camdessus said, this is an enormously precious baby with a horrible name.
The current administration is building on the achievements of the Conservative government. We support the Government in pursuing these policies. However, we are disappointed by the results achieved by the G8 meeting in Birmingham. We praised the Government for achieving agreement on the Mauritius target—that all eligible HIPCs are at least in the debt relief process by the year 2000—and the granting of interim relief wherever necessary. However, why did the summit fail to enlist the support of Japan and Germany to go further?
We on these Benches join the noble Lord, Lord Grenfell, in agreeing with the Prime Minister that:
"the issue is vast and complex, and it cannot be solved overnight—we have to mix our realism with our idealism. For debt relief to be effective, recipient countries must be committed to policies that ensure that the benefits reach the poor".
The Government accept that the promotion of good government is a vital necessity for development. Do the Government also accept that strict good government conditions are to be closely linked to writing off debt? I am inclined to agree with the quotation from G.K. Chesterton, given by the noble Lord, Lord Hardinge.
Good government entails a number of fundamental elements, including an efficient public administration. The importance of reforming public administration cannot be overstressed. I am afraid that I disagree with the noble Earl, Lord Sandwich, even though I have great respect for his vast knowledge on this subject. Uganda is a case in point. It was ravaged by more than 10 years of ruthless despotism, war and AIDS. Under the enlightened leadership of Museveni since 1986, the country has been transformed. It undertook an extensive programme of liberalisation, privatisation and property restitution. It put into place a quasi-democratic constitution. Its parliament is vigorous; its courts strive to be independent; and its press is remarkably free. As a result, the country is an island of relative stability at the heart of the troubled region. Its economy is catching up at a remarkable rate and foreign investment is growing.
Appropriately, Uganda is the first HIPC initiative beneficiary and will receive relief representing a reduction in its debt by about 20 per cent. However, debt relief is only an element of a wider strategy. The Ugandan Government are pursuing a programme of further social and economic reform. Even here, the model child of the HIPC, reform efforts and development may be undermined by an inefficient public administration. Corruption and political
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interference also burden the population, diverting funds from the fight against poverty; discouraging both domestic and foreign investment; and therefore hindering the creation of much needed jobs.
This problem is much more acute in less virtuous countries. Is the government action, either bilateral or through international agencies, sufficient to strengthen public administration in HIPCs? I look forward to the Minister's answers.
8.36 p.m.
Lord McIntosh of Haringey: My Lords, the whole House will be grateful to the noble Viscount, Lord Brentford, for raising issues of such profound importance, not only to us but to many millions of people around the world. I congratulate him not only on his introduction but also on the way in which he has attracted many speeches from those who have a keen understanding of the issues and personal experience in the third world. Notable among them is the right reverend Prelate the Bishop of Manchester who clearly understands the subject structurally and deeply and who spoke of his experience in Africa and Pakistan in a very effective speech.
During the recent inquiry of the International Development Select Committee into debt relief, the Chancellor of the Exchequer described the issue as a moral as well as an economic one. That view was echoed by the right reverend Prelate and by the noble Lord, Lord Redesdale. The debate has confirmed the view of my right honourable friend.
In responding to the debate, I need to address two fundamental questions about debt relief. First, what is necessary for debt relief to be effective in achieving the two wider goals of securing sustainable development and reducing poverty in the world's poorest countries? Secondly, why is unilateral debt relief by the United Kingdom not useful, as I believe it is not? In addressing these questions, I believe that I should demonstrate the importance and usefulness of the HIPC initiative as a way of tackling third world debt. I acknowledge the criticisms that have been made of the initiative as regards the qualifying periods and the debt exports measure which is used by the initiative.
Debt relief is important because it can create a climate for future investment and growth, as the noble Lord, Lord Hardinge, said. It can release resources for essential spending in areas such as health and education in poor countries. The noble Earl, Lord Sandwich, made that point. However, debt relief is not an end in itself and it is important to recognise that. The final goals must be the sustainable development of the world's poorest countries and the eventual eradication of poverty. Removing a country's unsustainable debt burden may be necessary to do this, but it is far from being a sufficient remedy.
In order to be as effective as possible, debt relief must be accompanied, first, by economic and social policies in the debtor countries that are likely to lead to sustainable development; and, secondly, by mechanisms to ensure that all new lending goes to productive programmes and is not wasted on excessive military

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expenditure or prestige products. I make those points in relation to the second and third questions asked by the noble Viscount, Lord Brentford. I shall deal later with his first series of questions. He queried whether the six-year threshold for HIPC is too difficult for many countries to achieve. I acknowledge that in the early years of the HIPC initiative, it means that very little appears on the ground. It has been rightly said that only Uganda has qualified so far.
But the need for sustainable, economic and social policies has been referred to by a number of noble Lords this evening, even when they were arguing for a more relaxed view of HIPC conditions. The Government really feel that although, of course, we should always argue for extra relief wherever possible, sustainable improvement is a necessary precondition.
Similarly, the noble Viscount rightly said that the money must go to those most in need. We must have assurances that the money is not being wasted on military expenditure and prestige projects. That is why the Mauritius Mandate stated that the UK would provide export credits to HIPC countries only for productive expenditure while also seeking international commitment to such a policy.
One positive outcome from the summit meetings in May was agreement by G8 on that point. It is crucial that we do not reward bad performers when it would only encourage further waste and corruption leading to money from debt relief never reaching the poor. As the noble Lord, Lord Hardinge, said, moral responsibility extends to debtors as well as to creditors.
One-off reduction of the debts of poor countries would not provide a long-term solution to their problems. What is required is the removal of their unsustainable debt burden together with programmes of economic and structural reform and the continued commitment of the creditor countries to provide new money for productive purposes.
The second question that I set out to address is why it would not be useful for the United Kingdom to give unilateral debt relief to the world's poorest countries. The first part of that answer is that unilateral debt relief by the British Government alone will not allow those countries to reach the levels of sustainable debt which will in turn make possible sustainable development. The noble Viscount, Lord Brentford, made the valid point that our own status as a creditor is much smaller than that of many other countries and is towards different countries from those which are most in need in many cases.
The second part of the answer is that because the level of debt relief is agreed multilaterally, if the UK were to go it alone, the only benefit would be to other creditors. But that does not mean that the British Government cannot act usefully to try to solve the problem of international debt. On the contrary, there is much that the British Government can do and have done to provide a lead in establishing debt relief mechanisms and then to ensure that they work as well as possible.
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In September, the Chancellor made a speech at the Commonwealth Finance Ministers' meeting which became known as the Mauritius Mandate. The speech set targets for the implementation of the HIPC initiative by the millennium—targets that the Chancellor has challenged the international community to meet.
The mandate calls for all countries that are likely to be eligible for debt relief under the HIPC initiative to have embarked on the process of securing that relief by the year 2000, and for three-quarters of those countries to have received firm decisions on the level and timing of relief that they will receive. I hope that the noble Viscount will forgive me for not reading out a list of countries in response to his specific question. That is the answer which Her Majesty's Government make. Clearly, those targets need full commitment from everybody concerned.
The Government have striven to obtain international agreement to the Mauritius Mandate targets since they were announced last September and under our presidency of the G8 there has been considerable success. During the recent summit meetings, culminating in the Birmingham summit, the G8 agreed to many of the Mauritius Mandate proposals, particularly the speedy and determined implementation of debt relief to more countries under the HIPC initiative. The summit urged all countries that are eligible for debt relief to embark on the process of securing relief by the year 2000.
However, we went further. At the G8 Foreign and Finance Ministers' meeting before the Birmingham summit, the Chancellor urged G8 colleagues to adapt the HIPC initiative to allow a special group of countries—that is post-conflict countries—to gain the resources necessary to rebuild their economic and social infrastructure as quickly as possible to minimise the chances of a return to conflict. The G8 agreed in Birmingham that work should be done to adjust current debt relief mechanisms to the needs of post-conflict countries. The Prime Minister has now written to the IMF and the World Bank to urge them to take that work forward. I do not have time to set out the mechanisms which we propose but it is clear that if we adapt our debt relief mechanisms in those ways we can provide quicker and greater resources from the international community for post-conflict countries.
Alongside the Mauritius Mandate, the Government have taken full part in the relief of export credit debts in the Paris Club, helping to provide last month a debt reduction of 67 per cent. for Senegal. I am afraid that I misunderstood the nature of the questions of which the noble Viscount warned me. I thought he was referring to the way in which we counted them in our accounts. Therefore, his very interesting questions about capitalisation, project cost sharing and that to which my noble friend Lord Grenfell referred—the possibility of the IMF selling gold—must be dealt with, not in this speech, bearing in mind the time available to me, but in a letter which I promise to write to him.
The Government have shown their determination to ensure that the HIPC initiative does not falter. They took an international lead when problems arose over

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financing debt relief for Mozambique and, as the noble Baroness, Lady Rawlings, said, we have cancelled £1.2 billion in old aid loans over the past 20 years.
But we have also played our full part in the debt relief work of the international community. The progress made at the Birmingham summit was only the latest evidence of the concern of creditors to provide debt relief. Indeed, over the past two decades, the Paris Club of bilateral creditors has rescheduled or reduced bilateral debts of more than £300 billion.
The HIPC initiative itself has also had a significant impact. To date 3 billion dollars has been pledged by the international community to six countries under the HIPC initiative, and several others are well down the road.
I wanted to conclude by repeating the answers to the two important questions about sustainable levels of debt and the undesirability of unilateral action by this country but I do not have time to do that. Suffice it to say that good progress has been made. The international community has worked together. Three countries have exited from the debt relief process under the HIPC initiative so far: Benin and Senegal have received debt stock reductions on Naples terms, having been shown not to require HIPC debt relief; and Uganda, as has been said, completed the full process in April, only 18 months after the launch of the new initiative.
By the new millennium several other countries will also have completed the process and it is our hope that the Mauritius Mandate targets will also have been met and that all countries eligible for HIPC relief will be firmly on the road to securing their debt relief.
I pay tribute also to the work of Jubilee 2000 and all those campaigners who have kept this issue in the public mind. I hope that what I have been able to say has indicated that the Government have a realistic but at the same time enthusiastic approach to tackling those problems.

Government of Wales Bill
Consideration of amendments on Report resumed.
Schedule 3 [Transfer etc. of functions: further provisions]:
[Amendment No. 36 not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 37:
Page 83, line 19, leave out from ("culture,") to end of line 21.
The noble Lord said: My Lords, in speaking to Amendment No. 37 I shall speak to Amendments Nos. 38, 228, 231, 232, 233 and 238, which are all within the same group. This set of amendments deals with the definition of Wales in the Bill and in particular the extent to which it includes the sea. The Interpretation Act of 1978 defines Wales by reference to the counties created by the Local Government Act 1972 in Section 20. As a result, the definition of Wales does not include the sea adjoining Wales. Paragraph 2 of Schedule 3 to the Bill currently provides for a ministerial function in relation to an area of sea adjoining the coast of Wales
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to be regarded as exercisable in relation to Wales, but this does not confine the reference to the territorial sea and only applies for the purposes of the transfer of ministerial functions to the assembly under Clause 22.
Amendment No. 232 inserts a definition of Wales in Clause 155 to include,
"the sea adjacent to Wales out as far as the seaward boundary of the territorial sea".
This applies to all references to Wales in the Bill.
Amendment No. 233 gives an order-making power to determine for the purposes of the definition of Wales any boundary between the parts of the sea which are to be treated as adjacent to Wales and those which are not. This is necessary in the case of the Dee and the Severn estuaries and the Bristol Channel, where the coast of Wales is less than 24 nautical miles from the coast of England. The definition of the parts of the sea adjacent to Wales may be included in an Order in Council under Clause 22 or an order made by the Secretary of State under Clause 155.
Amendment No. 231 provides for an order by the Secretary of State to be subject to the affirmative resolution procedure, as is already the case for draft orders under Clause 22. We anticipated the need for provisions in the Bill about matters relating to the sea because the Secretary of State has certain powers in relation to fisheries conservation and management, marine emergencies, the protection of the human food chain and the protection of the maritime environment. These amendments simply enable the seaward areas for which the assembly will have responsibility to be clarified and therefore defined.
We thought that it was right to limit the responsibility to the territorial sea to 12 nautical miles from the coast. It was also decided that the Bill should permit certain functions exercised beyond that limit to be made subject to a requirement to consult the assembly. That is the point of Amendment No. 38. They are largely functions concerned with the disposal and abandonment of oil and gas installations in Welsh-controlled waters.
As with the territorial sea adjacent to the coast of Wales, it is necessary to have the power to determine what are the boundaries of Welsh-controlled waters. This can be done by means of an order under Clause 22 or Clause 155, but again, I stress, subject to the approval of Parliament via the affirmative resolution procedure. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord for his explanation. I now rise only to say to him that he has in fact answered the questions I was going to ask, and so I am grateful for what he has said.
The Earl of Balfour: My Lords, I should like to ask just one question, because I am sure we are all very concerned about the smuggling of illegal drugs and so on. I hope that Customs and Excise, which would be dealing with such matters, is basically under United Kingdom control and its powers would not necessarily be delegated to the Welsh assembly in respect of the protection of these waters against smuggling and so on.

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It concerns me that the coastguards and Customs and Excise will continue to be managed by the United Kingdom Parliament.
Lord Williams of Mostyn: My Lords, I understand the noble Earl's concerns, but the powers that are intended to be devolved to the assembly are simply those powers which the Secretary of State presently has, and police powers, Customs and Excise powers and powers of the kind the noble Earl has in mind are not presently under the control of the Secretary of State. They are—wearing my other hat—powers that are still within the Home Office or within Customs and Excise.
The Earl of Balfour: My Lords, I am much obliged to the Minister.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 38:
Page 83, line 47, at end insert—
("Functions exercisable beyond the territorial sea
.—(1) The power conferred by section 22(1)(c) includes power to direct that any function under—

(a) Part II of the Food and Environment Protection Act 1985 (deposits in the sea), or

(b) Part IV of the Petroleum Act 1998 (abandonment of offshore installations),

so far as exercisable by a Minister of the Crown in relation to Welsh controlled waters shall be exercisable by the Minister only after consultation with the Assembly.
(2) In this paragraph "Welsh controlled waters" means so much of the sea beyond the seaward boundary of the territorial sea as is adjacent to Wales.
(3) The power conferred by section 22(3) includes (in particular) power to determine, or make provision for determining, for the purposes of the definition of "Welsh controlled waters" any boundary between—

(a) the parts of the sea which are to be treated as adjacent to Wales, and

(b) those which are not,

including power to make different determinations or provision for different purposes; and an order under section 155(1A) may include any provision that by virtue of this sub-paragraph may be included in an Order in Council under section 22.").
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 39:
Page 85, leave out lines 19 and 20 and insert—
("(1) This paragraph applies where a function is exercisable by a Minister of the Crown—

(a) only with the agreement of, or after consultation with, another Minister of the Crown, or

(b) only with the authorisation of Parliament or either House of Parliament.").

The noble Lord said: My Lords, this amendment provides for the disapplication of provisions in certain Acts: for example, the Ministry of Transport Act 1919 and the Industrial Development Act 1982, where action can only be taken by the Secretary of State if authorised by a Resolution of either House or both Houses of
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Parliament. The Bill at present would not disapply those provisions and so this amendment widens the scope of paragraph 8 of Schedule 3 so that it operates to disapply not only the requirements for ministerial consultation and agreement but also parliamentary authorisation requirements. It would not, I suggest, be appropriate to subject the assembly to the latter requirements because your Lordships have already agreed that other forms of ministerial and parliamentary approval should not apply to the assembly. This is therefore essentially a tidying-up amendment. I beg to move.
On Question, amendment agreed to.
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 40:
After Clause 26, insert the following new clause—

CONCORDATS WITH ASSEMBLY
(" .—(1) No minister of the Crown or Government Department shall enter into a concordat with the Assembly or a committee of the Assembly unless a draft of the concordat has been laid before each House of Parliament.
(2) Any such concordat may be annulled by either House of Parliament.").
The noble Lord said: My Lords, although the word "concordat" featured in the paper entitled A Voice for Wales it does not appear anywhere in this Bill and yet there is no doubt about the importance of the concept. It is to be the practical means by which the unity of the United Kingdom is maintained, and of course concordats are the subject of Amendments Nos. 40 and 42.
The Secretary of State for Wales, Mr. Ron Davies, in a Written Answer dated 27th February stated that the White Paper noted that the assembly would need to work in close partnership with those Whitehall departments responsible for developing policies and preparing secondary legislation for England on matters which in Wales would be the responsibility of the assembly. It also noted that the assembly's officials and their Whitehall counterparts would need to consult each other on a range of issues. The basis of the consultations would be set out in concordats.
Mr. Davies went on to say in his reply that the Government had produced guidance, setting out the principles which might govern the concordats, and placed copies in the Libraries of both Houses. I do not intend to comment in detail on the guidance, but your Lordships may wish to know that according to the document good working relationships currently exist between the Welsh Office and other departments of Government, and that such relationships are vital to the effectiveness of Government and serve the interests of the public.
Following devolution, the need for co-ordination will remain to take account of the programmes for implementing new legislation and shared interests in matters such as European Union business. It is clear that concordats are to be all-important links between central government and the assembly's executive and, for that matter, the Scottish parliament's executive. Yet we are told that concordats will normally be signed at senior official level only, except when they deal with

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politically sensitive issues when they might be signed by UK Ministers and assembly secretaries. They are all likely to be published.
As these concordats will increase in number and be the linchpin of co-operation between our governmental institutions post devolution, is it not appropriate that they should at least be laid before Parliament? Their contents must be known to and approved of by the assembly in the case of Wales; indeed, we gleaned that much from the remarks made by the noble and learned Lord the Solicitor-General, on Second Reading. Parliament should surely have the chance to consider them as well as the assembly. Again, that is one of the main purports of our proposed new clauses.
It may be argued that concordats already exist and that they are non-statutory. The best known is probably the Barnett formula described as,
"a non-statutory policy rule based on mutual understanding between parties within the policy network, the implementation of which is subject to both sides observing the behavioural 'rules of the game'".
There is also the DTI's most interesting Concordat on Inward Investment, which is broad in its scope and which provides for the resolution for disputes at official level, Cabinet Office level and, ultimately, through discussions between Ministers. But the key point is that whereas concordats have been fairly rare to date and of limited importance within a unitary government, they are now to increase in number and significance and become an important instrument of government.
I am sure that all of us who have had some governmental experience can give instances of how we have behaved when acting for other departments. I well recall an occasion when I visited a company in Japan. I was told that it had a great love of and interest in Wales, especially a part of it called Lanarkshire—whereupon, of course, I had to put on my best friend's Scottish hat and sing the praises of Lanarkshire. No concordat or understanding was necessary between myself and a Minister at the Scottish Office: we knew what was expected of us and what we were meant to do. However, in the future, I imagine that that kind of situation will be covered by a form of agreement by way of a concordat.
In my view, it would be totally wrong to bypass Parliament in this matter. Parliament really should know what is going on. The Institute of Welsh Affairs, which examined the issue after the publication of the White Paper, came out strongly in favour of,
"establishing in law the principle of concordats between the Assembly and the Whitehall departments".
The institute went further and said:
"It would be helpful, from the point of view of information and elucidation, for the Bill to contain a model of such concordats setting out the basic features of the relationship".
We have not had such a model. As I said earlier, there is barely a mention of concordats per se in the Bill. This is an important and obviously sensitive area. The success or failure of the devolution experiment may well depend upon it, together with the maintenance of the unity of the United Kingdom.
Our proposed new clauses are slightly different. In Amendment No. 40, the annulment could occur at any time whereas, as far as concerns Amendment No. 42,
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we are timed by the procedures relating to statutory instruments. That accounts for the main difference between the two clauses. I beg to move.
9 p.m.
Lord Thomas of Gresford: My Lords, the flaw in the amendments proposed by the noble Lord, Lord Roberts, seems to me to be the fact that they are far too legalistic. They are trying to set in stone agreements between the assembly and this Parliament, when those concordats should be flexible understandings between departments which are practical and readily capable of being amended.
Having made that criticism of the amendments, I believe that it is incumbent upon the Government to explain how they intend to make those concordats available for people to see so that they may understand what they are. In other words, there should be transparency. We should be able to know what arrangements are in place between the assembly and the Westminster Parliament. I look forward to hearing from the Minister the nature of those proposals.
It would be unfortunate if relationships were to develop between the assembly and this Parliament which remained secret and subject to speculation and rumour. That could give rise to problems either here or in Cardiff, which could easily be avoided by a transparent look at the arrangements.
Lord Crickhowell: My Lords, I have only one point to raise but it is an important one. Just before we adjourned for the dinner break, my noble friend Lord Mackay of Ardbrecknish, raised the crucial and absolutely vital issue of the manner in which European agricultural policy will be handled by the UK Government and by the assembly. Indeed, it is a subject to which we shall return when dealing with a later amendment.
I simply point out to the House that on 25th March in another place Mr. Ron Davies (at col. 618 of Hansard) said that all this was to be "covered in concordats". In other words, it is absolutely vital as regards the way in which agricultural policy and negotiations are to be handled that that should be a subject for concordats. Therefore, it seems to me that this is the kind of subject which should come before Parliament for explanation and probably for approval.
I take the point made by the noble Lord, Lord Thomas of Gresford, about being too legalistic. Indeed, when the noble Lord urges that we should not be legalistic, we must take the argument seriously. However, there are subjects of such profound importance, both for the United Kingdom and for the people of Wales, that it would be absolutely inexcusable if the agreements that had been negotiated were not known to Parliament and to the assembly, fully understood and out in the open. I believe that on subjects of that importance the agreements should receive the approval of both bodies.
Lord Elis-Thomas: My Lords, I am impelled to speak on this matter by the strange form of language used by the noble Lord, Lord Roberts, when he

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described what we are about as a devolution experiment. Devolution is not an experiment; it is an experience. The experience of devolution which we are about, the process of change, is what these concordats are really about. I have considered these issues in some detail since the Committee stage. I now understand more fully the importance of not viewing concordats as statutory instruments. Therefore they should not be subject to the same SI procedure. These are publicly agreed relationships between levels of government. This is what quasi-UK federalism tastes of, if I may express it that way just after supper.
It is important that we should see these measures on the one hand as flexible instruments and on the other hand as instruments which, as it were, can be tasted as they are used. In other words, these are relationships; they are not necessarily textual documents which are analogous to subordinate legislation or instruments of law. Therefore I think it is important that they are not part of the procedure of statutory instruments in either this House or another place or in the assembly. On the other hand, they must be transparently understood procedures. Here I agree entirely with the noble Lord, Lord Crickhowell. I believe it is possible in our debates here to flag up how we can establish relationships which on the one hand have clear validity in terms of relationships of government but on the other hand are not subject to the detailed textual analysis in statutory terms that occurs with an SI.
Lord Williams of Mostyn: My Lords, I am most grateful to the noble Lord, Lord Roberts, for the thoughtful way in which he addressed this issue as it is a matter of great importance. In a sense he is quite right to say that although there are precedents, there are likely to be more concordats than in the past. I also entirely take the point made by the noble Lord, Lord Crickhowell—which was made earlier by the noble Lord, Lord Roberts—that Parliament should know what is going on. I reiterate what was said in our debate on 2nd June. We intend that virtually all concordats between the assembly and Whitehall will be published.
As regards the point on transparency, which was made by the noble Lord, Lord Thomas of Gresford, we intend that drafts will be available for scrutiny and comment. We do not want to hide anything. I can envisage some circumstances where an area is so delicate that one cannot necessarily publish its details in full. The noble Lord, Lord Thomas, was right to say that one does not want legalism because that makes one the servant of drafting and legal procedures. Concordats may need to be altered. They do not need to be as rigid as statutory instruments, as the noble Lord, Lord Elis-Thomas, said. We have come to the conclusion that concordats should not be statutory instruments or legal instruments, any more than the Barnett formula is. However, it is important that people should know what the arrangements are in order to be able to discuss them and to suggest improvements. There are bound to be alterations as time passes and circumstances change. I agree entirely with all noble Lords who have spoken.
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The concordats must be open, clear and available for the public to read and to understand. A commentary should be provided if necessary in appropriate cases.
I hope that I have been able to satisfy your Lordships that we want the concordats to be open. After all, the assembly must be trusted to carry out its developing work in a way which is appropriate to changing circumstances. The concordat is the way to do that. One does not need something set in law to obtain workable arrangements, as long as one bears in mind the absolutely essential principle that the measures should be publicly available for scrutiny and comment.
Lord Roberts of Conwy: My Lords, I am grateful to the Minister for that reply. I made a careful note of what he said about concordats. He said it was important that they should be open, clear and available to the public to understand. It seems curious that the Minister should say that but at the same time fail to ascribe any particular role to Parliament in either helping to formulate and finalise concordats or in interpreting concordats to the public so that they understand matters properly. There is no question as to the importance of the concept. My noble friend Lord Crickhowell referred to remarks made about the role of concordats as regards the connection between the assembly and Europe. His comments were sufficient to show how important they are.
The noble Lord, Lord Thomas of Gresford, referred to the need not to be too legalistic. I should point out that the first of our amendments is closely related to a Liberal amendment tabled at Committee stage. Perhaps I may remind the noble Lord of his remarks. He said:
"The way we have put it in this amendment is that any concordat that is entered into should be laid in draft before Parliament and then, but only then, should one side or the other think it necessary, will the matter come before Parliament on a Motion to annul it".—[Official Report, 2/6/98; col. 271.]
Therefore I do not think that we are being too legalistic. We are simply following the example set by the noble Lord. That said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.15 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 41:
After Clause 26, insert the following new clause—

CONCORDATS IN RELATION TO AGRICULTURAL AND ENVIRONMENTAL PAYMENTS
(" . The Assembly may enter such concordats as may be required with a Minister of the Crown or with the officials of such a Minister to ensure that those persons in Wales entitled to receive payments under European Community and national agricultural and environmental schemes are treated no less equitably than persons entitled to receive such payments in England.").
The noble Lord said: My Lords, this amendment follows the problems expressed in the previous two amendments, but it itemises a special but very real practical problem. In Committee. I raised the question of what happens when a concordat does not perform satisfactorily. I have tabled this amendment to try to persuade the Government of the need for a better system than has obtained over the past few years in relation to the payment of grants to Welsh farmers. Those farmers

765
have received their subsidies, be it the beef special premium or IACS payments, months later than their English counterparts. Naturally, that has caused resentment, to put it mildly. I do not really care who makes the payments. However, it concerns me that as the problem appears to be the outdated computer in Cardiff, time and money could well be spent on it whereas it might be cheaper and quicker to make use of a computer system that is in use, say, by MAFF. Having said that, I would not wish the regional Welsh agricultural department offices to be closed as they provide a very useful and valued service.
The amendment would oblige the assembly to tackle this long-running problem in any way it thought best. It would impose on the assembly a discipline: to be at least as quick in making payments to Welsh farmers as in making them to English farmers, which has not happened in the past. It would not allow the usual excuse that the Welsh computer was out of date, or whatever.
In short, the amendment would add a little more openness, as suggested by the noble Lord, Lord Elis-Thomas, and indeed by the noble Lord, Lord Williams. It would also add competition which I understand the Government are keen on. I expect the noble Lord will say that this problem is not relevant to the Bill. However, I assure him that it is very relevant to the average Welsh farmer. I beg to move.
Lord Williams of Mostyn: My Lords, I entirely take the point made by the noble Lord in his concluding sentence. There is a sense of grievance, which I know well, in relation to delays in payments attributable to out-of-date computer systems. However truthful that may be as an explanation, the reason why you are not receiving your cheque on time pales into insignificance compared with the blunt fact that it is not arriving on time. I therefore understand the noble Lord's concern and do not overlook it for a moment. I know from personal conversation that this has been a source of great worry and anxiety to the Secretary of State. One is inheriting a computer system which many would say is simply not up to the work.
The amendment goes much wider than the question of the computer. I had understood the width of his amendment to be that there ought to be a uniform system throughout the United Kingdom even after the devolved assembly takes power.
As the noble Lord said earlier this evening, I wrote to him on 24th June about various issues and put a copy of my letter in the Library. I cannot say that there will not be changes to support arrangements in the future. There are presently allowed variations in the level of support or variable rates for different areas of the United Kingdom. I accept, having heard the refined way in which the noble Lord puts his amendment, that he is focused particularly on a single issue. If that is the purpose behind the amendment, I have dealt with it so far as I can.
I do not believe that this amendment is the way to deal with late payments on a computer system. If the noble Lord wishes me to develop a broader reply, I am
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happy to do so. Perhaps he will indicate whether he wishes me to develop my sermon or whether I have dealt with the point he made, albeit not satisfactorily to him.
Lord Stanley of Alderley: My Lords, the noble Lord did not deal satisfactorily with either point. I would rather he dealt with the wider points I raised before supper when the amendment of my noble friend Lord Crickhowell came up.
In relation to the specific concordat point, I am not asking for it to be written in stone, as the Minister suggested. All I am saying is that I hope there will be some openness when things go wrong—they have certainly gone wrong in the past—and it is made clear that it is the assembly's fault, if I may put it that way. Alternatively, I hope that the assembly will be able to do something about putting right these long-running problems that we have in Wales. As I understand it, that would be where the concordat comes in, because there will be a concordat probably between the Welsh assembly and whoever is doing the nitty-gritty work of paying the grants.
Lord Williams of Mostyn: My Lords, I do not believe that a concordat will solve that problem. The noble Lord identified the problem as one of out-of-date computer technology. It seems to me that no concordat will be able to deal with that.
Where the assembly could be influential, however, is in raising the questions put forward by the noble Lord, applying political pressure to the first secretary and, if necessary, instigating a vote of censure or no confidence, subject to the usual standing order arrangements, in the assembly itself. That is the way to deal with late payments. I do not believe that something as specific as late payments—I do not overlook it for one moment—should be the subject of a concordat. I hope I have dealt at least clearly, though I know not entirely to the noble Lord's satisfaction, with this point.
Lord Stanley of Alderley: My Lords, I do not suppose the noble Lord will ever entirely satisfy me. However, the point he made is relevant.
I wanted to establish that, whereas in the past we seemed to be hitting our head against a brick wall and could not get anywhere, he made it clear to me and your Lordships that there will be a case for the assembly when things go wrong to "chase" the first secretary or whoever it is, to make sure that the matter is put right. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 42 not moved.]
Lord Crickhowell Lord Crickhowell moved Amendment No. 43:
After Clause 29, insert the following new clause—

ASSEMBLY REPRESENTATION AT COUNCIL OF MINISTERS
(". At any meeting of the Council of Ministers of the European Community at which matters relating to Assembly functions are to be considered, a member of the executive committee (established under clause 56) shall, with the consent of the Minister of the Crown leading the United Kingdom delegation, be entitled to speak and vote on behalf of the Assembly and of the United Kingdom.").
The noble Lord said: My Lords, we now return to the important issues that were raised by my noble friend Lord Mackay of Ardbrecknish on Amendment No. 34 before the dinner break.
Amendment No. 43 puts in statutory form what Ministers have said they want to happen. I shall speak also to Amendment No. 51, which concerns consultation and has the same wording that I tabled at Committee stage. I shall also refer briefly to Amendments Nos. 63 and 64, which the noble Lord, Lord Elis-Thomas, tabled and with which I have some sympathy. I look forward to hearing what he has to say. This subject has been debated previously but in detail only at a very late hour in this House. It is therefore right that we should return to it now.
At Second Reading, I made plain my serious anxieties about the Government's arrangements for dealing with European issues and about the idea being propagated in some quarters that Wales was likely to be better represented in Europe than it had been in the past. That proposition, at least as it applies to Scotland, was effectively demolished in an important speech by my noble friend Lord Lindsay during the Second Reading debate on the Scotland Bill. He spoke from a wealth of experience as both a Scottish and a UK Minister at Council of Ministers' meetings. He asked acute and important questions and he received no adequate response from Ministers, who at times, I have to say, appeared to be ill informed about the issue. There was also no adequate response to the queries and points of my noble friend Lord Mackay of Ardbrecknish at the Committee stage of this Bill. This amendment gives us an opportunity to discover from the Government exactly how they think Welsh and Scottish interests are to be represented and defended in Brussels. The same principles apply in each case.
In my Second Reading speech, I referred to the proposition that had been advanced that,
"with the agreement of the UK lead Minister, the relevant Assembly Secretary could speak to the agreed UK line in the Council of Ministers".—[Official Report, 21/4/98; col. 1059.]
In his reply, the noble and learned Lord, Lord Falconer of Thoroton, said:
"And why should they not do so…?".—[Official Report, 21/4/98; col. 1130.]
My amendment attempts to give the proposition a statutory foundation, a foundation that may prove to be significant if an assembly member, asked by the lead Minister to represent the United Kingdom view, was to be challenged in the Council about his right to do so for reasons that I will refer to later. What I want the Minister to explain in detail are the circumstances in which they could do so and I want him to give us some very clear answers to some very important questions.
As I pointed out in the debate which we have just concluded on concordats, the Secretary of State for Wales argued in his response to the debate in another place on 25th March that it was all a matter for concordats, which meant that he left the position totally obscure. His response was referred to in the debate on the Scotland Bill in another place, in the course of which
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Mrs. Margaret Ewing drew attention to the fact that representatives of the German Länder had represented German interests in the Council of Ministers on four occasions. This matter was referred to earlier today.
Mr. Tam Dalyell, as so often in the past on these issues, was well informed and helpfully filled in the details. He told those present in another place that the State Secretaries for Justice and the Interior and the Senator for Internal Affairs of Hamburg had attended a meeting on 28th/29th November 1996, and that on 16th December 1996 there was a meeting to discuss audio-visual and cultural affairs. Apparently, the Foreign Affairs Minister and the Minister President of the Rhineland-Palatinate attended that meeting. On 20th November 1997, the State Secretary for Education, Science, Research and Technology and the Minister for Culture of Hessen attended a meeting on education. Finally, on 24th November 1997, the Foreign Affairs Minister and the Minister for Education, Culture, Science and the Arts of Bavaria attended a meeting on culture. The House was informed that, although Länder ministers attended Council meetings on those four occasions, they were never the sole representatives of the German government. I also believe it to be the case that they were not the lead ministers on those occasions.
In the speech to which I have already referred, my noble friend Lord Lindsay said that, despite the innumerable hours that he had spent in and around Council meetings, he never met, nor indeed did he ever hear, any reference to the presence of a minister from Catalonia, or any Belgian or other devolved region.
Following the Maastricht Treaty, Germany added a new Article 23 to its Basic Law. I received a most helpful brief on the subject from the Library of this House. It informs me that that article provides that the decision of the Bundesrat is decisive where such a transfer of legislative competence affects the exclusive legislative competence of the Länder; and also provides that Germany may be represented by a member of a Land Government in the Council of Ministers when matters affecting the legislative competence of Länder are being discussed. Representation in Council by a Land Minister should take place in areas of exclusive competence of the Länder. I ask the House to note that point. The note goes on to say that that would include cultural matters, for example, where the federal government has no competence.
The note goes on to explain the special agreement of 1993 that covers the arrangements in Belgium, which are rather more complex than those in Germany. There the Council of Ministers meetings are divided into four categories, (A to D), depending on the relative importance of federal and regional competences in the area under discussion. Federal ministers' only may attend Type A councils. Regional ministers accompany federal ministers at Type B councils where there are shared competences, but the federal level is more important, but only the federal minister may vote. In the Type C councils there are shared competences but the regional level has a greater weight; both levels are represented but only the regional minister may vote. At

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Type D councils where matters within the exclusive competence of the regional governments are discussed, only regional ministers may attend and vote.
The Lords' brief also referred to a House of Commons research paper 97/126, which has this to say about the situation in Spain. I refer to it because the subject of Catalonia is frequently raised, not least by the noble Lord, Lord Elis-Thomas. Mrs. Ewing stated in the debate to which I refer that the Spanish Parliament had recently voted to guarantee the representation of Catalonia and the Basque countries at Council meetings on devolved matters. However, in response, the Secretary of State for Scotland, Mr. Donald Dewar, rather sat on that suggestion. He said that there is no right, as Mrs. Ewing suggested, for Catalonia, the Basque country, or any other region to be part of the delegation. One representative of the 17 provinces will be on the delegation and the great question is how the 17 provinces will decide who that person should be. I believe that the situation as regards Catalonia remains to be established one way or the other. It is important to note and clearly understand that in each of the cases that have been described the arrangements are those that arise from and are made possible by domestic law, domestic agreements or domestic practice.
I have been anxious to discover what rights and opportunities are provided for by European law and practice. I believe that the House will be as anxious as I am to know if each member country of the European Union has a free hand as to the manner in which it is represented.
The question that I put to others in the course of my inquiries and which I now put to Ministers is this. Can the UK lead Minister decide that a case can be presented by representatives of the Scottish Parliament or the Welsh assembly regardless of the views of other member states' ministers in the Council and regardless of any treaty obligation? My noble friend Lord Cockfield has given me a most useful note on the subject. He has referred me to the Treaty of Paris signed in 1951 and the Treaty of Rome which established the European Economic Community, signed in 1957. The English translation of the original of the latter document provides that,
"The Council shall consist of representatives of the Member States. Each Government shall delegate to it one of its members".
The phraseology was applied to all three Communities by the so-called "Merger Treaty" of 1967 and it survived right down to the Maastricht Treaty, officially called the "Treaty on European Union", which substituted the following words. Again, I ask the House to listen to them carefully. The treaty stated:
"The Council shall consist of a representative of each Member State at Ministerial level, authorized to commit the government of that Member State".
My noble friend Lord Cockfield observes that the critical point is the phrase,
"authorized to commit the government".
The "government", so far as the Union is concerned, is the Westminster Government. My noble friend says that he does not see how a member of the Welsh assembly or the Scottish parliament could commit the Westminster
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Parliament; nor does he think that the House of Commons in particular would be at all happy if the Government attempted to give those members such powers. My noble friend says that none of that would prevent a Minister taking along a member of the Welsh assembly or of the Scottish parliament as part of his delegation, but that there could be objections on the part of other members of the Council, particularly in view of the establishment of the Committee of the Regions. My noble friend questions whether at a meeting of EU Councils, covering subjects that fall within the competence of the Welsh assembly, a member of the executive committee of the assembly would be entitled not only to attend, but also to speak and vote as the representative of the UK Government.
The final point to note in all these relative positions is that representation is in any case confined to those subjects where there is exclusive competence. This is the dramatic moment when I lose my text. No, I have found it again.
I refer now to a comment made by Mr. Derek Prague in his pamphlet, Democracy in the European Union, which describes the nature of negotiations in the Council, a subject on which my noble friend Lord Mackay of Ardbrecknish has touched on a number of occasions. Mr. Prague observes that negotiations in the Council normally involve a great deal of give and take. That means that the efforts of national parliaments to control the concessions of their Minister, as he attempts to get maximum consideration in the Council for his government's view, are fraught with difficulty. It is extremely difficult to influence a Minster engaged in a fluid negotiation in the Council of Ministers. Even the national parliament best organised for the scrutiny of European legislation—surely Denmark's Folketing—must find it difficult to control its Minister in the last stage of a negotiation when Ministers are making compromise concessions to each other.
My noble friend Lord Lindsay made much the same point on 17th June when he asked some key questions which apply equally to the Welsh assembly. He asked, for example, that when the Council of Ministers goes into closed session and only member state Ministers are allowed to remain in the room, how easy would it be for devolved Scottish Ministers to stay with their Minister or Crown colleagues. The same question applies to Welsh representatives. My noble friend also asked whether Scottish Ministers would be confined to the public areas of the Council buildings and whether they would be allowed to access the Council buildings and the Council chamber as and when they wish, even when their assistance has either not been sought by a UK Minister or has actually been refused by a UK Minister. Those are important questions to which I should like to hear an answer tonight. One begins to understand why Mr. Dewar was so cautious in the Scottish debate on 30th March and why Mr. Ron Davies, in the debate on 25th March, and the noble Lord the Minister who dealt with this matter in Committee in this House were so reticent.
There may be a few subjects on which a Welsh assembly representative may speak but not vote; for example, cultural and language issues. But it is clear

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that on great political issues such as agriculture, which we have discussed in relation to a number of amendments this evening, and industrial aids or employment measures, the UK will continue to be represented by a Minister of the Government at Westminster who will both speak and vote for Britain as a whole.
Let us consider what will now happen in the situation created by this Bill. Discussions about the UK's negotiating position will no longer take place between Ministers of one administration involving civil servants who prepare and defend a departmental case and have shared loyalty and responsibility to the same government. No. There will be discussions between Ministers who have different and perhaps opposing interests and civil servants with differing loyalties. To take agriculture as an example, perhaps UK Ministers want to adopt a negotiating position on beef on the bone that seems likely to add to the immense problems that already face the farmers of Wales. There will be a huge temptation for the chief secretary of the Welsh assembly to take up a public position of outrage and dismay so that he can defend himself in the face of the assembly and his electors. There is likely to be tension and conflict.
There is sometimes a wonderful symmetry about events in this place. Twenty four hours after the noble and learned Lord the Solicitor-General spoke about representation and the ability of Ministers to speak, to which I have already referred, a Question was posed by the noble Lord, Lord Islwyn, about the current negotiations on the crucial matter of the allocation of regional aid to Wales and the Agenda 2000 package. Confronted with that Question, the noble Lord, Lord Clinton-Davis, said:
"I do not believe it would be helpful at this stage as regards the negotiations if I were to give further and better particulars of our negotiating position".—[Official Report, 22/4/98: col. 1154.]
Later, when pressed he said, at col. 1155:
"I have already indicated that I do not believe it to be helpful in what is a difficult negotiating position to single out specific parts of the United Kingdom".
When pressed further he said, at col. 1156:
"I have already indicated that it is not helpful at this point in the negotiations to embark upon a sectoral appraisal of the position. All these questions are bound to impact upon the Government's thinking. Representations arc made by all areas in the United Kingdom and we will listen to them".
Clearly, that is what will happen. UK Ministers will have to take up a position that represents UK interests. It is wholly desirable that the cards are kept face down on the table. But what happens to those who have taken part in the preliminary discussions? What will the first secretary do? He knows the negotiating position and believes—perhaps like my noble friend Lord Stanley of Alderley—that it will be catastrophic for Welsh agriculture. Will he be silent or reveal that there is a profound difference between the Government of the United Kingdom and British Ministers? What is absolutely certain is that he will not be asked to represent the UK in those discussions. The negotiations would have to be conducted by the UK Minister.
My amendment establishes a statutory basis for the Welsh representation of UK interests in the Council of Ministers in those exceptional cases where lead Ministers agree to such representation. The amendment gives representatives of the Welsh assembly rights comparable with those of the German Länder and the Belgian regional Ministers who have so often been quoted as precedents. Unfortunately much of what has been said in earlier debates indicates that either the Government do not understand what happens in Council negotiations or they are attempting to put up a smokescreen to mislead the people of Wales.
Throughout our proceedings, the Ministers who reply to our debates are as helpful as they can be. I hope that we shall have real frankness from whichever noble Lord replies about questions that are of immense importance to Wales.
9.45 p.m.
Lord Elis-Thomas: My Lords, my Amendments Nos. 63 and 64 are grouped with these amendments and are intended to ensure that there is a representative—an assembly secretary for a responsible field in devolved functions—as part of the UK delegation and that, in parallel, the assembly can make representations to the EU commission.
I regret that my amendments are grouped with the rather lengthy lecture that we have heard from the noble Lord, Lord Crickhowell, on the existing and past arrangements of the European Union. All this is now up in the air. The letter from the Chancellor of the Federal Republic and the President of the French Republic in advance of the Cardiff summit, the communiqué of the Cardiff summit and the decision of heads of government and the president of the Commission to have an informal summit as part of the Austrian presidency in October relate to the whole question of relations between the European Union as a structure, member states and regional and national levels of government.
I will not quote from the letter or from the presidency decisions in detail except to emphasise that we are now in a new situation. The lecture we have just heard may be a rather inadequate summary of what was past practice. We are now in a new situation within the context of extension, within the context of the interesting political argument inside the German state about the relationship between the Länder and the federal government. In particular, the re-election of Chancellor Kohl and the positioning of the SDP in relation to that, has meant that the question of the role of regions—that is, a level of government below member state—in relation to the European Union is now a major issue in the politics of Germany. As often in these matters, the politics of one member state reverberate in another.
The issue of subsidiarity, the issue of levels of decision making—local, regional and national, as they are described in the Chirac-Kohl letter—are all issues which are currently part of the discussion within the Union. The points which were put forward by the noble Lord, Lord Crickhowell, about recent practices of the Council of Ministers and ways of operating are all issues now open for debate.

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I am not going to argue how those issues should be resolved. Clearly there are issues of competence which work at different levels. I do not accept the point that the noble Lord was making rather strongly that the issues of competence relating to Wales have to do only with matters which are somehow marginal, as he described them. According to him, culture is marginal, although it is a major source of employment in the Welsh economy. He was suggesting that issues relating to agriculture in the economy were somehow more central.
The division of relationships between different areas of policy is no longer relevant. We are in a position where the whole nature of the relationship between member states, regions, localities within the Union and subsidiarity will be an area for discussion at the informal meeting of heads of government under the Austrian presidency in October. We need to be creative in such a situation. I do not understand why the noble Lord, Lord Crickhowell, is so insistent upon freezing the relationships of the national assembly, the Northern Ireland Assembly, and the Scottish parliament into one model, and why he is so keen to fix upon what was agreed in the Belgian federation, the Spanish state, and the German Länder at particular times. Those are moving issues.
Lord Crickhowell: My Lords, I thank the noble Lord for giving way. I am puzzled as to why he thinks I am trying to fix the relationships in one particular form. All I have done is put down an amendment to turn into statute what the Government say they wish to happen and believe will happen, and to ask a number of questions about what may be allowed in the present circumstances. I hope feelings will move on, but it is a good idea to know where we are at present.
Lord Elis-Thomas: My Lords, I thought that the noble Lord was seeking to place on the face of the Bill what the relationships between the national assembly for Wales and the rest of the EU were going to be. Now I understand that that is not the intention, in which case I shall happily sit down and listen to the Minister's discourse about the future.
It is important that we understand that relations between the national assembly, the Scottish parliament and the European Union are, again, concordat-type relationships, conducted at the European level, and the possibilities of developing those relationships is something that we in this House should welcome and not seek to freeze-frame.
Lord Roberts of Conwy: My Lords, we have heard some interesting speeches. I detect a similarity between the amendment spoken to by my noble friend Lord Crickhowell and Amendment No. 63 put forward by the noble Lord, Lord Elis-Thomas. Both of them have taken at his word the speech of the noble and learned Lord the Solicitor-General on Second Reading, particularly when he described the relationship that the assembly would hope to have with the European Union. He said:
"However, the assembly will have an important role to play. It will be able to scrutinise fully European Union documents and proposals and to take evidence on their impact and therefore put a
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Welsh eye on what the impact will be on Wales. Where appropriate, assembly secretaries, as well as officials, will have a role to play in delegations to the Council of Ministers, as agreed by the UK Minister leading those negotiations. Assembly secretaries will be able, subject to the agreement of the lead UK Minister, to take part in relevant negotiations on policy at the Council of Ministers".—[Official Report, 21/4/98; col. 1130.]
I thought that the noble and learned Lord was being optimistic. The prospects that he held before us were glowing. I listened to the speech of the noble Lord, Lord Sewel, on Second Reading of the Scotland Bill. What he said appeared to be somewhat more guarded. He stated:
"As the White Paper foreshadowed, the conduct of relations with the European Union is necessarily reserved to the United Kingdom Government because the United Kingdom is the member state. But the Bill gives the parliament and the Scottish executive the full powers they need to observe and implement European Community obligations in so far as they relate to the devolved areas. The parliament will be able to scrutinise relevant EU proposals and legislate to give effect to Community obligations for Scotland. And Schedule 5 also provides that the Scottish executive will be able to play a role alongside the United Kingdom Government in negotiations".
It is interesting to note what Schedule 5 comprises. Paragraph 7 is headed "Foreign affairs, etc", which includes the European Communities and their institutions among the gamut of international organisations mentioned in sub-paragraph (1). But of course, paragraph 2(b) of paragraph 7 of Schedule 5 to the Scottish Bill points out that:
"Sub-paragraph (1) does not reserve … assisting Ministers of the Crown in relation to any matter to which that sub-paragraph applies".
Are we to understand that that degree of non-reservation is tantamount to providing,
"that the Scottish executive will be able to play a role alongside the UK Government in negotiations"?
What kind of assistance and role is that? Is it not a little too far-fetched to interpret Schedule 5 in that way?
The noble Lord, Lord Sewel, felt obliged to go on to say:
"Much has been made in another place of the omission from the Bill of a right in law setting out exactly when ministers of the Scottish executive will participate in meetings of the European Council of Ministers and other negotiations. I have explained that the Bill contains enabling provisions, to make clear that they may take part in such negotiations. But the UK is the member state; we must have a common UK position and a single UK delegation. The emphasis in negotiations will continue to be on working as a UK team; the delegations will be led by a UK lead Minister who will retain overall responsibility for the negotiations, the same as now".
Before we read much further into this speech there is a reference to the concordat. The Minister stated:
"We envisage that these matters will be covered by concordats between Edinburgh and London, but we are firmly of the view that it would be neither sensible nor appropriate to try to prescribe the detail of who should speak when on the face of the legislation".—[Official Report, 17/6/98; col. 1572.]
I do not believe that the Welsh position is very different. If one reads the closing speech of the noble and learned Lord the Solicitor-General on Second Reading of this Bill and couples that with the somewhat greater detail spelt out in the introductory speech of the noble Lord, Lord Sewel, to the Scotland Bill we arrive somewhere nearer the truth.

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My noble friend referred to the situation between the European Union and the Länder. That was a subject raised by my noble friend Lord Mackay of Ardbrecknish and was acknowledged by the noble Lord, Lord Williams, who has written to my noble friend saying that,
"During the second day of the committee stage of the Government of Wales Bill, you asked for examples where representatives of regional administrations had attended, on behalf of their Member State, formal meetings of the European Union".
The answer given by the Minister was:
"The more obvious instances which have been identified relate to the German Länder. Because of its particular expertise, Bavaria, for example, has represented the German Government at EU meetings where cultural issues have been the main agenda item; similarly, members of the Catalan autonomous government have attended meetings on behalf of the Spanish when language issues were under consideration".
I expected to find a reference to agriculture or fisheries. I accept that Bavaria may not quite rank as a fishing Land; although in respect of agriculture it would certainly do so. But no; it is in those areas that have been mentioned that those Länder and provinces have featured.
Then there is the very strong point made by my noble friend Lord Crickhowell quoting my noble friend Lord Cockfield about the status required for attendance and indeed for direct participation in the Council of Ministers. My noble friend covered the ground extremely adequately. The noble Lord, Lord Elis-Thomas, commenting on what my noble friend said, referred to the changing situation. Yes, the situation may be changing but we are, in legislation, bound to recognise the situation as it actually is, as we have experienced it. I do not believe that there is any real difference between the two sides on that. That is what the Government have been doing. They have been acting on their historical knowledge and experience. That is precisely what we have done with our Amendment No. 51.
We recognise that the Bill fails to guarantee a strong voice for Wales in the European Union. There is nothing to dispel the fear that the role of Wales in the Council of Ministers will be less than it is now. And so our proposed new clause seeks to give the assembly the right to be consulted before a Minister attends the Council of Ministers—a very important right; to be advised on proceedings in the Council of Ministers; to question the Secretary of State after a meeting of the Council of Ministers; and to attend with and participate in the United Kingdom delegation with the Minister's consent. Again, like my noble friend Lord Crickhowell, we have accepted the Government at their word and have defined our amendments accordingly.
10 p.m.
Lord Elis-Thomas: My Lords, I am grateful to the noble Lord for giving way. How does he say that the position of Wales within the European Union, under the devolved arrangements, in relation to the Council of Ministers and the structure of the Union will be less than it is now?
Lord Roberts of Conwy: My Lords, that is simply because we are currently represented by Ministers who belong to a unitary government. When any United Kingdom Minister represents the United Kingdom at the Council of Ministers he represents Wales as well as England, and indeed in many cases, Scotland too. Before he goes to the Council of Ministers he has usually been consulted by the Secretary of State for Wales, who has had his input into the position that the Government and the Minister representing them takes at the meeting of the Council of Ministers.
In future, it appears that our unity under the United Kingdom Government is changing, if it is not under some threat—but let us leave such words out of it—and there are doubts as to how that unity is going to be expressed in constitutional terms in relations between Ministers and between government departments. There are whole areas where there are question-marks, to which we have referred in relation to the concordats. Therefore we are very concerned about the future representation of Wales—and I am sure this extends to Scotland—in the Council of Ministers and about how our interests in Wales are to be safeguarded.
Lord Williams of Mostyn: My Lords, Amendment No. 43 differs significantly from Amendment No. 51, and Amendments Nos. 63 and 64 themselves differ from the other two sets of amendments. I think that some errors have been perpetrated this evening. A phrase used in respect of Amendment No. 43 was,
"We wish to give rights to the assembly on the face of the Bill."
I then look at the words of Amendment No. 43, and this gives no rights. It says,
"At any meeting of the Council of Ministers … of the European Community at which matters relating to Assembly functions are to be considered".
Assembly functions, I take it, are as set out in Schedule 2 on page 82 of the Bill. They include culture, museums and libraries, water and flood defence and the Welsh language. A great gamut of functions numbered 1 to 18 appears on page 82.
But what happens then?
"a member of the executive committee (established under clause 56) shall"—
and I omit some words deliberately,
"be entitled to speak and vote on behalf of the Assembly and of the United Kingdom."
The reason that I omitted some words deliberately is to underline them now and to point out again that it is an error to say that any right of any sort is being given, because what is suggested in Amendment No. 43 is simply this:
"shall be entitled to speak and vote on behalf of the Assembly and of the United Kingdom".
with the consent of the Minister of the Crown leading the United Kingdom delegation. That is exactly the present situation which obtains, as indeed the noble Lord, Lord Crickhowell himself observed. He quoted the treaty, saying that the key words were that the representative to the Council of Ministers is,
"authorized to commit the government of that Member State".

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I agree. The Government's view, which I believe to be correct, is that if they wished they could authorise an assembly secretary or a Scottish minister to take on that role and commit the United Kingdom. Therefore I repeat that no right would be given, because it remains entirely at the discretion of the Minister of the Crown leading the United Kingdom delegation. So to speak of "rights" is wholly misconceived, not to say bogus.
The noble Lord, Lord Crickhowell, reviewed constitutional arrangements in at least two other European Union countries. One concerned the position of the Länder. He spoke of a particular article of the German basic law which of course is subject to the direction of the German Supreme Court in Karlsruhe. He spoke of the German basic law, which is a written constitution referring to areas of exclusive competence of the Länder. Exactly so; but that has nothing to do with our present situation. The noble Lord spoke of the domestic legislation of Spain, as to whether or not the autonomous government of Catalonia could take the lead. That, too, is nothing to do with our present situation. Whatever piece of domestic legislation is introduced and passed in the Westminster Parliament, nothing in domestic legislation can override any legal rules binding in European Union contexts at the Council of Ministers. I repeat: nothing at all.
Therefore, Amendment No. 43 would do nothing more than underline the present situation. It is perfectly open to any lead Minister of Her Majesty's Government in the Council of Ministers to nominate even at the moment anyone,
"authorized to commit the government of that Member State".
It is quite right, as indicated in the citations that the noble Lord, Lord Roberts, made, that the only EU member is the United Kingdom. It is within that context that the UK Minister of the Crown can, if he or she wishes, nominate another person to speak and vote on behalf of the UK.
As I indicated earlier, Amendment No. 51 is different. I suggest to your Lordships that these are the sort of arrangements which are apt to be decided within the context of concordats; in other words, the assembly should put its mind to having a concordat with Westminster—and, in turn, Westminster should do likewise—about how one would have discussions, considerations and co-operative thoughts about what ought or ought not to go on. Therefore, Amendment No. 51 should not be on the face of the Bill but should be the subject of a concordat.
Other observations were made about the views of the noble Lord, Lord Cockfield, to which, of course, everyone pays the highest regard in this House. But, if I jotted down the citations correctly—and I cannot say that I got down every reference that the noble Lord, Lord Crickhowell, made because I do not think it was possible to do so—there is reference again to the phrases, "authorized by the government" and, indeed, "authorised to speak and vote as a representative of the UK Government". As far as I am aware, subject to
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correction, there is nothing in European law which prevents the UK Government designating a lead Minister,
"authorized to commit the government of that Member State".
The noble Lord, Lord Crickhowell, asked further questions relating to the speech made by the noble Earl, Lord Lindsay, as to what would happen if there were a session limited to the lead Minister of the United Kingdom. The answer is that the situation would be exactly the same as it is at present. It depends who the UK lead Minister is and what delegation in number is entitled to remain in the closed session. If within that number the UK lead Minister wants an official, a lawyer or a designated member, exactly the same rules would apply.
Other questions were put to me and I hope to deal with all of them tonight. However, if I miss any of them, I shall certainly write to the noble Lords who have shown an interest in the matter. The noble Lord, Lord Roberts, was courteous enough to read out my letter. I promised to research, in so far as I could, the question which the noble Lord, Lord Mackay of Ardbrecknish, put to me. I believe that I correctly represented the present situation in that letter; namely, that Bavaria, among the Länder, had represented the German Government where cultural issues had been the main agenda item.
The noble Lord, Lord Elis-Thomas, has a point when he says, especially in the context of the Welsh assembly, that cultural matters—including language, and so on—are important in the life of the nation and also in the context of tourism. People like to visit Wales because, in part, it is different. That is not unimportant. The mere fact that it relates to culture does not mean that it is of no value; in fact, it is of deeply profound value in the context of Wales.
I gave the House a further example about the Catalonian autonomous government attending on behalf of the Spanish when language issues were under consideration. I do not believe that any of those examples were incorrect. If I have misrepresented factual situations, then I shall be only too pleased to say that I am sorry that I was factually wrongly advised and wrote a factually incorrect letter. But I do not think that any attack on my factual assertions has been made, or is capable of being made. The document states that it is possible for an assembly member to lead such a delegation. Nothing I have heard from any of your Lordships this evening even begins to persuade me that I am wrong in that assertion, either politically, legally, or as a matter of fact.
Distinct questions were asked on an earlier occasion. The noble Lord, Lord Stanley of Alderley, was kind enough to say that he would not speak on this matter but wished me to deal with his points. I am most grateful to him for his courtesy. The question was asked: where EU schemes allow discretion, will it be open to the assembly to use that discretion? My answer is "yes". If a European scheme allows no discretion, the assembly will consequently have no freedom to act differently. The suggestion has been made that where joint issues arise, the assembly would simply rubber-stamp or initial

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papers prepared in Whitehall. That is not so. Joint functions will have to be exercised by both parties in agreement. That is not entirely different from the present situation where of course the Welsh Office makes representations to MAFF. In the discussions one Minister may be more persuasive than another, or one set of officials may be less persuasive than another.
I was asked: what would happen if MAFF conducted negotiations, or an assembly secretary conducted negotiations, on behalf of the United Kingdom in Brussels. Could the MAFF Minister be questioned in another place? That would, of course, be a matter for the Speaker and Standing Orders in another place. If a MAFF Minister is reporting to another place on concluded negotiations in Brussels, I see no reason why in appropriate circumstances questions should not be put to the Minister in another place. I stress that it is not for me to determine these issues or to be discourteous to another place and the authorities of another place. However, I see no reason in principle why that should not occur.
At present all members of the United Kingdom delegation in any context have to speak to an agreed line. The noble Lord, Lord Mackay, is quite right: the agreed line is sometimes the result of bruising encounters. I reiterate there is no question of an assembly secretary, or indeed first secretary, being able to speak on behalf of the United Kingdom without two things obtaining: first, the permission of the UK lead Minister and, secondly, speaking to an agreed line. However, that is no different from what the noble Lord, Lord Roberts of Conwy, did when he spoke in such circumstances as the UK Minister, as he told the noble Lord, Lord Elis-Thomas, earlier.
That is the present situation. I do not dissent from what the noble Lord, Lord Crickhowell, said. We need to know what the present situation is. But we also need to bear in mind that the assembly will grow and change organically. The noble Lord, Lord Elis-Thomas, has a point there. The assembly is able to scrutinise and debate proposals for European legislation. It is able to make representations to the Secretary of State when it has reached its own conclusion. It is able to deal with these matters in concordats, which will be prepared on the basis of efficiency and decent, co-operative working relationships, and which will be published. Assembly members will be able to sit on the Committee of the Regions. They will be able to submit nominations to the UK Government for Welsh representation on the economic and social committee.
Therefore it is a mistake to lodge oneself, willingly or unwillingly, in the straitjacket of the simple factual question of who can lead on behalf of the United Kingdom Government. The answer is precisely the same as that which applies at present. The only person who can lead for the United Kingdom Government is someone who will present an agreed policy and who will be nominated by the lead Minister.
Lord Mackay of Ardbrecknish: My Lords, before the noble Lord sits down, will he answer a question? Let us say that there is an agreed line, and the Minister
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for, say, agriculture or trade does a deal in the middle of the night. As the Minister will appreciate is the case with all these matters, the deal is never absolutely perfect; there has to be a little give and take in order to achieve the deals. Currently a Scottish Office, Welsh Office or Northern Irish Minister is bound by the collective responsibility of the one government to defend the agreement, even when he may perhaps have to swallow quite hard and possibly receive a lot of stick in his own back yard.
I cannot quite get my mind round what will replace collective Cabinet responsibility when it comes to defending the outcome of any package. I understand it down the corridor, because the lead Minister will be a UK Minister, or else he will have delegated the responsibilities. I suspect that in relation to the issues I am talking about, the lead Minister will be a UK Minister. How is the Welsh Secretary tied in to that decision? Currently, Ministers in the Welsh Office are tied in by collective responsibilities in government. That will not happen. How will he be tied in in the future?
Lord Williams of Mostyn: My Lords, it seems to me that there is no difficulty at all. If it is the Welsh First Secretary who is representing the United Kingdom line and the United Kingdom Government, because the UK is the only member of the EU, if he or she negotiates, for instance, on cultural matters, he or she will have to defend the agreement arrived at loyally. That is a necessary implied condition of his or her becoming the lead United Kingdom Minister.
Lord Mackay of Ardbrecknish: My Lords, I was not solely concerned with him as the lead UK Minister or if he was simply part of the discussion which went on beforehand and the UK was represented by, say, a MAFF Minister who came to those decisions. My suspicions have constantly been raised because the Minister goes back to culture and things like that. I want to get on to the big economic issues which drive the European Union and make up the common policies of the European Union. Those are the matters on which I want assurances. Let us say that the Welsh Secretary is not asked to be the lead Minister, and that the lead Minister is a MAFF Minister. Perhaps I did not make my question clear. How does the Welsh Secretary become tied in to what is currently collective governmental responsibility?
Lord Williams of Mostyn: My Lords, the noble Lord makes at least three points. I do not call culture "things like that", because it is extremely important. Turning to the noble Lord's points, there are three Ministers involved: there is the lead UK Minister; and he spoke of the Welsh Secretary—I am not sure whether he meant the Secretary of State or the First Secretary of the assembly. I am not nitpicking; I believe that there are three Ministers possibly involved. If it is the Secretary of State for Wales, there is no problem. If it is the first Secretary, and he has negotiated with MAFF and failed in the negotiations, it is a matter for his judgment what dissent he puts in the public arena, because he is an assembly First Secretary. If he wishes the United

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Kingdom position to be x and it is x-minus, then it is a matter for him, of course bearing in mind the political realities—he has to deal in future negotiations with Westminster colleagues. I hope that no one is of the brutalist school and will say, "I haven't had all that I wanted on this occasion. It is my bat. I shall now depart". He has to work with colleagues in Westminster in the future.
If one wants to be defeatist about these matters, or even unduly cautious, one can ask: what if there is no good faith, or what if there is an enormous chasm? One will approach these matters pragmatically, as Ministers do presently. If they cannot bear collective responsibility, they have the option of resignation. However, there are intermediate possibilities as well. I do not believe that these matters cannot be made to work if we wish them to work. However, I stress that nothing in domestic legislation can override European Union legislation in this context.
Lord Crickhowell: My Lords, I am grateful to the Minister for what he has just said to strengthening the arguments that I put earlier regarding the impossibility of the Secretary of State for Wales being the First Secretary. His remarks were incompatible with that situation. I was slightly surprised that both he and the noble Lord, Lord Elis-Thomas seemed rather belligerent on this subject. I do not believe that they are entitled to lecture either me or my noble friend Lord Roberts of Conwy on the subject of the importance of the Welsh assembly. There are not many people who have devoted more energy to encouraging and strengthening Welsh culture in all its aspects than we have. I could not be a stronger supporter of those subjects to which the noble Lord, Lord Elis-Thomas, referred.
Most of the matters which come under that umbrella are, in any case, the responsibility of the UK Government at present and will be the responsibility of the Welsh assembly. They are hardly touched on by European policy. These amendments are actually concerned with crucial issues on which we are wholly or substantially dependent on European policy; I refer in particular to agriculture and some aspects of industrial policy.
The Minister referred to wishing to give rights. I used the phrase, "put on a statutory basis". I was seeking to put on a statutory basis the words, the undertakings and the expectations raised earlier by Ministers. Indeed, though the noble Lord, Lord Elis-Thomas, seemed a little belligerent about my amendment earlier, it was probably because he hurried through dinner and had not read it. I find it hard to believe that he can criticise my amendment, which in many respects has much in common with his amendment. We are trying to give more power and effectiveness, more involvement to the Welsh assembly. I believe that we are aiming in the same direction with the same objectives.
I said also that I doubted whether national law could overrule European rules. The Minister confirmed that fact. I would add that it is not for me to decide between the legal wisdom of the Minister and the practical experience of my noble friend Lord Cockfield as a
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commissioner on the exact relationships in that respect. However, there are some issues which are not absolutely clear.
I fear that we are in a bit of a muddle about crucial negotiations. There are two aspects to this matter. One arises when we are putting together a policy. In my time as a Minister, the Minister of Agriculture always, as a matter of principle—it was true also for the Secretary of State for Industry—before going to Brussels for important negotiations, discussed the issues with the Secretaries of State for Wales, Scotland and Northern Ireland and reached a totally agreed position. As my noble friend pointed out, when they came back with whatever deal they had succeeded in obtaining, collective responsibility bound them together.
The situation will be different when the Minister is the representative of a different body and of a different assembly. It will not be possible to have the same cohesion in the agreement when they go and it is by no means clear that there will be the same unity about what has been achieved when the Minister returns, having completed his negotiations in the middle of the night.
The truth of the matter is that the position will not be stronger under existing arrangements. We are justified in our fears that in many respects it will be weaker. However, we received a detailed response to many of our questions. We shall want to consider that response carefully. It would not be right at this late hour—we always seem to come on to this important subject late at night—to divide the House. However, there are still issues which leave me extremely unhappy about the position and I shall want to consider the position carefully before Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 31 [Consultation about government's legislative programme]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 44:
Page 20, line 21, leave out ("such").
The noble Lord said: My Lords, I do not propose to be belligerent about this amendment but I am deeply disappointed that there has been no movement by the Government on this important issue; that is, the consultations to be carried out between the Secretary of State and the Welsh assembly about the Government's legislative programme.
As drafted, Clause 31 is written almost entirely from the point of view of the Secretary of State. It provides that he will consult with the assembly as it appears appropriate to him to do so. He is not required under subsection (4) to undertake consultation with the assembly about a Bill if he considers that there are considerations relating to the Bill which make it inappropriate for him to do so. All the emphasis is upon giving to the Secretary of State a discretion as to whether to consult the assembly. If he does not want to, he does not have to.
What is wrong with this is that it does not reflect the true balance between the Westminster Parliament and, specifically, the Welsh assembly. We know that the

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arrangements are different in Scotland and no doubt they are different in Northern Ireland. But, for Wales, all the primary legislation is to be made at Westminster, and it follows that the secondary legislation, which will be for the consideration of the Welsh assembly, must be contained within the framework of the primary legislation that is passed here. That primary legislation will obviously reflect the policies of the government who are elected to Westminster. They may be of the same political colour; but they may equally be of a totally different political colour. It seems to us on these Benches that where one has this constraining influence of the primary legislation—the framework within which everything that the assembly legislates about must be contained—it is essential that the Secretary of State should consult the assembly; not on matters that he considers to be appropriate but on the whole of the legislative programme.
That is the purpose of the amendment. It does not impose on the Secretary of State a particularly onerous burden. After all, the whole of the Bill removes from the Secretary of State many of the burdens that he sustains at the present time. Having taken away from him the weight of the responsibility of running the day-to-day work of the Welsh Office and the consideration of how the budget is to be spent, it is surely not too much to ask of him to come to the Welsh assembly and to explain, discuss and consult over the primary legislation within which the Welsh assembly has to work.
I think that all those eager young people, such as Kirsty Williams, to whom reference was made earlier today by the noble Lord, Lord Elis-Thomas, who are going to go along to Cardiff, full of enthusiasm and ready to put into effect the policies that the Welsh assembly considers to be appropriate for Wales, with a spark to do something for their country, will suddenly hit an enormous barrier—the existing primary legislative programme of the Westminster Parliament. Surely, the Secretary of State should be obliged to consult about it. I beg to move.
10.30 p.m.
Lord Mackay of Ardbrecknish: My Lords, the noble Lord, Lord Thomas of Gresford, has made a powerful point. I should have found it more powerful if the noble Lord had taken part in the previous debate, which was about consultations and discussions surrounding important matters on Europe. But that does not seem to matter too much.
I think that both are equally important. All governments use phrases like "such consultation as he thinks appropriate", and it is always difficult to defend them. It is a fairly vague form of words. I have no doubt that we shall receive some assurances from the Minister. It is particularly important, as the noble Lord said—perhaps we omitted this point in the previous debate—if the people involved are of different political parties with different manifestos and different agendas. That is when it may be convenient for the Secretary of State in the Westminster Government to decide not to bother consulting because he knows jolly well that when he
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consults he will find that he has an opposite number with an entirely different agenda. The noble Lord has made some valid points and I look forward to the Minister's reply.
Lord Falconer of Thoroton: My Lords, I shall certainly not deal with the amendments in a belligerent way. We had a debate on precisely the same amendments on 2nd June. The noble Lord, Lord Thomas of Gresford, was kind enough to describe my answer on that occasion as "wholly inadequate". Although I shall repeat enough of the points, I hope that I shall go further than on the last occasion.
I hope that it is clear from what I said on the last occasion—I shall certainly say it on this occasion—that there is very little between the Government and the noble Lord on the central issue in this debate; namely, that the assembly should be fully consulted about those government Bills which affect its responsibilities such as the environment, planning, education and social services.
In the course of the debate this evening, the noble Lord, Lord Thomas of Gresford, said that he believes it appropriate that the assembly should be consulted about the legislation within which the assembly must work. I do not believe that there is much difference between us in relation to what the central obligation should be. We also seem to be in agreement that the nature of consultation should not be prescribed by this clause since his Amendments Nos. 44 to 48 do not prescribe what form the consultation should take, only that there must be consultation.
In our draft, as is the way, it would be for the Secretary of State to form a judgment about the nature and extent of the consultation and its precise timing. When it is the Secretary of State who is, as it were, the one "in the know" as to proposals in relation to primary legislation in the Westminster Parliament, then, in effect, and simply through that circumstance alone, it must be for the Secretary of State to determine what is the most appropriate way for that consultation to take place and the most appropriate time for it. So the drafting of the Bill in its present form is simply intended to reflect that simple reality.
I believe that I may also lay to rest any concern that the noble Lord had that consultation would not take place until a Bill had been introduced. That would not be a practical way for the government of the day to proceed. I am sure that this and future governments will want relevant legislation framed with regard to the assembly's views. I say "relevant legislation" because, as I believe I have made clear and I believe the noble Lord accepts, plainly there will be some pieces of government legislation—for example, legislation applying only to England or matters such as the Armed Forces—which lie outside the assembly's responsibilities and where the Secretary of State may conclude that no consultation is appropriate. Again, I do not believe that that is very far from what the noble Lord said in the course of the debate.

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The final amendment in this group invites us to omit Clause 31(4) which states:
"This section does not require the Secretary of Stale to undertake consultation with the Assembly about a bill if he considers that there are considerations relating to the bill which make it inappropriate for him to do so".
Perhaps I may develop an example of where that provision might be relevant and draw on an actual case. When the community charge had been in operation for only one year, the Government decided to introduce a blanket reduction of £140 per person for the second year to be funded by an increase in VAT. The decision was announced in the then Budget and the relevant legislation was introduced afterwards in a Bill which was separate from the Finance Bill. Before the Budget announcement the Government had already formed an intention to introduce a Bill. If the assembly had been in existence at the time, that would have triggered a requirement for consultation under subsection (3) since, as we know, local taxation would be among the assembly's responsibilities.
I hope that the noble Lord can see how, in the scenario I have given, a Secretary of State might well have concluded that there were considerations prior to the Budget announcement which would make it wholly inappropriate for him to consult the assembly. In a sense it would have been in the same position as everybody else—it would have to wait until the Budget. Obviously, once the announcement had been made there would be nothing to prevent consultation and the full involvement of the assembly in the finalisation of legislation.
I hope that that example demonstrates that subsection (4) has a purpose which is separate from the discretion about consultation given to the Secretary of State in subsections (1) and (3). In view of those explanations, I very much hope that the noble Lord will see that we are on broadly the same lines and that the clause seeks to achieve that which the noble Lord wishes to achieve. I invite him to withdraw the amendment.
Lord Thomas of Gresford: My Lords, I am grateful to the Minister for his explanation and for reminding me that I described his previous reply as "wholly inadequate". I now amend that phrase and say that his reply has simply been "inadequate".
The essential point that I am trying to convey to the Government—I want them to give full consideration to amending the Bill—is with regard to the fact that there should be a firm duty on the Secretary of State, enforceable at law, to consult the assembly. It should not be a matter of discretion. The Minister knows that when we discussed concordats, I argued that they should not be legalistic documents, and that there should not be the opportunity to run to court to enforce the working relationships between various government departments. But this is of an entirely different order.
We should not get into the situation, to which the noble Lord, Lord Mackay, referred, where one political party is in power in Westminster and another in Cardiff, there is a clash between the two and the Westminster Government refuse to consult Cardiff. In that situation, there is a role for the courts to play, to enforce a duty on the Secretary of State to consult on the primary
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legislative programme within which the Welsh assembly has to work. That is what I seek from the Government. Heaven knows, we have helped them even today in certain other areas and I look for their assurances and their further assistance when we next debate this. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Elis-Thomas Lord Elis-Thomas moved Amendment No. 45:
Page 20, line 22, after ("session") ("and the National Assembly's legislative proposals").
The noble Lord said: My Lords, I move this amendment in a totally non-belligerent fashion. This is not just a rehearsal of what we debated in Committee on the notion of a fast-track legislative relationship between the assembly and both Houses of Parliament. It is an attempt to develop the argument. The amendments would allow for draft Bills in specified devolved areas and for formal consultation to take place both over the relationship between Cardiff Bay and Westminster as to the making of procedures for representations from the assembly and over consulting on the issue of the further devolution of primary legislative powers.
I am sure that we shall return to this issue over the years in the devolutionary process. I am not seeking a thin end of a wedge—if that can be sought; I seek rather a process of dealing with the specific situation whereby there is a separation of powers—if I can use that expression—between Westminster and Cardiff Bay in relation to legislative form; in other words, that we are dealing with a situation where delegated legislation will be operated and, indeed, devised in Cardiff, and primary legislation will be operated at Westminster. Some of the issues that were raised in Committee, about using procedures at Westminster to ensure that any issues arising out of the assembly's practical role as a deviser of delegated legislation, should be able to be dealt with here. If we do not have such a procedure, the danger is that there will be bland Wales primary legislation here, which means that debates on legislative issues relating to Wales will not be satisfactory at this end and the amount of delegated legislation at the Cardiff end will have to be more substantial. One needs a relationship between the two processes much like what happens at European Union level, where legislation and regulation are made through agreement between member states and implementation is carried out as a consequence.
I believe that merely to produce delegated legislation or implement primary legislation without a return to the source at Westminster means that the assembly may find itself regularly in what I described in Committee as logjams of opportunities to provide for primary legislation issues that arise out of its practical activities. I do not argue that the assembly should have additional powers but rather that it should be able formally to make representations to Westminster as the source of its primary legislative power in a way that makes its activities more meaningful.
To coin a phrase at this time of the evening to wake us up, this is all about taking Clause 33 seriously. The Minister will say that Clause 33 provides that the assembly may consider and make appropriate

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representations about any matter affecting Wales. Of course it may, but that is not the issue. To take the matter seriously means that there are specific indications for that purpose. That is why I have returned to the issue of a cycle of legislative activity whereby what is delegated to Cardiff and is practically produced there has a way of feeding back into the primary process at Westminster. I beg to move.
10.45 p.m.
Lord Roberts of Conwy: My Lords, so far as I can see, there is nothing in Clauses 31 to 33 to prohibit the assembly from making representations concerning any matter that affects Wales, including the need for legislation. Wales has had devoted to it over the years a number of primary legislative measures: the Eisteddfod Act 1959, for which my noble friend Lord Thomas of Gwydir was responsible, and the Welsh Language Act 1993, for which I had some responsibility. We now have the Bill. In recent years certain parts of Bills have related specifically to Wales. I am thinking particularly of the Education Act 1988, and subsequent education legislation also comes to mind.
I would have thought that when the Secretary of State discussed with the assembly the Government's legislative programme for the forthcoming Session under Clause 31 the assembly would put forward its special legislative requirements for Wales. It might have done so earlier on an informal basis. But no one can be sure what will be in the Government's legislative programme until it is announced in the Queen's Speech. I can understand the anxiety of the noble Lord, Lord Elis-Thomas, to get as much as he can on the face of the Bill. It is an anxiety which he has imputed to me in different contexts, but I question the need for this amendment except for its cosmetic value.
Lord Crickhowell: My Lords, I am all for consultation. I have nothing against the idea that the clause should encourage it. However, I look with some concern at Amendment No. 53 in the name of the noble Lord, which is grouped with the other amendments. That seems to be taking consultation an extraordinarily long way. The noble Lord said that he was not attempting to produce the thin of the wedge but this new clause goes pretty far in that direction.
Here we are told that,
"where representations are made by the Assembly to the Secretary of State concerning the acquisition by the Assembly of primary legislative powers in any field"—
pretty fundamental that—
"provided that such representations receive the support of at least a two-thirds vote of the members of the Assembly"—
certainly not a totally unlikely event—
"the Secretary of State for Wales shall within in one year of receiving any such representations, place before Parliament a bill incorporating those representations in the form of proposals for amendments to this Act".
The Secretary of State is apparently not entitled under this clause to go back to the assembly and say, "No, I am not having any of this. This simply is not on". He is obliged to produce a Bill. The noble Lord may tell
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me that the Secretary of State could come down to the House and say, "I have been made to produce this Bill because the Act says that I have to. I do not believe in it and I hope that you will all reject it". If he did that, the relationship with the assembly would be strained in the most appalling way. If a Government Minister comes down to either House with a Bill, there is a reasonable expectation that he will support the Bill.
This clause goes much further than I would wish to go. While I have every sympathy for the general concept that we should have consultation, I should find it quite impossible to support the amendment.
Lord Falconer of Thoroton: My Lords, I congratulate the noble Lord, Lord Elis-Thomas on his continuing ingenuity in seeking means to involve the assembly in primary legislation and to have conferred on it—as the noble Lord, Lord Crickhowell has pointed out—primary legislative powers. It will not surprise him to learn that the Government cannot accept his amendments, some of which were debated in Committee.
As we have already discussed, Clause 31 delivers the White Paper commitment that the Secretary of State would consult the assembly about the Government's legislative programme. The consultation upon it is one way in which the assembly can influence the content of primary legislation. Amendments Nos. 45 and 50 seek to go further and introduce a requirement for the Secretary of State to consult the assembly about the assembly's legislative proposals—namely, draft Bills and draft amendments which it, the assembly, has approved during the previous session.
I am not quite sure to what the draft amendments would relate. If they are to relate to government Bills in a particular session, it would require a remarkable degree of foresight on the part of the assembly to have drafted amendments to them during the previous session. If they relate to Bills in the previous session, it would be too late in any event.
Apart from the consultation under Clause 31, the appropriate way for the assembly to seek to influence legislation at Westminster would be for it to use its powers under Clause 33, which states that the assembly may consider and make appropriate representations about any matter affecting Wales. The assembly can make appropriate representations to whomsoever it chooses about any Bill before Parliament that affects Wales, whether or not the Bill relates to the fields in Schedule 2. Those representations might include suggested amendments and could be published or sent to the appropriate Minister or to any member of either House. It would be for the Government or Parliament, as the case might be, to decide what if anything they wished to do in the light of the assembly's representations.
As for the assembly drafting whole Bills, if the assembly was seeking to argue that some specific new legislative provision should be made for Wales, this could best be put forward in a policy document, again using the powers in Clause 33, rather than in a draft Bill. If the Government of the day were to take up such

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a suggestion from the assembly, they would wish to have their own Bill drafted by parliamentary counsel as now.
Turning to Amendment No. 52, I think Madam Speaker in another place would be well able to deal with any representations she might receive from the assembly without this Bill requiring the Secretary of State to produce proposals for procedure in another place. The assembly will not be part of Parliament, and it is difficult to see what representations it would wish to make to Madam Speaker. I imagine that the assembly would be more likely to make its representations to Government Ministers, or individual Members of this House or another place.
The noble Lord, Lord Crickhowell, took us through Amendment No. 53. He is right: it would require fresh primary legislation at Westminster to confer such powers on the assembly, but that should be a matter for the government of the day to propose and for Parliament to approve, no doubt following a referendum on the matter, rather than merely a vote in the assembly, as the amendment proposes. The new clause goes well beyond the Government's proposals which were put to the people of Wales last year, and we cannot accept it. In view of my response, I invite the noble Lord to withdraw the amendment.
Lord Elis-Thomas: My Lords, I am grateful to my noble and learned friend. I thank him for his remarks about my ingenuity which is matched only by his ability to expand upon the efficacious nature of Clause 33. I am grateful to him for the indication he gave. I accept that Amendment No. 53 is an attempt to raise the issue of the primacy of powers, and I am grateful for his confirmation that that will be a matter for Parliament.
I am grateful also to my noble and learned friend for the indication of the breadth of Clause 33 in relation to legislative proposals with regard to amendments and draft Bills, and the opportunity to have a creative relationship with Parliament in that whole area. I hope that the noble Lord, Lord Crickhowell, as always, will be part of that creativity. I thank him for his contribution to the debate. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 46 to 51 not moved.]
Clause 33 [Consideration of matters affecting Wales]:
[Amendment No. 52 not moved.]
[Amendment No. 53 not moved.]
Clause 34 [Staff]:
Lord Crickhowell Lord Crickhowell moved Amendment No. 54:
Page 21, line 5, leave out subsection (2) and insert—
("(2) Service as a member of the Assembly's staff serving the Assembly First Secretary, the Assembly Secretaries and the Executive Committee shall be service in Her Majesty's Home Civil Service.
(2A) Staff serving the Presiding Officer and the Deputy Presiding Officer, clerks and staff serving the subject committees and other committees (but not the Executive Committee), and other servants of the Assembly, may be either members of Her Majesty's Home Civil Service or employed by the Assembly as it considers appropriate.").
The noble Lord said: My Lords, we come now to the subject of the staffing of the assembly. It is a matter that was raised in Committee. Amendment No. 55 in the names of my noble friends Lord Roberts of Conwy and Lord Mackay of Ardbrecknish raises the issue in the form in which I did in Committee.
I have sought to widen the argument in Amendments Nos. 54 and 56 for reasons that I will explain. Since we started dealing with the Bill we have, of course, had the change in the Government's intentions as to how the assembly should operate. We are now, effectively, to have a Cabinet-type structure. That raises the issue to one of greater importance than may have been the case at the start.
The assembly's staff will come from the Welsh Office. At present, former Welsh Office staff will serve the assembly, the executive committee, the first secretary, the other secretaries and the cabinet, but other staff will have the job carried out by clerks in the clerk's department, the speaker's department, and so forth. We need to have different staff to do different jobs. That was a point raised at the last Welsh Questions, interestingly enough, in the other place by Mr. Rhodri Morgan who argued that there should be staff to look after the assembly in its role as a debating chamber and its committee work separate from the staff who serve the executive. The Secretary of State acknowledged that there would be a need for a distinction between the staff, but he suggested that that would simply be by some slight separation of civil servants. In an earlier debate, there was talk about Chinese walls being erected.
I then took a look at the Scottish Bill. I shall not argue that the Welsh assembly will need quite the scale of arrangements that are necessary in the Scottish parliament. The Scottish parliament will deal with legislation. Therefore the clerks will have a different, more formidable role and there will probably be a need for more people with different qualifications.
I confess that I wanted to raise the issue as one of principle which we could debate. Therefore, in tabling my amendments I did not want to choke them up with many provisions about employment conditions and pensions and add many schedules. I have taken from the Scottish legislation two matters of principle that I wish to raise. They seek to establish a situation in which the assembly secretaries, the executive committee and the first secretary shall be served by Her Majesty's Home Civil Service. But I want to give discretion to the assembly to take on other staff who may be employed on other terms and conditions. They may or may not be members of the Home Civil Service. It is not for us to decide whether they should be.
I am doing what I have been urged to do throughout the passage of this Bill by Ministers and the noble Lord, Lord Elis-Thomas; that is to leave it all to the assembly. However, we need to recognise the fact that there may need to be staff who are not members of the Home Civil Service. We need to have arrangements in place which provide for the assembly to take on clerks and other necessary staff. Indeed, in Amendment No. 56 I argue that there shall be a clerk to the assembly and an office of the clerk and that it should be properly staffed.
There is one other reason for the difference between the solution I have offered in the amendments and that adopted in the Scottish Bill. The Scottish parliament is not a corporate body and therefore a corporate body has to be created to employ these people. Earlier today, we had a long debate initiated by the noble and learned Lord, Lord Simon of Glaisdale. As a result, we are all much better informed about corporate bodies and their powers. The Welsh assembly is to be a corporate body and therefore I do not believe there is a need for the separate arrangements which are contained in the Scottish Bill.
My amendments seek to raise the question of principle and put the proposition to the Government. I have not sought to draft a complete set of what were bound to be technical amendments because that is a job for the Government. If the Government were to accept the principles which I am enunciating they would no doubt bring forward amendments on Third Reading. I believe that the assembly needs to be in a position where it can employ clerks and others who may not be members of the Home Civil Service and there needs to be a clear distinction between those who will serve the executive and those who will serve the assembly and its committees. I beg to move.
11 p.m.
Lord Roberts of Conwy: My Lords, my noble friend Lord Crickhowell is absolutely right to point out that one of the most blatant differences between the Scotland Bill and the Welsh Bill is the clear provision made in the Scotland Bill under Clause 20 for the presiding officer and his corporate body to appoint staff to serve the parliament per se and for the Scottish executive to have its own separate and distinct civil service under Clause 41. There is no such provision for separate staffing for the Welsh assembly and the executive in the Government of Wales Bill.
My noble friend raised the point on Second Reading and, in his absence, I reiterated the key points in Committee. We did not receive a satisfactory reply from the noble and learned Lord the Solicitor-General when he said:
"I do not believe that it is right or necessary to prescribe in statute how the staff of the assembly should be organised".—[Official Report, 1/6/98; col. 327.]
It is done in the Scotland Bill and clear for all to see.
My noble friend referred to the Official Report and oral Questions to the Secretary of State for Wales last Wednesday, 24th June, when he replied to a Question from Mr. Rhodri Morgan, Cardiff West. They clearly did not see eye to eye on that issue. Mr. Morgan sees the need for staff to serve Back-Benchers in the assembly while Mr. Davies hopes:
"that an Opposition mindset does not develop in the assembly".
Nevertheless, he went on to say:
"However, my hon. Friend is partly right to say that there will be a need to set up a Department that is broadly equivalent to the Department that you head, Madam Speaker".—[Official Report, 24/6/98; col. 1036.]
792
Therefore, I think that the Secretary of State should make up his mind on this issue before the assembly does it for him.
Lord Elis-Thomas: My Lords, I was not going to get excited about this issue but, as the noble Lord will remember, amendments were tabled in Committee about making the role of presiding officer on that model a guardian of the rights of members who are not part of the executive. There is merit in that approach. The noble Lord, Lord Crickhowell has suggested another approach; namely, creating the role of clerk.
However, both proposals come back to the issue of separation of the activity of administration as part of the executive and the executive committee, and the role of the members of the assembly generally and their rights, privileges and opportunities.
In particular, with regard to the supply of information and active participation in the role of the body, and reverting to the earlier debate at the beginning of our proceedings today to which the noble Lord, Lord Crickhowell referred, the notion of a corporate body which has responsibilities vested in itself and shares or delegates those responsibilities internally on the basis of accountability clearly applies to the executive notion. It applies also, in a very important way, to the rest of the body in that the supply of information and the opportunity for scrutiny are matters which need to be cared for.
I have not read what Mr. Ron Davies said in the other place but I am sure I agree with what he said about an oppositional mind-set. It is equally important that we do not have a Crown in Parliament mind-set in the assembly in what is not a Crown in Parliament type body in that it is a corporate body which shares responsibility. Therefore, on that basis I hope that we can have assurances from the Minister that, whether it is a clerk of the assembly or a presiding officer, there is a way of dealing with the issue of the spread of information and the guarantee of the democratic movement of the body, as it were, alongside the executive function, towards which I believe my non-belligerent colleague, the noble Lord, Lord Crickhowell, was moving in his amendment. I am grateful to him for moving it.
Lord Falconer of Thoroton: My Lords, these amendments concern the support structure of civil servants who will serve the assembly. I am grateful to the noble Lords, Lord Crickhowell and Lord Roberts of Conwy, for giving us an opportunity to debate what is an important issue. I recognise also the genuine concern of the noble Lords, Lord Crickhowell, Lord Roberts of Conwy and Lord Elis-Thomas, all of whom are concerned to ensure that the assembly is served well by its staff so that it can be most effective.
Perhaps I may set out briefly how the Bill presently deals with the problem. Clauses 34 and 63 ensure that the permanent secretary remains responsible for the management and structure of the officials who will deliver the objectives of the assembly. The Home Civil Service will deal with the different roles and responsibilities of the executive of the assembly or its

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committees with impartiality and independence. The structure which supports all parts of the assembly will reflect this.
Amendments Nos. 54 and 55 would create different groups of staff within those appointed by the assembly. This would depart from the principle that all staff of the assembly will be members of the Home Civil Service and the principle that the assembly is a single body. Amendment No. 56 would create a separate office of clerk to the assembly, which would serve the assembly and its committees, whose staff might or might not be members of the Civil Service.
Most of the staff of the assembly will serve the assembly secretaries and executive committees, developing and implementing the policies and functions of the assembly. In practice, staff will have dedicated roles to carry out particular functions, which is the same arrangement as applies today. The office of the presiding officer, which will provide support for assembly committees and safeguard the rights of individual members, will need to be seen as independent from the executive. I think we are all agreed in relation to that.
However, this does not mean we believe that this is best achieved by separating the office from the main body of staff. The organisation of the assembly's civil servants will need to be capable of ensuring the efficient and effective delivery of the assembly's standing orders. This may change in time, and there is a compelling need for flexibility so that the changing needs of the assembly may be met.
The noble Lord, Lord Crickhowell, has suggested allowing the assembly to decide which members of the staff would be members of Her Majesty's Home Civil Service. That would breach the fundamental principle that the national assembly shall be a single body corporate, with one group of staff. These amendments would restrict the ability of the permanent secretary to meet the needs of the assembly. In particular the statutory requirement to create a separate office of clerk to the assembly would circumscribe the responsibility of the permanent secretary to set up the most effective and efficient structure to respond quickly to the assembly's requirements.
The amendment would also reduce the benefit to the assembly gained by allowing staff to develop their skills by experiencing both policy development and the different challenges of supporting members and committees. There are many benefits a poacher may bring when he becomes a gamekeeper, and vice versa. The position is, I believe, different from the Scottish parliament, for the reasons given by the noble Lord, Lord Crickhowell. That is a much more powerful body in terms of being able to produce primary legislation and one where other requirements are needed.
We believe this is the most sensible arrangement. We believe that these are arrangements whereby the independence required from the office of the presiding officer to support the members of the assembly will be preserved. We believe this is the best way to provide
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the effective implementation of the assembly. I hope I have said enough to persuade the noble Lord to withdraw their amendments.
Lord Crickhowell: My Lords, Government Ministers, whenever they have a weak case, repeat several times the phrase "we believe". The trouble is that I do not believe and I do not believe that the case was made out. We heard from the noble Lord the Minister that there was a compelling need for flexibility. I agree. Therefore I do not see why we should fix at the outset the unalterable fact that all the servants of the assembly are to be members of the Home Civil Service. He told the House that it was a fundamental principle that there should be one body corporate, but he spent quite a lot of his speech acknowledging that there were to be two different components which would need different staff, who would have to be separated.
Again and again we have been told that we should not pass amendments to this Bill which impose a rigidity of structure and make it impossible for the assembly to set up sensible arrangements when it has considered the matter. Yet, to use the Minister's words, we believe that they are in this case imposing just that kind of rigidity. No one has a greater admiration for the services provided by the civil servants in the Welsh Office than I. They have served me astonishingly well and they bore with me with great patience for some eight years. But I do not believe that they have every quality or every skill. Indeed, I believe that qualifications may be required which are not found within the Home Civil Service.
Again, at this time of night, it is clear that we cannot divide on the matter. Nevertheless, it is extremely unsatisfactory that, having admitted in both Houses of Parliament that special arrangements will be needed, we get no clarification at all from the Government about how these things will be handled. Moreover, we have stuck into the Bill the shackles which will tie the hand of the assembly in the future and make it impossible for it to decide what is necessary. I may well return to the matter on Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 55 and 56 not moved.]
11.15 p.m.
Clause 41 [Agency arrangements and provision of services]:
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 57:
Page 23, line 9, after ("any") insert ("private contractor,").
The noble Lord said: My Lords, it seems rather odd that Clause 41 should allow arrangements to be made,
"between the Assembly and any relevant authority",
for the performance of functions and the provision of services but that the private sector should be excluded. We know full well that the sector is a considerable performer and provider in that field. This is a probing

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amendment. Is there is reason why this sector is excluded, or is it simply that private companies are not, strictly speaking, "authorities"? I beg to move.
Lord Falconer of Thoroton: My Lords, Clause 41 deals with two issues. It allows the assembly to arrange with other public bodies for them to exercise functions on its behalf or to undertake functions on behalf of other public bodies; and it makes provision for professional and technical services one to the other.
As I understand it, the amendment seeks to probe whether the assembly will be able to seek private sector involvement for the discharge of its functions. Perhaps I may say at the outset that there is nothing in the Bill which would preclude the assembly from considering whether to contract from the widest range of sources for the provision of services and supplies in relation to its functions.
While private sector firms can do anything within their competence, public bodies are constrained in the provision of services to what is authorised by legislation. Thus, with the establishment of the assembly, powers need to be provided to enable public bodies and the assembly to provide services to one another. That is the purpose of Clause 41. As private contractors already have the ability to contract with the assembly without the need for legislation, I suggest to the noble Lord that his amendment is inappropriate. I therefore invite him to withdraw it.
Lord Roberts of Conwy: My Lords, I am grateful to the noble and learned Lord for his reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 42 [Different exercise of functions by Assembly]:
[Amendment No. 58 not moved.]
Clause 43 [Construction of references to Ministers and departments]:
[Amendment No. 59 not moved.]
Clause 44 [Parliamentary procedures for subordinate legislation]:
[Amendment No. 60 not moved.]
Clause 45 [Laying of reports and statements]:
[Amendment No. 61 not moved.]
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 62:
Page 25, line 30, leave out ("subsection (1)") and insert ("this section—

(a) references to a report or statement include any other document (except one containing subordinate legislation) in the case of which any enactment makes provision for laying before Parliament or either House of Parliament, and

(b)")

The noble Lord said: My Lords, Amendment No. 62 is intended to widen the ambit of Clause 45. It is simply intended to make it quite plain that reference to reports or statements includes any other document contained in an enactment required to be laid before Parliament.
At present, reports and statements must be laid before the assembly where they are currently required in an enactment to be laid before Parliament. However, there are other types of document which are frequently required to be laid before Parliament—for example, the order-making power in Section 57(7) of the Land Drainage Act 1991, requires the Secretary of State to lay before Parliament,
"particulars of the matter in respect of which the appeal was made and of the reasons for his order".
It is arguable—and doubtless, therefore, would be argued—that these documents are not covered by the present clause. The amendment has been brought forward to make plain what is intended in Clause 45 so that other forms of document are included within the terms "report" and "statement". I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 63 and 64 not moved.]
Clause 46 [Regulation of procedure]:
Lord Elis-Thomas Lord Elis-Thomas moved Amendment No. 65:
Page 26, line 8, leave out subsection (6) and insert—
("(6) The Assembly shall establish a procedure committee which may from time to time consider any proposals for revision of its standing orders or other procedures and report to the Assembly.
(7) Any revision in procedure may be implemented by a simple majority of members supporting the motion.").
The noble Lord said: My Lords, this amendment constitutes a new initiative—although rather late in the day—in relation to procedure. I move it with some delight after the statement made by my noble and learned friend the Solicitor-General on an earlier amendment about the compelling need for flexibility. I believe that the whole area of standing orders and procedure needs to be revisited.
On what must have been my tenth reading of the Bill I realised that in another place, and particularly in this House, we have generally benefited—or not benefited, according to one's point of view—from being a relatively self-regulating Chamber whose procedures are capable of reform within the Chamber itself. We are creating a devolved assembly which will be bound hand and two-thirds foot to the standing orders as set down by commissioners, as described in the Bill—and accepted by the assembly upon the advice of commissioners and the recommendation of the Secretary of State in the opening session—and subject to a two-thirds majority for revision. Even at this late hour I believe we should explore why this is the case and why under the Bill the assembly is not trusted with the ability to regulate itself in the area of its standing orders by the device of a procedure committee. As I said, I believe this issue is worth exploring. I await with bated breath, of course, the Minister's response. I beg to move.
Lord Williams of Mostyn: My Lords, as has been indicated, Clause 46 provides in subsection (6) for standing orders to be amendable only by a two-thirds majority. I dare say the assembly will want a procedure committee. I believe that that is a matter for the assembly to decide in due course. As I say, it is quite likely that it will want to have such a committee. The

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proposed new subsection(7) in the noble Lord's amendment raises a quite different point. We believe that standing orders should be amended only by a two-thirds majority. We think that is important. We do not believe that standing orders should be the plaything of a party with only a bare majority in the assembly. The provision in the Bill therefore is deliberately intended as a protection for the interests of minority parties. It ought to produce stability. It ought to mean that standing orders can be changed only on a two-thirds basis. As I said, there is likely to be a procedure committee. That is a matter for the assembly. It is not a case of not trusting the assembly; it is a case of implementing safeguards of a well-known kind to protect minority interests and to prevent the dominance of a bare majority.
Lord Elis-Thomas: My Lords, I am grateful for the Minister's response. I give him an absolute assurance that were I or members of my party part of a bare majority we would not make procedure a plaything. I certainly accept his indication that there will be a procedure committee. That is a positive step. I appreciate that the two-thirds majority forms part of the inclusivity strategy of the Government. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 [Assembly First Secretary and Assembly Secretaries]:
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 66:
Page 27, leave out line 29 and insert ("Pennaeth").
The noble Lord said: My Lords, there is clearly something to be said for trying to devise a Welsh title for the chief executive officer of the assembly. After all, most countries that have a parliament or an assembly of the kind proposed for Wales and have their own language have appropriate native titles, some of which we have heard in the course of our debates in your Lordships' House. The Norwegian Storting, or parliament, has been mentioned; so has the Irish Taoiseach, the equivalent of the Welsh Tywysog, or "prince", the title usually given to the Prince of Wales. I depend upon the noble Lord, Lord Elis-Thomas, for the interpretation of Taoiseach. There were not many takers for my suggestion of "Premier" or "Pen Weinidog" for the first secretary when I suggested it in Committee. I hope there will be more enthusiasm for my new suggestion of "Pennaeth", meaning "chief' or "chieftain", but not in any old-fashioned sense. It is an apposite, modern and valid word for the post of first secretary.
I would remind the House that the Welsh titles for various bodies have caught on—Cadw, Welsh historic monuments, Tai Cymru, housing for Wales. I should be very sorry indeed to see this opportunity missed of giving a Welsh title to the first secretary of the Welsh assembly, Cynnlliad. I beg to move.
Lord Elis-Thomas: My Lords, the noble Lord, Lord Crickhowell, will forgive me for being completely belligerent on this issue. I have spent most of my political life trying to convert my own party into a
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bilingual organisation. Thank goodness, and thanks to the Secretary of State, we shall soon have before us a Bill of registration of political parties which will make this legal.
The noble Lord, Lord Roberts of Conwy, as it were, sold his own hospital pass when he used the words "native" and "chieftain" in relation to these titles, and when he referred to Taoiseach and its use in these contexts.
Far be it from me to criticise the Government of Ireland or our colleagues on the Irish Language Board, but I think they would be the first to accept that the Government of Ireland is not an entirely bilingual organisation and that the use of Irish language forms has more to do with a certain nationalistic fetishm relating to linguistic issues. We are not about that in Wales. We are a bilingual nation, and we have created a bilingual institution in the national assembly by law. We shall come to some of these issues later in our debates on the Bill. The notion of having a chieftain may relate to our earlier debate. If Mr. Ron Davies is to be both Secretary of State and first secretary, he should perhaps indeed be a chieftain—if not a Chieftain tank!
The serious point is that I am entirely opposed to monolingual nomenclatures for what are, and have to be, absolutely clearly identifiable and intelligible descriptions for jobs. Language is about efficacious translation of equality and flexibility. I want everyone world-wide who understands the English language to know that a first secretary of a national assembly for Wales is just that, not some native kitsch.
Lord Falconer of Thoroton: My Lords, I do not want to become enmeshed in the merits or otherwise of a particular word. However, I doubt that this is the right word; or indeed that it is right or desirable to have a Welsh only title.
Noble Lords will be aware that Clause 47 provides for equal treatment of English and Welsh in the assembly's business. I fear that there is a danger that adopting a Welsh only title for the assembly's leading figure would contravene the spirit, if not the letter, of the clause.
Amendment No. 67, which is different, would allow the standing orders to prescribe an alternative title to Assembly first secretary. I am sure noble Lords will be surprised to hear that this is one matter—perhaps the only one—which I do not think should be left to standing orders or to the assembly. Such provision would allow the assembly to be headed by a prime minister, a president, or something even grander and more unlikely. As the noble Baroness, Lady Carnegy of Lour, pointed out in Committee, this would introduce a real risk of misleading the electorate as to the status of the assembly and its place within the Union.
However, I do not think we should delay too long on this matter. Popular usage eventually formulates its own titles. My right honourable friend the Prime Minister is very rarely referred to as the First Lord of the Admiralty, and my right honourable friend the Foreign Secretary is not often called the Secretary of State for Foreign and Commonwealth Affairs. Anything provided in the Bill will, I am sure, be transformed by the same

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process into something more friendly to popular parlance—although I do not presume to guess what it might be. "Assembly first secretary" may not appeal to the noble Lord, Lord Roberts. However, I regret that he has not found a better alternative. I hope, therefore, that he will withdraw his amendment.
Lord Roberts of Conwy: My Lords, the noble and learned Lord the Solicitor-General referred to the Prime Minister as the First Lord of the Admiralty. He meant First Lord of the Treasury.
Lord Falconer of Thoroton: My Lords, I apologise for that mistake. Clearly the usage has fallen off.
Lord Roberts of Conwy: My Lords, I do not believe we need an official record of this interesting interchange as to the Prime Minister's role in life, be it the Admiralty or the Treasury.
In view of what the noble and learned Lord said, and in view of the fact that there are always three tries for a Welshman, I shall withdraw the amendment and hope to return to it at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 67 to 70 not moved.]
11.30 p.m.
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 71:
After Clause 53, insert the following new clause—

DISCHARGE OF EXECUTIVE FUNCTIONS OF ASSEMBLY
("(1) The executive functions of the Assembly shall be carried out by the Assembly Secretaries and by officials acting on their behalf.
(2) In the discharge of all such functions and otherwise, Assembly Secretaries shall be accountable to the Assembly for their actions and those of officials acting on their behalf.
(3) The Assembly may by resolution of no confidence at any time require any Assembly Secretary or Secretaries to resign.
(4) The standing orders of the Assembly shall provide for any motion of no confidence to take precedence over all other business and shall specify a reasonable minimum period of debate on such a motion.").
The noble Lord said: My Lords, we welcome the Government's decision to set up a Cabinet structure, but the ultimate decision whether to operate the system fully is left to the assembly. That is because functions are transferred to the assembly, which then establishes committees with responsibilities in various fields under Clause 57(1). At the same time there is established an executive committee comprising among others assembly secretaries who are allocated accountability in the committee fields.
The position is made clear in Clause 56(5) where accountability is defined, basically, as answering to the assembly for the exercise of functions in the various fields. But the line between the executive authority of the assembly's secretary and his committee is not clear cut. It is not easy to wrap one's mind around the distinction between the committee's responsibility and the secretary's accountability.
What happens if the committee takes action of which the secretary disapproves? It is not a problem in the Scotland Bill or here at Westminster where the role of Ministers is clear and distinct from the role of Parliament. Ministers carry both responsibility and accountability here, and of course there are Cabinet committees to help them. However, at the end of the day they are on their own at the Dispatch Box.
The aim of our new clause is to clarify the situation and activate the Cabinet structure. It states unequivocally that,
"The executive functions of the Assembly shall be carried out by the Assembly Secretaries and by officials acting on their behalf',
and that they will be accountable. Finally, I am bound to say that the mix of committee and Cabinet system, and the resulting uncertainty, could very well cause problems in practice and prove damaging to the working of the assembly. I beg to move.
Lord Falconer of Thoroton: My Lords, in this amendment the noble Lord, Lord Roberts of Conwy, returns to a matter he previously raised in Committee. As I said then, the Government support much of what lies behind this amendment and I regret that the assurances given then did not fully assuage the noble Lord's concerns.
There are a number of points here. Implicit in the noble Lord's amendments is what one might call a "ministerial" model of decision-making with individual assembly secretaries exercising executive power. While we naturally support a Cabinet system for the assembly, we do not support entrenching it permanently on the face of the Bill, which is what this amendment would do. The assembly must be free to review and, if needed, amend its operating structure in the light of experience.
Nor do I think the notion of assembly secretaries exercising executive functions directly squares with the status of the assembly as an indivisible body corporate. In practice, of course, they may well carry out functions within their portfolios, but action will still formally be taken in the name of the assembly itself. I therefore fear that the noble Lord's amendment would only introduce confusion into assembly secretaries', and the assembly's, legal status.
I am happy to repeat the assurances given to the noble Lord in Committee about votes of no confidence. I agree that provision needs to be made for debating such motions: representative bodies large and small are able to do so, and they are a vital part of democratic accountability. However, this is surely more a matter for the assembly's standing orders than for the face of the Bill. In due course, the national assembly advisory group will come forward with advice on handling motions of no confidence, which will then be reflected in guidance to the commission drawing up the assembly's first standing orders. I am happy to give the noble Lord a categoric assurance on that point. As to the standing of the individual committees, all the subject committees, under Clause 57, will have a make-up which broadly reflects the balance of parties in the assembly. So obviously the first secretary and the assembly secretaries will be in a different position from

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the members of the committee. They will be much more like members of the Cabinet in the traditional Westminster model.
I hope that deals with all the points the noble Lord has raised and that, in the light of the assurances I have given, he will feel able to withdraw the amendment.
Lord Roberts of Conwy: My Lords, I am bound to tell the noble and learned Lord that, despite his assurances, I am still very concerned about the mix, as I call it, of cabinet style and committee style government within the assembly. This will cause confusion and difficulties when decisions and actions need to be taken as to who really takes the initiative and ultimately carries full responsibility. I know it is stated that the committees carry the responsibility and that the assembly secretaries will bear the accountability. Nevertheless, actually to work such a system in practice will be difficult. But, having received the Minister's assurances and with a view to considering them and indeed the entire matter further, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 [Sub-committees]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 72:
Page 28, line 15, leave out ("the same party") and insert ("parties which are represented on the executive committee").
The noble Lord said: My Lords, with this amendment are grouped three amendments in my name and also amendments in the name of the noble Lord, Lord Williams of Mostyn. This is an interesting subject. We almost stumbled into it, thanks to a probing amendment from the noble and learned Lord, Lord Simon of Glaisdale. I thought there was a serious point but the Minister did not seem to see it. I was not sure whether that was my fault or the Minister's rather clever device when he does not want to engage in a debate but just passes you like the proverbial ship in the night, which I think is what he did in the debates about the European Union and representation there. The noble Lord, having passed like a ship in the night, actually rethought the position and was kind enough to write to me and say that, while he did not think it would ever happen, perhaps I did have a point. He has brought forward amendments which go half-way to meeting my concerns.
The Bill as it stood envisaged one party—the largest party—forming the executive. I think it was drafted on that basis. There is no doubt in my mind about that. It did not envisage coalition government, despite the fact that Ministers talk about it quite a lot, and it did not envisage the two scenarios of coalition government; namely, largest party and another or, alternatively, two of the smaller parties, not including the larger party, forming the government. Amendment No. 72 deals with Clause 55(1), which is about sub-committees. Subsection(3) states:
"A committee of the Assembly, other than the executive committee, shall not elect as members of a sub-committee Assembly members who all represent the same party".
That seems to be very good.
Going back to the point that I made, it seems to me that we should also say, "do not represent all the parties which are represented in the executive committee". I do believe that the Government mean that the minority and the opposition parties should be represented as well as the governing party. I believe that my amendment achieves that.
Amendments Nos. 84 and 85 refer to the chairmen of the scrutiny committees and Amendment No. 88 refers to the chairman of the audit committee. The Bill, as drafted, envisages the largest party equalling the executive and, rightly, as it is drafted, it ensures that the chairmen shall be drawn from the other parties and not from the largest party.
The problem is that in a 60-seat assembly, the largest party might have, say, 22 seats. Two of the other parties have 15 and 12 seats. They combine to make 27 seats and form the government of the assembly, albeit a minority government. The smallest party has 11 seats. One can play about with the figures. I am sure that your Lordships see very quickly my point that the second and third party and, indeed, other combinations, could form the government and the largest party could form part or all of the opposition.
The Bill, as written, would have the largest party not being able to take any of the chairmanships and would frustrate what the Government actually intended; namely, that the executive should not dominate the committees by having the chairmanships. My amendment would stop the coalition partners, if they were the smaller parties, from chairing. In that scenario they would ensure that the largest party would be able to chair. I do not know if the Minister goes that far.
The other scenario of the largest party combining with one of the other smaller parties to form the executive would also create a problem. In those circumstances one would want the chairmanships to be held by the people in the parties outwith the executive.
My amendment says very clearly that, if a party is represented in the executive, then its members shall not be considered as eligible to chair the committees. They may not be chaired by a member who represents,
"a party which is also represented on the executive committee".
The Minister has gone a little way towards me. He said that they should not be chaired by a member who represents the largest party. That still means that the smaller party in the executive could be chairing the committees. I do not believe that that is consistent with what I believe was the original drafting intention.
Having said that, I welcome the fact that the noble Lord, Lord Williams, has moved in some way, but I should like him to move that bit further. He may say to me, "What happens if there is a grand coalition of all the parties?" Dare I say to him that I believe that a suitable amendment could be found to deal with that proposition. It is slightly unlikely, but I fully concede that one ought to deal with it. I am really much more concerned about a situation where two parties are coalition partners and another two parties outside the coalition form the

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opposition. The intention is that it is on those parties that the chairmanships should fall and not those forming the executive. I beg to move.
Lord Kenyon: My Lords, there are two issues represented by this group of amendments. The second issue has been very adequately covered by my noble friend Lord Mackay of Ardbrecknish; namely, the membership and chairmanship of the scrutiny committees and the audit committees. But the first issue is Amendment No. 72, which relates to Clause 55. That deals with the actual membership of the sub-committees themselves.
I believe that the intention in the Bill is that the membership of the sub-committees should be broadly representative of the political balance in the whole of the assembly. Clause 54(2)(b) states,
"as far as practicable, the balance of the parties in the Assembly is reflected in the membership of the committee".
I should like to know why that is not repeated in Clause 55(3) so that the political balance remains the same on the sub-committees. It does not seem to me that my noble friend Lord Mackay of Ardbrecknish is going quite far enough in that respect.
11.45 p.m.
Lord Williams of Mostyn: My Lords, the noble Lord, Lord Mackay, raised these points in Committee. I did not think then—I am not sure that I think it now—that his concerns were justified, but I have written to him saying that we shall do our best to meet them. The effect of our amendments would be to prevent the largest party of representation on the executive committee from taking the chairmanships of the scrutiny and audit committees. Smaller parties with representation on the executive committee could still take them. It would he possible to prevent that by provisions in standing orders. If we went down the road suggested in Amendments Nos. 84, 85 and 88, the "grand coalition", to which the noble Lord referred, would lead to no one being able to assume any chairing responsibility of any sort. I believe that our tranche of amendments would meet the noble Lord's reasonable concerns.
Amendment No. 72 would not permit the establishment of any subcommittee in the circumstances of a coalition of all the parties. That is unlikely, but we think that it would be better not to include in the Bill a provision which depends on the unlikely not happening.
We think it proper to adopt the standing order that subcommittees must include at least one member from a party not represented on the executive committee. I am happy to take that question on board.
I am not sure that I have fully grasped the point made by the noble Lord, Lord Kenyon, but that is undoubtedly my fault. It may be because we have sat here for quite some time. Perhaps the noble Lord will allow me to consider this point and write to him, which I promise to do as promptly as I may.
Lord Mackay of Ardbrecknish: My Lords, I am sure that my noble friend will be content with that
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response. My noble friend has a point and he has suggested a better way to deal with this matter than I have proposed, so I, too, shall study it. Ironically, earlier today—a lot earlier!—I envisaged certain electoral circumstances which the Minister told me were totally unlikely and he said that we did not therefore need to deal with them. Now I am told that we cannot possibly change the Bill in the way that I suggest because there might possibly be the unlikely event of a grand coalition. The Minister is trying to have it both ways, but at this time of night, I am hoping for only one way; namely, one way home to my bed! For that reason, I am content to beg leave to withdraw my amendment, to welcome the Minister's amendments, as far as they go, and to thank him for accepting that there was a bit of a problem here.
Amendment, by leave, withdrawn.
Clause 56 [Executive committee]:
[Amendment No. 73 not moved.]
Clause 57 [Subject committees]:
Lord Elis-Thomas Lord Elis-Thomas moved Amendment No. 74:
Page 29, line 45, at end insert—
("(9) Each subject committee shall be responsible for monitoring the performance of the non-departmental public bodies within the fields covered by that subject committee.
(10) Each subject committee shall be responsible for deciding on any appointments which may be made to the boards of non-departmental public bodies.").
The noble Lord said: My Lords, I should like to home in briefly on the second subsection of this amendment which relates to responsibility for the appointment of members of NDPBs and the responsibility being laid on subject committees. At col. 376 and onwards in Committee (3rd June), we discussed a number of issues in relation to the role of public bodies and the assembly and I received a number of useful assurances.
However, perhaps we did not deal in sufficient detail with the question of whether there would be a role for subject committees in agreeing appointments to NDPBs. That proposal is very much in line with the Nolan and Neill procedures for such bodies in that it opens them out to selection and appointment procedures beyond individual secretaries. In ensuring transparency and accountability, it would be appropriate that the government of the day in the assembly, the executive, should not be the sole source of appointments to NDPBs, but that the subject committees should have a role. I beg to move.
Lord Williams of Mostyn: My Lords, we discussed this matter at some length at Committee stage. My response remains the same. I agree with the sentiments that the noble Lord then expressed and has repeated briefly this evening. One wants a creative relationship between subject committees and the non-departmental public bodies. He mentioned his particular public body; the Welsh Language Board.
I entirely agree with the noble Lord. It is for the assembly to put in place arrangements that provide proper democratic accountability. After all, there are

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provisions to allow subject committees to summon the members and staff of public bodies to give evidence and provide documents.
As to the subject committees, that is still under consideration by NAAG. I can assist your Lordships and in particular the noble Lord, Lord Elis-Thomas. I believe that there are likely to be recommendations involving the committees in the procedures about which we have been speaking. I cannot pre-empt that work. NAAG is coming to the end of its work. I believe that what it recommends will be pleasing and satisfactory to the noble Lord. I cannot give him an absolute reassurance. I understand his concerns. Obviously, this is a very important aspect, for the reason that the assembly was set up in the first place. I hope that what I have said is helpful.
Lord Elis-Thomas: My Lords, as always, what the Minister says is helpful but it is particularly so in this instance. I look forward to the NAAG report on this issue and the response to it. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 58 [Subordinate legislation scrutiny committee]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 75:
Page 30, line 2, leave out ("subordinate legislation") and insert ("relevant Welsh subordinate legislation.
(1A) For the purposes of this section "relevant Welsh subordinate legislation" is any subordinate legislation—

(a) which is made or proposed to be made, or

(b) which, or a draft of which, is (or but for paragraph 2(4) of Schedule 7 would be) required to be confirmed or approved,

by the Assembly (whether or not jointly with a Minister of the Crown or government department).").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 75. This group comprises Amendments Nos. 75 to 82 and 93 and 94. Of those, Amendments Nos. 75 to 79 inclusive and Amendments Nos. 81 and 82 are government amendments. I shall speak to those first and in closing deal with any other amendments in this group that may be moved or referred to. This is the first of four sets of amendments that we tabled in response to points made by noble Lords at Committee stage. These amendments effect a restructuring of Clause 58. Earlier I placed in the Library a copy of a letter to the noble and learned Lord, Lord Simon of Glaisdale, which shows how the clause would appear if these amendments were adopted.
The assembly will have important powers to make subordinate legislation. The Government's clear view is that it should be able to do this without excessive nannying oversight by Parliament. For this reason, Clause 44 of the Bill generally disapplies parliamentary procedures for assembly subordinate legislation. Clause 58 then requires the assembly to put in place its own scrutiny procedures.
Most assembly subordinate legislation will fall into the category of assembly general subordinate legislation which is defined in subsection (6) of Clause 58 as
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amended by Amendments Nos. 78 and 79. The subordinate legislation scrutiny committee will have specific responsibilities in respect of assembly general subordinate legislation. These are set out in subsection (4), as amended by Amendment No. 76. These responsibilities amount to a species of internal review as against the external scrutiny provided now in respect of ministerial subordinate legislation by the Joint Committee on Statutory Instruments.
However, the subordinate legislation scrutiny committee may also be given responsibilities in respect of the general category of "relevant Welsh subordinate legislation" which is defined in Amendment No. 75. This category includes assembly general subordinate legislation, but goes wider to take in, for example, orders made jointly with a Minister of the Crown. The assembly could give scrutiny responsibilities to its scrutiny committee in respect of such orders. I think that this meets a concern expressed at Committee stage by the noble Lord, Lord Mackay of Ardbrecknish, and my noble friend Lord Prys-Davies. The remaining Amendments Nos. 77, 81 and 82 are drafting amendments to create the right structure for the clause.
I believe that the noble and learned Lord, Lord Simon of Glaisdale, has done the House a service in asking us to look again at this clause. We have done so and I hope that the House approves the result of that re-examination. I beg to move.
The Chairman of Committees: My Lords, in view of the references which the noble and learned Lord has made to the various other amendments being dealt with at the same time, I must point out to your Lordships that if Amendment No. 79 is agreed to I cannot call Amendment No. 80.
Lord Roberts of Conwy: My Lords, I speak generally to the amendments standing in our names. Clause 58(6)(c) excludes from the definition of assembly general subordinate legislation to be considered by the scrutiny committee what is described as subordinate legislation subject to parliamentary procedure. It is questionable whether that is right. Surely the assembly should be aware of such legislation and its implications for Wales.
With regard to Amendment No. 93, the first part of Clause 65 requiring an appraisal of the costs and benefits of complying with assembly subordinate legislation is excellent, especially as it is to be carried out before a draft is laid before the assembly. Subsection (2), which we propose to delete, promptly states that the appraisal need not be carried out if it is inappropriate in the circumstances or not reasonably practical. There are further sound provisions in subsection (3) requiring publication and consultation if the costs are significant. They too would be negatived.
Looking at the clause as a whole, what is the point of procedural requirements for subordinate legislation if they can be dispensed with so easily? This is a very bad clause. It undoes all the good achieved earlier and leaves

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open the possibility of some very arbitrary subordinate legislation produced by the executive without the approval of the assembly and very little scrutiny indeed.
Lord Falconer of Thoroton: My Lords, the noble Lord, Lord Roberts of Conwy, made three points. First, he dealt with his Amendment No. 80. That amendment would delete the stipulation that orders which are subject to parliamentary procedure are not assembly general subordinate legislation. That cannot be right. As I said, Clauses 44 and 58 together assist us to distinguish between assembly orders, which are not subject to parliamentary procedure and which are called assembly general subordinate legislation, and other orders such as joint orders with Ministers of the Crown which will continue to be. Amendment No. 80 does not fit into that structure and I would ask the noble Lord to withdraw the amendment.
Amendments Nos. 93 and 94 raise important points about procedure. Clause 65, as presently drafted, imposes upon the assembly an obligation to undertake regulatory appraisals of its draft orders. However, Clause 65(2) allows the assembly to dispense with that if it would be inappropriate or it was not reasonably practicable to undertake them. Inappropriateness relates to the subject matter of the order. We are seeking to write into the Bill the existing administrative practice of holding regulatory appraisals in respect of many types of order but not all. For example, orders whose sole impact is on the public sector or which increase a statutory fee by a predetermined formula are not subject to regulatory appraisal now and it may well be that the assembly will not have appraisals of such orders in the future. There must be a let-out in the Bill to deal with that.
The not reasonably practicable test in both Clause 65(2) and Clause 67 which permits disapplication of procedural requirements relating to the making of assembly orders is primarily concerned with cases of urgency. For example, food safety orders may need to be passed very rapidly. It would obviously not be sensible to require the assembly to have to observe the full rigour of procedures appropriate when time is less pressing.
Your Lordships will see that Clause 67 allows for a revocation power so that any assembly member may, within 40 working days, seek to have withdrawn any order made under the urgency procedure. That is an important check on the use of the procedure. With that explanation as to why there are those let-outs to the regulatory appraisal and the reasonably practicable test, I hope that the noble Lord will see that they are sensible and will be minded not to pursue his amendments.
On Question, amendment agreed to.
12 midnight
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 76 to 79:
Page 30, line 7, leave out from ("any") to ("laid") in line 8 and insert ("proposed Assembly general subordinate legislation when the draft statutory instrument containing it has been").
Page 30, line 18, leave out subsection (5).
Page 30, line 22, leave out ("subordinate legislation") and insert ("relevant Welsh subordinate legislation within subsection (1A)(a)").
Page 30, line 24, leave out from beginning to ("any") in line 26 and insert—
("( ) not made or proposed to be made by an instrument in the case of which, or of a draft of which,").
On Question, amendments agreed to.
The Chairman of Committees: My Lords, this is probably unnecessary, but so that no noble Lord is taken by surprise I must point out that if Amendment No. 83 is agreed to I cannot call Amendment No. 84.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 81 to 83:
Page 30, line 28, at end insert—
("( ) The Assembly may not give to the subordinate legislation scrutiny committee responsibilities not relating to the scrutiny of relevant Welsh subordinate legislation.").
Page 30, line 29, leave out subsection (7).
Page 30, line 43, leave out from ("but") to end of line 44 and insert ("it may not be chaired by a member who represents the largest party with an executive role.").
On Question, amendments agreed to.
[Amendments Nos. 84 and 85 not moved.]
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 86:
Page 31, line 10, leave out from ("Act") to end of line 12 and insert ("a party is the largest party with an executive role if—

(a) an Assembly member representing the party is a member of the executive committee, and

(b) it is represented by more Assembly members than any other party represented by an Assembly member who is a member of that committee.").

On Question, amendment agreed to.
Clause 60 [Audit committees]:
The Chairman of Committees: My Lords, to avoid anyone being taken by surprise, I must point out that if Amendment No. 87 is agreed to I cannot call Amendment No. 88.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 87:
Page 31, line 24, leave out from ("but") to end of line 25 and insert ("it may not be chaired by a member who represents the largest party with an executive role.").
On Question, amendment agreed to.
[Amendment No. 88 not moved.]
Clause 61 [Regional committees]:
Lord Roberts of Conwy Lord Roberts of Conwy moved Amendment No. 89:
Page 31, line 28, leave out from ("establish") to end of line 36 and insert ("regional committees to hold the Assembly First Secretary and Assembly Secretaries accountable for the exercise of their functions in each region.
( ) Each regional committee shall be responsible for an electoral region in effect at the last ordinary election.").
The noble Lord said: My Lords, the establishment of regional committees is important, as the Government realise, for the future of the assembly. Such committees

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can help assure people in different parts of Wales that the assembly is aware of their interests and is taking them into account. The people of Wales need reassurance at this time.
Clause 61 as drafted specifies only a committee for North Wales, which is not further defined geographically, and a committee for each of the other regions of Wales, also undefined as to areas and numbers.
These committees are committees of assembly members, not councillors or any other body that has had occasion to sub-divide Wales. The assembly members are elected by constitutency and electoral region, of which there are five. They are disparate in terms of physical geography but not in terms of population. I refer to the electoral regions. They could form the basis for assembly committees. They could also be adapted in the light of experience and be subject to boundary changes. But even as they are, they are a reasonable starting point. I fear that if all that is left to the assembly to sort out many will justifiably fear that the regional committee proposal was a last-minute bid to gain regional support within Wales during the referendum campaign.
The second key point is that if these committees are to be meaningful, they must be more than advisory. That is why our amendment proposes that the assembly first secretary and his fellow secretaries are held accountable to those committees for the performance of their functions within the areas served by the committees in the same way as they are held accountable to other committees of the assembly. All this amounts to a reasonable proposition in line with other proposals in the Bill for subject committees. The regional committees will be responsible for the overall performance of the assembly in their respective areas. The knowledge that these committees are to be established will serve to reassure many people in Wales. I beg to move.
Lord Elis-Thomas: My Lords, during our Committee stage I expressed my concern about the priority being given to regional committees by a number of your Lordships. Having reflected upon my statements since then, I find that I am entirely in agreement with myself, despite what the noble Lord, Lord Hooson, might make of that when he reads Hansard.
This amendment is particularly unworkable. The noble Lord, Lord Roberts of Conwy, appears to be second guessing the assembly function at different regional levels. The amendment makes secretaries doubly accountable both for the national delivery of their programmes and for the regional delivery in as yet unspecified regions. Times have moved on. The announcement in the other place and in this House only at the beginning of this week about the new regions for Objective 1 status of the European Union for statistical purposes indicates that as regards regions of Wales we must be flexible. I have always been opposed to the notion of creating a place called North Wales because I do not know where that is. Is it the coastal strip, or is it mid or west? Where is it? The whole question of regional committees, although that was part of the
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debate in the referendum, has moved on. To try to re-establish an internal regionalism in a country of 3 million people with a double notion of accountability on the secretaries and the executive of the assembly is to place an unnecessary burden upon them.
The assembly will deliver new forms of national unity through diversity using the structure of existing local authorities. To create a doubly accountable regional committee over and above the current tiers of the new unitary authorities and over and above the activities of the NDPBs within Wales, including the WDA and its regional structure, is to create an incredibly structured and disorganised form of accountability within the country. I ask that the whole issue of internal regionalism and its divisive potential should not be flagged up so strongly by politicians who are seeking to curry votes, as I suggested in Committee, out of regional disparities and differentiation. The big issue we have to face has been displayed yet again by Regional Trends No. 33 published last week. It shows the overall income per head in Wales and the overall performance of the Welsh economy in relation to the rest of the UK and Europe. We should be mobilising ourselves in order to tackle those issues and not spend so much time on internal divisions and structures to balance between them.
Lord Stanley of Alderley: My Lords, I put my name to the amendment because in Committee I expressed concern that the regional committees would be "waffle shops" and have no influence. The noble Lord, Lord Williams, replied that if that were the case there would be no point in having them. Quite so; I could not agree more with the noble Lord.
However, I am not sure whether that reply agreed with my point that they were toothless wonders or whether the noble Lord did not mean me to take it in that way. I gained the impression from the noble Lord, Lord Elis-Thomas, that he was following a similar line of thought because, as he repeated tonight, the committees were in existence only for political reasons in order to encourage North Wales to vote for an assembly.
At least the noble Lord, Lord Williams, now has the chance to clear up this muddle, for, if he really believes that the regional committees will be able to influence the assembly and not be second, third or even fourth-class citizens, he must accept the amendment moved by my noble friend. It will at least give them a tooth, albeit a poor one.
Lord Thomas of Gresford: My Lords, I do not accept that the sole purpose of these provisions—to give North Wales its own regional committee and for there to be other regional committees—was simply to sell the concept of devolution.
One of the problems that we face in Wales, as we do in the United Kingdom, is the pull of the south east. In Wales, it is the pull of Cardiff, where the decision has been taken to site the assembly. As a North Walian, I have a very clear view of where North Wales is. I know North Wales from west to east. It is a very clearly defined area in my mind. I know also that the people of

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North Wales are not familiar with the south east of Wales and even less so with the west of Wales. Consequently, they tend to feel isolated from centres of gravity such as south east Wales.
I believe that a regional committee such as is envisaged for North Wales is extremely important. It will reassure the people of North Wales. I am pleased to see the provision in the Bill. I support it. As for other regions in Wales, it is for the assembly to determine what is appropriate; what sort of advice is required in respect of those regions; and to form its standing orders accordingly.
Lord Williams of Mostyn: My Lords, it seems to me that there are three issues here deriving from the amendments and comments made: boundaries, powers and membership.
If Amendment No. 89 were accepted, there would be five committees: one for North Wales, one for mid and west Wales, and then western, central and eastern parts of South Wales. The noble Lord, Lord Roberts of Conwy, himself said that, if his amendment were accepted, we should have the absurd situation of a single committee representing Llanelli and Llanrrhos. One would have other oddities; for example, most of us would say that Aberdare and Treorchy have much more in common with Merthyr, which is not in the same electoral region, than Cardiff, which is. The noble Lord's amendment would prevent that arrangement and similar arrangements being reflected in the assembly's committee structure. It seems to me that the noble Lord, Lord Thomas, is right to say that that is for the assembly to determine. That deals with boundaries.
As regards powers, those regional committees are not intended to hold the assembly to account. They are advisory and they will work, one assumes and hopes, with other public bodies in the area—for example, North Wales—to have what may well be genuinely not a separatist but a collective North Wales view which it can put forward to the assembly as a regional committee. That seems to be perfectly reasonable to me.
As regards membership, the noble Lord, Lord Roberts, suggests that his Amendment No. 90 would make the selection of members easier. That may be so. But the committee is not to be constituted to make selection easier but to perform a specific role which is advisory in the most effective way. The noble Lord, Lord Stanley, says the committees will be toothless waffle shops. No, it depends on the members who are elected, their commitment to their advisory function and their commitment to making the assembly work, not on the basis of confrontation—we have had enough of that over the past 25 or 30 years in Wales—but in a spirit of co-operation.
The boundaries suggested in the amendment of the noble Lord, Lord Roberts, will not work and should properly be within the province of the assembly's decision.
Lord Roberts of Conwy: My Lords, I am disappointed by that reply. Of course, I recognise that the amendments I have tabled have their shortcomings. But I should like to have a more positive attitude on the part of the Government.
We have been told quite clearly that the key features, beyond those contained in the clause, are to be sorted out by the assembly. I simply note the fact that this another highly problematical area which we are foisting on the assembly, even before it starts. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 90 not moved.]
12.15 a.m.
Lord Elis-Thomas Lord Elis-Thomas moved Amendment No. 91:
After Clause 61, insert the following new clause—

YOUTH ADVISORY COMMITTEE
(" .—(1) The Assembly may establish a committee to provide advice to the Assembly about matters affecting young people in Wales.
(2) A committee established under this section shall be known by such title as the standing orders may provide (but is referred to in this Act as the youth advisory committee).
(3) The members of the youth advisory committee shall be—

(a) all members of the Assembly under the age of 26 at the time of their election to the Assembly, and

(b) members selected by the Assembly from outside the membership of the Assembly.

(4) The standing orders of the Assembly shall provide for the selection of the members referred to in subsection (3)(b).
(5) The youth advisory committee shall elect one of its members to chair it.").
The noble Lord said: My Lords, we had a useful debate on 3rd June (col. 425) on the notion of a youth advisory committee. I raise it again now. Unexpectedly—perhaps I should have realised this—the proposal has generated much more support outside this House than I imagined likely. Indeed, they talk of nothing else in Clwb Ifor Bach in Cardiff and other places. Therefore it seems to me that we have to return to this issue and flag it up with perhaps slightly more support from the Government than was shown—although I am always very grateful for all assurances I receive from Government Ministers during these debates—and perhaps a little more assurance on the importance of this issue in terms of citizenship. Maybe I did not spell out sufficiently clearly what we are dealing with. We are dealing with a nation in which the remaking of a culture, particularly by the younger citizens, is an essential part of how we take the nation of Wales on, and the fact that a new institution does not come into being merely by legislation or Acts of Parliament. It comes into existence by being remade by the people who participate in it and relate to it. I hope

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that not only will the notion of a youth advisory committee be something that somebody will take on but that the assembly itself will be seen as something that moves and excites the people who will make the Wales of the next century.
That is the reason why I bring forward this matter again: to get a little more support for it from all sides of the House and to underline the fact that I think it is particularly important that we should, in the development of citizenship, pay attention to the recreation of a form of inclusive citizenship that gets us beyond the divisive stereotypes which are still in evidence, even in your Lordships' House, because certain noble Lords have referred to themselves as North Walians. I am not a Walian; I am not an alien; I am a citizen of Wales—and so, one hopes, are many in your Lordships' House here this evening, or this early morning. Indeed the young people who will participate in the youth advisory committee will not be Walians; they will be citizens of Wales. I beg to move.
Lord Williams of Mostyn: My Lords, as the noble Lord said, we discussed this quite fully on the last occasion. The assembly does not need this power because it has it under Clause 54(1)(b), and subsection (2)(b) in particular removes the requirement for any such committee to reflect party balance if the committee exists solely to provide advice. So if there were any members under 26 in the assembly they could all be on the committee, irrespective of any party allegiance.
The question of co-option we believe is wrong in principle. One should not co-opt outside members on to assembly committees, since they would not be elected. They are perfectly able to give evidence and to make submissions to the committee, if that is appropriate. I do hope that I was plain in indicating to the noble Lord on the last occasion that of course we want young people to be involved in the assembly and interested in it, because in many ways it is their future that the assembly is going to provide for. I repeat that I support the noble Lord in principle, but we do not need duplication of available powers, because it is plainly there in Clause 54(1)(b), given the absolute freedom of subsection (2)(b). I hope that I have said enough to satisfy the noble Lord. We do agree with the thrust of what he says, but these amendments are really not necessary.
Lord Elis-Thomas: My Lords, clearly, since I have failed to excite the noble Lord, Lord Thomas of Gresford, to de-alienate himself, I would merely like to thank the Minister for his further assurance and his emphasis on the issue. On that basis, I beg leave to withdraw the amendment.
Lord Thomas of Gresford: My Lords, before the noble Lord sits down, may I say that he illustrates one of the principles of people from north-east Wales: the further west you go the more trouble you get!
Amendment, by leave, withdrawn.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 92:
After Clause 64, insert the following new clause—

CROSS-BORDER AGRICULTURAL BUSINESSES
(" . The subordinate legislation procedures must include provision for securing that the Assembly makes such provision as it considers appropriate in any legislation it makes to take account of the position of agricultural businesses comprised of land partly in Wales and partly in England.").
The noble Lord said: My Lords, I moved an amendment in Committee regarding the problem which could be faced by farms straddling the border which was not accepted. That was partly because the noble Lord, Lord Williams, thought that I might be able to "work the system" in having a farm in both Anglesey and Oxfordshire. I have to admit that I had not realised the potential which, I am sorry to say, reflects poorly on my intellect. Indeed, if I had, I would have drafted the amendment more deviously.
However, I gather that the noble Lord really did not approve of the amendment. He suggested that it was cherry picking and said that the problem would be dealt with by "regulatory appraisal". With respect to the noble Lord, I cannot see that such an appraisal would solve anything other than necessitating a few civil servants spending the odd afternoon discussing the problem, shaking their heads in sadness, having a cup of tea and saying that they should not be made to do the job.
The current amendment would be more positive because it would do much more than appraise. It would oblige the assembly, when regulations are made, to consider any effect those regulations might have on farms straddling the border. That would then oblige the assembly to make a special regulation for those farmers if it was considered necessary. I beg to move.
Lord Williams of Mostyn: My Lords, I am not sure that I can add much more to what I said on the earlier occasion. From the wording of the amendment, it is not clear what is sought to be achieved. However, I understand what the noble Lord indicates is his hope. We are talking about an agricultural business comprising land partly in Wales and partly in England—indeed, I believe I said "partly in southern England" previously. It was only later that I realised that I ought to have said Oxfordshire, but I was not then quick enough to say so. Nevertheless, the noble Lord has made his confession in that respect.
An agricultural business could easily comprise land in Anglesey and land in Norfolk. Undoubtedly, if the assembly was making subordinate legislation affecting land in Wales, I dare say it would want to consider what consequential effects that might have on a business which was a true cross-border straddle. However, I do not see the point of this amendment which deals with "subordinate legislation procedures"; in other words, the process by which such legislation is to be made.
The Welsh assembly will only be able to legislate within the borders. The noble Lord's amendment would simply enjoin the assembly to take account of the position of businesses which straddle Wales and England. But that is virtually meaningless. If the

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assembly believes that there are anomalies, they will be taken into account in any event. I know the intended purpose of the amendment, but I do not believe that it would produce the desired result.
Lord Stanley of Alderley: My Lords, I am not sure that I follow the Minister's response. If he thinks that I am still trying to flog the case of a farm in Wales and one in Oxfordshire, that is not the case. I am really concentrating on a farm which straddles the border. I am saying—and perhaps the Minister is agreeing with me in this respect—that there may be occasions when this will cause a problem with regulations. Therefore, in such a case, I am asking the assembly to look specifically at such farms and make the necessary regulations to ensure that there are no further bureaucratic problems like those that the Minister said in Committee he did not want. That would ensure that the process would work correctly. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 65 [Regulatory appraisals]:
[Amendment No. 93 not moved.]
Clause 67 [Disapplication of procedural requirements]:
[Amendment No. 94 not moved.]
Clause 70 [Openness]:
Lord Elis-Thomas Lord Elis-Thomas moved Amendment No. 95:
Page 36, line 11, at end insert ("including in audio-visual or electronic form,").
The noble Lord said: My Lords, this is a new amendment which seeks to establish that the word "record" in the Bill as it relates to a record of the assembly's proceedings can indeed be in forms of information technology. This follows on from some concern that we may be replicating in Cardiff Bay—perhaps needlessly or necessarily, depending on one's viewpoint—the procedures of this House. It is certainly not for me, as one who has benefited from having my words recorded in Hansard over the years, to criticise that provision in the Official Report. I merely wish to point out that there are other ways and other procedures adopted by different assemblies to relate their proceedings. In particular, we are now in a situation where an electronic record and an audio-visual and textual record of that kind can be made instantly and easily accessible to those who want to follow assembly proceedings.
For those reasons I think it is important that we should consider what is happening in other countries. For example, I understand that in the Basque country members and officials have instantaneous access to video and audio tapes of proceedings and audio tapes of interpretation. There is a similar linguistic balance between the Castilian and Basque languages as between Welsh and English. They also provide access to electronic transcripts as soon as they are produced. I seek to ensure that we seek the simplest, most accessible, cheapest and most effective way of
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providing a record. I suggest that many of the bilingual issues can be resolved by use of the appropriate technology.
As I have argued on previous occasions, simultaneous translation from spoken Welsh into English will be immediately necessary in the context of the assembly and its record. As regards the written record, in the context of the subordinate legislation that has to be produced in a bilingual form, there is clearly an argument for a written record in both languages. I caution here that we should approach the issue of record and of language of record in a pragmatic and sensible way. We should consider the technology used to produce the record alongside the question of languages and content. We should consider the accessibility to the record on the Internet and treating the affairs of the assembly as if they were one great current affairs television production. With the modern techniques of electronic digital recording, time coding and so on, it is possible to retrieve the record rapidly.
Therefore the methods that we adopt in this House for reasons of history and of practice to produce a typewritten record overnight might not be the most efficacious way to deliver an immediate record of the proceedings of the assembly. These are issues that I want to flag up because they are under debate within government and within the advisory group. I want to ensure that the record can be produced in whatever form is appropriate. I beg to move.
Lord Falconer of Thoroton: My Lords, Amendment No. 95 would require standing orders to provide for publication of a report of assembly proceedings,
"including in audio-visual or electronic form".
While we do not think that this is a matter for the Bill, we sympathise with the thought behind the amendment. As a modern democratic institution, the assembly will want to ensure effective communication with those for whom it is working, and its reporting arrangements will need to reflect that. So, for example, it is quite likely that reports of its proceedings will be accessible through the Internet, and no doubt the fertile mind of the noble Lord will have other suggestions to make on assembly communications with people in Wales if the electorate of Meirionnydd Nant Conwy are bold enough to select him as their representative.
If the noble Lord will accept that we applaud the spirit of the amendment but cavil at its insertion into the Bill, perhaps he will be minded to withdraw it.
Lord Elis-Thomas: My Lords, I am grateful to the Minister for spelling out the breadth of the meaning of the word "record". I am not sure whether I take his other remarks as an endorsement of my candidature or whether they are, as it were, hostages to fortune. However, I shall not take up the time of the House at this time of the morning to discuss that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stanley of Alderley Lord Stanley of Alderley had given notice of his intention to move Amendment No. 96:
After Clause 72, insert the following new clause—

DETERMINATION OF PLANNING APPEALS
(" . Where the determination of planning appeals on planning applications under town and country planning legislation has been transferred to the Assembly by an Order in Council under section 22 of this Act, the standing orders must include provision for this function to be exercisable by the presiding officer.").
The noble Lord said: My Lords, I am in the hands of the House. This is a substantive amendment. I know that it is giving problems to NAAG. I shall certainly move it if that is the wish of the House. However, I think it may be better to delay it until the next stage. However, if the House wishes me to continue, so be it.
12.30 a. m.
Lord Falconer of Thoroton: My Lords, I know the substance of the amendment. The noble Lord is absolutely right. It is a substantive amendment on which it might be appropriate to spend a little time, effort and energy earlier than half past twelve at night. I shall be content if we can finish the other amendments, but leave this one until next time. That seems sensible.
Lord Stanley of Alderley: My Lords, I thank the noble and learned Lord. I shall not move the amendment, and I shall bring it back next time.
[Amendment No. 96 not moved.]
Schedule 5 [Bodies and offices covered by section 74]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 97:
Page 88, line 20, leave out ("in respect only") and insert ("only or mainly in respect").
The noble and learned Lord said: My Lords, in moving this amendment, with the leave of the House, I shall speak also to Amendments Nos. 226 and 227.
Amendment No. 97 relates to Schedule 5 to the Bill, which lists bodies covered by Clause 74; that is, those whose members or staff are liable to be summoned by the assembly for the purpose of giving evidence, and so forth.
Schedule 5, as it currently appears, refers by name to certain special health authorities which perform functions in respect of both England and Wales. It also refers to any special health authority performing functions in respect only of Wales. However, it would not include any special health authority that performed functions mainly, but not solely, in respect of Wales. That would obviously be anomalous. Although such bodies exist now, that could change. The National Health Service in Wales is to remain part of the wider National Health Service. One can easily envisage a body established primarily to serve Wales nonetheless providing services to NHS bodies in England too.
With the schedule as drafted, a decision to apply services across the border for what might be perfectly sound operational reasons would have the unintended
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effect of exempting the body entirely from the power of summons. That could not be right. The intention of the amendment is to ensure that such bodies, if and when established, are included. It would allow the assembly to summon any special health authority which performed functions only, or mainly, in respect of Wales, thereby removing the anomaly.
Turning to the second and third of these amendments, I would draw the attention of the House to Part II of Schedule 17. That lists NHS bodies subject to the provisions of Clauses 144, 145 and 146, covering audit and examinations into the use of resources. In particular, Schedule 17 defines the bodies that are to come within the remit of the Auditor General for Wales.
NHS bodies form a major part of the public sector in Wales. It is important that they are subject to the power of the Auditor General for Wales under Clause 145 to carry out examinations into the economy, efficiency and effectiveness with which they use the resources provided to them, and to report accordingly to the assembly. I might add that the current arrangements under which NHS bodies' accounts are audited by the Audit Commission appointees will not change.
However, the schedule as it currently stands may not adequately cover Welsh NHS bodies if they choose to operate in a particular way. The reason for that is that the schedule currently specifies that an NHS trust is subject to provisions only if all of its hospitals, establishments and facilities are situated in Wales, and a special health authority is subject to them only if it performs functions in respect only of Wales. As the Bill stands, Welsh NHS bodies with an English dimension, however marginal, are not subject to the Auditor General's powers; nor are they capable of being added to the list of bodies subject to those powers in Schedule 17 under the Secretary of State's powers in Clause 144(8)(a).
It is quite possible that a trust might acquire facilities just across the English border, perhaps to serve people living in parts of Wales near the border or to co-operate with an English-based NHS body in respect of certain patient services. As the Bill stands, it would then fall outside the remit of the Auditor General for Wales, as would a special health authority that started supplying services to a body in England or indeed elsewhere. That could not be right. Such bodies would remain predominantly Welsh and should be treated accordingly.
If noble Lords are minded to accept the amendments tabled, the schedule will refer to any NHS trust all or most of whose hospitals or facilities are situated in Wales, and to any special health authority performing functions only or mainly in respect of Wales.
I trust that your Lordships will be satisfied that it is wholly proper for bodies of such descriptions to come under the scrutiny of the Auditor General for Wales, so that he may report upon them to the assembly. I beg to move.
On Question, amendment agreed to.
Clause 76 [Role of Secretary of State for Wales]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 98:
Page 40, line 15, at end insert—
("( ) The Assembly may require the Secretary of State for Wales to attend any proceedings of the Assembly or a committee of the Assembly.").
The noble Lord said: My Lords, this amendment involves the consideration of Clause 76 of the Bill. It is headed,
"Role of Secretary of State for Wales".
It is worth looking at. In subsection (1) the Secretary of State for Wales has a broad power whereby he is,
"entitled to attend and participate in any proceedings of the Assembly".
That having been stated as a general principle, subsection (2) immediately cuts his role down to virtually that of a figurehead. The right to vote is then removed, and a right to attend or participate in the proceedings of a committee or sub-committee is removed. So he cannot attend the executive committee, the subject committees, the regional committees, the audit and the subordinate legislation committees. The Secretary of State is excluded from participation in that important aspect of the assembly's work in any form.
What is left? It would appear that all he can do is, if he feels like going down to the assembly one day in order to tick off the members or give them a wigging about what they are doing, he can attend and talk; and that is the end of it. But that is at his own whim. Again this is another clause written from the point of view of the Secretary of State.
One should really be considering in this legislation the attitude of the assembly to the Secretary of State. How will it feel? How will it react to the link man between the Cardiff assembly and the Westminster Parliament? The minimum that it will require is a right to demand his attendance if the members wish to ask him questions; to ask him to explain policy; to ask him to express views that he can convey, as the link man between the assembly and Parliament, to Parliament itself.
Again, if one postulates the different parties in power in the Westminster Government and the Cardiff government, that link between the two may be completely lost. Under the clause as drafted the Secretary of State can say, "I am not going to go down there. They are all a bunch of politicians from a different party. I am not going to talk to them". The assembly will have no right to demand his attention. So there may be a complete breakdown in communication between assembly and Parliament.
I ask the Government to think again about this clause and to ask themselves whether the role of the Secretary of State is to be as limited as set out here; or whether
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he is to have a valid function of bringing the two bodies together and ensuring that communication is maintained. I beg to move.
Lord Falconer of Thoroton: My Lords, I know that the noble Lord, Lord Thomas of Gresford, feels strongly about this. He made that clear at the Committee stage of the Bill and has made it clear again this evening.
We have thought about this matter and I regret that, notwithstanding his strength of feeling, we do not believe it would be right for a provision such as this to find its way into the Bill. A key role of the Secretary of State, after the assembly is created, will be to represent Welsh interests in the Government of the United Kingdom. In performing that function he will inevitably have to keep in close touch with the assembly. Of course, we provided for a specific obligation to apply requiring him to consult the assembly on the Government's legislative proposals.
Lord Thomas of Gresford: My Lords, we have already discussed that. He only has to consult them on such matters as he thinks fit. That is how the provision is phrased. I have already attacked the thinking on that issue, so if all the Secretary of State has to do is to consult on matters he thinks fit, he may think fit not to consult them at all.
Lord Falconer of Thoroton: My Lords, I made it clear that I thought, although the noble Lord appears rather belligerently to have a different view in relation to this, that on the central issue of Clause 31 we were broadly thinking along the same lines; namely, he would consult on legislative proposals that would affect Wales on such matters as the environment and other matters directly in the remit of the assembly. So I take issue with the noble Lord when he seeks to underplay the effect of the obligation to consult on the Government's legislative proposals.
The important point is that when all is said and done the Secretary of State will not be accountable to the assembly. He will remain accountable to Members in another place for the performance of his official duties, just as the first secretary will be accountable to the assembly for the performance of his. If that is the true constitutional relationship, it must surely follow that the Secretary of State should not be required to attend the assembly even if he could be—and will be—invited to attend on occasions. The reasoning here is precisely the same as in other parts of the Bill. Bodies which are accountable to the assembly may, in the last resort, be summoned to the assembly to give evidence. Bodies whose activities may be of particular interest to the assembly but which are not directly accountable to it may be invited to give evidence.
We debated this earlier in the context of amendments moved in Committee by the noble Lord, Lord Elis-Thomas, to what is now Schedule 5. As was said in that debate, invitations from the assembly to attend and give evidence would not be lightly declined, and I dare to say that invitations to the Secretary of State to attend particular meetings of the assembly, or one of its committees, will be treated with the equivalent

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seriousness, given his key role as the conduit of assembly opinion to the UK Government. But to give the assembly powers to require him to attend seems to us to be a step too far and one not consistent with the more general theme underlying our proposals that relationships after devolution should be based on non-legal concordats rather than statutory provision.
In the light of my explanation of our views, I hope that the noble Lord will see his way to not pursuing his amendment.
Lord Thomas of Gresford: My Lords, I do not propose to pursue the amendment to a vote at a quarter to one in the morning, but I have to say that I believe that the Government's thinking is wrong. I think they are hung up on the word "accountability" as though it implies that, because the assembly has a right to require the Secretary of State to come before it, in some way it can control his every movement and everything he does; that it can fetter his discretion in some way. That is not so. All it can do if it requires him to attend is to put questions to him and it has to accept his answers. The concept of accountability has come from a constitutional text book and is to a large degree slanting the thinking of the Government on this topic. I respectfully urge the Government to rethink the position before Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 77 [Defamation]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 99:
Page 40, line 35, leave out ("with any person") and insert—
("(i) between any person and a person").
The noble Lord said: My Lords, Amendment No. 99 is grouped with Amendments Nos. 100 and 102. The purpose here is to give clearer protection in respect of privilege. The amendments are concerned with absolute privilege in the context of the law of defamation.
Amendments Nos. 99 and 100 widen the scope of the existing privilege in subsection (2)(e) of Clause 77. This relates to communications about registration of interests. At the moment, protection would be given in respect of a communication to a registrar of members' interests; but if the letter instead was sent to the person's assembly member, which is entirely possible, it would not be so protected. That does not seem to be right. Therefore, we seek to broaden the protection.
Amendment No. 100 has a new element—subsection (2)(f). This gives protection to the same extent as amended subsection (2)(e), but this time in relation to complaints of maladministration on the part of individuals who are members of or employed by the
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assembly. Therefore, we believe that this is the appropriate protection for these circumstances. Amendment No. 102 is simply a consequential drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 100:
Page 40, line 36, at end insert (", or

(ii) between any person and an Assembly member,

in connection with such registration, or

(f) any communication—

(i) between any person and a person having functions in connection with the investigation of complaints about actions or failures on the part of the Assembly, or

(ii) between any person and an Assembly member,

in connection with any such complaint.").

On Question, amendment agreed to.
Clause 78 [Contempt of court]:
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 101:
Page 41, line 11, leave out ("made by or under the authority of the Assembly") and insert ("which either is made by or under the authority of the Assembly or is fair and accurate and made in good faith").
The noble Lord said: My Lords, this is a short amendment. It is designed to protect the freedom of the press in reporting assembly proceedings. Obviously, press reporting is extremely important, and media reporting generally, in the work of any assembly. The current drafting of subsection (1) is too tightly drawn. The effect of Amendment No. 101 is to disapply the strict liability rule in the Contempt of Court Act 1981, not only in relation to reports of assembly proceedings made by or under the authority of the assembly, but also—and this is very important—in relation to reports by others, providing that they are fair, accurate and made in good faith. This is a very important amendment as a matter of principle. I beg to move.
On Question, amendment agreed to.
Lord Williams of Mostyn Lord Williams of Mostyn moved Amendment No. 102:
Page 41, line 15, leave out ("(e)") and insert ("(f)").
On Question, amendment agreed to.
Lord Carter: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly and, on Question, Motion agreed to.
House adjourned at fourteen minutes before one o'clock.

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