Sitting of 8 July 1998

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

Points of Order
9.34 am
Mr. Menzies Campbell: On a point of order, Madam Speaker. I seek your advice on whether Standing Orders allow a Minister to make a statement between now and 3.30 on the apparent leak of the strategic defence review which appears on the front pages of all this morning's broadsheet newspapers. Earlier this week, you once again felt constrained to observe that it seemed that the House was consistently being bypassed on these matters. I understand that the leaking of the document was systematic, in that it was sent to a series of newspapers in brown envelopes. We thought that brown envelopes were a feature of the previous Parliament, not of this one.
I am sure that you will agree, Madam Speaker, that leaking in that way is an insult to the House and to the men and women of the armed services whose jobs and future may depend on the contents of the strategic defence review. Can you advise me whether Standing Orders permit any Minister who seeks to make a statement between now and 3.30 to do so, and whether you would look favourably on any such application?
Mr. Paul Tyler: Further to that point of order, Madam Speaker. The examples that you dealt with previously could have been accidental leakages, but, in the words of my hon. and learned Friend, this leak seems to be quite deliberate. May I draw your attention to the fact that they were not photocopies but actual copies of the defence review? It seems to be a deliberate attempt to drive other matters from the front pages of the newspapers.
Mr. Gerald Howarth: Further to that point of order, Madam Speaker. Given your strong feelings on such matters, could you tell Ministers that you would regard it as entirely appropriate if, following their investigations, the most proper and perhaps draconian action were taken against those who are responsible?
Madam Speaker: In answer to the first point of order, the Standing Orders of the House do not allow for a statement on that matter before 3.30. The Secretary of State for Defence has already telephoned me this morning. I am fully aware of the situation. He is prepared at 3.30 to make some comment—I put it no higher than that—on this matter, which disturbs him greatly, too. If the House will bear with me until 3.30, I think that he will be very forthcoming at that time.
Mr. Menzies Campbell: I am very much obliged, Madam Speaker.

EU Structural Funds (London)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
9.37 am
Mr. Tony Colman: I shall first declare an interest. I am a former director of Greater London Enterprise, and I am still the chair of Greater London Enterprise development capital on a pro-bono basis. I am a former leader of Merton borough council and vice-chair of the Association of London Authorities, a member of the leaders' committee of the ALG and a director of the London First centre.
I am pleased to have an opportunity to debate the current and future position of the EU structural funds for London. The United Kingdom's presidency of the European Union has just finished, and I am keen that the House should have an opportunity to hear from my hon. Friend the Minister about her progress in the past five months on achieving a good deal for the UK and particularly for London. She is, of course, a London Member.
Agenda 2000, which set this matter in train, led to the publication of new regulations governing the reform of the funds. They were published by the EU Commission on 18 March and cover the period 2000–2007. I understand that agreement on the overall structural funds budget is due at the Vienna summit in December and that final adoption of the regulations will take place at the German summit in June 1999. Therefore, the timing of the debate is helpful in ensuring that the London case is put in time.
Already, hon. Members in all parts of the House have been putting the case for their constituencies. A recent example of that was on 15 June when my hon. Friend the Member for Clwyd, West (Mr. Thomas) had an Adjournment debate on the subject in the context of Wales. All hon. Members would wish to support Northern Ireland's quest to continue its objective 1 status. The continuing sad news from Northern Ireland underlines the need to ensure that the Commission allows Northern Ireland to retain that.
I pay tribute to the various organisations that have, over recent years, been part of making the case for London. Greater London Enterprise has been foremost in that. It has a specialist team working on that case, but it was important that, some four years ago, London house was made available by Greater London Enterprise to ensure that there was a base for London to be able to lobby the European Commission. Before 1994, other regions had already set up lobbying organisations. Perhaps they were ahead of London in realising the importance of having a visible presence in Brussels.
The next grouping that I commend to the House is the Association of London Authorities, the London Boroughs Association, and the Association of London Government, as it became in 1995. I particularly pay tribute to my hon. Friend the Member for Hayes and Harlington (Mr. McDonnell), who, as secretary of the ALA and ALG, led the drive to ensure that London was not left behind in terms of ensuring that structural funds were available. I pay tribute to the current secretary, Martin Pilgrim, and to the assistant secretary,

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Madeleine Williams, the person in charge, for the work that she and her department do to ensure that London is properly represented.
I commend also the work that has been done on the London study, which was presented to my hon. Friend the Minister for London and Construction at a meeting on Monday to demonstrate a way forward. That study was part funded by the EU, by London boroughs and by many organisations in London, and sets the backdrop to a strong claim for objective 2 status for London in the negotiations that are coming up.
I obviously commend the work that has been done within the Committee of the Regions by our representatives on the committee, Councillor Peter Bowness, who has now been translated to another place and who, I think, was the first member of the committee, Councillor Toby Harris, who is shortly to be translated to another place, Councillor David Williams from the Liberal Democrats and Councillor Sally Powell. I know that other councillors have also done excellent work on the committee, but, at a key time, when it was so important to put the case for London in the committee and the European Commission, they were the four people who led the charge.
I mentioned the work of the London First centre. There was a tremendous need, which was clearly identified, for London to have its own development agency. On a basis of shared funding between the Department of Trade and Industry, the borough of Westminster, London Docklands development corporation, the Corporation of London and the business community, over the past three or four years, there has been a lively and successful inward investment agency for London, albeit working on rather limited funds compared with what is available for, say, Scotland, which has a similar population, or Wales, the population of which is significantly smaller.
As I develop my theme, hon. Members will see that London's needs are perhaps as great as those of Wales and Scotland combined, so it is important for the Minister to take back to the DTI the need to ensure that the funding for the London First centre and successor bodies is adequate.
Obviously, I commend the new shadow London development agency. That will help to bring together much more strongly the work of the organisations that I have mentioned. It is important that the Greater London authority—the elected mayor and assembly—has a clear view from the business community, from the social partners in London and from elected representatives in London of the way in which the GLA should support the way forward for EU structural funds and for the future of London.
I pay tribute to Members of the European Parliament who have spearheaded this work, including, obviously, Pauline Green, as chair of the socialist MEPs, and my own MEP, Anita Pollack, the MEP for London South West London, who has done sterling work in looking after that area.
As hon. Members will realise, Putney is not in an objective 1 or 2 area. Wandsworth council, with the local training and enterprise council, AZTEC, of which I was formerly a director, and the local regeneration partnership, the Wandle Valley Partnership, has been extremely
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successful in obtaining funds through objective 3, the European regional development fund, the European social fund, Adapt, Horizon, Social Exclusion, Youthstart, Life, Pacte, PHARE and Ecos Ouverture.
I have listed those EU programmes in full because I am concerned that virtually all the programmes will be subsumed within the new objective 2 and 3 status. It is important that areas in London that suffer from high unemployment and deprivation, such as Wandsworth and parts of Putney, should still be able to apply for and to receive EU funding.
I commend to the House the work of the Wandsworth economic development office, under Mike Brook and Judith Roscoe, in ensuring that those funds have been won fairly. One hears in the House, correctly, that there has perhaps been a tilting of the playing field, in favour of the standard spending assessment for Wandsworth, but, in this area, I commend Wandsworth council for its work to ensure that funds are available for unemployed people and others who can benefit from those programmes. It has won its case fair and square with Brussels, with the Government office for London and with Whitehall.
The vast majority of current EU London funding goes to the Lea valley and east London. I know that my hon. Friends from some constituencies in those areas wish to take part in the debate to do their own advocacy. Those areas will receive in 1997–99 some £80 million; that is 102 million ecu. That is 4 per cent. of the UK total of objective 2 funds. The London share of the UK unemployed is 18 per cent. and its share of the long-term unemployed is 25 per cent. London has more unemployed than Wales and Scotland put together; their share of the UK's unemployed is 15 per cent. London receives only 4 per cent. of objective 2 resources, compared with Wales and Scotland, whose share is 29 per cent. North-east England receives 15 per cent. of the resources and has only 7 per cent. of the unemployed. The west midlands receives 18 per cent. of the resources, but has only 9 per cent. of the unemployed.
I have no wish to denigrate other regions or countries within the British Isles about their share of those resources. I wish to ensure only that the London case is put. I believe that those comparisons have not been put to the House before. That clearly shows a lack of interest in London by the previous Government when it came to EU resources. I and fellow London Members want to ensure fair treatment for London for the next period—2000–07. I do not criticise the single regeneration budget division of resources, which more accurately reflects the needs of London, but it is remarkable that the EU share-out does not.
I have used comparative unemployment levels, which were the key indicator used for objective 2 for the last round. However, things are changing; the Minister will advise us of that. In terms of Agenda 2000, the amount of money that can be accessed is being reduced—the share of the EU population that benefits is reducing from 50 per cent. to between 35 and 40 per cent. There is a new way forward, which particularly takes account of EU enlargement in coming years.
I understand that, to maximise the UK overall take, the key criterion that should be used is gross domestic product; the UK has the fourth lowest GDP in Europe. However, while I would support that, other indicators should be looked at when considering the split of

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EU resources within the United Kingdom. I understand that 50 per cent. of the indicators come from Brussels and the other 50 per cent. from the UK.
The Association of London Government proposes criteria that relate to
"areas with substantial rates of unemployment in excess of the EU average which have recorded substantial industrial job losses since 1985."
Greater London has lost 382,000 industrial jobs, representing 50 per cent. of industrial employment, since 1984. In east London and the Lea valley, 51 per cent. of industrial jobs have been lost—77,000 down to 40,000—with a further loss of 10,000 jobs in the service sector. It is a difficult area and it needs every penny it can get. It is important that the current £80 million funding is sustained, if not increased.
Ms Oona King: It is important to stress that 70 per cent. of Britain's most deprived wards are in the capital, which people often do not realise. Although my constituency has been fortunate to receive funding, in some wards unemployment is now rising. In addition, no structural funding money hit the ground until 1996, whereas every other British ERDF area has had funding over a much longer period. It is critical that we do not lose the objective 2 money, and that other areas of London are able to benefit from it.
Mr. Colman: I agree with my hon. Friend; I was about to discuss the wider indicators that need to be taken into account.
The partner of my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman), Councillor Sally Powell, has fought successfully within the Committee of the Regions and the EU generally to ensure that "urban areas in difficulty" qualify under objective 2. The criteria should include the points made by my hon. Friend the Member for Bethnal Green and Bow (Ms King)—first, a high level of poverty, including precarious housing conditions; secondly, poor housing conditions; thirdly, a degraded environment; and fourthly, a low level of education. All those criteria are met in a number of wards in the constituencies of my hon. Friend the Member for Bethnal Green and Bow and other London Members, especially those representing the Lea valley and east London. It is important that my hon. Friend the Minister remembers that.
The London research centre-Peabody Trust document "A Capital Divided", prepared in February last year, gave information at ward level which clearly showed the needs of London.
Under the draft regulations for objective 2 funding, the particular strand covering "urban areas in difficulty" is seen as applicable to only 2 per cent. of the population. I urge my hon. Friend the Minister to convince her colleagues that the urban industrial reconversion strand should be significantly increased, if possible up to 10 per cent., which is the level of the other strands. My hon. Friend the Member for Bethnal Green and Bow made that point well.
I listed a number of new areas that Wandsworth had been able to access and those areas outside objectives 1, 2 and 3 that will not be available. There is particular concern that the urban initiative will be cut. While the funding for that initiative is modest—£12 million for the
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period 1994 to 1999—the benefits have been real. In evidence to the Select Committee on Trade and Industry, the Local Government Association endorsed the continuation of the initiative.
The proposals for Community initiatives outside objectives 1, 2 and 3 will now have to be extremely limited. I understand that there are just three, of which only one is directly relevant to London—although it is highly relevant: the new initiative on transnational co-operation to fight discrimination and inequality preventing access to employment. I commend that initiative to my hon. Friend the Minister. I know that not just London but many other areas will want to have a strong say in it.
The new proposals around objective 3 are very much needed for London. The divide in London between those who are out of work and those who are in work is widening. Those who do not have the right skills—the new deal provides a way to acquire them, and I applaud the fact that the scheme has now been widened to include the over-25s—can fall further and further behind. It is specifically a London problem.
Mr. Jimmy Hood: Structural funding is meant to help regions and economies through difficult times. It is intended to help economies to pick up and for the regions to benefit from that. The problem is that the more successful the scheme is, the greater is the risk of those regions losing continued support. Regions that already get funding argue to hold on to it, while others argue their need also to benefit from it. That is one of the problems with enlargement of the EU. Our Spanish colleagues are arguing against enlargement because they do not want any institutional reforms that would threaten their structural funding.
Mr. Colman: I agree with my hon. Friend. However, one piece of good news that we received last March was that Commissioner Kinnock had proposed a safety net, under which no areas would face a funding reduction of more than one third. That may be cold comfort to the Spanish, but it is important to UK regions in terms of their success compared with London.
In the 1970s and 1980s, London was booming while other regions were undergoing major industrial decline. London's nemesis came in the late 1980s, so we have had to face that problem later than other regions. It is important for those in areas such as Clydesdale, which my hon. Friend represents, to realise that the success that that area has achieved needs to be replicated, in particular, in the Lea valley and east London.
We need objective 3 to deal with retraining. We want London to get its full share, especially for areas that promote social inclusion, lifelong education and training, facilitation of economic change and, in particular, improving the participation of women in the labour market. London should be accessing those areas under objective 3. I know that other hon. Members will explore these issues in their speeches and will be urging the case for London.

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For the remainder of my speech, I want to deal with NUTS. I am not insulting the House with that acronym, it stands for the nomenclature of units of territorial statistics—
Madam Speaker: Order. It is nice of the hon. Gentleman to spell it out.
Mr. Colman: NUTS provides a single uniform breakdown of territorial units for producing regional statistics across the whole of the European Union. Almost all the sub-national statistics collected and disseminated by Eurostat are based on the NUTS structure of regions. The statistics deal with topics such as population, birth rates, employment, unemployment, gross domestic product, transport and energy. I am sure that they also deal with other matters.
Since 1988, NUTS regions have formed the geographical basis for determining distribution of structural fund expenditure. Currently, objective 2 funding is based on NUTS level 3 regions.
On 29 June, the Chancellor of the Exchequer answered a written question from my hon. Friend the Member for East Ham (Mr. Timms) about the new United Kingdom NUTS map. I know that some changes, such as splitting Cornwall and Devon at level 2, have been welcomed on both sides of the House. That change may help to ensure that Cornwall receives its fair share as an objective 1 area. However, it seems strange, at level 2, to divide London into inner and outer London, and the borough groupings at level 3 seem stranger still.
The statisticians seem to have no appreciation of the sub-regional partnerships that have been developed in recent years with the help of the Government office for London. The partnerships include the Lea valley partnership, which stretches up to Enfield; the east London partnership; the Park Royal corridor; and, in my case, the Wandle valley partnership, which covers Wandsworth, Merton, Sutton and Croydon. The partnerships of boroughs, and of the business and social partners in those boroughs, have been recognised in the past four single regeneration budget rounds and are increasingly successful in delivering solutions to areas with considerable industrial decline in those parts of London.
NUTS also do not relate to TEC areas. I therefore ask again whether the classification system will be re-examined. Alternatively, could each borough be designated a NUTS level 3? I remind the House that current objective 2 funding is agreed on the basis of NUTS level 3. Moreover, the population of individual borough often exceeds the population of other NUTS level 2 units. The population of some London boroughs, for example, is greater than that of Cornwall. A re-examination of the system is necessary.
As my hon. Friend the Member for Bethnal Green and Bow said, the current objective 2 map is drawn at ward level. I think that level 4 should be composed of wards within boroughs, rather than—as at present—of boroughs. As hon. Members will know, some wards—of which I have examples in my constituency of Putney—have a very high deprivation level, whereas others do not. It is extremely important that the objective 2 status map should
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deal with that fact. I believe that the NUTS classification system proposed on 29 June is not helpful to London, and perhaps not to other parts of the United Kingdom that share the same problem. I look forward to the Minister confirming that the matter will be re-examined.
In Putney and at Wandsworth council, we are concerned about the need for support in making objective 3 bids. It has been possible in previous years to make them, but it has been a problem this year. We want to ensure, first, that areas such as Wandsworth that have been successful when operating on a level playing field and on a case-by-case basis are not squeezed out.
Secondly, we have to ensure that as much pressure as possible is brought on Brussels to operate a more positive urban policy—which, as I said, would reflect London's priorities.
Thirdly, it is important that we work to decrease bureaucracy and simplify the approval process. Currently, there are many criteria assessment processes. Whereas some bids are approved directly from Brussels—via GOL—others are approved via Departments. We need clarity in the matter. We need quicker decision making and prompter payments, and greater emphasis on outcomes and outputs rather than—as currently—on inputs.
London as a whole has lost out on the Euro-gravy train of the past 18 years, during which the previous Government ignored the pleas of local government leaders and of the community of London. The fact is that 18 per cent. of the United Kingdom's unemployed live in London, but they receive only 4 per cent. of the EU resources provided to deal with the problem here.
Once the Greater London authority is established, we will have a doughty fighter to ensure that London's voice is clearly heard. Meanwhile, I ask the Minister—who is a London Member—to discover how that great economic injustice can be righted, and to ensure that the right thing is done for London, so that we receive a fair share of resources.
10.4 am
Mr. Edward Davey: I congratulate the hon. Member for Putney (Mr. Colman) on putting the case for London so well, and on pointing out that we have large unemployment problems in the capital and that we will have to ensure that London's case on the reshaping of structural funds is made.
I should like to make a few comments on reform of objective 3 funding—especially as it relates to the European social fund—which is particularly germane to London. As the hon. Member said, regional—even sub-regional—definitions can miss out areas of concentrated poverty, which are, by their very nature, quite wide. As he also said, London is likely to miss out not only on objective 1 funding but on much of objective 2 funding. In the worst case scenario, none of London's areas will be given objective 2 status. Therefore—particularly because of the regional definitions—it is important for areas such as London that overall objective 3 funding is well resourced.
As the hon. Member said, London has concentrated areas of poverty that are not revealed in the nomenclature of units of territorial statistics definitions. Those areas have to be able to share in support from Europe. If that

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support will not come from objective 2, we will have to ensure that objective 3 is well resourced so that it can back us up.
Administration of objective 3 funds is another issue which must be addressed. Although the hon. Member touched on the issue, I should like to make a couple of major points. Hon. Members will have read the Trade and Industry Select Committee's recent report on the reform of European structural funds, which makes two telling points on reforming administration of the European social fund. The first deals with the complexity of current administrative arrangements.
At the back of the report, there is a submission from the Leader II network in England, which describes current administrative arrangements for the social fund as "Kafka-esque" and says that the number and complexity of forms render it incredibly difficult for many organisations to apply. As a consequence of the complexity, simply to apply for funds, political lobbyists have to become involved in the process, and special posts have to be created. That is not an efficient way of running such a system.
Administrative complexity creates barriers for, and limits the number of, organisations that would otherwise apply. It is almost as if the funds were being rationed by complexity. We want a much more open, simple and transparent process in which many more people and organisations can apply.
A second aspect of the administrative arrangements that requires reform—which also was highlighted by the Select Committee—is to push down administration of large pots of money from Brussels to the national and regional tiers. Such reform would help to improve the fund's administrative efficiency, would inherently simplify administration and would provide a much more targeted focus in allocating funds.
The Liberal Democrats welcome the Government's proposals for regional government in London. The development of regional government and regional development agencies may well produce tiers of government to administer the pots of money that come from Europe through objective 2 or objective 3 status and ensure that they are more efficiently administered; the byzantine processes of the current system seem to miss many areas of need.
If we do not have better and simpler administrative arrangements that follow the principle of subsidiarity, we will miss out on money being channelled to some of the most severely deprived districts in the country. As the hon. Member for Putney said, some areas of London are severely deprived. The top four areas in the index of deprivation include London boroughs.
My constituency is normally considered to be one of the more prosperous boroughs, but some wards suffer severe deprivation. Norbiton, for example, has a higher Z score than almost any other ward in outer London and is on a par with the poorest areas of central London. The need to ensure that money goes where it is most required is urgent, and one of the best ways to achieve that is to reform the administrative processes.
10.10 am
Mr. Andrew Love: I join the hon. Member for Kingston and Surbiton (Mr. Davey) in congratulating my hon. Friend the Member for Putney
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(Mr. Colman) on securing today's important debate at such an appropriate time and commending him for focusing on London and correcting the mistaken impression of many right hon. and hon. Members and the wider public that London escaped the recessions of the 1980s and 1990s.
Londoners have not magically overcome or avoided the deprivation that affects other cities and regions. Indeed, there is enormous disparity between those who are very wealthy and those who are very poor. Greater London includes some of the poorest areas in the country, and is affected by poverty, deprivation and social exclusion.
This is an apposite time to be discussing structural funds for London. There are 13 objective 2 areas in the United Kingdom, covering 31 per cent. of the population and spending 30 per cent. of the objective 2 structural funds from Europe. However, as was said earlier, London receives only 4 per cent. of the UK allocation. That cannot be a fair distribution. Indeed, London has only one objective 2 area—east London and the Lea valley—which is programmed to spend about £132 million by the millennium.
Many have pressed the case for London over an extended period; several organisations were mentioned earlier. They include Greater London Enterprise and the Local Government Association, but I should like to pay particular tribute to the London Members of the European Parliament who campaigned for a long time, despite the scepticism of their colleagues and the opposition of many bureaucrats in Europe, but finally won through to secure a bridgehead for London and recognition of the multiple deprivation that is suffered here.
East London and the Lea valley objective 2 area combines great need and significant opportunity. The need exists across the entire area, but it is concentrated in the central and eastern parts—in Tower Hamlets and Newham. There are also significant development opportunities in the upper Lea valley where there are more than 200 hectares of underdeveloped and derelict sites waiting to be developed to provide opportunities.
The London TEC Council, recently produced a report entitled "Skills and Sustainable Development", which identified six distinct local economy profiles within London. They range from the global city core, which I do not need to describe, to the regeneration economy. The report states:
"A regeneration economy requires comprehensive long-term economic, social and physical development to compete successfully for investment, jobs and resources."
That is a description of east London and the Lea valley. All the indicators show that the area suffers significant deprivation, poverty and social exclusion. Tower Hamlets, Hackney and Newham would appear at the top of any list from any statistician. Indeed, parts of Haringey, Waltham Forest and, in my constituency, Enfield also appear high on the list of deprived areas.
Of course, the problems in the Lea valley have been exacerbated in recent years. There were 26,000 jobs losses between 1984 and 1991, and the area has failed to benefit from the wider new industries that have been attracted to the regional economy in Greater London. Perhaps most significantly, local people have been unable to maximise the opportunities that are available because they lack the skills to tap into the job market. The objective 2 bid was originally made in order to tackle some of those deep-seated problems.

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East London and the Lea valley has a population of just over 500,000. The area has a significant level of need, which is illustrated by one statistic that has been used by European statisticians. Unemployment there is two and a half times the national average. There are many deprived communities, especially black and ethnic minorities, who represent 36 per cent. of the total population, and, according to all the indicators, suffer significantly greater deprivation and unemployment than the norm. A recent survey carried out of the Bangladeshi community showed that only 44 per cent. were engaged in the real economy.
There have been a number of successful projects that will benefit local communities and have a significant impact on the development of the objective 2 area. I shall mention three of them briefly. First, a science park is being developed in northern Enfield on 45 hectares of derelict land. There are three partners: Middlesex university, Thames Water and the London borough of Enfield. The lead agency on the site is building 60 incubator units to foster new and high-technology businesses. It is a very exciting business called the Lea Valley Business Innovation Centre and it does tremendous work. It was set up using regional development funding and is one of 12 such developments across the United Kingdom and one of 150 in the European Community. It promotes innovation by providing support and advice, and early-stage finance, should that be needed for the development of the business. Since it was set up three years ago, it has supported more than 1,000 business ideas. In its first year, it helped to establish 22 new businesses, creating 44 jobs. It is a very exciting development.
I should also like to mention the Tottenham Hale transport interchange, which provides a one-stop service to either Stansted airport or central London. There are excellent connections on the London underground, and the road network is connected directly to the M25 and central London. The interchange will open up an entirely new and, until now, fallow area of the Lea valley objective 2 area for development.
I turn briefly to the impact that Agenda 2000 and the Government's negotiations will have on objective 2 funding for London. First, I accept that enlargement of the European Union will necessarily mean a refocusing of funds on new member countries of eastern Europe, although the Government's acceptance that that will lead to reductions in the overall structural fund does not sit easily with their commitment to regeneration. Indeed, in a recent consultation document in which the Government outlined the features that should underpin their future regeneration policy, they concluded that
"policies must be aimed at addressing social exclusion and need. Our cities will not be competitive unless opportunities are extended to everyone who lives in them. There is nothing more corrosive than the existence of disaffected or disadvantaged groups who feel they have no stake in their city's decisions and prosperity."
Achieving such aims require continued funding of objective 2 areas and the Government to address poverty and deprivation in many parts of London.
Secondly, concern has been expressed at the use of unemployment as the principal criterion for the designation of new objective 2 areas. That would be to the advantage of east London and the Lea valley—and,
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indeed, as has been said, of Greater London. I accept—and I think that London would accept—that, given that different countries are at different stages of their economic cycles, the use of such a criterion does not make sense and may not be the most appropriate basis on which to divide spoils among member states. Unemployment is only one of many indicators and will not, by itself, give an accurate picture of local need. Below the national criteria, some form of assessment of deprivation or social exclusion based on national and regional criteria would be favourable and a sensible way forward. After all, local people know best what is happening in their area.
Thirdly, there must be flexibility of implementation to allow member states both to decide on the new criteria for objective 2 designation and to draw the boundaries of new areas, taking account of the situation on the ground. For example, many deprived areas may be concealed in a larger and much more prosperous region. Such a problem is far more prevalent in Greater London than in other parts of the country. We need to take on board local experience and local knowledge in evaluating the criteria on which we want to operate.
Fourthly, I should like to address the issue of the safety net, which has been mentioned. According to recent estimates, before the concept of a safety net came forward, only a third of the current eligible population under objective 2 status were likely to be covered under the new criteria. A safety net that allows us to drop only a third of the coverage marks significant progress. The Government—and Commissioner Kinnock, if he was involved—should be congratulated on that.
However, there is still a difficulty. I understand that part of the EU's policy on objective 2 funding states that it will be limited to 18 per cent. of the population of any country. Such a limit could adversely impact on objective 2 funding in London. I ask the Minister to consider that carefully.
Fifthly, we must protect existing investment. East London and the Lea valley achieved objective 2 status only in 1995. Projects and programmes will have been running only for a maximum of four years by 1999. Continuity of funding is therefore necessary to deliver the regeneration that was called for when the objective 2 area was set up. That is important if we are to replace jobs lost through industrial decline, and train the local work force so that they can take jobs that are becoming available not only in the Lea valley but across London. The investment that has already been made in east London and the Lea valley area should not be put at risk by the phasing out of objective 2 status after 1999. Such status has contributed to a reversal of economic decline in the area.
To take up a point made by the hon. Member for Kingston and Surbiton, there is growing awareness among local groups and voluntary organisations—even the private sector—of the benefits that an area can accrue from structural funding. It is important that we maintain that interest and focus. If that is lost through the phasing out of objective 2 status, it will be difficult not only to maintain such interest but to set up the partnerships that will be critical to the future success of the area.
The new arrangements for Agenda 2000 should attempt to achieve several other things. They should reduce the complexity of the system. The EU has already gone some way towards that; it has reduced the number of objectives to three and the number of initiatives from 13 to three,

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greatly simplifying the structure. The Trade and Industry Committee suggested that funding arrangements for four or five different funds should be simplified and brought together in one straightforward fund.
We also need to consider how we can simplify the process for people at the other end of it. If we do so, we shall achieve significant benefits. We need to reduce bureaucracy. To how many agencies do people who have received European structural funds have to report? How many do they have to keep in touch with? How many forms do they have to fill out? The situation is ridiculous; we need to simplify it and ease the process for organisations and partnerships that are trying to achieve the objectives that we have set them.
We must simplify form-filling. One needs a degree in the subject simply to understand the complex forms. Indeed, the complexity of EU forms is legendary. Everyone who has attempted to contact the bureaucracy in Brussels has to complete an exceptionally complex form. That has become a major impediment to new groups coming forward, and it has meant the failure of groups that could have delivered on the objective 2 criteria if that hurdle had not been placed in their way.
We need arrangements to increase transparency. No one understands how Europe operates; I am still trying to find out. The reality is that we end up with consultants, political insiders and people who know how the bureaucracy operates earning a living doing that rather than contributing to the objectives. There should be opportunities to simplify matters for those filling in forms and trying to create local partnerships.
We need flexibility, a greater say for local agencies and the involvement of non-statutory organisations to help ensure that we target the funds more efficiently. That will be essential if we are to maintain public support for an effective programme of regeneration into the 21st century.
10.30 am
Mrs. Teresa Gorman: I congratulate the hon. Member for Putney (Mr. Colman) on securing the opportunity to debate the needs of London in relation to the European Union. I congratulate him also on his stoicism, as he appears to understand the bureaucracy and the nonsense related to accessing those funds.
I was surprised to hear him describe his constituency of Putney—where I was born and raised—as having pockets of severe deprivation. That must be a triumph of rhetoric over reality. I have toured all around Putney all my life, and to compare it with parts of other cities seems a slight exaggeration.
Mr. Colman: I was referring to the Roehampton estate. Perhaps since you left Putney—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman should remember to address other hon. Members in the third person. His remark appeared to be directed to the Chair.
Mr. Colman: I apologise, Mr. Deputy Speaker. May I, through you, remind the hon. Lady that Putney has several parts to it, including Roehampton, which is seen within the Z scores laid down by the Department of the Environment, Transport and the Regions as being an area of significant deprivation?
Mrs. Gorman: The hon. Gentleman has no idea which part of Putney I lived in. The old Roehampton estates
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were the jewel in the crown of the old GLC and were greatly desired by people moving out from the innermost parts of London, who regarded them as almost a rural retreat. As for the other parts of Roehampton and the appalling tower blocks overlooking Richmond park, they were a triumph for the gerrymandering of Labour Governments after the war. I deplore the blocks, but they are still much more pleasant places to live than many parts of our cities.
I wish to support, and not repeat, the remarks of the hon. Member for Kingston and Surbiton (Mr. Davey) about the rabbit warren of regulations and the regiment of bureaucrats through which one must manoeuvre to get to the pot of gold—gold which has been enormously contributed by the British taxpayer. We are, after all, accessing our own money as we go through the European rabbit warren. It is slightly more difficult than accessing lottery funds—perhaps not much more.
I wish to correct the image of London given by the hon. Member for Putney in his quite understandable pursuit of European money. I have lived almost all of my life in London, and I have represented parts of London on a council. That has given me an intimate view not just of central London, but of many of the parts of London that he described.
I have had a lot of contact with businesses that were driven out of London. The problems that they experienced were largely made by their own councils—most particularly with the rates, which went up and up through the roof until the roof came off and the businesses had to move out of town. People may not realise that local authorities often demanded from £10,000 up to £100,000 in rates from small high street shops, which made it impossible for them to function. All the small furniture factories in the east end and areas such as Hackney and Haringey—which sustained an enormous number of valuable jobs—were driven out by the nature of the local councils.
We cannot lay the blame for the depredation at the door of central Government. If the problem exists, bringing in European money will not necessarily solve it. The costs of running small businesses will still exist.
We hear about the 18 per cent. unemployment in London. That figure beggars belief. It can be difficult to find a Londoner working in some industries—particularly the service industries. The other evening, I had the great pleasure of going to dinner at the Norwegian embassy. We were served by young women from the Philippines, the butler who handed round the drinks was Spanish and I am not sure of the nationality of the person who opened the door for us.
The point is that there are massive opportunities in London to work, particularly in the service industries. We have one of the largest tourism industries in the country, which provides many opportunities for us to solve the problems. If there is unemployment, we should look at legislation that impedes employers from taking on English workers, or we should study the nature of the councils—many of which are under Labour control. It is for a council to decide how to utilise the funds that are available. Whether they wish to give funds to the society for sustaining three-legged dogs or to the useful business of keeping the rates down for shopkeepers is a matter for them.

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I have lived in London long enough to see parts of Wandsworth that were deprived turned into desirable areas, with lots of new industries, under the stewardship of my hon. Friend the Member for Christchurch (Mr. Chope). It is a question of management and leadership. Battersea is another part of central London which used to be considered run down. I am sure that the hon. Member for Putney would have described it as a deprived area, yet that, too, was resurrected—not by structural funds from Europe, but by the good management of Conservative councils. I urge the Minister to remember that we have in our hands the powers to restore the pockets of deprivation in London.
I read in the newspapers recently that a great many Indian restaurants are crying out for staff because of a staff shortage. Perhaps some of the unemployed Bangladeshis in London could find jobs if they looked for them a little harder.
10.38 am
Mr. Christopher Chope: We have had a good debate, ably introduced by the hon. Member for Putney (Mr. Colman). My hon. Friend the Member for Billericay (Mrs. Gorman) shares with me the privilege of having been born in Putney, so this is very much a debate about Wandsworth and London as a whole.
The hon. Member for Putney's conclusion that London had lost out on the Euro-gravy train over the past 18 years rather ignores the facts. The 1998 edition of "Regional Trends" shows that gross domestic product per head in London is over £13,000, compared with £8,700 in Northern Ireland and £8,900 in Wales. By 1996, disposable household income in London was 16.4 per cent. above the average for the rest of the UK, compared with 12.8 per cent. above the average in 1992. Things were getting better in London between 1992 and 1996, yet the hon. Gentleman tried to paint a picture of things in London getting worse.
In Wandsworth, and in Putney in particular, Wandsworth council has been able to deliver improved services, which have received massive endorsement in local elections. The hon. Member for Putney, intervening on my hon. Friend the Member for Billericay, described the Roehampton estate as an area of significant deprivation, but it will not have escaped his notice that, in May, for the first time in many years, the electors chose three Conservative local councillors, whom they believed would more properly represent them. That is a reflection of the success of the Conservative council in Wandsworth.
We should consider the structural funds in context. Figures from the Government office for London show that, last year, this year and next year, £25 million per annum have been and will be allocated to London through all the EU structural funds. The revenue support grant for London, which comes from the taxpayer, is £4.4 billion, which is in addition to Government capital grants. To debate structural funds in London—which are only £25 million a year—for one and a half hours, while ignoring the much larger sums of money that are being spent on London, is to fail to see the wood for the trees.
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The hon. Member for Putney argues that small EU-funded programmes in Wandsworth should be preserved, but, this year, the Labour Government substantially reduced the revenue support grant to Wandsworth. Surely Wandsworth council is in a better position than remote officials in Brussels to judge the needs of the local community. If he believes that there are pockets of deprivation in Wandsworth that need assistance, he should be arguing for a larger revenue support grant funded from our national taxes; he should not be trying to use a complicated structural arrangement through which a proportion of the money that we give to Europe returns to us after myriad committees have determined how it should be spent.
The leader of Wandsworth council stated in the foreword to the most recent annual report:
"These are exciting times in Wandsworth. The local economy is more robust than at any time in the last decade while confidence has returned in a spectacular way to the housing market…the council's economic development office helped to create more than 600 new jobs for local people… The value of construction activity last year topped £200 million—almost double the previous year".
That is the role that a local council can play in developing the local economy. With the greatest respect to the bureaucrats on the continent, I do not think that they are in a position to second guess local judgment.
I hope that the Minister, in winding up, will explain how, in what seems to be a new anomaly, the 14 new electoral areas that the Government want to set up for the Greater London authority will fit in with the five new NUTS regions for London, given that local authority and other electoral boundaries are supposed to be linked to the NUTS system.
There is also a problem with the lag in statistics. The allocation of EU resources between 2000–07, meagre as they are, will be based on average gross domestic product in 1993–95 and will be subject to a safety net to reduce the number of losers in the change from the previous system. Despite the unwieldiness of the system, that will allocate, at most, some £500 million. It would be much better if we left the Brussels bureaucracy out of it and kept the £500 million ourselves, so that Parliament could decide how the money should be allocated to individual regions or even wards.
A number of hon. Members mentioned subsidiarity. I understand that, as a result of a £90,000 European regional development fund grant allocated to the Banglatown area of Tower Hamlets, 10 historic buildings, 2 km of footpaths and one environmental area have been improved and one permanent and 300 temporary jobs have been created. Surely those matters should properly be dealt with by the local council—probably by the local councillor—rather than by highly paid bureaucrats in Brussels. One can only speculate about the amount and cost of the bureaucracy needed to allocate that one grant.
At a meeting of the Select Committee on Trade and Industry, the Minister rather wriggled when she was asked whether she thought that individual member states were in the best position to decide the needs of their communities. I hope that, in responding to the debate, she will be more robust and say that, yes, she thinks that local councillors and Parliament have a better idea of the needs of individual parts of the United Kingdom, and that it would be much better if we kept the money and allocated it according to our wishes.
10.45 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mrs. Barbara Roche): I congratulate my hon. Friend the Member for Putney (Mr. Colman) on bringing the needs of London to the attention of the House. As he rightly said, I am a London Member of Parliament, so I share his interests. However, as the Minister in the Department of Trade and Industry with responsibility for the co-ordination of structural funds issues for the United Kingdom as a whole, I have to take a wider view of the process and the factors that have to be taken into account.
Many good points have been made in the debate, especially on the need to tackle bureaucracy—something that the previous Government failed to do. The hon. Member for Christchurch (Mr. Chope) said much in his speech, but little about the reform of structural funds. Perhaps he will give a more considered response when he has had his brief a little longer. It will not surprise the hon. Member for Billericay (Mrs. Gorman) to hear that I did not agree with everything that she said in the speech that the House is used to hearing from her, although she made a good point on the need for simplification, as did my hon. Friends the Members for Putney and for Edmonton (Mr. Love).
Since the publication of the draft regulations on 18 March, we have, under the UK presidency, taken forward the negotiations on structural funds with the Commission and other member states. Throughout the negotiations, the Government continued to emphasise the overarching principles of fairness, affordability and durability. As we head into the discussions in the autumn under the Austrian presidency, those principles will remain as important.
The desire for fairness has dominated the lobbying position of the Government—and of local organisations—in Brussels with the Commission and with other member states since the publication of the Agenda 2000 communication. As I have said on a number of occasions—I have no compunction about repeating it now—fairness means that the costs of reform should be shared fairly between all member states. However, the Government do not believe that the current proposals will achieve that. We believe that, if we are to agree fair and affordable reforms, all member states must be prepared to accept cuts.
We are not prepared to bear disproportionate cuts in United Kingdom coverage. On the strength of our lobbying before publication of the proposals, we secured the last-minute concession of the safety net in the draft regulations, limiting the loss of coverage for objective 2 and 5b areas to no more than a third. That could certainly prove to be an important achievement in several areas in the UK.
In addition, the Government will continue to press for flexibility, both in the objective 1 gross domestic product cut-off and in the new objective 2, in which we are keen to ensure that funds are targeted within member states, using national and local indicators that accurately reflect the areas of greatest need. It has also been said that member states have the ability to know where their areas of deprivation are, and we shall seek the maximum flexibility on objective 2. Those points were well made by my hon. Friends the Members for Putney and for Edmonton, as well as by the hon. Member for Kingston and Surbiton (Mr. Davey).
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In the negotiations to date, the UK presidency has been able to secure agreement on some of the general principles that support the universally agreed aim of simplification of the funds, making them more effective and better value for money. That is an important first step, and we are proud to have played our part in it.
Reference has been made to the agreement on changes to the UK NUTS boundaries announced last week by my hon. Friend the Economic Secretary to the Treasury, who has responsibility for the Office for National Statistics. The structural funds reform negotiations are entirely separate from the issue of NUTS boundaries.
The Government supported the Government statistical service's proposals, sent to Eurostat last summer, which were the result of a general consultation early last year. We asked the Commission to encourage Eurostat to produce a rapid and satisfactory result. Ultimately, as the House will be aware, this has been a statistical exercise, subject to Eurostat's decision, and we welcome the fact that agreement has now been reached.
The European Commission has proposed that NUTS II and III areas be used to draw up the new European Union structural funds map. The Government expect that the new UK NUTS boundaries will be used. However, all those issues depend on the content of the final structural funds regulations and on the data for individual areas. We cannot at this stage predict with certainty what might be the implications for individual areas.
One of our goals in our presidency was to leave a solid framework for continuation of the work into the Austrian presidency, which began last week. All member states have very distinctive views on issues affecting finance and eligibility criteria. Most, including the UK, have difficulties with the proposals as they stand. The issues will begin to be tackled in earnest under the Austrian presidency. The discussions are likely to take place from the autumn and will continue into early 1999.
The Cardiff meeting last month set a deadline of March 1999 for the Agenda 2000 discussions. Reform of the structural funds is one of the most important elements in the process. It is certainly one of the most visible benefits of the European Union to local people, and I warmly welcome the emphasis in this debate on the local nature of the funds.
Many local representatives have put their case to me for objective 2 status, and I am sure that they will continue to do so. The eligibility criteria for the various strands within objective 2, and the distribution of funds, will not be clear until the final structural funds package has been decided. Neither will we know how much flexibility we shall have at member state level in determining the eligibility of areas. I am certainly aware that people feel strongly on those points, which is why the Government will press for maximum flexibility.
I think that we all welcome the proposal to target a number of non-industrial urban areas under objective 2. The extent to which we can do so is a matter for consideration and discussion. We would welcome the ability to home in on pockets of deprivation.
From various parliamentary answers, and the recent Adjournment debate through which I was able to bring the House up to date, hon. Members may know that the focus of our presidency has been to a large extent on simplifying the administration of the funds, which means attempting to reduce the bureaucracy wherever possible and to increase the involvement of local people.

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I am delighted to say that we have achieved a great deal of consensus among member states. At the informal meeting of EU regional policy Ministers in Glasgow last month, chaired by my right hon. Friend the President of the Board of Trade, there was universal agreement on a number of principles: the importance of job creation, employability and regional competitiveness; the value of effective partnership between the Commission, national Governments, and regional and local organisations, with a clear definition of the role for each; and bringing decision making as close as possible to the people affected. All hon. Members will welcome more regional and local control over the funds' delivery.
The UK has a reputation in Europe as a good manager and administrator of European funds. That has been earned through the hard work of those involved in the partnerships and on the monitoring committees throughout the country, including in London. The House has learnt today about some important projects.
I have been able to observe the development of some of the projects: for example, the business innovation centre in the Lee valley, which does excellent work with small businesses, and especially those looking for expertise in new technology. That is why I attach so much importance to ensuring that we engage those involved in the day-to-day administration of the funds and feed their views into the relevant discussions.
I spoke at the national simplification conference in May, where we discussed, among other matters, ways of improving administration and regional partnerships. We have heard about the important issue of community initiatives in London, such as the urban initiative in Park Royal. Some of those initiatives have helped to form useful local and regional partnerships, such as the urban partnership groups, which have involved local residents, community groups and voluntary organisations in the strategy for tackling social exclusion. My hon. Friend the Member for Bethnal Green and Bow (Ms King) spoke about some of those important partnerships.
I am aware that the programmes can be complex to administer, especially given the small amounts of funding involved, and often fragment the strategic approach to the very issues that they are designed to address. It is important that community initiatives should add value to the mainstream programmes. They should certainly not duplicate or cut across other programmes. Since there must be a close relationship between the community initiatives and the main objectives, we can take a view on particular initiatives only once the framework for the main objectives is clear.
We should remember that this is merely the starting point in a long and complex set of negotiations. A great deal more work needs to be done to achieve
"fair criteria and transparent systems"
—a phrase that we used time and again for all the objectives. I am grateful to those hon. Members and their local groups who have lent their support to our efforts in the structural funds discussions so far and also to all hon. Members who have come to see me. We have a long way to go, but, by working in the common interest in the United Kingdom, we can have a fair and just solution.
Mr. Deputy Speaker: Order. We must now move on to the debate on disadvantaged areas in Wales and to the right hon. Member for Caernarfon (Mr. Wigley).

Disadvantaged Areas (Wales)
10.59 am
Mr. Dafydd Wigley: I am very grateful for the opportunity to debate this subject and for Madam Speaker's choice of subject. I also thank the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), who is here to reply. I had half expected a Treasury Minister to be present. Indeed, the Treasury can be said to have most to answer for with regard to the state of the Welsh economy. Perhaps Treasury Ministers know that all too well and that is why they are not here. Clearly, the problems of the Welsh economy go well beyond the competence of the Welsh Office; likewise, the solution, which is worth remembering in the context of the National Assembly for Wales, which is to be set up next year and which will have no greater remit than that of the present Welsh Office. Its powers may not be adequate to deal with the problems.
I am conscious that this debate follows the publication yesterday of "Pathway to Prosperity". No doubt we will have an opportunity to discuss that document in detail when the Welsh Grand Committee meets in Merthyr Tydfil next Monday, and I look forward to that debate. Suffice it to say now that the document is certainly strong on analysis. Indeed, it is brutally honest about the lamentable state of the Welsh economy—more honest than any previous publication. It recognises the appallingly low gross domestic product per head in Wales. According to the figures in that document, GDP in Ireland is 43 per cent. higher; it also admits to a job shortfall of about 260,000, which presents a massive challenge on any analysis.
Whereas the publication is strong on analysis, it is sketchy on how the problems will be put right and it offers no additional resources, which is its central weakness. It is remarkable for such a document to refer to the need for better education and skills, better road links, fibre-optic networks, strengthening business support services, creating industrial villages and providing basic rural services, when all that is to be achieved without one single penny of extra Government expenditure in Wales. It is appropriate that we are debating the matter this week—the week before the Government's spending review—as the Treasury has a lot of responsibilities to face up to in that context.
There are both disadvantaged people in Wales—people who may be disabled, unemployed, sick, poor or old—and disadvantaged areas, with high unemployment, low activity rates and low incomes. Those are areas of physical decay, with sub-standard housing, dilapidated social provision, old hospitals, schools and village halls and even old toilets—a decaying environment. They are areas of inadequate provision: a lack of new leisure facilities; a lack of doctors and dentists, which is a problem that is becoming more and more apparent in many areas of Wales, both rural and industrial; a lack of a modern transport system; and a lack of opportunity and hope.
The disadvantaged areas come in many forms and in several parts of Wales. Parts of our cities suffer acute deprivation and poverty. Equally, there are areas of acute rural poverty, which is being exacerbated by the present rural crisis. What is more, in the old industrial areas—the coal mining valleys, slate quarrying villages,

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iron and steel working towns and sea fishing ports—those old industries have gone, leaving only their relics behind, and new industry has yet to find them.
Between 1986 and 1996, while the M4 and the eastern A55 corridors gained 9,600 new manufacturing jobs, which we welcome, the western part of Wales and the valleys lost 9,200 manufacturing jobs, which is almost an identical loss. That shows how Wales is becoming polarised.
We often hear about Wales's success in attracting inward investment and we certainly welcome what has been achieved, but we are in danger of becoming victims of our own propaganda. There is a gross disparity in the distribution of the jobs created by inward investment within Wales. The six counties with most jobs in overseas-owned manufacturing plants are Flint, Wrexham, Bridgend, Rhondda Cynon Taff, Caerphilly and Cardiff. Between them, they have 52 per cent. of all the jobs that have come to Wales by way of such plants. As that pattern shows, they are mainly in the north-east and the south-east of Wales. The six counties with the least such jobs are Conwy, Gwynedd, Ynys Môn, Ceredigion, Pembroke and Carmarthen, which have between them only 8 per cent. Of course, those areas are all in the west. There is thus a massive east-west divide in inward investment and the creation of new jobs.
Needless to say, the prospects for disadvantaged people who also live in disadvantaged areas are acutely limited. Surely we must put a priority on Government action in those areas. Whereas the Government may not be able to answer the problems of every man, woman and family in every community and every company, they can and must create the conditions in which those problems can be met and overcome—problems of economic, social and environmental infrastructure. Only Government can provide those prerequisites.
Which areas am I describing as being disadvantaged? Some are economically and some socially disadvantaged, and the two overlap. One may be the consequence of the other or may cause a spiral with one leading to the other. Economically disadvantaged areas can be considered in terms of high unemployment. In May 1998—the most recent date for which figures are available—Aberdare and Blaenau Gwent had 10 per cent. unemployment and Ynys Môn and south Pembroke 9 per cent. Those are in the north-west and the south-west and the old coalfield valleys. The lowest unemployment is found near the border with England in the counties of Flintshire, Wrexham, Powys and Monmouthshire.
Clearly, Wales has a problem with low activity rates. Blaenau Gwent has one of the lowest, with 67 per cent., Caerphilly has 68 per cent., and Ynys Môon and Rhondda Cynon Taff, 69 per cent. Again, it is the same pattern. There is a massive gulf between incomes per head in Wales. The lowest incomes per head are due to part-time and seasonal jobs and low wage rates. The areas with the highest wages, on a band of about £340 to £350 per week according to last year's figures, include Cardiff, Wrexham, Neath and Flint. The lowest have wages of about £280 to £290 a week and include Conwy with £284, Gwynedd with £289, and Blaenau Gwent with £309. There is a gap of £60 between weekly incomes in the better and the poorer areas, a fact which reflects pockets of real poverty, both rural and urban, and the Government must do something to close that gap.
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Some areas have low wage rates. There are variations within manufacturing industry, of course, and some assembly jobs pay abysmally poor wages—only £3 to £4 an hour. There are also areas with high manufacturing wages, for example in the steel industry, which mean that the Port Talbot and Neath area have a relatively high income per head.
Without doubt, the biggest problem is in the service sector because tourism, for example, pays relatively low wages and is seasonal. The service sector in Wales has a level of remuneration that is about 10 to 16 per cent. below the average for Great Britain because of the difference of the mix within that sector—tourism and other such elements in Wales, compared with financial services in south-east England. The problem of low incomes is acute and is increasing in agricultural areas, where farm incomes have fallen by 43 per cent. Many small family farms in Wales are subsistence farms. With that sort of reduction, if the farmer's wife did not have another job, the farms would not survive.
In the socially disadvantaged dimension, we have areas of high sickness and disability, particularly in the old industrial areas and the valleys—that is particularly true of Merthyr Tydfil. Indeed, eight of the 10 constituencies in the United Kingdom with the highest figures for long-term illness are in Wales, in the old coalfield areas of Dyfed, Glamorgan and Gwent. Many of those areas have poor housing stock, which worsens health. Housing renovation should therefore be a priority.
The four factors of unemployment, activity rates, low wages and widespread sickness mean that some areas have desperately low GDP per head. Of the five counties in Britain with the lowest GDP per head, three are in Wales—Mid Glamorgan, at 62 per cent. of the European Union average, Dyfed at 68 per cent. and Gwynedd at 72 per cent. Yesterday's publication showed that, for 1988–98, Gwynedd got just 3 per cent. of regional selective assistance spending in Wales, and Dyfed-Powys got only 4 per cent. RSA has certainly not started to solve the problem.
In addition to the disparity in GDP per head among areas of Wales, the gap is widening. Between 1982 and 1995, real GDP per head grew by 72 per cent. in Flintshire, 78 per cent. in Torfaen, 62 per cent. in Bridgend and the Vale of Glamorgan, 69 per cent. in Wrexham and 55 per cent. in Cardiff. In the same period, it grew by only 13 per cent. in Pembrokeshire, 16 per cent. in Conwy, 25 per cent. in Anglesey, 23 per cent. in Carmarthenshire, 23 per cent. in Blaenau Gwent and 31 per cent. in Rhondda. Unless action is taken to help the west and the valleys, the gap will worsen.
The western areas and the coalfield valleys are structurally disadvantaged. They are further from markets than other areas. They are at the fringe—sometimes they seem beyond the fringe—of the modern motorway network and of railway links. The population's age puts immense pressure on local government to provide personal services. The skills pattern is often geared to an industrial structure that has long gone. There is inadequate investment in modern educational and training facilities. Housing stock is often old and in need of renovation. Many of the remoter communities have long travel times to work, to hospital and to recreational facilities.
In many disadvantaged areas, money from grants, subsidies and social security immediately flows back out through the centralised structure of retailing and the

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banking sector. It is also difficult to retain maximum benefit in those areas from any Keynesian-type investment project. There are three approaches to those problems. First, there is the Thatcherite, free market response: "Let them decline; if they cannot regenerate, let them die." Plaid Cymru emphatically rejects that approach. Communities have rights; people are entitled to reasonable hope of decent jobs and services within reasonable reach of their homes. Young people should have a future within their localities, and should not simply be told to get on their bikes. Elderly people should not be left in limbo in aging communities that their grandchildren have left to search for work.
A second approach is Government intervention to help disadvantaged areas. What can the Government do? They could compensate for disadvantage by subsidising low wages through systems such as family credit. They could provide job creation schemes, although those may not survive in the long term. They could subsidise industrial premises, rents or capital.
However, a third approach, which we favour, is to work to remove disadvantage and to create better communications by air, rail, public transport and fibre optics. I was glad to see a reference to that idea in yesterday's publication, although there was no reference to the money needed. We could create better skills through investment in education. Ireland has used regional colleges of technology to boost the skills of its labour force, and to increase income per head. We need to make curriculums relevant to places of work, a point also referred to in yesterday's paper. We need to invest in infrastructure—hospitals, clinics, schools, energy conservation measures, housing and leisure facilities.
The second two approaches—subsidy to compensate for disadvantages, or action to remove the disadvantages—involve public spending, on social security and on rebuilding the capital stock of our communities. If we reject the Thatcherite approach, we must face the need for higher public spending. That is where the Government's juggernaut of promises crashes into the rocks of reality. It is not possible to implement a meaningful programme to rectify the disadvantages of western Wales and the coalfield valleys without higher public spending, a point ignored by "Pathway to Prosperity".
I can hear the Thatcherite mandarins, whose writ still seems to run in the Treasury, claiming that private capital will sort out the problems of the disadvantaged areas. However, private capital goes only to areas in which it will make a profit. It has not gone to western Wales and the valleys, because no profit can be seen. The private sector could be bribed to go there, but that would mean continuing subsidy, diverting public money into private pockets. It would be better to use public money to remove sources of disadvantage, and to harness public and private activity in competition or co-operation, as appropriate.
We cannot hope to tackle the problems of the disadvantaged areas if we adhere to Tory spending ceilings. We need to improve education with more teachers, schools and better equipment; to improve health care, build hospitals and clinics, and employ more doctors, physiotherapists and community nurses; to improve the housing stock through renovation and insulation, better rooms and replacement of defective
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doors and windows; to tidy up derelict buildings and the environment, bringing wasteland into proper use; to create a proper public transport system and new railways; and to develop recycling schemes.
If Tory orthodoxy were not in charge at the Treasury, we could choose between two options. First, we could divert expenditure from Trident and aircraft carriers to schools and hospitals, from millennium domes to fibre optic networks, and from nuclear weapons to energy conservation. The second option is to raise total public spending. The United Kingdom spends about 40 per cent. of gross national product in the public sector, less than in all but one EU country—Ireland, which ought to spend more in the public sector, too. Finland spends 52 per cent. of GNP in the public sector, Denmark 57 per cent. and Sweden 62 per cent. Yet those countries have high standards of income and quality of life, and of public services. We could raise taxes to allow ambitious plans to go ahead. We could, of course choose both options, changing spending priorities and raising taxes to meet our agenda.
If the Labour Government are not willing to put more public resources into helping disadvantaged people and communities, what on earth was the point of electing them? Were they elected just so that we could see different smiling faces at the Dispatch Box as they carried out the same old Tory Thatcherite policies? From May, responsibility for health and education, housing, roads, jobs and the environment will pass from the Secretary of State for Wales to the national assembly, to which the Welsh Office will be answerable. Where will the assembly get the extra resources to spend on disadvantaged parts of Wales to help attract private sector investment in new industry?
Are we restricted by the Barnett block, which Lord Barnett himself has acknowledged to have been inadequate to meet the needs of Wales? What new expenditure will there be? The figure seems to have fallen to £6.7 billion for 1998–99. Will that be the figure included in next week's spending review, or will we be allowed the £6.9 billion mentioned in April, or the £7 billion stated in the White Paper on which the referendum was fought? The White Paper provisions are being met in many other areas, so I hope that the spending priorities to be published next week will not take the figure below £7 billion.
What will happen if the Department of Trade and Industry changes industrial development policy by giving Wales higher status? In 1993, the Tories reduced development areas in Wales from covering 35 per cent. of the population to covering 15 per cent. Will resources additional to the Barnett block be available, or will money have to be diverted from education or health? Will the assembly be able to borrow to invest in infrastructure projects in disadvantaged areas? What are the prospects for the European structural funds, especially objective 1 funding? I am glad that the nomenclature of units of territorial statistics, NUTS 2, map has been accepted by Eurostat.
Wales has the lowest gross domestic product per head of any country or region in Great Britain and stands 68th in the league table of European regions. It is ridiculous that, unlike England, Scotland or Northern Ireland, we in Wales have never had any objective 1 funding. It is time that changed, and I hope that it will later this year with the announcement for the period 2000 to 2006.

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What will happen if we get objective 1 funding? May we assume that the additionality rule will apply and that such funding will be over and above current expenditure patterns? If so, it would logically be over and above the Barnett formula. Will the Minister confirm that? If we need to find 25 per cent. matching funds to trigger the objective 1 money, will they have to come from within the Barnett formula; and will there be enough to meet that cost without depriving other necessary social projects?
Can the Minister give an idea of the timetable for objective 1 decisions? Can he confirm that Eurostat accepts the east-west NUTS 2 map, as I think he can? Will he confirm that 75 per cent. of GDP per capita will still be the threshold for objective 1 eligibility? Will he clarify the financial implications for the assembly and ensure that a beefed-up Welsh Office team will work on projects to take advantage of objective 1 money for disadvantaged parts of Wales?
Will the Minister clarify the position on the new regional policy map? When can we expect the details? I realise that that is not a Welsh Office decision, but it is no doubt involved in discussions. Does he accept that the UK regional map should reflect the UK NUTS 2 bid, as in all logic it should? We hope that significantly more than 15 per cent. of the population will be in the new development areas.
On direct public spending programmes, will the Minister take note of the great dissatisfaction among local job seekers and local subcontractors about the way in which capital projects are managed? In many disadvantaged parts of Wales, for significant capital projects such as the A5 scheme across Anglesey the companies with the contracts bring in their workers with them. It is not only the key workers; we realise that they must come. They also bring people in to do work when local unemployed people could equally well do it. They give subcontracts to outside companies when local companies could do the work.
I realise that the European Union public contract rules tie the hands of central and local government but there must be some way of maximising local employment from such projects. Unless that is done, we lose half the benefit of the investment programmes. If Wales is to get objective 1 status, the objective is surely to raise the standard of living in these areas, not to let the benefit leach away and so lose the maximum impact in the NUTS 2 and objective 1 areas. I hope that the Minister will consider that.
We hope that the Welsh Office will create a new European project department that has some clue about how to use European funds to the maximum benefit of disadvantaged areas. The main issue is how those resources can create long-term self-regenerative economic activity in such areas to ensure that they develop in a way that makes subsidy and grants unnecessary, as Ireland has succeeded in doing. I acknowledge that Ireland has not yet distributed its new-gained wealth to eliminate its pockets of acute poverty.
These are the basic issues. In our disadvantaged areas, how do we ensure that we maintain and expand employment in existing enterprises in manufacturing, agriculture and services? How do we make them more efficient to give better rewards? How do we create more indigenous enterprises and innovation? How do we attract inward investment to disadvantaged areas and create in them the social infrastructure that enhances the quality
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of life? What is the role of public expenditure in creating industrial, transport and communications infrastructure? How do we adapt UK and EU regional policy to that end? Can that ever be a priority here in London; and shall we have the vision, drive and resources for it to be an effective priority in the Welsh assembly?
We give the Welsh Office credit for recognising the size of the problem, but we are far from convinced that it is providing the answers. We do not believe that it is possible to create 260,000 new jobs and increase GDP per head by 40 per cent. in an environmentally sustainable manner without higher public spending. We suspect that the Welsh Office ministerial team share that misgiving but are constrained by Treasury rules. "Pathway To Prosperity" ends on a significant note. Paragraph 9.6 states:
"Our success in achieving the vision will be judged against how well we do in closing the GDP gap, raising employment rates, increasing average earnings, and spreading prosperity."
We shall indeed judge the Government by those criteria. We look forward to working in our national assembly to achieve what Westminster has so far manifestly failed to deliver.
11.25 am
Mr. Alan Williams: I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on raising this subject. It concerns all hon. Members that there is gross imbalance in the Welsh economy.
When I came to the House in 1964, regional policy was based on a uniform system. There were development areas, and the rest of the country. Areas had development area status or nothing. As a Back Bencher, I argued that parts of the development areas were as much worse than their neighbours within those areas as the development areas were worse than, say, south-east England. We therefore needed a differentiated regional policy. I was lucky as a Minister in the Department of Economic Affairs in 1967 to be able to take my proposition through Cabinet Committee. That led to the creation of the special development areas that were so valuable to the valley communities while they were allowed to exist. They were destroyed by the previous Administration, however.
What worries me is that I am more depressed today than I was in 1964 when I was arguing for differentiated policy. I jotted some points down as I listened to the right hon. Member for Caernarfon. I am sorry that my remarks are not as structured as his speech was. He mentioned the 200,000 job shortfall. That conceals a problem in itself. The important thing is that the shortfall is not uniform across Wales. Most of it is in the areas that hon. Members here today represent. That is an internal problem of imbalance within Wales. The Cardiff area is doing relatively well, and I am delighted that it is. I find it incredible that Swansea, which was once a sub-regional hub of industrial development, now has some of the most deprived wards in Wales. Hon. Members present can cite wards in their constituencies in the same situation.
The job shortfall is not evenly spread throughout Wales, but is concentrated in the areas that have the least prospect of being able to make up the shortfall. It is not only that there has been job loss but that there has been a downgrading of jobs. New jobs have in general not matched the quality of the jobs that have gone. Well-paid, skilled and manufacturing jobs have been replaced by

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part-time and low-paid jobs. Welcome as such jobs are, it is implicit that the ability of the areas that have experienced this to pull themselves up by their own shoestrings is diminishing. As income levels in those areas go down, their ability to generate redevelopment becomes increasingly dependent on resources from outside.
Mr. Ted Rowlands: My right hon. Friend provides a telling description of the dilemmas facing communities such as mine. I was astonished that the press and other media did not record more prominently the stark and startling 200,000 jobs gap. So that we can get an impression of how much of a mountain that is, can my right hon. Friend tell us what is the averaged and annual net job creation over the past 10 years?
Mr. Williams: I have to confess that I do not have that information immediately to hand, but if my hon. Friend would give me two or three minutes, I am sure that I could produce it. My right hon. and hon. Friends on the Treasury Bench have access to the collective wisdom in the Box in the corner, so perhaps they can come up with those figures by the end of the debate. My hon. Friend is absolutely right to say that it is important that we should have that information, so perhaps the Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), can produce it when he winds up the debate. If he cannot, I have no doubt that he will provide the answer in a parliamentary answer as soon as possible.
The structural imbalance is sad, because it is a divisive force in Wales. We do not want Cardiff and the rest of Wales to be turned against each other. I rejoice in the prosperity that Cardiff and the south-east have in prospect; but to return to the comments of the right hon. Member for Caernarfon about resources, that prosperity has been achieved by an abnormal distortion in the flow of resources within Wales. We know that massive sums from the public purse have been put into the Cardiff bay development. That has been a success—as the Welsh Office rightly boasts, it has also drawn in £800 million or more in private funds—but when one adds the massive injection of lottery money, one can see how Cardiff has become what I would describe as a black hole: it has developed the capacity to draw in all the significant new developments that come to Wales.
Mr. Denzil Davies: My right hon. Friend makes the point that Cardiff is heavily dependent on public expenditure. Does he agree that some of that is old-fashioned public expenditure, in hospitals, universities, the BBC and other fields; and that that is where the danger lies, because restrictions on public expenditure could affect Cardiff's GDP?
Mr. Williams: My right hon. Friend is absolutely correct. One does not solve the problems of deprivation in an area as large as Wales without matching needs with resources.
I hope that my hon. Friend the Member for Merthyr Tydfil and Rhymney will forgive me for saying that part of the problem is that the valley communities, for example, were created as artificial economic units,
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bringing to previously sparsely populated areas people to drag the coal out of the ground. When we stopped mining the coal, economic logic ceased to be in the communities' favour. One needs only to look at an Automobile Association motorway map to see where the economic strength in Wales lies—at the focal point of all the motorways and of the Severn bridge.
Mr. Rowlands: All roads lead to Merthyr.
Mr. Williams: I desperately hope that Merthyr, too, will enjoy all the benefits that are currently flowing to Cardiff, but the fact is that, in addition to that capital and resource inflow, the south-east benefits from its strength of location, with its distribution network leading via the M5 and the M4 to the north of England, middle England, the east of England and the continent.
That enormous advantage is, as I said, creating a development black hole, which presents the rest of Wales with a double problem: we are in danger of being wedged in, because although we talk about what Ireland has achieved, we tend to forget that Ireland is our competitor. Those of us who represent western areas of Wales, not just the south-west, are competing against the attractions that Cardiff has to offer and against the massive incentives that Ireland has to offer. I remember my hon. Friend the Member for Merthyr Tydfil and Rhymney telling me that the ratio of European Community funds per head flowing into Ireland compared with Wales is about 5:1.
Recently, it looked as though Swansea was going to get a worthwhile electronic development, but we lost it. The Welsh Development Agency has suggested to me that the reason why that happened was not only the incentives that Ireland offered, but the fact that Ireland's tax regime is far more favourable to investment than is ours. It seems to me that that is a matter which we can solve without worrying about the EC. I recognise the constraints on Ministers and I know that, in respect of regional policy and incentives, we are in an EEC straitjacket—but we are free to set tax policy. When I was in charge of regional policy and inward investment in the last three years of a 1970s Labour Administration, we had the best tax regime of anywhere in Europe, with optional one-year 100 per cent. write-off with roll-on facilities, so a firm could choose the form of depreciation and write off that which best suited it. That enabled us to get a disproportionate share of new industry.
Ireland now occupies that position. It has probably the most benign tax regime in Europe, in addition to its regional incentives. The result is that new industry that looks beyond Cardiff has to ask itself whether it wants to go to the relatively low incentives available in west Wales, or whether it might as well go that little bit further and enjoy the tax regime plus high incentives available in Ireland. We are negotiating from a position of weakness, which is why it is essential that we do not lose out in the current negotiations in Brussels on the objective 1 status that Wales so desperately needs to keep. I welcome the announcement made by my right hon. Friend the Secretary of State about what appears to be a marked improvement in our prospects in those negotiations.
Let me conclude on the following point. Recently, my right hon. Friend the Secretary of State devised the term "powerhouse"; but a powerhouse that is created purely by merging three existing quangos, without providing extra

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resources, is a form of support that is only a marginal improvement on what was there before. All that can be achieved is a few efficiency gains. If a powerhouse is to work, it has to have power; and in this context, power is resources. I know that my right hon. Friend has been fighting his corner in the Cabinet, but so has every other Minister. We will see the result in the near future. It is important to recognise that the powerhouse is symbolic unless it has the resources to match the needs with which we expect it to deal.
11.39 am
Mr. Richard Livsey: I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on introducing this subject to the House. As we well know, there are many disadvantaged areas of Wales, including the valleys, Pembroke dock, Llandudno junction and areas to the west and the north as well as rural areas such as Powys and west Wales.
Rural and urban disadvantaged areas share similar problems in some respects, but there are causes and effects specific to certain areas. The key signs are poor housing, failure in education and training and, in many parts of Wales, low aspiration. That is a sad commentary.
The economy is the key to improving those social problems. The document published yesterday, "Pathway to Prosperity", is to be welcomed as far as it goes, but it does not tackle the issues of rural Wales comprehensively enough. It does not provide information or data specific to the area that I represent, which is Powys. Powys is lumped with Dyfed. I should like to know why no figures are available for Powys. It is a unitary authority. Will the Minister confirm that the Welsh Office does not intend to provide individual figures for the county of Powys? Why is it being ignored? The Office for National Statistics has the figures and I understand that it consulted civil servants in the Welsh Office, only to be told that the figures were not required.
I led a campaign in the early 1990s, when the previous Government were in office, to obtain economic indicators for Powys. I was told then that they were not available. I warn the Minister that I will bombard his Department with questions to get the answers as soon as possible because it is a serious matter. We need those indicators to quantify the problems.
The economies of disadvantaged areas of Wales must be addressed if Wales is to be successful within a United Kingdom and European context. According to 1995 figures, the weekly wage for males in Wales was £331: the figure for Powys was £278. As a result of work done by Bristol university, we know that in some areas of Powys, such as parts of Newtown and Cwmtwrch in my constituency, wages are as low as £159 and that in Ystradgynlais they are £188 per week. The average in Powys is £100 per week less than the UK average and that does not include figures for those who are not earning. These areas are really disadvantaged. According to Welsh Office reckoning, the whole of Wales must surely be disadvantaged, except the south-east and perhaps some corners of the north-east.
The economic disadvantage that exists already is worsened by the migration of educated young people. In mid-Wales, many young people leave at the start of their economically active life, as a result of which we cannot foster enough locally based entrepreneurs. I am glad that the document produced yesterday will address that problem.
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In rural areas, there are many people over the age of retirement—20 per cent. is a common figure in many parts of rural Wales. Large sectors of the population are not economically active enough and place a huge strain on local public services.
There is very little mention in the document of the agriculture crisis. We cannot blame that entirely on Welsh Office Ministers because Treasury policy on the strength of the pound has had a great impact on agriculture and on manufacturing industry, of which Wales has a higher percentage than any other part of Britain. It is difficult for anyone to export now. Last week, I visited a factory in Wrexham that produces JCB machines. I was astonished to find that most of the parts that it uses are imported from Turkey. Eighteen months ago, the factory obtained 20 per cent. of its parts from Britain, but it now imports 80 per cent. of its parts for transmissions. That is a big problem and is a result of Treasury rather than Welsh Office policy. It demonstrates how hamstrung we are.
The agriculture crisis is felt throughout the rural economy in support and service industries. We have a low-wage economy with low expectations. Urban areas of Wales face problems of higher unemployment. Many parts of rural Wales do not have such high unemployment, but that is partly because of the migration of many of our young people. There is a lack of job security in urban Wales with low-wage, low-skill jobs. Many social problems stem from that, as the document recognises. Bad housing, low educational achievement and so on must be put right, but it is a mammoth task.
The document, "Pathway to Prosperity", and the economic proposals were announced to the press yesterday, but not to Members of the House. I had to seek out the information from the press. The electronic revolution may be proceeding well in Wales, but nothing came through on my fax machine or e-mail to tell me about the announcement. I looked for it on Monday when it became obvious that there was a planted question, but we did not hear anything until the middle of yesterday afternoon. It was announced by an all-Wales electronic network known as Link-up, of which I heartily approve, but some hon. Members struggled to find the information yesterday.
I want to address specifically the issue of average earnings, which is a problem that is hanging round our necks. Many jobs in rural areas, particularly in Powys, are manual and are agriculture related. What targets does the Welsh Office have for manual workers, or are they not in the equation? The economic powerhouse must regenerate the whole of the Welsh economy, both urban and rural.
Money for home improvements—
The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): I apologise for intervening, but it is important to record the fact that "Pathway to Prosperity" was available to Members of Parliament at the same time as it was to the press conference. A parliamentary question was also answered at that time.
Mr. Livsey: I acknowledge what the Minister says, but we expected the document on Monday—it slipped out yesterday. We were not aware of its existence until well into the day. I have just been told that envelopes were made available during the morning, and, if that is true I apologise. I was not aware of that, and neither was the

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Vote Office because, when I asked for the document, it did not know that it existed. There is something wrong somewhere, as they say in some parts of the press.
I want to move on because many hon. Members want to speak. A Welsh Office Omnibus survey carried out in 1995 showed that almost a third of households in Powys suffered from some social deprivation and that almost one in six households suffered from material deprivation. Those figures were much higher than for Wales as a whole and they were much higher than for Dyfed. As I said, in many economic indicators for Wales, Powys is lumped with Dyfed. For example, the GDP figure is averaged out at 76 per cent. for Dyfed and Powys combined. That is not a satisfactory way to proceed and it must be put right.
The right hon. Member for Caernarfon stressed the needs of the valleys and west Wales. I am well aware of those because I lived in west Wales for many years. However, the needs of Powys are being lumped in with a NUTS 2 area excluded from Powys. We are not in the same income league as north-east or south-east Wales. We have many needs, but have practically no infrastructure—we do not know what an A55 or a motorway is.
Mr. Chris Ruane: What representations has the hon. Gentleman made to the Welsh Office for his county? Is he aware that the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), my hon. Friends the Members for Clwyd, West (Mr. Thomas) and for Clwyd, South (Mr. Jones) and I made strong representations to the Welsh Office at the 11th hour and managed to get Denbighshire and Conwy included in the objective 1 bid? What measures did the hon. Gentleman take to ensure that his county was included?
Mr. Livsey: The only official figure was 76 per cent. of average GDP, which, as the hon. Gentleman will realise, does not qualify for objective 1 status. The figures for Powys are lumped in with those for Dyfed. The county council had to commission and pay for a special study by Bristol university to produce many of the statistics that I am quoting in the debate, and that is not good enough. I want the Minister to promise that Powys will be considered for objective 2 funding from European Union structural funds because that is vital.
In future, we want better statistics about Powys. We know that it is very difficult to collect data for Powys because it is the most rural area in Wales. None the less, we need them.
Mr. Lembit Öpik: Does my hon. Friend agree that the people of Powys and we, as their representatives, have repeatedly impressed on Ministers, until they have probably become sick of hearing about them, the difficulties of rural poverty in our area and the need for objective 2 status?
Mr. Livsey: I certainly agree with my hon. Friend.
I realise that time is short, but I want to address one or two important issues; otherwise, as an agriculturist, I should be doing less than justice to the present crisis in rural areas. We are approaching common agricultural policy reform, which is very important for our family
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farms. CAP reform, as it affects rural Wales, must take into account the family farm structure, which differs from that in England. We must examine modulation and direct payments to farmers in the context of CAP reform. Direct payments will certainly be allowable within the context, for example, of the World Trade Organisation negotiations. It is vital that our family farm structure is maintained.
In the past two years, farm incomes have reduced by 90 per cent. Many of our farms are no longer viable—in fact, at DM3 to the pound, they are bankrupt. All these issues are causing enormous stress to farming families in rural Wales. I beg Welsh Office Ministers to influence the Chancellor to change his policy of high interest rates and high valuation of the pound to assist agriculture.
We are also having great problems with the domination of the supermarkets in purchasing livestock throughout Wales. I should be grateful if Ministers would take account of the Welsh Affairs Select Committee's report, which called for an investigation by the Office of Fair Trading, particularly into the marketing of meat through supermarket outlets and the possible problem of excess profits being made in that way and rock-bottom prices being received for livestock in markets in Wales.
We need—I am grateful that this is recognised in the "Pathway to Prosperity" document—much more effort in co-operative marketing of Welsh produce from our farms and added value for that produce so that more income can be generated in rural areas. That matter needs urgent action.
The creation of the Welsh Assembly and its start-up next year will undoubtedly assist the economy of rural Wales. The assembly's committees, particularly those that will focus on economic development in conjunction with the strategy for the Welsh Development Agency and the powerhouse, will certainly bring great benefit. However, those plans are long term—perhaps too long term for some parts of Wales that need immediate assistance.
The quangos must be made more democratic and responsive to the needs of many parts of rural Wales. I make a special plea for our local authorities, which need much more assistance and more generous support from the Welsh Office. I hope that Ministers succeed in their negotiations with the Treasury for the block grant so that local authorities can have greater assistance in the coming financial year. The Government will, I hope, propose targets for greater activity by local authorities, which have huge responsibilities throughout Wales and which, on the whole, have an excellent record of doing a good job.
Once again, I make a plea to the Minister on behalf of rural areas. In the past three months, 86 jobs have been lost in Powys from rural businesses. That may not sound like many, but if one examines the statistics, one realises that 100 jobs lost in Powys are the equivalent of 1,000 jobs lost in Merthyr. Those jobs are a huge loss. Some agricultural merchants have closed, as have two machinery firms in Powys. A multinational company has closed its feed mill. Many such closures have occurred. They may not be writ large on the pages of the Western Mail or the Liverpool Daily Post, but they are severe blows to some of our more remote rural areas.
The assembly has a huge task to improve the lot of people living in disadvantaged areas of Wales. Much poverty in urban and rural Wales must be dealt with. I know that Ministers' hearts are in the right place, but we need action.
11.56 am
Mr. Chris Ruane: I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on securing this important debate. I agreed with about 95 per cent. of what he said.
My county is hit particularly hard in a number of sectors. In the heavy industrial sector, we lost the Point of Ayr pit, which is on the outskirts of my constituency and used to employ 700 people. In the light industrial and service sectors, 1,500 jobs have been lost in my constituency in the past four months. Traditional British seaside tourism is in decline, which some say is terminal. Two of the biggest towns in my constituency—Rhyl and Prestatyn—have experienced that. Denbighshire has a large rural area which has suffered enormously in recent years. It has an abysmal record of attracting inward investment—that has created only 89 jobs in the past four years. I therefore share the opinions of the right hon. Member for Caernarfon.
I shall try to stress the positive aspects. We are very close to achieving objective 1 status for Wales. Last week's announcement by Eurostat that it has accepted the NUTS 2 map for Wales could provide the springboard for the long-term recovery of the Welsh economy. I am informed by Welsh Office civil servants that that would allow Wales to tap into £1.8 billion between 2000 and 2006. We have now jumped the biggest hurdle for achieving objective 1 status, but we are not there yet. Important negotiations must take place and decisions must be made before we have access to that money.
It is time to reflect on our success to date. Before we try to jump the final hurdles, we should assess our success so that we can go into the final straight invigorated and more determined than ever to secure the best possible deal for the people of Wales. There are many unsung heroes in the fight to gain objective 1 status. Many of the main movers have been castigated for their role. I want to take the opportunity to redress the imbalance and to mention a few of those key players.
I pay tribute to the work of the Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain). I extend to him my heartfelt thanks, on behalf of the people of Denbighshire, for his decision to allow, at the 11th hour, Denbighshire and Conwy to be included in the objective 1 bid for Wales. My hon. Friend the Member for Conwy (Mrs. Williams)—who, unfortunately, is in hospital for two months—has asked me to pass on her heartfelt thanks on behalf of her constituents.
The acceptance of Denbighshire and Conwy has extended to two of the most economically crippled counties in Wales the opportunity to share in a huge aid package. I remind hon. Friends of the plight of those two counties. Conwy has had the worst record of foreign inward investment in Europe—no jobs have been created by foreign inward investment in the past five years. The county has the lowest pay rates in the country and the lowest gross domestic product in Wales. Denbighshire, my county, has experienced 1,500 job losses in the past four months—800 jobs at KwikSave Group, whose national headquarters in Prestatyn have relocated to Bristol, 180 jobs at Hotpoint, Bodelwyddan, and 50 jobs at Egatube in St. Asaph in the past eight weeks alone.
Some people urged my hon. Friend the Under-Secretary to forget about Denbighshire and Conwy because, they said, their inclusion so late in the day would threaten the
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objective 1 bid for the rest of Wales. They said, in ignorance, that the inclusion of Denbighshire and Conwy would raise the GDP level of the Welsh objective 1 bid above the crucial 75 per cent., which would have excluded us—despite the fact that Conwy has the lowest GDP in Wales. Some people said that Denbighshire and Conwy belonged to the prosperous north-east region or sphere of influence in Wales, and that to include the two counties would produce a NUTS 2 region that was not cohesive or coherent—despite the fact that, historically, geographically and linguistically, the two counties share more with west Wales, and therefore should be included in the west Wales and valleys bid.
My hon. Friends the Members for Conwy, for Clwyd, West (Mr. Thomas) and for Clwyd, South (Mr. Jones) and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and I put the case for Denbighshire. My hon. Friends the Members for Conwy and for Clwyd, West and I countered the opposing arguments strongly with facts, figures and logical argument. Many of those opposed to the inclusion of Clwyd and Denbighshire would not listen. I am pleased to say that the Under-Secretary did listen. He listened carefully to our case and, after due deliberation, he included the two counties. Many were upset by that decision, but he stuck to his guns and did not waver in his support. He was truly a good shepherd, who looked after his entire flock, maximising the area and population covered by the Welsh objective 1 bid.
I pay tribute to the work of my right hon. Friend the Secretary of State for Wales. He spoke up in Cabinet for the Welsh case for objective 1 status. I commend him for the way in which he acquitted himself in that task. He carried the Welsh case forward, convincing his Cabinet colleagues and the Prime Minister that Wales had a fair and just case for objective 1 status. He had to do so in a Cabinet whose other members represented other areas that wanted objective 1 status.
The Secretary of State's calm and measured approach paid dividends. The Welsh case received the backing of the Cabinet and the Prime Minister. Some people openly criticised the Secretary of State for not being blatant, dogmatic and vociferous. If my right hon. Friend had adopted that approach, he would have jeopardised the Welsh case in Cabinet instead of aiding it. Many of those accusations were not responded to. He took the statesmanlike approach, put his country before political sniping and let the accusations go unchallenged, for to answer them would have distracted his attention from his main goal—that of achieving objective 1 status for Wales.
I congratulate other Ministers on their role in connection with the objective 1 bid, including the Minister for Small Firms, Trade and Industry, the Economic Secretary to the Treasury and the Minister for the Regions, Regeneration and Planning. Their guiding principle was "fairness not favours". They have shown themselves ready to hear the cases put by all Members of Parliament, from all areas and all political parties. Their every word and intonation on objective 1 matters was subjected to detailed examination. They have walked a political tightrope. Some hon. Members challenged those Ministers to declare openly their support for the Welsh objective 1 case. For a Minister to do so would probably have meant the end of that Minister's career, and it would definitely have meant the end of the Welsh objective 1 bid, because favouritism would have been seen to have preceded fairness.

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I thank the individuals, institutions and organisations who provided the hard-headed facts that enabled the debate to progress. I include among them the staff of the Library—I do not know whether I am allowed to name any individual, but I especially want to mention Jane Dyson, now Jane Hough. I also want to mention Cardiff business school and the Wales European Centre. They provided the factual information that was lacking. I share the concern of the hon. Member for Brecon and Radnorshire (Mr. Livsey) at the paucity of factual information available. I believe that that was due to the fact that Wales experienced local government reorganisation, and those facts were not available on a unitary authority basis. However, the Library and others dug out the facts, enabling us to prove our case.
The purpose of my contribution has been to recognise our achievements to date and to pay tribute to those who have worked behind the scenes, out of the glare of publicity, carefully making the case for Wales. I hope that, by recognising and celebrating our achievements to date, we can go forward with high morale, refreshed and united, in the final stages of achieving objective 1 status for Wales.
12.6 pm
Mr. Ieuan Wyn Jones: I congratulate my right hon. Friend the Member for Caernarfon (Mr. Wigley) on his good fortune in securing this debate, which allows many of us from many parts of Wales to make a contribution, and on the way in which he introduced the subject. The speeches that have been made from both sides of the Chamber have revealed much common ground.
I make common ground with the hon. Member for Vale of Clwyd (Mr. Ruane), who represents an area that I know extremely well. He put his case for objective 1 for his area forcefully and, obviously, successfully. Now that the European Commission and Eurostat have accepted the plan we are on our way, and we hope that an announcement will shortly be made on objective 1 status for west Wales and the valleys.
The comments of the right hon. Member for Swansea, West (Mr. Williams) struck a chord with me, especially when he spoke of jobs in rural Wales being lost and replaced by jobs of lower quality. That is a significant factor in the reduction of gross domestic product in many of the areas that we represent. The response of previous Governments to the loss of jobs in, for example, Trawsfynydd and Trecwn was to appoint task forces. I make a plea to the Minister to forget the idea of using task forces as a response to the loss of jobs in rural Wales. We need a coherent policy that replaces those jobs with jobs of equal quality, although we accept that there are difficulties in ensuring that that always happens.
I should like to respond specifically to a point that the President of the Board of Trade made in the statement on energy policy. My right hon. Friend the Member for Caernarfon alluded to the very high unemployment in Anglesey and to the fact that all parties—including the Labour party—fought the last election in Anglesey on a manifesto of support for a gas-fired power station at Porth yr Ogof on the Wylfa site. As the Under-Secretary knows, there was another application for Rhosgoch. Therefore, the statement gave rise to great disappointment.
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In a letter to me, the President of the Board of Trade acknowledged that the people of Anglesey were disappointed by the Government's energy policy proposals, which will prevent that gas-fired power station from being built. That disappointment is tinged with anger because we had a plan, agreed by all parties, that would have created hundreds of construction jobs in the next few years, created 100 permanent jobs and secured the future of Anglesey Aluminium, the other major employer on the island. The announcement by the President of the Board of Trade has jeopardised not only the construction plan and permanent jobs in the energy sector but the long-term contract for Anglesey Aluminium.
I understand that the Minister will see an Anglesey deputation next week to examine those issues. I stress the importance of looking again at plans to build the gas-fired station in Anglesey. It may be difficult for British Nuclear Fuels to do that itself, and it has highlighted the reasons for that. It is hard for a wholly owned Government company to breach the Government's energy plan. However, there is no reason why the plan could not be transferred to the private sector for section 36 consent. I ask the Minister to respond to Anglesey's concerns. If the path to prosperity is to be meaningful, quality jobs must be created in places such as Anglesey.
12.10 pm
Mr. Nigel Evans: I am grateful for the opportunity to contribute to this important debate. I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on securing the debate. It was wonderful to hear the old orthodoxy in his speech. Labour may have dropped socialism, but it is good to know that Plaid Cymru has picked up the torch and is running strongly with it.
I shall split my speech into several parts, but I do not want to rehash the speech that I may make next week in Merthyr Tydfil when we discuss the economic agenda for Wales. That is especially important because of the publication of "Pathways to Prosperity". It was not one of my most gripping reads and I have condemned it as being next to useless. It is full of apple pie and spin and has more waffle than Bird's Eye. Wales needs action, not rhetoric, which is what that document contains.
Wales came a long way during the 18 years of Conservative government. Before that, in 1970, some 270,000 people were employed in mining, but the figure is now down to 2,000. More than 30,000 jobs have been lost since the 1970s. Many jobs have transferred from heavy industry and mining to the public service, other service industries and tourism. Manufacturing is vital in Wales; I shall speak later about that.
We must consider the economic context in which Wales operates. The Government have inherited the longest period of low inflation for 50 years and faster growth and lower unemployment than in any other major European Union country. Britain was winning the lion's share of inward investment from outside the EU. With 5 per cent. of Britain's population, Wales gained 20 per cent. of that investment, but not enough of it was spread to west, north-west and south-west Wales. Much of it went to the M4 and A55 corridors.
I welcome the fact that the shift in investment emphasis started when my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) was Secretary of State for

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Wales. He ensured that it was more evenly spread and that there was greater emphasis on the Welsh Development Agency. One of its great challenges when it is turned into an economic powerhouse will be to compete with regional development agencies in England.
The golden legacy that I have mentioned is being wasted, frittered away. For the first time in many months unemployment is rising, and is doing so even before the introduction of the minimum wage. The Economist of 20 June stated:
"Ministers may make the situation worse in a number of ways: imposing a minimum wage will add to labour costs without any guarantee of improved productivity…By setting out his spending plans so far in advance Mr. Brown seems to have ruled out using fiscal policy to help bring the economy smoothly down to earth, leaving the bank to do the job alone by means of interest rates".
Interest rates have risen six times in the past 14 months, and it is pointless to blame the Monetary Policy Committee under Eddie George because the Government set that up with the emphasis on controlling inflation, which is now rising. The target has been missed 12 times out of 13, and there is a threat that interest rates will rise again. If that happens, Welsh businesses, especially the smaller businesses of west and north-west Wales, will be hit again. Inflation is bad for their ability to predict, and higher interest rates are bad for those with loans and overdrafts. The minimum wage will have a knock-on effect on differentials, and the high pound, which has been mentioned several times in the debate, is bad for exports.
I spoke about the importance of manufacturing. The publication "Pathways to Prosperity" states that manufacturing accounts for 28 per cent. of the Welsh GDP. The strong pound is hitting exports, and higher interest rates mean a stronger pound. A non-competitive pound makes our exporters less able to compete with those in the rest of the EU. A CBI survey shows that export orders for May and June were the lowest since January 1983. In a document that it sent to me, the Federation of Small Businesses recommends the introduction of an export promotion board.
"Pathways to Prosperity" states that the Government will try to bring together a number of agencies so that there will be a one-stop shop and advice centre for exporters and those who want to export, It is said that that will be introduced at the end of this year, but manufacturers face problems now and cannot wait until then. I urge the Minister to bring that plan forward to ensure that as much support as possible is given to Welsh firms that could benefit from an increase in exports. If they can increase exports, more jobs will be created throughout Wales.
The right hon. Member for Swansea, West (Mr. Williams) spoke about investment in Cardiff. We welcome that tremendous success, but we must ensure that investment spreads to the rest of Wales. One of the local Welsh newspapers reported that about £110 million is to be invested in redeveloping Swansea city centre. I hope that that is a success and that it will attract more jobs to Swansea and, as a result of the ripple effect, to west Wales.
The Federation of Small Businesses also seeks a development bank for Wales to help indigenous firms. It is excellent that 20 per cent. of inward investment comes to Wales, but indigenous firms must be enabled to grow. In a letter to me, the federation states:
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"Many small businesses currently find borrowing money over the medium term impossible because either the banks do not offer such facilities or the repayment conditions place an excessively heavy demand on cash flow. A development bank for Wales would ensure a greater degree of certainty that borrowing terms would be affected by cyclical factors such as inflation, recession or a housing market slump."
Farming is another disadvantaged sector in Wales. A press release from Bob Parry of the Farmers Union of Wales refers to the rally in Cardiff at the time of the European summit. It states:
"Farmers must stand together and fight for their rights against the hostility shown to the countryside by some senior members of the Government."
He condemned the Minister of Agriculture, Fisheries and Food and said that farm incomes in some places had fallen by 89 per cent. The press release continued:
"He is responsible for agriculture in the UK, but seems more interested in cutting costs and guarding the purse strings of the Treasury. He is the enemy within. Chancellor Gordon Brown is keeping a miserly grip on spending despite the overwhelming crisis that threatens to engulf our industry. Prime Minister Tony Blair is presiding over this farce as the entire fabric of rural life in Wales is torn to shreds."
On Monday, I was in Welshpool, where I spoke to some farmers from Smithfield. They have no doubt about who is responsible for this crisis—the Government. The Government must take urgent action to assist farmers in Wales before it is too late. It is already predicted that, if this carries on much longer, 8,000 more farming jobs will be lost in Wales. That must not be allowed to happen.
All that the report says about farming is that we should think about putting greater emphasis on organic farming. Farmers want to do the job that they set out to do. Many have done it for generations, yet all the Government can offer them is greater emphasis on organic farming. The Government are simply not listening.
The economic report talks again and again about education. It says that the Government need to invest more in education to ensure that more people in Wales get a better education, yet what do we see? Apart from the fact that we were promised lower class sizes, which are increasing in Wales, yesterday, the House of Lords threw back to this House the amendment that proposed that students in Wales, England and Northern Ireland should pay £1,000 extra if they go to Scottish universities—£1,000 more than students from Scotland, Milan and Catalonia.
That has to be wrong. I hope that the Minister will put great emphasis on that, and will have words with Ministers in the Department for Education and Employment and with the Prime Minister to ensure that we do not throw that amendment back to the House of Lords, but accept it. It is common sense and it will help all the people of Wales and Britain with their further education.
12.20 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on securing this debate because it allows the Government to underline our absolute commitment to achieving economic prosperity for the whole of Wales.
May I immediately respond to the predictable tirade of the hon. Member for Ribble Valley (Mr. Evans)? Instead of being cheap and cheerful, he has become cheap and

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cheeky in his role in Welsh affairs. He attacked—I know that he is doing his job valiantly as an Opposition Member—"Pathway to Prosperity", saying that it is "next to useless." That is interesting. The document was written in careful partnership with the Confederation of British Industry, the Federation of Small Businesses, the Trades Union Congress, academics from the economic sector and others involved in the serious job of building the Welsh economy. The hon. Gentleman rejects it with a cheap and cheeky slogan.
The hon. Gentleman's Government presided over 20 years of destruction of west Wales and the valleys, from which we are now trying to recover and which the right hon. Member for Caernarfon addressed with great eloquence We never had an economic agenda from the Tory Government; it could have been written on the back of an envelope. At least we have produced 53 pages of closely argued analysis and action proposals, which need to be debated on their merits.
The higher pound is undoubtedly causing severe problems, especially for manufacturing exporters in Wales and elsewhere in Britain, but two thirds of the rise in the pound occurred under the Tory Government. The hon. Member for Ribble Valley cannot simply wish away or ignore that. I remind him that "Pathway to Prosperity" proposes detailed action plans, which we will have an opportunity to discuss next Monday in Merthyr Tydfil; in that sense, the pathway to prosperity leads to Merthyr Tydfil. We will address that when we get the opportunity.
I apologise on behalf of my right hon. Friend the Secretary of State for Wales, who is unable to be here for the whole debate, but he assures me that he will carefully read all the speeches—with the exception perhaps of the previous one—for the detailed points that they make, especially the speeches of my right hon. Friend the Member for Swansea, West (Mr. Williams), which included some valid points, and of the hon. Member for Brecon and Radnorshire (Mr. Livsey). I look forward to being bombarded with questions about statistics, but I tell the hon. Member for Brecon and Radnorshire that Powys will be a separate NUTS 3 area, so the Office for National Statistics has been asked by the Welsh Office to supply detailed figures, including those on gross domestic product, for Powys. I hope that that will therefore absolve him from the obligation to bombard me, and absolve me from the obligation to reply to him.
Mr. Rowlands: Anyone who has read "Pathway to Prosperity" will have been struck forcefully by the enormous job gap figure of 200,000. Earlier, I intervened on my right hon. Friend the Member for Swansea, West (Mr. Williams) to ask how we can measure that job gap by net job creation in Wales over the past 10 years. I do not know whether the Minister can reply to that point today, but, if he comes to Merthyr Tydfil, I hope that he will have an answer.
Mr. Hain: The broad answer to my hon. Friend's point is that, if we had the Tory strategy on job growth, it would take another 40 years to make up that gap, so it is not a strategy at all.
The hon. Member for Ynys Môn (Mr. Jones) understandably raised important points about Anglesey, particularly the future of Anglesey Aluminium. As the
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Minister most immediately responsible, and having worked with the Secretary of State, I assure the hon. Gentleman that we have been determined to protect the future of Anglesey Aluminium in particular, which is crucial to the local economy. I am confident that we will be able to do that and to secure its energy supply at a relatively cheap rate, if not at exactly the rate that it has enjoyed, which it was not expecting to maintain. Therefore, I do not think that there is doom and gloom ahead for Anglesey in general, or for Anglesey Aluminium in particular.
I express my gratitude to my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) for his contribution and especially for the expert way in which he identified the plight of Conwy and Denbighshire.
Nearly two decades of woeful neglect have produced a real crisis in west Wales and the valleys. There has been a dramatic change in the economic and social fabric of Wales over the past two decades: rather than the historic north-south divide, there is now an east-west divide. That has been confirmed by an authoritative analysis from the department of city and regional planning at Cardiff university, which I understand is to be published next week.
I was particularly grateful that the European Commission has now designated west Wales and the south Wales valleys as a single NUTS 2 area and, in so doing, has recognised the new realities of the Welsh economy.
I agree with many of the points that the right hon. Member for Caernarfon made, and join him in rejecting the Thatcherite free-market approach that plunged Wales into such difficulty over 20 years. I gently point out that his contribution was strong on analysis, but weak on the action that he called for us to provide. I hope that when he inspects this pamphlet before making his speech in Merthyr—which, as my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) always reminds me, is the centre of the industrial revolution—he will read some of our detailed proposals and discuss them on their merits.
Mr. Wigley: My main criticism was the lack of resources. Will the Minister confirm whether there is any additional money to turn this into reality?
Mr. Hain: There is much money; indeed, tens of millions of pounds, if not hundreds of millions, is embedded in this strategy, but I point out that, next week, an announcement is due to be made by my right hon. Friend the Chancellor of the Exchequer on the comprehensive spending review, and the right hon. Gentleman would not expect me to anticipate that—at least not if I wanted to stay in this job.
GDP per head in west Wales and the valleys NUTS 2 area is about 72 per cent. of the European Union average. It is one of poorest areas of Europe, as the right hon. Gentleman rightly pointed out. That compares with the east Wales GDP per head, which is over 90 per cent. of the average.
A third of the working age population are jobless. They may or may not be on the unemployment register, but they are without work. In areas such as Pembrokeshire and Anglesey, the official male unemployment rate is more than twice as high as for the rest of Wales. Even

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those in work suffer among the lowest wage rates in Britain. Ill health and disability is rife in the south Wales valleys in particular, where the rate of limiting long-term illness is more than 60 per cent. higher than the Great Britain rate. That is a terrible indictment.
Those problems have been at the forefront of our thinking on the analysis in "Pathway to Prosperity", our new economic agenda for Wales, which the Government published yesterday. We did so for the first time with a video link conference throughout Wales. The Secretary of State was able to take questions, including some from Caernarfon, Wrexham, Newtown and Newcastle Emlyn, not forgetting Swansea. The chief executive of Gwynedd county council welcomed the document, and we are grateful for that.
The document is an important milestone and there will be a full opportunity to debate it next Monday. One of its themes is the need for a pronounced and decisive shift of effort to those areas that are most in need, notably west Wales and the valleys. The area must have the infrastructure that it needs, key industries must be fostered, small businesses must receive the support that they need to grow, and communities and individuals must be given the opportunity and facilities to sustain them. This programme depends on a powerful and productive partnership between the public and private sectors and we are determined to secure one.
Concern has been expressed about tourism. I fully acknowledge that the Welsh tourist industry, which is vital to the economy of west Wales, is under real pressure. Increasing competition—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

Illegal Encampments
12.30 pm
Ms Gisela Stuart: Every year, with the onset of spring and summer—although this year the onset of summer has been some time coming—all elected representatives begin to fear one particular telephone call. It usually comes on a Saturday evening, and it is that some 30 caravans have descended on one of the public spaces in our constituency. We are asked, "What are you going to do about it?"
The problem arises every year and we try to deal with it. Once summer has passed and the pressure eases off, the determination to work out a defined plan goes with it. Therefore, I am grateful for the opportunity to raise the matter today, more in anticipation of difficulties in Birmingham—which we have experienced from year to year—rather than because there is an acute problem.
I chose "Illegal Encampments" as the title of the debate quite deliberately. I am not referring to Romanies and other people with an alternative life style, who have the right to be protected. They have the right to expect us to treat them as seriously as we treat our constituents. I am talking about cowboy builders and traders who use mobile phones to do business from public sites. They cause havoc for neighbouring communities. They cannot be traced when anything goes wrong—they move on and leave devastation behind.
I shall never forget the Ley Hill estate last summer, when some 30 caravans and their owners occupied one of the parks. The devastation they caused was more like an invasion of the original tribe of the Vandals than the pursuit of an alternative life style. The village hall's windows were smashed and wooden fences were ripped apart. Several cars were dismantled and torched; one caravan was gutted and dismantled. They even left bits of kitchen units behind. I had some difficulty explaining how they came to be there. They also left behind soiled clothes and general household rubbish. There was fly tipping. My powers of description are inadequate, but I know that hon. Members will be familiar with the scene that I am trying to describe.
I am talking about cowboy builders and tradesmen, unsafe working practices, stray dogs, noise nuisance from generators and fly tipping of commercial as well as domestic waste. Local residents feel threatened, intimidated and helpless. They turn to us and say, "What are you going to do about it?" If a local authority serves notice, the whole process of eviction can take up to 10 days. That may not seem a long time, but try living next to one of these sites and 10 days is a very long time.
The problem appears to be seasonal; during the summer, tarmacing and double glazing businesses are pursued from public spaces. During the winter months, the traders move to more permanent and, I assume, more comfortable surroundings.
I know that some of my hon. Friends feel that it is not especially useful to try to draw a distinction between real travellers and cowboy business men with their anti-social behaviour. I understand that it may be difficult to define that distinction in legislation, but I can assure the House that our constituents do not care a great deal about the finer legalistic difficulties; they are exposed to nuisance and they want us to deal with it.
Mr. Brian White: Does my hon. Friend accept that part of the problem is that the

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Criminal Justice and Public Order Act 1994 means that local authorities have to deal with the problem on an individual basis? Could not part of the solution be a return to a designated area, which might solve some of the problems she has described?
Ms Stuart: I accept my hon. Friend's point and I am grateful to him for raising it.
How much of a problem are illegal encampments? Birmingham city council suggests that the number of encampments is not rising, but the number of complaints is. There is a little sophistry here—if the number of complaints is rising it is because people are getting very tired of the absence of any co-ordinated action. The council also made the point, which I accept, that, as the city has changed and there are now fewer derelict factory sites—which the travellers used to use—travellers have moved to more publicly visible spaces, which has provoked a more open public response.
The council also suggested that, because of public hostility, travellers feel the need to travel in larger groups for security. I accept that, but the travellers are not an homogenous group. People who want to pursue an alternative life style, such as gipsies, may want to travel in larger groups, but cowboy business men do not need to do that.
No evidence from national figures is available. When I raised the issue with the council, it said that when travellers are moved on they simply go to another area and cause the same problems there, which does not resolve the underlying problem. I am reluctant to accept that. We have no national figures that show the true extent of displacement, but I am convinced that a significant section of the transient business community could be discouraged from continuing with the practice.
When travellers descend on public spaces, where do we ask them to go? Birmingham has two properly supervised sites—one run by the local authority, the other private. One is in Castle Vale, the other in Aston. They can accommodate some 20 vans. However, I am far from convinced that the sites are properly managed. At one, internecine disputes between groups of travellers means that the minute one group moves on, warfare breaks out. I understand that the National Gypsy Council tried to intervene. One of my colleagues has told me that some of the travellers are on the electoral register, with the caravan site as their address. That gives a degree of permanency to the sites, which is not what was intended. The sites in Birmingham are not properly used.
When there is an invasion of a public space and the travellers move on after 10 days, at the most, we are left with the bill for clearing up. Birmingham city council has spent £300,000 over the past two years on clearing up such public spaces. That is unacceptable.
I understand that, in the last week of June, 20 caravans were illegally parked—compared with 70 last year. I have some doubts about the comprehensiveness of the figures. Perhaps one reason for this year's figure being slightly lower is the particularly successful police operation at Woodgate Valley country park a few weeks ago. Some 30 caravans were on the move and local residents tipped off the police. When the travellers reached the park, they began to dismantle a wooden fence. The police arrived
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and Inspector Pepper told them that they could either face charges of criminal damage—they had been caught red handed—or they might like to move on. They decided that, on balance, they would like to move on.
What would happen if the police brought criminal damage charges against 30 caravan owners? They have the power to impound some of the vehicles, but if the owners are charged and taken to the police station, the administration is time consuming and bureaucratic and probably will not help in the long run.
Miss Melanie Johnson: I fully support my hon. Friend's argument and should like to add a further point to the one she has been making. In Hertfordshire, we have similar problems with encampments, which impose substantial costs not only on the police and local councils, but on private individuals. A number of private individuals in my constituency have incurred considerable expense either making security arrangements to stop people encamping on their land or remedying the effects of such encampments. Harassment of many members of the local population when dealing with travellers is another problem. Does my hon. Friend think that that is also a problem in her area?
Ms Stuart: Yes, I can confirm that it is a problem in my area. Some of the remedies that I should like the Minister to consider would address the problems of both private individuals and local authorities. My hon. Friend's intervention was therefore very timely.
Speed—being on the spot almost immediately—is the essence of resolving the problem, as it is almost too late once an encampment has been established. We have to have good co-ordinated action involving a variety of agencies, which must act simultaneously and with one purpose. We also require good local intelligence—perhaps almost as an extension of neighbourhood watch schemes.
We must also not overlook the availability of properly supervised traveller sites. Such provision is essential. It is perhaps a pity that local authorities are no longer under a statutory duty to provide sites. Nevertheless, as I said, I do not accept that lack of sites in Birmingham can be used to justify lack of action. The problem is one of supervision.
Birmingham city council has not entirely ignored the problem, and I give it credit for the advances that it has made. The council has committed £108,000 to secure—as my hon. Friend the Member for Welwyn Hatfield (Miss Johnson) described—five public open spaces that have frequently been used by travellers. Although, unfortunately, all five sites are outside my constituency, I shall certainly continue to press for securing the more vulnerable ones.
Mr. Robin Corbett: Two of those sites are among about five in my constituency that are regularly abused by itinerants. I hope that the Government's Crime and Disorder Bill—which puts responsibility on councils, in partnership with police and local organisations—will show that partnerships are one way of preventing such illegal trespassing, which is what it is, and finding swifter means, by building local crime action plans, to combat trespassing when it happens.
Ms Stuart: I am grateful for my hon. Friend's intervention. I very much support his comments.

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Although securing sites by installing concrete bollards, for example, is useful, it is only a delaying tactic.
Mr. Richard Burden: Although I am aware that my hon. Friend has to finish her speech, I should like to say that one of the sites—Barnes hill—is in my constituency. She will be aware that it is a great tribute to the area's residents that security measures are now being installed there. They co-operated with the local council and me to ensure that scenes of devastation such as she saw in Ley Hill could not happen there. Does she agree that our hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) is right: we need better co-ordination, which must operate both inside and outside working hours? All too often, the system seems to grind to a halt once 5 o'clock comes along.
Ms Stuart: I thank my hon. Friend. He is absolutely right.
Do we—as we are constantly told—require new legislation? Birmingham city council's environmental services committee presented proposals to Birmingham Members and asked us to push for new powers allowing local authorities, once they had made proper provision for alternative sites, to ask police to require travellers to move on to those sites within 48 hours. Although that is a very tempting solution—which should perhaps be pursued with another Minister—I have a difficulty with the proposals because they define a gipsy as a person of nomadic habit of life, whatever their race or origin, but do not include members of an organised group, travelling showmen or persons engaged in travelling circuses who are travelling together as such.
I am worried that such definitions get away from the real problem—anti-social behaviour. We object to such behaviour—by whomever and in pursuit of whatever life style. We have to deal with it.
What can be done? It is a difficult problem and there is no easy solution. Travellers form an extremely diverse community. Very often, that diversity of backgrounds and purposes is used as an excuse for doing nothing. I am no longer prepared to accept that excuse. We have reached a stage at which we often mistake activity for achievement—thinking that we are achieving something by holding yet another meeting to discuss a difficult problem. The time has come to deal with the problem.
Dr. Tony Wright: The problem that my hon. Friend is describing exists in the outer conurbation—it certainly exists in south Staffordshire and Cannock Chase. The issue has previously been discussed as it applies to the shires, but the urban aspect of the issue is the pressing one. Although my hon. Friend has discussed some solutions, my meetings with police suggest that only two things are required: moving-on power, to which I should add power to impound vehicles, and the provision of sites. I speak as someone who was stoned by some of the people she has described when trying to make those points to them.
Ms Stuart: I thank my hon. Friend for his intervention and am delighted that—by the looks of it—they missed.
I stress that I take traveller welfare issues extremely seriously. I am not dealing with those issues more explicitly in this debate because of time limitations and the fact that I want to deal with co-ordinated action.
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The Crime and Disorder Bill provides us with a unique opportunity—it imposes a duty on local authorities—with police, to make provision for safe communities. I should like the plans to include specific proposals to deal with illegal encampments and to state who will be responsible. Who does one telephone on a Saturday afternoon? Who will man the telephone lines? As my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) said, it is entirely unacceptable that—as happened last year—a city council does not start until the Tuesday morning following a bank holiday to deal with an encampment that started the previous Friday. The Crime and Disorder Bill's safer community strategy will provide us with power to take immediate action.
We should establish a communication system so that people know there is a hotline and who to telephone if they see encampments on the move. They should be clear about whether police or the local authority are responsible for reacting to reports. We need fast and reliable information.
The public have a role to play not only in providing information but in taking some responsibility for the problem. It is no good complaining one week about cowboy traders but using those traders the next week to fix the driveway. There is some inconsistency in behaviour which will have to be resolved. We will have to make it clear to people that a natural consequence of using cowboy traders is that those traders will be attracted to an area.
I should like other agencies to be involved in the matter much more swiftly and with much greater co-ordination. I expect those who do business from open sites to pay tax. I therefore expect the Inland Revenue, Customs and Excise and the Benefits Agency to take some interest in such trading. The action should be co-ordinated—even at the risk of stoning—and possibly include police.
Illegal encampments are a local problem with national implications. I urge the Minister to assess the various local strategies to develop a national strategy. We need agreed and enforceable protocols. We cannot continue with the current arrangements whereby responsibility is shifted from one agency to another. At the end of the day our residents suffer and, to add insult to injury, they are also left to pick up the bill.
12.49 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing a debate on a subject that I know is of very great concern to her, to many of my hon. Friends who are here today and to residents and businesses in her constituency. I fully take on board the concerns that have been voiced about the particular problems experienced in the west midlands.
We do not underestimate what an appalling nuisance unauthorised encampments can be. I and my ministerial colleagues have met a number of local authorities and hon. Members to discuss the issue, and it is not surprising that correspondence about it continues to feature heavily in my postbag. We liaise regularly with our colleagues in the Home Office, who have responsibility for police powers to deal with trespass on land and with criminal activity, whether by gipsies or by anyone else.
Mr. Geoffrey Clifton-Brown: On that very point, perhaps the Minister or his colleagues in the Home

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Office will be able clarify a matter that I am raising on behalf of the Country Landowners Association, of which I am a member. Can the Minister confirm that the Wealden case did not apply to section 61 of the Criminal Justice and Public Order Act 1994, but only to section 77, which applies to local authorities, and that therefore the police can take action even though the landowner concerned may not have taken civil action first? I appreciate that it is a highly technical point and I should be grateful if the Minister would respond by correspondence in due course.
Mr. Raynsford: As the hon. Gentleman recognises, he has raised a highly complex issue and, rather than give a brief response on a matter of which I have had no prior notice, I would prefer to write to him and I undertake to do so.
On a more positive note, however, our latest biannual count of gipsy caravans shows the lowest number ever on unauthorised sites. For the first time the figure has fallen to below 20 per cent. of the recorded number of caravans, compared with 50 per cent. when the counts began almost 20 years ago. Some of those vans will be on sites that are tolerated, even without planning permission. The remaining 80 per cent. of caravans are on local authority or authorised private sites.
Before moving on to talk about what the Government are doing to tackle the problem of unauthorised camping, let me make it clear that we recognise that not all gipsies and travellers cause problems. The Government have no quarrel with those who pursue a nomadic way of life. Many gipsies are keen to follow their travelling way of life in peace and are keen to provide sites for themselves or to secure places on authorised sites. In addition to meeting those concerned about unauthorised camping, I have met several groups representing gipsy and traveller interests to gain their perspective on a travelling way of life.
As I have said, it is clear from our biannual count of gipsy caravans that there is a persistent problem with unauthorised camping in the Birmingham area, and I understand the wishes of my hon. Friend's constituents to have something done about it. I understand that she has put forward proposals to the Minister of State, Home Office, my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) for changes to the law that her local authority considers would enable it and the police to deal more effectively with unauthorised camping.
Of course, it is for my hon. Friend the Minister of State the Member for to respond in detail to those proposals. I understand that he is to meet my hon. Friend the Member for Edgbaston to discuss the matter further. He has certainly made it clear that he will do so.
In the meantime, I know that my right hon. Friend the Secretary for the Home Department is deeply concerned about the disruption and misery that can be caused by unauthorised encampments. The police have a wide discretion under sections 61 and 62 of the Criminal Justice and Public Order Act 1994 to remove people who trespass with a view to taking up residence. Enforcement of the law is the responsibility of chief police officers. The Government urge them to use their powers in relation to trespass whenever appropriate. The law makes no
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distinction between travellers and anyone else, and applies to anyone who acts in a way which society finds unacceptable.
Mr. White: Does my hon. Friend accept that it is often easier for police and local authorities to negotiate travellers to move on than it is to use the powers that are available to them, and that that is part of the problem?
Mr. Raynsford: I shall come to the specific procedures in a moment, but I wanted to make it absolutely clear that the police have powers to remove people. There is no question about that.
The Government are under no illusion about the nuisance associated with many unauthorised encampments. If there is evidence of criminal activity on an unauthorised site, of course it is right that the police should deal with that as they see fit, just as they would with members of the settled community.
I have seen the proposals for changes in the law to which my hon. Friend the Member for Edgbaston has referred, and I have given some thought to the policy issues relevant to my Department, in particular the proposals that affect local authorities. The proposals appear to envisage a return to the position in part II of the Caravan Sites Act 1968, which is now repealed, which placed a legal duty on local authorities to provide sites for gipsies, as then defined. Once a local authority had provided adequate sites, or the Secretary of State had deemed it not necessary or expedient for them do so, the authority's area could be designated by the Secretary of State as an area where gipsies camping on certain categories of land were committing an offence.
The provisions in the 1968 Act resulted in a good number of sites being provided by local authorities, and there is a network of well over 300 sites providing some 5,200 pitches for gipsy families. We want those sites to remain open and available for gipsies to use if they wish. They should also be properly managed. My hon. Friend the Member for Edgbaston referred to that important issue. I understand that one site in Birmingham can accommodate up to 15 caravans and that the last five biannual counts indicate that there may be vacancies on it. That may be associated with the management difficulties to which my hon. Friend referred.
However, the overriding demand from gipsies is for sites owned and managed by gipsies themselves. That came across very strongly in the meetings I had with gipsy representatives. The proportion of vans on privately owned sites has more than doubled in the past 20 years, but, in the same time, the number of vans on local authority sites has increased by only a third. The January 1998 count revealed that a new privately owned site, with planning permission, has emerged in the Birmingham area, which in January was accommodating five caravans.
Dr. Lynne Jones: The council has identified that providing for all the unauthorised campers would require an additional 70 places. My hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) referred to the seasonality of the problem. Surely we need to establish the origin of some of the travellers. Rather than being taken to local sites, they should be sent packing back to where they came from or where they stay in the winter.
Mr. Raynsford: I should make two points to my hon. Friend. First, the provision of local authority sites in

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Birmingham reflects the level envisaged as appropriate for Birmingham to meet its responsibilities under the 1968 Act. I am not sure whether further extensive provision to meet the needs of a substantial number of additional people who may well be transients is necessarily appropriate, given the seasonal factors to which she referred. Secondly, it is extremely difficult to anticipate whether and when people of a genuinely nomadic life will arrive in a particular place; therefore, there have to be proper arrangements in place to cope with the particular problems generated by unlawful camping, which is often the consequence.
The provision of sites for gipsies under the 1968 Act required a tremendous level of local political will to identify and produce sites that were acceptable both to gipsies and to the local community. I can see no reason why local authorities today would find it any easier to secure such sites. It involves difficult decisions, often against considerable local opposition, so I am somewhat sceptical about the proposed changes in the law back to the 1968 model.
It is clear that the authors of the proposals my hon. Friend the Member for Edgbaston described recognise that there will be a need for further sites to ensure that gipsies will have somewhere lawful to camp. Local authorities already have discretionary powers to provide further permanent sites if they consider it necessary. Alternatively, if the gipsies concerned are visiting the area for short periods, they can consider the provision of temporary, tolerated sites on council owned land. Circular advice to local authorities from my Department already advocates the provision of such sites in local authority areas to cater for the needs of those visiting the area for short periods.
The provision of short-stay sites with sanitary and refuse collection facilities can do much to ameliorate nuisance and should deter some gipsies from camping on more unsuitable public or private land. My hon. Friend the Member for Edgbaston rightly drew a distinction between genuine gipsies and people whom she described—probably rightly—as cowboy builders. It is important to recognise that the Government are determined to ensure that effective action is taken against people who camp unlawfully and cause immense nuisance and trouble to others. In consultation with the university of Birmingham, we have therefore been developing good practice on the handling of unauthorised camping. Work on that is proceeding apace; there will be an announcement in the autumn. Obviously, we are also working with the Home Office and other Departments.
In the meantime, I am sure that Birmingham city council appreciates the importance of working closely with the police in dealing with this issue. Inter-agency agreements—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

Village Schools
1 pm
Mr. David Prior: It is a great privilege to secure this Adjournment debate on village schools and rural communities—it is disappointing that not a single Liberal Democrat Member is present to listen to it.
When I became the Member of Parliament for North Norfolk more than a year ago, I was unaware of the extent of rural deprivation. I knew what poverty was like in cities such as Birmingham, Sheffield and Glasgow because I had lived and worked in such places. Poverty is much less obvious in small rural villages, but it is just as serious. Industrial areas have suffered great change, but, to some extent, have been cushioned by inward investment and Government spending. Rural areas have faced similar changes, but without the cushion.
The change has been insidious; village life has progressively had the heart torn out of it. In my village, there is no longer a school, a pub or a shop. The church is hanging on by its fingernails. Public transport in many areas is a joke. Market towns are facing competitive challenges from supermarkets and big-city shopping complexes, and as a result of changes in agriculture. Housing, especially in coastal and other tourist areas, is being priced out of the reach of local people. Some villages are in danger of being populated solely by retired people and holidaymakers.
That is the social background against which politicians must assess the importance of village schools. The Minister for School Standards will know that I intend to raise the future of Potter Heigham first school: I visited the hon. Gentleman only 10 days ago with the school's chairman of governors and head teacher, the vice-chairman of the parish council and a parent of a child at the school. I raise the subject of Potter Heigham both because I feel passionately that the school and its children deserve a future and because it raises wider issues.
Mr. Geoffrey Clifton-Brown: On such wider issues, does my hon. Friend agree that the decision whether to keep open a village school is often taken purely on financial grounds, without giving proper consideration to the children, who, on the closure of their school, must be bussed much greater distances to another school in the local town, thereby making their school day very long and their schooling programme much less satisfactory?
Mr. Prior: I fully agree with my hon. Friend. I shall draw out some of those points later.
Potter Heigham parish council has written as follows:
"The whole structure of our village and way of life would be gravely affected by the loss of the School.
We would be condemned to a retirement village with an ageing population. Young people with families would no longer come and live here, and those already here will move away to where there is a local school.
We feel that children are an essential ingredient in a balanced society and the children and School play an important role in the local community.
The School holds a Nativity Play, a Harvest Festival and a Carol Service. They sing regularly at the Old People's Home and appear every year in the Christmas Pantomime run by the local drama group—all this will be lost to our village if the School is closed.

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The loss of young persons in the village will also affect various Village Hall-based clubs:—Playgroup, Brownies and Cubs will all fold through lack of numbers … There would be a domino effect on local amenities and societies".
The parochial church council has written:
"The PCC has always had links with the School. The village children have held their own services in the Church … Closing the School will result in those village children whose parents do not take them to services, never having the opportunity to get to know the Church building and its associated activities. Whichever school they attend will naturally have links with its own village Church.
The Church and other village organisations would lose the vital energy that young adults bring to them, besides the enjoyment of young children participating in village life. The result would be a steady and unstoppable decline in village activities".
Elderly residents of Potter Heigham have written:
"As elderly residents of Potter Heigham, we realise the value of having a School in our village. Young families are vital to small rural communities such as ours, otherwise a village dies. We enjoy visiting the School several times a year for functions such as shows, fetes and the School's Nativity Play."
A group of past pupils has written:
"The presence of the School in the village engenders a community spirit which stays with children throughout their education, and helps provide a sense of identity. All children and parents know each other, and can provide support for each other; for example, pupils have familiar adults present if their parents are late."
Those statements are more eloquent than any words of mine could be.
I should add that transport is another key consideration. in the debate. In Norfolk, home-to-school transport costs £11 million a year. The closure of village schools will add to that, as well as putting more cars on already-congested roads. The Minister should be in no doubt that village schools go to the heart of the rural community. I know that he spent some time as a child in Coltishall in Norfolk, so he will be well aware of those facts.
Village schools do far more than I have so far described. Being part of the community would not be enough if they did not also provide excellent education for our children. I ask the Minister to go to North Norfolk to see for himself. Last week, he was in North-West Norfolk, where he said, if the newspapers are right:
"We are investing in schools in rural areas … to offer a high quality of education."
He knows that village schools can and do offer excellent education, so long as they have high-quality teaching resources and the support of their local education authority. He went on to say:
"Norfolk's village schools will be protected, so long as they are providing pupils with a high standard of education."
There is a fashionable belief in some quarters that small village schools somehow cannot deliver the national curriculum. That is rubbish, and totally contradicted by all the evidence—certainly in the primary schools that I have visited in North Norfolk. In last year's key stage 2 tests, schools with fewer than 100 pupils delivered the goods: 66 per cent. of pupils reached level 4 or above, compared with the national average of 57 per cent. In science, the figure in small schools was 65 per cent., compared with 54 per cent. nationally. In maths, it was 74 per cent. against 62 per cent.
In July 1996, the present Secretary of State for Education and Employment sent a message to the National Association for the Support of Small Schools.
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He commended the excellent service that village schools offered both to their pupils and to their communities. He hoped that
"the period of pressure of 'surplus places' is drawing to a close and that we can concentrate instead on developing the excellence that does exist, and recognising the valuable work of all schools, including those that do form the core of the communities."
I—and all those in Potter Heigham and other villages with schools—rejoiced when the Minister stated earlier this year that
"All proposals"—
by an LEA—
"for the closure of a rural school will be called in by the Secretary of State for decision",
and that
"there will be a presumption against closure".—[Official Report, 26 March 1998; Vol. 309, c. 672.]
We now want the Minister to honour those words and to send out a message to Norfolk county council and other rural councils that village schools are too important to be allowed to wither and die. Councils and the Government have an obligation to rural communities to provide high-quality local first and primary education. The Minister must make it clear that the deliberate, orchestrated attempt to close Potter Heigham by Norfolk LEA is wrong and must be reversed.
The council seized on a temporary decline in teaching standards—which has since been reversed, as confirmed by the Office for Standards in Education—and a poor head to justify the closure of the school without making any serious effort to address the problem. Indeed, the council encouraged parents to take their children away from the school to help to prove the case against it. That is not acceptable, and I hope the Minister will examine all the facts surrounding the proposed closure with great care.
The matter does not reflect well on the council, and there are local demands that the council's behaviour should be placed before the ombudsman. There are also legitimate claims that it is not just the schools which should face tough Ofsted examination, but the LEA. I can agree with the council in one respect, however. The Government must recognise the extra costs implicit in providing education and other services—especially social services—in rural areas. I accept fully the comments of Bryan Slater, the director of the LEA, who has written to me as follows:
"The issue for Norfolk and for the Government is whether historical funding mechanisms adequately meet the inescapable additional cost of providing education through small schools in the county. A recent study carried out for Norfolk County Council showed that it can reasonably be estimated that the sparsity factor in the existing Standard Spending Assessment falls short by up to £100 per primary age pupil (or about £6 million) for the county in this regard alone. This is in addition to the unsupported additional costs of transporting children to school in the county which are a staggering £50 per school pupil, or about £5 million in total."
The Government must recognise the funding issue. First and primary schools in North Norfolk and other rural counties have been the Cinderella of the education budget for far too long. There are far too many mobile classrooms and dilapidated buildings in primary schools in North Norfolk.
The governors of Potter Heigham and those who live there are not against change—neither am I. In my experience, institutions and organisations never stay the

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same—they either improve or get worse. The Potter Heigham village school has been around for over 100 years. It has seen good heads and bad heads come and go. It has gone from being a primary school to being a first school. It has seen its numbers vary between 100 and about 40. It has seen the arrival of Ofsted and the national curriculum. Perhaps above all, it has seen the extraordinary and wonderful rise in the aspirations of parents and children. Children whose ambitions would have been limited both by geography and education and by their parents can now raise their eyes to wider and much more challenging horizons.
Small schools can and do adapt to change. Perhaps we shall see a cluster of village schools sharing a head in that part of North Norfolk. Perhaps the internet, or an intranet between local schools, will provide part of the solution. No doubt nursery education will pose its own challenges. All I know for sure is that village schools, when properly supported, provide a firm foundation for an excellent education, the right transition from home to school and a strong basis for a cohesive integrated local community.
Mr. Lembit Öpik: I realise that the hon. Gentleman is coming to the end of his comments, and I thank him for giving way. Does he agree that village schools are important in preventing the depopulation of the countryside, which ultimately becomes inevitable if there is nothing to attract young families?
Mr. Prior: I am pleased that the hon. Gentleman has taken his place, and I agree fully with his comments.
For me, and for the people of Norfolk—I am glad to see two other Norfolk Members on the Government Benches—Potter Heigham is a test case. The Government's commitment to village schools will be judged by whether or not the school stays open. I hope that the Minister will reassure us in that regard.
1.13 pm
The Minister for School Standards (Mr. Stephen Byers): I begin by congratulating the hon. Member for North Norfolk (Mr. Prior) on securing this debate and on the measured and reasoned way in which he presented the important arguments concerning village schools and the part that they play in the rural community—an important issue.
May I say how pleased I am that the hon. Member for Montgomeryshire (Mr. Öpik) has joined us for the debate? He has been missed over the last few months—certainly by me. I am delighted that he is back in the House and, I hope, fully fit.
Mr. Öpik: Just.
Mr. Byers: "Just," he says, and I hear the sound of plastic being tapped. It is good to see the hon. Gentleman here.
This is a timely debate. As the hon. Member for North, including Norfolk said, I had the opportunity last Friday to visit schools in North-West Norfolk at the invitation of my hon. Friend the Member for North-West Norfolk (Dr. Turner).
I visited five schools serving that part of Norfolk, including Magdalen primary—where I saw a good example of a village community supporting a school by
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offering the use of the village hall to ensure that the school has a vibrant and successful future. I visited Terrington St. John primary, to see at first hand the difficulties of an old building having to be adapted to meet the needs of the new national curriculum. I visited Harpley primary school, which serves a clearly identifiable community—and I was pleased to be there on the day that my right hon. Friend the Secretary of State announced not only more than £1 million for Norfolk schools as a whole, but £72,000 specifically to ensure that the pupils of Harpley primary would no longer have to suffer the indignity of using outside toilets. I visited Smithdon high school in Hunstanton, to see the links it has developed as a high school with local primary schools, serving a rural community, and I visited Brancaster voluntary controlled primary on the north Norfolk coast— a very small school whose education difficulties and problems of a few years ago have been turned round by the devotion and hard work of a good and effective head teacher.
That visit showed clearly the commitment from heads, teachers, parents and the community, and brought home the very important role that schools play within the community. Schools are part of an active community, and that is particularly important when we consider their role in rural areas. That is why the Government support rural schools. We are aware of the problems that may arise if there are smaller numbers of children in a catchment area. However, it is not good enough to say that we support rural schools—we have to do more. We have to offer practical help and assistance.
Clearly, one of the major concerns of village schools is the threat of closure. We heard from the hon. Member for North Norfolk about his concerns about Potter Heigham, and I shall say a few words about that school later. It is worth reflecting on the fact that, since 1983, some 450 rural schools have been closed. I would not wish to suggest that none of those schools should have been closed—clearly there will be occasions when it is wholly appropriate through amalgamation or closure to provide the sort of education that our children deserve.
Having looked at some of the schools that were closed—I have to say, under the previous Government—I am in no doubt that, had the previous Government adopted a presumption against closure, as we have done, a number of schools would have been saved. We have adopted a presumption against closure because we recognise that a rural school is often the focus of village life.
If a rural school closes, it affects not just the pupils attending the school but the wider community. That is why we announced last February that proposals to close rural schools would be called in for decision by the Secretary of State and that there would be a presumption against closure. That policy is now in operation. No rural school will be closed until all the issues have been considered carefully, including any points made by local people. The onus will be on the promoters of closure to provide clear evidence that a school should be closed.
Mrs. Theresa May: Will the hon. Gentleman clarify that point? He confirms the statement that he made at the time of the countryside march earlier this year, that decisions to close rural schools would be called in by the Secretary of State. The Government resisted attempts to enshrine that policy in the School

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Standards and Framework Bill, but will they now give it a legislative framework, rather than merely asserting it in the House?
Mr. Byers: We are in danger of rehearsing a debate that we have already had. As we said in our discussions on the School Standards and Framework Bill, it is not appropriate to specify in a Bill the detailed criteria that the Secretary of State must consider. However, in exercising his powers to decide whether a school serving a rural community should be closed, the Secretary of State will make a presumption against closure. I have put that on the record and, if people feel that we are ignoring that criterion, they can take action against the Secretary of State through judicial review.
The hon. Member for North Norfolk mentioned standards in small schools. He was right to say that it is almost an assumption in some quarters that small schools cannot deliver a quality education. However, it is clear that they can. He referred to the excellent results that schools with fewer than 100 pupils attain. The independent inspectorate Ofsted has also said that there are many effective small schools and that small schools do not disadvantage their pupils in terms of standards or the national curriculum and the breadth of the curriculum that can be offered.
All schools, whether they be small or large, whether they serve a rural or an urban area, need the same things—strong management and good teachers—to deliver the quality of education that we all want. Obviously, small schools find it more difficult to offer the range of activities that are available in larger schools, but there are many examples of small rural schools which, with imagination and flair, offer a whole range of experiences to those children for whom they are responsible.
I do not have time to go into great detail about how that can be achieved, but I want to give three examples of small schools in rural areas that have met the challenges that they faced. Hornton primary school in Oxfordshire has 49 pupils. It has developed a productive partnership with parents and governors; it has good teaching and excellent support from adults in the classroom; the environment is imaginatively used; and the school is the focal point for the community.
Temple Sowerby Church of England school in Cumbria has 30 pupils. Its philosophy and aims are strong and it enjoys good leadership. It has a rich curriculum, which is enhanced by good use of outside activities. Again, the school is well led by a head teacher who expects and requires high standards.
Thornton in Craven primary school near Skipton in North Yorkshire has 24 pupils, but its standards are well above average. There are high expectations and standards throughout. The school has an exciting and challenging curriculum, and excellent use is made of school grounds, visits to museums and education resource centres. There are many other examples across the country of small schools in rural areas that offer a rich diversity of provision and high standards of education.
The hon. Member for Maidenhead (Mrs. May) referred to the procedures that must be followed when closure or a significant change of character of a school is proposed. First, the local education authority must consult all
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interested parties. Detailed information must be given on all the options, and the responses that are received as part of the consultation exercise must be listened to carefully. The LEA can publish its proposals for a school only when it has considered all the views and, if there are disagreements, all the objections. The proposals must say who may object, and to whom their objections should be sent.
A copy of the published proposals must be sent to the Secretary of State; Ministers will consider them very carefully, along with any objections, before arriving at a decision. In doing so, Ministers will take into account the views of Ofsted about the quality of education that is offered, but we shall also consider other factors, including the accessibility of alternative schools—and the length of bus trips to them—the standards of those schools and the effect of closure on the local community. Those who promote the closure of a village school will need to consider those significant factors if they want to rebut the presumption against closure.
The hon. Member for North Norfolk mentioned the proposals for Potter Heigham county first school, which the Department is currently considering. He will understand that it would not be appropriate for me today to deal with the issues that he raised, but I assure him that I shall take them into account before a final decision is made. I shall also take into account the points that were made so effectively by the delegation of concerned parents, teachers and people from the local community that he brought to meet me some 10 days ago. I am conscious that people want a decision to be made, and I hope that we shall be able to arrive at one in the near future.
The hon. Member for Maidenhead referred to the decision-making procedures. As she knows, the School Standards and Framework Bill contains proposals, through the establishment of school organisation committees, to devolve the power to determine school closures to local level. I assure the House that the Secretary of State will ensure that the presumption against closure of a rural school will form part of his guidance to those committees on how to determine applications; the committees will have to take account of the needs of local communities in arriving at their decisions, as will any independent adjudicator to whom the issue is referred.
The key must be to raise standards in our schools. That applies to rural schools as much as to schools in urban areas. Rural schools face particular challenges, but, as I said, those challenges can be met. We need to find new ways in which to ensure that children in rural schools have the opportunity to progress and achieve the highest standards.
I believe that we can harness the new technologies to assist small rural schools and communities. The STARS—superhighways teams across rural schools—project, for example, has created a network of schools in isolated rural areas across the north and north-west of Scotland, with the aim of enhancing provision for able pupils. Eighteen small primary schools with four teachers or fewer and two secondary schools have taken part in the project, with excellent results. In Argyll and Bute, effective use has been made of new technology to enhance the curriculum, extending opportunities for teaching and learning and supporting the management of schools and

1045
co-operatives. Forty small rural schools participated, using a combination of text and video conferencing, e-mail and fax.
New technology can be harnessed to provide a lifeline to small, rural schools, and I am pleased that, through the national grid for learning, we have been able to help Norfolk—to the tune of £1.6 million—to improve information technology. As we develop the national grid, we shall similarly help schools across the country.
There can be no doubt that a small school in a rural area plays an extremely important role. The Government recognise and intend to address the issues not only by fine words but by deeds, ensuring that schools are given the support that they deserve and need.
This debate has provided a timely opportunity to discuss the importance of rural schools and the communities that they serve. A school is part of a community, and sees it through good times and bad. Because we value the role played by rural schools, we have taken practical steps to help them and to safeguard their future.
We look forward to working with rural schools and the communities that they serve to raise standards and provide children with the quality of education that they deserve.

Women (Science and Engineering)
1.30 pm
Dr. Phyllis Starkey: I should perhaps declare an interest as I am a woman scientist, although, unless the electorate decide otherwise, I do not intend to return to my scientific career.
The importance of science, engineering and technology to Britain's future prosperity is well recognised and has been stressed by my right hon. Friends the Prime Minister, the President of the Board of Trade and the Chancellor of the Exchequer. If we are to build a truly competitive economy, we need to develop the new industries that exploit the opportunities provided by science and engineering, and especially biotechnology and electronics, and a key component of that strategy is to ensure that we have qualified scientists and engineers to work in those high-technology industries.
The pharmaceutical industry, which is arguably the industrial sector in which Britain is most competitive internationally, is already expressing concern at the shortage of suitably qualified scientists, and the engineering industry, including some firms in my constituency, is seriously affected by skills shortages. In that context, the under-representation of women and girls in science and engineering is of great concern.
In 1993, although 60 per cent. of university students in the biological sciences were female, women accounted for only 30 per cent. in maths and the physical sciences, and only 14 per cent. in engineering. How can we hope to meet future needs for scientists and engineers if half the population is excluded?
The previous Government, to their credit, began to recognise the problem, which was documented in the report, "The Rising Tide", published soon after the science White Paper, "Realising Our Potential". Measures were introduced to try to encourage girls and women to take up scientific careers, and those have been built on and extended by the present Government.
Much attention and activity, including the Engineering Council's WISE—Women in Science and Engineering—campaign, have focused on making science education more girl-friendly. The problem for girls is not only getting in, but getting on. There is considerable qualitative research evidence suggesting that women actively choose not to enter science and engineering professions because they perceive that they offer them poor promotion prospects. A report by the Prism group of the Wellcome Trust in 1994 documented a feeling among women science undergraduates that science had a masculine culture of which they did not want to be a part.
There is little quantitative data on women's participation in science in the private sector, so most of the statistics that I cite will relate to the academic sector, but anecdotal evidence suggests that women scientists experience the same difficulties in both the private and the public sectors.
In 1994, although 17 per cent. of all university science academics were women, they were disproportionately concentrated in the lower echelons, constituting 19 per cent. of all science lecturers, but only 5 per cent. of all readers and senior lecturers and only 2 per cent. of all science professors.

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A recent study by Fielding and Glover of the occupational destinations of women science and engineering graduates, funded by the Engineering and Physical Sciences Research Council, showed that only 15 per cent. were employed as professional scientists or engineers, compared with 31 per cent. of the equivalent male graduates.
Most women science graduates are employed in teaching and in non-professional jobs for which they are overqualified. That represents not only a limitation for the women involved, but a considerable underuse of public resources. It is expensive to train engineers and scientists, and it must be of general concern if a high proportion of those trained choose not to stay in science and engineering, even when jobs are available.
Given the apparently poor promotion prospects for women, it is not surprising that they choose not to enter science. I want to focus on one factor that may contribute to women's problems in getting on in academic science: the difficulty in successfully competing for research funding. That funding is absolutely essential for scientists to establish themselves as independent investigators and progress up the academic promotion ladder.
Last May, a paper was published in Nature by two Swedish women scientists, Christine Wenneras and Agnes Wolde. The authors used Sweden's freedom of the press rights to gain access to the scoring system used by the Swedish Medical Research Council in assessing candidates for post-doctoral fellowships.
It was already public knowledge in Sweden that women had a lower success rate than men in the fellowships. The panels that award them base their assessment of each applicant in part on a score for scientific competence, the most objective measure of which is given by a person's record of scientific publication, which would consist of both the number of articles and the quality of the journals that published them. Wenneras and Wolde showed that women were consistently marked down by the assessment panel, and on average a woman needed to have published 2.6 times as many papers as a man to be awarded the same competence score.
The publication of the Swedish study raised concerns in this country about the appraisal methods used in allocating research funding here. In response to that concern, my right hon. Friend the President of the Board of Trade asked the director general of the research councils to investigate whether their assessment methods for allocating both grants and fellowships were free from any bias against women.
The director general reported that the success rates of men and women applicants for funding were similar, and that there was no statistically significant evidence of a bias against women. That is confirmed by figures given to me in parliamentary answers and by a study by the British Medical Research Council, published in Nature in December 1997.
Will the Minister ask his officials to examine more closely the systems used by the research councils? The strength of the Swedish analysis was that the competence scores of all the applicants, both successful and unsuccessful, were compared with an objective measure of their scientific output, whereas the director general's
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analysis merely compared success rates, which would demonstrate an absence of bias only if the quality of the male and female applicants was exactly the same, and I shall expand in a moment on why the quality of female applicants might in fact be expected to be higher. The director general should be asked to look again and consider whether candidates of equal competence are assessed equally, regardless of gender. The research councils should also be asked to monitor their own assessment procedures internally to ensure that British peer review panels, unlike their Swedish counterparts, do not discriminate in favour of men.
In questioning whether equal success rates really reflect a lack of bias in assessment, I pointed out that women and men applicants might not have equal competence. The most striking statistic in relation to research council funding is the percentage of women among the applicants. Even in the biological sciences, which have the highest proportion of women graduates, only about 15 per cent. of applicants for project and programme grants from the Biotechnology and Biological Sciences Research Council are women, for the Natural Environment Research Council, the figure is only 9 per cent., and for the Particle Physics and Astronomy Research Council, the figure falls even further to 7 per cent.. The percentages are slightly higher for fellowships and grants aimed at new investigators, but even so, they are still low.
I have already quoted data to show the reduction in women's participation as they move up the scientific career pyramid. That must indicate a greater difficulty for women in achieving promotion in science, which suggests that women who have succeeded in establishing themselves as independent investigators—that is, the women who are in a position to apply for research funding—may well be of higher average competence than the much larger group of male applicants who have faced fewer barriers to their career progress. If that is so, one would expect women to have a higher success rate than men if the assessment system were truly without bias.
The low percentage of women among applicants for research funding is an issue in itself. Promotion within academic science depends on publication record and the number of publications depends, apart from on ability itself, on the ability to win research funding for oneself and one's research group. Clearly, the larger the group, the more work it will get done and the more publications it is likely to be in. We need to identify the factors that discourage women from applying for grants and fellowships. It could well be that fewer women are in a position to apply for funding. In most cases, only researchers in permanent positions can make independent applications, which rules out many women researchers as evidence shows that men are more likely to get permanent positions.
The Government have encouraged the research councils and the universities to introduce more family-friendly conditions, including more child care provision, holding women's grants in abeyance while they are on maternity leave and allowing women to take fellowships with them if they have to move from one place to another because of family commitments. I applaud all those measures, which obviously help to make it easier for women to pursue a scientific career and I hope that the Government will redouble and continue their efforts in that way.

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However, it appears that the barriers to women's progression in science are more complex than that. Comparisons between the situation in Britain and in France, for example, suggest that the problem is more fundamental. France has a tradition of high levels of support for child care, which is reflected in the fact that most women scientists in France have full-time and relatively uninterrupted working patterns similar to those of male scientists. That is not so in Britain. In addition, academic scientists in France do not have to cope with the same degree of insecurity and mobility as do scientists in British universities. Obviously, that is a factor that tends to affect women more than men. Despite those advantages, French women scientists and engineers experience exactly the same difficulties in promotion as do their British sisters, which suggests a need for a serious rethink about the way in which science is organised.
Dr. Ian Gibson: I congratulate my hon. Friend on this debate, as I have been involved in this matter for some time as a boss in a university department where more than half of the students were female, but where we had only one female member of faculty. It took some brutishness on my part and that of others to increase the number of women, but we managed to get it up to five after much resistance.
Recently, I went to the United States on a Science and Technology Committee visit with my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones), to find out how practices in science were progressing. Somehow, I had expected more of the United States. Sadly, the situation is just as bad there. The US Congress has now set up a commission, which will legislate to improve matters for women. The battle continues throughout the world and its time has certainly come.
Dr. Starkey: My hon. Friend confirms that the problem is extremely complex and that no country has yet managed to crack it.
Furthermore, all the figures I have quoted so far on the percentage of women applying for research funding and on their success rates relate only to that part of the Government science budget that is channelled through the research councils. However, that is only just over a fifth of Government spending on research and development. About £1.3 billion is allocated annually through the research councils and just over £1 billion by the Higher Education Funding Councils for England, Wales and Scotland to finance university infrastructure, but more than £3.5 billion or 63 per cent. of the Government's total science budget, is spent by other Departments including the Ministry of Defence, the rest of the Department of Trade and Industry—apart from the Office of Science and Technology—the Department of the Environment, Transport and the Regions, the Ministry of Agriculture, Fisheries and Food, the Department for Education and Employment and the Department for International Development. All those Departments award research funding by competitive tender, yet when I asked them in written questions to tell me the percentage of women among the researchers that they funded, they were unable to do so because they do not collect the data.
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If the Government are serious in their commitment to ensure that they do not discriminate against women researchers—I believe that they are—they need to monitor all their science spending for equal opportunities, not merely the money within the OST budget. I hope that the Minister will be able to take up that point with his colleagues in the other Ministries and urge them to monitor gender balance in the same way as the OST.
I shall end with an allusion to my constituency. Last week, I visited a school on an estate in Milton Keynes where all the streets are named after famous engineers. It is called Energy Village and has many energy-efficient homes. When the head teacher was first appointed to the school, which is new, he noticed that the street names all commemorated famous male engineers. Therefore, he chose to name the school after Caroline Haslett, who was born in 1895 and became the first secretary of the Women's Engineering Society and the director of the Electrical Association for Women. Through the association, Caroline Haslett encouraged the use of electrical power in the home, believing that electricity was the real emancipator of women.
I applaud the efforts of that head teacher in choosing Caroline Haslett's name for his school to give a positive message to his pupils—girls and boys alike—that engineering is not the sole preserve of one sex. However, unless the reality of the barriers to women's progression in science are removed, girls will continue to choose more congenial career options and British industry will continue to be held back by a shortage of engineers and scientists. Making science and engineering more woman-friendly is not merely an issue for women, but one which we have to get right if we are to capitalise as a country on the opportunities of the new technologies.
1.47 pm
The Minister for Science, Energy and Industry (Mr. John Battle): First, I thank my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) for raising this subject, as well as all hon. Members who have stayed to take part or to listen. My hon. Friend speaks with more authority than most of us on these matters. We often ask for role models for women in science and she said, almost apologetically, that she had a former life as a scientist to which she might not return. As a scientist in here, her scientific training shines through in the quality of her contribution and long may she contribute to this House precisely on those terms.
I am tempted to be brief and to say, "Yes, I applaud and agree with every word my hon. Friend has said", and that the Government will take forward her proposals in a practical and direct way. I am grateful to her for her comments.
We must not continue to risk wasting the talents of more than half the population. If we do not allow women's talents to be fully developed, we shall jeopardise our future. There is an international problem, but we have much to do. Women are significantly under-represented in almost every area of research and employment in science, engineering and technology. In those areas, women work disproportionately in junior positions. There is little room at the top for women in science, and that must change. More practical action is required to increase participation.
Since we came into office, my right hon. Friend the President of the Board of Trade—a scientist herself—has actively pursued equality of opportunity and has

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attempted to increase the participation of women in science, engineering and technology, not least through the Department of Trade and Industry's development unit on the subject. She has also worked closely with bodies including the Engineering Council, which is making great efforts.
My hon. Friend the Member for Milton Keynes, South-West said that there are complex reasons for lack of participation. I was encouraged to read an article in The Independent by Susan Greenfield, the professor of pharmacology at the University of Oxford. She wrote:
"One of the problems of 'women in science' is that it is not just one problem. Rather, the term is a convenient umbrella for referring to a range of issues touching on women in late 20th-century society in all its complexity, and encompassing therefore economic imponderables, cultural values, biological imperatives and the public perception of science and scientists. There is no magic bullet through this tightly woven tapestry of feelings and facts."
There are complex reasons for the lack of participation, and we must tackle them.
The problem starts at an early age. Not enough young women are attracted into science, engineering and technology, particularly the physical sciences such as engineering, physics and information technology. If we are to change that, we must understand why girls tend to opt out of such subjects. We must explore that with the Department for Education and Employment.
Even when women choose science subjects at school and go on to higher education and research or careers in industry, further factors inhibit their progression, as my hon. Friend has said. Having chosen a career, women face barriers to progression; that, contrary to popular opinion, is true even of the biological sciences and medicine. My hon. Friend put it well when she said that we need to focus attention not only on women getting into science, but on women getting on in science. Many barriers are associated with the balance of work and home life, and those need to be addressed.
One disincentive to continuing an academic research career in the United Kingdom is the possibility of a fixed-term contract. Although that might bring advantages of flexibility for funders of research and employers, it can, if badly managed, put women off.
The development unit in my Department works with other Departments in trying to attract more girls towards science subjects and to encourage women into higher education. It considers means to improve women's career progression up the academic ladder. The campaign for Women in Science and Engineering—WISE—began in 1984 when only 7 per cent. of engineering graduates were women. That figure improved a little—to 14 per cent.—by 1998, but it remains far too low. The Engineering Council, the Women's Engineering Society, women in computing, physics, medicine and neurosciences and the European Union's women in technology group are all dedicated to increasing the participation of women.
WISE recently asked for funding for 1998–99 for an outlook project to provide an opportunity for girls aged 13 and 14 to obtain practical experience of engineering on a three-day programme at a further education college, including a visit to a company. That would be a sort of engineering workshop, and the DTI is providing £35,000 to allow 1,750 girls from 70 schools to
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participate. That is a small step, but we can build on it. The development unit's booklet, "X2—the mystery of vanishing girls", was aimed at girls aged 13 and 14. A series of posters was published in September. Videos and websites are among small, practical ideas aimed at secondary schools as we try to use every means to ensure increased participation.
My hon. Friend raised important points about the difficulties women face as they try to progress in their careers in science once they reach the research stage, especially if it is academic research. She mentioned the Swedish study. Its findings were welcome, and we have taken prompt action to examine our research council's review system. We examined success rates for grants and fellowships for all research councils. A much larger exercise than the Swedish study examined the outcome of 114 applications, and we are trying to make sure that success rates for grants and fellowships are monitored annually so that we can keep a grip on the analysis.
My hon. Friend referred to our study's finding of no apparent difference in success rates for men and women. Although that is welcome, especially in view of the concern generated by the Swedish study, we cannot be complacent. We must recognise that our study is not necessarily the whole picture. We will go a step further by examining whether there are underlying gender differences in the proportion of potentially qualified candidates who apply for grants and fellowships—a study that should help us to begin to address seriously my hon. Friend's concerns. We need to get down to the level of examining competence, and to find out why such a small proportion of academically qualified women apply for fellowships. I assure my hon. Friend that the work that she has requested today will be undertaken. I am grateful for her exploration of gaps in the preliminary research.
It is important to develop policies for family-friendly employment. We can co-ordinate Government policies on employment and social security to fit in with that, and we must identify examples of good practice so that we can focus the employers' attention on ensuring that opportunities exist.
Dr. Lynne Jones: Might my hon. Friend embark on a study, perhaps through the European Union, to find out why there are more women in science and engineering in southern Europe? In Spain, about 30 per cent. of engineers are women, and it may be that lessons could be learnt from that.
Mr. Battle: I am grateful to my hon. Friend for internationalising the point. She, my hon. Friend the Member for Milton Keynes, South-West and I, among others, attended a conference in April at which note was taken of the comparative differences within the EU. I was struck by the German delegate who said Germany was like a developing country when it came to equal opportunities. That is true of all EU countries. We need to consider family-friendly policies, but without seeing families and children as the problem, because that would suggest, in turn, that women were the problem. There are deeper structural questions to address, and comparative work with our EU partners could prove helpful.

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Role models are important. I have met young women doing high-level particle physics research at CERN in Geneva and running gas plants as top engineers in the north-east. We should draw attention to such examples so that they can inspire other women. I was delighted to hear from my hon. Friend the Member for Milton Keynes, South-West about the school named after Caroline Haslett. Many women have been involved in the development of science, but they are, sadly, absent from the record. I should name Dorothy Hodgkin, a Nobel prize winner for her work on crystallography, Jocelyn Burnell, who discovered pulsars, and Rosalind Franklin, the co-discoverer of DNA. Their names are lost in the male stories, and we should celebrate women in science rather more.
We are making strong efforts to increase representation on public bodies, councils and committees in science-related fields. Women's voices should be heard more strongly in policy and decision making. In 1992, women held 8 per cent. of places on research councils.
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The figure is up to 17 per cent. now, and the Government's target is 30 per cent. by 2000 with further improvement after that. That is achievable.
I have tried to stress that the problem is complex. Only 8 per cent. of all professors are women, but an even lower 3 per cent. of professors in science, engineering and technology are women. The shortage of women professors is not simply a result of women having children. Larger structural questions need to be addressed—
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

PRIVATE BUSINESS

  ALLIANCE AND LEICESTER PLC (GROUP REORGANISATION) BILL [Lords]
  Order for Second Reading read.
  To be read a Second time on Thursday 16 July.

Oral Answers to Questions
  DUCHY OF LANCASTER
  The Chancellor was asked—
  DUCHY OF LANCASTER

    Freedom of Information Bill
    Mr. Norman Baker: When he intends to publish the proposed freedom of information Bill. [47908]
    The Chancellor of the Duchy of Lancaster (Dr. David Clark): I am in the process of drawing up the draft Bill, taking into account representations following the public consultation and the views expressed in the report of the Select Committee on Public Administration. I intend to publish the draft Bill for pre-legislative discussion before the end of September.
    Mr. Baker: I am pleased to hear that, but can the right hon. Gentleman directly confirm or deny whether senior members of the Government, including the Home Secretary and the Minister for every portfolio, have been trying to weaken the Bill and take out its sharp edge to secure their positions? Will the Bill be as radical as the White Paper produced earlier this year or will it be weaker?
    Dr. Clark: The White Paper sets out the principles of the whole Government towards freedom of information. Clearly, as the Select Committee's report showed, there are many complex issues in the White Paper and the draft Bill. As one would expect, there has been healthy discussion of those issues.
    Mr. Austin Mitchell: Will my right hon. Friend—in whom I have every confidence, if that is not too sycophantic—ensure that the Bill is the strongest possible opening to information and that it is in the Queen's Speech for the next Session so that we can end the situation in which people claim that they have wholesale access to information and try to retail it at inordinate profit for themselves?
    Dr. Clark: I can assure the House that we have an agreed timetable to publish the draft Bill by the end of September. There is nothing in that timetable that precludes its candidacy for inclusion in the Queen's Speech later this year.
    Sir George Young: In addition to the legislative change on freedom of information mentioned by the previous two questioners, do we not also need a cultural change? Without both, will not greedy and loud-mouthed young men continue to seek information and contacts at extortionate prices?
    Dr. Clark: I agree entirely with every sentiment expressed by the right hon. Gentleman. I hope that if we have radical freedom of information legislation, it will mean that the milieu in which such people purport to operate will be diminished.
    Mr. Dale Campbell-Savours: In reply to the hon. Member for Lewes (Mr. Baker), my right hon.
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    Friend referred to "healthy discussion". I wonder whether he was using those words with great care. Can we have an assurance that everyone is equally committed to taking this legislation forward in the way for which Labour party branches throughout the country have argued for the past 20 or 30 years? We believe that this is the litmus test of a Labour Government. Do we deliver on this agenda that everyone wants?
    Dr. Clark: I listened carefully to what my hon. Friend said; I choose all my words with care. Clearly, there is a healthy debate, but, at the end of the day, we are committed to the principles contained in our White Paper. I was certainly encouraged by the support that I received, not only from my hon. Friends on the Government Benches, but from Opposition Members, when we had a full discussion of the issue on Monday.
    Rev. Martin Smyth: I welcome the Chancellor's openness on the matter. He will be aware that the Royal Society of Chemistry is keen on freedom of information because it is part of the scientific world; but will he bear in mind the society's concern that such freedom might be misused by others and that that issue might not be taken care of in the Bill?
    Dr. Clark: We are aware of that sort of difficulty and that there is always a balance to be struck between privacy and personal freedom. We are also aware that there must be protection for genuine scientific research and we have built into the Bill the seven special exemptions that can be considered when deciding whether information should be withheld. If information were to be withheld, the information commissioner could make a judgment, based on the merits of the case, as to whether that decision was right. It is a robust piece of legislation, designed with the ordinary citizen—the ordinary men and women—of this country in mind.

    Public Appointments
    Mrs. Jacqui Lait: What plans he has to encourage Government Departments to use the public appointments list. [47920]
    The Parliamentary Secretary, Office of Public Service (Mr. Peter Kilfoyle): Departments seek nominations from a wide range of sources, of which the public appointments unit's list is one. Others include advertising, executive search, consultation with interested bodies and other departmental databases. Departments regularly consult the unit for names of candidates for specific appointments. Since April, the unit has suggested some 1,200 candidates for more than 150 posts and has been informed of 20 appointments. Others are still under consideration.
    Mrs. Lait: I thank the Minister for that reply, but is he aware that the 20 appointments since April bring the grand total to 71 appointments of the hundreds made by Government Departments since the general election? Is he also aware that seven staff are employed in the operation? Does he regard it as an effective means of providing names to Government Departments, or does he agree that it is time either to beef it up, or to shut it down altogether?
    Mr. Kilfoyle: The hon. Lady may recall that, when I was in opposition, I raised exactly the same questions

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    about the public appointments unit, but, because the then Government insisted on secrecy, it was difficult to extract the very information to which she is now privy. I share her concern, but I have to tell her that the public appointments unit is devoted specifically to trying to increase the representation of women and people from ethnic minorities; and, although I accept that its performance appears to be in question, I would remind her that the decisions are made by individual Departments and not by the unit. The unit is trying purposefully to project as many names as possible into consideration for appointments, as they become available.

    Millennium Compliance
    Fiona Mactaggart: What assessment he has made of the relative preparedness of Government Departments and agencies in respect of millennium compliance. [47922]
    The Chancellor of the Duchy of Lancaster (Dr. David Clark): The results of the June quarterly review show that central Government are making good progress in achieving millennium compliance, although greater attention needs to be paid to embedded systems and to telecommunication systems. Departments have typically completed about 30 per cent. of the necessary correction work and 25 per cent. of their testing. On the whole, departmental plans have remained stable since the first review in March and all Departments now have target dates for completion of work on critical systems.
    Fiona Mactaggart: I congratulate my right hon. Friend on his continuing review of the matter and his openness about it. However, I should like to press a matter that I have raised with him before, which is using agencies, where appropriate agencies exist, to ensure the proper preparedness of different parts of the public service. I am especially concerned about the role that the Medical Devices Agency could play in providing a centralised test of different pieces of equipment used within the health service, so as to stop different parts of the health service and different health service trusts repeating each other's work. Will he give me an assurance on that?
    Dr. Clark: My hon. Friend has raised this matter on a previous occasion and it is a pertinent point. The whole issue of the national health service has caused some concern in the House and, during our recent debate on it, I expressed my concern at the fact that there are still gaps in the national health service and local government—a view supported by the National Audit Office and the Audit Commission. Since that time, the NHS executive has completed its own review, which is more encouraging. It shows that satisfactory progress is being made in over 90 per cent. of NHS organisations. I am still concerned about the other 10 per cent. I shall draw the attention of the NHS executive to the specific point raised by my hon. Friend.
    Mr. David Atkinson: Is it not the case that, on this unique issue, no one can really say—not even the Government—how well we shall be prepared to respond to the problems until the first midnight of the new
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    millennium? Is it not essential that we have contingency plans prepared, put in place and tested well before the end of next year?
    Dr. Clark: The hon. Gentleman is, as always on this issue, absolutely correct. We shall probably not have to wait until 1 January 2000 because various other dates, such as 9 September 1999, will trigger difficulties. We need contingency plans in place and that is why the Government have established MISC4 and MISC4(P) to look at those issues and to try to ensure that there are contingency plans across both the private and the public sectors because one interrelates with the other.
    Mr. Derek Wyatt: Has my right hon. Friend had a chance to look again at something that I have suggested before, which is a practice on a Saturday or Sunday where we could take 10 per cent. of public services, wind the clocks forward and test the embedding technology? I wonder whether my right hon. Friend has evaluated that. Can he comment further?
    Dr. Clark: We are looking at that proposal. It may not be possible to do that in every Department, but we believe that there may be opportunities in certain sections to try that experiment. It is something which we are trying to evaluate now.
    Mr. William Ross: Is the Chancellor in a position to guarantee that at least the public utilities such as water, the sewerage system, electricity and so on will continue to work? If not, when will he be?
    Dr. Clark: We are discussing those very issues in the Cabinet Committees dealing with the matter. We have papers by the week from the various Departments and the territorial Departments which explain how the public utility suppliers are trying to cope. We must consider the interrelationship between the public utility suppliers and the contingency plans that will be necessary because, if one fails, they will almost certainly all fail. We are taking this seriously and there are almost weekly meetings of Cabinet Ministers looking at the matter, and getting the best advice possible.
    Mr. Christopher Chope: The situation in the NHS is still worrying, with perhaps 10 per cent. of projects behind schedule. How will the Minister ensure that the people responsible are held to account, because accountability is an essential part of any meaningful target setting? Has the right hon. Gentleman persuaded the Prime Minister that, in the interests of accountability, he should remain as Chancellor of the Duchy of Lancaster until the millennium so that he can be held to account?
    Dr. Clark: The hon. Gentleman raises a serious point about accountability, and nobody has a monopoly of knowledge in that sphere. I hope that every hon. Member will take it upon herself or himself to ensure that they are confident that their local health trust is following the course of action outlined in the excellent document by the Audit Commission entitled, "A Stitch in Time". We have set in place a template for the national

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    organisation—the national health service—with its millennium project to try to deal with the outstanding issues. We also need action at local trust level. I urge hon. Members to assure themselves that their constituents are being satisfied and protected in this respect.

    Smartcards
    Mr. John Healey: What progress he has made in developing the use of smartcards to provide access to Government services and information. [47923]
    The Chancellor of the Duchy of Lancaster (Dr. David Clark): Smartcards and other new technologies can radically change the way in which the Government do business. Examples such as supermarket loyalty cards are already transforming the levels of service and choice offered in the private sector. As we move from the old industrial society and its way of working to the new information age, the Government's relationship with our citizens is changing and we must lead and manage that change. I want a wired-up Government to provide high-quality, easy to use and flexible services to our citizens.
    Mr. Healey: I thank my right hon. Friend for that encouraging but rather general response. I draw his attention to a specific smartcard project—the Endorse project, which was launched last month by the Government with Barclays bank to cut out form filling for the newly self-employed. Is the Minister aware that the project is being piloted in Rotherham, which is one of nine pilot areas, four of which are in South Yorkshire? Can he tell me when the pilot period is due to end and what plans he has to make sure that the lessons and benefits from the pilot are promoted across the country?
    Dr. Clark: I was pleased to launch Barclays' Endorse, which followed a similar pilot project by NatWest and the Post Office, called "Business as usual". They make life easier for our citizens, who, until we introduced an electronic method of registering as self-employed, had to send to three Departments six separate forms, with the possibility of having to follow those with eight forms. The result was, not surprisingly, a failure rate of 40 per cent. We tackled that problem by allowing people to register electronically as self-employed, which means that they fill in one smart form on a personal computer, which is immediately electronically transmitted to all the relevant Government Departments. I am sure that the experiment will be a success, and I look forward to the days when there are 1,000 such terminals available to our citizens.
    Mr. Michael Fabricant: What consideration has the right hon. Gentleman given to using smartcards for providing information to the authorities? For example, when shall we do away with the flimsy bit of paper that happens to be our driving licence and use a smartcard for that, or does the right hon. Gentleman live in fear of the civil liberties lobby?
    Dr. Clark: The Government have made a decision not to introduce a national identity card, but we already have in hand the issue that the hon. Gentleman mentioned. A small smartcard driving licence is being tested in various
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    parts of the country and, before long, will become universal. Like the hon. Gentleman, I look forward to the day when we use smartcards to provide Government services such as the renewal of television licences and payment of motor taxes. We would not have to go to the post office armed with a sheaf of papers, but simply go to a kiosk, use our smartcard and get a licence immediately. That is the future.

    Forms
    Mr. Nigel Beard: What steps he is taking to (a) simplify and (b) condense Government forms that the general public have to fill in before having access to many Government services. [47925]
    The Parliamentary Secretary, Office of Public Service (Mr. Peter Kilfoyle): Making it simpler and easier for people to access public services and cutting down forms and queues are at the heart of better government. Pilots of interactive on-line forms are part of the story, but so, too, is a move from telesales to teleservices: for example, using the telephone to help people at home to complete forms and to make better use of public services.
    Mr. Beard: I thank my hon. Friend for that reply. Is he aware of the case of my constituent, Mrs. Ball, who was faced with a 32-page form when claiming disability living allowance for her son? She could fill in that form only with the aid of the local branch of Mencap. Now she is notable in the area for her achievement, and is inundated with requests for help from people who are as bemused and confused as she once was. Has any assessment been made of the waste of time in people going to tribunals unnecessarily or the personal hardship involved in delayed payments as a result of those complex forms being wrongly filled in? Does my hon. Friend accept that public support for benevolent policies is being destroyed by the ordeal to which people are subjected in gaining access to the entitlement that they have as citizens of this country?
    Mr. Kilfoyle: I am aware of the problems encountered by Mrs. Ball, my hon. Friend's constituent, and I understand that my right hon. Friend the Chancellor of the Duchy of Lancaster has written to express our regrets at her experience.
    The Benefits Agency keeps all claim forms under regular review. The disability allowance and attendance allowance claim forms were redesigned recently—a new child-specific pack was introduced in August last year and a new adult pack in October last year. Disability organisations were involved in the development and design of the new forms. However, I understand my hon. Friend's concern. The characterisation of government in queues and forms is one aspect which the "Better Government" agenda will address later in the year.
    Mr. Peter Viggers: Does the Minister not realise that the civil service is doing what it always does very well, which is to produce forms that fully meet its own standards? Can the civil service not take lessons from the private sector, the first lesson of which is that the customer is always right? The customer finds forms very

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    complicated. Is it not possible to include more representations by the consumer in the planning of those forms?
    Mr. Kilfoyle: The hon. Gentleman will have to forgive me if I disagree with his assertion that there is always something to be learned from the private sector.
    Increasingly, the public service, pragmatically, is willing to learn from private sector practices, and it is always willing to re-evaluate its own procedures. As I said, the Benefits Agency does so, and we want to extend that type of good practice into all arms of government, central and local.

    Millennium Compliance
    Mr. Ian Bruce: If he will make a statement on the progress and cost of year 2000 compliance by Government Departments. [47926]
    The Chancellor of the Duchy of Lancaster (Dr. David Clark): My statement in the House on 8 June 1998, Official Report, column 716 gave the results of the latest quarterly review. They show that central Government are so far making good progress in achieving millennium compliance. However, we are not complacent; the review raised a number of concerns, which I have taken up with the Departments concerned. The latest estimate of the costs of millennium compliance within central Government is £402 million.
    The next quarterly return is due in September. As that will fall during the recess, I propose to write to all Members during the recess to report the results. I shall also arrange for all relevant information to be placed in the Libraries of the House and on the internet.
    Mr. Bruce: I thank the right hon. Gentleman for that answer, but can he confirm that the Government have not allocated any new money to Government Departments to tackle that problem? Can he also confirm that, despite the fact that, three months ago, the Prime Minister said that he would put new money into training 20,000 bug busters, not a single one has started a training course, let alone started work?
    Dr. Clark: Every Department of central Government was aware of the cost implications of millennium compliance, and figures for those implications were built into the estimates that we inherited from the previous Administration. In his Budget, the Chancellor of the Exchequer announced that £30 million was to be made available for the training of 20,000 bug busters. That process is on course. We have had discussions with the training agencies to ensure that the right course is made available to people. We are also discussing with small and medium companies how they can best release people for training, so that they can do their own millennium compliance. [Interruption.]
    Madam Speaker: I should be obliged if conversations were not quite so loud. [HON. MEMBERS: "Hear, hear."] I see that the House agrees with me. Thank you.

    Electronic Information
    Mr. Lawrie Quinn: What steps he has taken to permit individuals to supply information electronically to Government. [47927]
    The Parliamentary Secretary, Office of Public Service (Mr. Peter Kilfoyle): The Government have been working closely with the public and private sectors on identifying new ways to enable people to supply information electronically to Government.
    Last December, we launched the "intelligent" form, which enabled people to register as self-employed at a bank. That model has now been extended by the launch of the Post Office-led "Open for Business" pilot, which enables people to register as self-employed in a post office, library, a community-based "telecottage" or local government office. As my right hon. Friend the Chancellor of the Duchy has said, the Barclays bank Endorse project, which uses a smartcard-based digital signature service, enables registration on the internet to take place in people's homes.
    Mr. Quinn: I thank my hon. Friend for that reply. Does he agree that many people are phobic about information technology? If we go for a process of open government under which the citizen will be allowed to provide feedback, many people who are allergic to IT will need assistance and encouragement. What are his Department's plans to encourage that process?
    Mr. Kilfoyle: In reality, many projects are being encouraged, not just by my Department but by Government, to raise the standard of IT literacy throughout the nation. There will be a parallel approach to the fulfilment of the information technology era. Hard copy forms of information and electronic forms will run contemporaneously. There will always be those who lag behind new developments.

    Open Government
    Mr. David Amess: What recent representations he has received on his Department's open government proposals. [47928]
    The Chancellor of the Duchy of Lancaster (Dr. David Clark): I recently received the report of the Select Committee on Public Administration in response to the White Paper, "Your Right to Know". I am studying that report and its 44 detailed recommendations.
    Mr. Amess: Will the right hon. Gentleman explain how he can reconcile his Department's proposals for open government with the practice of arranging meetings between Ministers and the general public to discuss policies, when the only members of the public who are invited to such meetings are those who are soppy about the Labour party? How can he reconcile his proposals on open government with the practice of leaking sensitive material before it is reported to the House? Is that not taking openness a bit too far, and is not the truth about the Government that they are open to no one other than Labour party supporters?
    Dr. Clark: I simply have no idea of what the first part of the hon. Gentleman's question was about. In answer to

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    the second part of his question, we and the Government have made it quite clear that we deplore the leaking of all Government documents. In terms of the recent assertion about the leak of a defence document, the Prime Minister has announced that there will be a leak inquiry to ascertain how that came about.
    Mr. Robert Maclennan: I welcome the Prime Minister's announcement of a leak inquiry into the appearance of a defence document before selected journalists. The Government's proposal on open government is to ensure that, under the process of democratic discussion, everyone—and not just the chosen few—is equally informed.
    Dr. Clark: The right hon. Gentleman is right to draw the House's attention to the need for freedom of information legislation that will provide the hyphen between the Government and the people. I passionately believe that more freedom of information in the genuine and true sense will obviate the occurrence of young whippersnappers leaking and bragging to the press about how they can get access to Ministers and influence Government decisions.
    Ann Clwyd: What steps he has taken to make his Department more open. [47929]
    Dr. David Clark: Openness is intrinsic to good government. In addition to my proposals for a radical and robust freedom of information Act, which will be the flagship for openness, much more is being done. We do not need to wait for the Act to provide our citizens with more and better information, as I have shown in my quarterly reports to Parliament on the year 2000 problems. Our proposals are to open up quangos and to ensure 50:50 representation on them for men and women. The Government have been open in providing information to their citizens on the internet, and we shall continue to do that.
    Ann Clwyd: I congratulate my right hon. Friend on his commitment to openness in government. I know from his strong freedom of information proposals that he believes that it is essential to our democracy to have that openness. I hope that he may long continue in his present post; despite the malign briefing against him, he has done an excellent job. However, some other Government Departments are not as committed to openness as his Department. For example, too many answers start with the words, "Because of disproportionate cost," and, despite the fact that we spend £32 million a year on Chevening scholarships, Departments are not prepared to say even to whom we award those scholarships. It is essential to a Government who are committed to openness in government that we have that freedom of information legislation in the next Queen's Speech.
    Dr. Clark: This Government are committed to freedom of information legislation. We had the declaration in our manifesto and we shall deliver on that manifesto commitment. We believe that, if we are going to rebuild the trust between Government and the people, we must empower people by giving them information. That is precisely what our new Bill will do; that is precisely the new Bill that this Government will introduce.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Sir Teddy Taylor: If he will list his official engagements for Wednesday 8 July.
    The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.
    Sir Teddy Taylor: Is the Prime Minister aware that, in Southend-on-Sea, where Labour and Liberal Democrat councillors have just imposed savage increases on home help charges for the disabled and elderly, and are planning to close three old folks' homes—not because they are nasty, but because there is not enough money—there is huge anger at the fact that the Government have had no difficulty in finding an extra £1.5 million to increase the number of political advisers by 50 per cent? Does not the Prime Minister think that it would strengthen our democracy if he simply allowed civil servants—respected people—to tell people the truth, whether good or bad, rather than employ that huge and costly army of news twisters, who many of us think are an insult to democracy?
    The Prime Minister: No, I do not know about the particular circumstances in Southend that the hon. Gentleman has raised—[Interruption.]—although I have to say to him and his colleagues who are shouting about it that, of course, as a result of keeping to tough spending limits in the first two years, we have had difficult financial decisions to make. But I hope that he realises that, as a result of what the Government have done since they came to office, we have put more money into the health service, into education and into social services. That is a huge difference between the Government whom he supported—more or less—and the Government whom I lead.
    Mr. Robert Marshall-Andrews: In view of the recent reports in The Observer, will the Prime Minister consider one constructive suggestion? The ministerial code should be amended to prohibit Ministers and officials from dealing with people who are lobbying on behalf of others, where those people have, within the past five years, been employed as aides or advisers to any Minister. Will he add, by way of a gloss, that the legitimate way in which to petition Parliament or the Government is either directly to Government offices, or through the agency—the legitimate and open agency—of elected Members of Parliament?
    The Prime Minister: Of course Ministers or Members of Parliament will meet lobbying groups and organisations as part of their normal work, and there is nothing wrong with that; but I agree with my hon. and learned Friend that the concern that has been expressed—and I do take it seriously—does show, as I said yesterday, that we have to be extremely careful about any relations between

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    lobbying firms and special advisers and those in Government. I have instructed the Cabinet Secretary, therefore, to revise the rules that we inherited that govern such contacts and to strengthen them in any way that he thinks fit. In particular, there can be no circumstances that ever justify either passing confidential or inside information to a lobbyist, or the granting of any improper preferential access to, or influence on, Government. These rules will be strengthened and they will be published. Anyone found breaching them will be out on his ear.
    Mr. William Hague: Why does not the Prime Minister tackle the culture of cronyism that he has created in his Government, instead of talking about rules that should already be observed across the Government? After the allegations in The Observer at the weekend, a national newspaper sacked one of its columnists, a lobbying company suspended one of its directors and another reprimanded one of its employees. The only organisation who have not acted against their employees or investigated their employees are the Government. When will the right hon. Gentleman act, rather than protecting the cronies with whom he has surrounded himself?
    The Prime Minister: First, I welcome the right hon. Gentleman back. Secondly, I can tell him that we have investigated each allegation in The Observer in turn. I shall go through them for him. First, there was the supposed leak of a Select Committee report. We investigated that—no Minister was involved and no Members of Parliament were involved. A member of a lobbying firm simply took a press-embargoed copy. That should not have happened, but obviously it was not the Government's fault.
    Secondly, there was the allegation of a leak of selective information in my right hon. Friend the Chancellor's Mansion House speech. There was no such leak; indeed, the information concerned was not even in the speech. Thirdly, the allegation about Mr. Liddle, as the right hon. Gentleman knows, was based on talk at a cocktail party at the Guildhall. A freelance journalist claiming to be an American business man said that he wanted to invest in Britain. He asked Mr. Liddle to help, and he perfectly properly agreed to do so. It is emphatically denied that, in doing so, he in any way offered to act on behalf of a lobbying company. The journalist claimed to have words suggesting that on tape, but it is now admitted that that claim was false and that no such tape exists.
    We have investigated these matters very carefully. Instead of making general allegations, the right hon. Gentleman should make a specific allegation, provide the evidence for it and, of course, we would then investigate it.
    Mr. Hague: I am grateful for the welcome back, but even with my sinuses I can smell the stench from these revelations. As for this so-called defence, of course some things did not involve Members of Parliament or Ministers—it is not MPs and Ministers who are running the affairs of this Government.
    The central allegation about Mr. Liddle has not been disproved: it has been denied by Mr. Liddle. If it had involved an ordinary civil servant, investigations would now be under way and disciplinary action would be in prospect. Saying that people drank too much champagne
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    on the night and could not remember what they had said would not be regarded as an adequate or convincing defence.
    When will the right hon. Gentleman stop protecting the money-grabbing cronies with whom he has surrounded himself and start—[Interruption.]. They are indeed feather-bedding, pocket-lining, money-grabbing cronies. When will the right hon. Gentleman clean up the Government's act?
    The Prime Minister: Perhaps I could return the right hon. Gentleman to the facts. The right hon. Gentleman alleges that if Mr. Liddle had been a civil servant he would have been suspended immediately. I have checked that with the head of the civil service and it is not correct—he would not have been suspended. Secondly, all the right hon. Gentleman's other allegations have been investigated and found to be false. I understand why he wants to suggest that this Government are the same as the Government of whom he was a member—[HON. MEMBERS: "Worse."] This case is not Jonathan Aitken; it is not Neil Hamilton; it is not cash for questions; and it is not Asil Nadir. Those allegations were made and proven, whereas not a single allegation in The Observer article is true.
    Mr. Hague: Only people in the Prime Minister's inner circle would think that a fireside chat with someone with a hangover disproves the allegations. The problem is not just the allegations but the whole culture that he has now created—in which hon. Members can be hung out to dry; Ministers, such as the one sitting next to him, can be briefed against; and members of his inner circle are the untouchables. The right hon. Gentleman has created a culture of cronyism—in which the Paymaster General hangs on to his job because he has villas in high places, and in which Ministers do not even blush when they try to make the wife of his private pollster the deputy chairman of the BBC. Let the Prime Minister tell the House whether he even recognises that there is a problem of cronyism over which he now presides.
    The Prime Minister: If I may return the right hon. Gentleman to the facts, just a moment ago he alleged that I had put someone connected with me forward for the BBC deputy chairmanship. I have had nothing whatever to do with those who have been put forward for the BBC deputy chairmanship. If he has any evidence to the contrary, perhaps he will produce it. All the other allegations are general ones. He is making general allegations because he knows that he cannot sustain a single specific one: it is a classic smear tactic.
    The one allegation that the right hon. Gentleman has not made—perhaps he is about to make it—is that we leaked the strategic defence review. Such an allegation would not surprise me. We have instituted an inquiry into how the leak happened. The BBC correspondent Robin Oakley said that, at six o'clock yesterday, he was shown a copy of the document by a Conservative Front Bencher. If I find that anyone in the Ministry of Defence, or any other Ministry, was involved in leaking that document, I will dismiss him. Would the right hon. Gentleman do the same?
    Mr. Hague: Only a Prime Minister in desperate trouble could believe that the leak of a Government document

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    did not somehow originate with the Government. How ridiculous! He cannot admit that there is a problem of cronyism—which all the rest of the country can see—because the problem goes to the heart of new Labour, in which cronyism has taken the place of principle. In the words of the former aide to the Chancellor—who is chuntering on—the
    "Labour Government is always of two minds…On big issues especially, they don't know what they are thinking."
    Does the Prime Minister not realise that government without principle quickly becomes government for sale—which is what is beginning to happen?
    The Prime Minister: People will again note that the right hon. Gentleman has made no specific allegation or tried to substantiate one. All we have had is the usual windy rhetoric and general allegations. Until very recently, he and the Conservative party were trying to claim that we were responsible for the leak of the strategic defence review. I notice that he has not repeated that claim today, or said that he would take action against anyone involved in the leak.
    As for saying that we do not get the big issues right, we have in the past few days published our proposals on the Child Support Agency—[HON. MEMBERS: "Leaked".] We have also published our proposals on the rough sleepers initiative, on numeracy and on the defence review—[HON. MEMBERS: "Leaked."] They were certainly not leaked by us—[Interruption.]
    Madam Speaker: Order.
    The Prime Minister: Those are all very serious issues, and the Government's policy to deal with them is correct. The right hon. Gentleman has nothing to say about those issues, because the Opposition have no policy criticism that they can sustain against the Government. He is reduced to making wide allegations with no particularity. He does that because he wants to try to prove that we are the same as the previous Government—but we are not, and we never will be.
    Mr. Hague: Of course these are all serious issues and they should all have been brought to the House before they were brought to the media, as should every other Government announcement. This is a serious issue in which former aides of the Prime Minister, the Chancellor and the Minister without Portfolio—wherever he happens to be skulking at the moment—appear to have offered access to Government and Government information in return for a fee, and the Government have not been able to disprove it. That is an extremely serious matter and it is taken seriously by the people of this country. Will not the Prime Minister come to see in time that it was a defining moment in the record of the Government when people were able to see the Government for what they are—too many cronies and too few principles?
    The Prime Minister: The right hon. Gentleman gets no better with repetition. He keeps making great allegations of cronyism and corruption. He bandies around the words, but he will not make a specific charge and sustain it because every allegation made in The Observer has been investigated and found to be untrue. The reason that he carries on with all this rhetoric about
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    the Government is that he and his party—as is noticed more in the country than anywhere else—have nothing whatever to say about the big policy issues of the day.
    Mr. Mike Hall: Given the Leader of the Opposition's sinuses, I will not ask him how he thinks Westminster city council smells. A report by Alan Langlands, chief executive of the National Health Service Executive, states that under the previous Administration, health authorities and emergency care services in the north-west were facing collapse. Since we have been in government, we have spent an extra £19 million on the South Cheshire health authority and an extra £9 million on North Cheshire to improve care in cancer treatment, to reduce waiting lists, to improve intensive care treatment for young people and to attack the winter crisis. How will my right hon. Friend ensure that under our Administration the health service in the north-west will never again face collapse?
    The Prime Minister: By giving it the investment and the reform that it needs. Of course my hon. Friend is right. Since the election, we have put substantial extra sums of money into the health service over and above Conservative spending plans. Of course there was a defining moment a few days ago when the shadow Chancellor said that the Government were spending too much. That is the position of the Conservatives. Their attack on us in respect of public services is that we are spending too much, so let us never hear anything more from them about waiting lists or any other public service matter.
    Mr. Paddy Ashdown: Whatever problems the Government have over the events of the past couple of days—they have some and I hope that they will tackle them—I know of no sight more stomach-churning than the Conservative party accusing others of sleaze. [Interruption.]
    Madam Speaker: Order. The House will come to order to hear the right hon. Gentleman.
    Mr. Ashdown: Surely the issue that should worry us today is not so much the job prospects of a couple of cadet new Labour insiders, but the jobs of tens of thousands of people across the country that are now placed in jeopardy as a result of the rising pound and rising interest rates. Does the Prime Minister not realise that he could take a decision today that would relieve the pain immediately: he could come off the fence on the single currency, set a target date—subject to a referendum—and give the economy, the country and industry the lead that they so desperately need?
    The Prime Minister: As I think I have told the right hon. Gentleman before, the worst reason for making a decision to join the single currency would be some short-term advantage in the currency markets. That would not be sensible at all. The economic policy that the Government are pursuing is to make sure that we have monetary stability, which is why we gave the Bank of England independence to set interest rates, which have had to go up—they should have gone up before the election and they have had to go up since in order to squeeze out inflation. We will also ensure financial

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    stability through curing the Budget deficit. That is the right long-term policy for the country. I have no doubt about that; and I have no doubt, either, that it is ultimately in the best interests of industry, although I understand the concern about the short-term problems that have resulted from the rising pound.
    Mr. Ashdown: The Prime Minister has given that answer before. It did not wash then, and it does not wash now. If he took the decision that I have suggested, the pound would come down tomorrow, interest rates would come down next week, investment would keep coming into this country over the next decade, and Britain would have more influence in Europe right through into the next century. Why does he not realise that, on this occasion, long-term interest and short-term advantage coincide? He will have to take such action soon; why not take it now?
    The Prime Minister: It is because I do not believe that short-term advantage and the long-term position coincide. If the pound were to be brought down artificially tomorrow, and if we, say, cut interest rates when the monetary conditions were not right to do so, the result would be inflation—the very problem that we had under the Conservative Government. If we do not take the action necessary to root out inflation, put the economy on a stable footing and ensure that the public finances are in order, we will be back to the days of 15 per cent. interest rates and the record repossessions and bankruptcies that occurred under the Conservatives. The policy mechanisms in place are precisely designed to avoid that.
    A decision on the single currency must be taken in the national economic interest. Given the national economic interest, and as our economy has not converged with the economies of continental Europe, it would not be sensible at the moment to say that we would join.
    Mr. John Home Robertson: What do students with A-levels from Eton, Charterhouse, Wellington and Westminster schools do during their first year at St Andrews and Edinburgh universities? Does my right hon. Friend share my suspicions about the motivation of some of their parents, who happen to be members of another—hereditary—House and who keep on voting for public subsidies for that, no doubt, very interesting first year?
    The Prime Minister: If I may deal with tuition fees, I suggest that people who have doubts read the speech of Lord Dearing—who, after all, chaired the committee that was set up by the Conservatives when in government—in which he backs the Government's case to maintain our position on Scottish tuition fees. He does so for the very sensible reason that, if we were to do what the Opposition are suggesting—although I believe them to be completely opportunist in so doing—we would end up having to find another £27 million. It would be far better to spend that money on improving university education.

    Community Hospitals
    Mr. John Burnett: If he will make a statement on the Government's policy on community hospitals.
    The Prime Minister: We certainly recognise the strength of feeling that people have for their local
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    community hospitals. Community hospitals can play a role in the national health service, particularly offering a safe, clinically effective and efficient service for their areas. They must of course meet the same high quality standards and fairness and efficiency tests as any other hospital.
    Mr. Burnett: I have just come from a meeting of many community hospital representatives, who are here because 27 community hospitals are either definitely to close or threatened with closure. How does the Prime Minister reconcile that fact with his oft-stated commitment to save the national health service?
    The Prime Minister: The programmes of closure are proposed by local health authorities; there may be varying reasons for them. In certain areas, closures are proposed because health authorities genuinely believe in reorganising hospital provision. It is important to ensure that the reasons for any change in community hospital provision are genuinely concerned with the national health service and its interests. That does not mean that, if other provision is being made, every hospital closure must necessarily be wrong. That is not so in all 27 areas. Indeed, my right hon. Friend the Secretary of State for Health is to sit in on appeals against several of those cases. However, not every programme of reorganisation must be opposed.
    Mr. Andrew Dismore: Does my right hon. Friend agree that after the closure of Edgware hospital by the previous Government, this Government have been making great strides in restoring services to the new Edgware community hospital, and that the new waiting list money will go a long way in helping that process? Is he also aware that after the rundown of the hospital by the previous Government, one of the problems is getting over to local people that there are services at Edgware hospital, and that it is alive and vibrant? Will he use his best endeavours to ensure that we can get that message over to the local community?
    The Prime Minister: I am sure that my hon. Friend has just done that, and I back him up entirely. Edgware hospital provides a valuable service to local residents and will continue to do so. It is, of course, under this Government that the largest hospital building programme in the NHS is being put through. After years of delay, we are getting that hospital building programme under way, and five are already starting up.

    Ministerial Visits
    Mr. Andrew George: What plans he has to pay an official visit to the St. Ives constituency.
    The Prime Minister: I have no immediate plans to do so.
    Mr. George: That is a pity. In my constituency, we are concerned about the NHS. When will the highly committed NHS staff of three of the four community hospitals in my constituency that I visited this weekend be told whether they have hospitals to work in and jobs to go to? Their jobs have been on the line since October last year, and the plans have been on the desk of the

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    Secretary of State for ever and a day. When will they know whether they can join in the 50th anniversary celebrations of the NHS?
    The Prime Minister: The plans have not been there for ever and a day. It is correct that my right hon. Friend the Secretary of State has to make his decision in due course. He will examine the proposals carefully to make sure that they represent the best way forward for health services in Cornwall. On underfunding, we accept that the NHS needs more investment. That is precisely why the comprehensive spending review is geared and designed to make sure that the health service has the resources it needs.
    I hope that the hon. Gentleman will welcome very much what the Government have done in Europe to try to make sure that Cornwall, with its special circumstances, is treated as an area in its own right for the purposes of regional aid. That is a different topic, but we are trying to do our best for the people of Cornwall and will carry on doing so.

    Engagements
    Mr. Geoffrey Clifton-Brown: How can the Prime Minister, as an elected Member of this House, be satisfied that he presides over a Government who, time after time, trail important policy announcements in the press before they are made properly to this House? Is he determined that, in future, policy statements will be made by unelected and unaccountable spin doctors, lobbyists and cronies?
    The Prime Minister: In respect of the leak of the strategic defence review, I have made it clear that if anybody in government has been connected with that, they will be dismissed forthwith. The leak inquiry will try to get to the bottom of the matter, but I do not believe that anyone in government has been involved. I hope that the hon. Gentleman will join me in saying that if the review has been leaked not by someone in my party but by someone on his side, that person should be dealt with by his leader.
    Mr. Rhodri Morgan: Can the Prime Minister confirm that an undiluted, full-strength, 22-carat freedom of information Bill will be in the next Queen's Speech? Does he agree not only that
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    that would redeem a key manifesto pledge, but that it would be the best way to stop lobbyists and other parliamentary parasites trading, because it would, by making Government information available to the many, not the few, devalue the very currency in which they trade?
    The Prime Minister: As my hon. Friend appreciates, I cannot start saying what will be in the Queen's Speech, but a freedom of information Act is a key part of our constitutional reform programme. We have set out proposals in the White Paper, and the next step is to publish the draft Bill for further consultation, as we shall in due course. It remains a key Government commitment.
    Mr. Nigel Evans: Yesterday, a Labour peer—and former Labour Minister—described the measure whereby students from Northern Ireland, Wales and England would pay £1,000 more in fees than students from Scotland and the rest of the European Union as repugnant and as discrimination against our fellow countrymen. Will the Prime Minister explain why students from Manchester will have to pay £1,000 more than students from Milan and why students from Liverpool will have to pay £1,000 more than students from Lisbon? To get through the message that that is nonsense, will the students have to club together to hire a lobbyist to contact one of his cronies at No. 10?
    The Prime Minister: I do not know whether the hon. Gentleman paid any attention—I suspect that he did not—to what I said about Lord Dearing, who, as far as I am aware, is not known as a lobbyist. Lord Dearing has rightly pointed out that 354 students from other parts of the European Union are involved. If the proposals were limited to Scotland, the sum of money involved would be only £2 million. However, as Lord Dearing also pointed out, it would be wrong to suggest that students who do four-year courses in Scotland should be treated differently from those who do four-year courses in England—[HON. MEMBERS: "That is what you are doing."] We are not doing that; that is precisely the point. If we were, the cost would be £27 million.
    I remind the hon. Gentleman that the £1,000 tuition fee will not be paid by the poorest third of students and that the next third will pay a reduced rate. The Conservative party proposals, however, would make all students, from whatever part of the United Kingdom, pay the full tuition fees. That would be wrong and would discriminate against those from low-income families.

Strategic Defence Review
3.31 pm
The Secretary of State for Defence (Mr. George Robertson): With permission, Madam Speaker, I should like to make a statement on the outcome of the strategic defence review.
Today, I am publishing a White Paper setting out the conclusions of the review and a volume of detailed supporting essays. Copies are available in the Vote Office. Moreover, I have written, enclosing copies, to all hon. Members individually.
Before I deal with the review, may I first apologise to you, Madam Speaker, and to the House for the unauthorised and improper disclosure to some newspapers last night of the White Paper's contents? I am as angry and as outraged at this leak as any hon. Member—indeed, I hope that it will be condemned by hon. Members from both sides of the House.
I have today asked the Cabinet Secretary to authorise an immediate and thorough investigation into how the leak came about. The person or persons responsible will be dealt with severely. The leak represents a serious breach of an embargo designed to ensure that the detail of this major review was given first to the House of Commons, and I very much regret the fact that the House and Ministry of Defence employees heard first from the media. I take full responsibility for that, as my office demands, which is why I apologise to you, Madam Speaker, and to my parliamentary colleagues
The British people are rightly proud of their armed forces. They want—indeed, they expect—the Government to provide strong defence for their country. The strategic defence review does just that. It is the most radical and far-reaching reshaping and modernisation of our armed forces for a generation. It is unique in three key ways. First, it has been foreign policy led, not Treasury driven; secondly, it has been unprecedentedly open and inclusive; and thirdly, it has the whole-hearted support of all the service chiefs, for whose help I express my thanks.
The review will fundamentally reshape and modernise Britain's armed forces, sorting out the weaknesses, building on our strengths and providing a structure to deal with tomorrow's threats, not yesterday's enemies. Our forces will be more mobile, better manned, better supported and equipped, and better able to act as a force for good in the world, where we can and when we choose.
The world has changed out of all recognition since the end of the cold war. NATO remains the basis for defence and security, but, while the threat of major war in Europe is now a remote prospect, new threats confront us: terrorism; the international drugs trade; the proliferation of nuclear, chemical and biological weapons; information warfare; ethnic rivalries; population pressures; and the break-up of existing states.
In the cold war, we needed large forces at home and on the continent to defend against the constant threat of massive attack from the Soviet Union, but now instability is the new enemy, and the need is increasingly to help to prevent, or to shape, crises further away, if necessary by deploying military forces rapidly before they get out of hand. In other words, we must now be prepared to go to the crisis, rather than have the crisis come to us.
The review has demonstrated that our forces are not properly adapted to the new environment. In today's world, we need to get our troops to trouble spots and crisis
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areas quickly and safely, and ensure they are properly supported when they get there. The review has highlighted the serious weaknesses that we inherited, most notably in heavy transport and in our hollowed-out and demoralised defence medical services.
At the same time, increased commitments have taken their toll on morale and on recruitment and retention, and have worsened the already very serious problem of undermanning in our forces. The review proposes major new investment and enhancements to improve our troops' ability to deploy more rapidly to trouble spots around the world.
We will acquire four additional roll-on, roll-off container ships and four large C-17 aircraft or their equivalent. To support and supply our troops once they reach the trouble spots, we will enhance the Army's supporting arms, so that, for the first time, they can undertake two operations simultaneously.
Because we have a solemn duty of care to our service men and women, whom we ask to put their lives at risk, we will make new money and personnel available to revitalise the defence medical services. In total, I am proposing an increase in the size of the Regular Army of 3,300: a change which will go a long way towards restoring vital parts of our armed forces that have been hollowed out.
Another key theme of the review has been a more integrated or joint-service approach to defence, to improve the operational effectiveness of our forces. We are introducing a series of radical changes, which include bringing together all our battlefield helicopters under a single command and expanding the responsibilities of the Chief of Joint Operations; a new joint defence centre to develop doctrine and other planning on a tri-service basis; and a four-star Chief of Defence Logistics, who will properly co-ordinate and standardise our three support services for the first time. I am pleased—I know that my pleasure will be shared widely in the House—to announce that the first such Chief will be Lieutenant General Sir Sam Cowan, who is currently the Army's Quartermaster General.
I am also responding in the review to an historic proposal by the First Sea Lord and the Chief of the Air Staff, by developing what will be known as Joint Force 2000, bringing together Royal Navy and Royal Air Force Harrier jets into a single organisation, able to operate equally effectively from aircraft carriers or land bases.
The most important of the joint initiatives is the creation of a new pool of joint rapid reaction forces, which will be the spearhead of our new modernised front line and will include all our high-readiness forces. Not only will they enable us to respond quickly and effectively to crises of all kinds and to build up larger forces should that be necessary, but—unlike today—we will be able to mount more than one Bosnia-type operation at a time.
The review also introduces important new front-line capabilities. We will create a sixth deployable brigade, which will increase the Army's flexibility and help tackle overstretch. The parachute role of the current airborne brigade will also be transferred to the airmobile brigade, which will become a new powerful and highly mobile air-manoeuvre brigade or air cavalry when the Apache attack helicopter enters service.
To meet our longer-term needs, I am delighted to be able to tell the House that we plan to replace our current small carriers from around 2012 with two larger,

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more versatile, carriers—in effect floating airfields capable of carrying a more powerful force, including a future carrier-borne aircraft to replace the Harrier—the cost of which will be spread over about 20 years.
I can also tell the House that the review confirms that the acquisition of 232 Eurofighters remains central to our long-term plans, providing a step change in the RAF's combat ability. Changes in the nature and scale of operations mean that we need two fewer submarines, three fewer destroyers and frigates and 36 fewer combat aircraft. However, those changes will not lead to cuts in the overall strength of our regular forces since the manpower released by the reductions will be used to fill gaps in front-line manning, thereby easing overstretch.
For our reserves, there will also be important enhancements to the Royal Naval Reserve and the Royal Air Force Reserve. I am determined that the Territorial Army should become more relevant, usable and integrated with the rest of our forces. Those who want it to languish in an outdated cold war role do the TA no service at all. Although its numbers will be trimmed to 40,000, it will be given a real heavyweight role in our nation's defences and called up more frequently in times of crisis. For that, we intend also that it should be better trained and properly equipped.
Unlike other recent reviews, this review is designed to put people first. That is why I am today announcing a significant new training and education initiative to boost recruitment and retention. All recruits will be given the opportunity to gain the six key skills needed by all in the workplace, and all personnel will be given the chance to achieve qualifications recognised by civilian employers.
In addition, there will be a major new programme—the learning forces initiative—to expand education and training opportunities for the armed forces through the new learning credits, which may be claimed during service careers and for some time afterwards. Those proposals will boost recruitment and retention by increasing the already considerable benefits of a service career, and benefit defence by developing the skills needed for modern warfare. The economy as a whole will also benefit as better qualified personnel return to the civilian employment market after their service career.
For our service families, we are setting up a task force to address the special problems that arise from their particularly mobile life style. For Britain's ex-service men and women, we are setting up a new veterans cell to provide an access point for guidance and advice.
Of course, it is vital that our armed forces are properly resourced, but if defence is to command the support of the nation, it must also be seen as good value for money. By 2001–02, in three years' time, we will be spending £747 million more than this year. In real terms, allowing for one-off asset sales, that will be a reduction of £685 million or about 3 per cent. of the defence budget. That compares with a reduction of more than 20 per cent. in real terms in the last seven years of the previous Government. We will do that primarily through increased efficiency, smarter procurement and better utilisation of our assets. Because the review represents a three-year settlement, we will be able to bring a new stability to our defence planning.
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The Government believe that, in addition to caring for our people and defending our rights at home, we must also discharge our responsibilities in the world.
We must strengthen the effectiveness of the international community in peace support and humanitarian missions of all kinds, particularly through the United Nations. I can announce, therefore, that Britain will make a larger proportion of our front-line capabilities potentially available to the UN for peace support and humanitarian deployments, including all our rapidly deployable forces.
In a still uncertain and unstable world, we must be able to react quickly to crises as they develop, but we should aim to do more than that. We should aim to prevent conflict from arising in the first place. I intend to elevate conflict prevention—defence diplomacy, as I have called it—to be one of the eight core missions that will underpin our defence planning. That commitment will be backed up by a series of practical measures, including a new education and training initiative to help to develop and promote modern, democratically accountable forces around the world.
I turn now to the review's conclusions on our nuclear deterrent. The Government were elected on a promise that we would retain Trident. We have kept that promise, and we will continue to keep it. All of us want a safer world in which there is no place for nuclear weapons, but, while large nuclear arsenals and risks of proliferation remain, our minimum deterrent remains a necessary and continuing element of our security. We have, however, conducted a rigorous re-examination of our present deterrence requirements, and we have concluded that we can safely make further significant reductions from cold war levels. We will retain Trident as our sole nuclear system, but the single submarine on patrol at any one time will carry only 48 warheads. That compares with the previous Government's announced ceiling of 96 warheads. By reducing our overall stockpile to 200 operationally available warheads, we will have cut the explosive power of the deterrent by 70 per cent. since the end of the cold war.
At the same time, we will press ahead with arms control, and will introduce much greater openness on nuclear issues, including on our stocks of fissile material.
All in all, these are sensible measures, and I am sure that they will be widely welcomed. This truly radical review builds on the strengths and successes of our armed forces. It rectifies the weaknesses that we inherited, and it modernises our forces to deal with tomorrow's threats rather than yesterday's enemies. It places the skilled, brave and versatile people on whom our defence depends firmly at the centre of planning, and it gives them a clear sense of direction into the next century. Above all, it delivers the modern forces Britain needs for the modern world. It is a good deal for defence and a good deal for the country. I commend it to the House.
Mr. John Maples: I endorse entirely the tribute paid by the Secretary of State to our armed forces and their families. They always acquit themselves with courage and distinction, and the whole country is rightly proud of them.
Let us be clear that the review was never a strategic defence review, but was always about cutting defence expenditure. The Secretary of State even began with

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a pre-emptive concession, offering the Treasury £500 million. He has ended up with cuts of more than £900 million a year. The Treasury has had its first instalment, and I must warn him that it will not be the last.
The cuts come as no surprise: Labour Governments always cut defence spending—[Interruption.] At least Labour Members have woken up and are making a lot more noise than they did when the Secretary of State made his statement. My hon. Friends and I noticed their ringing endorsement for his policy on Trident; I can assure him of at least our support on that.
The review was intended to take six months, but it has taken 14. For only 10 of those was it in the Ministry of Defence. The final four months saw the strength of our country's defences become a political football as the review was kicked around Whitehall between the Ministry of Defence, the Treasury and No. 10. No doubt a few focus groups were thrown in, too. What that has done to the morale of our armed forces can only be imagined.
Nor was it ever a foreign policy-led review. The Government have never published the foreign policy baseline as they promised—not even today. Even the panel of experts set up by the Government to advise them has never seen it. If the review had genuinely been foreign policy-led, it would have had to make some effort to match capabilities to commitments. There is no attempt in the White Paper to do that.
What has happened since 1 May last year to make the Secretary of State think that the world has become a safer place? All the evidence of the past year suggests exactly the opposite. Our commitment in Bosnia is clearly very long term. We nearly became involved in another Gulf war. A nuclear arms race has begun in Asia. The enlargement of NATO increases the level of our commitment to that organisation. I believe that we might still become involved in Kosovo. On top of that, there are dangers that no one can foresee, and it is not good enough to say that there are no threats just because we cannot foresee them. Who foresaw the Falklands or the Gulf crisis? Who, in the early 1930s, when defence spending was last at the level to which the Government plan to reduce it, foresaw the threat that subsequently engulfed the world? By their nature, such threats cannot be foreseen, but they must be provided against.
We welcome many of the proposals in the review and will support them. The Secretary of State concentrated on the few gains; I want to ask him about the many losses. The defence budget is to be reduced by £915 million a year under these proposals. Can he say what exactly that means for our armed services? Paragraph 89 of the White Paper says that we should be able to respond either to a major crisis such as the Gulf war or to undertake a lesser-scale deployment and a peacekeeping operation. Is he saying that we will not able to mount a major deployment such as the Gulf war as well as maintaining our operation in Bosnia? That is the implication of paragraph 89.
We welcome the various initiatives intended to make the lives of our service men and women and their families better and to improve conditions of service. There is one simple thing that the Secretary of State could to do this afternoon. He could respond to the repeated calls for more generous telephone allowances for our troops in Bosnia. It is a small matter for him, but a major matter for our troops, and he could solve it today.
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The Navy is to lose two of its hunter killer submarines, three frigates and destroyers and three mine hunters. Those are significant reductions in capability. We will have fewer frigates and destroyers than France or Japan and about the same number as Italy. When will the cuts be implemented and which ships are involved? Can the Secretary of State confirm that the Falklands protection force will not in any way be diminished?
The Secretary of State has made much of the two planned aircraft carriers. They will, of course, add significantly to our ability to project force, but they will be very expensive and they are not planned to be in service until 2012, by which time Invincible will be 35 years old. Can he give a firm commitment to order those carriers? Conservative Members would be amazed if a Labour Government ever built and equipped them. They will be too expensive and will get killed off by the Treasury, first by delay and then cancellation.
Is the Secretary of State satisfied that our much-reduced surface fleet will be able to protect two carrier groups as well as HMS Ocean? Can he tell us something about the state of Project Horizon? It is widely known that it is in trouble, but the White Paper says that the new ships will replace our air defence destroyers in 2004. Can he confirm that that is the plan? The Navy is getting real cuts today for the possibility of two new carriers in 15 years' time. I confidently predict that the Government will never commission the new ships and that we will be left with a permanently weakened Navy.
We are delighted that the concepts of joint operations and rapid deployment are to be developed. Those ideas were started by us. We are also delighted that the Army is to get its full complement of Challenger 2 tanks. They were ordered by the previous Government, as was so much of the equipment now coming on stream, such as the Eurofighter and the Apache and Merlin helicopters. They will ensure that our forces have first-class equipment. Conservative Members doubt whether that would have been so had Labour been in power in the 1980s when those decisions were made.
We believe that cutting the Territorial Army by a third will prove to be one of the biggest mistakes of the review. Is it true that 172 TA centres will close? Which will they be, and when will they close? How much money will be saved by cuts to the TA?
The Paras have won the respect of the public and their fellow soldiers, to say nothing of our enemies. It is probably sensible to acknowledge the limited remaining role for brigade-sized drops, but, in making the change to the Paras' deployment, can the Secretary of State assure the House that the ethos and identity of the Paras will be retained as a discrete unit in the new brigade that they are to join?
The RAF is to lose 36 front-line aircraft: that is a significant and, we believe, dangerous reduction in our air power. We welcome the acquisition of the four C-17s, but is the Secretary of State confident that that will be enough? We were expecting him to order six. Can he tell us whether those planes are being leased or purchased; and, if leased, for how long? The future large aircraft project is apparently continuing, despite its well-known problems. Does he foresee a successful conclusion and to what timetable?
The White Paper is appallingly light on finance. It is absolutely impossible to understand how the annual totals are arrived at, or how capital receipts have been treated.

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Will the Secretary of State publish, in the very near future, detailed figures, so that the Select Committee can review them? He admits that the cut in the annual defence budget will amount to £915 million in real terms by the end of this Parliament, but does he agree that defence spending in the last year of the Conservative Government was £21.5 billion and that his plans for 2001–02 are for £23 billion, which represents a real-terms cut of £1.25 billion—considerably more than the £915 million that he is claiming?
There are many aspects of the White Paper that we shall support—indeed, many are simply the continuation of things that we had started or planned. However, there are far too many cuts—cuts in manpower and cuts in equipment. There will be fewer men, fewer planes and fewer ships to do more and more in an increasingly unstable and dangerous world. The Government's priorities are now clear and defence is not high on the list. We always suspected that the strategic defence review was a cover for cuts and today we have been proved correct.
Mr. Robertson: It is my pleasure to welcome the hon. Gentleman to the Dispatch Box for the first time as shadow Secretary of State for Defence. He has been put to a good and important job, although I cannot congratulate him on the quality of his argument. I suspect that he inherited that press release from somebody who was there before, rather than having made it up himself after giving due consideration to the White Paper that I gave him four and a half hours ago so that it would be possible for him to digest it.
It is a bit rich to be lectured by a former Conservative Treasury Minister about cuts in the defence budget. The hon. Gentleman was Economic Secretary to the Treasury between July 1990 and April 1992. The defence budget in the year 1991–92—one single year—was cut by a full 10 per cent. in real terms, yet he has the brass neck to come to the House of Commons and complain that I am going to reduce the defence budget by 3 per cent. over three years. The Government of whom he was a member cut defence expenditure in this country by 23.5 per cent. in real terms between 1990 and 1997, which amounts to 4 per cent. in real terms every year. The figure for the defence budget in 1997 was £6.5 billion lower than in 1990. Cumulative total cuts of some £25 billion of defence expenditure were made. I really think that we should take with a pinch of salt some of the hon. Gentleman's points.
The hon. Gentleman says that we have treated defence like a political football in the past year, but the very opposite is true. I wish that he had consulted his predecessor, the right hon. Member for North-West Hampshire (Sir G. Young), because the right hon. Gentleman knows that the review has been unprecedentedly open and inclusive. The hon. Member for Salisbury (Mr. Key) attended some of the seminars that we organised and gave his point of view as part of that exercise. We have made sure that everybody had their say in the whole of the process, so that today the review is not simply the property of me as Secretary of State for Defence, or of the Ministry of Defence; I believe that it comes from all the inputs that we received over that time.
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The hon. Gentleman made a point about the foreign policy baseline. I have provided for him in the White Paper the foreign policy priorities of the country and he will see a further outline in the supporting essays. Last October, I gave the House a clear outline of the Government's foreign policy objective and I followed that up with two major speeches; one at the Royal United Services Institute and the other at Chatham House. That is a weak debating point.
The hon. Gentleman said that we live in a much more dangerous and unpredictable world. Of course, we do. One of the problems that I have had to address when trying to ensure that our forces are fit to deal with that more dangerous world is to repair some of the weaknesses that I inherited. The hon. Gentleman will have noted that I was deliberately not critical of the previous Government, but those inherited weaknesses are there for everybody to see in defence medical services, logistics and heavy lift. We have had to rectify that.
Contrary to what the hon. Gentleman says, the outcome of the review means that there will be more regulars in the armed forces of this country. They will have better equipment and be better organised and they will be more relevant to dealing with the new dangers.
I gave the hon. Gentleman the White Paper and the supporting documents well in advance of my statement, so I am surprised that he asked about the force planning assumptions. It states clearly in the White Paper that our force planning assumption is based on being able to conduct a Bosnia peacekeeping operation and a Gulf operation simultaneously. That is what drives it. In the supporting papers, the hon. Gentleman will find even more documentary evidence of that.
The hon. Gentleman has obviously not read the supporting papers very thoroughly because he asked about telephone allowances. On page 9–6 of the supporting documents he will see that we say that telephone allowances will be increased as part of the review. We were responsive to what the armed forces had been telling us all along.
The number of frigates and destroyers will be reduced. It is interesting that, in the background piece of paper on which the hon. Gentleman was working last week, his researchers did not seem to know how many destroyers and frigates we had in the Royal Navy. The piece of paper that I have says that they thought we had 33 frigates and destroyers when, in fact, we have 35. It claims that the number will be reduced to 30 when, in fact, it will be 32. That is manageable in the current strategic circumstances and I stand behind it.
Our commitment to the Falklands is laid out in specific and graphic terms. The garrison will remain unaltered, and our commitment to the islands and their inhabitants remains and is on alert.
The hon. Gentleman made a point about aircraft carriers. Rather than deal with this substantial issue, which the Government have studied in detail, the hon. Gentleman chose to make a few cheap debating points. I said that we were planning to replace our three valuable and useful small carriers with two large carriers in 13 years' time. That is the commitment that we make in the review, and it is part and parcel of the capabilities that we think will be relevant for the future. As I have said, they will be paid for over a substantial time.

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Major decisions will still be required about what aircraft they will carry and what role they will perform, but we believe that our intention makes sense.
The fleet configuration has been part of the defence review, and the Royal Navy is completely satisfied with it. The Royal Navy may be losing some frigates and destroyers, the number of attack submarines may eventually drop from 12 to 10 and it may have fewer than planned in the way of mine counter-measure vessels, but it will also have the enhanced amphibious capability which is so important and of which it is so proud. It will also have some missiles that will work on the vessels that it has today.
The hon. Gentleman made much of the reduction in numbers in the Territorial Army. The bulk of the Territorial Army is configured for a threat that has gone. We want to make the Territorial Army more relevant, more usable and more integrated into the regular forces because that is what it wants. We want the Territorial Army to be able to be called up and form units because it told us that that is what it wants. My hon. Friend the Minister for the Armed Forces will outline more of the details tomorrow, and we shall consult the Territorial Army about the footprint and contact point that is so important.
I am glad that the hon. Member for Stratford-on-Avon (Mr. Maples) congratulates us, or at least commends us, on the new deployment for the Parachute Regiment, which it will welcome. It will make it much more usable.
The Royal Air Force will lose some of its fast jets, but will gain 232 Eurofighters, which is one of the best multi-role aircraft that the country has probably ever seen. When it comes into service, it will add substantially to our RAF capabilities. We shall order C-17s or their equivalent because that is one of the capability holes that the previous Government left us. The future large aircraft will be a contender for the longer-term role.
The hon. Gentleman concludes that we have left the forces less strong than they have been, and that we have reduced manpower; but we have increased it. He claims that we have reduced the capability of the armed forces, when we have increased it. I know that he is new to the job, but the review has the backing, in public and in private, of the three service chiefs and the Chief of the Defence Staff. The review is right for Britain and its defence forces. That is why the hon. Gentleman is wrong and the forces are right.
Mr. John Hutton: I very strongly welcome and support what my right hon. Friend has announced to the House. I congratulate him and other Ministers in the Department on making the right decisions on difficult issues.
I strongly welcome my right hon. Friend's announcement about the replacement of the aircraft carriers, which will be good news for my constituency. Will he spell out in more detail the time scale for that procurement objective? What further work will be put in place now to prepare for the replacement of the carrier programme? Will he say more about the Government's plans for our nuclear attack submarines? In particular, what decision have the Government made about ordering the additional two Astute class SSNs, which, as he will
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understand, formed part of the original decision last March under the previous Administration, who ordered three, with an option for two?
Mr. Robertson: I thank my hon. Friend very much for his understandably warm welcome for the review and its conclusions. As he is the Member for Barrow and Furness, which is the birthplace of HMS Invincible, I can understand his attachment to the concept and actuality of carriers. The time scale that I have made clear is an in-service date of 2012. That is the date which the Royal Navy believes to be sensible and achievable. Any acceleration was not viewed as practical.
On the new attack nuclear submarines, the existing plans remain as they are, and we are committed to taking delivery of the Astute class.
Mr. Menzies Campbell: I thank the Secretary of State for his courtesy in allowing me sight of the White Paper some four and a half hours ago, which is about 50 per cent. longer than his right hon. Friend the Foreign Secretary and I were allowed to study the contents of the Scott report.
I share the Secretary of State's indignation at the leaking of the White Paper. Whoever was responsible for that insulted not only the House of Commons but the men and women of all three services, whose lives and jobs may well be affected by the White Paper's conclusions.
I hope that the right hon. Gentleman will not be surprised if the response to his White Paper is relief, and not necessarily one of rapture, on the somewhat dubious ground that the reductions are not as severe as was originally feared.
I welcome the premium to be placed on flexibility, mobility and rapid deployment, the decision to restrict the number of Trident warheads, the confirmation of the commitment to Eurofighter and the emphasis on joint operations and planning. Will the Secretary of State explain why the White Paper of a Government who, rightly, want to play a leading role in Europe makes such scant reference to the opportunities for defence integration in Europe—a mere 22 lines or so on page 10? Will he tell the House what consultations took place with our European allies in the thinking that lay behind the White Paper? Will he also tell the House what account was taken of the current strategic concept review being carried out by NATO?
Finally, can the Secretary of State confirm that the expeditionary strategy that lies behind the White Paper will be pursued in the interests of the United Kingdom, and in accordance with our treaty and other obligations—as, for example, to the United Nations—but will not be based on an automatic assumption that the United Kingdom will, in all circumstances and in all parts of the world, underpin United States foreign policy?
Mr. Robertson: I thank the hon. and learned Gentleman for his welcome for the key items in the review. I register his thanks for the time that was made available to him to read the report. I suffered 18 years in opposition, constantly complaining about the amount of time available to the Opposition to read documents before statements had to be made. I am very glad that, at the first major opportunity, I was able to do as I said for so many years; I believe that it makes for a better debate.

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This is a good review by any standards. The force structure was put together following the foreign policy baseline establishment, and the force structure reflects the country's foreign policy priorities, which I believe are generally agreed and appreciated. Only after that was done were the proposals presented to Government, and the resources discussed and debated.
The force structure that was recommended by Defence Ministers, with the full support of the chiefs of staff, was accepted by the Government in its entirety—that is a crucial point for people to register. I believe, and they believe, that the finances that are available for it, given the new configuration of forces and the targets for efficiency and for asset management, are demanding but achievable, and will still give us the ability to pack a punch in the world.
The hon. and learned Gentleman's criticisms were more moderate than those that we received from the Opposition Front Bench. It is strange how keen the Conservative Front-Bench defence team are to spend more public money, when the shadow Chancellor does not spare an opportunity, any day of the week, to say that the Government are slack on public expenditure. I wonder whether they would deliver in government what they are so keen to say today.
On Europe, we have been engaged in a permanent consultation with our allies about the strategic defence review. On Monday night, at Lancaster House, where I met the Defence Ministers of Germany, France, Sweden, Spain and Italy and outlined where our review had taken us, they welcomed it with considerable congratulation. I hope that when they read the review when they get it in the post tomorrow, they will find something there of interest and value. NATO colleagues have also been consulted as we have gone along, and the formulation of the strategic concept takes very much on board many of the ideas in the review.
We are not tied to any particular alliance or to any individual country, because Britain needs and demands a right to be able to act alone. However, we take our treaty commitments enormously seriously. We take our alliances seriously, and our deep and lasting continued friendship with the United States of America underpins a common view that we have about many of the problems in the world today.
Several hon. Members rose—
Madam Speaker: Order. I seek the co-operation of the House. There has been an opportunity for only three questioners in three quarters of an hour. There must now be very brief questions; I am sure that the Secretary of State will co-operate in his responses.
Mr. Harry Cohen: I welcome the outcome of the review and welcome the reduction in operational nuclear weapons, but I note that annual savings could be doubled if Britain concentrated on non-nuclear defence. I ask my right hon. Friend a single question: from this review, will the Government be in a position to get rid of nuclear weapons in the period following the next general election?
Mr. Robertson: If there is progress in multilateral negotiations, and if there is to be a balanced reduction in
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nuclear weapons leading to their elimination, we shall play our part in that, but today I have announced reductions in our nuclear forces. We shall maintain the minimum deterrent to which we committed ourselves before the general election—a commitment on the basis of which my hon. Friend and I were elected—but we have done so in circumstances where we have made a contribution to a process which, I hope, will eventually lead to a nuclear-free world.
Mr. Michael Colvin: The House will have had considerable sympathy for the Secretary of State as he searched for something to say about the strategic defence review that we have not been able to read in the newspapers over the past four weeks. In terms of the leak, if the Ministry of Defence is so insecure, one wonders whether it can be entrusted with our country's security.
The right hon. Gentleman made a welcome announcement about increasing the establishment of the Army by 3,300, and he mentioned pay and conditions of service. Could he be specific about those? He will be aware that there was already a shortfall of 5,000 men in the infantry, and I cannot think of what he can announce in the SDR that will enable 8,300 more soldiers to be recruited and others to be retained.
Mr. Robertson: Let me deal with the leak. I am not prejudging the outcome of the inquiry or who leaked the document and how it was disseminated. Let us wait and see, and hope that everybody condemns it because it was wrong and whoever did it, if that person is found, will be treated appropriately. However, let us distinguish that leak, which was wrong and improper, from the widespread consultation through the year on all the issues on Britain's defence, for which I apologise not one bit.
I listened to the views of many sections of the community. The right hon. Member for Bridgwater (Mr. King) who is a distinguished former Secretary of State for Defence, came to me and offered his view and advice, as did Lord Younger of Leckie; Lord Carrington; Lord Healey; Sir Geoffrey Pattie; Pat Duffy; the right hon. Member for Kensington and Chelsea (Mr. Clark); the former shadow Secretary of State for Defence, the right hon. Member for North-West Hampshire (Sir G. Young); and a host of others. We listened carefully to military and non-military views, and they were debated in the country as a whole. I am proud that although the review may not be a surprise today, it will be seen as common sense, the way forward on which we should all be able to unite because of that consultation process.
The hon. Member for Romsey (Mr. Colvin) mentioned the increase in Army numbers. That is welcome, and is in line with the Army's ideas. My hon. Friend the Minister for the Armed Forces, like his predecessor, is making valiant efforts to turn round the recruitment position that we inherited. The Army was 5,500 short, but we think that we have turned the corner and that recruitment is making up the deficiency. Through the other enhancements, and especially through the learning forces initiative, it is up to us to make sure that we get the right people of the right quality for the future.
Ms Rachel Squire: May I begin by paying tribute to my right hon. Friend and my hon. Friends in his ministerial team? The strategic defence review is a tremendous achievement and will provide a

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secure future in a modern world. Does my right hon. Friend agree that a core mission of defence diplomacy for the United Kingdom's armed forces is essential to deal with the diverse uncertainties and crises of the present day world? Will he confirm that the review will provide the equipment and support that are needed by our armed forces for such a role, and that it will build on their excellent worldwide reputation as forces for good which can make a difference?
Mr. Robertson: I very much welcome my hon. Friend's support, which she has given not just today but throughout the exercise. As the Member of Parliament for Dunfermline, West and therefore for Rosyth dockyard, she will welcome the review's good news for that dockyard. She is right to pick up the defence diplomacy initiative and to ask for assurances. If we are to engage in serious military-to-military contacts that will lead to a reduction in tension and a greater increase in understanding, we must back our efforts with proper resources. That is why our defence attaché network will be strengthened and why there will be more resources for joint training and exercises with some of our allies, including some of our former opponents. That will make a much safer world, and certainly a safer continent.
Mr. Tom King: I congratulate the right hon. Gentleman on putting a brave face on what is obviously a difficult announcement, and on his courtesy in inviting me to give him advice on the review; I only wish that he had taken it. Having said that, I certainly welcome the development of a number of ideas that have been Ministry of Defence policy for some considerable time and are right—the development of jointery and the development of the rapid reaction forces have to make sense in the new world in which we live.
May I correct the right hon. Gentleman on one other point? As he will know, he has not made any reduction in the number of warheads because we never announced the number of warheads that we would have, for good reasons, and I am surprised that he has chosen to announce it today; we only ever announced the maximum that there could be.
I have had the opportunity of reading only The Daily Telegraph to find out what is actually in the review. The one thing that sticks out clearly, which is profoundly unwise in the present situation and which will link in to the problems of overstretch, undermanning, recruitment and morale, is the cuts in the TA. That is merely an initial comment, because I have not had a chance to study the statement, but there is one specific question and one point that I should like to put to the right hon. Gentleman. It is one thing to make reductions in our armed forces because there is a major change in the strategic situation, and then to fix at a level of defences which I believed was the minimum level that this country should have. There cannot be a justification to make further reductions on the ground that "You did it, so we can do it, too."
The Chancellor of the Exchequer has just left. Will the Secretary of State assure the House, after all the worries of this review, which took longer than I know he wished, that, now the review is over and the expenditure levels are fixed, there will be no attempt whatever by the Treasury to make further cuts in the defence programme—and that he has had that undertaking?
Mr. Robertson: I valued the advice that the right hon. Gentleman gave me. I listened to the advice that was
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given to me by former Secretaries of State, former chiefs of the defence staff and former permanent secretaries, as I listened to many others involved in this exercise. Like him, I could not take on board everything that was said in terms of advice. I wonder how, when he looks back on his career and on the substantial cuts in defence expenditure that occurred around the time that he was in office, he cogitates on that. However, I welcomed what he said, and I am sure that he will recognise some of the views that resonate through the White Paper when he has a chance to read it.
In terms of the nuclear deterrent, the world has moved on. I sit on the Euro-Atlantic Partnership Council and the Permanent Joint Council of the NATO-Russia Founding Act with the Russian Defence Minister. We are building trust and relationships. We should be much more open and much more transparent, and the rules of the cold war should not necessarily bind us at times such as this. That is why we are opening our books, making it clear what we have and, by doing that, making absolutely certain that people know that the deterrent is still there, still credible and no one should mess with us as a consequence.
The right hon. Gentleman says that we are going to reduce further the level of our forces. We are not. The Regular Army, the regular forces of this country, will be increased by 3,300 as a result of this review. That is what is going to happen. I hope, therefore, that he will not rely on The Daily Telegraph, although, as it was working from a photocopy of the White Paper, it may have got it right.
We are increasing the strength and capability, and we have the satisfaction of the Chief of the Defence Staff as well as of the other chiefs in putting forward this force configuration. The right hon. Gentleman may think that we are unwise to cut the TA. I hope that he will look at the White Paper and see what we propose. We want to strengthen and underline the TA's importance, make it more usable and more integrated and give it a role for the future, not let it be stuck in the past, still in a cold war role.
Dr. Doug Naysmith: May I congratulate my right hon. Friend on this strategic defence review, which has clearly been taken for strategic reasons and not, as the Opposition Front-Bench team has maintained, for financial reasons? I particularly welcome the joint operations, the rapid deployment that is mentioned in the document and, when thinking of my constituency, the Eurofighter confirmation. Is it possible for my right hon. Friend to say a word or two about the Procurement Executive at Abbey Wood in Filton, and what effect the review will have on it?
Mr. Robertson: I welcome my hon. Friend's question, which allows me to underline what he said—that this has not been a Treasury-led review. As my right hon. Friend the Chancellor has made clear, the finances are fixed for three years. That will give the armed forces a much greater ability to plan ahead and much more stability than they have ever had in the year-by-year haggling that characterised public expenditure in the past. I can understand my hon. Friend's interest and, I am sure, satisfaction in the confirmation of the role and numbers of Eurofighters that we will be ordering.
There will be implications for the Procurement Executive in Bristol—a considerable reform of the procurement process, which will lead to better value being

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obtained for the equipment that we buy. However, it is right and proper that these changes should be subject to consultation with the Procurement Executive's employees before anything is announced in the House.
Mr. John Wilkinson: The objectives of greater mobility, flexibility, firepower and joint operations are admirable. However, as there are to be fewer flying squadrons, is there not a risk that morale will be further reduced and personnel may leave? In order to fill the 232 cockpit places for the Eurofighter, will the right hon. Gentleman consider allowing pilots to do commercial pilot courses at ground school during their flying training, so that if they leave the regular service they could join the auxiliary air force, thereby making good any shortfall in that way?
Mr. Robertson: The training initiative is already under way and my hon. Friend the Minister for the Armed Forces has it under review. I assure the hon. Member for Ruislip-Northwood (Mr. Wilkinson) that morale in the Royal Air Force will not be affected, other than for the better, by this review and our vision for the future. The confirmation of the order for Eurofighters has been looked for and their role has been vindicated by the very deep analysis carried out in the review. I thought that the hon. Gentleman might have welcomed the decision to take over the lease on the C-17s or their equivalent. I am aware that he has a long-standing interest in that.
Morale in the forces has been badly affected in the past by hollowing out. That is especially true of morale in the RAF, which has led to an exodus of fast jet pilots. That will be relieved by a reduction in the number of fast jets but a continuation of the existing levels of manpower. It will relieve the overstretch that has been at the basis of falling morale.
Mr. Jim Murphy: I congratulate my right hon. Friend on his foreign policy-led defence review. I especially welcome his comments not just on expensive pieces of military kit, but on our most valued asset—the men and women of our services and their families.
In the context of the review, does my right hon. Friend agree that the process has again highlighted the absolute lunacy of an independent Scotland, a separation of the forces and their payment and the creation of two foreign armies, two foreign navies and two foreign air forces, operating in two separate countries side by side on these islands?
Mr. Robertson: I entirely agree with my hon. Friend. Nothing better highlights the fantasy world of the separatists in Scotland than the concept of a separate Scottish army, navy and air force—presumably with the hon. Member for Banff and Buchan (Mr. Salmond) as the commander-in-chief. Our armed forces contain a rather large proportion of high-quality Scots, and they are strengthened as a consequence of that.
The review is very good news for the armed forces in Scotland. It is good news for Rosyth dockyard; good news for Faslane; good news for the Nimrod replacement and Kinloss; good news for Leuchars; good news for the Edinburgh area with the Eurofighter contract; good news
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for the Army personnel centre and the other central functions of the MOD in Kentigern house in Glasgow; and good news for Scotland. Separation and ripping Scotland out of the United Kingdom would be profoundly bad news for Scotland and for the rest of the country.
Mrs. Margaret Ewing: Leaving aside the panic button that was obviously triggered by opinion polls in Scotland, may I tell the Secretary of State that—despite many hon. Members' urgency in finding answers to specific questions—the documents merit serious study and considered response? What are the geographical implications of reductions in Territorial Army numbers? There has been genuine concern in the highlands and islands of Scotland that, in a line from Fort William to Stonehaven, there may be no Territorial Army centre.
The Secretary of State also mentioned the issue of the special problems—such as mobility—faced by service families. Will there be a specific Ministry of Defence education budget to assist children who have to move from various settings and countries—sometimes at very short notice—or will the matter be negotiable with the Department for Education and Employment, the Scottish Office, the Welsh Office and local authorities? Parents and families are concerned about that matter.
Finally—very briefly—why are we only cutting in half the number of Trident nuclear warheads? Why do we not set a model example for the rest of the world, so that we can genuinely argue the case for non-proliferation?
Mr. Robertson: I do not know what position the hon. Lady will have in Alex's Scottish army—perhaps chief of the air staff. We shall see. She asked about the Territorial Army. The geographical distribution of the new, reinvigorated Territorial Army is a very important matter which should be the subject of consultation with the Territorial Army itself. My hon. Friend the Minister for the Armed Forces is currently engaged in such consultation—which, rightly and properly, should take time to be completed.
The hon. Lady was right about education, and I hope that she will register both my comments and the White Paper's contents dealing with the matter. We shall establish a task force to deal specifically with the problems experienced by mobile families—who do not have first choice in choosing schools to provide the education that their children deserve, and who find it difficult to get on to doctors' waiting lists and almost impossible to get NHS dentistry.
Those problems are difficult ones because of the current structure of the health service and education service, which is why a specific task force will be established to deal with them. Although the problems may seem to be small issues within a vast strategic defence review, they are far greater than any strategic issue if one cannot get medical attention or one's children into school. We want to deal with those problems.
Mr. Barry Jones: With the interests of my 3,800 aerospace workers in mind, will my right hon. Friend say more about the heavy-lift future large aircraft? We want to build its wings—will it fly? Will the Astor project—I have a constituency interest in

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it—go forward? Will he say how many more months we shall wait to hear the fate of the 3rd battalion Royal Welch Fusiliers (Territorial Army)?
Mr. Robertson: My hon. Friend is a doughty champion of the interests of the aerospace workers in his constituency, and rarely wastes an opportunity to make his views on them clear to me. I am always glad to listen to him. I have made it clear that we have an interim need for heavy-lift transport, and the C-17 or an equivalent fits into that category. However, the future large aircraft project continues. We fully support it, and hope that it will provide an appropriate European heavy-lift aeroplane for the future. We have a commitment to the Astor programme, which goes ahead. My hon. Friend will receive news of the Territorial Army configuration once consultations have been completed.
Mr. Gerald Howarth: The Secretary of State will be aware that the proposal for the joint rapid reaction force expansion builds on the Conservative joint rapid deployment force; therefore, we welcome it. However, he will also be aware that I am extremely concerned about the future of the Parachute Regiment and airborne forces. Is it not the case that, as a result of a review, the cap badge and the red beret of the Parachute Regiment and the proud ethos of airborne forces is likely to be submerged into the new air manoeuvre brigade? Is he now able to respond to the point that I made in the House last week—that this welcome new brigade should be based in Aldershot in Hampshire rather than in East Anglia because the forces have to deploy from west of London not east of London?
Mr. Robertson: The hon. Gentleman takes a healthy non-partisan view of defence which is very welcome. Although he did not say it, I am sure that he welcomes the thrust of the review. He says that we may well have taken some ideas from the previous Government's joint rapid deployment force, but even he will recognise that it was not easily deployable, so we have given it the capability to deploy and the rapidness that it did not have in the past. I am happy to continue with some of the better ideas of the previous Government and to give them the resources to make them work.
The hon. Gentleman is right to praise the Parachute Regiment, its proud tradition and record of fighting, but it is generally felt that its capability in parachuting should be built into something that makes more sense and is relevant to future circumstances. Its cap badge will be maintained, as will its traditions and, given those who run the Army at present, it is highly unlikely that there will be any attempt to change that. However, within the new air manoeuvre brigade, its relevance and purpose will undoubtedly be increased in future. No decision has been taken about where the brigade will be based, I hear what the hon. Gentleman says about Aldershot and I am sure that he expresses a dispassionate and objective view, but I have no doubt that other objective views will be expressed from other parts of the House, and we shall listen to them all.
Laura Moffatt: May I welcome my right hon. Friend's announcement today, particularly the reference to the defence medical services? It was depressing to find that those in Bosnia doing the job on
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behalf of our reserves and regular forces were so damaged by the reorganisation of services by the previous Government. It is difficult enough to work in the medical services, as I know, and to do that job in dangerous and awful conditions is something which I consider unacceptable. I very much welcome the move to do something about it, and I am most grateful to my right hon. Friend.
Mr. Robertson: I thank my hon. Friend who is a member of the Defence Select Committee and has seen at first hand many of our troops in operations. Like so many others, she has heard from them about the current demoralisation in the defence medical services. The previous Government made a serious mistake in the way in which they made economies. It is something which many people regret. I do not make much of it, in the interest of maintaining the consensus that we have built up, but it has to be rectified, and we are committed to that. If our deployed troops require and rely on anything during operations, it is the medical back-up; we have to re-create that and make sure that it is there.
Mr. Mike Hancock: I should be grateful if the Secretary of State could answer three or four quick questions about the White Paper, as I am sure that many right hon. and hon. Members will have doubts about how £750 million will be saved. He spoke specifically about overstretch and undermanning. How does he square that with reducing the number of ships. Putting more men into ships, but having fewer ships will undoubtedly mean more deployment, possibly for longer. Where will the new aircraft carriers be kept? I should like to make a special plea for Portsmouth dockyard, which is custom made for it. Will he also explain to the tens of thousands of people in the Greater Portsmouth area who rely on the defence industry for jobs what there is in the White Paper that will give them some satisfaction that their jobs are safe and that the projects that they are currently working on will not be abandoned? I am heartened by the thought that there will be a further statement tomorrow. Finally, will he let us know what he plans to do with defence medical services, in particular the future of the Royal Haslar naval hospital?
Mr. Robertson: It is difficult to give short answers, Madam Speaker, if hon. Members ask five questions. May I first put the hon. Gentleman right? The savings in the defence budget will not be £750 million. We are talking about a 3 per cent. reduction in real terms in the defence budget by the end of three years—£685 million. We believe—and the MOD believes—that that can ensure that we still deliver the force package that we have announced. Undermanning in the Royal Navy will be helped by the reduction in the surface fleet. Unlike previous Governments—let them remain unnamed at the moment for the sake of peace—who reduced both the surface fleet and manpower, creating overstretch, we are leaving manpower levels as they are. The Navy believes that that will make a substantial difference to overstretch.
I note—no more than that—that the hon. Gentleman wants the new aircraft carriers to be based in Portsmouth. The happy news is that my constituency of Hamilton, South is absolutely landlocked. I am therefore completely objective in that regard. No doubt, there will be competing interests for that basing policy. It is just conceivable that

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I will not be the Defence Secretary around at the time who must make that decision. [HON. MEMBERS: "Oh."] I express shades of mortality rather than any sign of modesty.
The defence industry is in very safe hands. It is important to the country because of the jobs that it creates, the exports that it generates and the technology of which it is a part. The defence review underlines the importance of the British defence industry, which I spend much of my time helping when visiting foreign lands.
Mr. John McAllion: Does my right hon. Friend understand that the threat of a new nuclear arms race in southern Asia is worsened by Britain retreating to a position from which we defend our national right to use nuclear weapons but deny that same right to almost every other nation on earth? If so, does he accept that, in announcing that Britain is and will remain a nuclear weapons power, he has missed an unique opportunity to give a lead on nuclear disarmament, which could pull the world back from a nuclear brink that has suddenly and frighteningly become that much closer?
Mr. Robertson: Despite my new post, I watch the Scottish press carefully. I always thought that my hon. Friend believed in delivering what one promised. He and I were both elected on a manifesto that stated that we would retain Trident; we should keep our commitments. On the subject of new nuclear arms races, this Government ratified the comprehensive test ban treaty immediately they came to power. I hope that India and Pakistan will also do so. That would make a serious contribution to reducing the chances of proliferation and the dangers of testing.
Mr. Nick Hawkins: The Secretary of State will be aware that service men and women, from the most senior officers to the newest squaddie, will have been watching and listening to what he has said. Does he accept that what he has announced, which an artillery man might call a smokescreen barrage, cannot disguise huge cuts? Our service men and women will have noticed that he failed to answer the question asked by my right hon. Friend the Member for Bridgwater (Mr. King). The Secretary of State has no undertaking that the cuts will end—otherwise, he would have told us. How can he possibly believe that recruitment, retention and overstretch will be helped by his announcement of huge, Treasury-driven cuts?
I welcome one or two points, particularly the strengthening of defence medical services, which the Secretary of State will know are important in my constituency. Does he recognise that his announcement on the cutting of fast jets now, with the promise of jam tomorrow when the Eurofighter arrives, will not help retain pilots? That is the economics of the madhouse; they will all have left long before the Eurofighter is available. Does he recognise that all he is promising is beyond visual range? Will he finally answer the question that I have been asking him and his Minister of State on behalf of my constituents for more than a year? Will he address the scandalous refusal to announce what there will be in the splendid buildings of the staff college in Camberley?
Mr. Robertson: The hon. Gentleman is right in one respect. Our forces across the world will be interested in
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the defence review and in what their Parliament has to say about it. Where he is wrong is in underestimating their intelligence when it comes to discriminating between what he is saying and what I am saying. They know what the past seven years have been like. They know of the 23 per cent. cuts and compulsory redundancies in the armed forces when they were on operations in Bosnia.
We are saying today that the regular armed forces of this country will be increased. The Army will be increased by 3,300, and all other services will be maintained at present levels. Our forces will be able to understand what is in the review, and they will see the contrast between it and what they have experienced. The hon. Gentleman was not listening when I made the point—following the right hon. Member for Bridgwater (Mr. King)—that the financial deal in the White Paper is part of the comprehensive spending review and is guaranteed for the next three-year period. No Conservative Government gave a three-year forward commitment.
The hon. Gentleman mentioned Camberley and what use might be made of that building. We will consider, with all the valuable buildings that are within my responsibility, the best and most appropriate way of dealing with those sometimes surplus assets, and whether they could be used in terms of the rationalisation of some of the defence estate.
Mr. Nick Ainger: I congratulate my right hon. Friend and the rest of the MOD team on the review. It is the first review I can recall where Wales has not been penalised in terms of job losses. During the final two terms of the Conservative Government, 2,000 defence jobs were cut in Pembrokeshire and Carmarthenshire.
May I ask specifically about the three armoured regiments that are planned to return from Germany with their 2,500 personnel? Has a decision been made on where those three regiments will be based and trained? If no decision has been made, may I recommend that my right hon. Friend look closely at basing them and providing training at the Castlemartin tank range in my constituency?
Mr. Robertson: I am taking careful note—I am sure that my officials will be as well—of all bids for the new configurations, which I know will be generally welcomed. No decisions have yet been taken about where the regiments coming back from Germany will be based. We will look carefully at the assets, to ensure that the right decisions are taken in terms of the military and the public purse. My hon. Friend is absolutely right to draw a contrast between the experience of those in the armed forces and what is promised in the review today. The defence review was designed as a vision of the future that would unite as many different elements in the country as possible, so that defence would cease to be the political football that it has sometimes been in the past. I believe that it does that, and that it is good for the country.
Mr. Michael Mates: As the right hon. Gentleman continues to deny that the Treasury had anything to do with the review, he is, I suppose, unable to accept the congratulations that some of us would want to offer him and his colleagues on having fought extremely well against the predators of the Treasury and

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having coming out with cuts which are much smaller than many of us feared. I am sorry that he cannot accept those congratulations, which are offered sincerely.
May I particularly welcome the appointment of a new Chief of Defence Logistics? I hope that the Secretary of State will instruct him to finish the job of managing defence centrally, which was started all those years ago by Mountbatten and has been frustrated from time to time by single-service rivalries and turf protection. If he can solve that problem and bring together all the defence logistics, he will have done us a great service.
I wish to make a point about the Territorial Army. In this country, the services, in their professionalism, are gradually getting further and further away from the people. The closing of Territorial Army centres and the taking out of the defence world of members of the civilian community will accelerate that. Will he look at that problem, because if the services are divorced from their civilian counterparts, we will get an unstable and unsatisfactory situation, which we have not had in this country since the war?
Mr. Robertson: If I had had a battle with the Treasury, I would have been happy to accept the congratulations of the hon. Gentleman. My right hon. Friends the Chancellor of the Exchequer, the Prime Minister, the Foreign Secretary and the President of the Board of Trade have all had an interest in the White Paper, and we have had a reasonable discussion.
As I said—and it should not be underestimated—the package that was designed in the Ministry of Defence by the Chiefs of Defence Staff, the Ministers and others who gave their input to the process was untouched by Government. A civilised discussion then took place with the Treasury, and a package was agreed. None the less, I accept the hon. Gentleman's congratulations on the size of the package and pass them on to my hon. Friend the Minister for the Armed Forces.
I thank the hon. Gentleman for welcoming the Chief of Defence Logistics; we believe that it will result in better co-ordination of a key component in ensuring that the right forces can be delivered at the right time. I know that General Sir Sam Cowan's appointment as the first chief has been generally welcomed; there is probably no better man to fit that position and to begin with energy doing the job that the hon. Gentleman describes.
I recognise that very small armed forces, which are proudly treasured by the British people, can become disconnected from their local communities and lose visibility. The TA plays a part—but not the only part—in ensuring that there is contact. That will be one of the key criteria by which we judge the TA's final shape when it is reconfigured, reinvigorated and made more appropriate to the future.
Mr. Malcolm Savidge: Recent events in Iraq, India and Pakistan have raised awareness of the terrible risks of nuclear proliferation. Does my right hon. Friend believe that the initial cuts in British nuclear weapons that he has announced will enable Britain to take a strong lead both in discouraging proliferation and in reviving the process of multinational disarmament?
Mr. Robertson: My hon. Friend is right. We need to move with some urgency towards a safer world, in which
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there are fewer of these weapons. We believe that we should maintain a credible nuclear deterrent, but that that can be done at lower levels. We also believe that we can be more open about what we have. The review will achieve that, which is good news for those who serve in our deterrent patrols and will, I believe, be welcomed in the country and, indeed, in the wider world.
Mr. Peter Viggers: Does the Secretary of State agree that, on the crucial medical services, the White Paper is strong on generalisations, which I welcome, but silent on points of detail? Is that not surprising, as a report was completed some months ago on the secondary care agency? Will he confirm that he will build on the core of the Royal Naval hospital at Haslar and the medical college at HMS Dolphin, retaining them as a centre of the enlarged medical services?
Mr. Robertson: Rebuilding the defence medical services and the morale that has disappeared will not be easy, but we are committing money and people to ensure that it happens. I cannot say what the final shape will be; Haslar and the local national health service trust are having on-going discussions. I want urgently to consider how best we can fulfil our commitment, use properly the money that we have set aside and ensure that one of the key capabilities of our armed forces is given the priority that people believe it should have.
Gillian Merron: May I pay particular tribute to the review's acknowledgement of the worth of our service people and its practical commitment to improving their lives through better personnel services, education and training and the task force for the family? Will my right hon. Friend tell my constituents when a decision is likely to be reached on the future of RAF Scampton in Lincolnshire?
Mr. Robertson: My hon. Friend is right to point to the key role that people have in the review and in the armed forces as a whole. I am told that it is a cliché to say that people are our key asset, and I suppose that it is; it is repeated by those who have done them a disservice as well as by those who have done them a service. However, it is a fact of life. People make our defences the envy of the world; their capability and skills are highly important. She mentions the Royal Air Force, of which the same is true; the fast jets do not fly without skilled people to man them, and we give those people due priority.
We will announce in due course the implications of the review for individual circumstances, which are complex at this stage, and I am sure that my hon. Friend will be relieved as a consequence.
Mr. Alan Clark: I thank the right hon. Gentleman for including me in the consultation process, and I am naturally gratified that some of the recommendations that I, among others, made have found their way into the document. He did not, however, properly answer the question put by my hon. Friend the Member for Stratford-on-Avon (Mr. Maples): will the carriers in fact be built? They are the only factor that justifies the word "strategic" in relation to the review, which is otherwise a list of fairly intelligent cuts and an exercise in saving money.

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How will the Secretary of State protect himself against the fact that, as soon as the Treasury realises how much equipment and expense will be involved in maintaining a dual-carrier task force—the review is short on detail—it will torpedo the carriers, leaving only the debris of the three services that have been pillaged to pay for them?
Mr. Robertson: I thought, when I made the announcement, that I would have the right hon. Gentleman's support, as I know of his abiding interest in the subject. Every capability in the Ministry of Defence has been examined thoroughly in the review. The balance in the document and in the supporting documents—he may care to read them—leads to clear conclusions about how we should best configure our forces to meet the uncertainties of the new world. That is why we decided to plan for two new carriers to replace the current three.
The costs of the carriers and the aircraft to go on them—decisions are still further down the line—will be considerable, but they will be spread over a long period in both preparation and delivery. It is no intention of the Government to make a proposal and then walk away from it. We are saying in the review what we believe will be right for our country's future and what should be delivered.
Mrs. Anne McGuire: I congratulate my right hon. Friend on an inclusive and open process, culminating in the television programme, which was undoubtedly the talk of the steamie throughout Scotland. As a member of the armed forces parliamentary scheme, it struck me as faintly bizarre that we have invested tens of thousands of pounds in technicians who have no transferable pieces of paper to take them into civilian life, and officers who can drive boats and ships across the world but are not qualified to drive a CalMac ferry across the Minch. I welcome the learning forces initiative. Does my right hon. Friend have a time scale in mind for its implementation?
Mr. Robertson: My hon. Friend is my own representative in Parliament, and a very fine one, too. I welcome her question. The transferable qualifications that we have proposed that all recruits and existing personnel should aim for are a key component of the review, to help to ensure that we recruit and retain the best people. The learning forces initiative is designed to be implemented as quickly as possible.
I know that my hon. Friend is in the armed forces parliamentary scheme with the Royal Navy, and perhaps I may take the opportunity provided by her question to make a small announcement about the review's implications for our frigates. As the White Paper makes clear, the emphasis is moving away from large-scale maritime warfare and open-ocean operations, and as we have concluded that our force of attack submarines will be reduced from 12 to 10, there will be implications for frigates.
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HMS Splendid will pay off in 2003, when she was due for refit. HMS Spartan will have a refit in Rosyth, starting in 1999, but will pay off in 2006, a little earlier than previously planned. Five type 22 frigates based in Devonport will be paid off: in 1999, HMS Boxer, HMS Beaver and HMS London; HMS Brave will be paid off in 2000; and HMS Coventry in 2001, as two new type 23s are brought in. HMS Birmingham—a type 42 destroyer—will pay off as planned in 1999, to be replaced by a new type 23 frigate. It is right that the House should receive that news, not any outside audience.
Several hon. Members rose—
Madam Speaker: Order. I must conclude questions on the statement—[Interruption.] Order. Some Members are exasperated that they have been rising for a long time, but have not been called and I sympathise. At 4.15 pm, I said that progress was not to my satisfaction, but hon. Members ignored what I said and continued to put many questions to the Secretary of State, as well as making long statements. To a large extent, the House must discipline itself. I have done my utmost to call hon. Members with direct responsibility for defence establishments in their areas. If there is a debate on the White Paper, I shall see to it that those hon. Members who have taken an inordinate length of time asking questions today do not get priority.

Points of Order
5 pm
The Parliamentary Secretary, Office of Public Service (Mr. Peter Kilfoyle): On a point of order, Madam Speaker. It arises from yesterday's debate, in which the right hon. Member for South-West Surrey (Mrs. Bottomley) sought to intervene on my speech. I initially resisted her intervention. However, I had named the right hon. Lady and intended to give way to her after I had completed that part of my speech. I apologise to the House for any unintended discourtesy on my part. I must reassure the House that I accept unequivocally that it is right and courteous to give way to right hon. and hon. Members whom one has named in a speech and I thank you, Madam Speaker, for giving me the opportunity to advise the House that I intended no discourtesy to it.
Madam Speaker: Thank you.
Mrs. Virginia Bottomley: Further to that point of order, Madam Speaker. I accept the hon. Gentleman's apology. Perhaps he should have allowed me the opportunity to right that wrong accusation, but I accept his apology and his endorsement of the convention.
Madam Speaker: I appreciate that. Thank you.

Empty Homes (Value Added Tax)
5.1 pm
Mr. Jonathan Shaw: I beg to move,
That leave be given to bring in a Bill to reduce Value Added Tax paid on the renovation of long standing empty homes.
The Bill would take a large knife and cut the waste of empty homes, which litter our towns, cities and countryside. Ours is a small island straining to provide enough decent housing for all its inhabitants. With the countryside under threat from development and inner cities in need of regeneration, we have a bewildering and contradictory situation that allows the building of new houses on green-field sites to be exempt from value added tax, yet penalises those refurbishing, converting or saving homes by charging them VAT at the full rate at 17.5 per cent. The Bill would provide a greater incentive to the building industry to bring empty homes back into use by reducing the level of VAT paid on their refurbishment. In doing so, it would help to create a more sustainable house-building policy.
In England and Wales, more than 800,000 homes are empty, and the great bulk of them are in the private sector. When publishing the White Paper, "Planning for the Communities of the Future", my right hon. Friend the Secretary of State for the Environment, Transport and the Regions announced that the target for building homes on previously developed land would increase from 50 to 60 per cent., which was a welcome move. As we frame a new housing policy, it is vital that we consider how to sustain existing property. Wasted homes that are lying idle could make a significant contribution to the Government's inherited figure of 4.4 million homes being needed—or however many we end up believing we need.
Lowering VAT to 5 per cent. on the renovation and refurbishment of homes that have been empty for more than a year would make that significant contribution to providing for the nation's housing. The Government have stated that they are committed to producing an agenda for sustainable development and, in doing so, have undertaken to consider moving taxation to environmental bads from environmental goods. We saw evidence of that in the vehicle fuel escalator and the reducing of burdens on home energy-saving materials in the recent Budget. Most environmental groups are convinced that the use of empty homes would not only provide a contribution to housing the nation, but save the existing fabric of buildings and reduce toxic greenhouse emissions associated with the manufacture and transportation of materials.
Much has been done to bring empty properties back into use, but it has been led principally by local authorities, often in partnership with housing associations. I was responsible for introducing an empty property strategy on my local council. Within 18 months, we had refurbished 100 empty homes, but the cost had to be transferred to tenants through higher rents. High rents can prove a barrier or a disincentive to low-income families, or to those who want to move from welfare to work. If my Bill had been in place, my council could have renovated 15 more properties. The same is true of many excellent local authority initiatives up and down the country. However, the matter cannot be left to local councils, because most empty properties are in the private sector.
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There is proper concern about how we define an empty property in need of refurbishment. My Bill would not provide a loophole for anyone who left home on holiday, returned via a do-it-yourself store and sought a reduction in value added tax. The Bill addresses the 250,000 empty homes of long standing, on which councils all over the country have full information because of the details that they are required to provide from their council tax work. Councils are well placed to issue exemption certificates, as local authority bodies have said. A mechanism is in place for the avoidance of fraud.
The next question is whether the Bill's proposals are achievable under European law. The Government have successfully negotiated a cut in VAT on fuel. They had to work hard for that, and cutting VAT again would require time-consuming and difficult negotiations. However, a modest, sustainable and sensible policy would be better than the ill-conceived and contradictory existing policy that allows barns to be converted and millionaire mansions to be built on green-field sites for social reasons, free of VAT, while local councils have to stump up the full whack when they bring a two-up, two-down terraced house back into use for a family on low pay. The policy is the wrong way round.
I concede that there would be an initial loss of revenue. However, we should not lose sight of the savings that my Bill would bring. Increasing work on empty homes will increase the VAT yield. More work for the construction industry means more national insurance and tax contributions. Lower rents will cut benefit bills, and grants to housing associations could also be reduced.
My Bill does not go far enough. I am constrained by the rules on Bills from promoting all that I would like. I want the Government to create a level playing field for the refurbishment of long-standing empty homes and the building of new homes on green-field sites by harmonising VAT at 5 per cent.—a move which was supported by more than 60 hon. Members on both sides of the House in early-day motion 1467. Harmonisation would yield £200 million a year for the Treasury if 176,000 houses were built. That truly would be a sustainable policy.
The Bill is supported by the Campaign for the Protection of Rural England, the Civic Trust and the Empty Homes Agency, which has done much work and which deserves tribute. Moreover, the Bill has been recommended to the Government by their own advisory panel on sustainable development.
Reducing VAT on refurbishment of long-standing empty properties to 5 per cent. is an important first step towards dealing with the waste that bedevils our community. We inherited an appalling legacy in social housing, with council house repairs running at £20 billion. The Government made a good start by releasing council house receipts, but many families still live in appalling bed-and-breakfast accommodation, which is bad for their health, bad for their children's education and an indictment of society. The indictment is all the greater when houses are waiting for renovation and builders want to do the work.
Question put and agreed to.
Bill ordered to be brought in by Mr. Jonathan Shaw, Mr. Robert Marshall-Andrews, Mr. Bill Rammell, Dr. Brian Iddon, Mr. David Chaytor, Mrs. Helen Brinton, Jane Griffiths, Mr. Martin Salter, Mr. Derek Wyatt, Mr. Vernon Coaker and Mr. Brian Sedgemore.

EMPTY HOMES (VALUE ADDED TAX)
Mr. Jonathan Shaw accordingly presented a Bill to reduce Value Added Tax paid on the renovation of long standing empty homes: And the same was read the First time; and ordered to be read a Second time on Friday 6 November, and to be printed [Bill 223].
Orders of the Day

  Competition Bill [Lords]
  Ordered,
  That the Competition Bill [Lords], as amended, be considered in the following Order, namely, Amendments relating to Clauses 1 to 3, Clauses 17 to 19, Schedules 1 to 4, Clauses 4 to 16, Schedule 5, Clauses 20 to 24, Schedule 6, Clauses 25 to 45, Schedule 7, Clauses 46 to 49, Schedule 8, Clauses 50 and 51, Schedule 9, Clauses 52 to 54, Schedule 10, Clause 55, Schedule 11, Clauses 56 to 74, Schedules 12 to 14, Clauses 75 and 76, New Clauses, New Schedules.—[Mr. Ian McCartney.]

  Competition Bill [Lords]
    Clause 3

      EXCLUDED AGREEMENTS
      5.10 pm
      Mr. John Redwood: I beg to move amendment No. 2, in page 2, line 42, at end insert
      'or—
      (e) resale price maintenance for over-the-counter medicines'.
      Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss new clause 4—Exempted goods—
      '() The Chapter I prohibition does not apply to an agreement relating to the resale price of goods of a class which are the subject of an order made under section 14 of the Resale Prices Act 1976 (exemption of goods by the court).'.
      Mr. Redwood: I am grateful for this opportunity to speak on amendment No. 2 and comment on the rather good new clause tabled by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), which directly bears on the same problem.
      In many of the debates on the Bill, the Opposition have pointed out that one of its unfortunate consequences—which I trust was unforeseen by those who drafted it—will be the closure of many smaller pharmacies. We have continually argued that the Bill makes it more likely that resale price maintenance will have to go. We have had confirmation of that view and various explanations from Ministers in Committee. Ministers would like the nation to believe that the threat comes from Brussels rather than from their actions and legislation. However, we will seek to show that pharmacies are threatened by the Bill and the Government, as well as by the possible threat from Brussels to which Ministers like to refer.
      There are some agreed matters in this debate. It is agreed that, if resale price maintenance is abolished, some pharmacies will close. Indeed, Ministers have suggested that hundreds will close. It is common ground for about 170 Labour Members and for Opposition Members that that would be extremely damaging.
      Mr. Tim Boswell: Where are they?
      Mr. Redwood: My hon. Friend asks where all those Labour Members are. It would be good to have them here expressing concern about their local pharmacies. However, the Whip on duty, who is now going through contortions trying to show that he has a sense of humour, has done a good job of ensuring that there will be no

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      dissent and no expression of opinion or strong views by Labour Members in defence of the pharmacies that they know will close.
      The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths): Perhaps the right hon. Gentleman can tell us why the Community Pharmacy Action Group does not support the amendments.
      Mr. Redwood: I trust that the Minister will restrain his impatience a little, because it will give me great pleasure later in my analysis to take the House through the position of the Community Pharmacy Action Group and its advisers, Lawson Lucas Mendelsohn.
      It is agreed that there is a substantial threat of closure, and that it comes from the abolition of resale price maintenance. It is also agreed, I think, that we can go this far in asserting agreement—that some combination of possible Brussels investigation and this legislation will cause the end of resale price maintenance.
      The Minister will doubtless say, as he did in Committee, that there is an investigation under the existing system, but he should remember that there have been investigations before. The most recent concluded that the arrangements were in the public interest. If the Bill did not change the law, it would be possible for the retail pharmacies to win their case under existing law and arrangements as they did before, and continue thereafter to benefit from the advantages that resale price maintenance brings them.
      It may help the House to remember why RPM is important to pharmacies, and why there are sensible alternatives for customers who rate price above service. This is important, because the typical local or rural pharmacy provides service and advice. That is often expensive. The number of customers may be limited, but they appreciate the whole service—not just the ability to purchase the goods once the right one has been identified. To sustain the considerable costs of this service, there is a system of recommended and maintained prices which enable pharmacies to recoup the costs of providing the full service and advice through a slightly higher margin than would otherwise be the case.
      Mr. David Chidgey: Does the right hon. Gentleman agree that retail price maintenance would become insignificant if the professional services provided by pharmacists were properly rewarded? Should not the President of the Board of Trade talk to her Cabinet colleagues about getting the Department of Health to pay properly on time, rather than keeping chemists waiting 90 days to pay bills?
      Mr. Redwood: The hon. Gentleman makes an excellent suggestion. It is a pity that the President of the Board of Trade is not present to hear that advice. I trust that her Minister of State or the Minister for Competition and Consumer Affairs will pass it on. I do not wish to repeat the allegation made outside this House that she is insignificant. She holds an important office of state, and I hope that she will consider that kind suggestion from her allies in government, the Liberals. I associate the official Opposition with the idea that the NHS should pay its bills on time. That would help the cash flow of many small and larger pharmacies.
      1102
      Pharmacies need something more than the NHS paying its bills on time. They have traditionally enjoyed the protection of slightly higher prices, which provide them with extra money. That has been found to be in the public interest under the law that the Government are trying to replace.
      Dr. Stephen Ladyman: Given the right hon. Gentleman's comments about the presence of my right hon. and Friends and the powerful case that he is making for community pharmacies, has he wondered where the hon. Member for Tunbridge Wells (Mr. Norman) is this afternoon? As the chairman of the Asda supermarket chain, he launched the complaint against resale price maintenance with the restrictive trade practices court. Why is he not here to debate these important matters?
      Mr. Redwood: It shows my hon. Friend's strong sense of conflict of interest that he does not wish to be here to make the business case that is firmly held by Asda. He knows that the official Opposition strongly disagree on this occasion with Asda, fine company though it is. We will vote in favour of support for retail pharmacies. I am not a spokesman for my hon. Friend the Member for Tunbridge Wells (Mr. Norman). He is wisely not here tonight because he has other important business.
      Although the case is now being taken forward by the executive management of Asda and not by my hon. Friend, his absence shows how sensitive he is on this important point. I should have thought that Labour Members would want to give him credit for that, rather than trying to coax him into making a statement that they would doubtless misconstrue against him.
      Dr. Ladyman: I am grateful to the right hon. Gentleman for his continued patience. I understand the conflict of interest that has been created. Does he have any information about which Lobby the hon. Member for Tunbridge Wells will join this evening?
      Mr. Redwood: I have already made it clear that I do not speak on this occasion for my hon. Friend the Member for Tunbridge Wells. I speak for the Opposition, and I am making our position clear. I suggest that we move on to more weighty matters that relate to the future of many of retail pharmacies. [Laughter.]
      Many Labour Members think it is amusing and that the only interesting thing is the position of my my hon. Friend the Member for Tunbridge Wells, who is a fine Member of this House. They should concentrate on what worries their constituents, who are not asking about my hon. Friend's position. They are asking what, if anything, the Government will do to help community pharmacies. Will they tonight, by their inaction and vague statements, sign the death warrant of hundreds of small pharmacies, as I think they will; or will they listen to the urging of the Opposition, and, for a change, do something that might help those businesses?
      Mr. Nigel Griffiths: The right hon. Gentleman promised the House that he would answer the question I put to him: why is the Community Pharmacy Action Group not supporting the amendment? It is because it supports us.
      Mr. Redwood: Life is not that simple. I must again ask the Minister to contain his impatience. His hon. Friend

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      the Member for South Thanet (Dr. Ladyman) has been interrupting on less important matters, and I have been extending to him the courtesy of answering his point. The Minister makes a more important point that is worthy of a longer reply, which I shall give at the right point in my argument; but it is right that I first explain the general position: the threat of closures, the sort of services that the pharmacies offer, and why they are important in local communities.
      If someone, even in one of those local communities, thinks that price is far more important than service and the branded medicine, that person can travel to the nearest large supermarket and take advantage of the excellent goods sold in, for example, the supermarket that used to be run by my hon. Friend the Member for Tunbridge Wells. There, and in other, rival and equally competitive, supermarkets—I do not wish to recommend any particular supermarket—can be found cheaper medicines, equivalent to the branded goods, sold on price.
      We are not trying to stifle choice in the marketplace, or to prevent people from buying cheap medicines if price is important to them, but we think that, in this unique situation—we do not recommend similar measures for other industries—it is worth preserving the system of RPM that has served local communities so well in the past and could do so in future.
      The House will want to know how we propose to achieve that. There are two mechanisms on offer, in amendment No. 2 and in new clause 4. The amendment tabled in my name on behalf of the official Opposition does the job in a straightforward way, providing that, if the competition authorities wished to change their minds on the issue, Ministers would have to come back to the House to amend the legislation.
      It is an old technique and a democratic one. I know that such things are going out of fashion with the Government, but I recommend it to the House, as it would ensure that the matter would be under democratic control and properly debated. The amendment provides a lock on the door, unless and until a majority party in future wished to change the arrangements. It works simply, by adding
      "resale price maintenance for over-the-counter medicines"
      to the list of exemptions in clause 3, which sets out the main prohibition regime and exemptions to it.
      If the House finds the amendment a little too dramatic, because it would clearly do the job, there is an alternative in the form of new clause 4, standing in the name of my hon. Friend the Member for South Cambridgeshire. If the Government chose to accept that instead of the really strong version, it would enable the Government to continue to exempt those goods
      "which are the subject of an order made under section 14 of the Resale Prices Act 1976".
      The new clause would preserve the exemption all the time that the court exemption is in existence; and the court would still have to satisfy itself about the particular case. That, too, would receive the blessing of the official Opposition, if that is the best that the Government are prepared to accept in order to get themselves out of the hole of their own making.
      Ministers argued in Committee—as doubtless the Minister will argue tonight—that there is no point in taking such action in British law, because Brussels is
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      determined to end the system of RPM, and that we must allow Brussels to have its way. However, instead of leaving it to Brussels to do that, Ministers say that the issue must be examined by the courts here: if the courts find in favour of the current practice, it will go, albeit over some longer period; and if the courts find against it, the courts will impose their own timetable for its removal. It is not much fun for the retail pharmacies fighting the case before the court to know that, either way, they will lose, but there may be some debate about how quickly the system is phased out.
      I find it quite extraordinary that the Government take such a view of Brussels as they have done on this subject. In the fine soundbites to which we are often treated, we are told that the Government intend to be influential in Brussels. We are told that, by having made so many concessions to Brussels—on the social chapter and the treaty of Amsterdam, to name but two occasions—they are now in an extremely good position to get all sorts of free gifts back from Brussels.
      Therefore, we ask the Minister to put up on this matter, and take a trip to Brussels. So generous am I in this respect that I should be happy to see public expenditure rise by the price of a return air fare to Brussels, if only the Minister could promise me that he would use that trip to insist on a better answer for the British retail pharmacy sector from Brussels.
      The Minister must by now have had enough dealings with Brussels to know that, in Brussels, matters are often more in the nature of a negotiation than of a legal construct. Although they have legal form under treaties and court procedures, in practice many matters are settled, not in the normal judicial way as we would understand it, but behind closed doors by bargains between politicians and/or senior officials.
      The matter before us is clearly a case in which the Government could use their influence—if they have any—to try to get Brussels to agree that RPM for retail pharmacies in this country is in the public interest, as was found under the previous Government, and that Brussels should recognise that, and not be too crass in its application of competition law.
      Dr. Ladyman: Will the right hon. Gentleman clarify his remarks? Is he telling the House that he would prefer, and that we and our community pharmacies should put our trust in a deal struck behind closed doors with civil servants in Brussels, rather than in a British court, the restrictive practices court, and the current arrangements?
      Mr. Redwood: No—the hon. Gentleman is being uncharacteristically slow-witted. I have made it clear that I want British parliamentary democracy to settle the issue. As proof that the Government have influence in Brussels—I do not believe they do, but I am always willing to be proved wrong—I want them to go there and tell Brussels to get its tanks off the lawns of our retail pharmacies.
      That is a simple proposition, and I am explaining, for the benefit of the Minister, how Brussels works. I am not saying that I approve of that system; I am saying that that is the system, that it is the one within which the Government must work, and that, on this occasion, they should do so in the interests of British democracy—so that we can settle the matter here—and the interests of our constituents, who would clearly like the RPM system to be maintained.

      1105
      I believe that the Government's influence in Brussels would be greatly strengthened if they accepted either amendment No. 2 or new clause 4—the position would be clearest if the official Opposition's amendment were accepted. They could go to Brussels and say, "That is the will of the whole House of Commons," because not only would they carry with them tonight all the Opposition Members, as far as I know, but they would have all the Government Members' votes, if the Minister asked the Whip to get people to stand on their heads again and vote more in line with their conscience.
      The whole House of Commons could be united for once, in defence of a good public service and a good British interest. Surely that would have some sway with those in Brussels when trying to judge both the political mood in this country and how much rope they would have to change our minds for us. Making the amendment would give a strong signal, and I recommend it strongly to the Government.
      We know that the United Kingdom authorities are investigating, and I dare say the Minister will say that that cannot be stopped, but there is more chance of that investigation coming to the right conclusion from the pharmacies' point of view if the House clearly expresses its views.
      Mr. Nigel Griffiths: I am not going to argue that that investigation cannot be stopped. I suspect that it could be stopped if the vice-chairman of the Conservative party were persuaded to withdraw the complaint that he lodged on behalf of his company. Will the right hon. Gentleman support me in making such a request?
      Mr. Redwood: I am suggesting that the complaint could be stopped by changing the law, which is what is on offer this evening. I have no doubt that I would not be able to persuade the Asda company, which has moved on from the days when my hon. Friend the Member for Tunbridge Wells was in sole charge and has new executive management, to drop its complaint. The executive board members would meet and say, no, they want to pursue the complaint, because it is in their business interests so to do.
      I do not object to that, because I believe in a free society in which people can pursue their legitimate interests. All I ask is that we know where people are coming from, just as the House asks hon. Members to reveal whether they are coming from a particular position in cases where people should be aware of their interest.
      I am saying that, on this occasion, we can change the process if we wish by primary legislation. We could do so tonight and that would send a clear signal to the investigating authorities or it could even overturn the investigation itself. The Government have the power to do something if they wish. That is all I am trying to establish at this stage in my argument.
      5.30 pm
      I shall now deal with the issue that has been the passion of the Under-Secretary—the attitude of the Community Pharmacy Action Group. As he has asked about it, perhaps the House will give me leave to go into some detail about the different positions that it has adopted during the passage of the legislation.
      1106
      When the Community Pharmacy Action Group first alighted on the issue, it considered it carefully and drafted a comprehensive paper on the changes it thought were needed to the Bill in order to protect the interests of its members. It wrote to Mr. Mark Hickson of the Competition Bill team at the Department of Trade and Industry—I believe that that letter has been circulated to all interested Members.
      The action group stated that it was campaigning for the continuance of resale price maintenance on over-the-counter medicines. It said that its response
      "seeks to make the case for the retention of RPM on OTC medicines and proposes amendments to the draft Bill that we believe will be necessary if the present agreement is to have any chance of surviving…we have made it clear in the submission that our preferred option would be the inclusion in the new Competition Bill of a specific exemption for the present agreement based on contemporary public interest grounds. We have sought to be constructive and hope that you will incorporate this in the final version of the Bill."
      I agree with that advice.
      I think that the action group was sensible, and I told it so when I was in touch. The group did not tell me or my staff at the time that it was working in conjunction with LLM, the lobby firm. I dealt directly with the action group, and the telephone number that I had was the telephone number of the Royal Pharmaceutical Society of Great Britain. The letterhead made it clear that the Community Pharmacy Action Group was extremely well supported, and that it consisted of the Royal Pharmaceutical Society, the National Pharmaceutical Association, the Pharmaceutical Services Negotiating Committee, the Scottish Pharmaceutical General Council, the Company Chemists Association, the Proprietary Articles Trade Association, the British Association of Pharmaceutical Wholesalers, the Proprietary Association of Great Britain, and the Co-operative Pharmacy Technical Panel. The action group led me to believe that it spoke for all those bodies, which in turn spoke for all their members. I believed that it was an extremely wide-ranging and broadly based alliance. I and my office continued to be in touch with the action group through the Royal Pharmaceutical Society.
      Today, I received a letter dated 6 July which changed the line that the action group was recommending in some respects, although not as much as the Under-Secretary is suggesting. For example, it says that it is continuing to oppose the action of the European Community on all this. The letter says:
      "I have seen the letter from the Commission, and the Community Pharmacy Action Group is appalled at this threat of legal action"—
      that is, from the Commission.
      "The EU appears to be seeking, whether of its own motion or at the request of the OFT is unknown, to interfere in the UK's internal market. The effect of the threat from the Commission is that we have been presented with a choice: fight in the UK courts or in Europe."
      The letter goes on to say that it firmly believes that resale price maintenance serves the British public well, particularly those who depend on the local chemist. The action group does not believe that Europe has a role in deciding its future, and would prefer UK to European jurisdiction. At the end of the letter, it says, rather surprisingly, that the action group no longer supports or seeks further amendments to the Bill.
      I decided to telephone the action group today to seek clarification on that amazing change of heart from the strong and sensible position that was adopted as long ago

      1107
      as September, and which had continued throughout the Committee stage of the Bill. I was surprised to find that the telephone number under the letterhead of the Community Pharmacy Action Group was that of LLM.
      When I asked to speak to the chairman of the action group, I was told that he was not there, but that I could talk to the account executive who was handling the case. I was happy to do so. However, the account executive became rather shy, and said that, since it was me, perhaps it would be better if I continued talking to the chairman with whom I had dealt in the past. As soon as I put down the telephone from the account executive at LLM, I received a telephone call from the chairman, Mr. David Sharpe, trying to explain the change of heart.
      I have serious questions for the Under-Secretary in the light of these extraordinary exchanges. I should like to know whether the meetings with the President of the Board of Trade and the Under-Secretary were arranged by LLM. Was LLM present at the meetings.
      Mr. Ian Bruce: The Under-Secretary is not listening.
      Mr. Redwood: I do not mind whether or not he is listening. He has some questions to answer and, one way or another, he will have to answer them, for the House and for the benefit of the nation.
      Was LLM present at the meetings? Did the Under-Secretary have private meetings or telephone calls with LLM, and did he tell LLM that it would be helpful to get that group of small pharmacies to back off from pursuing what is obviously an embarrassing amendment for the Government? I do not know whether that happened, but we have a right to know whether there were any such conversations or private meetings or telephone calls between the Under-Secretary and LLM on this issue without the client, the Community Pharmacy Action Group, being present.
      We should like to know whether there was any sort of deal. We see in the newspapers that lobbyists believe that one can do deals with the Government. Was there a deal? If so, can we please know its terms, so that we can judge whether it was a good deal?
      Dr. Ladyman: I wonder what point the right hon. Gentleman is making. Is there not a fraction of possibility that the action group, which has been represented all along by people supporting its interests and helping it to present its case, has considered the facts and concluded that the Government are right and have been right all along? Could it be that the group believes that the Government have been advising it correctly throughout, and has now decided to support the Government's position?
      Mr. Redwood: That is a theoretical possibility, but there are many other more interesting ones that are considerably more likely, and I shall explain why.
      There is an inaccuracy in the comments of the hon. Member for South Thanet. Mrs. Sharpe, the wife of the chairman of the group, confirmed on the telephone to me this afternoon that she and Mr. Sharp had never informed me or my staff that LLM was involved in the case. I was not aware that that was the position. I prefer to see people directly. I do not like the intermediary of a lobbyist.
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      I take the view that we are all paid to represent good causes in the House, and that we are the natural channels for a good case. A good case should go directly to the Minister and persuade him, or it should come through me and my hon. Friends or through the constituency Member, so that we can make our judgments about whether it is a good case, which we wish to back without remuneration, or whether it is not a good case, which should be politely referred to someone else, or that those involved should be told that we are not in agreement. That is the purpose of the House. We must make sure that people can get redress for legitimate grievances. I do not like to feel that I have been in any way misled about who is acting for different people, and what sort of game is being played.
      I want to get back to the Government's involvement. We need to know how much the Government knew and how they were able to persuade either the advisers or the Community Pharmacy Action Group, or both, that this was not the appropriate way to proceed.
      The letter from the action group, and my subsequent discussions with it, have made it clear that something changed, and that it came to believe that Brussels would pursue this case even if the United Kingdom protected the position in legislation. That is not a new fact. I have known that that was a possibility for months, ever since I began handling this Bill. I believe that the Under-Secretary made that clear in his defence of the Government's position in Committee.
      The Under-Secretary has not suddenly come to the view that Brussels might take this up independently. It has been a well-known threat for a long time. All my planning to help the community pharmacies, which I wish to do, has been predicated on the fact that Brussels could interfere. I have constantly urged the Government to take Brussels seriously, and to go there to try to sort it out.
      Mr. Nigel Griffiths: The letter to which the right hon. Gentleman refers specifically says that the author, David Sharp, has seen the letter from the Commission. That is the letter of 8 May, which I believe changed things. Has the right hon. Gentleman seen the letter because it has been available?
      Mr. Redwood: That letter certainly did not change my view, because, since last year, when I first examined the Bill, I have of course been aware that Brussels might well pursue the case separately, or that there could be separate complaints to Brussels.
      I thought that the aim of the Bill was to sort out double jeopardy. We have been telling Ministers that it will be very difficult to do so, and, as the Under-Secretary will remember, I have been urging the Government to go to Brussels expressly to sort out that point. It is clear from his attitude tonight that he has not done so. He is not about to say, "The right hon. Gentleman is wasting his breath, because I have solved the problem. I have been to Brussels, and there is agreement that Britain should be able to settle this issue in the interests of retail pharmacists by maintaining resale price maintenance."
      The Government have given us fine words, saying that they support small pharmacists, as do the rest of us, that RPM would help, and that some pharmacists will close if it is not maintained. However, they say to the pharmacists, "Pity us, because wicked Brussels will sort out the

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      problem in a way that we do not want, so you should back off and not embarrass us in the House by backing amendments that would solve your problem."
      Mr. Oliver Letwin: Does my right hon. Friend agree that it would be interesting to know also what conversations between the Minister, his colleagues and the Commission preceded the emission of the letter from the Commission? It would be interesting to know precisely what requests were or were not made to the Commission, formally or informally, for assistance to get the Government off the hook by issuing such a letter, which was, as my right hon. Friend has pointed out, always a possibility. Should not the Minister give us a travelogue to make it clear exactly what contact he had?
      Mr. Redwood: As always, my hon. Friend has put his finger on an extremely important point. It is possible that the Under-Secretary went to Brussels and implied that it would be very helpful to Britain if such a letter were written, because it would get him off the hook and avoid a potential large Government Back-Bench rebellion. He clearly has a vested interest in trying to explain to his hon. Friends and the nation that he has no power to do anything, that he is only the Minister and cannot be expected to sort out the problem, and that it is all the fault of Brussels. Now that he has a letter, he is able, directly or with the help of friends—perhaps another part of the magic crony circle is at work—to get decent people to back off because the Government are misinforming them about the true state of play of the relative powers of the House and Brussels.
      Mr. Ian Bruce: I want the Minister to have the full question put to him. Although my hon. Friend the Member for West Dorset (Mr. Letwin) was very forensic, he did not mention that, when deals are done for the Department of Trade and Industry in Brussels or anywhere else, they are normally conducted by people from the Treasury or No. 10, or possibly by "Tony's cronies". We ought to know exactly who, if anybody, has been to the Commission to ask about these matters.
      Mr. Redwood: My hon. Friend is absolutely right, and he has enlarged the question in a way that will further embarrass the Government.
      We should like to know more about the web of influence and lobbyism that seems to have been working. Perhaps we have here the first case of cash for no influence. This might be the first case of a group being asked to pay money to a lobby group only to be told that it should obey the Government and not influence them for the better. I feel rather sorry for those who thought that their interests were being looked after, who now find that that is not being done properly in the way that they would expect. We need to know rather more about their change of heart.
      Suffice it to say that Her Majesty's Opposition—and, I trust, other Opposition Members—wish to give proper support to community pharmacists. This is a problem which the Government could solve by using British law if they wanted to. Ministers should go to Brussels and argue the case for our businesses and the services in our communities, instead of using Brussels in an attempt to stifle a Back-Bench rebellion that would be very embarrassing for them.
      1110
      The Government should understand that community pharmacies in this country, as Health Ministers recognise, provide an extremely important service, which is now at risk, not just because of Brussels, but because of the Government's actions and inactions. There are many questions that the Under-Secretary should answer before we finish the debate.
      Mr. Nigel Beard: This argument is not new. There is no division in the House about the wish to help retail pharmacies and maintain them in their role, which is invaluable to the communities they serve. At issue are the two approaches to safeguarding their position.
      The approach outlined by the Government is to let the appeal to the Office of Fair Trading continue because, if it is successful, the Bill will allow the agreement to be maintained for five years. The appeal is highly likely to be successful, given that the Office of Fair Trading has previously adjudicated on the agreement and found it to be in the public interest. The proposed line would protect retail pharmacies' position for about five years, during which they could adjust to the new climate imposed by Brussels and the Bill.
      5.45 pm
      The right hon. Member for Wokingham (Mr. Redwood), however, proposes to hard-wire into the Bill perpetual protection for resale price maintenance for retail pharmacies. He tabled the amendment knowing that it is in breach of, or counter to, the principles of the legislation—articles 85 and 86—with which the Bill harmonises UK law. It is known also that the only outcome of pursuing the right hon. Gentleman's approach is that, if it were successful, Brussels would take over, investigate and, very likely, decide that resale price maintenance should be stopped. The pharmaceutical industry would then be in far greater jeopardy than if the Government's course were followed.
      We came to the nub of the issue in the right hon. Gentleman's winding up. He is challenging the Government to go to Brussels and demand that the law is changed, knowing very well what the answer would be. What marks out the true obsessive is that, whatever the issue, he returns to the point of obsession, which in the right hon. Gentleman's case is Europe. We realise the true nature of the Opposition: the amendment has nothing to do with helping retail pharmacies; it is an attempt, yet again, to stage a confrontation with Europe to demonstrate the likely infringement of the sovereignty of British law. We have heard that case before and it is being rehearsed in exactly the same form tonight.
      At issue is an attempt to dupe the retail pharmacies.
      Mr. Redwood: Will the hon. Gentleman explain what is wrong with the idea of Ministers going to Brussels to try to achieve a sensible exemption for a British industry that will otherwise be damaged?
      Mr. Beard: What is wrong is that the right hon. Gentleman knows that that is inconsistent with the Brussels legislation under which the Bill falls. The Bill tries to harmonise British legislation with that of Brussels so that—this is the precise point that the right hon. Gentleman made earlier—companies will not face double

      1111
      jeopardy and the uncertainties and expense of two legislative regimes. The right hon. Gentleman knows that, and all the legal advice that he has been given must have told him that, yet he persists with his amendment, knowing that it could lead only to a confrontation that cannot be won.
      Retail pharmacies would be damaged by the amendment, and if they adopted the right hon. Gentleman as a friend they would have a false friend. However, they are more sensible, which is why they sent the right hon. Gentleman the letter he read out earlier. They will not be duped by this attempt to use them to stage a stunt that goes against Brussels and highlights the issue of European legislation and British sovereignty. I am thankful that the pharmaceutical industry has more sense than to listen to Opposition Members.
      Mr. Andrew Lansley: I am grateful for the opportunity to support amendment No. 2 and to speak to new clause 4, which stands in my name.
      My right hon. Friend the Member for Wokingham (Mr. Redwood) was right to emphasise the desirability of basing one's arguments, in the first instance, on what may be learned by talking to community pharmacists. As members of the Committee know, I was at pains to talk to staff of community pharmacies in my constituency and I instanced one in particular, in the village of Gamlingay.
      The pharmacy in Gamlingay fully illustrates the predicament of community pharmacies. They often have a limited catchment area that does not give them a very high rate of return, but instrumental in that rate of return is the mark-up they are able to achieve on over-the-counter medicines, given their difficulty—to which the hon. Member for Eastleigh (Mr. Chidgey) rightly drew attention—in securing an adequate rate of return on the provision of prescription medicines and the valuable advice service that pharmacists provide.
      In the example I offered, the pharmacist gave 15 consultations a day. Each of those 15 consultations would have resulted in a general practice consultation but for the presence of a pharmacist. It is the only opportunity many people in the village have to access to a local pharmacy. The suggested alternative of a visit to a large, multiple superstore is not available within seven or eight miles.
      There is every reason, therefore, to support community pharmacies. I understand from our debate in Committee that support for community pharmacies is not confined to the Opposition; Labour Members' support is evident. I shall not detain the House by quoting them, but Second Reading speeches by the hon. Member for South Thanet (Dr. Ladyman) and others gave particular support to community pharmacies.
      The question is whether, in Committee, and especially in relation to the schedule introduced by the Under-Secretary to provide for new transitional provisions, the Government have provided the protection the House seeks for community pharmacies and for resale price maintenance on over-the-counter medicines in the long run. I say "in the long run" because it seems to me that when the other place made amendments and they were, initially, considered by the Committee, what was proposed presented a problem.
      1112
      At that stage, the case before the restrictive trade practices court would have been stayed and there would have been an accusation to be made to the Commission. This is at the heart of the problem. There would have been an accusation to be made to the Commission that the case had not been considered on its merits, including the public interest and general public health interests additional to the competition considerations; that the legislation had simply obviated—circumvented—proper consideration of those issues; and that, therefore, the Commission should take it upon itself to consider the issues.
      For that reason, it was probably right for the amendments made in another place to be overturned in Committee and to be substituted by measures designed to give direct effect in the Bill to the House's intention to support resale price maintenance on over-the-counter medicines. However, the Government have gone about it in a way that has limitations, which were clear in Committee. Although the Government rest upon the question of the court considering the issue, if the court considers the issue and concludes that resale price maintenance does not act against the public interest, a protection is built into the Bill—a protection, through transitional provisions, for five years. However, there is no provision in the schedule to extend the transitional period further.
      That brings us back to the letter that the Under-Secretary was at pains to speak about, and on which my right hon. Friend the Member for Wokingham rightly responded. The letter from the Community Pharmacy Action Group illustrates the point. The CPAG has been presented with two unpalatable options. The more unpalatable of the two is that the court goes ahead and comes to a conclusion without Government support for community pharmacies before the court—or, indeed, without the Government going to the Commission and saying, "You should rest on the court's decision". On the other hand, the action group is told, "Do not press the amendments; do not look for anything else; do not embarrass the Government on Report. Say that the Government have done what is required, and you will get Government support"—presumably by way of evidence, or whatever, before the restrictive trade practices court—"and you will subsequently benefit from the five-year transitional provision."
      I say that with the evidence that, in the letter referred to, Mr. David Sharpe, chairman of the CPAG, says:
      "On the understanding that the Government will continue to support retaining the network of community pharmacies, we will not seek further amendments to the Bill".
      When the Under-Secretary replies to the debate, will he tell us the meaning of the phrase,
      "On the understanding that the Government will continue to support retaining the network of community pharmacies"?
      That is the key question.
      Mr. Redwood: My hon. Friend is right. Does he agree that the Under-Secretary would be more convincing if he published the letter or evidence that he sent to Brussels in defence of our pharmacists before he received the letter giving him a rather dusty answer, and if he published the evidence that he intends to give the court, also defending our pharmacies?
      Mr. Lansley: I am grateful to my right hon. Friend. I hope that the Under-Secretary takes up that challenge; it would be very enlightening if he did.

      1113
      However, the response from the Commission—the Under-Secretary may interrupt me if I am wrong—referred to on 8 May, is essentially about whether the Commission would intervene if the legislation were amended, as happened in another place, to stay proceedings before the restrictive trade practices court. That is not the question before us now, which is: will the Commission seek to intervene if the House legislates on the basis of resting on the decision of the restrictive trade practices court?
      The view that the Under-Secretary expressed in Committee was pretty clear on that point. He said:
      "I reached the conclusion…that the Commission is looking to the restrictive practices court to examine the evidence and to make a ruling."—[Official Report, Standing Committee G, 23 June 1998; c. 608.]
      That is in the context of a conclusion reached by Richard Whish, an eminent competition lawyer, that the Commission is capable of taking into account general public health interests in its examination of a case under article 85 of the treaty on European Union. The proposition seems to be, therefore, that the Commission would be able to rest upon the public interest test applied by the restrictive trade practices court and, on that basis, not pursue an article 85 investigation if that court concluded that RPM was not acting against the public interest.
      That brings us back to amendment No. 2 and new clause 4. They differ from what the Government propose in the following important respect. The Government are proposing that community pharmacies should be protected for five years. I do not understand it to be the intention of the House that community pharmacies should be given a stay of execution. My understanding of the debate, including the contributions made on Second Reading and in Committee by Labour Members, was that we had concluded that, subject to an examination of the evidence by the court, there was a belief in the House that the process of resale price maintenance on over-the-counter medicines acted in the public interest—that it was not necessarily anti-competitive in any case, but that, in addition, it was justified on general public interest grounds. We had concluded that, if we moved to an article 85-style or chapter 1 prohibition-style investigation, the narrower gateway—moving from a public interest examination to a simply competition examination without taking broader public interest criteria into account in this instance—might well lead to a narrower conclusion that was prejudicial to community pharmacies. We concluded that that was undesirable. The House therefore wished to move toward protection for community pharmacies and to vest that in the legislation.
      The Government are offering only five years' protection, but the wish of the House is to go further. Devices are available to achieve that: amendment No. 2 and new clause 4 would be perfectly adequate for the purpose. The proposition before the House is that we should not limit the protection of community pharmacies by a stay of execution but should rest on the court's decision that RPM on over-the-counter medicines is not against the public interest. I hope that the Government will respond positively to the amendment and the new clause.
      Dr. Phyllis Starkey: I shall expand on the points that were made by my hon.
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      Friend the Member for Bexleyheath and Crayford (Mr. Beard). The amendment's stated aim, which was outlined by the right hon. Member for Wokingham (Mr. Redwood) is to protect community pharmacies. It is interesting to note that there seems to be a slight split in the Tory party in that there are alternative proposals, but I shall pass over that. As I understand it, the amendment also aims to ensure that resale price maintenance continues for ever. As my hon. Friend said, it has several aims. One is to distract attention from the unfortunate fact that in a former life the hon. Member for Tunbridge Wells (Mr. Norman) initiated the attack on RPM.
      6 pm
      Until the Bill started its passage through Parliament, the Tories took no action to protect pharmacies. An early-day motion has been widely cited, but that is a two-edged sword because I understand that although only three Conservative Members signed it, the Conservative party now says that it is wonderful and does not go far enough.
      The reason for the smokescreen was evident in the speech made by the right hon. Member for Wokingham: the amendment is an opportunity for yet further Euro-bashing. The constant talk about Brussels is revealing. It is as if Europe is over there in Brussels and not a community of which we are a part. To speak about Europe as if it were separate is ridiculous and demonstrates a certain mind set. I congratulate the right hon. Gentleman on his ingenuity in dragging the issue of lobbying into the debate.
      Mr. Redwood: Amendment No. 2 does not seek anything in perpetuity. Parliament can change its mind and change legislation at the drop of a hat if there is a will to do that, and that freedom is in my amendment. New clause 4, which my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has tabled, would allow the court to come to a different judgment at some future time. There is no split between us, and we are aware that we would need Labour votes to pass either. We offer Labour Members a choice and we would be happy with either. The hon. Lady spoke about the early-day motion. My right hon. and hon. Friends and I voted for its wording on Second Reading—and we should have liked Labour Members to join us on that.
      Dr. Starkey: I accept the correction: of course Parliament can undo what it has done and, to that extent, nothing need continue for ever. I dissent from the right hon. Gentleman's analysis of the effect of the amendment and the new clause. They would expose RPM to abolition by the Commission within years, whereas the Government proposals give at least five years of protection.
      Another point that has arisen in the debate was also made in Committee. The Opposition have made great play about being the protectors of community pharmacies, but they have slightly narrowed the definition of such pharmacies. Judging from how they speak about them, they have been recruited to their rather spurious notion of country life and occur only in the countryside. I appreciate that such pharmacies are incredibly important to rural communities, but they are also important to urban communities, and the dichotomy between supermarkets and independent pharmacies is not quite as strong as the Opposition make out.

      1115
      In my constituency, some small pharmacies are independent and others are branches of a large national chain. There is also an excellent pharmacy inside a Tesco supermarket. It is extremely active in co-operating with local GPs and has run health education campaigns on asthma, diabetes, antenatal care and emergency contraception services.
      There is no argument between us about the need for an extensive network of pharmacies in all communities; I merely ask the Opposition to accept that community pharmacies are not simply small independent ones. Pharmacies serve all sorts of communities and include those in large supermarkets as well as the independents. I look forward to the Government's plans to ensure that all pharmacists, whether they are independent, in community pharmacies or in shops or supermarkets, are used more effectively. However, I do not think that such a debate should form part of the discussion on this part of the Bill.
      The Opposition are engaging in a cynical exercise. Under the guise of the protection of community pharmacies, they are addressing an entirely academic point. They know that their amendment would provoke the end of RPM, although they say that they are trying to protect it.
      Mr. Colin Breed: I shall not reiterate what has been said because I agree with much on both sides of the argument. We all support community pharmacists, large or small, urban or rural, and we want them to be able to function with some security. The people who use them should have access to them not just for the next five years, but beyond. The proposals that we are debating will lead to a lack of security. If resale price maintenance fails the public interest test, that could be the end of many community pharmacists. The alternative is a five-year stay of execution.
      We would have more sympathy for the Government's proposals if, during the five years, they offered an opportunity to look at ways in which to fund pharmacists and provide them with security. However, after five years, pharmacists will be left to the marketplace, and that would not provide the security that they seek or leave the communities that they serve with the feeling that such pharmacies will remain.
      If the five-year transition period were used positively to prepare plans for the funding of pharmacists, that might enable us to support the proposal. Pharmacists in my constituency feel that convenient access to medicines for people who have been to their doctors is a vital part of primary health care. It is an anomaly of the health care system that that one part is not included in health care operations. That is because we regard pharmacists as small chemists and take the view that resale price maintenance is the best and only way to fund them. Many pharmacists feel that their qualifications and experience, and the valued support that they provide to GPs by way of health education and even diagnosis are worth more than just the protection of RPM on over-the-counter medicines. They should be considered as part of primary health care.
      Resale price maintenance has served pharmacists and their communities well. We will support the amendment because it would ensure, at least in the short term,
      1116
      the continuance of RPM and, therefore, the protection of pharmacists. RPM will be under constant commercial attack, and those challenges may be the pathfinders for many more. Such insecurity may prompt some pharmacists to give up. Pharmacists who are thinking of retiring in the not-too-distant future may be feeling fearful about their ability to sell their businesses. Pharmacists who have received their qualifications and are looking for new opportunities may feel distinctly uncomfortable about taking on positions in small chemist shops that may be under threat in only a few years.
      That insecurity is the reason for this debate. Although the Minister has provided good protection for a short period of years, if it is needed, he has not looked in the long term—at the long-term provision of pharmacists and access to them, which is at the heart of what we are looking for. On this occasion, we support the Opposition amendment.
      Mr. Redwood: I hope that the Liberal Democrat party will make it clear how it wishes to help the pharmacists, if it does not wish to support either the amendment or new clause tonight. We think that they are the best way in which to do it.
      Mr. Breed: I did say that we would support the Opposition's amendment as I was about to sit down.
      Mr. Letwin: I want to discuss the substantive issue—community pharmacies—and move to an issue of much wider significance, which arose from the exchange between my right hon. Friend the Member for Wokingham (Mr. Redwood) and the Minister for Competition and Consumer Affairs, where matters have reached a serious pitch.
      In common, I suspect, with many hon. Members on both sides of the House and certainly with many of the Liberal Democrat Members who are present, I represent a seat that is perhaps the archetype of the problem. It is inconceivable that there should be available in the smaller towns of West Dorset sufficiently elaborate national health service provision to meet all the needs of the ordinary citizen, who is often unable to move around easily because of necessarily limited rural transport. The Government's persistent attack on rural transport by car through short-sighted actions with environmental aims has limited it even more. It is of the essence that such citizens in West Dorset should have available to them what has been available to them for a long time, and will, if the amendment is passed, continue to be available to them—access to a rural pharmacy. That will not continue to be available for much longer if the amendment is not passed.
      Our pharmacies in West Dorset depend on the amendment. I speak not speculatively, but on the basis of intensive discussions with each of the principal rural pharmacies in each of the smaller towns in my constituency, of which there are not very many; it is possible to cover them all because their number is small. The number of villages is, of course, great and, again, that is an archetype. There are some 55 larger villages in West Dorset, each clustered around the towns. They, too, depend on the rural pharmacist. In discussions with rural pharmacists—in many cases, I have gone to the trouble of asking them specific questions about their turnover, margins and current profitability—it has become clear that their existence depends on resale price maintenance or some equivalent.

      1117
      I thought that the interjection of my right hon. Friend the Member for Wokingham during the remarks of the hon. Member for South-East Cornwall (Mr. Breed), who spoke for the Liberal Democrats, was highly pertinent. It is possible to imagine—it has always been possible to imagine—that the Government would seek to introduce alternative means of supporting rural pharmacies. There may even be, theoretically, preferable alternate means of supporting such pharmacies.
      I have a worry, which I suspect is shared by many hon. Members who represent seats such as mine, which is not a theoretical worry; it is substantive, practical and based on a knowledge that I suspect all hon. Members have of how Government and, in particular, the Treasury, under any Administration, work. If grants, subsidies or special arrangements are introduced to support a particular cause when there is a ferment about that cause—this would be one such case, potentially—they are always a soft target for any Chief Secretary to the Treasury when he comes in the spending round to look at what might be eliminated.
      For all the dangers that the hon. Member for South-East Cornwall pointed out, resale price maintenance has at least persisted for a long time and is difficult to dislodge, because it requires action in the courts and may take time. At least that system is not as likely to suffer from the vicissitudes of the attentions of a Chief Secretary which, alas, can quickly be brought to bear on any grant system.
      6.15 pm
      Essentially, if the amendment is not passed, the access of many of my constituents to what is effectively the only source of help and advice available to them other than GPs, many of whom they find it difficult to reach on many occasions, will depend on the hope that the Government will introduce an as yet unknown mechanism—there is no certainty that they will do so—and that no future Chief Secretary will remove the mechanism.
      There is a ready remedy, which is to extend the provision of NHS services in rural areas. That takes us way outside the scope of the amendment and anything, I suspect, that the Government are willing to guarantee. The costs of doing that vastly exceed the economic cost of resale price maintenance in this sector.
      That point is of great interest. I was, alas, unable to continue as a member of the Committee during the stages when these matters were considered, but I have had the opportunity to read the official record. I find to my intense surprise that the Minister for Competition and Consumer Affairs has not brought forward any analysis of the economic cost of continuing with resale price maintenance for rural pharmacies. There is a good reason why he has not. It is extremely difficult to identify a significant economic cost in that case.
      If one looks at the cost of providing alternative NHS services, the economic and, in particular, fiscal gain of having these pharmacies is fairly easy to ascertain. A cost-benefit analysis of the amendment, so to speak, could easily identify the costs of not having the amendment, but trying to identify the benefits of not having the amendment—the economic gain to the country from abolishing RPM—is quite a task.
      Alas, we discovered at a much earlier stage in the proceedings of the Committee that the President of the Board of Trade had conducted a compliance cost
      1118
      assessment that was probably wrong by some magnitude. Therefore, it is not surprising that the Minister has been reluctant to conduct any economic analysis in this particular case, but, if he had done, he would probably have found that the figures would have worked against him.
      This is a remarkable case. We have a system, which is theoretically imperfect, but nevertheless produces what I think is by universal accord a practically beneficial result, with probably a low economic cost—it has certainly not been ascertained—almost certainly a high fiscal gain and hence an economic gain. There is no certainty about any replacement and there is an extreme danger that, if there were to be a replacement, it would come under attack from a future Chief Secretary.
      That chain of argument suggests that there is a strong reason for seeking to retain the ability for this industry to engage in resale price maintenance. That is the substance of the matter. In rising, my main intention was not to address that issue.
      Mr. Lansley: Before my hon. Friend moves on to a separate argument, does he agree that, in this respect, it is not so much the compliance cost assessment that is the mechanism through which the Government should assess what the costs and benefits of proceeding through legislation are, but the regulatory appraisal? While he was speaking, I have taken the opportunity to look at the regulatory appraisal and it is silent on the issue of the economic costs and benefits that might result from the abolition of a number of pharmacies as a result of the Bill.
      Mr. Letwin: It was one of the abiding sadnesses of being removed from the Committee that I was no longer able to benefit from the shafts of wisdom that my hon. Friend so often cast on aspects of the Bill. He is right to remind me that it is not the compliance cost assessment, but the regulatory appraisal that should have contained the information. To say that the regulatory appraisal is silent on this issue is, in the now immortal words of Mr. Draper, the understatement of the century. The regulatory appraisal is silent on almost every issue. It is a document of such extreme gnomic quality that it is rather like the holy Roman empire, which was neither holy nor Roman nor an empire. The regulatory appraisal is to do neither with regulation nor with appraisal; it is a piece of paper. However, it would have been possible for the Under-Secretary to produce a serious analysis in Committee, had he wished to do so. I have no doubt that he did not do so because he would not have liked the results.
      Mr. Redwood: Will my hon. Friend also think about the plight of the retail pharmacist? He will also need reassurance from the Government that the complicated arrangements to remunerate him for his NHS work will not fall foul of the Bill. Presumably, the Government will have to make use of the public policy provision or the general economic service provisions to exempt retail pharmacists. Would not it be helpful to the pharmacists to be reassured at least about one of their strands of income? Otherwise, they might find that all their income was under threat from the Bill.
      Mr. Letwin: My right hon. Friend is absolutely right. He will recall, as I do very poignantly, that both the

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      Under-Secretary and the Minister were wholly unable to deliver to the Committee the slightest remnant of a definition of general economic service that would illuminate the question whether that point would actually apply. Manifestly, there are serious issues about whether the Bill will allow provisions to be made to support rural pharmacies. That has wider implications because it is not just rural pharmacies or even pharmacies generally with which we are concerned; it is the general principle of whether a Competition Bill ought simply to take into account the narrow focus of industrial economics, or whether some kind of social cost or social benefit—especially when there are fiscal consequences—should be taken into account.
      I come now to the major topic that I want to discuss. I am afraid that I shall make a very grave accusation. I hope that it can be rebutted; I hope that the Under-Secretary will produce evidence to show that I am wrong. No one would be happier than I to withdraw my accusation, in an open and fulsome way, if it turns out that it is false. My accusation has to do with the character of government. It is raised, in particular, by the response to this amendment and by the interchange between my right hon. Friend the Member for Wokingham and the Under-Secretary earlier.
      I begin with a question. What was the treaty base upon which the Commission was operating when it produced the letter to which the Under-Secretary referred? I stand open to correction. The hon. Gentleman has vast legal resources at his command, while mine are negligible. It may be that I am, therefore, wholly misled, but I imagine that the treaty base was article 85—subject to the Under-Secretary's correction. I should be grateful if he would save me and himself from further embarrassment, and intervene at any stage of my argument if he feels that something that I am saying is incorrect.
      Article 85 is very clear, unlike its transposition into English law in the Bill, which is very unclear. It states in its first clause:
      "The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices"—
      I have not the slightest doubt that resale price maintenance falls into those categories—
      "which may affect trade between Member States."
      Alas, Mr. Deputy Speaker, you were not the Chairman of our Committee. Those who were present during our sittings will remember that on many occasions during the deliberations of the Committee—and I find on reading the Official Report that this persisted beyond the time when I ceased to be a member—points were made about the contrast between the specific clause
      "which may affect trade between Member States"
      and its transposition into UK law in the Bill. We frequently pointed out the clarity of the statement in article 85 and the fact that it made it clear that the Commission, in applying the article, was to restrict itself to those sorts of action that affected interstate trade. We drew attention to the difference between that and the lack of clarity about the Commission's scope for action within the United Kingdom.
      The Under-Secretary and the Minister had ample opportunity to challenge us on that point in Committee. They had ample opportunity to say that they or their legal
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      advisers thought that we were misinterpreting article 85. In short, they had ample opportunity to tell us that article 85 was not restricted to interstate trade. However, I would have found it odd if they had said that because if we look back through the legislative history of article 85 to the early writings of Monnet and Schuman on the origins of the competition sections of the treaty of Rome, it is clear that in the minds of those who formed the treaty, it should restrict itself—admirably to my mind, and, I suspect, that of my right hon. Friend the Member for Wokingham—to interstate trade.
      Mr. Redwood: The two Ministers, both by their silence throughout my hon. Friend's remarks and by what they said in Committee, have to accept that the treaty is about interstate trade. That is why we are debating a law for Britain to deal with intrastate trade. The treaty does not directly act on intrastate trade—if it did, we would not need all this rigmarole tonight and we could just let Brussels get on with it.
      Mr. Letwin: One of the annoyances of dealing with a Bill on which my right hon. Friend leads is that he is inevitably one and a half steps ahead of me. He precisely anticipates the next leg of my argument. It is not simply that we would have been surprised if the Under-Secretary or the Minister had told us that article 85 applied more widely than to interstate trade—had they done so, we would have told them that the Bill was not required as it would not be necessary to have the prohibition if it already existed and applied to intrastate trade. Therefore, it must be the case that Ministers accept that article 85 does not provide a treaty base for intervention by the Commission in matters such as resale price maintenance, unless the Commission can satisfy itself that the practice concerned
      "may affect trade between Member States."
      This is where I have to make a grave accusation. If the Commission were to satisfy itself that resale price maintenance in pharmacies—and I think in particular of rural pharmacies—in this country might affect "trade between Member States", the Commission would have to be on some sort of elaborate hallucinogenic drug. I cannot think of a single reason why RPM, desirable or undesirable as hon. Members may think it to be, between the suppliers and a pharmacy in, for example, Beaminster in my constituency,
      "may affect trade between Member States."
      I cannot imagine that the pharmacist in Beaminster spends much time shopping around for arbitrage possibilities in buying his supplies from a wide range of European suppliers. I cannot suppose that he much affects the balance of trade between member states. It would require the most extraordinarily tenuous logic for the Commission to have argued to itself convincingly—or to be able to argue to anyone else convincingly—that RMP, in this particular case,
      "may affect trade between Member States."
      The Under-Secretary has already had, and will again have in his reply, the opportunity to challenge each leg of my argument. I hope that he will tell me that I am wrong about article 85 being the supposed treaty base. I hope that if he cannot tell us that, he will tell me that I am wrong to suppose that there is no good argument for supposing that such resale price maintenance

      1121
      "may affect trade between Member States".
      However, if he cannot say either of those things, we have to ask why the Commission wrote that letter.
      I genuinely believe—again I make it abundantly clear that, if I am wrong, I should be happy to be disproved by evidence to the contrary—that the Commission wrote the letter because someone in the United Kingdom Government, acting via the agencies of the UK Government in Brussels—presumably the UK permanent representative in Brussels—made it known by formal or informal means to the Commission that it would be helpful to the UK Government if the Commission wrote that letter and told, or suggested or halt-hinted to, the Commission that it did not too much matter whether there was a treaty base for the letter and that, in the meanwhile, a letter might solve a parliamentary problem. Moreover, it may have been suggested that if the letter did solve that problem, there would, regardless, be UK legislation preventing such resale price maintenance. Therefore, the Commission, having written the letter, would never be subject to legal challenge, as the letter would never become an effective one. I repeat that I should be happy to have those assertions disproved. However, if proved, they are very grave.
      6.30 pm
      Mr. Redwood: I fear that my hon. Friend may be on to something, that there is a pattern and that the Government may be hoping to avoid embarrassment—and not only in this case. Has he thought about the recent allegations on the "Panorama" programme—that Mercedes and Volkswagen are arranging their prices in the United Kingdom in an anti-competitive manner? Is he aware that the Government have said that they want nothing to do with that, but would rather that Brussels investigated the whole matter on their behalf? Is it not another case in which Ministers seem to wish not to take responsibility for anything in United Kingdom competition competence?
      Mr. Letwin: I agree with my right hon. Friend that it may be part of a pattern. It is a bad pattern if it is an overt one. It is bad because the United Kingdom Government should not rely on the Commission to take action on matters in which—for UK policy reasons, especially when the Government agree with the action—the Government not only have the capacity to act, but should be acting. My right hon. Friend's example of the automobile industry is pertinent.
      I regret to say that, in this debate, we may be dealing with something that is far worse and far more insidious—a covert attempt to have the Commission do the Government's work. Moreover, it would be a covert attempt by the Government to have the Commission do a piece of political work for them. If that is what has happened, it would be an attempt by the Government to have the Commission spare the Government a political embarrassment because of a division within the Labour party's own ranks. That is not a way in which it would be reasonable or decent for the Government to use the Commission.
      Mr. Beard: Does the hon. Gentleman have a shred of evidence for that conspiracy theory?
      Mr. Letwin: I have been at pains—I do not want to be irresponsible—to point out that every leg of my argument
      1122
      is something that I believe may be the case, but is open to rebuttal. I have suggested to the Minister that, by intervention or in reply, he can rebut any part of the argument. If he does so, I shall fulsomely withdraw. I am making an allegation for which I realise I currently have no proof. However, the Minister has so far been notably silent. I hope that, in his reply, he will challenge one or another part of the argument. I make the accusation not recklessly, but because I cannot myself find another explanation for a letter that seems to be based on so thin a treaty basis.
      Mr. Beard: Is not the nature of reckless allegation such that it has absolutely no evidence behind it?
      Mr. Letwin: No, it is not. It is the purpose of Parliament to expose arguments and to have answers. I think that it is a reasonable proceeding for an hon. Member conscientiously to make an argument that would have a devastating effect if it were true, to pose it for the Minister and to allow the Minister there and then to refute it. It would, of course, not be reasonable for me to repeat the allegation if the Minister had disproved it. However, the allegation has to be answered.
      Mr. Redwood: My hon. Friend is generous in giving way again. If he was wrong, should not Ministers have leapt to their feet and produced evidence that they have been trying to lobby Brussels in the right direction rather than the wrong one?
      Mr. Letwin: Again, my right hon. Friend takes me to the next leg of my argument. It will not be enough for the Government to establish that they did not engage in the piece of shady dealing that I am alleging that they might have engaged in and that I am asking the Minister to disprove. They will have to show that they tried to avoid production of the letter, because it is ill-based on treaty—unless they can show that the Commission is not basing it on article 85. If the letter is ill-based, and if many hon. Members agree that it would have a bad effect on an important part of our social fabric, which they do, it behoves the United Kingdom Government to argue the case against the letter, and then to take their own domestic action.
      Mr. Lansley: I am following my hon. Friend's comments with interest, and realise that he is arguing from circumstantial evidence. Will he add to that circumstantial evidence the fact that the Minister parades a letter—which he says is dated 8 May—that was, presumably fortuitously or coincidentally, received by Ministers before Second Reading, on 11 May? Therefore, the proposition that the letter was related to the Government's pursuit of the legislation's passage is not an idle point, but is backed by circumstantial evidence.
      Mr. Letwin: I agree entirely with my hon. Friend that the circumstantial evidence is, if not compelling, quite considerable. His point about the timing makes it all the greater.
      The problem goes one stage deeper. We are dealing not merely with the possibility—I admit it to be a possibility rather than a certainty—that the Government covertly prayed in aid the Commission to issue a letter on a frail treaty basis that, if it were true, would have undermined

      1123
      the whole of the Government's logic in their Bill. The Government have also brought pressure to bear through a lobbyist, who is intimately—as we now fortuitously discover—connected with the Government, upon a group of people who should, at least in my view, be representing those whom they purport to represent and who should be making that argument.
      We have reached the point at which there is a connection between the first and second legs of my remarks. If the case for maintenance of RPM were not so very strong substantively, one could well understand that representatives of rural pharmacies might have been in two minds on the subject and might have been wavering between results. One could also understand those representatives taking their own view on the matter. One might also understand that they might have been influenced by a letter, however frail, from the Commission.
      However, when a substantive case for retention of RPM for rural pharmacies is not only in itself so strong but—as so many hon. Members on both sides of the House know—is also felt to be so strong by very many or, I speculate, almost all, of those whom that body is meant to be representing; when the letter in question is based on a treaty basis that is so frail; and when the Government must have known how frail the basis was—or they would not have introduced the Bill in its current form, as they would have had to take the view that article 85 had a scope wider than merely interstate trade—one is driven to the conclusion that it must have been by heavy-armed tactics that the Government used the offices of that lobbyist to persuade that group of representatives to change their minds in the light of the letter.
      Mr. Deputy Speaker, at the beginning of my rather—I regret to say—over-lengthy speech, I said to your predecessor in the Chair that I had a grave accusation to make. I have made it in good faith—[Interruption.] I have made it in utterly good faith. I believe that it probably is true. It may not be true—I have admitted that, and I admit it now. It now falls to the Minister, in replying to this debate, to go through the logic—as I did not see him do in most of the Committee stage—of the allegation, to take it seriously, and to show that I have got wrong one of my propositions. Have I got it wrong that the treaty basis of the letter from the Commission is article 85?
      Mr. Deputy Speaker (Mr. Michael J. Martin): Order. As the hon. Gentleman said, I have just taken the Chair. However, I should draw it to his attention that we are considering narrow amendments. The hon. Gentleman appears to be referring to a treaty. Can he explain what that treaty has to do with the two amendments before us?
      Mr. Letwin: I was not interrupted by your predecessor, Mr. Deputy Speaker, because I explained the relevance of the treaty at the beginning of my speech. So as not to try your patience, let me briefly repeat the logic of my argument; it is very straightforward. The amendment seeks to protect resale price maintenance, which was being advocated by a particular group. That group has withdrawn part of its advocacy of that on the basis of a letter from the Commission to which the Minister has referred. The letter is meant to have some treaty basis, which I believe is article 85. I have been asserting that
      1124
      the Minister concocted the letter from the Commission in order to change the attitude of that group to resale price maintenance—and hence the necessity of the amendment. That is the structure of my argument.
      In conclusion, I repeat that if any leg of my argument is false, it falls to the Minister to show it. It is for him to show that article 85 is not the treaty base, that I have misinterpreted its scope or effect, or that the Commission genuinely acted on its own initiative and is at fault because he can show that he tried to get the letter withdrawn.
      Mr. Nigel Griffiths: It is, indeed, unusual to hear the Opposition filibustering on their own amendment, but the amendment relates to a subject that is particularly embarrassing to them. It is a subject that they ignored for years—the plight of community pharmacists. Indeed, when the right hon. Member for Wokingham (Mr. Redwood) was in the Cabinet, 178 pharmacists ceased trading.
      The Opposition have had no long-standing dialogue with community pharmacists, and, in speaking to the amendment and the new clause, cannot command their support. They asked us about representations and I shall be happy to deal with that, along with the treaty basis for what is happening. The right hon. Member for Wokingham made no representations to the Director General of Fair Trading about the complaint. In 1996, when the Commission was liaising with the Office of Fair Trading in respect of the Asda complaint, the right hon. Gentleman was too busy with the downfall of his own Government to make any representations to Brussels. I understand that he has made no representations on the matter, either to the Office of Fair Trading or to the Commission, during the passage of the Bill or previously. We will take no lessons from the Opposition about commitments to community pharmacists.
      As my right hon. Friend the President of the Board of Trade told the House:
      "My right hon. Friend the Secretary of State for Health has made it clear how important community pharmacies are to his vision of health in the next century."—[Official Report, 11 May 1998; Vol. 312, c. 34.]
      The amendment and the new clause put at risk all the representations made to the OFT and the Commission.
      The right hon. Member for Wokingham does not care whether amendment No. 2, which is, after all, a political stunt, puts at risk all that community pharmacists have been fighting for. It would disapply the prohibition and effectively pre-empt the findings of the restrictive practices court. It is carelessly drafted in that it does not distinguish between retail price maintenance agreements in the over-the-counter medicine sector which are exempt under section 14 of the Resale Prices Act 1976 and all other retail price maintenance agreements. New clause 4 refers to agreements that have been exempted from section 14. Both proposals would have the effect of stopping proceedings in the United Kingdom and handing them over to Brussels—coming from the right hon. Member for Wokingham, that is a paradox.
      The Commission has made it perfectly clear that article 85 is directly applicable in the United Kingdom, irrespective of the Bill. On several occasions in Committee, Opposition Members highlighted the fact that an agreement of conduct must have an appreciable effect

      1125
      on trade between member states if articles 85 and 86 are to apply. They went on to argue—as they have this evening—that that requirement somehow makes the competition test for the application of the domestic prohibition different from that for the application of article 85. The right hon. Member for Wokingham nods in agreement, but that view is mistaken.
      The hon. Member for West Dorset (Mr. Letwin) asked whether he was wrong and I can confirm that he is wrong on that and most of the other matters that he raised.
      6.45 pm
      Mr. Letwin: Will the Minister give way?
      Mr. Griffiths: I shall give way in a moment, with great pleasure.
      The requirement that the application of article 85 would affect interstate trade is a jurisdictional hurdle. It does not affect the meaning of the prohibition itself in the sense of determining whether or not an agreement is anti-competitive. Nor does it affect the meaning of the prohibition in determining whether conduct is abusive of a dominant position.
      Mr. Letwin: The Minister has made some quite remarkable statements. First, he has admitted that article 85 is the treaty base. Secondly, does he agree that if article 85 has the scope that he claims for it, the reason for the clause that creates a prohibition under English law is nullified? He has undermined the whole purpose of his own legislation.
      Mr. Griffiths: The hon. Gentleman had left the Standing Committee at that stage, as he put his career before chemists. He also sought to spare the Opposition the embarrassment of the publication in the 1980s that he and the right hon. Member for Wokingham produced on financing the health service. Their report is germane to today's debate on community pharmacists, as it advocated a pill tax. They wanted to ensure that the prescriptions that are the life-blood of so many chemists were operated, if not for profit, at least by charging enough to ensure that demand matched supply. So the hon. Gentleman's history is certainly not in support of community pharmacists—which is why Opposition Members have shown absolutely no interest in the issue for so long.
      Mr. Letwin: Will the Minister give way?
      Mr. Griffiths: I shall make some progress, but I shall give way to the hon. Gentleman before I sit down.
      It is important to be aware that the proposals would stop proceedings in the United Kingdom. The Commission has made it clear—not just to the Government but to the Director General of Fair Trading, with whom it has been liaising for more than two years on the matter—that if that happened, it would have to take action. It did so under the previous Administration, without a finger being lifted by Ministers or Conservative Back Benchers at the time to support community pharmacists. I can confirm, as I have it here, that a letter from the Commission was sent to the Director General of Fair Trading. I am sure that it is part of one of a number of dialogues over the past two years since Asda lodged its complaint in 1995.
      1126
      Amendment No.2 would have dire consequences. The Commission has made it clear that if the restrictive practices court were not looking at the issue, it would take lock, stock and barrel the evidence that the Office of Fair Trading has collected over a long time. Let us look at just how long it can take for the Commission to act. A recent investigation into the Italian tobacco sector took around two years. The decision on Volkswagen took around three years. That means that the present arrangements could unravel alarmingly quickly for community pharmacists.
      The Bill provides a five-year transitional period if the court decides that there should be an exemption for over-the-counter medicines. I urge my hon. Friends to reject the amendment and the new clause.
      Mr. Lansley: The Minister will know that the letter from the Commission on 8 May related to whether proceedings before the court were stayed under the previous amendment tabled in another place. When the court's proceedings continue, will the Commission investigate and intervene on RPM on over-the-counter medicines if the chapter I prohibition in this country is not applied but the court's decision is sustained?
      Mr. Griffiths: The Commission has made it very clear that, if the court comes to a decision that the community pharmacies deem favourable—the same decision at which it arrived, having weighed up the evidence, the last time that it considered the matter—and if due processes have been followed, it should be satisfied. That is an important point. We went into this matter in some detail in Committee.
      Mr. Lansley rose—
      Mr. Griffiths: I shall not let the hon. Gentleman detain the House further, given that his questions as a member of the Committee that considered the Bill were answered.
      The do-nothings when they were in government are lecturing us about doing something. Owing to the inadequacies of Opposition Members' explanations in favour of the amendment and the new clause and the patent lack of support from the Community Pharmacy Action Group, I urge the House to reject the amendments.
      Mr. Letwin: I hope that the Minister will answer this question. If he is saying that article 85 extends into activities that do not affect interstate trade, how can the prohibition clause that he is enacting be necessary?
      Mr. Griffiths: The hon. Gentleman was honest enough to say to the House that he might be wrong. He is completely and utterly wrong in this matter. I wonder whether his lack of a grasp of these issues was the reason why he was moved off the Committee.
      There is no support for the amendments. Indeed, I have a card—I suspect that the right hon. Member for Wokingham does not have one—from David Sharpe of the Community Pharmacy Action Group, thanking me for my support for community pharmacies. The number that I rang this morning was that of the group's legal adviser, Sue Sharpe. We have support for our policy; no one supports the Opposition's amendment and new clause.
      Mr. Redwood: What a dreadful statement from the Minister. He ended with a strange statement that no one

      1127
      supports the amendments. We are shortly to show that quite a few Members support them. Many people outside the House want a solution to the problem, and the Government have left them without one.
      I shall deal briefly with the Minister's attempt at a response. He said that I have made no representations to Brussels or to British competition authorities. I have made endless representations through debates on this Bill. As the shadow spokesman responsible for such matters, I believe that the right way in which to make representations is through the House, when parliamentary opportunity presents itself. I know that the Government do not like the House—but we do. This is a proper way in which to proceed.
      The Minister said that a certain number of pharmacies closed while I was in the Cabinet, and that that proves that the outgoing Government did not care. It is not possible to prevent some pharmacies closing for commercial reasons. We are debating not whether the Minister can prevent commercial closures—I am sure that he will not be able to do so—but whether he can prevent deliberate closures on top of those that will be forced through as a result of the Bill and his inability to sort things out in Brussels. He has not confirmed the figures that have been bandied about in the trade, suggesting that perhaps 3,000 pharmacies will close as a result of the legislation and of the Brussels decision that he fears.
      The Minister asked why I have not made representations to Brussels. There is no need to do so at the moment because, at the moment, the issue can and should be sorted out here, in the United Kingdom—either at the restrictive practices court or in the House by suitable amendment to legislation.
      The Minister and I agree on one thing: community pharmacies will be very important to health care and health services in the next century. That makes the Government's attitude even more stunning. As my hon. Friend the Member for West Dorset (Mr. Letwin) said, pharmacies provide a very important service in smaller market towns and the suburbs. If they are removed or destroyed by the Government, Brussels or some combination of the two, considerably more cost will fall directly on the health service as it struggles to replace the services.
      Neither my hon. Friend the Member for West Dorset nor I come easily to defending practices which, in all other industries and areas, we are happy to see go—and which, at times, we have helped to go. Normally, we prefer open, competitive markets, where prices and services are determined in the marketplace by people spending their money as they see fit. We make an exception for this issue. I urge the House, knowing, as it does, that both my hon. Friend and I nearly always come down on the side of free markets and complete choice, to think very carefully before rejecting the amendment. I stressed to the House—and shall do so again—that we are satisfied of two things: first, that there is quite enough price choice in the market for those who think that price is the most crucial aspect. Secondly, such community services are important and would be much more expensive to provide at the taxpayer's expense if they are demolished as a result of this ill-considered legislation.
      1128
      I shall pass over the Minister calling our actions a political stunt; that is not worthy of him or of the Government whom he serves. We are seriously arguing a case for many small businesses in our communities that need some help and are looking to the Government for it—the Government whom they thought might represent them.
      I agree with the Minister that the effect of the amendment would be to stop proceedings in the court. That is the point; the idea of the amendment is to settle the matter following democratic debate in the House of Commons. We could always return to it if we had second thoughts, if the commercial and service argument had moved on.
      Mr. Lansley: Does my right hon. Friend agree that if the Government object to the amendment on the ground that it would stop proceedings in the court and would lead to intervention by the Commission, they could take the route of new clause 4, which would not stop proceedings in the court?
      Mr. Redwood: Indeed; I am grateful to my hon. Friend for clarifying that point. That was my understanding of his new clause. The Minister seems to have a different view of it.
      I gave the Minister due notice in Committee of the problems with Brussels and how I, on behalf of many people, expected the Government to go to Brussels to try to get a better deal for our pharmacies and to sort the matter out for them. I did not want the House to be left with Hobson's choice—either accepting my amendment then worrying about what Brussels might do as a results of our actions, or not being able to do anything at all to help community pharmacies. The inaction of the Minister and his colleagues places us in such a position.
      If the Minister had taken my advice in Committee, he would by now have had productive discussions in Brussels. He would have explained that the practice has not driven a coach and horses through Brussels competition law during our membership of the Community. He would have explained that the practice matters to people in Britain—and that, for once, he could swing the will of the whole Parliament in favour of keeping our community pharmacies. He could surely have pleaded for some special treatment—an exemption, an agreement that the practice was in the public interest, not against it. Evidence from the previous Restrictive Trade Practices Act case in Britain and the previous RTPA finding were already available.
      There was a most extraordinary dialogue on the Government Benches on the legal position of article 85 and direct action under the treaty. Of course my hon. Friend the Member for West Dorset is right: the idea of the treaty, as set out by the founding fathers and in the debates when we joined the European Community, was to regulate competition between states and between firms in different member states. There was no presumption at all that the organisation also had to interfere in intrastate trading.
      We wish to make clear that we believe that the measure is an extension of jurisdiction from Brussels and that it is about intrastate trade. The Minister needs to propose new legislation because the European Community should not have that power to start with. There is, as has been said,

      1129
      a jurisdictional hurdle, which we are addressing. The Government have got it wrong, and have misinterpreted the matter. They should not allow Brussels to intervene in this case and they should accept our amendment. We urge the House tonight to do something decent for the retail pharmacies and for health care in our country. The only way to do that now is to accept the Opposition amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 161, Noes 328.

      Division No. 330]

      [7 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Gale, Roger

      Allan, Richard

      Garnier, Edward

      Amess, David

      George, Andrew (St Ives)

      Ancram, Rt Hon Michael

      Gibb, Nick

      Arbuthnot, James

      Gill, Christopher

      Atkinson, David (Bour'mth E)

      Gillan, Mrs Cheryl

      Baker, Norman

      Gorman, Mrs Teresa

      Beggs, Roy

      Gorrie, Donald

      Beith, Rt Hon A J

      Green, Damian

      Beresford, Sir Paul

      Grieve, Dominic

      Blunt, Crispin

      Hamilton, Rt Hon Sir Archie

      Body, Sir Richard

      Hammond, Philip

      Boswell, Tim

      Hancock, Mike

      Bottomley, Peter (Worthing W)

      Harris, Dr Evan

      Brake, Tom

      Harvey, Nick

      Brand, Dr Peter

      Hayes, John

      Brazier, Julian

      Heald, Oliver

      Breed, Colin

      Heathcoat-Amory, Rt Hon David

      Brooke, Rt Hon Peter

      Hogg, Rt Hon Douglas

      Browning, Mrs Angela

      Howard, Rt Hon Michael

      Bruce, Ian (S Dorset)

      Howarth, Gerald (Aldershot)

      Bruce, Malcolm (Gordon)

      Hughes, Simon (Southwark N)

      Burnett, John

      Hunter, Andrew

      Burns, Simon

      Jack, Rt Hon Michael

      Burstow, Paul

      Jackson, Robert (Wantage)

      Cable, Dr Vincent

      Jenkin Bernard

      Campbell, Menzies (NE Fife)

      Jones, Nigel (Cheltenham)

      Cash, William

      Keetch, Paul

      Chapman, Sir Sydney (Chipping Barnet)

      Kennedy, Charles (Ross Skye)

      Key, Robert

      Chidgey, David

      King, Rt Hon Tom (Bridgwater)

      Chope, Christopher

      Kirkbride, Miss Julie

      Clappison, James

      Kirkwood, Archy

      Clarke, Rt Hon Kenneth (Rushcliffe)

      Lait, Mrs Jacqui

      Lansley, Andrew

      Clifton-Brown, Geoffrey

      Leigh, Edward

      Collins, Tim

      Letwin, Oliver

      Colvin, Michael

      Lewis, Dr Julian (New Forest E)

      Cotter, Brian

      Lilley, Rt Hon Peter

      Cran, James

      Livsey, Richard

      Curry, Rt Hon David

      Lloyd, Rt Hon Sir Peter (Fareham)

      Davey, Edward (Kingston)

      Llwyd, Elfyn

      Davies, Quentin (Grantham)

      Loughton, Tim

      Davis, Rt Hon David (Haltemprice)

      Luff, Peter

      Donaldson, Jeffrey

      McIntosh, Miss Anne

      Dorrell, Rt Hon Stephen

      MacKay, Andrew

      Duncan, Alan

      McLoughlin, Patrick

      Duncan Smith, Iain

      Madel, Sir David

      Evans, Nigel

      Major, Rt Hon John

      Ewing, Mrs Margaret

      Mates, Michael

      Fabricant, Michael

      Mawhinney, Rt Hon Sir Brian

      Fallon, Michael

      May, Mrs Theresa

      Fearn, Ronnie

      Michie, Mrs Ray (Argyll & Bute)

      Fisher, Mark

      Moore, Michael

      Flight, Howard

      Moss, Malcolm

      Forth, Rt Hon Eric

      Nicholls, Patrick

      Foster, Don (Bath)

      Oaten, Mark

      Fowler, Rt Hon Sir Norman

      Öpik, Lembit

      Fox, Dr Liam

      Ottaway, Richard

      Fraser, Christopher

      Page, Richard

      1130

      Prior, David

      Taylor, John M (Solihull)

      Randall, John

      Taylor, Matthew (Truro)

      Redwood, Rt Hon John

      Townend, John

      Rendel, David

      Tredinnick, David

      Robathan, Andrew

      Trend, Michael

      Robertson, Laurence (Tewk'b'ry)

      Tyler, Paul

      Robinson, Peter (Belfast E)

      Tyrie, Andrew

      Rowe, Andrew (Faversham)

      Viggers, Peter

      Ruffley, David

      Wallace, James

      Russell, Bob (Colchester)

      Wardle, Charles

      St Aubyn, Nick

      Webb, Steve

      Salmond, Alex

      Wells, Bowen

      Sanders, Adrian

      Whittingdale, John

      Sayeed, Jonathan

      Widdecombe, Rt Hon Miss Ann

      Shephard, Rt Hon Mrs Gillian

      Wigley, Rt Hon Dafydd

      Simpson, Keith (Mid-Norfolk)

      Willetts, David

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

      Willis, Phil

      Spelman, Mrs Caroline

      Winterton, Mrs Ann (Congleton)

      Spicer, Sir Michael

      Yeo, Tim

      Spring, Richard

      Young, Rt Hon Sir George

      Steen, Anthony

      Streeter, Gary

      Tellers for the Ayes:

      Syms, Robert

      Mr. Nigel Waterson and

      Mr. Stephen Day.

      NOES

      Abbott, Ms Diane

      Clarke, Charles (Norwich S)

      Ainger, Nick

      Clarke, Rt Hon Tom (Coatbridge)

      Ainsworth, Robert (Cov'try NE)

      Clelland, David

      Alexander, Douglas

      Clwyd, Ann

      Allen, Graham

      Coaker, Vernon

      Anderson, Janet (Rossendale)

      Coffey, Ms Ann

      Armstrong, Ms Hilary

      Cohen, Harry

      Ashton, Joe

      Coleman, Iain

      Atherton, Ms Candy

      Colman, Tony

      Atkins, Charlotte

      Cooper, Yvette

      Austin, John

      Corbett, Robin

      Banks, Tony

      Corbyn, Jeremy

      Barron, Kevin

      Corston, Ms Jean

      Battle, John

      Cousins, Jim

      Bayley, Hugh

      Cranston, Ross

      Beard, Nigel

      Crausby, David

      Beckett, Rt Hon Mrs Margaret

      Cryer, John (Hornchurch)

      Begg, Miss Anne

      Cunliffe, Lawrence

      Bell, Stuart (Middlesbrough)

      Cunningham, Rt Hon Dr John (Copeland)

      Benn, Rt Hon Tony

      Bennett, Andrew F

      Cunningham, Jim (Cov'try S)

      Benton, Joe

      Curtis-Thomas, Mrs Claire

      Bermingham, Gerald

      Davey, Valerie (Bristol W)

      Best, Harold

      Davidson, Ian

      Betts, Clive

      Davies, Rt Hon Denzil (Llanelli)

      Blackman, Liz

      Davies, Geraint (Croydon C)

      Blizzard, Bob

      Davies, Rt Hon Ron (Caerphilly)

      Blunkett, Rt Hon David

      Dawson, Hilton

      Boateng, Paul

      Dean, Mrs Janet

      Borrow, David

      Denham, John

      Bradley, Keith (Withington)

      Dismore, Andrew

      Brinton, Mrs Helen

      Dobson, Rt Hon Frank

      Brown, Rt Hon Nick (Newcastle E)

      Donohoe, Brian H

      Brown, Russell (Dumfries)

      Doran, Frank

      Browne, Desmond

      Dowd, Jim

      Burden, Richard

      Drew, David

      Burgon, Colin

      Dunwoody, Mrs Gwyneth

      Butler, Mrs Christine

      Eagle, Angela (Wallasey)

      Byers, Stephen

      Eagle, Maria (L'pool Garston)

      Campbell, Mrs Anne (C'bridge)

      Edwards, Huw

      Campbell-Savours, Dale

      Efford, Clive

      Canavan, Dennis

      Ellman, Mrs Louise

      Caplin, Ivor

      Ennis, Jeff

      Casale, Roger

      Etherington, Bill

      Caton, Martin

      Fatchett, Derek

      Chapman, Ben (Wirral S)

      Field, Rt Hon Frank

      Chisholm, Malcolm

      Fisher, Mark

      Church, Ms Judith

      Fitzpatrick, Jim

      Clark, Rt Hon Dr David (S Shields)

      Fitzsimons, Lorna

      Clark, Paul (Gillingham)

      Flint, Caroline

      1131

      Flynn, Paul

      Kumar, Dr Ashok

      Follett, Barbara

      Ladyman, Dr Stephen

      Foster, Michael Jabez (Hastings)

      Lepper, David

      Foster, Michael J (Worcester)

      Leslie, Christopher

      Foulkes, George

      Levitt, Tom

      Fyfe, Maria

      Lewis, Ivan (Bury S)

      Galbraith, Sam

      Lewis, Terry (Worsley)

      Gapes, Mike

      Linton, Martin

      Gerrard, Neil

      Livingstone, Ken

      Gibson, Dr Ian

      Lloyd, Tony (Manchester C)

      Gilroy, Mrs Linda

      Lock, David

      Godman, Dr Norman A

      Love, Andrew

      Goggins, Paul

      McAllion, John

      Golding, Mrs Llin

      McAvoy, Thomas

      Gordon, Mrs Eileen

      McCabe, Steve

      Griffiths, Jane (Reading E)

      McCafferty, Ms Chris

      Griffiths, Nigel (Edinburgh S)

      McCartney, Ian (Makerfield)

      Griffiths, Win (Bridgend)

      McDonagh, Siobhain

      Grocott, Bruce

      Macdonald, Calum

      Grogan, John

      McDonnell, John

      Gunnell, John

      McFall, John

      Hain, Peter

      McGuire, Mrs Anne

      Hall, Mike (Weaver Vale)

      McIsaac, Shona

      Hall, Patrick (Bedford)

      McKenna, Mrs Rosemary

      Hamilton, Fabian (Leeds NE)

      McLeish, Henry

      Hanson, David

      McNulty, Tony

      Heal, Mrs Sylvia

      McWilliam, John

      Healey, John

      Mahon, Mrs Alice

      Henderson, Ivan (Harwich)

      Mallaber, Judy

      Hepburn, Stephen

      Mandelson, Peter

      Heppell, John

      Marsden, Paul (Shrewsbury)

      Hesford, Stephen

      Marshall, David (Shettleston)

      Hewitt, Ms Patricia

      Marshall, Jim (Leicester S)

      Hill, Keith

      Marshall-Andrews, Robert

      Hinchliffe, David

      Martlew, Eric

      Hodge, Ms Margaret

      Meacher, Rt Hon Michael

      Hoey, Kate

      Meale, Alan

      Home Robertson, John

      Merron, Gillian

      Hood, Jimmy

      Michael, Alun

      Hoon, Geoffrey

      Michie, Bill (Shef'ld Heeley)

      Hope, Phil

      Milburn, Alan

      Hopkins, Kelvin

      Miller, Andrew

      Howarth, Alan (Newport E)

      Mitchell, Austin

      Howarth, George (Knowsley N)

      Moffatt, Laura

      Howells. Dr Kim

      Moran, Ms Margaret

      Hughes, Ms Beverley (Stretford)

      Morgan, Rhodri (Cardiff W)

      Hughes, Kevin (Doncaster N)

      Morley, Elliot

      Humble, Mrs Joan

      Morris, Ms Estelle (B'ham Yardley)

      Hurst, Alan

      Morris, Rt Hon John (Aberavon)

      Hutton, John

      Mudie, George

      Iddon, Dr Brian

      Mullin, Chris

      Illsley, Eric

      Murphy, Denis (Wansbeck)

      Jackson, Ms Glenda (Hampstead)

      Murphy, Jim (Eastwood)

      Jackson, Helen (Hillsborough)

      Murphy, Paul (Torfaen)

      Jamieson, David

      Naysmith, Dr Doug

      Jenkins, Brian

      Norris, Dan

      Johnson, Alan (Hull W & Hessle)

      O'Brien, Bill (Normanton)

      Johnson, Miss Melanie (Welwyn Hatfield)

      O'Brien, Mike (N Warks)

      O'Hara, Eddie

      Jones, Barry (Alyn & Deeside)

      Olner, Bill

      Jones, Mrs Fiona (Newark)

      Organ, Mrs Diana

      Jones, Helen (Warrington N)

      Osborne, Ms Sandra

      Jones, Ms Jenny (Wolverh'ton SW)

      Palmer, Dr Nick

      Pearson, Ian

      Jones, Jon Owen (Cardiff C)

      Pendry, Tom

      Jones, Dr Lynne (Selly Oak)

      Pickthall, Colin

      Jones, Martyn (Clwyd S)

      Pike, Peter L

      Jowell, Ms Tessa

      Plaskitt, James

      Kaufman, Rt Hon Gerald

      Pollard, Kerry

      Keeble, Ms Sally

      Pound, Stephen

      Kemp, Fraser

      Powell, Sir Raymond

      Kennedy, Jane (Wavertree)

      Prentice, Gordon (Pendle)

      Kidney, David

      Primarolo, Dawn

      Kilfoyle, Peter

      Prosser, Gwyn

      King, Andy (Rugby & Kenilworth)

      Purchase, Ken

      King, Ms Oona (Bethnal Green)

      Quin, Ms Joyce

      1132

      Quinn, Lawrie

      Strang, Rt Hon Dr Gavin

      Radice, Giles

      Straw, Rt Hon Jack

      Rapson, Syd

      Sutcliffe, Gerry

      Raynsford, Nick

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Reed, Andrew (Loughborough)

      Roche, Mrs Barbara

      Taylor, Ms Dari (Stockton S)

      Rogers, Allan

      Taylor, David (NW Leics)

      Rooker, Jeff

      Temple-Morris, Peter

      Rooney, Terry

      Thomas, Gareth R (Harrow W)

      Ross, Ernie (Dundee W)

      Timms, Stephen

      Rowlands, Ted

      Tipping, Paddy

      Roy, Frank

      Todd, Mark

      Ruane, Chris

      Touhig, Don

      Ruddock, Ms Joan

      Trickett, Jon

      Ryan, Ms Joan

      Turner, Dennis (Wolverh'ton SE)

      Salter, Martin

      Turner, Dr Desmond (Kemptown)

      Sarwar, Mohammad

      Turner, Dr George (NW Norfolk)

      Savidge, Malcolm

      Twigg, Derek (Halton)

      Sawford, Phil

      Twigg, Stephen (Enfield)

      Sedgemore, Brian

      Vaz, Keith

      Shaw, Jonathan

      Vis, Dr Rudi

      Sheerman, Barry

      Walley, Ms Joan

      Sheldon, Rt Hon Robert

      Ward, Ms Claire

      Skinner, Dennis

      Watts, David

      Smith, Rt Hon Andrew (Oxford E)

      White, Brian

      Smith, Angela (Basildon)

      Whitehead, Dr Alan

      Smith, Rt Hon Chris (Islington S)

      Wicks, Malcolm

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Williams, Rt Hon Alan (Swansea W)

      Smith, John (Glamorgan)

      Williams, Alan W (E Carmarthen)

      Smith, Llew (Blaenau Gwent)

      Wilson, Brian

      Snape, Peter

      Winnick, David

      Soley, Clive

      Winterton, Ms Rosie (Doncaster C)

      Southworth, Ms Helen

      Wise, Audrey

      Spellar, John

      Wood, Mike

      Squire, Ms Rachel

      Worthington, Tony

      Starkey, Dr Phyllis

      Wright, Anthony D (Gt Yarmouth)

      Stevenson, George

      Wright, Dr Tony (Cannock)

      Stewart, David (Inverness E)

      Wyatt, Derek

      Stewart, Ian (Eccles)

      Stinchcombe, Paul

      Tellers for the Noes:

      Stoate, Dr Howard

      Mr. Greg Pope and

      Stott, Roger

      Ms Bridget Prentice.

      Question accordingly negatived.

    Clause 18

      ABUSE OF DOMINANT POSITION
      Mr. Lansley: I beg to move amendment No. 48, in page 10, line 38, at end insert—
      '(2A) For the purposes of this section "market" means a market the whole or part of which is in the United Kingdom but in relation to the abuse of a dominant position in a market which extends beyond the United Kingdom the prohibition imposed by subsection (1) shall not be regarded as infringed unless that abuse occurs in the United Kingdom.'.
      Clause 18 outlines the chapter II prohibition on an abuse of dominant position in a market, which is one of the two key prohibitions contained in the Bill. In Committee, we did not debate an amendment that had the same purpose as amendment No. 48, but we discussed some of the related issues—indeed, I tabled the amendment in the light of some of our discussions.
      In the execution of the prohibition, it is obviously necessary to define a market, but that is done neither in clause 18 nor elsewhere in the Bill. The draft guidance issued by the Director General of Fair Trading makes it clear, in paragraph 2.12, that a market definition comprises two dimensions:

      1133
      "a product and a geographic area".
      It cites the example of the Commission's consideration of a complaint about ice cream cabinets in Ireland. The Commission defined as the relevant market
      "impulse ice cream in Ireland"—
      that contains a product and a geographic definition.
      7.15 pm
      In paragraph 4.9, the director general makes it clear that, where there are significant imports of a product, the relevant market is international. The contrary is not necessarily implied where there is a lack of imports; the example cited is that of the bus market in Germany, on which the Commission decided that, although imports were low, there were no significant barriers to entry to the market, so that one could substitute domestic German providers with imports. Again, the definition of the market was held to be international.
      In paragraph 6.7, the director general states:
      "If the market is international, market shares should be calculated to cover the whole geographic market."
      That makes it clear that he intends, under the Bill, to use a definition of a market that, if the evidence demanded, extended beyond the United Kingdom.
      Similarly, in Committee, the Minister for Competition and Consumer Affairs, responding to some of my remarks, said:
      "I entirely agree with the point made by the hon. Member for South Cambridgeshire that the relevant, geographic market should not be limited to the United Kingdom."—[Official Report, Standing Committee G, 4 June 1998; c. 235.]
      The intention, which seems to be shared by the Government and the Opposition, is that the relevant market should extend beyond the United Kingdom.
      How will the market be defined under clause 18? I tabled the amendment not to provide a substitute for the Government's intentions, but to fulfil them. One of the problems of earlier competition legislation was that, from time to time, the market was construed too narrowly. A market that was considered for public interest purposes may have been a regional market inside the United Kingdom, even though that regional market was capable of substitution from beyond its boundaries. It is important to look beyond the boundaries not only of any region but of the United Kingdom itself.
      Subsection (3) says that a dominant position
      "means a dominant position within the United Kingdom".
      That is the problem, because it is the only place in the clause where "market" is arguably defined. The director general and the Minister may believe that they can look beyond the United Kingdom to define the relevant market, but I am not sure that the clause allows that to happen. Taking account of such markets may be open to challenge.
      It is possible that, on the question of dominance, the boundaries will move back within the United Kingdom, so that the director general's decision will be made in relation not to the relevant market but to some subsection of that market. It is important to avoid that.
      The amendment would allow the definition of "market" to extend beyond the United Kingdom, when the evidence requires that, and would avoid the problem of extraterritoriality by showing straightforwardly that,
      1134
      for the prohibition to come into effect, the abuse of the dominance would have to occur within the United Kingdom. It would helpfully create a clear hierarchy.
      For example, someone could be dominant in the market for ice cream cabinets in the whole of Ireland, but the dominance could occur only in the Republic, and not in Northern Ireland. The market would include Northern Ireland, but if the abuse occurred only in the Republic, it would not be subject to the prohibition.
      I commend the amendment to the Minister as a positive attempt to give appropriate effect to the Government's intentions.
      Mr. Redwood: The Opposition support the amendment. We have found many examples of poor, misleading or inadequate drafting in the Bill. In this case, we have produced a form of words to clarify the meaning for the sake of business. Our general worry about the Bill is that it is badly drafted and loose, and will be a lawyers' charter, enabling many lawyers to do well and many businesses to do badly, because of the enormous fees that will be demanded. The amendment would clarify the meaning and give business greater certainty.
      We think—as did Ministers in Committee—that penalties should be limited to a fine on the turnover in the affected market in the United Kingdom in which the offence has occurred. That is part of our process of trying to refine the legislation and make it a bit more realistic.
      The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): I agree with the hon. Member for South Cambridgeshire (Mr. Lansley) that the clause is an extremely important part of the Bill. I reject the view of the right hon. Member for Wokingham (Mr. Redwood), expressed in his usual manner, that our drafting has been poor and misleading. That is entirely without foundation.
      We made it entirely clear in the other place and in Committee that our intention was that the Committee stage should be used to assess and improve the Bill. That is not an admission of poor or misleading drafting; it is evidence of a co-operative, partnership approach with those who will be directly affected by the provisions. The right hon. Gentleman's comment was entirely unacceptable and, inadvertently I assume, damaged the case of the hon. Member for South Cambridgeshire.
      It is clear that, in the modern commercial world and, indeed, in the single market in the European Union, many economic markets will extend beyond the United Kingdom. That may be true for a wide range of goods and services, from banking and financial services to air transport, the sale of aeroplanes, computer software, engineering products—the list is almost endless.
      We entirely agree that the relevant geographic market should not be limited to the UK under the Bill, but that is already the effect of the Bill as drafted, and we believe that the amendment is unnecessary. In fact, amendments designed to clarify the drafting of the clause on exactly this point were accepted in another place.
      In moving those amendments, my noble Friend Lord Simon of Highbury stated clearly that their purpose was to ensure that subsection (3) would not be read as limiting the relevant geographic market for assessing dominance to the United Kingdom. Clearly, there will be many circumstances in which the relevant market includes, but

      1135
      is wider than, the United Kingdom. The drafting of the clause does not cut across that in any way. We see no reason to revise the drafting.
      The issue is important, and I accept that the hon. Member for South Cambridgeshire raises it because he genuinely wants confirmation and clarification, so I should like to explain in a little more detail why we do not think that the amendment is needed.
      Any analysis of whether there has been an abuse must start with an analysis of the relevant market in terms of both the relevant products and the relevant geographical area. Under the Bill, the relevant market will have to be determined according to the economic circumstances in the case concerned, as it would be in applying articles 85 and 86. The Director General of Fair Trading will issue advice and information to provide further guidance on that point. He has already published a draft of his guidance on market definition for consultation. I will ensure that the hon. Gentleman's remarks are sent to him so that they can become part of the consultation process.
      Subsection (1) requires that there must be dominance in a market. Subsection (3) provides that that dominance must exist within the United Kingdom or any part of it. There is a two-stage process. Once the relevant market has been identified, it must be established whether the undertaking is dominant in the UK or a part of it. It is plainly right that both those elements should be present. We are not interested here in dominance that exists elsewhere, but does not extend to the United Kingdom. The clause does not require that the market that must be considered when the prohibition is being applied must be entirely contained within the United Kingdom.
      Should the courts consider that the meaning of the clause is ambiguous or obscure in that respect, they will be entitled to consider the statements that Lord Simon made in another place, and those that I have made here. That follows the decision in the case of Pepper v. Hart that reference can be made to statements in Hansard in certain circumstances to clarify the meaning of legislation. However, we do not believe that there is any ambiguity in the current drafting or that the amendment would represent an improvement.
      I hope that those detailed comments will assist the hon. Gentleman and that he will withdraw the amendment.
      Mr. Lansley: I am grateful to the Minister for responding so positively and sympathetically to the amendment. I confess that I am still uncertain whether in practice when a court is asked, presumably by way of judicial review, to consider the phrase, "dominant position" in this context, meaning within the United Kingdom, it will look for the legislative means by which the director was empowered to consider the relevant market as subsisting beyond the United Kingdom or to consider dominance within the United Kingdom as a self-contained matter. I take the point that if such matters are not set out in the legislation, the courts can consider them on a Pepper v. Hart basis. On that basis, and given the Minister's comments, I am happy to beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Giles Radice: I beg to move amendment No. 1, in page 10, leave out lines 40 and 41 and insert
      1136
      "dominant position" means a position of economic strength which enables an undertaking to act independently of competition, customers and ultimately consumers within the United Kingdom; and'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following: amendment No. 8, in page 10, leave out lines 40 and 41 and insert
      "dominant position" means—

      (a) in relation to the national newspaper market, a substantial degree of market power, and

      (b) in relation to all other markets, a dominant position within the United Kingdom; and'.

      New clause 1—National newspapers—
      '.—(1) This section shall apply if a monopoly situation exists, within the meaning of section 6 of the Fair Trading Act 1973, in relation to the supply of—

      (a) national newspapers; or

      (b) national newspapers of any description

      And where this section applies, it applies to any person or persons in favour of whom that monopoly situation exists, within the meaning of section 49 (2)(b) of the Fair Trading Act 1973.
      (2) Any conduct on the part of any person to whom this section applies shall be prohibited if—

      (a) it constitutes an anti-competitive practice, and

      (b) it may reduce the diversity and independence of the national newspaper press in the United Kingdom.

      (3) For the purposes of this section, an anti-competitive practice is a course of conduct which has, or is intended to have, or is likely to have the effect of restricting, distorting or preventing competition.
      (4) The prohibition imposed by subsection (2) is referred to in this Act as the press diversity prohibition.'.
      7.30 pm
      Mr. Radice: I must remind the Minister and hon. Members what was said on this subject on Second Reading. Many hon. Members, including myself, believe that there is a prima facie case showing predatory pricing by The Times in the broadsheet market. In the past five years, the newspaper has consistently been priced below cost—often considerably below. At the moment, one has to pay only 30p for a copy.
      Apparently, that is a special offer for the world cup, or so we are told by the editor. That is not merely a marketing ploy, but a deliberate predatory pricing strategy, the purpose of which is not only to win extra readers but to put The Independent out of business and attract at least some of its readers, so that The Times can get closer to its objective of overhauling The Daily Telegraph.
      I said that there was a prima facie case, because we cannot prove it until we have all the facts and figures. It is up to the Office of Fair Trading to prove it. At the moment, the pricing practices of The Times are being investigated by the OFT, although that is under the existing and not the new law.
      I am not claiming that other newspapers do not employ some types of predatory pricing, although I would argue that, in most cases, it is a reaction to what The Times has done. Such predatory behaviour is dangerous for the newspaper market. If one paper is knocked out, the market will be less diverse. The practice has an impact on other newspapers in the broadsheet market as most feel the need to react to the actions of The Times, which takes money

      1137
      out of the market, which means that there is less profit and less money to spend on journalists and improving the quality of the newspaper.
      Mr. Redwood: The hon. Gentleman said that the price of The Times was below cost. What are the costs of The Times?
      Mr. Radice: If the right hon. Gentleman knows, he knows more than I do. There have been a number of estimates, but The Times has told us that it is making considerable losses, so I assume that the price is below cost. It is widely thought to be, and that is precisely the purpose of the investigation. I should have thought that the right hon. Gentleman would know that, and I am surprised at his intervention.
      Dr. Ladyman: When The Times was previously investigated, the question upon which the case hinged was not whether it had a dominant position, which was being abused. It was understood that the newspaper could be investigated and that it had satisfied that criterion. It was let off the hook because it could not be proved that it was selling below cost. My hon. Friend's amendment would reduce the threshold at which it is necessary to prove dominance, but that was never the question. How will it help with the need to prove that The Times is selling below cost?
      Mr. Radice: I will come to that. My hon. Friend is an expert on the matter, having been a member of the Standing Committee.
      Dr. Ladyman: I would hardly say that I am an expert. The right hon. Member for Wokingham (Mr. Redwood) was a member of the Committee, and I would not call him an expert.
      Mr. David Winnick: It is not the purpose to have experts in Committee.
      Mr. Radice: It makes it more difficult.
      I was about to point out that such below-cost pricing makes it more difficult for new newspapers to enter the market, because they have to pay the extra cost of pricing below their costs, which is bad for competition.
      The question for us—it also relates to the other amendments in the group—is whether the Bill will enable the Office of Fair Trading to deal effectively with predatory pricing in the newspaper industry. The Lords did not believe that it would: hence clause 19, which was taken out of the Bill in Committee and which dealt with that industry. The Government's case, which they made on Second Reading—they did not make it strongly in the Lords, which is probably why there was such a special clause—was set out by the President of the Board of Trade. I have also read the excellent statement by the Minister of State in Committee. Their case was that the Bill would introduce a tough regime on predatory pricing.
      Clause 18 sets out certain conducts, including predatory pricing, which would amount to an abuse of dominant position, and clause 60 sets out various ways in which the principles of European legislation—perhaps this is the point of the intervention by my hon. Friend the Member
      1138
      for South Thanet (Dr. Ladyman)—are to be introduced into British law. Those principles are laid down by treaty and by the European Court of Justice. Any decision of that court must be taken into account by the Office of Fair Trading and British courts, which also have to take into account any relevant decision or statement by the Commission. As I understand it, that means that we have to consider cases in Europe.
      One famous case was that of Tetra Pak in 1994, which I am sure my hon. Friend the Member for South Thanet knows all about. It said that, if pricing by a dominant firm was below the average variable cost of production, predation should be presumed, and the proof of intent was not required. It also defined "dominant position". One problem is that The Times has only 28 per cent. of the market, and one could argue that that is not a dominant position. However, the Commissioners have made it clear that a dominant position is one in which a firm can act independently of competition, and that it does not specifically relate to market share, so that is a stronger position than we have at present.
      Dr. Ladyman: The case to which my hon. Friend refers, which covers freedom to act independently, is that of United Brands v. the Commission, which includes almost identical language to that in his amendment, which makes it superfluous, because that language will be in the Competition Bill as it stands and as the Government propose it to be.
      Mr. Radice: If my hon. Friend would listen to my argument before he knocks me down, I should be most grateful.
      Mr. Redwood: He already has.
      Mr. Radice: We shall see. He thinks so. He is acting in a predatory manner.
      Dr. Ladyman: Not, unfortunately, from a dominant position.
      Mr. Radice: No, from a sitting position.
      My hon. Friend argues that the Bill as it stands provides a powerful mechanism for dealing with predatory pricing. I said on Second Reading that I was impressed by that case, and that I would consider it seriously. I said that I would take the best legal advice. Having spoken to a considerable number of lawyers, I find that, like economists, they have different opinions. There has been some support for the Government's interpretation of the Bill, but also some dissent. The hon. Member for Eastleigh (Mr. Chidgey) is aware of the advice of Richard Fowler QC, the lawyer used by The Independent. Some may say that one can hire one's lawyer to suit the case, but I do not make that point.
      Mr. Chidgey: I note the hon. Gentleman's feeling that The Independent has a particular line to pursue, but does he agree that an eminent QC's opinion is an independent opinion? There would be no other point in seeking it.
      Mr. Radice: Let me cite Mr. Fowler. He said that it is unlikely to be possible to establish a relative dominant position as that concept is defined in Community

      1139
      jurisprudence. He is concerned that that will not do the job. Lord Borrie, a person respected by the whole House, shares that view.
      I want to strengthen the Bill by adding to it the words of the President of the Board of Trade and the Minister of State. There are conflicting views of what the Bill will do, and my amendment would make the position more certain by saying that a
      "'dominant position' means a position of economic strength which enables an undertaking to act independently of competition, customers and ultimately consumers within the United Kingdom".
      That is a good description of the dominant position of The Times, which is able to use the profits of the Sunday Times, and perhaps other undertakings owned by the Murdoch empire, to persist in a policy that it could not otherwise afford.
      Mr. Andrew F. Bennett: I understand what my hon. Friend is getting at, but I do not understand why he did not go along with amendment No. 8, which is more specific to the newspaper industry. It makes the point that, in buying peas or Tetra Paks, one does not need much choice. However, buying ideas, which is what newspapers are about, is another matter.
      Mr. Radice: I am sympathetic to amendment No. 8, but one would have to define "substantial", and that would lead to a circular argument, because there is no definition—certainly there is none in the Bill—of that word. Amendment No. 8 would throw us back to European legislation. I am sympathetic to my hon. Friend's idea, and I consider that we are trying to do the same thing, but I think that my way is perhaps better, despite the criticisms offered by my hon. Friend the Member for South Thanet.
      Dr. Ladyman rose—
      7.45 pm
      Mr. Radice: Does he want to criticise me a third time?
      Dr. Ladyman: My hon. Friend seems to minimise the impact of European legislation on the Bill. Clause 60 makes that legislation central to the Bill, so that all European jurisprudence can be used. As my hon. Friend's amendment contains the same wording as European case law, what is its purpose?
      Mr. Radice: My purpose is to put the position beyond peradventure. I am interested in listening to the Minister, and to my hon. Friend, and I may well be persuaded by them, but I want to try to tease out a strong definition that can be used in the courts.
      Mr. Robert Marshall-Andrews: May I helpfully suggest an answer that my hon. Friend might have given? European case law as adumbrated in the Bill
      1140
      by clause 60 may change, and that is one reason for enshrining the principle in our own legislation, to set it in stone.
      Mr. Radice: I am most grateful to my hon. and learned Friend. I sense another helpful intervention.
      Mr. Winnick: If Mr. Murdoch had a vote tonight, he would certainly vote against the amendment and new clause 1. The Murdoch empire and the media do not want to see them carried.
      Mr. Radice: They might even vote against the Bill.
      Mr. Winnick: More so against the amendment.
      Mr. Radice: Probably.
      I have covered my amendment, which is about predatory pricing and a dominant position in the national newspaper market. It is not about the Murdoch press, or about the fact that The Times is no longer a paper of record. It is not about the fact that The Sun is sometimes disgracefully xenophobic. Nor is it about the fact that News International has perhaps too big a share of the United Kingdom newspaper market. This is not the place in which to express my concern about how an unelected Australian-American media owner interferes, through The Sun, in British politics. [HON. MEMBERS: "Go on."] I am having a good try, but I might be ruled out of order.
      Mr. Deputy Speaker: Order. The hon. Gentleman is not debating the amendment with his immediate circle of hon. Friends, but addressing the whole House. Let me say to some of his hon. Friends that they must be quiet, as they are being unfair to the rest of the House.
      Mr. Radice: Lord Beaverbrook once said, "What I want is power: kiss 'em one day, kick 'em the next." Rudyard Kipling, whose words were later quoted by his cousin Stanley Baldwin, said:
      "Power without responsibility—the prerogative of the harlot throughout the ages."
      Those words still apply. I shall not ask the Minister for his views on them or on their relevance today.
      Mr. Ian McCartney: For the record, the last gentleman that tried to kiss me one day and kick me the next, spent 12 months at Her Majesty's pleasure.
      Mr. Radice: I congratulate my hon. Friend on his robust attitude. I ask him either to accept my amendment, or to reassure me that the Bill will enable us to take tough action against predatory pricing wherever it occurs, including in the newspaper industry.
      Mr. Chidgey: Most hon. Members know that, during the Bill's passage, we have had several opportunities to debate the issues before us. It stands out from our deliberations in Committee and on Second Reading that Ministers have been accused several times—not by me, I hasten to add—of altering course and changing their position. At times, they have argued that an action should be ruled out in the interests of avoiding putting undue burdens on business. At other times, they have said that action is unnecessary.

      1141
      The one thing in which the Government have been constant throughout our proceedings is opposing any additional safeguards on predatory behaviour in the national newspaper business. The Government's position is surprising, because, when Labour was in opposition, it was boisterous and vigorous in promising action. It is surprising that, in office, it appears less interested in that promise; some might say that it has betrayed it. The Government seem determined that no one should have the opportunity to help them with it. That is the nub of this debate.
      I want to discuss some of the issues raised in Committee, and some of the objections that Ministers made to amendments in Committee, particularly in respect of new clause 1 and amendment No. 8, which was tabled by the hon. Member for Sunderland, South (Mr. Mullin) and which I have signed, which would take us some way forward.
      There is a need for a clause specific to the newspaper press. I strongly believe that competition law should contain specific, and stricter, provisions on the press. Ministers have argued that it is wrong in principle to have different prohibitions in different sectors, but perhaps they forget that schedules 2 to 4 are devoted to excluding certain sectors from the Bill altogether. There is an inconsistency there.
      With the press, diversity of provision, and hence of expression of comment, are necessities in their own right. That need goes beyond the need for competition in the supply of goods and services. Competition is a means to an economic end, but a diverse press is an end in itself. Where the diversity of the press is concerned, competition law must go further than it does for ordinary goods and services.
      That need has always been recognised in mergers policy. I think that sections 57 and 62 of the Fair Trading Act 1973 are devoted entirely to establishing stricter criteria to apply to newspaper mergers alone. The Government should recognise that the same need exists in other areas of competition law—notably the control of anti-competitive conduct, which is the subject of the Bill. That is the gap that new clause 1 and amendment No. 8 seek to fill.
      Is the chapter II prohibition sufficient in the case of predatory behaviour in the newspaper business? Ministers have argued that it is enough to rely on the Bill as it stands. They point to clause 18, which prohibits the abuse of a dominant position, to clause 60, which imports European jurisprudence into the interpretation of that prohibition, and to European case law on predatory pricing.
      I agree with the hon. Member for North Durham (Mr. Radice) that those claims have been exploded by the recent opinion of leading counsel, in particular that of Mr. Richard Fowler, QC. He has shown that European jurisprudence sets a very high threshold before dominance can be established. That is unsustainable when the diversity of the press is at issue. Such diversity could easily be threatened by anti-competitive conduct long before a newspaper reached the point of dominance set out in the jurisprudence.
      Ministers also argue that clause 18 will make predatory pricing easier to establish than it is under present competition legislation. They point again to European case law, which says that predation should be presumed
      1142
      whenever prices are below the average variable cost of production. Mr. Fowler has again made it clear that, for newspapers, with their reliance on advertising revenue, that precedent would not run. Another ministerial reassurance is thus undermined, if not negated.
      Dr. Ladyman: Will the hon. Gentleman give way?
      Mr. Chidgey: I could see the hon. Gentleman's enthusiasm mounting. In a spirit of generosity, I am delighted to give way.
      Dr. Ladyman: Far be it from me to suggest that the learned gentleman whom the hon. Gentleman quotes was talking poppycock, but he claims that in Europe there is a high threshold for establishing a dominant position. It is clear from what the Commissioners have said that, under some circumstances, they would regard a 20 per cent. market share as dominance. Does the hon. Gentleman seriously suggest that less than 20 per cent. should still be considered dominant?
      Mr. Chidgey: I am somewhat confused by that question. I think that the hon. Gentleman referred to me as learned, or perhaps it was to someone else. He accused a leading counsel with an international reputation of talking poppycock. I cannot comment on that, but the opinion is on the record. It differs from the Government's legal opinion, but where there is conflicting legal opinion, there is a problem with legislation. If he contains his enthusiasm while I continue my remarks, I think that I shall be able to demonstrate why that is important.
      Mr. John Hayes: Will the hon. Gentleman give way?
      Mr. Chidgey: We have a new face in the Chamber. What a pity the hon. Gentleman was not here for the opening remarks. Nevertheless, I shall be generous and allow him to contribute.
      Mr. Hayes: The hon. Gentleman's generosity is clearly not matched by his courtesy. My point supports what he said. He will be pleased to learn that not only leading counsel but European case law supports his argument and not that of the hon. Member for South Thanet (Dr. Ladyman).
      Mr. Chidgey: I am grateful for that point. I quickly withdraw any discourtesy. I was perhaps momentarily excited; it was meant merely as part of the usual cut and thrust of our friendly behaviour in the Chamber, particularly at this hour.
      I contend that counsel's advice is clear. The comfort that Ministers have held out on the adequacy of clause 18 is illusory. It will leave untouched a range of anti-competitive practices that could threaten the diversity of the press. Those threats will remain unless the House enacts specific safeguards against them.
      It has been argued that it is wrong to use legislation to target a particular case—an issue addressed several times in Committee. Ministers argued that legislation should provide a general framework, and should not be used to target individual abuses by individual companies or even

      1143
      against individual companies. That is clearly right. A vital aspect of press diversity is that the market should be open to newcomers.
      The amendments are couched sufficiently generally not to prejudge the facts of any particular case. Findings of fact are for the relevant enforcement authorities, not the legislators. The purpose of the amendments is to establish a general safeguard for press diversity and make it a new and free-standing responsibility of the Director General of Fair Trading, and, as necessary, the new Competition Commission.
      I am concerned about how the Minister may respond on new clause 1. I trust that the House will welcome its provisions. Its purpose is to stand in place of, and improve on, the clause 19 that was added to the Bill in another place before it reached Committee here and the Government were able to remove it through their votes there.
      New clause 1 would prohibit any anti-competitive practice that threatens to reduce the diversity of the national newspaper press, but only if the author of that practice enjoys a monopoly situation. Both "anti-competitive practice" and "monopoly situation" have existing statutory definitions, in the Competition Act 1980 and the Fair Trading Act 1973 respectively. Therefore, their meaning will already be familiar to the business community affected by the Bill.
      Let me deal with the question of dominant position and monopoly situations. On Second Reading and in Committee, Ministers criticised the original clause 19, because, it was claimed, it relied on a special definition of a dominant position, including any
      "substantial degree of market power".
      Ministers claimed that the clause was too wide, because, they said, practically any established newspaper will hold substantial market power.
      The new clause meets that criticism by confining its reach to monopoly situations as defined in the Fair Trading Act, which entails a market share of 25 per cent., which is common knowledge. The scope of the new clause is thus confined within existing strategy limits. Surely nobody would argue that practically any established national newspaper company will hold a market share of 25 per cent.
      8 pm
      Turning to the definition of the abuse that will be prohibited, the old clause 19 was also criticised by Ministers because it prohibited any conduct, within certain limits, which might reduce the diversity of the national newspaper press. It was thought that the clause would throw the baby out with the bath water, because it applied, or could be seen to apply, to any conduct, legitimate or illegitimate, that might reduce the diversity of the national newspaper press; it could even condemn good journalism. However, in new clause 1, anti-competitive practices are defined in the same way as in section 2 of the Competition Act 1980, which I believes overcomes the problem.
      Let me now turn to advertising revenues of newspapers. Much has been of the costs of producing The Times, and the accounting procedures of News International. In our
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      debate on the old clause 19, we focused on its reference to "selling prices", which was thought to imply that a low cover price could be an abuse regardless of advertising revenues. Obviously, that argument on its own is unsustainable, because no one would be able to support a principle that prohibited the publication of free sheets. Therefore, the issue is not selling price, but overall costs.
      The new clause meets that criticism by eliminating all reference to selling price; instead, it deals only with anti-competitive practices that threaten to reduce the diversity of the national newspaper press. It would be for the competition authorities—the Director General of Fair Trading and the new Competition Commission—to identify such anti-competitive practices, according to their practised judgment. If accepted, the new clause would leave them entirely free to consider advertising revenues in whatever way they thought right.
      Ministers should recognise and acknowledge that all their objections have been heard, heeded and fully catered for in new clause 1. The new clause now applies only where there is a monopoly situation, and only to actions that constitute an anti-competitive practice. It prohibits such practices when they may reduce the diversity of the national newspaper press. Surely nobody could doubt the justification for that.
      Mr. Chris Mullin: I rise to speak to amendment No. 8, which stands in my name and those of several colleagues, including the hon. Member for Eastleigh (Mr. Chidgey).
      Let me say out the outset that I welcome the Bill. It contains many desirable measures and I shall have no difficulty voting for it on Third Reading. However, the acid test is the one that I mentioned on Second Reading, during an intervention on the Secretary of State: whether the Bill deals with predatory pricing in the national newspaper market, which is the worst example of predatory pricing and abuse of the market and is all the more serious because, unlike predatory pricing in other sectors, it has implications for the democratic process. The Bill as drafted does not pass that test; therefore, the purpose of my amendment is to bring predatory pricing in the newspaper industry within its scope.
      The issue is one in which my hon. Friend the Member for North Durham (Mr. Radice) and I have taken a serious interest. It will be evident from the signatures of seven Select Committee Chairmen to amendment No. 8 and that of the distinguished Chairman of the Liaison Committee to amendment No. 1 that our concern is widely shared. We have not tabled the amendments lightly. We have talked to the Secretary of State, who has listened courteously to our concerns, to Lord Borrie and to representatives of the industry—including the editor of The Times and the chairman of News International—and we have taken advice from experts.
      I had an open mind on Second Reading, after the effect of clause 60 was belatedly explained to us, but I have been impressed by two things: first, that Lord Borrie, a former Director General of Fair Trading, is of the opinion that the Bill as drafted will not catch what is going on in the newspaper industry and, secondly, the opinion of Richard Fowler QC, who shares that view. They are both of the view that the Bill will be ineffective against the five-year war of attrition conducted by News International against its rivals, which is the fundamental reason why I tabled the amendment.

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      The background to the problem has been outlined by my hon. Friend the Member for North Durham. For the past five years, News International has been selling The Times and occasionally The Sun for far less than the cost of production. That is not a temporary promotional activity; it has been going on for five years. It is dragging down other newspapers: for example, The Daily Telegraph and the Daily Mirror have felt obliged to respond in order to compete. It is having an extremely damaging effect on our national newspaper market, especially the broadsheet market.
      Be under no illusions, The Times is making huge losses. When the chairman of News International came to see my hon. Friend the Member for North Durham and me, we asked him how much it had cost the company so far. Although he was the chairman, he did not appear to know the exact figure, but "under £75 million" was the figure he mentioned. It is unclear whether that comes from the profits of The Sunday Times or from other parts of the empire. Subsequent to our meeting, I wrote to the chairman asking whether the profits of The Sunday Times over the same period exceed the subsidy to The Times and, if so, by how much. Mr. Hinton replied:
      "We do not break out the profit and loss of The Times and Sunday Times separately"
      so there is no way of telling.
      News International argues that the increase in advertising revenue resulting from the increase in sales of The Times should be taken into account, and I agree—that is a perfectly reasonable point—but I am assuming that the £75 million loss Mr. Hinton talked about already takes account of that. The figure is in addition to any increase in advertising revenue. Let us not be distracted: it is clear that News International's war of attrition could be sustained only by a corporation with huge resources.
      Those are the facts so far as we are able to discover them. The result is that hundreds of millions of pounds, much of which might otherwise have been invested, has been drained out of the national newspaper industry. The Independent, which I accept has other problems, has been forced to the brink of extinction. It is bogus to describe what has been going on as normal promotional activity—it is not normal; no other national newspaper engages in such sustained price cutting. If the purpose was to make The Times the market leader, the strategy has not succeeded; nor has it succeeded, after five years, in making the newspaper profitable, even when advertising revenue is taken into account. However, it is no defence to say that the strategy has not worked. As to whether the strategy has worked and what was the goal of the strategy, the jury is still out. It could go on for years with consequences on which we can only speculate. Who knows where it will end?
      There is another possibility—a different interpretation from the one that News International would like us to believe is the purpose of its activity—and that is to inflict damage on or to sink rivals. Mr. Murdoch has said in public that by the early part of the next century there will be only three national daily newspapers left—The Times, The Sun and the Daily Mail. He did not say whether that was a desirable target or an inevitable and regrettable fact of life. Whatever view one takes, were it to come to pass—I hope that it will not—it would mean that the British public would be left with a choice of lie machines, either the Harmsworth or the Murdoch lie machine. I do not want that day to arrive.
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      Happily, there is no shortage of ex-Murdoch executives. A fax may arrive from Los Angeles or New York and they are here today and gone tomorrow. Who knows, that fate may yet overtake one or two of those who are giving us the lavish assurances about how this is just a normal promotional activity. If that fate does overtake them, perhaps they will be in a position to be more frank with us about what it is all about.
      As I have said, even now there is no shortage of ex-Murdoch executives. One such person told me that he was in the presence of the man and heard him ask, "How do we sink The Daily Star?" As he said, Murdoch does not need to do that. It is almost an irrelevance to his interests, but he cannot resist the challenge. That is a little glimpse of his mind set.
      Another former senior executive of News International has been overheard talking in similar terms about how to sink The Mirror. The strategy has certainly inflicted some damage on that paper over the years.
      I do not want to get bogged down by arguing about the purpose of all this. If it is any help, for the purposes of argument, I am willing to assume that Mr. Murdoch's motives are purely honourable and commercial. I want to concentrate on the effect. It is deeply damaging to our democracy to limit or threaten to limit the diversity of our national press.
      So far there have been three investigations by the Office of Fair Trading and a fourth is under way. As my hon. Friend the Member for North Durham said, since it is taking place under the existing competition regime, we should not have any high hopes of it. That is the background.
      As my hon. Friend ably explained, amendment No. 1 makes explicit what is at present implicit. It is welcome, but, in my view, it is not sufficient to solve the problem. As the Bill stands, it is necessary to demonstrate that there is an abuse and that the abuser has a dominant position in the market. New clause 1, tabled by the Liberal Democrats, attempts to address both those points by lowering the test for national newspapers. I believe that it is not difficult to prove an abuse. After five years, it is surely no longer possible to argue that News International is engaged in a temporary promotional activity. I have concentrated on lowering the test of dominance in relation to national newspapers. That is the purpose of amendment No. 8.
      European law is based on cases where a company such as Tetra Pak, having 80 or 90 per cent. of the market, seeks by means of artificially low pricing to squeeze rivals out of the remaining 10 or 20 per cent. It is true that the Commission has indicated that it might be willing to look at cases where the alleged abuser has a much lower percentage of the market, but, in those circumstances, market dominance is a hurdle which will prove difficult to cross in the national newspaper industry.
      Depending on which definition one takes, News International has somewhere between 28 and 33 per cent. of the market. I was interested to hear the chairman of News International say on the "Today" programme that News International has only 19 per cent. of the market. That is evidence of how much reliance we can place on News International figures because, as I have said, the true figure is somewhere between 28 and 33 per cent.

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      Lord Borrie and Mr. Fowler, an expert on competition law, take the view that market dominance is a hurdle which will prove difficult to cross in the national newspaper industry. In an opinion commissioned by The Independent, Mr. Fowler says:
      "whether the relevant market is defined as broadsheet newspapers or national newspapers generally, it is unlikely in my opinion that the position of The Times, or of News International, would meet the European Court of Justice tests for dominance."
      So, we could sit back and say that nothing can be done about predatory pricing until one of the abusers—it is likely to be Murdoch—has, by fair means or foul, obtained a 50, 60 or 70 per cent. share of our national newspaper market.
      What Government would dare to take on a corporation with that percentage of the market? Heaven knows, it is difficult enough to get anyone in high places to think sensibly about Murdoch when he has only one third of the market. Instead of waiting for a bad situation to get worse, I am seeking to rectify the matter now. My amendment does that by lowering the test for national newspapers from dominance to
      "a substantial degree of market power".
      8.15 pm
      The Government have two principal objections to my proposal. First, they say that they are not in the business of singling out Rupert Murdoch or any other proprietor. My amendment does not do that. It seeks to outlaw predatory pricing among national newspapers regardless of the identity of the proprietor. As we have seen, The Daily Telegraph and The Mirror would also be affected. Any newspaper corporation that attempts to subvert the market by predatory pricing would be caught by my amendment. Mr. Murdoch's name crops up more than most because he is the greatest living practitioner of predatory pricing. I am sorry about that, but it is an unavoidable fact of life. My amendment makes no mention of Mr. Murdoch or News International. It would apply across the market.
      Secondly, the Government object to singling out national newspapers. That is the key issue—it is the core difference between us. It is a difference of principle and we should not shy away from it. I am grateful to Ministers for not arguing that my amendment is technically defective—it is not. We are discussing a straight issue of principle and my argument is simple.
      The free flow of information is the life blood of democracy. A diverse media is a precondition of democracy. Any practice that, by accident or design, is likely seriously to limit newspaper diversity therefore threatens democracy. That is why newspapers are a special case. As the hon. Member for Eastleigh said, previous Governments have accepted that in relation to merger policy and other aspects of competition law. Clauses 57 to 62 of the Fair Trading Act 1973 are devoted to establishing stricter criteria for newspaper mergers. That Act was passed by a Conservative Government.
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      It is disappointing to see so few Conservative Members today. I saw a poll which suggested that 95 per cent. of Conservative Members thought that the Government were too close to Murdoch. If they really thought that and were concerned about it—
      Mr. Radice: They want to be close to Murdoch.
      Mr. Mullin: My hon. Friend is right; it is jealousy. I had hoped that one or two Conservative Members would come to the House to express their concern on this issue. Alas, that is not the case.
      In case anybody thinks that the Government have changed their mind, I can say that that is not so. In the consultation document that preceded the Bill, the President of the Board of Trade said:
      "We do not propose to use the Bill to amend the Fair Trading Act newspaper merger provisions. The original rationale for these provisions was that increasing concentration of newspaper ownership could threaten freedom and variety of expression in the press. We consider this rationale remains valid."
      Those are the words of the President of the Board of Trade within the past 12 months. In other words, when it suits them, the Government accept that newspapers are a special case.
      I could not put it better myself. However hard I try, I am unable to distinguish between a threat to newspaper diversity caused when a large corporation seeks to take over its rivals and a threat to diversity caused by a corporation that already has an enormous share of the market seeking to expand its share by a practice so blatantly unfair as predatory pricing. In any case, it is not strictly true that the Bill applies across the market. As the hon. Member for Eastleigh pointed out, schedules 2, 3 and 4—no doubt for good reasons, which I do not dispute—list all sorts of areas to which the new competition regime will not apply. It would be a simple matter to make an exception for newspapers. The Fair Trading Act is a healthy precedent. All that is required is the political will, which is the purpose of my amendment. In the absence of a miracle, I intend later to put the amendment to the vote.
      Mr. Marshall-Andrews: I support the amendment, which is not specifically anti-Murdoch or anti-News International. I declare an interest: I write reasonably regularly for The Sunday Times, which is, of course, part of News International. In the past few weeks, I have written about the potential catastrophic effects of the third way, the vulgarity and vast waste of the millennium dome and the abolition of the Lord Chancellor. I very much hope that I shall in future be given the opportunity to write other articles that are helpful to the Government. I do not attack News International or Rupert Murdoch and I am very happy to write for his newspapers and take his shilling.
      The point needs to be made that this is a commercial Bill, the purpose of which is to regulate commercial dealings and promote the purifying oxygen of competition. It is a perfect Bill. It is strong and good in every respect except one: it fails to address the unique commercial position of the newspaper industry, which is worth £700 million a year and, notwithstanding that, succeeds in making an aggregate net loss of £50 million. Why is it unique? That question is essentially the argument that the Government have against the amendment. Why single out the newspaper industry?

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      I shall attempt to answer that in one sentence. No other major commercial undertaking is owned for the express and specific purpose of obtaining and using political power and influence. That is the difference between the newspaper industry and any other. Protestations to the contrary are not worth even considering.
      The Sun did not run a banner headline, "It Was The Sun Wot Won It" because of mere vulgar braggadocio, but because it believed that it was true. The Prodi incident caused consternation not because it was an unedifying example of politicians operating at the behest of business men, but because the business man was Rupert Murdoch, who is, in effect, a strong and established politician.
      What is the effect of that single difference between the newspaper industry and every other? I suggest that it has two effects. First, we have a legitimate interest in debating the industry in the House because it affects politics and democracy. The second effect, which is far more important in the context of the amendment, is that the political power that is wielded within the industry, which it conceals, distorts the commercial strategies of the market. The Bill deals with those commercial strategies and is predicated on commercial reality.
      In normal commercial considerations, no commercial entity can or does afford, for a long period, to trade at a loss. It can do so only for a limited period to drive its competitors to the wall. That does not apply in the newspaper industry. The normal capitalist impulse to destroy one's competition is based always on the desire to obtain a monopoly position to manipulate price. That is not the motive in the newspaper industry, where the impulse is to destroy one's competitors to obtain a monopoly of power. That imports into the industry completely different commercial realities. One has only to test that against what has recently happened in the industry to realise that it is true.
      Nobody but a commercial lunatic would have purchased The Independent for commercial reasons. It was purchased not because it is a commercial concern but because it is a newspaper and is likely, let us face it, to make a loss for a considerable period. Precisely the same may be said—topically—of the New Statesman. Nobody but a commercial lunatic would have purchased that, but it was purchased by a gentlemen of enormous commercial acuity, not because it would make a profit but because it is a newspaper.
      The difference in the commercial considerations imported into the industry by the reason people use, purchase and run newspapers is extremely important for the purposes of clause 18. As we know, one must break two separate rules to transgress clause 18. The first relates to predatory pricing, which is set by Tetra Pak because of the European provisions of clause 60. There is no problem in the House with the conditions that Tetra Pak lays down. If one applies those rules there is a near certainty that Rupert Murdoch has been predatorily pricing with News International and, in particular, with The Times. I cannot tell the House that that is true because I am not privy to the inner workings of News International, but every objective test suggests that Rupert Murdoch has transgressed the Tetra Pak principle. That is not the problem, which is why amendment No. 8, which bears my name, does not even contemplate examining predatory pricing.
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      The single issue here is what is domination in the market, and, on that issue, the newspaper industry is different from others. The reason the Bill and European legislation and jurisprudence apply only to dominance in the marketplace is that that is the only place where it matters. No one who is not dominant in the marketplace will predatorily price. If they do, it will not be for long because if they do not hold a dominant position in the marketplace, predatory pricing is commercial suicide. Ultimately, if such a war is started, the person who holds the dominant position will always win on the well-known General Haig principle that there will always be one man left standing at the end. That is why legislation, in commercial terms, applies itself to the dominant position in the marketplace.
      That does not apply to newspapers because the reasons for using and owning them mean that those with a substantial share in the marketplace will sustain losses for years, as News International has done, to break their competitors not commercially but politically and to gain a greater political share. The implicit danger is commercial. News International holds 33 per cent. of the market. I have to say to my hon. Friend the Member for North Durham (Mr. Radice) that, under any test, 33 per cent. will not be enough to guarantee that a court or the Office of Fair Trading will find that a company holds a dominant position in the marketplace.
      A little law that I know proves that that is the case. The United Brands or Michelin test, which began its life in the ninth or 10th version of the Commission's report on competition, is that dominance exists if the nature and structure of the market enable a company to act independently of competition. I shall not bore hon. Members to tears with the reasons, but my view, which coincides with those of other silks who have been quoted, is that that test will not guarantee a finding of a dominant market position for Murdoch's empire or any other newspaper empire in this country.
      If the House is to safeguard the principles that my hon. Friend the Member for Sunderland, South (Mr. Mullin) articulated so well—the democracy of the House and the continuation of a healthy, democratic newspaper industry to support it—the only way for it to do so is for the House, united, one hopes, without party, to vote for the amendment.
      Mr. Winnick: It has been said that amendments Nos. 1 and 8 and new clause 1 do not refer to Mr. Murdoch, but we all know that we are debating the Murdoch clauses, and there is no doubt whom we have in mind.
      I do not regard Mr. Murdoch as being responsible for all, or necessarily most, of the ills of the media world. If, for example, we looked at The Independent, we would probably conclude that it had been an excellent newspaper and that, unfortunately, a decline took place. The Independent started as a very good newspaper—it was highly welcome—but, in the past two or three years, it was undoubtedly the author of its own decline. I am pleased that, as a result of a change of editor, there now seems to be a good prospect that The Independent will be the type of newspaper that one wants to see, and will provide honest competition for the other broadsheets. One need only compare The Independent with what it was under some previous editors and my point is made.

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      8.30 pm
      I might be accused of making a wrong point, but I do not believe so, when I say that some of the anti-Murdoch sentiments come from those who dislike the political line that he—or at least his newspapers—is advancing on the single currency and against economic and monetary union. I support amendment No. 1, despite the question that I shall now pose. If the Murdoch newspapers—The Times and The Sun—were very pro economic and monetary union, and were in favour of Britain joining the single currency at the first opportunity, would there be the same amount of criticism? Undoubtedly, my hon. Friend the Member for Sunderland, South (Mr. Mullin) would not change his opinion—he would be making the speech that he has just made, and doing very well indeed—but I wonder whether some of the critics are motivated by the line on the European Union that Mr. Murdoch or at least his newspapers are advancing.
      The other broadsheets, The Guardian and The Daily Telegraph which have also been mentioned, are excellent newspapers, well able to look after their own, and one hopes that that continues to be the position, even if I would not tend to support the politics of those newspapers—especially, of course, of The Daily Telegraph.
      There are three main reasons why I believe that new clause 1 and amendments Nos. 1 and 8 are necessary. First, the point has been made, and cannot be reiterated too often in the debate, that the pricing of The Times is unfair—that the purpose of such pricing arrangements is to drive competitors out of business. When recently I had a meeting—with one other colleague—with the editor of The Times, the fact that such pricing arrangements would drive competitors, especially The Independent, out of business was hotly denied, as though the thought had never come into the mind of those who control the Murdoch newspapers in this country.
      We know that that is nonsense. We know that the sole purpose—perhaps it is unfair to say that, but one of the main purposes—of the pricing of The Times as it is at the moment in comparison to its broadsheet rivals is to drive at least one, perhaps two, of those rivals out of business. We also know—the point was made by my hon. Friend the Member for North Durham (Mr. Radice) when he moved amendment No. 1—that if The Times was not so heavily subsidised by all the other Murdoch outlets, it would simply not be possible to have such a pricing arrangement. That is the first reason why I am, and have been for some time, very critical of what is happening. If The Independent were forced out of business, that would undoubtedly be a serious blow to the broadsheet market, to British politics and to British democracy.
      The letter that we have received from the executives of The Daily Telegraph and The Guardian, containing the views of the lawyer, Mr. Fowler, has been mentioned. I agree that the executives have an interest, but Mr. Fowler's views should be noted.
      The second reason why I am opposed to the present situation regarding the Murdoch media empire is that far too much media power is undoubtedly concentrated in the ownership of Mr. Murdoch—in Britain, as has been stated, in Australia and in the United States. I do not believe that that is desirable, or that it is healthy in a democracy. The danger is that if other broadsheets went out of business—certainly if The Independent did so—
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      that would give the Murdoch press empire even more power than it has. That is why I say that that concentration of media outlets in the hands of Mr. Murdoch, not only in the press, but very much in television, is undesirable. One would hope that the Government would recognise that and act accordingly.
      My third reason is somewhat different. In my view, Mr. Murdoch believes that he has any Government in Britain in his pocket and that his power—that word is very appropriate in this context—is such that no one in the main stream of British politics or, to put it more clearly, the two main parties, whether in government or not, is likely to take any position that will endanger his press empire. Although I appreciate what the Liberal Democrats have done in another place and here, I nevertheless have to say that, if they stood a realistic chance of forming the next Government, it is not likely, although I may be wrong, that they would be pushing new clause 1 with as much enthusiasm as they have been, and it is more than likely that they would be adopting the same position as the Conservative Opposition.
      Mr. Chidgey: I am grateful to the hon. Gentleman for giving way; he realises that he has offered me a bait that I cannot refuse. I was not aware that he had some magical orb in his hand with which he could predict the future electoral success of any political party in this country. Perhaps he would reveal the secret.
      Mr. Winnick: I am merely saying that it is interesting to note the attitudes of political parties. The Conservative Opposition, for example, are staying silent. They certainly will not vote for the amendments; that was made clear at a previous stage of the Bill's passage. The reason is pretty obvious: they do not want to give Mr. Murdoch the impression that they will act, or vote, in any way that will cause him offence.
      That is the sort of power that Mr. Murdoch has. His feeling is that, with all the media power that he already possesses, he has the Government in his pocket. I do not believe that my Government are in his pocket at all, but I do believe that there is a feeling—I am speaking as frankly as I can on the Floor of the House—that, in order to be re-elected, we should not do anything by way of legislation that will give offence to the person who owns so much of the media in this country.
      I think that that feeling is highly undesirable, and that it is not—I hope that it is not—the purpose of British democracy for one person virtually to decide who should be the Government of the day. It is not for one person, be it through The Sun or The Times—but especially the tabloid Sun—to say, in effect, that if the Government displease Mr. Murdoch, he will campaign to get them out of office. At the moment—I am being as frank as I can—both the Government, whom I enthusiastically support, and the main alternative Government give the impression that they do not want to take any action that would offend Mr. Murdoch.
      I conclude by saying that in a democracy, there are bound to be—there always have been in this country, I suppose—powerful people in the media world, such as the late Lord Beaverbrook who was mentioned, who hold a good deal of power. I suppose that, by the very nature of capitalism, that is bound to be the case. Mr. Murdoch is somewhat exceptional in that he has more power than

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      previous media tycoons. He would like to concentrate even more power in his empire and the time has come for the Government, and certainly for Parliament, to say that enough is enough. The most effective way in which to do that is to accept the amendments and the new clause.
      Mr. Austin Mitchell: Unusually, I want to support the Government's line and oppose the amendments. I cannot support the amendments because the Government's definition of predatory pricing in the Bill is perfectly adequate to deal with the situation. What has been added to that is an explosion of impotent anger against Rupert Murdoch, and the reasons for that are many and varied. My hon. Friend the Member for North Durham (Mr. Radice) is obviously upset because Rupert Murdoch is voicing the views of British people on the euro. Others do not like The Sun on taste grounds and some, particularly on the left, do not like Rupert Murdoch's politics. As we spent more than 20 years attacking the politics of The Sun and have now come to accept so many of them, that is a rather curious ground on which to attack Mr. Murdoch.
      Some hon. Members, such as my hon. Friend the Member for Walsall, North (Mr. Winnick) and the Liberal Democrats, do not like the fact that Rupert Murdoch is so close to the Government. The Liberal Democrats would rather that the right hon. Member for Yeovil (Mr. Ashdown) was close to the Government. I do not agree with any of those notions because they do not seem to do anybody any credit. I certainly do not come to praise Rupert Murdoch, but I certainly do not intend to bury him. I admire him as a stirrer and a brilliant newspaper man, many of whose actions have been good for the newspaper industry. I also admire him as a risk-taker and innovator who successfully gave us Sky television. When I say that I admire him, I do so with no implication of vested interests.
      Mr. Radice: My hon. Friend used to do a television programme for him.
      Mr. Mitchell: As my hon. Friend reminds us, I used to do a television programme for Rupert Murdoch but, thanks to one of his many commercial mistakes, my programme was dropped. That shows that even Rupert Murdoch is capable of bad judgment. The Sky television management have gone flabby because they took off the best current affairs programme on the network. I am trying to look at the matter in the light of the arguments, decide on the facts, and do myself a little credit with the Government. A reshuffle is coming and my hopes are strong. I have not yet received any word from Downing street, although I sit at home every night waiting for the phone not to ring. I hope that my speech will encourage the process. I want the Newcastle Brown award for meritorious conduct in this matter.
      Mr. Ian McCartney: On the grounds of clarification and job insecurity, may I ask my hon. Friend whether he is after my job?
      Mr. Mitchell: Certainly not. I could not do it anything like as well as my hon. Friend after all those conversations we had.
      We should oppose the amendments for a number of reasons, the first of which is that it is wrong to use a Bill that deals with competition to reduce competition and
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      increase prices. What on earth will we achieve by increasing prices? That is a distortion of the Bill's role. If there is a problem about Murdoch's share of the market, let us have the guts to tackle it directly rather than in a back-door, covert way.
      Mr. Mullin: Will my hon. Friend give way?
      Mr. Mitchell: No. We can all whinge about Rupert Murdoch. I am slightly embarrassed because I differ from my hon. Friend the Member for Sunderland, South (Mr. Mullin). Like him, I am on the extreme left of the party. I am there because the party has moved so far to the right behind me. My hon. Friend and I are all that is left and I am a Gaitskellite.
      Murdoch has been successful: The Sun is a success. He kept it alive and boosted it to a mass circulation newspaper. He kept Today alive far longer than would have been the case under any other management. The Times and The Sunday Times have been built up into successful papers. It is true that there is a threat to The Independent, but that is The Independent's fault, not Rupert Murdoch's. If The Independent has gone off, it is because it is no longer independent, has lost its way and has been a wandering, bad paper. It has pulled itself together and enormously improved, but the fault lies with The Independent, not with the attack on it by predatory pricing.
      I did not notice The Independent being particularly squeamish, when it set up The Independent On Sunday, about deliberately smashing The Sunday Correspondent, which it duly did; The Sunday Correspondent sank. We did not get this concern and desire for protection then.
      I do not notice The Daily Telegraph avoiding predatory pricing. About a quarter of its circulation is sold on much-reduced subscription rates and it gives away 33,000 copies. I love it, but I much prefer reading it for free and I am happy to be deluged with free copies wherever I go. However, that is another form of unfair, unreasonable competition. Why is the paper whingeing about predatory pricing when it gives copies away on that scale?
      8.45 pm
      Competition is endemic in the newspaper industry. My hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) is wrong to say that we are talking about a lust for power. We are talking about someone's pride in their product—in their newspaper. Does my hon. Friend not want his articles to be read by the maximum number of readers? Is that not what journalism is all about—competition? If we suppress competition in terms of pricing, will it not come back in all sorts of other ways?
      I grew up in a home that was weighed down with encyclopaedias because predatory-pricing newspapers had been going from door to door, giving encyclopaedias away with a subscription to this and that newspaper. We never read any of them. We never read the papers, but we were festooned with encyclopaedias.
      Mr. Marshall-Andrews rose—
      Mr. Mitchell: I know that my hon. and learned Friend is going to say that I should have read the newspapers and encyclopaedias, and that I would not be making this speech if I had done so. I am not going to give way.

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      In any case, what has predatory pricing done for Rupert Murdoch? He has the same proportion of sales now that he had in 1988. The only newspaper that has gone under in the intervening period is his own paper, Today, so what has predatory pricing done for him? Is it such a powerful threat?
      To go on in this fashion about predatory pricing assumes that people are stupid. Price is only a marginal factor in buying newspapers. Most people buy a newspaper because they identify with it. They feel that it expresses their character.
      Dr. Lynne Jones: My hon. Friend has just said that he got The Daily Telegraph for free.
      Mr. Mitchell: In my case, I hope to buy more newspapers than that. My point is that getting them for free does not kill newspapers. It widens the circulation of quality newspapers. However, in the main, people buy a newspaper because they feel comfortable with it and it expresses their personality. They have an empathy and bond with it; that is what it is all about. It is not about the price being reduced one day a week. People look for quality.
      A symptom is that red-top newspapers are all losing circulation while that of the quality papers is increasing, a helpful and hopeful sign. However, the Daily Express lost circulation when it lost its way. Fortunately, it has pulled itself together recently, but it is the fault of newspapers when they lose circulation. They cannot establish that empathy with their readers any longer because they do not have a personality with which readers can identify.
      That point is what we need to emphasise, not predatory pricing, which is a marginal factor in such decisions. My hon. Friend the Member for Sunderland, South says that he wants diversity. So do I, but I do not want it at the expense of closing other newspapers. The enemy is bad newspapers and newspapers without character or identity, not predatory pricing. That is a failure of the newspapers. Therefore, I cannot support the amendments. They are mostly an expression of anger at Rupert Murdoch—an impotent and somewhat pathetic rage against the man—which does not become us.
      I say loyally that the amendments are not a critique of our leader, who is on close terms with Rupert Murdoch. I am not going to put myself in the position of criticising our leader in any way, but, more importantly for practical purposes, what is proposed will not work. I do not think that my hon. Friend the Member for North Durham will even vote for his amendment because he will not want to rebel against the Government, so why are we wasting our time with this futility?
      Ms Diane Abbott: This is an excellent Bill, which will be even further improved if the Government find it in their heart to accept the amendments. I want to deal with the particular point that the Government have made: they see no case for creating a special clause to deal with circumstances in the newspaper industry.
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      It has been put to the House this afternoon that the newspaper industry is a special case, for a number of reasons. The first is that newspapers are, above all else, a means of circulation of information—a free, unfettered and generally competitive circulation of information, which is vital to a healthy civil society. The Government are committed to recasting civil society—we want more people to be volunteers, to be aware of their rights, to be involved in local authorities and so on. We cannot shape a healthy civil society without the freest possible flow of information. A monopoly in newspapers, predatory pricing by newspapers, or an unhealthy dominance by any individual newspaper proprietor fatally hinders the free flow of information. That is the first reason why the newspaper industry is different and why specific measures are needed to deal with undue dominance and monopoly.
      The second reason, which has been touched on by my hon. Friends, is the relationship between newspapers and politics. It is nonsense to argue, as some of my hon. Friends have done, that people go into newspapers because they want to make a profit. Beaverbrook, the archetypal proprietor, said it clearest and said it best—as he said so many things—when he said that he owned his newspapers to make propaganda. People become newspaper proprietors not because of profit—there are easier ways to make a return on their money—but for political and social influence and power. It must be unhealthy in politics for there to be undue dominance and monopoly in political and social power and influence.
      Because of the importance of freedom of information and the free flow of information, and because of the relationship between newspapers and politics, it is all too easy to make a special case for dealing with monopoly and undue dominance in the newspaper industry. I declare an interest as one of the few remaining members of the parliamentary Labour party who will admit to having picketed Wapping by candlelight at the beginning of the 1980s.
      My point is not an ad hominem point about Murdoch—it is that twice in recent times the Murdoch empire has driven a coach and horses through the clear intentions of monopoly legislation. The first time was when Murdoch acquired The Times. Anyone who doubts me needs only to read Harold Evans's book about that acquisition. Harold Evans is one of the legion of ex-Murdoch executives. He makes it perfectly clear in his very carefully documented book—as one might expect from one of the leading journalists of our generation—that the way Murdoch acquired The Times was wrong, was in breach of the legislation, and was based on a phoney presentation of statistics and undue pressure on the politicians of the time. Murdoch drove a coach and horses through the clear intentions of politicians when he acquired The Times.
      The second time was Murdoch's acquisition of Sky, on top of his control of the newspaper and magazine market. I served on the Committee that shaped the regulations covering Sky and other outlets. It was clear to me that, for a second time, Murdoch was being allowed to get away with it—through his power, through politicians' fear of him and through the need not to be seen to cross Rupert Murdoch.
      Now, at the beginning of this Administration, we have a Competition Bill and an opportunity to deal with the issue of undue dominance and monopoly in the media. Many people outside the House will not understand if we

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      do not do something. We do not need to look in the crystal ball; we can read the book. Time after time, in Britain, Australia and America, Murdoch has driven his way through the intentions of the people and the legislators on the issue of monopolies. We have an opportunity, which will not come again, to deal with the issue. I urge my hon. Friend the Minister to consider accepting the amendment, even at this late hour.
      Mr. Beard: It must make bad legislation first to find a villain and then to find the legislation by which to condemn him. We are in danger of doing just that if we follow some of the arguments that have been deployed in this debate. The real issue is whether the rules that apply in a vast range of industries to abuse of a dominant position—or anti-competitive behaviour—apply also to the newspaper industry, or whether that industry requires special treatment.
      The Standing Committee considered the clause that had been included by the other place—which deemed that special treatment was required—and removed it from the Bill for very good reasons. The first reason was that the clause did not meet certain of the Bill's principles—such as that it should be universally applicable right across industry, thereby giving it greater clarity. The second was that the Bill should be consistent with European legislation, so that the two legislative regimes could evolve in harmony. The third was that the clause introduced absurdities. The fourth was that the clause introduced a test for predatory pricing that was completely inappropriate and at odds with European precedent.
      Each of the proposals in this group falls for one or more of those reasons. New clause 1—taking the proposals in reverse order—like the clause from the other place, speaks of any activity that reduces diversity. Applying that definition produces some absurd examples. Is a newspaper that recruits many gifted writers and attracts readers towards it and away from another newspaper, thereby endangering that other newspaper's existence, to stop recruiting talented writers? Of course not. Many other examples can be concocted to demonstrate the absurdity of the definition.
      Amendment No. 8 would reduce the threshold in distinguishing whether there is a dominant position. However, when the matter is analysed and considered within the European context, it is doubtful whether there is such a distinction to be made. The European regime introduces a definition of dominant position that can catch abuse of dominant position in the newspaper industry if there is such a dominant position. In many of the examples cited in this debate, there seems to be an assumption that there is a dominant position for The Times, although very few facts and figures have been quoted to demonstrate it.
      Currently, a dominant position will be interpreted as one in which anyone can operate without regard to competition or customers. That definition may very well apply to someone who is using cross-subsidisation from another business to operate predatory pricing. The solution for such practice is for the Director General of Fair Trading to investigate the matter according to the precepts that are already included in clause 18, to reach a conclusion and to operate accordingly. There is no evident reason why newspapers require a special definition of dominant position that is any different from that applying to any other part of industry.
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      Amendment No. 1 is very close to the likely definition in European legislation of dominant position. The weakness of including that specific definition in the Bill is that we would freeze the definition at the time when the legislation is passed, whereas European definition of dominant position might evolve and diverge from the Bill's definition. There is therefore a weakness that we will end up with two divergent pieces of legislation, whereas the intention was to have them in close harmony.
      I do not think that any of the cases that have been cited in this debate justify a belief that clause 18 cannot deal with abuses and anti-competitive behaviour in the newspaper industry. The amendments are also in danger of introducing absurdities and breaking from some of the Bill's very basic principles—such as its universality and consistency with Europe.
      I do not believe that the situation has changed since the Committee considered the Bill. I therefore believe that all three proposals in this group should be rejected, and that the principles applying in the newspaper world should be those stated in clause 18.
      Dr. Ladyman: Some of my hon. Friends have railed against Mr. Murdoch and that is fine by me. I hold no candle for Mr. Murdoch and—short of my growing mammaries—I doubt whether he will ever say anything nice about me. I certainly hold no brief to defend his position. Nevertheless, I do not believe that my hon. Friends have shown that the Bill does not deal unamended with the position as they perceive it.
      Let me reiterate how the Bill works. Clause 18 defines what cannot be done and who cannot do it. Clause 60 pulls in all European case law in order to define what is not allowed and who cannot do it. As a result of clause 60, anything that we can scrape out of European case law can be used. The provision is not optional. It does not say, "You may," or "You can if you want to." There is no choice in the matter. The Bill provides that European case law must be used in interpreting the Bill.
      9 pm
      As my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) said earlier, that includes the Tetra Pak judgment, which provides a mechanistic definition of what predatory pricing involves. Under a mechanistic definition it is not necessary to prove intent. Previous investigations into what Mr. Murdoch and The Times have been doing failed because at the moment it is necessary to prove intent. When that is no longer necessary, as my hon. and learned Friend said, given what everyone is alleging about Mr. Murdoch's predatory pricing activity, if the figures can be demonstrated to prove that, he will be found guilty and prevented from predatory pricing. I do not know whether the figures will prove that or whether the arguments used by The Times are true and the newspaper is not selling below cost. If it is selling below cost, it will be dead meat.
      The only question arises in respect of dominant position. As I said earlier, European case law in United Brands v. the Commission says that organisations or individuals may be acting from a dominant position if they can influence the market and have the power from other sources to act independently. It uses almost identical language to amendment No. 1, so in my view amendment No.1 is superfluous. If that is the case and my hon. Friend

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      the Minister confirms my interpretation when he replies to the debate, I assume that my hon. Friend the Member for North Durham (Mr. Radice) will not find it necessary to press the amendment to a vote as the provision is already in the Bill.
      Amendment No.8 seeks to introduce a new definition of dominant position in respect of newspapers, including the word "substantial". Under European case law, it is not necessary to have 80 per cent. of a holding in a marketplace to be dominant. European case law specifically says that a holding of 40 to 45 per cent. is almost certainly dominant and that a holding of as little as 20 per cent. might be dominant given the right circumstances. If we interpret "substantial" as being different from "dominant" and representing a lower threshold—otherwise the amendment would have no purpose—the amendment is saying that a holding of less than 20 per cent. of the market might represent a "substantial" position and could therefore result in anti-competitive practice. I am sorry to say that that would bring in not only The Times but all the other broadsheet newspapers that would be in a "substantial" position.
      Mr. Mullin: My hon. Friend makes my point for me. The amendment is not an anti-Murdoch amendment, as it would apply to anyone—including The Daily Telegraph or the Daily Mirror—who attempted to engage in predatory pricing.
      Dr. Ladyman: My hon. Friend is certainly right, but if the definition of predatory pricing according to the Tetra Pak judgment is selling below the cost of production and making a loss on a consistent basis, that is doubly the definition of The Independent. The day we knock on Mr. Murdoch's door and say, "You must stop doing this because you are breaking the law," he will say, "If you bring me to court, I want The Independent taken to court with me because it is also making a loss. It has a substantial holding in the marketplace and is every bit as covered by amendment No.8 as I am." That is why amendment No.8 is dangerous as well as unnecessary.
      My hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard) described the absurdities that the new clause would introduce. Under new clause 1, an attempt by The Independent or The Guardian to hire new and better journalists to improve their newspapers could be defined as acting to try to close down competitors. That makes a nonsense of the Bill. The Bill, as the Government have defined it, is strong enough to deal with Murdoch and The Times if it can be shown that Murdoch is selling below the cost of production. If my hon. Friends who fear that that is what he is doing are right, the Bill as it stands is already perfectly adequate to deal with such behaviour. I call on my hon. Friends to reject the amendments and the new clause.
      Mr. Boswell: I rise with some diffidence on behalf of Her Majesty's Opposition to intrude on what is clearly the Labour party's private grief. This has certainly been an interesting and illuminating debate, perhaps characterised more by heat than light. It has been characterised more precisely by hon. Members' vain attempts to distil their dislike of a particular individual—Rupert Murdoch—and his empire into a series of penal measures that would be imposed on that empire.
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      I should make it clear from the start that the Conservative party is not against competition. Indeed, we Conservatives favour vigorous competition. Our reservations about the Bill more generally reflect the fact that it does not always achieve the objectives that it claims to seek. As a party, we are not in favour of predatory pricing or the abuse of a dominant position. As the hon. Member for South Thanet (Dr. Ladyman) made fairly clear, the issue is whether the measures proposed in the clutch of amendments are appropriate to the ills that are seen.
      I should like to make it clear, as my right hon. Friend the Member for Wokingham (Mr. Redwood) did in Committee, that we accept that, in certain specific cases, competition legislation, as it has operated in this country over the years under different Governments, may be required to address some specific problems concerning the newspaper industry. It is clearly appropriate to legislation on mergers and the allocation of titles.
      Although I do not have a detailed knowledge of the genesis of legislation, it is fair to say that one of the major concerns was that titles might disappear or be bought for the purpose of closing them down. Regardless of whether that is the intention of any individual in the present scene, we have clearly not failed to secure vigorous competition among broadsheets and tabloids—as well as, increasingly, dare I say, between them—and a wide range of differing titles. That may change. One reason for such a change, to pick up a point made earlier, may be the falling away of the propensity of persons to buy titles that are making losses, in order to advocate a particular position. At the moment, however, we have a very lively newspaper scene and must therefore identify what specific ill the amendments address.
      We look forward to the Minister's remarks. I agree with recent comments that a case has not yet been made that any problem can be tackled in the way that is suggested. I apologise to the hon. Member for North Durham (Mr. Radice) for picking up only a few of his latter remarks. I turn particularly to the remarks of the hon. Member for Sunderland, South (Mr. Mullin), who clearly dislikes Murdoch—an opinion to which he is entitled. He moved round several different ways in which the Murdoch problem, as he sees it, could be addressed. It could be predatory pricing, the abuse of a dominant position, something done in the past, motive or effect. It was difficult to pin down how it was to be tackled.
      I wish to refer to the most likely of the candidates—the predatory pricing test. As my right hon. Friend the Member for Wokingham pointed out in Committee, it is very difficult in practice to differentiate that consideration from ordinary commercial pricing and keen marketing. As has been mentioned—I declare an interest in this—many of us benefit from subscription arrangements, either to daily newspapers or periodicals which are priced at a considerably lower figure than would apply if we were to buy them day-by-day at the newsagents. Other people may be able to intercept a copy given away on their way to work. There is a wide variety of effective pricing arrangements.
      How on earth can we find what is predatory and what is not? That is still not clear to me. It is clear that if one seeks a remedy along those lines, it could be encompassed by the Bill as drafted and it should be possible to do so by generality, rather than by a specific case.

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      Another possibility would be to look at predatory pricing in terms of cost, and that was addressed. However, it is clear that most national newspapers, by definition, price themselves at below the cost of production or at an uneconomic level. They make that up by advertising, or they may run at a loss from time to time. One should look at another test, which is that of a formerly dominant position, I was interested in the exchanges that have just taken place, because it is possible to synthesise the situation in which—to take the case of the argument by the hon. Member for South Thanet—a newspaper might have a substantial position in the market; shall we say The Times. However, The Daily Telegraph, which sells many more copies, might have, within the terms of the Bill, a dominant position—so those two newspapers could be subsisting. However, it is not clear whether they would be subjected to the same or different tests.
      I mention those examples because I feel that it is difficult to pick our way through to a fungible solution to what I am far from convinced is an actual problem, given the strength and diversity of the press and the weapons that the Bill will give the Government as part of their general approach to competition legislation. This is essentially an argument between the soul and the head of the Labour party as to the way forward. We shall look forward to the Minister of State's effort to wrestle with what are, in the words of the preacher, "doots" among his colleagues.
      In conclusion—this is in no sense an attempt to subvert Government Back Benchers, or to discourage them from supporting the Minister; that is a matter for them—in declining to oppose the Government's position, as I anticipate it to be, I would commend the Government on a strange phenomenon. Their characteristic phenomenon is to find a public ill—or, if they cannot find one, to invent one or make a fuss about one—and then to tackle it with a great flourish. People are named and shamed, and action is taken, or threatened to be taken. Something is done about it, particularly if the focus groups say that something should be done.
      Quite exceptionally, unusually and, in this case, sensibly, the Government have not bowed to the pressure to produce a specific remedy for a specific ill. They are relying, wisely, on principles of general application. We shall listen to the Minister of State with interest, and I am sure that, his hon. Friends will be listening with even greater interest. We shall—as they say in the history books—then await events.
      Mr. Ian McCartney: My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) asked me to find it in my heart to support the amendments. No one can accuse me of being anything but a big-hearted person, but tonight I am not going to let my heart rule my head. We want intelligent decision making.
      The Bill is not about ownership; it is about dealing with abuses of dominance and other anti-competitive behaviour. It will provide much stronger powers to deal with such behaviour. The media industry will continue to be subject to the existing merger control and newspaper merger regimes under the Fair Trading Act 1973 and to media ownership regulations under the Broadcasting Act 1990.
      The Government have made clear their belief in the importance of a strong, diverse and independent press. That is why we are keeping the special merger provisions
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      for newspapers in the Fair Trading Act, which protect plurality of ownership and diversity of content. The Bill deals with anti-competitive practices, which are wrong wherever they occur. The Government believe that abuses of dominance, such as predatory pricing, should be stamped out whatever the market. Clause 18 clearly covers firms that abuse their dominance by predatory pricing, which is vital.
      9.15 pm
      The principles established in European case law will apply under the Bill by virtue of clause 60(2) which makes it clear that there must be no inconsistency between the principles applied by courts in applying a domestic prohibition and those laid down by
      "the European Court, and any relevant decision of that Court".
      The principles on predatory pricing established in AKZO and Tetra Pak will apply under the Bill.
      Hon. Members have referred to briefings sent to them by executives of The Independent and The Daily Telegraph newspapers and to the opinion of the Queen's counsel that those briefings quote. It is important to distinguish between allegations about The Times and questions of principle about the interpretation of the Bill, but The Independent and The Daily Telegraph executives mix them together to suit themselves. The briefings entirely wrongly imply that what the Government have said about the European Court case law is dubious. I do not accept the assertion that
      "many lawyers disagree with this interpretation".
      I have seen nothing to back up that assertion, and no hon. Member has said anything tonight to persuade me that it is right. On the contrary, even those who have tabled the amendments have, in their arguments, accepted that the European Court case law is very clear on the relevant points.
      The suggestion in the briefings that Rupert Murdoch can operate with immunity from competition law should be treated with the disdain that it deserves. I take exception to the fact that hon. Members have said that the Government are in the pocket of Rupert Murdoch. The socialist Member for Makerfield in Rupert Murdoch's pocket? No one can say that I have ever worn a Sun lover's T-shirt.
      Hon. Members should consider what the Government have done in the past few weeks: we have introduced automatic recognition, removing Wilson and Palmer—which allowed the newspaper industry to discriminate against employees on the ground of their trade union membership—and permitting those sacked for taking part in lawful industrial action to claim unfair dismissal. Moreover, we have introduced a national minimum wage, against which The Times has campaigned, and continues to campaign, vigorously.
      This is a Government of fairness, not favours. No one can suggest that a Government in the pocket of Rupert Murdoch could introduce such workers' rights legislation. It is nonsense, and Labour Members should not claim that the Government are in the pocket of a vested interest. The Government are in the pocket of no vested interest. We were elected to tackle vested interests, which is precisely what we are doing in the Bill.
      Mr. Winnick: I did not say that the Government were in the pocket of Murdoch. I said the opposite: that

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      Murdoch believes that he has in his pocket the Government and the Conservative party, which is a highly undesirable state of affairs. That does not in any way mean that the Government, whom I support, are in Murdoch's pocket. Will my hon. Friend say whether he believes that the Murdoch empire has too much power and, if so, what steps should be taken to deal with that?
      Mr. McCartney: I thank my hon. Friend for that clarification. I think that I made the Government's position on dealing with vested interests absolutely clear. I accept what I believe was an attempted apology, but it is invidious to give the impression, inside or outside the House, that the Government are treating anyone differently. That is not the case. We are a Government of fairness, not favours.
      Much has been said about the actions of News International and The Times. It would be wrong of me to comment on whether the actions of an individual undertaking are or are not anti-competitive, as that is a matter for the competition authorities, both under the Bill and under existing legislation. The House should note, however, that the director general has asked News International to provide detailed information about The Times, to enable him to assess the impact on its competitors of its trading strategy.
      I am surprised that that was not mentioned in the debate, especially by those who spoke in favour of new clause 1. This is the proper way forward. I do not accept the arguments of those who are out to get The Times and who say that, if its actions are not caught by the legislation, we must alter it to catch them.
      That is not the purpose of the Bill or of the legislative programme. If someone has a case against Murdoch or any other individual, he can pursue that case, but we cannot distort the Bill as has been suggested. That would undermine the concept of the Bill, and our ability to prevent abusive and anti-competitive behaviour in the marketplace. Let us remember that, when such abuse takes place, small, medium and large enterprises suffer, and it is the responsibility of the House to improve legislation to prevent that from happening and to ensure that, if it does happen, we have the capacity to stop it and to take action to ensure that any loss is recognised.
      Mr. Clive Efford: Does my hon. Friend accept that there is a problem in the newspaper industry that should be dealt with in the Bill? If the Bill were to fail to deal with the problem, what action would he take to remedy it?
      Mr. McCartney: I thought that I made it clear that such matters are for the competition authorities. We are responsible for providing a legislative framework, and we have not only done that but improved on the existing framework. We oppose the amendments and the new clause because we do not believe that the framework is inadequate; we believe that it is rigorous and that it is constituted in the context of European jurisprudence, taking account of articles 85 and 86. It has been recognised from the outset as the only way of ensuring that we have an effective regime to deal with anti-competitive behaviour, including predatory pricing.
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      I want to make it clear from the outset that I sympathise with the thinking behind amendment No. 1. I entirely appreciate the fact that the object is to clarify what is meant by dominance under the Bill, drawing on the relevant EC jurisprudence. I and other Ministers have defined dominance in similar terms in debates in Parliament. We have no quarrel with the definition itself. I have no objection to the description of dominance set out in the amendment, as far as it goes. It is consistent with the explanations that I and other Ministers have given.
      I am grateful to my hon. Friend the Member for North Durham (Mr. Radice) for highlighting these important principles of interpretation. There is common ground between us on the substance, but the amendment itself is unacceptable. It could inadvertently do serious damage to the central policy of the Bill, which is to align the domestic prohibition of abuse with that of article 86.
      European jurisprudence is clear that dominance means a position of economic strength that enables an undertaking to hinder the maintenance of effective competition on the relevant market by allowing it to behave to an appreciable extent independently of its competitors, of its customers and, ultimately, of the consumer. That test is laid down in case law, for example in the Michelin case.
      Those EC principles of interpretation will apply under the Bill, by virtue of clause 60. Subsection (2) makes it clear that there must be no inconsistency between the principles applied by the courts in applying the domestic prohibition, and those laid down by the European Court, and any relevant decision of that Court.
      Market share is not determinative of dominance, but it is an important factor. The Commission has expressed the view that while, in general, companies with market shares below 40 per cent. are unlikely to be regarded as dominant, undertakings with market shares as low as 20 per cent. may none the less be dominant if the nature and structure of the market enable them to act independently of competition.
      Clause 60(3) requires our courts to have regard to relevant statements of the Commission, such as this one, in applying the domestic prohibition. Therefore, the assessment of dominance under the Bill will need to have regard to the Commission's statements. In short, the principles of interpretation on dominance, which are established in EC case law, will apply under the Bill.
      Either the words of the amendment correctly define what is a dominant position under Community law, in which case they are unnecessary because that definition is already supplied through clause 60, or the words do not set out the test correctly and fully, in which case they should not be included. Where unnecessary provisions are inserted in legislation, they tend to go septic—that is to say that the courts look for some meaning to give them, rather than accept that they were not intended to have any effect of substance. In that way, in time they are likely to have effects that were entirely unintended. That uncertainty could cause business a major problem. If the latter interpretation were to prevail, it could lead to a UK prohibition being interpreted significantly differently to article 86.
      The amendment would freeze the position in domestic legislation. That would carry the risk of the application of the domestic law diverging from that of EC law in an

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      important area. As we stressed many times in Committee, we should not seek to specify or alter how the prohibitions themselves apply, but should rely on the governing principles clause. So, while I sympathise with the thinking behind the amendment, I hope that my hon. Friend will accept that it would be seriously counterproductive in practice. Having heard my assurances on the meaning of dominance under the Bill, and the principles of EC jurisprudence on the matter, I hope that he will be prepared to withdraw the amendment.
      Amendment No. 8 tackles the issue by lowering the threshold of what is "dominant" in the national newspaper market. I see no justification for treating newspapers differently in that respect. Frankly, it smacks of fixing the legislation to catch The Times regardless of the proper merits of the case.
      I have explained carefully what is meant by dominance in the Bill. That is a soundly based test drawing on established European jurisprudence. It would be wrong to replace that with a different test which would in any case be highly uncertain.
      Mr. Redwood: Is the Minister saying that under the definition that he prefers The Times clearly is not dominant?
      Mr. McCartney: The right hon. Gentleman is trying to be far too clever by half, as is his nature. I set out clearly what the Bill does, which is to provide a legal framework to deal with abuse of dominance in the marketplace, including predatory pricing. Whether someone is abusing the marketplace through predatory pricing is a matter for evidence, which should be taken properly by the competition authorities.
      If the right hon. Gentleman has any bottle and if he thinks that the Government's policy is correct, he should go through the Lobby and support us on that basis. I assume that he will not do so, not because he wants to curry favour with News International, but because he believes that the Government's policies in that area are far too tough. He wants to be weak on competition policy and to allow abuses of dominance on occasions. Throughout the passage of the Bill, he has been at great pains to find ways out of dealing with those types of abuses in the marketplace. It is no surprise to me, even at this late hour, that he is still attempting in a few weasel words to place the Government in an unfavourable position. Once again, he has failed spectacularly—well, that got that out of the way.
      New clause 1 introduces a press diversity prohibition and is similar to the clause that was thrown out in Committee. The earlier clause was wholly unworkable. I am glad to say that the supporters of new clause 1 have half met the criticisms that I made in Committee. They could have met my criticisms fully by withdrawing the proposed clause altogether. They have replaced the earlier threshold of a substantial degree of market power with the Fair Trading Act 1973 threshold, broadly at 25 per cent. of market share. I have already explained that there is no justification for a lower threshold to apply solely in the newspaper sector.
      We said that the previous clause was too wide ranging and that any conduct—legitimate or illegitimate—may reduce the diversity of national newspapers by reducing competition. Now it is suggested that the concept of
      1166
      anti-competitive behaviour should be built in. That might be an improvement, but I have yet to hear a proper justification for applying tests to the newspaper market that are different from the tests in the economy at large. If conduct is anti-competitive and constitutes an abuse, it should be dealt with, whatever the sector. That is what the Bill does, and I urge the House to reject the amendments.
      Mr. Radice: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment proposed: No. 8, in page 10, leave out lines 40 and 41 and insert
      '"dominant position" means—

      (a) in relation to the national newspaper market, a substantial degree of market power, and

      (b) in relation to all other markets, a dominant position within the United Kingdom; and'.—[Mr. Mullin.]

      Question put, That the amendment be made:—
      The House divided: Ayes 68, Noes 301.

      Division No. 331]

      [9.29 pm

      AYES

      Abbott, Ms Diane

      Jones, Dr Lynne (Selly Oak)

      Allan, Richard

      Jones, Nigel (Cheltenham)

      Austin, John

      Keetch, Paul

      Baker, Norman

      Kirkwood, Archy

      Beggs, Roy

      Lewis, Terry (Worsley)

      Beith, Rt Hon A J

      Livingstone, Ken

      Benn, Rt Hon Tony

      Livsey, Richard

      Best, Harold

      Llwyd, Elfyn

      Brake, Tom

      McAllion, John

      Brand, Dr Peter

      McDonnell, John

      Breed, Colin

      Marshall-Andrews, Robert

      Bruce, Malcolm (Gordon)

      Michie, Mrs Ray (Argyll & Bute)

      Burnett, John

      Moore, Michael

      Burstow, Paul

      Mullin, Chris

      Campbell, Menzies (NE Fife)

      Oaten, Mark

      Canavan, Dennis

      Öpik, Lembit

      Chidgey, David

      Rendel, David

      Clwyd, Ann

      Robinson, Peter (Belfast E)

      Cohen, Harry

      Russell, Bob (Colchester)

      Corbyn, Jeremy

      Sanders, Adrian

      Cotter, Brian

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

      Davey, Edward (Kingston)

      Swinney, John

      Donaldson, Jeffrey

      Taylor, Matthew (Truro)

      Dunwoody, Mrs Gwyneth

      Tyler, Paul

      Ewing, Mrs Margaret

      Wallace, James

      Fearn, Ronnie

      Webb, Steve

      Flynn, Paul

      Wigley, Rt Hon Dafydd

      Foster, Don (Bath)

      Willis, Phil

      George, Andrew (St Ives)

      Winnick, David

      Godman, Dr Norman A

      Wise, Audrey

      Gorrie, Donald

      Wood, Mike

      Hancock, Mike

      Wyatt, Derek

      Harris, Dr Evan

      Harvey, Nick

      Tellers for the Ayes:

      Hopkins, Kelvin

      Mr. Andrew F. Bennett and

      Hughes, Simon (Southwark N)

      Mr. Neil Gerrard.

      NOES

      Ainger, Nick

      Banks, Tony

      Ainsworth, Robert (Cov'try NE)

      Barron, Kevin

      Alexander, Douglas

      Battle, John

      Allen, Graham

      Bayley, Hugh

      Anderson, Janet (Rossendale)

      Beard, Nigel

      Armstrong, Ms Hilary

      Beckett, Rt Hon Mrs Margaret

      Ashton, Joe

      Begg, Miss Anne

      Atherton, Ms Candy

      Bell, Stuart (Middlesbrough)

      Atkins, Charlotte

      Benton, Joe

      1167

      Bermingham, Gerald

      Foulkes, George

      Betts, Clive

      Galbraith, Sam

      Blackman, Liz

      Gapes, Mike

      Blizzard, Bob

      Gardiner, Barry

      Blunkett, Rt Hon David

      Gibson, Dr Ian

      Boateng, Paul

      Gilroy, Mrs Linda

      Borrow, David

      Godsiff, Roger

      Bradley, Keith (Withington)

      Goggins, Paul

      Brinton, Mrs Helen

      Golding, Mrs Llin

      Brown, Rt Hon Nick (Newcastle E)

      Gordon, Mrs Eileen

      Brown, Russell (Dumfries)

      Griffiths, Jane (Reading E)

      Browne, Desmond

      Griffiths, Nigel (Edinburgh S)

      Burden, Richard

      Griffiths, Win (Bridgend)

      Burgon, Colin

      Grocott, Bruce

      Butler, Mrs Christine

      Grogan, John

      Byers, Stephen

      Gunnell, John

      Campbell, Mrs Anne (C'bridge)

      Hain, Peter

      Campbell-Savours, Dale

      Hall, Mike (Weaver Vale)

      Caplin, Ivor

      Hall, Patrick (Bedford)

      Casale, Roger

      Hamilton, Fabian (Leeds NE)

      Caton, Martin

      Hanson, David

      Chapman, Ben (Wirral S)

      Heal, Mrs Sylvia

      Chaytor, David

      Healey, John

      Chisholm, Malcolm

      Henderson, Ivan (Harwich)

      Church, Ms Judith

      Hepburn, Stephen

      Clark, Rt Hon Dr David (S Shields)

      Heppell, John

      Clark, Paul (Gillingham)

      Hesford, Stephen

      Clarke, Charles (Norwich S)

      Hewitt, Ms Patricia

      Clarke, Rt Hon Tom (Coatbridge)

      Hill, Keith

      Clarke, Tony (Northampton S)

      Hodge, Ms Margaret

      Clelland, David

      Hoey, Kate

      Coaker, Vernon

      Home Robertson, John

      Coffey, Ms Ann

      Hoon, Geoffrey

      Colman, Tony

      Hope, Phil

      Cooper, Yvette

      Howarth, Alan (Newport E)

      Corbett, Robin

      Howarth, George (Knowsley N)

      Corston, Ms Jean

      Howells, Dr Kim

      Cousins, Jim

      Hughes, Ms Beverley (Stretford)

      Cranston, Ross

      Hughes, Kevin (Doncaster N)

      Crausby, David

      Humble, Mrs Joan

      Cryer, John (Hornchurch)

      Hurst, Alan

      Cunliffe, Lawrence

      Hutton, John

      Cunningham, Rt Hon Dr John (Copeland)

      Iddon, Dr Brian

      Illsley, Eric

      Cunningham, Jim (Cov'try S)

      Jackson, Ms Glenda (Hampstead)

      Curtis-Thomas, Mrs Claire

      Jackson, Helen (Hillsborough)

      Darling, Rt Hon Alistair

      Jenkins, Brian

      Davey, Valerie (Bristol W)

      Johnson, Alan (Hull W & Hessle)

      Davidson, Ian

      Johnson, Miss Melanie (Welwyn Hatfield)

      Davies, Rt Hon Denzil(Llanelli)

      Davies, Geraint (Croydon C)

      Jones, Barry (Alyn & Deeside)

      Davies, Rt Hon Ron (Caerphilly)

      Jones, Mrs Fiona (Newark)

      Dawson, Hilton

      Jones, Helen (Warrington N)

      Dean, Mrs Janet

      Jones, Ms Jenny (Wolverh'ton SW)

      Denham, John

      Dewar, Rt Hon Donald

      Jones, Jon Owen (Cardiff C)

      Dismore, Andrew

      Jones, Martyn (Clwyd S)

      Dobson, Rt Hon Frank

      Jowell, Ms Tessa

      Donohoe, Brian H

      Kaufman, Rt Hon Gerald

      Doran, Frank

      Keeble, Ms Sally

      Dowd, Jim

      Kemp, Fraser

      Drew, David

      Kidney, David

      Eagle, Angela (Wallasey)

      Kilfoyle, Peter

      Eagle, Maria (L'pool Garston)

      King, Andy (Rugby & Kenilworth)

      Edwards, Huw

      King, Ms Oona (Bethnal Green)

      Ennis, Jeff

      Kumar, Dr Ashok

      Etherington, Bill

      Ladyman, Dr Stephen

      Fatchett, Derek

      Lepper, David

      Field, Rt Hon Frank

      Leslie, Christopher

      Fisher, Mark

      Levitt, Tom

      Fitzpatrick, Jim

      Lewis, Ivan (Bury S)

      Fitzsimons, Lorna

      Linton, Martin

      Flint, Caroline

      Lloyd, Tony (Manchester C)

      Follett, Barbara

      Lock, David

      Foster, Michael Jabez (Hastings)

      Love, Andrew

      Foster, Michael J (Worcester)

      McAvoy, Thomas

      1168

      McCabe, Steve

      Rooker, Jeff

      McCafferty, Ms Chris

      Rooney, Terry

      McCartney, Ian (Makerfield)

      Ross, Ernie (Dundee W)

      McDonagh, Siobhain

      Rowlands, Ted

      Macdonald, Calum

      Roy, Frank

      McFall, John

      Ruane, Chris

      McGuire, Mrs Anne

      Ruddock, Ms Joan

      McIsaac, Shona

      Ryan, Ms Joan

      McKenna, Mrs Rosemary

      Salter, Martin

      McNulty, Tony

      Savidge, Malcolm

      McWalter, Tony

      Sedgemore, Brian

      McWilliam, John

      Shaw, Jonathan

      Mahon, Mrs Alice

      Sheerman, Barry

      Mallaber, Judy

      Skinner, Dennis

      Mandelson, Peter

      Smith, Rt Hon Andrew (Oxford E)

      Marsden, Paul (Shrewsbury)

      Smith, Angela (Basildon)

      Marshall, David (Shettleston)

      Smith, Rt Hon Chris (Islington S)

      Marshall, Jim (Leicester S)

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Martlew, Eric

      Meacher, Rt Hon Michael

      Smith, John (Glamorgan)

      Merron, Gillian

      Smith, Llew (Blaenau Gwent)

      Michael, Alun

      Snape, Peter

      Michie, Bill (Shef'ld Heeley)

      Soley, Clive

      Milburn, Alan

      Southworth, Ms Helen

      Miller, Andrew

      Spellar, John

      Mitchell, Austin

      Squire, Ms Rachel

      Moffatt, Laura

      Starkey, Dr Phyllis

      Moran, Ms Margaret

      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

      Mudie, George

      Stott, Roger

      Murphy, Jim (Eastwood)

      Strang, Rt Hon Dr Gavin

      Murphy, Paul (Torfaen)

      Straw, Rt Hon Jack

      Naysmith, Dr Doug

      Stuart, Ms Gisela

      Norris, Dan

      Sutcliffe, Gerry

      O'Brien, Bill (Normanton)

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      O'Brien, Mike (N Warks)

      O'Hara, Eddie

      Taylor, Ms Dari (Stockton S)

      Olner, Bill

      Taylor, David (NW Leics)

      Organ, Mrs Diana

      Temple-Morris, Peter

      Osborne, Ms Sandra

      Thomas, Gareth R (Harrow W)

      Palmer, Dr Nick

      Timms, Stephen

      Pearson, Ian

      Tipping, Paddy

      Pendry, Tom

      Todd, Mark

      Perham, Ms Linda

      Touhig, Don

      Pickthall, Colin

      Trickett, Jon

      Pike, Peter L

      Turner, Dennis (Wolverh'ton SE)

      Plaskitt, James

      Turner, Dr Desmond (Kemptown)

      Pollard, Kerry

      Turner, Dr George (NW Norfolk)

      Pond, Chris

      Twigg, Derek (Halton)

      Pope, Greg

      Twigg, Stephen (Enfield)

      Pound, Stephen

      Vaz, Keith

      Powell, Sir Raymond

      Vis, Dr Rudi

      Prentice, Ms Bridget (Lewisham E)

      Walley, Ms Joan

      Prentice, Gordon (Pendle)

      Ward, Ms Claire

      Primarolo, Dawn

      Watts, David

      Prosser, Gwyn

      White, Brian

      Purchase, Ken

      Whitehead, Dr Alan

      Quin, Ms Joyce

      Wicks, Malcolm

      Quinn, Lawrie

      Williams, Alan W (E Carmarthen)

      Radice, Giles

      Wilson, Brian

      Rapson, Syd

      Winterton, Ms Rosie (Doncaster C)

      Raynsford, Nick

      Worthington, Tony

      Reed, Andrew (Loughborough)

      Wright, Anthony D (Gt Yarmouth)

      Robertson, Rt Hon George (Hamilton S)

      Wright, Dr Tony (Cannock)

      Roche, Mrs Barbara

      Tellers for the Noes:

      Rogers, Allan

      Jane Kennedy and

      Mr. David Jamieson.

      Question accordingly negatived.

    Schedule 3

      GENERAL EXCLUSIONS
      Mr. Nigel Griffiths: I beg to move amendment No. 69, in page 53, line 38, leave out 'which'.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss Government amendments Nos. 70 to 72, 11, 16, 26, 15, 28 to 32, and 38.
      Mr. Griffiths: These are minor and tidying amendments. Government amendments Nos. 69, 70, 71 and 72 tighten the definition of "trading practices" in relation to the European economic area regulated markets, and bring it into line with the definition of practices in relation to recognised investment exchanges in the Financial Services Act 1986.
      Government amendments Nos. 11 and 15 tidy up a matter which was dealt with in Committee. Clause 50, which was inserted in Committee, enables the Secretary of State by order to provide for any provision of part I to apply in relation to land or vertical agreements, with such modifications as may be prescribed.
      Government amendments Nos. 16, 26, 28 to 32 and 38 are minor, and are part of the overhaul of the transitional provisions. I hope that the House will accept the amendments.
      Amendment agreed to.
      Amendments made: No. 70, in page 53, line 39, after '(a)', insert 'which'.
      No. 71, in page 53, line 41, leave out '(b)' and insert 'and which'.
      No. 72, in page 53, line 43, after '(c)', insert 'which'.—[Mr. Nigel Griffiths.]
      9.45 pm
      Mr. Redwood: I beg to move amendment No. 6, in page 53, leave out lines 44 to 49.
      Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 51, in page 54, line 37, leave out from beginning of line to end of line 6 on page 55.
      Mr. Redwood: It was a pity that the Minister of State, in responding to my intervention in the previous debate, chose to make a crude and inaccurate political point during what was meant to be a civilised exchange to elicit information about whether The Times was in a dominant position under different definitions.
      The Minister of State alleged that the Opposition are keen to water down the competition legislation, and that, by implication, we favour anti-competitive practices. One of the principal purposes of this amendment is to show that the contrary is true. As we argued in Committee, so we argue on the Floor of the House; we believe that, in several important respects, the Bill is sadly lacking. It does not have sufficient bite to deal with potential abuses of the marketplace by monopolies. Indeed, the Bill could be more accurately called the competition and protection of monopolies Bill, particularly if one looks at schedule 3 and the enormous loophole it contains. That is what we are trying to excise with our amendment.
      1170
      The House will know that I have declared two interests and my wife's interest in the Register of Members' Interests. The House should know that I am not furthering those interests by anything that I say or do in these debates.
      Mr. Nigel Griffiths: The right hon. Gentleman must clarify the statement he made in Committee on 21 May. He said:
      "The Minister must know that our case against the Bill is that it is either unnecessary or premature …we are against it in principle."—[Official Report, Standing Committee G, 21 May 1998; c. 48.]
      Mr. Redwood: That is quite right. We made it clear that we are against the Bill because we do not think that it fulfils what the Government say is a joint aim, which is to have a strong and fair competition policy in our country. We have said that we do not think that the Bill can fulfil the Government's aim of clarifying between European and British law and avoiding double jeopardy. We do not think that it would sharpen the attack of the British competition authorities on those revenue-producing monopolies that are most undesirable.
      I am conscious, Mr. Deputy Speaker, that at this relatively late hour you will want me to keep strictly in order. With the Under-Secretary's agreement, I shall deal with the words that we are seeking to excise from the schedule.
      We wish to leave out paragraph 4 of schedule 3 on page 53. It might be for the convenience of the House, since not all hon. Members have the schedule before them, to remind the House of the words. It is headed:
      "Services of general economic interest etc."
      It states:
      "Neither the Chapter I prohibition nor the Chapter II prohibition"—
      the two effective prohibitions that the legislation is about—
      "applies to an undertaking entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly in so far as the prohibition would obstruct the performance, in law or in fact, of the particular tasks assigned to that undertaking."
      I accept that the last line and a half offers some limitation on what is otherwise a breathtakingly wide definition of exceptions. However, I think that it would be possible for clever lawyers operating for revenue monopolies or even companies with a dominant position who claim that they have a general economic interest that they are delivering through their services, to draw the attention of the courts to the big loophole in the legislation. Some will doubtless use it to good effect.
      In Committee, we moved a specific amendment to try to improve competition in the water industry. The Opposition are strongly committed to the idea that water services could be improved, and that water prices could be lowered if proper competition was introduced into the industry. We had an interesting debate in Committee, and I was delighted that the Under-Secretary expressed some sympathy for the general thrust of my argument about the need for more competition in the industry.
      It is well known that the Labour Government have been critical of the standards and practices of some in that industry, and of some companies in the industry. The Opposition are no friend of poor services or of

      1171
      anti-competitive practices. We would like to see rapid progress in the case of water. It is one very big example where we think that paragraph 4 of schedule 3 would make the Under-Secretary's task more difficult in the courts, and perhaps in persuading his colleagues in the Government that some action should be taken. Indeed, with the Bill before the House, this is the obvious time, and the Bill is the obvious vehicle, to make the water industry more competitive, but the Government seem to want to throw away that heaven-sent opportunity, and they voted against our amendment accordingly.
      I urge the Under-Secretary, even at this late stage, to see the wisdom of removing the words that we seek to excise from the Bill, or tabling another amendment so that the words will not be as damaging as I fear they could be. We must think again.
      Dr. Ladyman: How nice it is to be arguing with the right hon. Gentleman again, rather than with my hon. Friends. The right hon. Gentleman said that the last line and a half of paragraph 4 provide some limitation. If he means the words beginning "in so far as", they provide an absolute limitation on the schedule. Why does he not believe that?
      Mr. Redwood: There is nothing absolute about those words. They provide limited circumstances for the competition authorities to counter-argue that a monopoly is going too far. They are limited, because the monopoly could always say that, if it were not allowed to continue with its price fixing or special agreement or deal, it could no longer fulfil the tasks assigned to it.
      If a water company wanted to defend a particular agreement or pricing practice, it would argue that it could no longer supply clean water in the required quantities to all households. That would be a serious threat, and the court might believe the company, because it is the monopoly producer. It presumably has some credibility, and knows whether it can provide water on different bases. The court might judge that the company was right, and allow it to continue its anti-competitive practice.
      How much better it would be if there were a market test for that practice. If another company could enter the market and provide a better service without such a restriction, it would be allowed to do so, and it would not be possible to argue through the courts in defence of the restrictive practice or the special agreement.
      I was pleased, after my recent discussion of the subject in Committee, to discover that some leading companies in the water industry agree that more competition could be introduced, and that they might benefit because they are active and innovative. They believe that if there were more freedom in the market, they might be beneficiaries. That is a good sign that there would be an entirely positive response to more competition. In that case—I could think of many others—we should like the words in the amendment removed, or modified by the Government's statements, so that there is scope for introducing competition.
      Before the House votes on whether to retain the words, we should also learn a little from the Government about what services they have it in mind to exempt under this wide-ranging paragraph. They must have had something in mind when they drafted it.
      1172
      In Committee, it was suggested that such words are found in the treaty, so they had to be found in the Bill, but I am sure that the Government have done a little more research and thinking than that. The Bill creates a British law for British markets, as we have often argued, so we need the Government to tell us what would be permissible by way of a general economic interest service or a revenue-producing monopoly to exempt companies from the otherwise sensible provisions of the Bill and earlier competition legislation.
      I am sure that my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) will eloquently argue the case on his amendment No. 51, which attempts to test out or achieve something similar on the Bill's other substantial loophole, which relates to public policy. The House is owed an explanation of how often the public policy rubric would be used, and why we need it as well as the conditions of revenue-producing monopoly and general economic services, which might cover similar cases. Certainly the cases that I have in mind could be covered by either of those conditions.
      I am sure that my hon. Friend has tabled his amendment partly to test out the exclusion and how wide it will be. The competition authority and the Bill will be very weak if those large loopholes remain and are generally used, so we shall urge the House to vote for the amendments.
      Mr. Lansley: I am grateful for the opportunity to support my right hon. Friend the Member for Wokingham (Mr. Redwood) on amendment No. 6, and to speak briefly to amendment No. 51, which would delete from schedule 3 paragraph 7, relating to issues of public policy. I want to add a few points in relation to paragraph 4, which relates to services of general economic interest.
      My right hon. Friend is right to say that, in Committee, there was speculation about the purposes for which the Government were proposing paragraph 4. It was suggested—I confess that I cannot remember by whom—that the paragraph was inserted at the request, or at the behest, of the Post Office, which, in United Kingdom circumstances, may be regarded as both a service "of general economic interest" and "a revenue-producing monopoly". That raises the question whether, in any case, the Post Office would be allowed to carry on its activity without infringing a chapter 1 prohibition by virtue of paragraph (5), which relates to a legal requirement, as, if the Post Office is obliged by legal requirement to provide a universal service at a uniform tariff, it might be exempted for that reason.
      My right hon. Friend is right to say that the Government have taken that path ostensibly, as argued in Committee, because there is parallel text in the treaty on European Union: article 90. However, we should reconsider the matter, not only to repeat the argument that my right hon. Friend eloquently made about the desirability of promoting competition and not giving the Government a let-out to protect monopolies when it suits them, but to question in this context—as I believe was not done in Committee—whether, even in their terms, the Government have gone about the process of introducing article 90 into the UK context appropriately. I question that, for three reasons.
      First, it is obvious that the Government have not gone about the process appropriately in the context of article 90, which consists of three limbs. Limb 1 makes it clear

      1173
      that one is talking about public undertakings and undertakings to which member states grant special or exclusive rights. That rubric, which introduces article 90 and makes clear the circumstances in which article 90 and questions of services of general economic interest are to be interpreted, is not carried through into schedule 3 or paragraph (4).
      As a result, it is not obvious, in the context of the language used in paragraph (4), that we are dealing with essentially public undertakings, or those that exercise public functions. We are simply talking about services of general economic interest or revenue-producing monopolies, entrusted—the paragraph does not say by whom—with the operation of those services, and where the "particular tasks" are "assigned to that undertaking." Again, the paragraph does not say who assigns those particular tasks. It is all implied that it is the state that assigns those tasks. In the context of the treaty, it is perfectly clear, under article 90, that the tasks are assigned by the state, but that is not carried through into the Bill.
      The second problem is the manner in which the Bill is constructed. It would be tedious of me to go on about the form of the language, but essentially there is a difference between the form of article 90, which effectively applies the rules except in so far as that would obstruct the performance of the duties, and that of paragraph 4, which disapplies the rules except
      "in so far as the prohibition would obstruct the performance"
      of those tasks.
      It is not simply a case of asking whether the bottle is half full or half empty. It is important in law that the prohibitions are applied, but with limits—as distinct from the prohibitions being disapplied, except in so far as they could be reapplied, as it were. That may, in practice, come to be quite a different distinction, and the Minister did not address that in Committee.
      A third matter is that, in the context of article 90, the paragraph has a final sentence, which is not carried through into paragraph 4. That sentence reads:
      "The development of trade must not be affected to such an extent as would be contrary to the interests of the Community."
      I understand why the Government have not tried to carry that sentence through into the Bill: it would not make sense, in the context of UK domestic legislation, to talk about the interests of the Community. They could have left that out, and said that the development of trade must not be affected to an extent that would be contrary to the public interest. They could apply an overall public interest test.
      In the Community context, the protection that is offered to member states should not be allowed to go so far as to hinder trade unduly, but the Government have not taken that important factor into account. I appreciate that the Government should not look at the widespread application of the measure in the way that, for example, the EU contemplates the protection of tobacco or alcohol monopolies in some member states. However, it is important to know under what circumstances the Government wish to proceed.
      Amendment No. 51, which deals with public policy, is more straightforward. By their own admission, the Government have introduced paragraph 7 as a catch-all, or perhaps I should say a catch-nothing, because in Committee—

    BUSINESS OF THE HOUSE
    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 Competition Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Betts.]
    Question agreed to.
    As amended (in the Standing Committee), again considered.
    Question again proposed, That the amendment be made.
    Mr. Lansley: In Committee, Ministers said that they had no intention of using the paragraph 7 provision, and two questions arise in relation to that. First, if there is no intention to use the provision, why have it? Secondly, if it is intended to be used, under what circumstances will it be used?
    I was struck by the debate on "exceptional and compelling". Ministers took great pains to stress how high the test of exceptional and compelling would have to be before Ministers were convinced that it would be right to use the provision—and they said that they had no intention of using it. About two weeks ago, during debate on the Human Rights Bill, there was a question about the circumstances under which Ministers should use a statutory instrument to amend primary legislation rather than waiting for an opportunity to change it by primary legislation.
    There were two competing arguments about the circumstances in which Ministers should resort to this Henry VIII measure. The first was under compelling reasons, and the second was under exceptional reasons. As we had recently debated "exceptional and compelling", I told the Home Secretary that Ministers in the Department of Trade and Industry had used the phrase "exceptional and compelling" and regarded it as the appropriate high test. I asked whether it would be an appropriate test in that context.
    The Home Secretary has no function to defend Trade and Industry Ministers and, with his customary perspicacity, asked why, if their intention was not to use it, they were proposing it. That is precisely the question. The paragraph 7 provision has no parallel in the treaty on European union, so under what circumstances do Ministers propose to use it? If they do not intend to use it, why not accept the amendment and delete it?
    Mr. Nigel Griffiths: I cannot accept amendment No. 6 to delete paragraph 4 of schedule 3, which contains a limited exclusion that is drawn from article 90 (2) of the EC treaty. Including article 92 will mean that the activities that benefit from that article in relation to articles 85 and 86 will not be put in a less favourable position with respect to domestic prohibitions.
    It is important to appreciate that article 90 (2) has been interpreted as providing only a limited derogation from the competition rules, and that its definitions are to be strictly interpreted. By virtue of clause 60, we are applying that jurisprudence, which means that the same will be true of the exclusion in paragraph 4 of schedule 3.
    Revenue-producing monopolies are undertakings that have been granted monopolies by the state to raise money for the state. When this matter was raised in Committee,

    1175
    we mentioned some European countries that have such monopolies, and we agreed with the hon. Member for Daventry (Mr. Boswell) that tobacco was one instance and alcohol was another. In that instance, it is clear that the application of the exclusion will be limited. In such circumstances, we believe that it is entirely right that the prohibitions should be disapplied. Otherwise, the purpose of the act of public authority that entrusted the undertaking with the service would be frustrated.
    Let me give some examples of the services that a vote on the amendments would put in jeopardy. They include not just some of the public utility networks, but uniform letter pricing. Is it the real intention of the Opposition to threaten uniform postal pricing and to make it very difficult for many people living in rural and remote areas to post a letter at the same price that people enjoy in the capital city and in major conurbations? That is the effect of amendment No. 6.
    I hardly think that that can have escaped the notice of the right hon. Member for Wokingham (Mr. Redwood). I believe that that is a hidden way in which to try to drive a coach and horses through uniform letter pricing and to open it to the private sector, which could greatly damage rural and other areas that require uniform letter pricing. It must be a viable service. I wish just that he had come clean on that.
    On amendment No. 51, by its nature the power in paragraph 7 could be exercised only in rare circumstances. Before its exercise, the Secretary of State must be satisfied that there are "exceptional and compelling" reasons of public policy for her to act. That is a high hurdle to surmount. The power is, in that sense, a "reserve" power.
    Not surprisingly, we have no present plans to exercise the power. However, if there are grounds to exercise the power, it should be available to us. The hon. Member for South Cambridgeshire (Mr. Lansley) may at some point feel that there are exceptional and compelling reasons of public policy why the prohibitions should not be applied, but this amendment would ensure that they would nevertheless apply. That cannot be right.
    The power in paragraph 7 is a necessary safeguard. I note that the previous Administration also considered the power necessary, as it was included in the draft Bill that they published in August 1996. I urge the right hon. Member for Wokingham to withdraw his amendment.
    Mr. Redwood: The Minister should know that the Opposition's policy is to maintain a uniform tariff for a national postal service. We have made that clear, and we have no intention tonight of undermining or destroying that. We believe that it is possible to guarantee that system, which I believe is favoured by hon. Members on both sides of the House, by a director general exemption, or even perhaps by using the public policy power; I am sure that my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) will not wish to press his amendment to a vote.
    It is our case that having both the public policy power and this rubric about services of general economic interest weakens the Bill too much, and that this could be handled easily by one or the other. The Minister has to agree that if the postal system cannot be accommodated under other parts of the Bill where we think that it can, it could certainly
    1176
    be accommodated under the public policy power, and should be accommodated as quickly as possible, so that there is no doubt.
    Mr. Nigel Griffiths: If that is the case, why did the right hon. Gentleman and his hon. Friends not table an amendment that would protect our uniform letter pricing service? They have not done so, and passing the amendment would threaten that vital service.
    Mr. Redwood: I have just told the Minister how it is very easy to accommodate our mutual wish. He is a member of the Government, for heaven's sake. He is the one who has to sort out all the consequences of our important debates on the big principles of the Bill. I have told him that the Opposition would give a fair wind to anything that did that. Given his majority, I think that he could probably do it even without that Opposition guarantee, but it has been and remains Opposition policy to support the current national tariff for the postal system. There are many ways in which to accommodate it under the Bill—through director general rules or other exemption powers in the Bill—without needing this enormous blockbuster of paragraph 4 to schedule 3.
    I am not persuaded by what the Under-Secretary has said. I find it odd that British legislation should be framed to exempt a continental tobacco monopoly. We do not have tobacco monopolies in this country, so there is no need to make special provision for them in British law. However, we do have other types of services of general economic interest or revenue-producing monopolies. The Under-Secretary cannot be sure how the courts will construe these phrases. Despite clause 60, there is always the danger that they will be construed in other ways.
    It would be much safer, and would produce better competition legislation, if this very general clause were struck out. If it is only about continental tobacco monopolies, nothing will be lost; if it is there to protect real monopolies in Britain, we do not want it. I have already told the House how the one example that the Under-Secretary has produced, where we are in agreement, can be accommodated in other ways
    With the permission of my hon. Friend the Member for South Cambridgeshire, I suggest that we do not press his amendment to a vote, but that we should vote on this fundamental issue of whether the Bill should be heavily diluted by paragraph 4 of schedule 3.
    Question put, That the amendment be made:—
    The House divided: Ayes 117, Noes 291.

    Division No. 332]

    [10.10 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Bruce, Ian (S Dorset)

    Amess, David

    Burns, Simon

    Ancram, Rt Hon Michael

    Cash, William

    Arbuthnot, James

    Chapman, Sir Sydney (Chipping Barnet)

    Atkinson, David (Bour'mth E)

    Beggs, Roy

    Chope, Christopher

    Beresford, Sir Paul

    Clappison, James

    Body, Sir Richard

    Clark, Rt Hon Alan (Kensington)

    Boswell, Tim

    Collins, Tim

    Bottomley, Peter (Worthing W)

    Cran, James

    Bottomley, Rt Hon Mrs Virginia

    Curry, Rt Hon David

    Brazier, Julian

    Davies, Quentin (Grantham)

    Brooke, Rt Hon Peter

    Davis, Rt Hon David (Haltemprice)

    Browning, Mrs Angela

    Donaldson, Jeffrey

    1177

    Dorrell, Rt Hon Stephen

    Mates, Michael

    Duncan, Alan

    Mawhinney, Rt Hon Sir Brian

    Duncan Smith, Iain

    May, Mrs Theresa

    Evans, Nigel

    Moss, Malcolm

    Faber, David

    Nicholls, Patrick

    Fabricant, Michael

    Norman, Archie

    Fallon, Michael

    Ottaway, Richard

    Flight, Howard

    Page, Richard

    Forth, Rt Hon Eric

    Prior, David

    Fraser, Christopher

    Randall, John

    Gale, Roger

    Redwood, Rt Hon John

    Garnier, Edward

    Robathan, Andrew

    Gibb, Nick

    Robertson, Laurence (Tewk'b'ry)

    Gill, Christopher

    Robinson, Peter (Belfast E)

    Gillan, Mrs Cheryl

    Rowe, Andrew (Faversham)

    Gorman, Mrs Teresa

    Ruffley, David

    Green, Damian

    St Aubyn, Nick

    Grieve, Dominic

    Shephard, Rt Hon Mrs Gillian

    Hamilton, Rt Hon Sir Archie

    Simpson, Keith (Mid-Norfolk)

    Hammond, Philip

    Spelman, Mrs Caroline

    Hawkins, Nick

    Spring, Richard

    Hayes, John

    Steen, Anthony

    Heald, Oliver

    Streeter, Gary

    Heathcoat-Amory, Rt Hon David

    Syms, Robert

    Hogg, Rt Hon Douglas

    Tapsell, Sir Peter

    Howard, Rt Hon Michael

    Taylor, Ian (Esher & Walton)

    Howarth, Gerald (Aldershot)

    Taylor, John M (Solihull)

    Hunter, Andrew

    Townend, John

    Jack, Rt Hon Michael

    Tredinnick, David

    Jackson, Robert (Wantage)

    Trend, Michael

    Jenkin, Bernard

    Tyrie, Andrew

    Key, Robert

    Walter, Robert

    King, Rt Hon Tom (Bridgwater)

    Wardle, Charles

    Kirkbride, Miss Julie

    Wells, Bowen

    Lait, Mrs Jacqui

    Whittingdale, John

    Lansley, Andrew

    Widdecombe, Rt Hon Miss Ann

    Leigh, Edward

    Wilkinson, John

    Letwin, Oliver

    Willetts, David

    Lewis, Dr Julian (New Forest E)

    Winterton, Mrs Ann (Congleton)

    Lidington, David

    Winterton, Nicholas (Macclesfield)

    Lloyd, Rt Hon Sir Peter (Fareham)

    Woodward, Shaun

    Loughton, Tim

    Yeo, Tim

    Luff, Peter

    Young, Rt Hon Sir George

    McIntosh, Miss Anne

    MacKay, Andrew

    Tellers for the Ayes:

    McLoughlin, Patrick

    Mr. Stephen Day and

    Madel, Sir David

    Mr. Nigel Waterson.

    NOES

    Abbott, Ms Diane

    Borrow, David

    Ainger, Nick

    Brinton, Mrs Helen

    Ainsworth, Robert (Cov'try NE)

    Brown, Rt Hon Nick (Newcastle E)

    Alexander, Douglas

    Brown, Russell (Dumfries)

    Allen, Graham

    Browne, Desmond

    Anderson, Janet (Rossendale)

    Burden, Richard

    Ashton, Joe

    Burgon, Colin

    Atherton, Ms Candy

    Burstow, Paul

    Atkins, Charlotte

    Butler, Mrs Christine

    Austin, John

    Byers, Stephen

    Baker, Norman

    Campbell, Mrs Anne (C'bridge)

    Barron, Kevin

    Campbell-Savours, Dale

    Battle, John

    Canavan, Dennis

    Bayley, Hugh

    Caplin, Ivor

    Beard, Nigel

    Casale, Roger

    Beckett, Rt Hon Mrs Margaret

    Caton, Martin

    Begg, Miss Anne

    Chapman, Ben (Wirral S)

    Beith, Rt Hon A J

    Chaytor, David

    Bell, Stuart (Middlesbrough)

    Chisholm, Malcolm

    Benn, Rt Hon Tony

    Church, Ms Judith

    Bennett, Andrew F

    Clark, Rt Hon Dr David (S Shields)

    Bermingham, Gerald

    Clark, Paul (Gillingham)

    Best, Harold

    Clarke, Charles (Norwich S)

    Betts, Clive

    Clarke, Rt Hon Tom (Coatbridge)

    Blackman, Liz

    Clarke, Tony (Northampton S)

    Blizzard, Bob

    Clelland, David

    Blunkett, Rt Hon David

    Clwyd, Ann

    1178

    Coaker, Vernon

    Hopkins, Kelvin

    Cohen, Harry

    Howarth, Alan (Newport E)

    Coleman, Iain

    Howarth, George (Knowsley N)

    Colman, Tony

    Hughes, Ms Beverley (Stretford)

    Cooper, Yvette

    Hughes, Kevin (Doncaster N)

    Corbett, Robin

    Humble, Mrs Joan

    Corston, Ms Jean

    Hutton, John

    Cousins, Jim

    Iddon, Dr Brian

    Crausby, David

    Illsley, Eric

    Cryer, John (Hornchurch)

    Jackson, Helen (Hillsborough)

    Cunliffe, Lawrence

    Jenkins, Brian

    Cunningham, Jim (Cov'try S)

    Johnson, Alan (Hull W & Hessle)

    Curtis-Thomas, Mrs Claire

    Johnson, Miss Melanie (Welwyn Hatfield)

    Darvill, Keith

    Davey, Valerie (Bristol W)

    Jones, Barry (Alyn & Deeside)

    Davidson, Ian

    Jones, Mrs Fiona (Newark)

    Davies, Rt Hon Denzil (Llanelli)

    Jones, Helen (Warrington N)

    Davies, Geraint (Croydon C)

    Jones, Jon Owen (Cardiff C)

    Davies, Rt Hon Ron (Caerphilly)

    Jones, Dr Lynne (Selly Oak)

    Dawson, Hilton

    Jones, Martyn (Clwyd S)

    Dean, Mrs Janet

    Kaufman, Rt Hon Gerald

    Dismore, Andrew

    Keeble, Ms Sally

    Donohoe, Brian H

    Keetch, Paul

    Doran, Frank

    Kemp, Fraser

    Dowd, Jim

    Kennedy, Jane (Wavertree)

    Drew, David

    Kidney, David

    Dunwoody, Mrs Gwyneth

    Kilfoyle, Peter

    Eagle, Angela (Wallasey)

    King, Andy (Rugby & Kenilworth)

    Eagle, Maria (L'pool Garston)

    King, Ms Oona (Bethnal Green)

    Edwards, Huw

    Kumar, Dr Ashok

    Efford, Clive

    Ladyman, Dr Stephen

    Ennis, Jeff

    Lepper, David

    Etherington, Bill

    Levitt, Tom

    Ewing, Mrs Margaret

    Lewis, Ivan (Bury S)

    Fatchett, Derek

    Lewis, Terry (Worsley)

    Fisher, Mark

    Linton, Martin

    Fitzpatrick, Jim

    Lloyd, Tony (Manchester C)

    Fitzsimons, Lorna

    Llwyd, Elfyn

    Flint, Caroline

    Lock, David

    Flynn, Paul

    McAllion, John

    Foster, Michael Jabez (Hastings)

    McAvoy, Thomas

    Foster, Michael J (Worcester)

    McCabe, Steve

    Foulkes, George

    McCafferty, Ms Chris

    Fyfe, Maria

    McCartney, Ian (Makerfield)

    Galbraith, Sam

    McDonnell, John

    Gapes, Mike

    McGuire, Mrs Anne

    Gardiner, Barry

    McIsaac, Shona

    Gerrard, Neil

    McKenna, Mrs Rosemary

    Gibson, Dr Ian

    McWalter, Tony

    Gilroy, Mrs Linda

    McWilliam, John

    Godman, Dr Norman A

    Mahon, Mrs Alice

    Godsiff, Roger

    Marsden, Paul (Shrewsbury)

    Goggins, Paul

    Marshall, David (Shettleston)

    Golding, Mrs Llin

    Marshall, Jim (Leicester S)

    Gordon, Mrs Eileen

    Marshall-Andrews, Robert

    Gorrie, Donald

    Meacher, Rt Hon Michael

    Griffiths, Jane (Reading E)

    Meale, Alan

    Griffiths, Nigel (Edinburgh S)

    Merron, Gillian

    Grogan, John

    Michael, Alun

    Gunnell, John

    Michie, Bill (Shef'ld Heeley)

    Hall, Mike (Weaver Vale)

    Milburn, Alan

    Hamilton, Fabian (Leeds NE)

    Miller, Andrew

    Hanson, David

    Mitchell, Austin

    Heal, Mrs Sylvia

    Moffatt, Laura

    Healey, John

    Moore, Michael

    Hepburn, Stephen

    Moran, Ms Margaret

    Heppell, John

    Morgan, Rhodri (Cardiff W)

    Hesford, Stephen

    Morris, Ms Estelle (B'ham Yardley)

    Hewitt, Ms Patricia

    Mudie, George

    Hill, Keith

    Mullin, Chris

    Hinchliffe, David

    Murphy, Jim (Eastwood)

    Hodge, Ms Margaret

    Norris, Dan

    Hoey, Kate

    O'Brien, Bill (Normanton)

    Home Robertson, John

    O'Hara, Eddie

    Hoon, Geoffrey

    Olner, Bill

    Hope, Phil

    Organ, Mrs Diana

    1179

    Pearson, Ian

    Stevenson, George

    Pendry, Tom

    Stewart, David (Inverness E)

    Perham, Ms Linda

    Stewart, Ian (Eccles)

    Pickthall, Colin

    Stinchcombe, Paul

    Pike, Peter L

    Stoate, Dr Howard

    Plaskitt, James

    Stott, Roger

    Pollard, Kerry

    Strang, Rt Hon Dr Gavin

    Pond, Chris

    Stuart, Ms Gisela

    Pope, Greg

    Sutcliffe, Gerry

    Pound, Stephen

    Swinney, John

    Prentice, Ms Bridget (Lewisham E)

    Taylor, Rt Hon Mrs Ann (Dewsbury)

    Prentice, Gordon (Pendle)

    Primarolo, Dawn

    Taylor, Ms Dari (Stockton S)

    Prosser, Gwyn

    Taylor, David (NW Leics)

    Purchase, Ken

    Temple-Morris, Peter

    Quin, Ms Joyce

    Thomas, Gareth R (Harrow W)

    Quinn, Lawrie

    Timms, Stephen

    Radice, Giles

    Tipping, Paddy

    Rapson, Syd

    Todd, Mark

    Raynsford, Nick

    Trickett, Jon

    Reed, Andrew (Loughborough)

    Turner, Dennis (Wolverh'ton SE)

    Rogers, Allan

    Turner, Dr George (NW Norfolk)

    Rooney, Terry

    Twigg, Derek (Halton)

    Ross, Ernie (Dundee W)

    Twigg, Stephen (Enfield)

    Rowlands, Ted

    Vis, Dr Rudi

    Roy, Frank

    Wallace, James

    Ruane, Chris

    Walley, Ms Joan

    Ruddock, Ms Joan

    Ward, Ms Claire

    Russell, Bob (Colchester)

    Watts, David

    Ryan, Ms Joan

    Webb, Steve

    Salter, Martin

    White, Brian

    Savidge, Malcolm

    Williams, Rt Hon Alan (Swansea W)

    Sedgemore, Brian

    Shaw, Jonathan

    Williams, Alan W (E Carmarthen)

    Sheerman, Barry

    Wilson, Brian

    Sheldon, Rt Hon Robert

    Winnick, David

    Skinner, Dennis

    Winterton, Ms Rosie (Doncaster C)

    Smith, Rt Hon Andrew (Oxford E)

    Wise, Audrey

    Smith, Angela (Basildon)

    Wood, Mike

    Smith, Miss Geraldine (Morecambe & Lunesdale)

    Woolas, Phil

    Wright, Anthony D (Gt Yarmouth)

    Smith, John (Glamorgan)

    Wright, Dr Tony (Cannock)

    Smith, Llew (Blaenau Gwent)

    Wyatt, Derek

    Snape, Peter

    Squire, Ms Rachel

    Tellers for the Noes:

    Starkey, Dr Phyllis

    Mr. John McFall and

    Mr. David Jamieson.

    Amendment accordingly negatived.

    Clause 13

      NOTIFICATION FOR GUIDANCE
      Amendment made: No. 9, in page 8, line 22, leave out from 'with' to end of line and insert—
      'such date as may be specified in a notice in writing given to the applicant by the Director when the application has been determined.
      () The date specified in a notice under subsection (4)(b) may not be earlier than the date on which the notice is given.'.—[Mr. Nigel Griffiths.]

    Clause 14

      NOTIFICATION FOR A DECISION
      Amendment made: No. 10, in page 8, line 40, leave out from 'with' to end of line and insert—
      'such date as may be specified in a notice in writing given to the applicant by the Director when the application has been determined.
      () The date specified in a notice under subsection (4)(b) may not be earlier than the date on which the notice is given.'.—[Mr. Nigel Griffiths.]

    Clause 26

      POWERS WHEN CONDUCTING INVESTIGATIONS
      Mr. Breed: I beg to move amendment No. 76, in page 14, line 2, at end insert—
      '(7) In exercising the powers conferred by subsection (6)(a)(ii) above, the Director shall afford the undertaking under investigation a reasonable opportunity for its legal or other representative to be present when the employee or officer is required to provide an explanation of the document.'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 77, in clause 66, page 37, line 10, at end insert—
      '(5A) In exercising the powers conferred by subsection (5)(a)(ii) above, the Director shall afford the person notified a reasonable opportunity for his legal or other representative to be present when the employee or officer is required to provide an explanation of the document.'.
      Mr. Breed: I do not want to detain the House too long at this late hour. It is widely accepted that the powers proposed in the Bill are extensive. We ought, therefore, to consider for a few moments amendments Nos. 76 and 77, which seek to introduce a couple of safeguards that are vital to the protection of companies that may find themselves under investigation. Although I fully accept that powers currently available to the director general are insufficient and that the Government feel, as I do, that they should be strengthened, it is important to ensure that companies receive fair treatment when they are under investigation and subject to the Bill's extensive powers.
      Powers to question employees and officers both past and present of any company are critical to the effective enforcement of action, particularly if a company has been committing an infringement over a long time. Although it is not disputed that it is appropriate that there should be power to seek information from employees and officers who have since left the company, it is surely sensible and in a spirit of natural justice to afford a company at least a brief—I emphasise brief—opportunity to comment on the role of any employee or officer who is to be questioned and on the appropriateness of so doing, and allow a company to have a representative present at any interview.

      1181
      The proposed powers are extraordinarily extensive in their force and reach. Before the director or his or her staff exercise any investigatory powers, they should be balanced by some safeguards. Let us consider potential ex-employees or officers who may be interviewed in the process of an investigation. First, an ex-employee or officer may have been made redundant or been dismissed and may have a grudge or be prejudiced against the company personally or through sympathy for a former colleague. Secondly, an ex-employee may be working for a competitor and under contractual agreements that prevent them from disclosing information to anyone. They would find it difficult under such questioning.
      Thirdly, an ex-employee or officer may wish not to answer any questions because they feel that it may incriminate them or someone else, or because they are not certain of information. That should not be seen automatically as casting any doubt on the activities or motives of the company under investigation. Finally, an ex-employee or officer may genuinely have forgotten—or at least not remembered well enough—all the facts or information for which they are asked, but may feel obliged to give opinions rather than facts and knowledge.
      Those are practical examples. I recognise that the Bill provides a right of challenge, albeit only at the appellant stage, which is rather too late. I also recognise—[Interruption.]
      Mr. Deputy Speaker: Order. There is too much background conversation in the House; I cannot hear the debate properly.
      Mr. Breed: I recognise that speed is important in such investigations. The Government have made it clear on several occasions that they want the investigations to progress and not be bogged down. In some cases, however, it might be wise to allow a company a brief opportunity to comment and to have a representative present, not to influence, control or make any decision on whether the investigation should go ahead but simply to help avoid the time and expense of future challenges, which can certainly arise on appeal.
      If the Government accepted the amendments, they would slightly redress the balance on behalf of companies that find themselves under the significant powers of the investigations, which are heavy and extensive. If the Bill proceeds unamended, companies may well find that those powers are so extensive as to be difficult for them to comply with—even if they want to.
      Mr. Nigel Griffiths: I have listened carefully to the speech of the hon. Member for South-East Cornwall (Mr. Breed) on a matter to which we have given considerable thought. I hope that he may consider withdrawing the amendment in the light of assurances that I can give him.
      The matter of legal advice being available during an investigation has arisen in various ways and has been debated at length in this House and the other place. In relation to clause 27, the Government gave an assurance in Committee that the right to legal advice was an important matter and would be covered by the director's rules under clause 50. Those rules are subject to the Secretary of State's approval and annulment by vote of either House. The amendment, if I have understood it
      1182
      correctly, is rather different. Investigations under clause 26, and under the Fair Trading Act 1973 as strengthened by clause 66, are "off-site" in character—that is to say they will not involve entry to premises.
      10.30 pm
      The Office of Fair Trading expects generally to exercise those powers by correspondence and therefore will allow time for legal advice to be sought. If the powers are exercised by requiring the production of documents at a specified time and place, the employee or officer concerned could be accompanied by a legal adviser. The right of an employee or officer to be accompanied by a legal adviser should be dealt with in the director's rules, and I am happy to give that assurance.
      Mr. Breed: I am happy with what the Minister has said so far, but I ask him to clarify one point. If the matter is conducted in correspondence with an ex-employee, will the company be advised that such correspondence is in operation?
      Mr. Griffiths: In terms of the effectiveness of the investigation, it is for the director general to weigh up whether the employee is likely to be the subject of any undue pressure, but being always mindful that, with an established appeals procedure, any actions of the director general that are not considered to be within the competence of the new Act would give people some recourse to justice and review. It is clear that the director's rule will cover the issue of access to legal advice. I hope that, in the light of my explanation, the hon. Gentleman will feel able to withdraw the amendment. I am grateful to him for raising this important issue.
      Mr. Breed: The Minister has addressed part of the problem. The amendments seek to ensure that companies have notice that ex-employees are to be approached, thus giving them the opportunity to comment early in the investigation on the appropriateness of the background information concerned with the employee, which would perhaps provide helpful information to the director general and staff anyway. However, I accept the Minister's assurances that the matters will be worked out only in practice as cases happen. On that basis, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 7

      THE COMPETITION COMMISSION
      Mr. Lansley: I beg to move amendment No. 49, in page 64, line 8, leave out from 'person' to end of line 16 and insert 'is—

      (a) a puisne judge of the High Court;

      (b) a judge of the Court of Session; or

      (c) a judge of the Supreme Court of Northern Ireland,

      and before appointing as a member of the appeal tribunal any person who holds the judicial office mentioned in paragraph (a), (b) or (c) he shall consult the Lord Chancellor, the President of the Court of Session or the Lord Chief Justice of Northern Ireland, as he considers appropriate.'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 50, in page 64, leave out lines 19 and 20.
      Mr. Lansley: The amendments work together in the sense that amendment No. 50 leaves out the requirement

      1183
      for consultation with the Lord Chancellor and other Law Officers, since that is incorporated into the proposed structure of amendment No. 49. The purpose of amendment No. 49 is to replace the requirement laid upon the Secretary of State in the existing paragraph 4 of schedule 7 to appoint someone with legal qualifications. It would make explicit that the person to be appointed was a High Court judge. In a similar debate in Committee, it was made clear that the Government intended that the person to be appointed would be not a High Court judge, but equivalent to a High Court judge.
      The appeal panel will represent the Competition Commission in considering appeals against the decisions of the director general. It was certainly understood in Committee that the Government intended to be free to appoint to the panel members who had not only suitable legal qualifications, but the ability to assess the economic character of the judgments. Those who bring appeals will believe that it is in their interests regularly to go to the courts rather than to rest on the decisions of the panel if they feel that the panel does not have the necessary legal credibility to give robust judgments that are likely only in the most exceptional cases—such as where high principles are at stake—to be overturned by the courts in a further appeal. We were at pains to make that point in Committee, but I do not feel that it was sufficiently taken on board.
      To ensure that the appeal panel functions in the best way, the panel and the president of the appeal tribunals should bring the maximum legal credibility to their judgments, but that will not be achieved if the president is appointed on the ground of his or her economic credibility. The director general and other members of the commission are likely to have economic credibility, but those who appeal against the director general's decisions must have sufficient faith in the legal credibility of the system not to make a further appeal or even to circumvent the procedure.
      Mr. Boswell: I am grateful to my hon. Friend for giving way, as I want to deal with the matter by way of intervention, not in a substantive speech. Does he agree that there is a real risk that there will be a much higher incidence of appeals against a tribunal's decision to a higher court and that it would be counter-productive not to incorporate into the Bill a provision such as the one suggested in the amendments?
      Mr. Lansley: I agree. Our intention is to make the process work in the best interests of British industry, but industry will not be well served if it finds that, because of tribunals' lack of legal credibility, it regularly has to have recourse to the higher courts. The tribunals must provide a forum in which economically and legally credible decisions can be made straightforwardly and inexpensively. It is difficult to see how that could be achieved without a High Court judge as president of the tribunals.
      Mr. Ian McCartney: Like the hon. Member for South Cambridgeshire (Mr. Lansley), I am convinced that we need robust decision-making processes that have clarity as their central focus. I also believe that the membership
      1184
      of the panels must be credible in terms of the law, of business practice and of economics. The panels will be similar to the restrictive practice courts, where all three key pillars are consistent throughout the membership.
      That is very important. If the process is to work, there must be a clear understanding from the outset that the membership must have a quality and credibility that ensure that people can accept a tribunal's decisions. We can all agree that access to full and independent appeal on the merits of the case is essential in ensuring that the new regime is fair and transparent. The Bill provides for precisely such a right of appeal.
      Our proposals provide a clear separation between the body that has the investigative and original decision-making function and the body that hears appeals. Such a separation is essential to ensure a fair, independent and transparent appeals process. We achieve the separation by making the appeals tribunal a completely separate body from the Office of Fair Trading, which has the primary responsibility for investigating and dealing with infringements.
      In its response to the consultation document, the Confederation of British Industry said:
      "We are pleased that the Government has taken into account the suggestions put forward by the CBI and has chosen to preserve an independent body with the power to conduct a full review of the DGFT's decisions."
      Fairness demands that appeals can be dealt with efficiently and by people with the necessary expertise and experience. We believe that our proposals for a specialised tribunal will best achieve that aim. We are clear that the person appointed to be president of the tribunal will be a senior figure, with status at least equivalent to that of a High Court judge.
      The tribunal itself will have equivalent status to the High Court and appeals from its decisions on points of law or levels of penalty will be direct to the Court of Appeal. It is clearly essential that the president should have appropriate legal qualifications, experience and standing, and strict minimum requirements are set out in schedules to the Bill.
      We do not think that it would be right to limit further the range of people and expertise available to fill this vital post, as the amendments would do. General legal standing is vital, but so are special knowledge and experience of competition matters. We do not believe that it would be in the interests of the users of the appeal tribunal to limit the field of potential candidates to High Court judges alone, as the amendments propose. Our proposals will open up a much wider range of potential candidates. We believe that that is very important in what is, after all, a complex and specialist field.
      I hope that, having heard that explanation of our position, the hon. Gentleman will be prepared to withdraw the amendment.
      Mr. Lansley: I am grateful to the Minister for that reply. He has made clear the Government's intention to meet the tests of legal credibility that were implicit in the amendment, rather than limiting the tests to other kinds of credibility that will be vested elsewhere, in the activities of the director general and the commission. I therefore beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 50

      VERTICAL AGREEMENTS AND LAND AGREEMENTS
      Mr. Lansley: I beg to move amendment No. 41, in page 26, line 4, at beginning insert 'Subject to subsection (1A)'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 53, in page 26, line 4, leave out
      'The Secretary of State may by order provide'
      and insert
      'The Director may recommend that the Secretary of State by order provides'.
      No. 54, in page 26, line 4, leave out 'Secretary of State' and insert 'Director'.
      No. 42, in page 26, line 8, at end insert—
      '(1A) Subject to subsection (1B), the Chapter I prohibition does not apply to a vertical agreement.
      (1B) If the Director is satisfied that there is a vertical agreement which, but for the exemption in subsection (1A) would infringe the Chapter I prohibition, he may issue a notice to each of the parties to the agreement bringing that exemption to an end in relation to that agreement on the date specified in that notice.'.
      No. 55, in page 26, line 14, leave out from beginning to 'is' in line 15 and insert
      'The Director shall have power to give directions that an exclusion, exemption or modification made under subsection 1'.
      No. 57, in page 26, line 15, leave out 'in prescribed circumstances'.
      No. 58, in page 26, line 17, at end insert 'or category of agreement.'.
      No. 56, in page 26, line 17, at end insert—
      '(3A) Prior to making an order in relation to vertical agreements under subsection (1) the Secretary of State shall carry out and publish an assessment of the benefits to consumers of such an order.'.
      No. 43, in page 26, line 21, at beginning insert "'connected" and'.
      No. 44, in page 26, line 21, leave out 'and "vertical agreement" have' and insert 'has'.
      No. 45, in page 26, line 23, at end insert—
      '"price fixing agreement" means an agreement which seeks to control the price charged for the goods or services which are the subject of that agreement, whether or not by purporting—

      (a) to fix a particular price, a minimum price or a price band, or

      (b) to impose a requirement, make a recommendation or offer an incentive,

      other than an agency agreement under which the principal establishes the price at which the agent sells the goods or services which are the subject of the agreement or an agreement which relates exclusively to the price of an interest in land.
      "vertical agreement" means an agreement between two or more undertakings (other than connected undertakings) under which one undertaking acts as purchaser and another acts as supplier of the goods or services which are the subject of that agreement and includes an agency or distribution agreement but does not include a price fixing agreement.'.
      Mr. Lansley: The amendments are designed to clarify the characteristics of vertical agreements and to restructure the clause to give effect to the Government's apparent intentions. I think that it is common ground on
      1186
      both sides of the House that, like any other aspect of the activity, one has to judge whether the impact of vertical agreements on competition and consumer benefits is beneficial. Whereas one would judge many other classes of agreement simply on their effects, there is more of a presumption that vertical agreements are benign, and the President of the Board of Trade stated earlier that she would try to find a mechanism by which such agreements could be excluded from the scope of the prohibition.
      10.45 pm
      The difficulty is that, throughout the passage of the Bill, we have been waiting for the Government to tell us by what means they propose to exclude vertical agreements. We have been awaiting the views of the task force established between the Government, the Confederation of British Industry and other bodies to look into the matter. In Committee, we were told that there was a further reason for delay because we had to take on board the Commission's final view of the matter. When we began to understand the thinking behind the Commission's approach, there was all the more reason to amend the legislation so that the House could lead the Commission to an appropriate definition of vertical agreements, rather than simply wait for what it would tell us.
      I will not dwell on all the other incidental matters, but, for me, what gave rise to most concern in Committee was the Under-Secretary of State making it clear that the Commission was considering a definition of vertical agreements that would encompass operations at different economic levels. Rather, therefore, than having an effects-based approach, we would have a narrow, form-based approach to the exclusion for vertical agreements. It seemed an unhappy precedent for the Commission to go down that path as it would be perfectly possible to define such agreements differently. Indeed, the purpose of the amendments is to undertake that definition. For example, price-fixing agreements will clearly be excluded from the vertical agreements that should obtain the benefit of exclusion from the prohibition; one amendment would achieve that.
      Clearly, there must be a proper clawback provision. If the director feels that a vertical agreement that has the benefit of the exclusion would infringe the prohibition, he must have the right to take that agreement back under the terms of the prohibition. All that is set out in the amendments, including the requirement that vertical agreements should relate to two or more unconnected undertakings.
      There are a number of benefits, on which I will not dwell at great length as they were set out well in Committee. However, it is important to recognise that, the vertical agreements that the Commission seems to be moving towards are necessarily those that operate at different economic levels, whereas those that we meet in practice often have horizontal aspects. One instance weighs heavily on my thinking and that is that, where a franchise agreement forms the vertical agreement, the franchise holder will often have a small number of units in his own control at a particular level to protect the brand, demonstrate the franchise and show how the agreement should be manifested. The sort of definition that the Commission is considering would exclude such vertical agreements. We do not have the benefit of its final

      1187
      document, so it is not clear how it will disinter such an agreement to separate out the vertical and horizontal aspects.
      If Ministers intend, as they stated at the outset, to provide an exclusion for vertical agreements, we should give effect to that provision, but with suitable safeguards and definitions. The amendments pick up on those points and would give effect to them. In contrast to their stated intention to exclude vertical agreements, all that Ministers have come up with—in months—is a bold enabling power, with no specifics. Nor have they, as yet, given us any clear definition of the terms on which they would be likely to produce statutory instruments to give effect to their intentions.
      The amendments have two purposes. They challenge Ministers to tell us, even at this late stage, the basis on which they propose to handle vertical agreements, and they ask the Government to incorporate in the Bill an exclusion and subsequent definitions of the kind they ought to have proposed in the first place.
      Mr. Chidgey: Amendments Nos. 53 to 58 attempt to address concerns raised in parts of the British music industry. Vertical agreements are vital to the industry, particularly for songwriters, composers, music publishers, record companies and collecting societies. The success of the music business depends on its ability to license musical works effectively and efficiently to parties who wish to use them. The important point is the variety of agreements concerned, and I hope that the Minister can clarify the position.
      One-off agreements may allow use of a piece of music in specific circumstances, such as for television advertisements. Agreements may comprise collective licences, allowing frequent music users, such as television or satellite broadcasters, to play a licence holder's repertoire without seeking authorisation for each composition. Vertical agreements concerning copyright are different from other vertical agreements, for several reasons. Unlike transactions involving other types of property, copyright licences do not transfer ownership from one party to another. They merely give permission for use of copyright work. It is right that such agreements should specify the circumstances in which the licensee is permitted to use the work. Anything else would render rights worthless.
      European Commission case law already recognises that intellectual property contracts must contain conditions of use. Regardless of specific terms and conditions, licences grant freedom to those who wish to use music. Should the Bill result in uncertainty for rights holders about whether licence agreements are valid, they may choose not to enter into such agreements rather than risk losing control of their work, the source of their income. Members of British Music Rights, songwriters, composers and music publishers need certainty in their business relationships. We want the Government to assure rights holders that they do not consider agreements to be restrictive, and that the Director General of Fair Trading will not regard agreements as falling within the Bill's scope.
      The National Consumer Council is concerned about clause 50. A balance needs to be struck between ensuring that the Office of Fair Trading is not overwhelmed by
      1188
      dealing with vertical agreements, and making sure that the director general has adequate powers to act against malign vertical agreements. The NCC feels that that balance is not struck sufficiently in favour of consumers. Broadly, we are concerned that the powers will not be sufficiently robust to deal with vertical agreements and anxious about the use of the clawback power in clause 50(3), which is the key to protecting consumers from malign agreements. We are worried that, unless the director general has sufficient powers to consider all vertical agreements that have been exempted or excluded, the provision will fail.
      Our amendments are designed to probe the operation of clause 50. The purpose of amendments Nos. 53 and 54 is to probe why it should be the Secretary of State who makes the relevant order. Why should it not be the director general, or even the Secretary of State on the advice of the director general? Will the director general have any role in making the order?
      Those questions have been raised in the context of the other powers in the Bill, particularly the Secretary of State's exclusion powers in clause 3, the director general's power to make individual exemptions under clause 4 and the block exemptions under clause 6 that may be made by the Secretary of State at the director general's recommendation. In clauses 3, 4, and 6, there is a clear distinction between the roles of the Secretary of State and the director general, but it has been lost in clause 50.
      In the past, the National Consumer Council has feared that there has been too much scope for unfettered Executive action on competition policy. The director general should have the final say on competition issues while the Secretary of State should have it when broader economic issues must be considered. Clause 50 confuses that distinction. We look to the Minister for clarity.
      Amendment No. 56 provides that, before making an order, the Secretary of State should justify why vertical agreements should be excluded or exempted from the prohibition. In doing so, he should assess the benefits to consumers of the order. The assessment should be published as part of the consultation process. That should make the process of making the order as open and accountable as possible.
      Openness is important because clause 50(1) does not specify the criteria for making exclusions or exemptions. The situation in the Bill is different from what has been proposed in the European Union document, "Draft communication on the application of the EC competition rules to vertical restraints". The EU proposals, by comparison, are based largely on market share triggering the blacklisting of prescribed practices.
      The main thrust of amendments Nos. 55, 57 and 58 is to ensure that the director general's clawback power is not too limited. As currently drafted, clause 50 means that the order will have to specify whether the director general has such a power or not. We believe that he should be able to use it whenever he considers it appropriate and not only when specified in the Secretary of State's order. The worst case scenario is that the Secretary of State could exclude or exempt all vertical agreements under clause 50(1) without empowering the director general to use any clawback power at all. Should that happen, no vertical agreement would be exposed to competition scrutiny. That would be unacceptable and we do not believe that that is the meaning of the legislation.

      1189
      Amendment No. 57 would ensure that the director general does not have to be too constrained in his use of the clawback power. Clause 50(3) limits the use of the power to "prescribed circumstances". What are the prescribed circumstances likely to be? If such circumstances were confined to a merger inquiry identifying problems, it would be far too restrictive. The director general should have the power to consider any vertical agreement brought to his attention as being potentially malign. He should then be able to assess it, judge its anti-competitive effects and, if necessary, use the clawback power under clause 50(3) to bring it within the chapter I prohibition.
      I have set out as clearly as I can our concerns about clause 50 by tabling probing amendments and providing background information on the specific concerns of the National Consumer Council and of the music rights fraternity, in particular British Music Rights. I expect the Minister to address the issues seriously and I hope that he will give some words of encouragement when he winds up the debate.
      11 pm
      Mr. Letwin: I should begin by reassuring hon. Members that I do not intend to dwell on this matter at the length at which I dwelt on a previous matter this evening.
      Clearly, at some point after I found myself dislodged from the Committee, my hon. Friends had an attack of extreme moderation, for they have tabled amendments that are minimalist. From an early stage in the Bill's progress, we were assured by the Secretary of State that action of a firm and decisive nature would be taken to remove vertical agreements from the scope of the Bill. We were assured repeatedly throughout the Committee stage—I have checked the Official Report of the later part of the Committee's proceedings—that we would be given a judgment of Solomon, if not something better, on the issue as a result of the prolonged deliberations of the Government and their chosen parties that would tell us exactly how that would be done.
      Yet what do we find? We find provisions in the Bill that are simply a replication of the Government's general tendency to insert clauses that either are, or bear a striking resemblance to, Henry VIII clauses—clauses that give the widest possible discretion under regulation. My hon. Friends have tabled amendments that would make provisions that might be described as presumptive—they would still allow a considerable degree of discretion. The Minister owes it to the House to explain how he intends to use clause 50 as it stands; and why he would not be prepared to accept amendments that slightly constrain that regulation-making power.
      I shall go further, because there is a point here that connects with proceedings earlier this evening. If my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) is right and the reason why the Government have wholly failed to bring forward a clear and concrete definition of the sorts of vertical agreement that will be exempt and those that will not is that they await the views of the Commission on the matter, the Government are once again guilty of entirely failing to distinguish between interstate and intrastate commerce. The views of the Commission on this matter are of exactly the same academic interest as might be the views of a range of economists: if the Commission has superior
      1190
      economists, its views are of greater interest; if inferior, as is all too often the case, its views are of less interest. The Commission has no jurisdictional interest whatever in this matter. As we have been repeatedly assured, it is precisely the purport of the Bill to deal with intrastate commerce. In such matters, the Government cannot hide behind the views of the Commission.
      Therefore, we have before us the straightforward spectacle of the Government having spent many months considering an issue only to bring before the House something that they could perfectly well have brought before the House six months ago—provisions that enable the Government to decide in due time what the Government want to do. I would venture to say that my hon. Friend the Member for Daventry (Mr. Boswell) could have drafted such provisions immediately—indeed, his research assistant or secretary could have done so.
      The clauses tell us nothing, so, if the Minister intends to reject the amendments, he owes it to the House to tell us exactly why he is doing so. He owes it to the House to tell us how he will go about exercising the wide latitude given to him; and why he would not be able to exercise sufficient latitude if he accepted the amendments tabled by my hon. Friend the Member for South Cambridgeshire. If the Minister cannot give that explanation, we owe it to the country to explain that this is yet another case in which the Government intend to abrogate responsibility over intrastate trade to an external power that ought not to have jurisdiction in that matter.
      Mr. Ian McCartney: The issue of vertical agreements was considered at length in Committee. Clause 50 was added to the Bill at that stage to allow additional flexibility in the treatment of vertical agreements. Since that time, the CBI has written to hon. Members—and specifically to members of the Committee. The letter was dated 7 July. I shall quote the CBI's views on the clause added in Committee. The letter states:
      "The Government amended the Bill at Standing Committee to allow for an exclusion to be brought in at a later stage—the CBI supported this."
      The CBI supports the position the Government have taken in respect of these matters.
      Mr. Ian Bruce: Will the Minister give way?
      Mr. McCartney: On that specific point?
      Mr. Bruce: Yes. I had intended to make a speech, but an intervention is simpler. I sat through the debate on Second Reading and tried to find out from the Government what they were trying to achieve with the Bill. Can the Minister give us one or two examples of cases in which he feels that vertical agreements are not working and tell us what the Government intend to do about it so that we can judge whether the clauses will do what they intend?
      Mr. McCartney: With all due respect, we are trying to achieve a fair and effective competition regime, which includes the capacity to exclude vertical agreements. The vast majority of vertical agreements are benign, but there are circumstances in which a vertical agreement may not be benign. We must have provisions in place to deal with that. That is why the Government, after discussion with

      1191
      interested parties, came forward with clause 50. I repeat that that is why the CBI went out of its way to write to hon. Members saying that it supports the way in which the Government are proceeding.
      Mr. Chidgey: The Minister is quoting a letter from the CBI, dated 7 July, which, as he rightly said, has been circulated to members of the Committee and others. The hon. Gentleman has given the House the impression—I am sure he did not mean to—that the letter contains a complete endorsement of the Bill. The Minister knows that it does not. There are seven points in the letter which express the concerns that the CBI still has. I am not saying that I agree with those concerns, but it is only right and proper that the record should show that, although the CBI welcomes the Bill in principle, it does still have seven specific concerns.
      Mr. McCartney: With all due respect, I thought that I had made it absolutely clear that I quoted the CBI's view of what has happened on vertical agreements since the Committee stage. I quoted it accurately. I made no attempt, either generally or specifically, to attribute to the CBI any other remark—nor would I attempt to do so. I was trying to be helpful to the House. I have been dealing specifically with the issue around clause 50. I did that because that clause came about as a result of the consultations that took place. I believe that it was legitimate for me to quote the CBI's view. I assume that the CBI sent that note to hon. Members so that they could be clear about the process involved in achieving clause 50.
      Mr. Letwin rose—
      Mr. McCartney: I cannot think for a moment what the hon. Gentleman wants to add to that. Perhaps he will wait until I get a little further into the body of my speech.
      We have said on a number of occasions that we believe that there is significant merit in recognising the special features of vertical agreements as a whole under the chapter I prohibition. The prevailing view among economists is that vertical agreements do not normally give rise to competition concerns, except where one of the parties holds market power or there exists a large network of agreements. In recognition of that, using the powers under clause 50 will reduce the burden on business of unnecessary notification. That will enable the better concentration of regulatory resources on areas of competition concern.
      As hon. Members may be aware, the European Commission has been conducting a review of the treatment of vertical restraints. Papers that we have received recently from the Commission contain possible definitions of vertical agreements which could form the basis of a description for the purposes of the chapter I prohibition.
      There is, of course, great merit in using the same language as proposed by the Commission, if possible. Many UK businesses are already subject to EC competition law and it might be burdensome to apply two different tests at EC and UK level when deciding how they will fall to be treated under the UK and EC prohibitions. This is a matter we are actively considering
      1192
      with the vertical agreements task force, which includes representatives from the CBI, the Monopolies and Mergers Commission and the Office of Fair Trading.
      Nevertheless, we recognise that some vertical agreements can cause serious competition concerns that might not be readily dealt with by reliance on the chapter II prohibition or the complex monopoly provisions of the Fair Trading Act. Clever lawyers—there are a few in the House—may also test the terms of the special treatment and squeeze agreements within it which were not intended to benefit. In particular, we do not propose to give special treatment to price-fixing vertical agreements.
      It is essential that the director general is able to claw back individual agreements to examine them. That is a quid pro quo of a wide-ranging exclusion.
      We have discussed our approach in detail with representatives of the CBI and it has their support, as I noted earlier when I quoted the body's parliamentary briefing.
      I turn now to the specific amendments proposed by the hon. Member for South Cambridgeshire (Mr. Lansley). True to his tradition, he spoke to them in a reasonable and cogent manner. That sounds trite, but he understands what I mean. The definition suggested in amendment No. 45 for a vertical agreement is at odds with that suggested by the European Commission in its papers. As I have said, businesses may find it burdensome to have two different tests that they have to apply. Our approach in this area, as in many others, is to assist businesses by introducing a prohibition that is consistent with article 85.
      Mr. Letwin: I want to press the Minister on the point about the CBI. Opposition Members entirely accept that the CBI prefers the current position to the original position, in which vertical agreements might have been entirely prohibited. Does the Minister not accept that, if the CBI was offered the alternative of total or possible total prohibition, compared to what is currently in the Bill, it would be very likely to favour the latter? He has not addressed the question whether it might favour over that the amendments in the name of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley).
      Mr. McCartney: I cannot say what the CBI thinks about the amendments. I suppose that, having read them, it decided to say in its briefing that it agreed with the Government's position on the matter, which would indicate that, on reflection and consideration, and after discussions with others who are stakeholders, it believes that the Government's proposal is the best way forward. If that was not the CBI's view, it would have told hon. Members so in no uncertain terms in its note to us, because this issue is as important to the CBI and its members as it is to other businesses.
      Even without the objection that I described, I am concerned that the definition provided in the amendment may allow anti-competitive horizontal agreements to slip through by masquerading as vertical agreements. For example, two parties at the same level of trade could enter into reciprocal agreements for the supply of a particular good, setting conditions that relate to the supply of the good to consumers.
      The amendments do not allow flexibility to amend the definition of vertical agreements over time. That is the key difference between the Government's approach and that of the hon. Member for South Cambridgeshire.

      1193
      Amendment No. 45 would limit our ability to make adjustments to ensure consistency with the European regime. It would also preclude amendments to the definition if it proved to be defective. Some flexibility of that nature is desirable to ensure that special treatment remains of real value to businesses but does not open a loophole in the operation of the prohibition. Hence, clause 50 allows the special treatment to be altered, but only by affirmative resolution.
      Mr. Lansley: I acknowledge that the route that I suggest might lead, in the initial stages, to a contest between a definition derived here and one proposed by the Commission. I want to tax the Minister on whether he believes that the definition towards which the Commission is moving is one with which he is content. Is it acceptable for the Commission to have a definition that includes operating on different economic levels, since that is more about form than effect and may have a significant adverse effect for franchise holders?
      Mr. Deputy Speaker (Mr. Michael J. Martin): Ian.
      Mr. McCartney: Thank you, Mr. Deputy Speaker. You call me that because we have known each other since childhood—I was the child.
      I would not have prefaced my remarks on the necessity to provide the opportunity in clause 50 to use the wording of the Commission's proposals as I did if the Government were unhappy or thought that the proposals would not work as we want them to. The fact that we are rejecting the hon. Gentleman's amendments means that, as I have said, we believe that the proposals from discussions in Europe will meet the objectives of the Government and business for vertical agreements. I understand that the hon. Gentleman will not accept that. Although I understand his reasons, there is a genuine disagreement between us. I hope that the judgment that I am making will prove to be correct. I spent a great deal of time discussing it with the CBI and others, to ensure that the decisions that we took, in relation to the principle of clause 50 and in relation to what comes out of it, genuinely met the requirements of business. There would be no point in the Government dealing with the matter in any other way.
      The amendments proposed by the hon. Member for Eastleigh (Mr. Chidgey) tackle the issue of vertical agreements from a different perspective. Amendments Nos. 53 and 54 give the Director General of Fair Trading a role in the making of an order for vertical agreements. Amendment No. 58 also gives the director general power in relation to the scope of the prohibition, allowing him to remove the benefits of an order from a category of agreements.
      11.15 pm
      As my hon. Friend the Minister for Competition and Consumer Affairs said in Committee, where a power extends to the scope of the prohibition, it is right that it be subject to affirmative resolution of both Houses of Parliament. Equally, it is right that a Minister, rather than the director general, is responsible for making orders.
      Amendments Nos. 55 and 57 would both give the director general an ability to exercise clawback whenever he wishes to do so. As we have said, we think it right that
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      the director general be able to exercise clawback, but only when he considers that an agreement would, if clawed back, infringe the chapter I prohibition, and that he would not be likely to grant it an unconditional exemption. That test will allow him to exercise clawback when an agreement is seriously anti-competitive, while giving businesses that enter into benign vertical agreements the proper certainty that they require.
      By removing a test for clawback, the amendments could undermine the purpose of clause 50. If businesses are not given reasonable confidence that there is an appropriately high threshold before clawback, they may well seek to notify benign vertical agreements that are covered by an order to obtain that greater certainty.
      I fully accept the sentiment that gave rise to amendment No. 56, but do not view it as necessary. We intend to consult widely with consumer groups, such as the National Consumer Council, as well as business before making an order under clause 50.
      The hon. Member for Eastleigh raised the issue of intellectual property. We do not believe that there is a need to cover such agreements in the special treatment proposed. The licensing of intellectual property rights has been subject to article 85 in the United Kingdom for more than 25 years, and a licence to use intellectual property rights as such is not restrictive; it is granting a freedom. Other copyright issues are covered by the Copyright, Designs and Patents Act 1988 and recent European Community directives. I shall send the hon. Gentleman copies of the recent directive, because discussions of it took place upstairs. I do not think that the hon. Member for Daventry (Mr. Boswell) had quite joined the DTI team from the Treasury at the time—one of his hon. Friends dealt with it—so, if that would helpful, I shall send the hon. Gentleman a copy too, so that both Front-Bench Teams are aware of the position.
      Let me return to amendment No. 56. The Department would expect as a matter of course to conduct an assessment of the costs and benefits for all legislation—primary or secondary. That assessment is placed in the Library when legislation is introduced to Parliament. In addition, my right hon. Friend the Chancellor of the Duchy of Lancaster has undertaken to issue guidance requiring Government Departments to publish such an assessment when a proposal is consulted on. That new guidance is likely to be in place by September this year.
      On that basis, I invite the hon. Members for South Cambridgeshire and for Eastleigh not to press their amendments.
      Mr. Lansley: I am grateful to the Minister for the manner in which he responded, although I feel that on this occasion—although not in some of our earlier debates—the substance was not sufficient. It is like trying to grasp a hologram; one looks for the Government's proposals on vertical agreements, and they are just not there.
      I am prepared to accept that the objective should be to arrive at a definition of vertical agreements which is workable, consistent and aligned between ourselves and the European Commission, and which, as the CBI proposes, should presume that vertical agreements are excluded in the vast majority of cases with appropriate clawback and definitions. The proposed amendments do that.

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      The difference between Conservative Members and the Minister is that we feel that we should be leading the Commission to an appropriate definition, not simply resting upon the proposition that the Commission will, in due course, come up with a definition. Judging by the first accounts that have been presented to us in Committee and in the Chamber tonight, I believe that there may be practical difficulties with the definition when the time comes. Rather than resting on the proposition that flexibility is all and that we must go with the Commission when the moment arrives, it would be better to legislate rationally and in accordance with our objectives, and to press the Commission to come on board. However, I appreciate that the Minister was trying to respond helpfully and, as I understood him, he was not rejecting the definitions in the amendments so much as trying to see whether in due course some of those thoughts about price fixing and so on could be taken on board. On that basis I see no purpose in pressing the amendment. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 11, in page 26, leave out lines 24 and 25.—[Mr. Ian McCartney.]

    Schedule 9
      DIRECTOR'S RULES
      Amendment made: No. 16, in page 77, leave out lines 12 to 16.—[Mr. Ian McCartney.]
    Clause 53

      FEES
      Mr. Boswell: I beg to move amendment No. 5, in page 27, line 39, at end insert—
      '(1A) a fee charged to a business for the discharge of functions by the Director shall not exceed the costs of fulfilling that particular function in that case.'.
      I am conscious of a rather unsatisfactory discussion in Committee about the charging of fees, during which the Under-Secretary of State made it quite clear that the Government had not yet decided whether to charge fees or what they would be. As my hon. Friends said, that made it difficult to see whether the fees that might be charged had been taken into the compliance cost assessment, about which we have considerable reservations.
      The amendment cannot be contested in principle. It seeks to ensure that in charging fees—we do not at this stage reopen the question whether fees would be charged—the director should not exceed the cost of fulfilling the function for which the fee is charged. That is basic natural justice and proportionality, and I have two points to support it, the first of which is at the macro level. It is important that the competition legislation and the suite of advice and fees to be charged by the director should not be used, to use the phrase in schedule 3, as a revenue-producing monopoly. The idea is not to charge greater amounts than the costs would require.
      The second point is at the micro level and, in a sense, it is embodied in the amendment. It would be possible for the regulator to produce a schedule with a discriminatory
      1196
      function. For example, if the director or the Government prompting him were to take against the press or pharmaceutical companies or public utilities, the fees schedule might be arranged in a way that would discriminate between those businesses, or one of them, and other businesses that requested services from the director. Those services could be of more or less the same character and involve approximately the same cost.
      As I have said, the amendment seeks to establish the principle that fees should not exceed the costs of the case, although it leaves open the principle that the fees could be lower—they could be rebated—or might not be charged at all. I hope that Ministers will consider those matters and give some assurances on them.
      Mr. Ian McCartney: When we discussed the issue of the director's fees in Committee, it was recognised that it can be appropriate to charge fees when a genuine service is provided by the public sector. It was also recognised that fees for the giving of guidance and decisions might be a way of managing the director's work load in concentrating resources on where they are most needed and discouraging frivolous applications. However, the Government have not decided whether fees should be charged, still less the basis on which they might be set. I cannot accept the amendment because, if we decide the director should charge fees, it would narrow the range of options for calculating them. In particular, it would contradict subsection(2)(a), which provides that the rules may in particular provide for the amount of any fee to be calculated by reference to matters that may include
      "(i) the turnover of any party to an agreement"
      and
      "(ii) the turnover of a person whose conduct the Director is to consider".
      That provision was inserted by an amendment in another place because some respondents to the consultation exercise had argued that it might be appropriate to set differential fees for applicants to the director, based on their ability to pay.
      I do not suggest that that is the basis on which any fees will be charged. As I have said, we have not taken any decision on whether fees will be charged, or how any fees would be calculated, but I do believe that it is an option which the Bill should make available. I recall that, in Committee on 11 June, the hon. Members for Eastleigh (Mr. Chidgey) and for Daventry (Mr. Boswell) raised co ncerns about the burden of fees on small companies, and the hon. Member for Daventry recognised the value of being able to consider the possibility of relating the fees to the size of the undertaking. However, I can give some assurances about the exercise of the power to charge fees.
      First, the Bill will enable fees to be set only at a level intended to cover the costs of the director in providing the particular services to which they relate; the fees could not be set at a level designed to generate a profit. Secondly, as any fees would be set by the director's rules, they would have to be consulted on, by virtue of clause 51(3). Business will therefore have an opportunity to consider and comment on the amount of any fees and the basis on

      1197
      which it is proposed to calculate them. I hope that that helps the hon. Member for Daventry in his consideration of whether to withdraw the amendment.
      Mr. Boswell: Although I am not entirely satisfied by that response, in the light of the assurances that the Minister has been able to give at this stage, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 54

      REGULATORS
      Mr. Lansley: I beg to move amendment No. 46, in page 28, line 15, at beginning insert
      'Subject to subsections (4) and (5)'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: Government amendments Nos. 12 and 13.
      No. 47, in page 28, line 18, at end insert—

      '(4) A regulator shall not exercise any functions under this Part in respect of any matter until he has consulted—

      (a) the Director, and

      (b) any other regulator who may have jurisdiction in relation to that matter,
      and they have jointly determined whether and, if so, the manner in which, any of them are to exercise any functions under this Part in relation to that matter.

      (5) In respect of a matter which—

      (a) disregarding the concurrent jurisdiction of a Director, is not exclusively within the jurisdiction of one regulator, or

      (b) affects or may affect competition outside the jurisdiction of that regulator,
      any decision within the meaning of section 46 in relation to that matter shall be made jointly by that regulator, the Director and any other regulator who has jurisdiction to a material extent in relation to that matter.

      (6) A regulator shall not exercise both—

      (a) his functions under this Act, and

      (b) his functions under the enactment from which he derives his regulatory jurisdiction,
      at the same time and in respect of the same matter.'.

      No. 60, in schedule 10, page 78, line 7, at end insert
      'if, but for those subsections, regard could be had to that general matter.'.
      Government amendments Nos. 17 to 25, 33 to 37, 39 and 40.
      Mr. Lansley: May I direct attention to amendments Nos. 47 and 60 in particular? It is helpful to have seen Government amendment No. 13. I recognise that it is, in substantial measure, a response to the issues that were raised in Standing Committee. I welcome the amendment in principle for that reason. Therefore, I will focus just on one important difference between amendment No. 13—which tries to create a structure that enables joint working between the Director General of Fair Trading and the other sector regulators—and amendment No. 47.
      Subsection (6) of amendment No. 47 is intended to prevent a regulator, who has both Competition Bill powers and sector statute powers, from acting in relation
      1198
      to any given matter using powers from both Acts. To put it in a nutshell, it is intended to prevent a regulator from using Competition Bill powers in the first instance, but giving effect to decisions through regulators' powers.
      Of course, not only does the director of the utility sector acquire additional powers, not least in relation to investigation and enforcement, through the Competition Bill, but, by using sector statute, he might be able to avoid some of the due processes that are contemplated in relation to the Bill. Therefore, the mixing of the two is an unhappy situation. Using the two together might lead to an unsatisfactory blurring of the distinctions between the exercise of Competition Bill powers and of regulators' powers.
      To cut a long argument to a simple point, we all recognise that regulators have competing objectives. In this particular instance, they are often seeking to meet what are essentially structural objectives in relation to the industry: for example, the reduction of market share on the part of an operator within the utility that they regulate. They may pursue that objective through the exercise of regulatory powers, but they may try to use Competition Bill powers in the first instance, or undertake investigations, and so on. It would be undesirable for there to be a blurring between the two things. There may be circumstances where they want to reduce dominance, but in doing so try to assert abuse where abuse does not necessarily exist.
      11.30 pm
      The intention of that part of amendment No. 47—which I continue to commend to the Government, and which is not really reflected in Government amendment No. 13—is to take away the opportunity to move between the two jurisdictions in relation to the same matter. I welcome the Government's response to that point.
      We could tie ourselves up in discussing amendment No. 60, so suffice it to say that, in Committee, the Under-Secretary took the view that the Government amendments were sufficient to bring the powers of the Director General of Telecommunications directly in line with the other utility statutes. However, my view is that, given that the Telecommunications Act 1984 does not operate in precisely the same way as other sector statutes, that would be true only if this further tailpiece was added on to the relevant part of schedule 10. I hope that the Under-Secretary will reflect on whether he has achieved the objective of trying to bring the powers directly into line.
      To save time, I will not dwell on any other arguments. Given that the Under-Secretary has been looking for assistance from industry, I was grateful to receive from the electronics industry—to cite just one example—confirmation that it saw benefit in some of my amendments, especially amendment No. 47. It is concerned to ensure that there is clarity in the manner in which the utility sector regulators use their powers.
      Mr. Nigel Griffiths: At 11.31 pm, I can offer the House my 18-page briefing or the truncated Griffiths two-page version. I hope that the two-page version will cover the key points. In particular, I want to spend a little time on amendments Nos. 47 and 60.
      There are Government amendments in this grouping. They would allow regulators to co-ordinate their activities under the Bill in a more effective manner.

      1199
      They are a response to the concerns voiced by the hon. Member for South Cambridgeshire (Mr. Lansley) in Committee. It was suggested that the present arrangements imposed artificial constraints. The amendments would replace the present inflexible arrangement with a more flexible regulation-making power.
      Amendment No. 60 would add clarification to new section 3(3C), which this Bill inserts into the Telecommunications Act 1984. Section 3(3C) deals with the ability to have regard to the subject matter of statutory duties when the duties themselves are disapplied. I assure the House that no amendment is needed, as section 3(3C) achieves its intended effect. It makes specific provision about consideration of the subject matter of statutory duties in the context of the exercise of the Director General of Telecommunications' concurrent functions under the Bill. However, it makes no change to the ability to have regard to the subject matter of statutory duties, where it is relevant, in respect of other functions in the Telecommunications Act where the statutory duties themselves have been disapplied.
      As the hon. Member for South Cambridgeshire was generous enough to admit, amendment No. 47 covers the same ground as the Government's amendment in dealing with the consultation and joint determination on who should exercise functions—subsection (4). However, it would also require joint decision making where jurisdictions overlap—subsection (5)—and it would preclude a regulator from exercising Bill functions and sector-specific regulatory functions at the same time in relation to the same matter—subsection (6).
      The effect of the third part of amendment No. 47 would seem to be to import uncertainty about the lawfulness of use by a regulator in particular cases of information that he has obtained under Bill powers when subsequently exercising his functions under the regulatory Act. The amendment, by creating a firm division between the two sets of functions, increases the scope for challenge to the original use of the powers—for example, on the grounds that the chances of being able to take any enforcement action under the Bill were so small that the use of Bill powers to gather information was unreasonable.
      I believe that amendments Nos. 60 and 47 would—I put it no stronger—weaken the Bill.
      I hope that my explanation satisfies the hon. Member for South Cambridgeshire. However, if he would like me to deal with further points, I shall be more than happy to do so from my 18-page briefing.
      Mr. Lansley: I am grateful to the Minister for the character of his reply. On that basis, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendments made: No. 12, in page 28, line 16, leave out 'exercised' and insert 'exercisable'.
      No. 13, in page 28, line 18, at end insert—
      '(4) The Secretary of State may make regulations for the purpose of co-ordinating the performance of functions under this Part ("Part I functions") which are exercisable concurrently by two or more competent persons as a result of any provision made by Part II or III of Schedule 10.
      (5) The regulations may, in particular, make provision—

      (a) as to the procedure to be followed by competent persons when determining who is to exercise Part I functions in a particular case;

      (b) as to the steps which must be taken before a competent person exercises, in a particular case, such Part I functions as may be prescribed;

      (c) as to the procedure for determining, in a particular case, questions arising as to which competent person is to exercise Part I functions in respect of the case;

      (d) for Part I functions in a particular case to be exercised jointly—

      (i) by the Director and one or more regulators, or

      (ii) by two or more regulators,
      and as to the procedure to be followed in such cases;

      (e) as to the circumstances in which the exercise by a competent person of such Part I functions as may be prescribed is to preclude the exercise of such functions by another such person;

      (f) for cases in respect of which Part I functions are being, or have been, exercised by a competent person to be transferred to another such person;

      (g) for the person ("A") exercising Part I functions in a particular case—

      (i) to appoint another competent person ("B") to exercise Part I functions on A's behalf in relation to the case; or

      (ii) to appoint officers of B (with B's consent) to act as officers of A in relation to the case;

      (h) for notification as to who is exercising Part I functions in respect of a particular case.

      (6) Provision made by virtue of subsection (5)(c) may provide for questions to be referred to and determined by the Secretary of State or by such other person as may be prescribed.
      (7) "Competent person" means the Director or any of the regulators.'.—[Mr. Ian McCartney.]

    Schedule 10

      REGULATORS
      Amendments made: No. 17, in page 78, line 23, at end insert—
      '() In subsection (4), omit paragraph (c) and the "and" immediately after it.'.
      No. 18, in page 79, line 12, after '(5)' insert '—
      (a)'.
      No. 19, in page 79, line 13, at end insert—
      '(b) after paragraph (b), insert "and";
      (c) omit paragraph (d) and the "and" immediately before it.'.
      No. 20, in page 80, line 9, at end insert—
      '() In subsection (4), omit paragraph (c) and the "and" immediately after it.'.
      No. 21, in page 81, line 4, at end insert—
      '() In subsection (5), omit "or in subsection (3) above".
      () In subsection (6), omit "or in subsection (3) above".'.
      No. 22, in page 81, line 39, at end insert—
      '() In subsection (4), omit paragraph (c) and the "and" immediately after it.'.
      No. 23, in page 82, line 37, at end insert—
      '() In paragraph (4), omit sub-paragraph (c) and the "and" immediately after it.'.
      No. 24, in page 83, line 26, after `(4)' insert `—
      (a)'.
      No. 25, in page 83, line 27, at end insert—
      '(b) after sub-paragraph (b) insert "and";
      (c) omit sub-paragraph (d) and the "and" immediately before it.'.
      No. 26, in page 89, line 49, at end insert—
      '() Omit section 131 (modification of Restrictive Trade Practices Act 1976).'.
      No. 52, in page 90, line 12, at end insert—
      '() In section 21 (duties as to exercise of regulatory functions), in subsection (6), at the end of the paragraph about regulatory functions, insert "other than any functions assigned to him by virtue of section 67(3) of that Act ("Competition Act functions").
      (7) The Regulator may, when exercising any Competition Act function, have regard to any matter to which he would have regard if—

      (a) he were under the duty imposed by subsection (1) or (2) above in relation to that function; and

      (b) the matter is one to which the DGFT could have regard if he were exercising that function.".'—[Mr. Ian McCartney.]

    Clause 59

      INTERPRETATION
      Amendment made: No. 14, in page 31, line 31, at end insert—
      '() The fact that to a limited extent the Chapter I prohibition does not apply to an agreement, because of an exclusion provided by or under this Part or any other enactment, does not require those provisions of the agreement to which the exclusion relates to be disregarded when considering whether the agreement infringes the prohibition for other reasons.'.—[Mr. Ian McCartney.]

    Clause 60

      PRINCIPLES TO BE APPLIED IN DETERMINING QUESTIONS
      Mr. Lansley: I beg to move amendment No. 61, in page 31, line 40, leave out from 'concerned)' to end of line 43 and insert
      'the provisions of this Part are applied in a manner which is consistent with the application of the corresponding provisions of Community law.'.
      Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 62, in page 31, line 44, at beginning insert
      'Subject to the other provisions of this Part,'.
      No. 63, in page 31, line 44, leave out 'determines a question' and insert 'deals with a matter'.
      No. 64, in page 31, line 45, leave out from 'act' to `whether' in line 1 on page 32.
      No. 65, in page 32, line 4, leave out 'determining that question' and insert 'dealing with that matter'.
      No. 66, in page 32, line 6, leave out from 'time' to 'Community' in line 7 and insert
      'dealing with a similar matter under'.
      No. 67, in page 32, line 13, at end insert—
      '(4A) Subject to subsection (4B), where any question arises concerning the interpretation of this Part and, in particular, whether for the purposes of this section—

      (a) a provision of Community law is a corresponding provision,

      (b) a relevant difference exists between a provision of this Part and a corresponding provision of Community law,

      1202

      (c) a matter arising under Community law is a similar matter, or

      (d) a decision or statement of the Commission is a relevant decision or statement,

      any person with sufficient interest in the matter to which the question relates may apply to the relevant court for the determination of that question and the court may determine that question and make such declaration as it considers appropriate.
      (4B) Where any question concerning the interpretation of this Part arises in proceedings before an appeal tribunal, an application for the determination of that question by a relevant court in accordance with subsection (4A) may only be made with the leave of that tribunal.
      (4C) In subsections (4A) and (4B) "relevant court" means—

      (a) in England and Wales, the High Court;

      (b) in Scotland, the Court of Session;

      (c) in Northern Ireland, the High Court.'.

      No. 68, in page 32, line 18, at end insert—
      '(7) In this section "a provision of Community law" includes the general principles of Community law and decisions of the European Court.'.
      New clause 3—Decisions on matters subject to a Commission investigation—
      '.—(1) Subject to subsection (3) below, the Director shall not make a decision that—

      (a) an agreement infringes the Chapter I prohibition; or

      (b) conduct infringes the Chapter II prohibition,
      if that agreement or conduct is the subject of an investigation by the European Commission under a provision of Community law relating to Article 85 or 86.

      (2) Nothing in this section shall prevent the Director from conducting in respect of that agreement or conduct—

      (a) an investigation in accordance with section 25; or

      (b) a Director's investigation or Director's special investigation within the meaning of Part II.

      (3) If the Director has grounds to believe that the European Commission will conclude that agreement or conduct to which subsection (1) applies will not be found to be within the Commission's competition law jurisdiction, he may proceed to make a decision under sections 14 and 22.'.
      Mr. Lansley: At this late hour, the House will forgive me if I do not explain the arguments in their full form—the 18-page version. Earlier in the debate, the Minister was at pains to say that the Government believe that it is important to respond to representations—not least from the Confederation of British Industry, for example. He will be aware that, like my hon. Friends and members of the public, the CBI is very concerned that the provisions in clause 60 will have to be better defined in the legislation if the Government's intentions are to be realised accurately. We essentially believe that the issues should be better defined in legislation rather than waiting for the courts to do the job.
      The matters of "corresponding question" and "relevant difference", for example, have not yet been defined in the Bill. If the Government's intention is to align UK and Community law as closely as possible, they should be able to tell us what constitutes the relevant differences. Otherwise, over time, the principles may begin to diverge again. For example, clause 60 deals with incompatibilities. Will the Government list them? Where do the Government expect the Bill to depart from European Community law?

      1203
      In respect of the purpose of amendment No. 61 and the others grouped with it, I am attempting to do the Government's job for them. If we cannot have the legislation that we want, we may as well amend the Bill to achieve the secondary objective of which industry is seized—clarity and certainty. We will end up with lack of clarity and uncertainty if we proceed with clause 60 without knowing what the corresponding questions are and how they are to be determined. The clause should be amended so that all the provisions in the Bill are treated as corresponding in effect. We should not have relevant differences—those that exist should be specified. Instead of including phrases or provisions from Community law, we should replace corresponding provisions or inconsistency with a much clearer definition.
      Amendment No.67 is additional and stands alone. It seeks to provide a better mechanism for determining the issues that arise on clause 60 by permitting a person with sufficient interest in the matter to apply for a determination by the relevant courts so that a declaratory ruling may be obtained.
      I have provided an unsatisfactory explanation of a matter on which I could have spent considerable time. I am concerned that so far—even in Standing Committee—Ministers have not examined clause 60 sufficiently. The phraseology used in the clause opens up precisely the differences between UK and EC law to which they objected in other respects. It should have been replaced by a provision that aligned the two systems of jurisprudence instead of one that served the Government's purposes without telling us in what respect they envisaged that the relevant differences and incompatibilities would emerge over time.
      Mr. Ian McCartney: First, I thank the hon. Member for South Cambridgeshire (Mr. Lansley) for his constructive approach to the matter. I accept that, because of an agreement to complete proceedings on the Bill within an appropriate time, neither he nor I will be able to set out in detail why he feels the amendments should be accepted and why I would resist them. Therefore, I shall write to him setting out the points that I do not have time to make tonight so that he can consider them before the Bill returns to the House. That is inviting opportunities, but it is only fair to the hon. Gentleman and to myself.
      Clause 60 is important. It exists to ensure that, as far as possible, UK and EC prohibitions are interpreted and develop consistently with the EC competition law system. That is critical in minimising burdens on business.
      Although I welcome the spirit of the amendments, I cannot accept that they would improve the wording of the clause or the operation of the regime and I am happy to explain briefly why that is the case.
      Amendment No.67 is significant as it introduces a new and separate step into the operation of the Bill—the right to apply to the High Court, or the equivalent in Scotland and Northern Ireland, to determine questions. The questions include whether a provision of Community law is a corresponding provision; whether
      1204
      a relevant difference exists between UK and European law; whether a matter arising under European law is similar and whether a decision or statement of the Commission is relevant.
      The amendment is wrong in principle. It appears to be based on the mistaken view that there is a choice of law between UK and European systems and that the choice should be made even before the substance of a case is addressed. There is no such choice of law. There are not two rival sets of principles. There is but one set of principles. Accordingly, interpretation of the Bill is not a two-stage process. One cannot construe the prohibitions and then compare them. They must be construed from the outset on the basis of clause 60.
      The Government have made it clear on a number of occasions that it would be wrong to allow appeals on interim stages of the decision-making process. If we allowed appeal at every step of way, we would end up in an interminable process. The appropriate course is to allow the director to make a decision and to confine appeals to substantive decisions. Those arguments apply in this context.
      The hon. Member for South Cambridgeshire also tabled amendments Nos. 62 to 66. We believe that we have followed the right formulation and approach in clause 60. I shall give the hon. Gentleman a more substantive reply on the amendments in writing, and hope that he will feel able, even given this stilted debate, to fight another day.
      New clause 3 covers similar ground to the subject of the discussion in Committee of various amendments to clause 42, especially the then proposed new clause 12. The amendments were broadly concerned with avoidance of forms of possible double jeopardy, where agreements or conduct may fall both within the scope of domestic prohibitions under the Bill and European prohibitions under articles 85 and 86 of the treaty. It will probably come as no surprise to the House that we do not see any need to alter the Bill's provisions for dealing with parallel jurisdiction, particularly in investigations.
      More particularly, I reiterate that, when the Commission is actively investigating an agreement or conduct, there will be no practical point in the director's starting a separate investigation. The practical assurance of unnecessary duplication of investigation between the Commission and the director is achieved by the alignment of the UK prohibitions with those of articles 85 and 86 and the practical co-operation that will exist between the Commission and the United Kingdom. For those and a number of other reasons, we find the new clause unacceptable. I ask the hon. Gentleman to withdraw the amendment.
      Mr. Lansley: I was quite fond of new clause 3, and quite sad to forgo the opportunity to explain it in detail. In fond expectation of further communication from the Minister, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 71

      REGULATIONS, ORDERS AND RULES
      Amendment made: No. 15, in page 39, line 20, leave out 'or' and insert—
      '() section 50, or'.—[Mr. Ian McCartney.]
      11.45 pm
      Mr. Peter Brooke: I beg to move amendment No. 59, in page 39, line 20, leave out 'or' and insert—
      '() section 51, in the case of the first order made by the Secretary of State under that section, or'.
      This evening is only the second time that I have played hookey from the proceedings of the Bill. On Second Reading on May 11, I hung on the lips of the President of the Board of Trade during her 52-minute speech. I stayed on the ramparts while what seemed like half the Labour party attacked Mr. Murdoch, and at about a quarter to 9, I made my own plea to serve on the Committee that considered the Bill. It is perhaps forgivable at that late hour that I misquoted an interlocutor of the Duke of Wellington.
      The Committee of Selection graciously put me on the Committee, on which I served with constant admiration for my right hon. Friend the Member for Wokingham (Mr. Redwood) and my hon. Friends, and occasional amazement at the ramshackle quality of the arguments deployed by the Government. Until late this evening, I have been serving on the Select Committee on Northern Ireland Affairs, the members of which very properly feel that one cannot make a mature decision until after dusk.
      My first absence from the proceedings of the Bill was on the morning of June 23, when I was absent from the Committee on lawful occasions, which, in all piety, I indicated to the Minister. A little after 11 o'clock that morning, the Minister for Competition and Consumer Affairs embarked on the long furrow of moving and speaking to his new schedule, which affected community pharmacies. He concluded the furrow with a passage of the new schedule three and a half hours of debate later at 6 o'clock.
      Very early that morning, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) moved the amendment that served as a jewel-like harbinger to the matter before us. He moved it with the same coruscating clarity that characterised his actions throughout the Committee, which makes it such an honour that his name is attached to mine on amendment No. 59.
      I shall not rehearse all the arguments that my hon. Friend the Member for South Cambridgeshire deployed on June 23, which occupy three columns in the Official Report of Committee proceedings. The issue related to the fact that, in what was then clause 70, now clause 71, there is a power to make regulations and orders. My hon. Friend sought to make the Secretary of State's orders under clause 51 subject to affirmative resolution.
      The Minister resisted the amendment on two grounds—first, the slowness and greater difficulty imposed on the process of introducing any necessary adjustments to the rules, and secondly, that the rules concerned only procedural matters, which fell below the level of primary legislation or matters subject to affirmative resolution.
      My hon. Friend the Member for South Cambridgeshire responded by reminding the Minister of the weight that the Government had attached throughout the Committee to the clarificatory rules that the director will make. He said that the rules might be procedural in content, but were substantive in effect. My hon. Friend added that, although he understood the Minister's case—that multiple use of the affirmative resolution procedure might be
      1206
      difficult in practice when the rules were amended—it was still desirable to have the fullest possible scrutiny on the first occasion that the director's rules were made.
      The Minister's total silence in response to that reasonable suggestion by my hon. Friend the Member for South Cambridgeshire has provoked him and me to bring the concept back on report. In making this tiny personal scratch on the Government's adamantine front—this is the only time I have bothered the House on report—I remark that, on the Government's other objection, EU experience has shown that the procedural elements of competition law can be of immense importance. In a number of key cartel cases, appeals have turned on procedural points.
      In schedule 9, there are matters on which rules may be made which are not merely procedural. If I may give examples where the rules provide for the circumstances in which the director may act, the imposition of conditions or the cancellation of them in relation to parallel exemptions under paragraph 9—and, likewise, in relation to third-party rights on disclosure of information under paragraph 12—will serve.
      What will be of particular interest in such matters—the House will be delighted to hear that I am concluding—is the extent to which the rules will depart from EU principles in similar circumstances. Finally, rules under clause 51 are not limited to the matters in schedule 9, and I draw the Minister's attention to clause 51(2). I hope that the Government will look with favour on this small amendment at this late hour.
      Mr. Nigel Griffiths: I should like to be able to accommodate the right hon. Member for Cities of London and Westminster (Mr. Brooke), whose contributions to the Committee have been entertaining from first to last.
      I recognise that the right hon. Gentleman is proposing only that the first exercise of the power to make orders under clause 51 should be subject to the affirmative resolution. Nevertheless, I do not think that the rules under clause 51 are of such significance that they should be subject to affirmative resolution. Lest he does not wish to rely on my judgment, I pray in aid two other important bodies.
      We are reflecting the guidance of the then Joint Committee on Delegated Legislation, which, in its second report in 1972-1973, suggested that the affirmative resolution procedure might normally be appropriate for powers substantially affecting provisions of Acts of Parliament. The powers under clause 51 do not fall into any of those categories. Similarly, the House of Lords Select Committee on Delegated Powers and Deregulation did not question the fact that this power was subject to negative resolution when it reported on the Bill.
      I want to reassure the right hon. Gentleman that clause 51 (3) requires the director general to consult when he is preparing rules, so those likely to be affected will have the opportunity to make their views known. I hope that that will allow the right hon. Gentleman, on reflection, to withdraw the amendment.
      Mr. Brooke: I am disappointed by the Minister's response, as is my hon. Friend the Member for South Cambridgeshire (Mr. Lansley). However, the Minister knows the way to my heart. The original Committee set up in the House of Lords to look at delegated legislation was chaired by my late noble father. When it was decided

      1207
      that there should be a Joint Committee of both Houses, my father was approached by the Leader of this House, who said how desirable it would be to have at least one member of the House of Lords Committee serving on the Joint Committee, and how helpful it would be if he would chair the Joint Committee. My father did that as well.
      Under those circumstances, it would be churlish of me to resist the plea that the Minister is making—although I hope that the Government will not rue the day. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Schedule 13

      TRANSITIONAL PROVISIONS AND SAVINGS
      Amendments made: No. 27, in page 101, line 31, at end insert—
      '() The fact that to a limited extent the Chapter I prohibition does not apply to an agreement because a transitional period is provided by virtue of this Schedule does not require those provisions of the agreement in respect of which there is a transitional period to be disregarded when considering whether the agreement infringes the prohibition for other reasons.'.
      No. 28, in page 105, line 16, after 'proceedings' insert
      'under section 3 or 26 of the RTPA'.
      No. 29, in page 106, line 26, at end insert—
      '() There is no transitional period for an agreement to the extent to which, before the starting date, a person has acted unlawfully for the purposes of section 27ZA(2) or (3) of the RTPA in respect of the agreement.".'
      No. 30, in page 106, line 42, after 'period' insert
      'for the exempt provisions of the agreement'.
      No. 31, in page 106, line 44, at end insert—
      '(2) In sub-paragraph (1) "exempt provisions" has the meaning given by paragraph 14(3).'.
      No. 32, in page 112, line 25, leave out '(other than section 131)'.—[Mr. Nigel Griffiths.]

    Schedule 14

      REPEALS AND REVOCATIONS
      Amendments made: No. 33, in page 118, line 37, at end insert—
      'In section 50(4), paragraph (c) and the "and" immediately before it.'.
      No. 34, in page 119, line 16, at end insert—
      'In section 36A(5), paragraph (d) and the "and" immediately before it.'.
      No. 35, in page 119, line 49, at end insert—
      'In section 43(4), paragraph (c) and the "and" immediately after it.'.
      No. 36, in page 120, line 22, at end insert—
      'In section 31(5), "or in subsection (3) above".
      In section 31(6), "or in subsection (3) above".'.
      No. 37, in page 120, line 49 at end insert—
      'In section 67(4), paragraph (c) and the "and" immediately after it.'.
      No. 38, in page 120, line 52, at end insert—
      'Section 131.'.
      No. 39, in page 122, line 4, at end insert—
      '() in paragraph (4), sub-paragraph (c) and the "and" immediately after it.'.
      No. 40, in page 122, line 40, at end insert—
      '() in paragraph (4), sub-paragraph (d) and the "and" immediately before it.'.
      —[Mr. Nigel Griffiths.]
      Order for Third Reading read.
      11.56 pm
      Mr. Ian McCartney: I beg to move, That the Bill be now read the Third time.
      First, I thank the hon. Member for South Cambridgeshire (Mr. Lansley) for his assistance. If he keeps it up, he may be in for a job on this side of the House. [Laughter.] This is new new Labour.
      The Competition Bill is a major step forward for British consumers, business and competitiveness. It will radically reform and strengthen the laws to deal with anti-competitive behaviour, such as cartels and abuses of a dominant market position.
      Both consumers and business deserve a better deal, which the Bill will deliver. The Government have acted swiftly, whereas the Conservative Government dithered for years and did nothing. Anti-competitive behaviour hits ordinary people; it means lower quality, at higher prices. Competition is vital to ensure choice and value. The vast majority of businesses that work so hard to compete also deserve better protection from the few that seek to cheat and bully.
      The current competition regime is often bureaucratic, slow and ineffective. The powers for rooting out and dealing with serious anti-competitive behaviour are notoriously weak. In the meantime, customers and competitors suffer. Smaller companies have been driven out of business while complaints were investigated. Even the most blatant cartels can get away with little more than a slap on the wrist. As a result, there is very little deterrence to anti-competitive behaviour, and no recompense for firms and consumers that are on the receiving end of it.
      The Bill will put those failings right. The Director General of Fair Trading will be able to act swiftly to stamp out anti-competitive practices. Those on the receiving end of such practices will have new rights to seek damages. Moreover, the Bill will sweep away the

      1209
      existing bureaucratic restrictive practice laws, which require many thousands of harmless commercial agreements to be registered.
      The Bill modernises our competition law to bring it more in line with the prohibition regimes that already operate in the European Union and in many of the Organisation for Economic Co-operation and Development countries. Many UK firms already have to deal with EU competition laws. The Bill will greatly simplify matters for such firms by introducing prohibitions that are modelled on those in the EU rules.
      Reform of the current regime is long overdue. The Bill will give us a really modern and effective competition regime at last. The result will be stronger markets, a better deal for consumers and more opportunities for good British businesses to thrive. I commend the Bill to the House.
      11.58 pm
      Mr. Boswell: We have all enjoyed listening to the Minister's press release. The Government have been ambitious, even courageous, in introducing a complex Bill which attempts to merge the European philosophy on competition with British domestic legislation. The attempt is massive in scale, but it has by no means wholly succeeded.
      In preparation for tonight, I read my Second Reading speech, and I have never before found that so many queries that I raised on Second Reading remained on Third Reading. Many additional issues of concern arose in Committee. My old philosophy tutor used to say, "Always start your essay with a query, try to answer it, and end with another." The Minister must have been one of his pupils, too.
      There are some concepts in the Bill about which industry may be happy, but the CBI and other representative and responsible organisations retain considerable y areas reservations on various aspects. In our haste to consider the Bill, one or two issues were not fully rehearsed. For example, the CBI brought to our attention in its latest letter the interaction of the continuing powers on scale monopoly with the new prohibitions. Much will depend on how the Government and the director general interpret the law.
      There is a need for clarity in explanation for businesses, and especially small businesses, at all stages of implementation. As has been clearly revealed tonight, there is a huge, and in my view unhealthy, reliance on the order-making process—for example, in relation to the director general's rules and issues such as fees, of which we know nothing yet. The House will need to give those subjects further detailed scrutiny.
      Real concerns remain about the compliance costs, even conceptually. We have not explored tonight, as we did in Committee, the imperfections, inconsistencies and incoherence in the Government's analysis of compliance costs, which does not do nearly enough to acknowledge the problems that businesses will face in seeking legal advice.
      Most businesses are legitimate and want to trade fairly, so it is incumbent on the Secretary of State and the director general to proceed whenever possible by exception, and with sensitivity. We move now from press release to implementation, which affects business, whose costs need to be kept to a minimum.
      1210
      There are still gross imperfections and a tendency to excessive intrusion in the Bill, which has been greatly oversold in its effects, but we do not think it appropriate to divide on Third Reading: like the Minister, no doubt in his case with his fingers crossed, we stand back to see how it will work in practice.
      12.3 am
      Dr. Ladyman: This is the first Bill on which I have served throughout its passage through the House. I apologise to my hon. Friends for irritating them at times, and beg their indulgence. I am grateful to Opposition Members for the challenge that they have offered throughout.
      Opposition Members seem on occasions to have minimised the crimes with which the Bill is designed to deal. When people act anti-competitively, they are stealing just as much as someone who burgles or steals from one's house, so it is important that we take the matter seriously. The Government have done so; they have done good work in producing the Bill, and I am proud to have helped with some parts of that process.
      12.4 am
      Mr. Chidgey: I, too, do not intend to detain the House for long—[Interruption.]—although I am grateful for the support that I seem to be gathering from all corners of the House; the longer it goes on, the longer I will go on.
      The Liberal Democrats have made it clear since Second Reading that we support the main principles in the Bill and welcome the strengthening of competition law by the tow major prohibitions: the chapter I prohibition on agreements to prevent, restrict or distort competition, and the prohibition of abuse of a dominant position. We have had many interesting, but not necessarily satisfactory, debates on those. We also agree with the principle of providing for a new regime to be applied and enforced by the Director General of Fair Trading and giving powers to investigate if reasonable grounds for suspecting that either of those two prohibitions have been infringed.
      However, it is about the body of the Bill, the substance of the debate and the detail of the arguments that our reservations have remained—reservations which the Government have failed to overcome in spite of extensive debates, attempts to amend the Bill and lengthy probing in Committee.
      Hon. Members will recall that the Bill came to the House from the other place with key amendments, which in the main met our fundamental reservations about the Bill. During our debates, the Government have seen fit in every case to overturn those amendments—specifically, measures to clarify the exclusion of vertical agreements, to resolve the issue of retail price maintenance on over-the-counter medicines and the effect that that will have on community pharmacies, and to tackle the dangers of predatory anti-competitive practices in reducing the diversity and independence of our national newspaper press.
      The last is the key issue—the Government's refusal to recognise the limitations of the Bill in dealing with predatory anti-competitive practices in the national press. The Government have claimed that the various amendments tabled at different stages were all unnecessary and unworkable, yet they know only too well that independent and highly respected legal advice has

      1211
      argued to the contrary. At the very least, the Government's legal advice is saying one thing and equally eminent, reliable and respected advice is saying the opposite. That means that we may enact a Bill which will be a field day for lawyers and a great benefit to those organisations that intend to pursue predatory practices.
      The Government should reflect on that, as this Bill could well be a Pandora's box for the future. I hope that it will not be, and that, through the various processes, we will find some strength in it. If we do not, the Government know where the blame will lie.
      12.7 am
      Mr. Brooke: I shall be exceptionally brief.
      In the first debate of this Parliament, I said that the battle of Isandhlwana was over, and the defence of the mission station at Rorke's Drift was about to begin. The Minister of State, who was good-humoured throughout our proceedings, paid me the, perhaps unconscious, compliment of echoing that thought. In Committee, he picked up a reference of mine to faith and bestowed the soubriquet of "Faith, Hope and Charity" on my right hon. Friend the Member for Wokingham (Mr. Redwood) and my hon. Friends the Members for Daventry (Mr. Boswell) and for Westmorland and Lonsdale (Mr. Collins), the Whip.
      Whether consciously or unconsciously, the Minister bestowed upon them the names of the three Fairey Swordfish biplanes that, at the start of the world war two assault on Malta, represented the entire British aerial defence of the island available to the Governor. The
      1212
      Government may mock the resources available to this side of the House, but the three Fairey Swordfish successfully defended Malta, and we went on to win the war.
      12.8 am
      Mr. Howard Flight: As perhaps one of the few Members of the House who have run businesses around the world, I welcome in principle an improvement in competition law. It has been my experience that north America and even Asia have considerably more open and competitive economies than continental Europe or the United Kingdom. However, I am not entirely sure whether the primary objective of the Bill is harmonisation with European competition law or the improvement of competition in Britain.
      The Bill has grave weaknesses. We have already heard of the problems of harmonising with European law relating to intrastate versus interstate under article 85. We need to harmonise on whether cases will be heard in one jurisdiction when they could be dealt with in two. Companies will have the problem of requiring clearance both in Europe and in the United Kingdom. There is the problem of whether UK authorities can vary exemptions obtained in Europe, which could add to the muddle.
      The Bill will create uncertainty, and it will give too much power to the Director General of Fair Trading, rather than providing democratic accountability through the President of the Board of Trade. It will be a burden on medium and small businesses. I am particularly concerned that those who run oligopolistic companies seem too relaxed. I hope that the Bill will improve competition, but I fear that it tries to do two different things, and that it will fail adequately to achieve either.
      Question put and agreed to.
      Bill accordingly read the Third time, and passed, with amendments.

  Economic Development (North Northumberland)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]
  12.10 am
  Mr. A. J. Beith: The Minister for Competition and Consumer Affairs has been on the Treasury Bench for most of the past seven hours, but I must detain him a little longer. A matter of importance to people in my constituency has arisen from the announcement last week by the Dawson Group of more than 700 redundancies. The group, which owns Pringle, the knitwear company, has blamed the high pound, a reduction in far east markets and general economic conditions, all of which have presented severe obstacles to exporting companies, particularly those producing quality products for the far east. However, the company has had its own failings in the United States and in its marketing strategy.
  It is a tragedy for Berwick that so many jobs should be lost in the borders. Pringle has been in Berwick for 50 years, and the factory that is to close currently employs 280 people. The remainder of the 700 jobs are in other parts of the borders. Pringle used not say much about the Berwick factory; I think that it thought that too high a profile for the significant part of its product that was expertly made in England would undermine its claim to be Pringle of Scotland. Privately, however, Pringle recognised how successful that manufacturing unit was.
  The shock closure follows many years of job losses in a small town that cannot stand so many losses. Recently, 200 jobs were lost at Pringle. More than 100 jobs were lost when Polychrome left Berwick. About 100 seasonal jobs in the salmon fishing industry have been lost. More than 150 went when the shipyard closed. Other trades, including agriculture and engineering, have also had significant job losses. The latest blow is devastating for the families involved. The loss to the local economy will add up to millions of pounds in wages that passed through the town's businesses and contributed to the welfare of all.
  We need help, on both sides of the border, and some of the crisis can be dealt with on a cross-border basis. Reports in London newspapers have referred to closure of two Scottish factories by Pringle, carefully omitting to mention that one of them is in England. That is why the English Minister responsible for industry—Scotsman though he is—is here to answer this debate. His counterpart at the Scottish Office, the Minister for Education and Industry, has also been closely involved in discussions since the redundancies were announced. He said:
  "I recognise that a significant proportion of the people working in the Berwick factory are resident on [the Scottish] side of the border."
  There are many reasons why the Scottish Office must remain interested in what is happening not only in Scottish parts of the borders, but in Berwick-upon-Tweed, for which the English-based Minister is responsible.
  The Minister for Education and Industry, Scottish Office visited Hawick two days after the closure announcement. He announced a package of measures at a meeting arranged before the closure by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood). The package aroused much interest.
  1214
  My hon. Friend described it as the beginning of an answer, feeling grateful that the measures had been announced but that more needed to be done. From the English side of the border, the question that comes to mind is: what is our equivalent of those measures? That is one of the things that I hope the Minister will tell us tonight.
  The Scottish Office Minister announced an additional £1 million for Scottish Borders Enterprise immediately; a commitment to best endeavours to find additional extra funding if Scottish Borders Enterprise can bring forward further viable projects; the setting up of a new rural inward investment unit within Locate in Scotland, which will attract investment to areas such as the borders; a commitment to provide the borders with reallocated, unused European structural funds if any become available; and a commitment to keep discussions with the Dawson Group open and to assist it in redevelopment. We are anxious that that may lead to the funding of new factory development on the Scottish side of the border to replace factory capacity still available on the English side. That would make no sense.
  The Scottish Office Minister also announced Scottish Office support for an IT link between Heriot-Watt university and the Scottish college of textiles and mentioned other measures already announced, such as the designation of Hawick as a property employment support programme area and the expansion of telecoms infrastructure in the borders. In some parts of the borders, it is even less developed than it is in Berwick. The package must have some English counterpart, and I hope that the Minister will say what it is.
  I wish to put to the Minister some other measures that should form part of the response on the English side. On European funds, we are already anxious about the potential loss of objective 5b funds, which have been a source of some help for industrial projects in north Northumberland. Northumberland and Durham's joint bid for objective 1 funding has been jeopardised by the claims of European statisticians that it is not a cohesive area. I contradict that argument. I hope that the Government will continue to press actively for objective 1 status.
  I wonder whether the Retex scheme for textile areas still has funds in it that could be made available to help replace lost textile jobs in the area. The loss of jobs in the textile industries is recognised across Europe as requiring special help.
  There are employment measures that could be taken. The Government could accelerate the new deal programme for over-25s. On present plans, it will be some time before they become eligible, and redundant Pringle workers would not be become eligible until they had satisfied the 12-month rule. In other areas, I think that measures have been taken to exempt redundant workers from that limitation. It could be done alongside bringing forward the new deal measures for over-25s so that they become available more quickly in Berwick. I hope that the Minister will press his colleagues to pursue that course.
  To attract new industry to the area, we want to press ahead with infrastructure projects that make the area attractive to and viable for industry, of which the best known is the need to complete the dualling of the Al, which remains on either side of Berwick an unsatisfactory single carriageway road and a deterrent to industrial development. There is cross-party agreement that dualling

  1215
  should go ahead. We await the announcement of the roads review with trepidation. I hope that the news about Pringle has been telegraphed to the Department of the Environment, Transport and the Regions so that it realises that A1 dualling has assumed even further importance as we try to make the area attractive to industry.
  Berwick has longer-term plans for a rail freight terminal. We want that development to be encouraged. There are also various local projects in different Government Departments and with other bodies which, in these circumstances, Ministers should try to help along and give a sympathetic nod to. There is a private finance initiative bid by the council for 250 houses to be built by housing associations in the town and the surrounding area; I hope that that will be encouraged. There is a foyer project for young people in the Old Granary in the town centre. There is a heritage lottery bid for completion of townscape work that has already been begun, but has been set back by a change in the national heritage fund rules and system of bidding. I am concerned about that, because we need such work to continue; it provides some continuing employment during the present crisis and helps to attract people to the town.
  I emphasise that many of my suggestions go beyond the Department of Trade and Industry. What needs to be done is interdepartmental, involving many Government Departments, and cross-border. We used to have an eastern borders development association that recognised, by its very existence, that the eastern borders had a coherence. Indeed, the borders as a whole, with their shared dependence on the textile industry and agriculture, have many features in common; people travel across the border, and businesses ignore the border as their activities cross it continuously. We have to look at the impact on both sides of the border of measures of this sort.
  A practical way forward is to respond to the present crisis by getting the relevant agencies together and knocking heads together so that we can get some co-ordination of possible solutions. That could be done by forming a task group, which could meet in Berwick and draw together all those who have a contribution to make, ensuring that action in Berwick was related to that in the adjoining borders. That group could include the local authorities from both sides of the Border—Northumberland county council, Berwick-upon-Tweed borough council and the Scottish Borders council—the Northumberland training and enterprise council, Northumberland business link, English Partnerships, the Northern Development Company, the Government office for the north-east and Scottish Enterprise. The group would embrace the means to cover local business development, training measures, the attraction of new activities to the town and the provision of the new infrastructure and facilities to support new growth. In addition, it could press the European funding issues I mentioned.
  The work would be greatly helped if the Government looked again at Berwick's status for development purposes. Berwick lost its assisted area status in 1984, but, much more recently, the Rural Development Commission excluded Berwick from the areas in which it did economic regeneration work, even though that work was vital to the rural hinterland around Berwick, whose population's prospects depended on what happened in the town. Now
  1216
  that the factory closure has taken place, surely this is the moment to reintroduce the RDC work into Berwick. That work is in the process of being transferred to the regional development agency, but, before that process is completed, a decision should be taken that Berwick should be included within the rural project work that used to be undertaken by the RDC.
  All that work can be better advanced if we get the various agencies together, recognise that many Departments, governmental bodies and local government bodies have a contribution to make, and acknowledge that the problem is a cross-border issue. We have to get people moving to draw together the resources that are already available through existing channels and to put in bids for the new funds that will be needed for significant new action.
  Over the years, the nominal unemployment rate in Berwick may have appeared low, but, as in much of the borders, that is partly because young people simply give up and go away to find work elsewhere. The actual unemployment rate will be increased by 50 per cent. as a result of the closure of the Pringle factory. The situation has worsened significantly, so action of the sort that I have outlined is now essential.
  12.24 am
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Nigel Griffiths): I congratulate the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on securing this important debate. The right hon. Gentleman has represented his constituency for 25 years and he spoke with considerable knowledge. I grew up in the borders and I have always taken a keen interest in the issues affecting Berwick, Galashiels, Hawick and the other conurbations. I am pleased to be able to respond on behalf of the Government.
  I worked briefly in a textile mill and I have some first-hand knowledge of the sector. I am sad, but not surprised, that neither the shadow President of the Board of Trade nor any of his Conservative colleagues have appeared in the Chamber to listen to this important debate on the problems facing the textile industry, particularly in the Berwick area. I am afraid that it is yet another example of the Opposition failing to know or care about the problems that have been raised.
  The textile and clothing sector is of great importance to the United Kingdom economy, to local employment and to regional economies. The sector is the ninth largest UK manufacturing industry, if we include footwear. Manufacturers' sales total over £17 billion and the value of exports was over £7 billion in 1996, the latest figure available. With employment totalling over 421,000, it is clearly an important and significant employer. That is why my hon. Friend the Minister for Science, Energy and Industry has met representatives of the textile, clothing and footwear industries over the past six months. He has had the opportunity to discuss with them the important issues affecting that sector.
  The Government are supporting a range of activities aimed at improving the competitiveness of the textile and clothing industries. These include projects to help improve marketing skills, develop supply chain partnerships, encourage better links with industry and academia and improve environmental performance,

  1217
  as well as promoting the profile of the industry and assisting young fashion designers, which I know that all right hon. and hon. Members will welcome. My hon. Friend has also initiated a dialogue with the leading trade associations and with the trade unions with a view to reviewing and establishing a national strategy for the textile and clothing industries.
  Let me indicate the help that has been given and then go on to deal in more detail with some of the other points raised by the right hon. Member for Berwick-upon-Tweed. In the five years from April 1993 to 31 March 1998, enterprises in Northumberland received 127 offers of financial assistance from the regional selective assistance scheme. That totalled almost £24 million. The projects involve a total investment of £156 million, and they aim to create 3,340 new jobs and safeguard 865 existing jobs.
  The right hon. Gentleman told us of some of the ways in which the Scottish Office has been able to respond to the Pringle closure, which demonstrate the value of regional autonomy. That is not yet available in the English regions, but the Government have introduced legislation that will result in the creation of regional development agencies. They will be in operation in April 1999. Until then, the Government's response will be as strong and positive as possible.
  A number of steps have been taken so far in response to the local crisis to which the right hon. Gentleman referred. The regional director of the Government office for the north-east has already been in contact with Berwick-upon-Tweed borough council and will be visiting soon to co-ordinate a response group. That group already includes the Northumberland training and enterprise council, the Employment Service, Northumberland county council, Berwick-upon-Tweed borough council, Scottish Border Enterprises and representatives from Pringle. Initially, it is trying to help those affected by the redundancy by improving counselling, careers guidance and advice on retraining opportunities. The group will also examine ways in which
  1218
  to make better use of resources, including the Government's new deal programme and funding from a range of European sources.
  The right hon. Gentleman has asked me whether his constituency is eligible for Retex assistance. Berwick-upon-Tweed is eligible for assistance under the EU's Retex II initiative. The purpose of that scheme is to provide assistance to areas affected by the decline in the textiles industry. The closure of the Pringle factory makes the area an obvious choice for funding from the scheme.
  Over £500,000 is still available and can be used to provide business support to small and medium-sized enterprises, and for the conversion of former textile buildings to put them to commercial use. Another source of EU funds is the objective 5b northern uplands programme, which provides funding support for four main priorities: economic development and diversification, tourism, community development and environmental enhancement and conservation. Some £2 million of assistance is still available from that resource.
  The creation of a response group provides the basis for a robust reaction to the Pringle factory closure. My officials in the Government office for the north-east understand the priority that I attach to ensuring that the group gets all possible Government support. I urge the right hon. Gentleman to liaise with the group to ensure that it benefits from his considerable expertise, which he has built up over a long period.
  Mr. Beith: Can the Minister assure me that there is no obstacle to the response group drawing in expertise and interest from bodies on the Scottish side of the border?
  Mr. Griffiths: I can confirm that. Scottish Border Enterprises is a member of the group and is working with representatives of Pringle and the right hon. Gentleman's local council. I hope that their excellent input will ensure that all possible local and national resources are devoted to ameliorating the problems that he has rightly highlighted in the debate.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes to One o'clock.

TRADE AND INDUSTRY

  Coal Mining Subsidence
  Mr. Todd
  To ask the President of the Board of Trade if she will list(a) the number of damage notices served under the Coal Mining Subsidence Act 1991 and (b) the number of damage notices rejected in each of the last three years. [49262]

  Mr. Battle
  Figures for 1997/98 are not yet available. The number of new claims received by the Coal Authority and the coal companies in the period 1994/95–1996/97 was:

  1996–97: 8,958

  1995–96: 9,259

  1994–95: 10,582

  The number of claims rejected was:

  1996–97: 2,872

  1995–96: 3,797

  1994–95: 3,915

  Source:
  The Coal Authority's Annual Reports to the President of the Board of Trade on the administration of coal-mining subsidence damage claims, 1994/95–1996/97.

  Mr. Grogan
  To ask the President of the Board of Trade how many claimants have pursued cases of coal mining subsidence damage through the general arbitration scheme in each year since its inception; and what was the amount of awards made to successful claimants in each year.[49102]

  Mr. Battle
  The Annual Report of the Chartered Institute of Arbitrators lists the number of cases registered under the Householders' Arbitration Scheme and the General Arbitration Scheme as 71 in 1993, 97 in 1994, 130 in 1995, 156 in 1996, and 122 in 1997.

  The Chartered Institute does not separately publish references registered under the two Schemes. However, it advises that, from March 1997 to 3 July 1998, ten cases were registered under the General Scheme, and 155 under the Householders' Scheme.

  The arbitration procedure is private between the parties, and the content of any Award is known only to the Arbitrator and the two parties concerned.

  ABI Group
  Mr. Cran
  To ask the President of the Board of Trade (1), pursuant to her letter of 11 May 1998, when her Department' s Redundancy Payments Service will complete its scrutiny of claims for payments under the Employment Rights Act 1996 from former employees of the ABI Group; [48808]
  518
  (2) what are the reasons for delays in processing claims by her Department's Redundancy Payments Service from former employees of the ABI Group who are seeking payments under the Employment Rights Act 1996. [48807]

  Mr. Ian McCartney
  [holding answer 7 July 1998]: Information came to light after 11 May suggesting a possible transfer of the business, or part of it, to a new employer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981. Those Regulations provide that, where such a transfer takes place, employees automatically transfer to the new employer under existing terms and conditions of employment. Further inquiries were therefore made as a matter of urgency.

  Sufficient information has now been received to establish entitlement on some claims and they are being processed. Information remains outstanding in other cases and is being sought as a matter of urgency.

  Mr. Cran
  To ask the President of the Board of Trade when her Department's Redundancy Payments Service received from the Receiver the redundancy payment forms relating to former employees of the ABI Group who are seeking payments under the Employment Rights Act 1996. [48809]

  Mr. Ian McCartney
  [holding answer 7 July 1998]: The Department's Redundancy Payments Service received the first tranche of these employees' claim forms from the Receiver on 19 May 1998.

  Solar Products
  Mrs. Brinton
  To ask the President of the Board of Trade what plans she has to encourage the building of new production capacity for solar products in the United Kingdom. [48893]

  Mr. Battle
  The Government are committed to a new and strong drive to develop renewable energy sources. In June 1997 I initiated a review of new and renewable energy policy, including what would be necessary and practicable to achieve 10 per cent. of UK's electricity needs from renewables by the year 2010. The Review is considering what further Government support might be given to encourage the development of all forms of renewable energy, including solar power.

  I have also visited the photovoltaic (PV) roof at Ford's plant in Bridgend (which has panels supplied by BP Solar) and the Intersolar factory in South Wales.

  The UK is competitive with any other country in Europe as a location for new production plants. Amongst the attractions are low corporation tax, low costs of production, an established enterprise culture, a skilled adaptable workforce, and an established industrial infrastructure. My Department would be pleased to talk to any companies which are thinking of setting up a solar manufacturing plant in this country, and to advise them on the range of incentives available, such as Regional Selective Assistance and other Enterprise grants.

  Multinational Enterprises
  Dr. Tonge
  To ask the President of the Board of Trade if she will make a statement on the current review of the OECD guidelines for multinational enterprises. [49159]

  Mrs. Roche
  [holding answer 7 July 1998]: The Government fully support the review of the OECD Guidelines for Multinational Enterprises which was formally launched last month. The first phase of the review, a stocktaking and examination of experience of the guidelines, will provide a basis for determining which areas of the guidelines require revision or updating. This Department will continue to consult widely with other Government Departments and with business, trade unions, and interested NGOs in preparing detailed positions on the issues addressed by the guidelines.

  Toys (Phthalates)
  Mr. Baker
  To ask the President of the Board of Trade what recent advice her Department has issued to toy retailers in respect of toys containing phthalates. [49203]

  Mr. Nigel Griffiths
  [holding answer 7 July 1998]: I refer the hon. Member to the response I gave my hon. Friend the Member for Chorley (Mr. Hoyle) on 1 July 1998, Official Report, columns 214–15, on the use of phthalates in toys. Since that reply, the European Commission has issued a statement recommending that Member States take steps to ensure that the migration of phthalates from PVC child-care articles and toys on their markets do not exceed the limits proposed by the Scientific Committee on Toxicity, Ecotoxicity, and Environment. I welcome the Commission's statement—it vindicates the approach the UK has taken in discussions with the Commission and other Member States. Manufacturers' and retailers' representatives are aware of the Commission's statement.

LORD CHANCELLOR'S DEPARTMENT

  Legal Insurance
  Mr. Garnier
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list the meetings(a) he and (b) the Lord Chancellor has had with Mr. Brian Raincock of Litigation Protection to discuss legal insurance. [48614]

  Mr. Hoon
  Both the Lord Chancellor and I have had a number of meetings with various representatives of the insurance industry, in the context of our proposals for the expansion of conditional fee arrangements. The Lord Chancellor met representatives of the Association of British Insurers and seven insurance companies, including Mr. Raincock, on 9 December 1997. I held a briefing session for legal journalists on 31 March 1998 along with others, including Mr. Raincock, interested in the Government's reforms in this area. I also spoke at a conference on 30 June 1998 organised by Neil Stewart Associates, which was chaired by Mr. Raincock.
  520
  Mr. Garnier
  To ask the Parliamentary Secretary, Lord Chancellor's Department when he last met Mr. Brian Raincock of Litigation Protection to discuss the insurance of conditional fee arrangements. [48613]

  Mr. Hoon
  I have had no formal meetings with Mr. Raincock. I last met Mr. Raincock at a conference on 30 June 1998, organised by Neil Stewart Associates, which he chaired.

  Mr. Garnier
  To ask the Parliamentary Secretary, Lord Chancellor's Department what assessment he has made of the(a) viability and (b) integrity of Litigation Protection as a provider of conditional fee arrangement insurance. [48612]

  Mr. Hoon
  The Department has a continuing dialogue with the insurance industry about developing the market in insurance products to underpin the use of conditional fees. That has not involved us in undertaking an assessment of particular products or individual providers.

  Magistrates
  Mr. Mullin
  To ask the Parliamentary Secretary, Lord Chancellor's Department what is the current average time that elapses between an application to become a magistrate and(a) the interview and (b) the outcome of the interview being made known to the candidate; and if he will make a statement. [48493]

  Mr. Hoon
  Advisory Committees on Justices of the Peace normally make recommendations to the Lord Chancellor only once a year. The length of time a candidate must wait, from making an application to being informed of its outcome, depends on when an application is made in relation to the point in the year when recommendations are made. The Lord Chancellor directs his Advisory Committees to keep candidates informed of the progress of their applications at all stages.

  Public Registers
  Mr. Cohen
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list the public registers which his Department has responsibility for. [47350]

  Mr. Hoon
  The Lord Chancellor's Department or its Agencies are responsible for the following public registers:Court Service Headquarters

  Register of County Court Judgments (administered by the Registry Trust Ltd.)

  The Register of bailiffs holding a general certificate to levy distress for rent.

  Principal Registry of the Family Division
  Probate Calender—record of all grants issued in England and Wales since 1895
  Royal Courts of Justice

  Petitions for Bankruptcy, applications for interim orders, and applications to set aside Statutory Demands

  Petitions for administration issues in the Companies Court

  Winding up Petitions issued in England and Wales

  Local Election Petitions

  Parliamentary Election Petitions

  521

  Deeds Poll Register

  Bill of Sale Register

  Book Debt Register

  Public Trust Office

  Register of unclaimed balances

  Register of Enduring Powers of Attorney

  Register of Notices served on the Public Trustee under Section 18 of the Law of Property (Miscellaneous Provisions) Act 1994

  Lands Tribunal

  References

  Law of Property Act 1925 Section 84 Applications

  Rating Appeals

  Leasehold Reform Appeals

  Absent Owner Applications

  Rights of Light Act 1959 applications

  Appeals against Determinations of the Inland Revenue

  Land Registry

  Registers of Title

  Register of Agricultural Charges

  Register of Land Charges

  Register of Pending Actions

  Register of Writs and Orders

  Register of Deeds of Arrangement

  Register of Annuities

  Index of Proprietors' Names

  Northern Ireland Court Service
  The following are all registers within the Northern Ireland Court Service which the public have access to in whole or part:
  Supreme Court

  Queen's Bench Writs/Cause

  Queen's Bench Judgments

  Court of Appeal Register

  Bankruptcy Register

  Companies (Winding Up) Register

  Probate Register

  Matrimonial Register

  Crown and County Court

  Crown Court Book

  Civil Bill Book

  Small Claims Register

  Criminal Injuries Register

  Equity Register

  Divorce Register

  Default Judgment Register

  Magistrates' Court

  Intoxicating Liquor Licences Register

  Registered Clubs Register

  Bookmarkers Licences Register

  Bookmaking Office Licences Register

  Bingo Club Licences Register

  Gaming Machine Certificates Register

  Gaming Machine Permits Register

  Lottery Certificates Register

  Enforcement of Judgments Office
  Register of Judgments.

  A number of registers are kept within the Magistrates' Courts in England. and Wales but they are the responsibility of the Justices Clerks rather than the Lord Chancellor's Department and so are not included.

SCOTLAND

  Lottery Funding
  Mr. Alexander
  To ask the Secretary of State for Scotland how much National Lottery funding has been distributed by(a) the Scottish Sports Council and (b) the Scottish Arts Council for projects in (i) Paisley, South constituency and (ii) Renfrewshire. [48485]

  Mr. Galbraith
  The information requested is given in the table.

  £

  Distributing body

  Paisley, South

  Renfrewshire

  Scottish Sports Council

  —

  1681,575

  Scottish Arts Council

  69,520

  2241,312

  1Figure relates to capital projects only and refers to the pre-1996 constituency of Renfrew, West and Inverclyde

  2Figure relates to projects in the local government area of Renfrewshire and includes figure quoted for Paisley, South

  Unemployment
  Mr. Alexander
  To ask the Secretary of State for Scotland if he will estimate how many claimants of jobseeker's allowance over the age of 25 in Paisley, South have been unemployed for more than two years. [48487]

  Mr. Wilson
  In April 1998, there were 361 people in the Paisley, South constituency aged 25 and over who had been claiming unemployment related benefits for over two years.

  Further Education Colleges
  Mr. Gorrie
  To ask the Secretary of State for Scotland if he will estimate the (i) percentage and (ii) amount of the fee income paid to further education colleges in February which related to expenditure required to be met in the third term in the academic year, relating to next financial year. [48300]

  Mr. Wilson
  For the 1997–98 academic year tuition fees for full time higher education students have been paid by the Student Awards Agency for Scotland (SAAS) in three instalments, one third in October, one third in February and one third in April. From academic year 1998–99, those fees payable by SAAS will be paid in a single instalment, in February. Approximately one third, or £8 million, of the amount to be paid to further education colleges in February 1999 will relate to expenditure on tuition during the third term of the 1998–99 academic year.

  Departmental Staff
  Mr. Brake
  To ask the Secretary of State for Scotland how staff numbers in his Department have varied between 1 May 1997 and 31 March 1998. [48876]
  523
  Mr. Dewar
  Details of the number of permanent staff in The Scottish Office, expressed in full-time equivalents, at 1 May 1997 and 1 April 1998 are shown in the table.

  1 May 1997

  1 April 1998

  Percentage change

  Scottish Office Core

  3,489.1

  3,436.5

  -1.5

  Executive Agencies:

  Fisheries Research Service

  217.9

  227.0

  +4.2

  Scottish Fisheries Protection Agency

  254.0

  255.6

  +0.6

  Scottish Agricultural Science Agency

  123.2

  121.0

  -1.8

  Scottish Office Pensions Agency

  152.1

  143.5

  -5.7

  Student Awards Agency for Scotland

  122.3

  125.8

  +2.9

  Historic Scotland

  592.7

  626.8

  +5.8

  Scottish Prison Service

  14,531.0

  4,723.0

  +4.2

  1Figure relates to the position as at 1 April 1997

  Respiratory Disease
  Mr. Chisholm
  To ask the Secretary of State for Scotland how many emergency admissions to hospitals where the diagnosis related to a respiratory disease other than influenza there were in each month in (i) 1993, (ii) 1994, (iii) 1995 and (iv) 1996 in respect of patients aged(a) 0 to 14, (b) 14 to 64 and (c) 64 years and over. [48986]

  Number of emergency admissions where a respiratory diagnosis1 excluding influenza was recorded

  Age group (years)

  Year of admission

  Month of admission

  under 15

  15–64

  65+

  Total

  1993

  January

  1,337

  1,542

  2,674

  5,553

  February

  1,648

  1,338

  2,239

  5,225

  March

  1,546

  1,692

  2,906

  6,144

  April

  1,061

  1,338

  2,386

  4,785

  May

  1,147

  1,425

  2,207

  4,779

  June

  1,132

  1,397

  2,178

  4,707

  July

  872

  1,356

  2,003

  4,231

  August

  909

  1,358

  1,965

  4,232

  September

  1,381

  1,467

  2,071

  4,919

  October

  1,679

  1,952

  2,810

  6,441

  November

  1,945

  1,962

  3,713

  7,620

  December

  2,144

  1,783

  3,190

  7,117

  Total

  16,801

  18,610

  30,342

  65,753

  1994

  January

  1,587

  1,786

  3,067

  6,440

  February

  1,216

  1,429

  2,304

  4,949

  March

  1,214

  1,569

  2,474

  5,257

  April

  966

  1,450

  2,354

  4,770

  May

  1,141

  1,575

  2,280

  4,996

  June

  1,033

  1,455

  2,263

  4,751

  July

  751

  1,395

  2,229

  4,375

  August

  722

  1,511

  2,040

  4,273

  September

  1,143

  1,557

  2,188

  4,888

  October

  1,174

  1,651

  2,303

  5,128

  November

  1,532

  1,594

  2,216

  5,342

  December

  1,955

  1,758

  2,792

  6,505

  Total

  14,434

  18,730

  28,510

  61,674

  1995

  January

  1,548

  1,841

  2,946

  6,335

  February

  1,453

  1,477

  2,458

  5,388

  March

  1,357

  1,742

  2,737

  5,836

  April

  955

  1,569

  2,452

  4,976

  May

  984

  1,691

  2,498

  5,173

  June

  1,011

  1,687

  2,354

  5,052

  July

  705

  1,612

  2,312

  4,629

  August

  665

  1,594

  2,145

  4,404

  September

  1,120

  1,866

  2,276

  5,262

  524
  Figures are shown separately for the policy core and Executive Agencies of The Scottish Office.

  Mr. Galbraith
  The number of emergency admissions to NHS hospitals in Scotland, where a diagnosis related to a respiratory disease other than influenza was recorded in each month in 1993, 1994, 1995 and 1996 in respect of patients aged under 15, 15 to 64 and 65 years and over is given in the table.
  525

  Number of emergency admissions where a respiratory diagnosis1 excluding influenza was recorded

  Age group (years)

  Year of admission

  Month of admission

  under 15

  15–64

  65+

  Total

  October

  1,221

  1,953

  2,537

  5,711

  November

  2,067

  2,150

  3,116

  7,333

  December

  2,505

  2,280

  4,457

  9,242

  Total

  15,591

  21,462

  32,288

  69,341

  1996

  January

  1,934

  2,133

  3,801

  7,868

  February

  1,458

  1,664

  2,568

  5,690

  March

  1,291

  1,809

  2,771

  5,871

  April

  980

  1,799

  2,785

  5,564

  May

  1,120

  1,693

  2,665

  5,478

  June

  994

  1,656

  2,480

  5,130

  July

  783

  1,621

  2,361

  4,765

  August

  784

  1,662

  2,288

  4,734

  September

  1,121

  1,643

  2,324

  5,088

  October

  906

  1,654

  2,524

  5,084

  November

  1,162

  1,647

  2,555

  5,364

  December

  1,871

  2,297

  4,001

  8,169

  Total

  14,404

  21,278

  33,123

  68,805

  1Respiratory diagnosis, excluding influenza—cases selected from relevant codes based on the Health Organisation's International Classification of Diseases 9th and 10th Revisions (ICD9 & ICD10 respectively), the codes used were ICD9 460–519, excluding 487 and ICD10 J00–J99, excluding J10–J1

  Source:

  ISD Scotland, SMR1/SMR01

  Disabled Voters
  Mr. Evans
  To ask the Secretary of State for Scotland what representations he has received concerning access for disabled people to polling stations during the Scottish parliamentary elections. [49325]

  Mr. McLeish
  We have received no representations directly concerning the Scottish Parliamentary elections. However, my officials, together with representatives from Capability Scotland, have recently held 2 seminars attended by officials from local authorities in Scotland responsible for electoral arrangements to highlight improvements which can be made to access at polling stations.

  Police (Firearms)
  Mr. Sarwar
  To ask the Secretary of State for Scotland how many police officers in Scotland are authorised to carry firearms. [49340]

  Mr. McLeish
  In 1997, the most recent year for which figures are available, there were 723 police officers in Scotland authorised to carry firearms in the strictly limited circumstances covered in guidelines issued by the Secretary of State in 1984.

  Burncrooks Waterworks (Contamination Incident)
  Mrs. Fyfe
  To ask the Secretary of State for Scotland what plans he has to publish the report of Robert Fraser into the diesel contamination incident at the Burncrooks Waterworks in December 1997. [49977]

  Mr. Dewar
  I am publishing Mr. Fraser's report today. I have placed copies of the report in the libraries of both Houses.

  Repossession Orders
  Mrs. Ewing
  To ask the Secretary of State for Scotland how many mortgage repossession orders there were to each court district in each of the months of April, May and June 1997 and the month of April 1998. [49208]

  Mr. Dewar
  Figures in relation to repossession of property by mortgage lenders have been collected by the courts since a revised system of collecting Civil Judicial Statistics was instituted on 1 January 1994. The figures for the months of April, May and June 1997 and the month of April 1998 are shown in the table.

  Mortgage Lender

  Court

  April 1997

  May 1997

  June 1997

  April 1998

  Aberdeen

  1

  28

  8

  15

  Airdrie

  16

  18

  12

  3

  Alloa

  2

  0

  9

  5

  Arbroath

  0

  3

  8

  10

  Ayr

  7

  12

  12

  18

  Banff

  0

  0

  1

  2

  Campbeltown

  0

  0

  2

  2

  Cupar

  6

  4

  1

  3

  Dingwall

  1

  0

  0

  2

  Dornoch

  0

  0

  1

  0

  Dumbarton

  10

  5

  17

  19

  Dumfries

  4

  1

  1

  4

  Dundee

  15

  16

  10

  12

  Dunfermline

  0

  15

  17

  11

  Dunoon

  2

  1

  2

  1

  Duns

  0

  0

  2

  0

  Edinburgh

  55

  46

  39

  42

  Elgin

  4

  1

  1

  4

  Falkirk

  5

  12

  10

  9

  Forfar

  3

  2

  1

  4

  Fort William

  0

  0

  0

  1

  Glasgow

  87

  56

  109

  63

  Greenock

  2

  0

  5

  5

  Haddington

  7

  4

  5

  6

  527

  Mortgage Lender

  Court

  April 1997

  May 1997

  June 1997

  April 1998

  Hamilton

  29

  23

  0

  0

  Inverness

  13

  6

  9

  10

  Jedburgh

  0

  0

  0

  6

  Kilmarnock

  17

  3

  0

  10

  Kirkcaldy

  20

  17

  17

  23

  Kirkcudbright

  0

  1

  2

  0

  Kirkwall

  0

  0

  0

  0

  Lanark

  7

  4

  4

  6

  Lerwick

  0

  0

  0

  0

  Linlithgow

  18

  11

  13

  25

  Lochmaddy

  0

  0

  0

  0

  Oban

  1

  2

  0

  3

  Paisley

  24

  0

  25

  0

  Peebles

  2

  0

  0

  1

  Perth

  10

  5

  4

  10

  Peterhead

  2

  5

  8

  4

  Portree

  0

  0

  0

  0

  Rothesay

  2

  0

  0

  3

  Selkirk

  5

  4

  1

  3

  Stirling

  5

  3

  6

  6

  Stonehaven

  4

  5

  3

  5

  Stornoway

  3

  0

  1

  2

  Stranraer

  0

  3

  2

  3

  Tain

  2

  2

  0

  0

  Wick

  0

  0

  0

  0

  Grand Total

  391

  318

  368

  361

  Knee joint replacement

  Mean wait (days)

  Area of residence

  31 March 1992

  31 March 1993

  31 March 1994

  31 March 1995

  31 March 1996

  31 March 1997

  31 March 19981

  Argyll and Clyde

  160

  163

  152

  148

  129

  151

  189

  Ayrshire and Arran

  125

  124

  124

  118

  105

  102

  109

  Borders

  85

  61

  76

  78

  90

  97

  90

  Dumfries and Galloway

  230

  205

  290

  276

  239

  217

  204

  Fife

  163

  150

  133

  155

  106

  87

  131

  Forth Valley

  143

  207

  233

  227

  251

  237

  238

  Grampian

  73

  102

  97

  82

  88

  106

  94

  Greater Glasgow

  133

  109

  162

  172

  173

  193

  216

  Highland

  227

  193

  206

  182

  211

  206

  182

  Lanarkshire

  117

  117

  140

  179

  170

  158

  125

  Lothian

  159

  177

  141

  173

  174

  168

  145

  Orkney

  41

  35

  38

  39

  48

  34

  74

  Shetland

  33

  45

  86

  118

  132

  109

  109

  Tayside

  138

  136

  110

  109

  102

  129

  141

  Western Isles

  234

  263

  145

  136

  121

  78

  75

  Scotland

  146

  145

  146

  152

  145

  149

  155

  Hip joint replacement

  Mean wait (days)

  Area of residence

  31 March 1992

  31 March 1993

  31 March 1994

  31 March 1995

  31 March 1996

  31 March 1997

  31 March 19981

  Argyll and Clyde

  132

  121

  127

  123

  120

  141

  144

  Ayrshire and Arran

  105

  130

  97

  96

  93

  83

  113

  Borders

  68

  63

  68

  76

  82

  85

  86

  Dumfries and Galloway

  196

  225

  218

  233

  184

  153

  136

  Fife

  131

  114

  131

  138

  107

  83

  115

  Forth Valley

  105

  158

  176

  193

  186

  169

  175

  Grampian

  81

  95

  90

  81

  81

  90

  82

  Greater Glasgow

  127

  127

  145

  149

  158

  176

  184

  Highland

  185

  144

  159

  153

  201

  191

  182

  Lanarkshire

  104

  125

  140

  146

  139

  114

  116

  Lothian

  130

  150

  128

  159

  154

  143

  133

  Orkney

  40

  39

  24

  36

  44

  48

  55

  Shetland

  24

  48

  100

  100

  77

  108

  92

  Tayside

  112

  107

  94

  111

  99

  108

  122

  528
  Mrs. Ewing
  To ask the Secretary of State for Scotland how many mortgage repossession orders there were to each court district in each quarter of 1992–93. [49211]

  Mr. Dewar
  Information as to orders for mortgage repossession for each court district in 1992 and 1993 are included in the returns relating to all actions involving land or heritable estate which are supplied to the courts for the purposes of the Judicial Statistics (Scotland) Act 1869 and cannot be identified separately.

  Health Service
  Mrs. Ewing
  To ask the Secretary of State for Scotland what were the actual or estimated payments(a) in real terms, (b) in cash terms and (c) as a percentage of total NHS expenditure in Scotland to NHS trust chairs and non-executive directors in the year 1997–98. [49210]

  Mr. Galbraith
  Details for 1997–98 are not yet available. Provisional figures will be available from 31 August 1998.

  Mrs. Ewing
  To ask the Secretary of State for Scotland what were the average waiting times for each Scottish health board for(a) knee and (b) hip joint replacement operations at 31 March in each year since 1992. [49209]

  Mr. Galbraith
  The meaning waiting time for knee and hip joint replacement operations at 31 March in each year since 1992 is given in the table.
  529

  Hip joint replacement

  Mean wait (days)

  Area of residence

  31 March 1992

  31 March 1993

  31 March 1994

  31 March 1995

  31 March 1996

  31 March 1997

  31 March 19981

  Western Isles

  141

  153

  123

  90

  77

  66

  59

  Scotland

  121

  127

  126

  133

  128

  126

  131

  1Provisional

  Source

  SMR1/SMR01

  Women Prisoners
  Mrs. Ewing
  To ask the Secretary of State for Scotland, pursuant to his answer of 3 June 1998,Official Report, columns 281–82, on women prisoners, what percentage of female prisoners in each year were incarcerated for non-payment of fines. [49206]

  Mr. McLeish
  The information provided in the table relates to all sentenced female receptions, both direct and fine default, to the Scottish prison system by type of sentence. The table also provides details of the percentage of female prisoners in each year who were incarcerated for fine default.

  Total number of sentenced female receptions to Scottish prison system, 1978–79, 1979–80, 1986–87, 1987–88, 1996–97 and 1997–98 by type of sentence

  Year

  Total number of sentenced female receptions1

  Total number of fine default female receptions

  Fine default female receptions as a percentage of total sentenced female receptions

  1978–79

  731

  381

  52

  1979–80

  656

  292

  45

  1986–87

  1,220

  698

  57

  1987–88

  1,216

  623

  51

  1996–97

  1,325

  722

  54

  1997–98

  1,141

  575

  50

  1Excludes borstal sentences; of which there were 38 in 1978–79 and 36 in 1979–80

  School Curriculum
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland how many responses were received by the Scottish Consultative Council on the Curriculum on the place of Scottish culture in the curriculum; and when he expects the report to be published. [49274]

  Mr. Wilson
  This is a matter for the Scottish Consultative Council on the Curriculum since the report of their Review Group on Scottish Culture and the Curriculum has not been submitted to the Secretary of State. A decision not to publish the report was taken by the Council at its meeting on 19 June.

DEFENCE

  Army Tactical Reconnaissance Capability
  Ms Dari Taylor
  To ask the Secretary of State for Defence if he will make a statement on the Army's future tactical reconnaissance capability. [50040]
  530
  Mr. Spellar
  The Strategic Defence Review has emphasised the importance of investment in the area of fast, detailed and accurate intelligence, surveillance, target acquisition and reconnaissance, known as ISTAR. This is not only vital for combat operations, but also for many peace support operations.

  We have, therefore, decided to undertake a programme of work aimed at enhancing the Army's tactical reconnaissance capability. This involves an integrated series of studies into future sensors, land reconnaissance vehicles and unmanned air vehicles. These studies will enable us to identify the most cost-effective mix of reconnaissance sensors and platforms to meet our future needs.

  As part of this programme, we will conduct with the United States a collaborative Project Definition study which will examine sensors, sensor integration and the vehicles needed to meet our armies' future manned land-based reconnaissance requirements. This joint project is known as the Armoured Scout and Reconnaissance Vehicle, ASRV, and seeks to provide a highly mobile, stealthy battlefield reconnaissance capability. A Memorandum of Understanding with the United States has now been signed, and an Invitation to Tender will be released to industry in the near future. The United Kingdom element of ASRV is known as TRACER—Tactical Reconnaissance Armoured Combat Equipment Requirement. The United Kingdom will be an equal partner with the United States in this project, which will have major benefits for the United Kingdom armed forces and industry.

  In parallel, we are conducting national studies into the use of Unmanned Air and Land Vehicles for meeting the Army's future reconnaissance requirements. The sensor and sensor integration work carried out under the ASRV project will inform this work. We are also examining the scope for collaboration with the United States on the Unmanned Air Vehicle element of the programme.

  Multiple Launch Rocket System
  Mrs. Gilroy
  To ask the Secretary of State for Defence if he will make a statement on a future rocket for the Multiple Launch Rocket System. [50046]

  Mr. Spellar
  The United Kingdom intends to join the collaborative programme to develop a guided rocket for the Multiple Launch Rocket System, MLRS. This guided rocket will replace the current MLRS rocket, which begins to reach the end of its service life early next century. The new rocket will have a greater range and accuracy than current rockets.
  531
  Guided MLRS is expected to be developed collaboratively with the US, France, Germany, and Italy, our partners in the original, highly successful MLRS programme.

  RAF Squadrons
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what are the personnel numbers for(a) the full strength and (b) the current strength of each RAF squadron. [44188]

  Dr. Reid
  [holding answer 10 June 1998]: The table gives the figures for the establishment of each RAF operational Squadron, and the number of established posts filled as at 1 May 98.

  Squadron station

  Establishment

  Established posts filled

  Strike/attack

  9 Sqn Bruggen

  177

  169

  12 Sqn Lossiemouth

  175

  163

  14 Sqn Bruggen

  177

  164

  17 Sqn Bruggen

  177

  163

  31 Sqn Bruggen

  175

  165

  617 Sqn Lossiemouth

  178

  162

  Offensive support

  1 Sqn Wittering

  173

  158

  3 Sqn Laarbruch

  165

  158

  4 Sqn Laarbruch

  168

  154

  6 Sqn Coltishall

  135

  122

  54 Sqn Coltishall

  134

  119

  Air defence

  5 Sqn Coningsby

  179

  169

  11 Sqn Leeming

  194

  181

  25 Sqn Leeming

  192

  178

  29 Sqn Coningsby

  180

  168

  43 Sqn Leuchars

  193

  184

  111 Sqn Leuchars

  193

  181

  Airborne early warning

  8 Sqn Waddington

  102

  90

  23 Sqn Waddington

  89

  77

  Maritime patrol

  120 Sqn Kinloss

  125

  118

  201 Sqn Kinloss

  125

  123

  206 Sqn Kinloss

  126

  114

  Reconnaissance

  2 Sqn Marham

  222

  211

  13 Sqn Marham

  221

  207

  39 Sqn Marham

  126

  118

  41 Sqn Coltishall

  204

  190

  51 Sqn Waddington

  216

  178

  Air transport/tankers

  10 Sqn Brize Norton

  333

  310

  101 Sqn Brize Norton

  244

  217

  216 Sqn Brize Norton

  350

  309

  Air transport

  24 Sqn Lyneham

  117

  110

  30 Sqn Lyneham

  118

  115

  32 Sqn Northolt

  85

  59

  47 Sqn Lyneham

  129

  125

  70 Sqn Lyneham

  121

  114

  532

  Squadron station

  Establishment

  Established posts filled

  Support helicopters

  7 Sqn Odiham

  220

  200

  18 Sqn Odiham

  201

  185

  27 Sqn Odiham

  209

  170

  33 Sqn Benson

  182

  156

  72 Sqn Aldergrove

  165

  163

  78 Sqn Mount Pleasant

  41

  37

  84 Sqn Akrotiri

  57

  42

  230 Sqn Aldergrove

  181

  167

  Search and rescue

  22 Sqn St. Mawgan

  9

  8

  A Flt Chivenor

  53

  50

  B Flt Wattisham

  55

  52

  C Flt Valley

  51

  49

  202 Sqn Boulmer

  60

  57

  D Flt Lossiemouth

  54

  53

  E Flt Leconfield

  50

  48

  RAF regiment

  1 Sqn RAF Regt

  164

  141

  2 Sqn RAF Regt

  164

  102

  3 Sqn RAF Regt

  131

  119

  15 Sqn RAF Regt

  108

  99

  16 Sqn RAF Regt

  108

  100

  26 Sqn RAF Regt

  108

  88

  27 Sqn RAF Regt

  78

  71

  34 Sqn RAF Regt

  163

  146

  37 Sqn RAF Regt

  108

  95

  63 Sqn RAF Regt

  122

  111

  8,858

  8,052

  Notes:

  1. Service posts only

  2. Excludes station staffs not covered by squadron establishments

  Public Registers
  Mr. Cohen
  To ask the Secretary of State for Defence if he will list the public registers which his Department has responsibility for. [47358]

  Dr. Reid
  [holding answer 29 June 1998]: We have no requirement for a central record of such registers for which the Ministry of Defence is responsible.

  Major Eric Joyce
  Mr. Keith Simpson
  To ask the Secretary of State for Defence what disciplinary action, under Queen's Regulations, is being taken against Major Eric Joyce, Adjutant-General's Corps in respect of his participation in the selection process as a parliamentary candidate for the Scottish Parliament. [48336]

  Mr. George Robertson
  [holding answer 2 July 1998]: Administrative action in respect of Major Joyce's future in the Army has been in hand for some time. No disciplinary action is currently being taken against Major Joyce.

  Royal Navy Establishment
  Mr. Blunt
  To ask the Secretary of State for Defence if he will list the(a) current establishment and (b) actual current manning levels of (i) the Royal Navy as a whole, (ii) the Fleet Air Arm, (iii) the Royal Marines, (iv) the Royal Marine Reserve and (v) the Royal Naval Reserve. [47547]
  533
  Dr. Reid
  [holding answer 25 June 1998]: I will write to the hon. Member and a copy of my letter will be placed in the Library of the House.

INTERNATIONAL DEVELOPMENT

  Microfinance
  Dr. Tonge
  To ask the Secretary of State for International Development what representations her Department has made to British banking institutions concerning their support for micro-credit financing in developing countries. [49315]

  Clare Short
  The Department for International Development (DFID) has engaged with a number of UK based banks to involve them in support to particular bilateral microfinance projects in Bangladesh and Kenya. DFID is a very active member of the World Bank based Consultative Group to Assist the Poorest (CGAP) which is currently devoting considerable attention to developing methodologies to involve the formal banking sector in microfinance. For the past two years DFID has supported a series of round table discussions on microfinance at the London based Centre for the Study of Financial Innovation (CSFI). These meetings involved a variety of financial institutions from the City and resulted in a well received publication on mainstreaming microfinance. DFID has also recently established a Working Group on Financial Service, the first meeting of which was attended by a number of bankers and is likely to lead to the creation of a sub-committee specifically concerned with involving British financial institutions in microfinance in developing countries.

  Indonesia
  Ann Clwyd
  To ask the Secretary of State for International Development if she will list the projects in Indonesia supported by her Department which have been cancelled or reviewed by the Indonesian Government in the last 12 months(a) as a condition of IMF assistance to Indonesia, (b) as a result of links with the family of former President Suharto and (c) for other reasons, in each case specifying (i) the reason, (ii) the nature of the project and (iii) the expenditure incurred to date; and if she will make a statement. [49353]

  Clare Short
  We know of two projects, both concerned with power supply, that have been reviewed by the Government of Indonesia. They are:

  (a) 150/500 KV sub-stations and

  (b) Outer islands diesel generation.

  Work on (a) has been suspended. Discussions continue on both projects. They are existing commitments supported from the Aid and Trade Provision. DFID expenditure to date on (a) has been £14.473 million while (b) has not yet commenced. The reviews are a direct response to the overall economic situation.

  Ann Clwyd
  To ask the Secretary of State for International Development what level of aid commitment her Department plans to make at the forthcoming meeting of the Consultative Groups on Indonesia, specifying the amounts which will be provided as(a) budgetary support,
  534
  (b) project aid and (c) humanitarian aid; and to what extent the commitment will be dependent on political reforms in Indonesia and East Timor. [49334]

  Clare Short
  Discussions are continuing in the run-up to the Consultative Group meeting on 28–30 July. To address the current crisis, urgent action is needed by the Government of Indonesia to implement economic and political reform, supported by a concerted international effort. We are already making a substantial contribution through our membership of the International Financial Institutions and in other ways. We are considering what more we might do. In particular, my Department is looking at options for providing rapid assistance through civil society organisations to particularly vulnerable groups affected by the crisis.

NORTHERN IRELAND

  Millennium Compliance
  Mr. David Atkinson
  To ask the Secretary of State for Northern Ireland what contingency plans her Department is making in the event of the failure of computer systems to recognise the year 2000; when she expects them to be in place, and tested; and if she will make a statement.[48840]

  Mr. Paul Murphy
  The Northern Ireland Office and the Northern Ireland Departments are addressing contingency planning within their overall year 2000 programmes to ensure that systems will not fail before, during, or after the year 2000. The plans are due to be in place by December 1998 and will be tested by the Departments during 1999.

  Departmental Staff
  Mr. Brake
  To ask the Secretary of State for Northern Ireland how staff numbers in her Department have varied between 1 May 1997 and 31 March 1998. [48885]

  Mr. Paul Murphy
  The number of industrial and non-industrial Northern Ireland Civil Servants and Home Civil Servants in the Northern Ireland Office and Northern Ireland Departments, including those seconded to the Police Authority for Northern Ireland, at 1 May 1997 and 1 April 1998 was as follows:

  Permanent

  Casual

  Total

  1 May 1997

  25,672

  1,889

  27,561

  1 April 1998

  25,270

  1,861

  27,131

  Note:

  Staff numbers are quoted as full-time equivalents where part-time staff are counted as a proportion of full-time hours worked

  Fair Treatment Analyses
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland what date the policy appraisal and fair treatment analyses undertaken in relation to the impact of the proposed Criminal Justice (Children)(NI) Order was completed; and if she will place it in the Library. [48356]

  Mr. Ingram
  [holding answer 6 July 1998]: A Policy Appraisal and Fair Treatment analysis of the draft Criminal Justice (Children)(NI) Order was completed in July 1997. A copy has been placed in the Library.

SOCIAL SECURITY

  Benefits (Equality of Treatment)
  Mr. Todd
  To ask the Secretary of State for Social Security what plans she has to secure equality of treatment between widows and widowers in the benefits system. [49106]

  Mr. Denham
  I refer my hon. Friend to the Written Answer I gave the hon. Member for Edinburgh, West (Mr. Gorrie) on 23 June 1997,Official Report, column 413.

  Benefits (Intensive Treatments)
  Mr. Hancock
  To ask the Secretary of State for Social Security (1) what benefits are available to individuals and their carers during temporary periods of chemotherapy and other intensive treatments; [48932]

  (2) what research she has evaluated into the success rate of claims for disability living allowance from people undergoing periods of chemotherapy and other intensive treatments; [48933]

  (3) what assessment she has made of the effect of the rules for disability living allowance on those people undergoing periods of chemotherapy and other intensive treatments. [48934]

  Mr. Denham
  People who receive chemotherapy and their carers can qualify for Social Security benefits on the same basis as others who are sick or disabled or provide care, and discrete information about their claims is not collected.

  The benefits designed specifically to help sick or disabled people or their carers are Attendance Allowance, Disability Living Allowance, Disability Working Allowance, Severe Disablement Allowance, Invalid Care Allowance, Statutory Sick Pay, Incapacity Benefit and Industrial Injuries Disablement Benefit.

  Disability Living Allowance provides help for disabled people who have had care or mobility needs for at least three months and are likely to need help with those needs for a further six months or more. People who are terminally ill and expected to live no longer than six months automatically qualify for the highest rate of Disability Living Allowance care component.

  Gender Impact Assessments
  Jackie Ballard
  To ask the Secretary of State for Social Security, pursuant to her answer of 24 June 1998,Official Report, columns 557–58, prior to 18 May, what mechanisms were used to determine how legislation passed in the current session would affect women; what consultation she had with women's organisations; and if she will make a statement. [49092]

  Ms Ruddock
  Guidance on policy appraisal for equal treatment has been available since 1992. Application of the guidance has been the responsibility of individual Departments.

  As Ministers for Women, we have worked to promote the need to identify any adverse differential impact on women as an integral part of the policy making process. On 18 May we launched the mainstreaming initiative across Whitehall.
  536
  Within this Department we are making use of consultation, research projects and disaggregated statistics to identify the impact of policy upon women. As an example the recently published draft legislation on pension sharing on divorce has been the subject of consultation with key organisations representing divorcing women.

  My right hon. Friend the Secretary of State is preparing a report on the impact of Social Security policies upon women which will be published shortly.

  Child Support Agency
  Mr. Cox
  To ask the Secretary of State for Social Security if she will make a statement on her Department's re-organisation of the Child Support Agency; and when this re-organisation will be implemented. [48324]

  Mr. Keith Bradley
  I refer my hon. Friend to the oral statement made by my right hon. Friend the Secretary of State for Social Security on 6 July 1998,Official Report, columns 739–54.

  Mr. Terry Davis
  To ask the Secretary of State for Social Security what targets have been established by her Department for the Child Support Agency. [49363]

  Mr. Keith Bradley
  The administration of the Child Support Agency is a matter for the Chief Executive, Mrs. Faith Boardman. She will write to my hon. Friend.

  Letter from Faith Boardman to Mr. Terry Davis, dated 7 July 1998:
  I am replying to your Parliamentary Question to the Secretary of State for Social Security about Child Support Agency targets.
  Every year the Secretary of State for Social Security sets targets for the Agency which are published in the Business Plans each March. For 1998/99 these targets generally follow a similar format to those for the previous 2 years, but with much increased levels, they are as follows:
  Child maintenance collected and arranged
  £750 million of child maintenance to be collected or arranged for direct payment from the non-resident parent to the parent with care
  Maintenance assessments
  65% of new maintenance applications to be cleared within 22 weeks and on 31 March 1999 there to be no applications outstanding over 52 weeks old
  Reviews
  Where a client is dissatisfied with a Child Support Officer's decision and requests a review; or where a change of circumstances requires a review; 80% to be cleared within 13 weeks
  Payments
  97% of payments made to the parent with care to be made within 10 working days of receipt from the non-resident parent
  Accuracy
  The cash value of all assessments checked in the year to be correct in at least 75% of cases
  The following Milestone targets have also been set:
  Review the first six months of closer working with the Benefits Agency, taking into account the views of stakeholders and produce a report by 31 December 1998
  By 30 June 1998 formalise national and local consultation arrangements with stakeholders with a view to improving customer service.
  However, Ministers have asked the Agency to carry out a review of the targets so they focus more on outputs rather than processes (for example, on the time taken to secure an actual payment rather

  537
  than to complete a formal assessment or review). Ministers will be considering our proposals, in the light of their priorities set out in the Green Paper and we plan to test them out later this year. As part of the review of targets Ministers are also likely to include a Secretary of State target on customer service.
  I hope this is helpful.

  Pensioner Incomes
  Mr. O'Hara
  To ask the Secretary of State for Social Security if she will list the(a) mean and (b) median income of (i) single pensioners, (ii) pensioner couples and (iii) all pensioners living in (1) pre-1989 regulated tenancies in the private sector and (2) housing association tenancies (A) before and (B) after housing costs. [48551]

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

  Incomes of pensioner units living in pre-1989 regulated tenancies in the private sector

  £ per week July 1995 prices

  Mean Income

  Median Income

  All Pensioner Units

  Net income before housing costs

  126.30

  110.10

  Net income after housing costs

  93.70

  74.00

  Pensioner Couples

  Net income before housing costs

  185.20

  163.40

  Net income after housing costs

  149.30

  122.70

  Single Pensioners

  Net income before housing costs

  109.60

  101.80

  Net income after housing costs

  77.80

  66.30

  Notes:

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

  2. Due to small sample size figures should be treated with a degree of caution

  3. All figures are based on Pensioner Units. A Pensioner Unit is defined as a single (non-cohabiting) person over the State Pension Age (SPA) or a couple (married or cohabiting) where the man, defined as the head, is over SPA

  4. The answer is comparable with Table 1a in the Family Resources Section of The Pensioners' Incomes Series 1995/96-Revised Edition

  Source:

  The Family Resources Survey 1995/96

  Incomes of pensioner units living in housing association tenancies

  £ per week July 1995 prices

  Mean Income

  Median Income

  All Pensioner Units

  Net income before housing costs

  130.10

  118.60

  Net income after housing costs

  85.10

  70.00

  Pensioner Couples

  Net income before housing costs

  176.80

  171.50

  Net income after housing costs

  129.20

  121.80

  Single Pensioners

  Net income before housing costs

  118.60

  110.80

  Net income after housing costs

  74.30

  65.90

  Notes:

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

  2. Due to small sample size figures should be treated with a degree of caution

  3. All figures are based on Pensioner Units. A Pensioner Unit is defined as a single (non-cohabiting) person over the State Pension Age (SPA) or a couple (married or cohabiting) where the man, defined as the head, is over SPA

  4. The answer is comparable with Table 1a in the Family Resources Section of The Pensioners' Incomes Series 1995/96-Revised Edition

  Source:

  The Family Resources Survey 1995–96

  Fraud
  Mr. Chope
  To ask the Secretary of State for Social Security what is her latest estimate of how much money the ICL Pathway Project will save through a reduced incidence of claimants-fraud in 1998, 1999 and 2000. [49503]

  Mr. Field
  Current plans assume that the project to automate benefit payments at post offices will save £1 million in 1998–99, £64 million in 1999–2000 and £135 million in 2000–2001, in addition to savings of £70 million, £52 million and £52 million from existing anti-fraud measures at post offices over the same period.
  Note:
  All figures are in today's prices.

  Benefits Agency Caller Offices
  Mr. Gordon Prentice
  To ask the Secretary of State for Social Security how many Benefits Agency public caller offices were closed during the period April 1992 to May 1997; how many have been closed since May 1997; and how many are under review. [46980]

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

  Letter from Peter Mathison to Mr. Gordon Prentice, dated 7 July 1998:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question concerning the number of Benefits Agency public caller offices closed during the period April 1992 to May 1997, the number closed since May 1997, and the number under review.
  The numbers are as follows:

  April 1992 to May 1997: 62

  Since May 1997: 2

  Under review: 11

  Since May 1997, where a public caller office has been closed, measures have been taken to ensure that there was no reduction in the level of service to customers. The 2 public caller offices closed since May 1997 are Evesham and Bromsgrove. Although the closure of Bromsgrove has been approved, the closing date has not been finalised.
  We are consulting the local community about the future of those offices under review.
  I hope you find this reply helpful.

WALES

  Departmental Staff
  Mr. Brake
  To ask the Secretary of State for Wales how staff numbers in his Department have varied between 1 May 1997 and 31 March 1998. [48886]

  Mr. Ron Davies
  The number of full time equivalent staff employed by The Welsh Office between 1 May 1997 and 31 March 1998 is as follows:

  Permanent staff

  Casual staff

  1 May 1997

  2105.3

  199.4

  31 March 1998

  2115.9

  204.5

  Rhuddlan Borough Council
  Mr. Martyn Jones
  To ask the Secretary of State for Wales how many capital grants and for what purpose the former Rhuddlan Borough Council received from his Department and its agencies in the last 10 years of its existence; and which have final grant claims outstanding. [48741]

  Mr. Win Griffiths
  Information on grants paid by agencies of this Department is not held centrally. I will reply to my hon. Friend with information on the grants paid by the department as soon as possible and place a copy of my reply in the Library of the House.

  Correspondence
  Mr. Sanders
  To ask the Secretary of State for Wales what is his Department's average response time to correspondence from members of the public; and how such response times are monitored. [48666]

  Mr. Ron Davies
  My Department's target is that all correspondence should be answered within 15 working days of receipt and, for 1997–98, we achieved that target in 86 per cent. of cases. Replies from Ministers are recorded individually as are replies from officials to correspondence addressed to Ministers. Correspondence sent directly to officials is monitored on a sample basis.

  National Assembly
  Mr. Wigley
  To ask the Secretary of State for Wales if he will make it his policy that no binding contract for the construction of a new building for the National Assembly of Wales is entered into until after the National Assembly has been elected. [48898]

  Mr. Ron Davies
  No. The process of procurement of the new building will have several stages, whose nature and timing will depend upon the contract strategy that I adopt. The design competition assessment panel will recommend an appropriate contract strategy together with an outline design in the late Autumn. It will then be necessary to develop the detailed design and seek the appropriate statutory consents. I cannot yet say when the construction contracts will be let.

  Health Service (Sterile Services)
  Ms Lawrence
  To ask the Secretary of State for Wales if the contract between the University Hospital Wales Trust and Sterile Services International Ltd. for the provision of sterile services provides for the trust to receive a financial benefit as a consequence of any new business acquired by Sterile Services International Ltd. for the provision of sterile services to other health trusts. [49186]

  Mr. Win Griffiths
  The Trust will receive a payment equal to 10 per cent. of the charge (net of VAT) made by Sterile Services International for any third party work serviced from the University Hospital of Wales site. There are also revenue savings of £525,000 over 10 years in comparison with current costs.

  Health Service (Complaints)
  Mr. Livsey
  To ask the Secretary of State for Wales if he will make a statement on the findings in the 1997–98 Annual report of the Health Service Commissioner for England, Scotland and Wales relating to the level of increase in new complaints in Wales relative to England and Scotland in 1997–98. [49414]

  Mr. Win Griffiths
  The number of complaints referred to the Health Service Commissioner is low (149 in Wales, 196 in Scotland and 2,315 in England). Relatively small numerical changes, therefore, can produce larger percentage movements year on year than are justified by the trend.

  Since 1994–95 the number of complaints received by the Health Service Commissioner increased by 52 per cent. in England, 36 per cent. in Scotland and 33 per cent. in Wales.

  Horticulture
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on the future prospects of the horticulture industry in Wales. [49561]

  Mr. Win Griffiths
  We have a strong horticulture industry in Wales that produces premium products which are in demand across the UK.

  As part of our review of the Food Strategy, we will be looking at ways of developing this valuable sector to consolidate its current market position and open up new opportunities.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Railway Stations
  Mr. Ottaway
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the percentage of Britain's railway stations which have been upgraded by Railtrack; at what estimated cost; and by what date the full programme of works will be completed. [48640]

  Ms Glenda Jackson
  Railtrack's current Network Management Statement states that 24 per cent. of stations had been upgraded by 31 March 1998 and that the whole programme is expected to be complete by 2001 at a total cost of £1 billion (1996–97 prices).

  Road Accidents
  Mr. Plaskitt
  To ask the Secretary of State for the Environment, Transport and the Regions what proportion of road deaths and injuries involve one or more vehicles driven by someone at work. [48747]

  Ms Glenda Jackson
  The information requested is not available. The Department does not collect data on whether drivers involved in injury accidents are at work. The information given is the number and percentage of
  541
  injuries in accidents involving buses, coaches and heavy goods vehicles (HGVs). The majority of these drivers could be presumed to be 'at work'.

  Casualties in accidents1 involving either a bus, coach or an HGV GB 1995–97

  1995

  1996

  1997

  Casualties

  Fatal

  758

  724

  655

  Injured2

  31,638

  31,732

  32,924

  Per cent.

  Fatal

  21

  20

  18

  Injured

  10

  10

  10

  1Involving at least one bus, coach or HGV

  2Seriously and slightly injured

  Climate Change
  Mr. Stunell
  To ask the Secretary of State for the Environment, Transport and the Regions when he plans to publish the Government's consultation paper on climate change; and if he will make a statement. [48896]

  Mr. Meacher
  We intend to issue a consultation paper in the summer on policy options for delivering our climate change targets. This will focus on our 12.5 per cent.

  Proportion of households provided with wheeled bins—1995–96

  Authority type

  0% to 24.99%

  25% to 49.99%

  50% to 74.99%

  75% to 99.99%

  100%

  Mean % households in the district

  London boroughs

  19

  1

  3

  3

  2

  24

  Metropolitan district

  13

  3

  1

  13

  0

  47

  Non-metropolitan districts

  150

  1

  7

  89

  7

  37

  Wales

  10

  0

  1

  5

  1

  37

  Source:

  Table 51, Municipal Waste Management 1995–96, DETR December 1997

  Rural Public Transport
  Mr. Grogan
  To ask the Secretary of State for the Environment, Transport and the Regions what guidance his Department has given to local authorities regarding the spending of the extra funds allocated recently to rural public transport [49075]

  Ms Glenda Jackson
  I refer my hon. Friend to the answer given to my hon. Friend for South Derbyshire (Mr. Todd) on 17 June 1998,Official Report, column 206.

  Regional Development Agencies
  Mr. MacShane
  To ask the Secretary of State for the Environment, Transport and the Regions what proposals he has to involve(a) hon. Members and (b) members of local authorities in the process of nomination and appointment to regional development agencies. [49189]

  Angela Eagle
  We wrote to hon. Members in February inviting them to put forward their nominations for RDA board membership. We also invited members of local authority regional associations to submit names to be considered for the four local authority places on each board.
  542
  legally binding commitment from Kyoto as well as considering how we might move beyond that towards our domestic goal of a 20 per cent. reduction in CO2 emissions by 2010. We will be looking at the scope for savings from improved energy efficiency by business and in the home; lower transport emissions; and an increase in the electricity generated from renewables and combined heat and power.

  Refuse Collection
  Mr. Menzies Campbell
  To ask the Secretary of State for the Environment, Transport and the Regions which councils in England have adopted the use of wheeled bins for refuse collection. [48988]

  Angela Eagle
  Of the 337 waste collection authorities in England and Wales who responded on this issue in the Municipal Waste Management Survey 1995–96, 168, or almost exactly a half, were using wheeled bins for waste collection to some degree. The detailed breakdown below shows that on average 36.5 per cent. of households in any one district had wheeled bins. A list of the Councils concerned can be provided if the hon. and learned Member requires. He may also be interested to know that the results of the 1996–97 survey, which will include an analysis of the effects of the provision of wheeled bins, will be available shortly. I will make sure that he receives a copy.

  Air France
  Mr. Ottaway
  To ask the Secretary of State for the Environment, Transport and the Regions what steps his Department is taking to ensure repayment of the £2 billion subsidy paid to Air France by the French Government. [49071]

  Ms Glenda Jackson
  We understand that the Commission is considering its response to the recent judgment of the Court of First Instance. We will consider any further steps in the light of action taken by the Commission.

  Mr. Ottaway
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the decision of the European Court of Justice that Air France received a £2 billion subsidy from the French Government contrary to the Treaty of Rome. [49072]

  Ms Glenda Jackson
  We welcome the recent judgment of the Court of First Instance, which confirms that public subsidies to airlines must be granted only in strict conformity to Treaty rules.

  Radioactive Waste
  Mr. Chaytor
  To ask the Secretary of State for the Environment, Transport and the Regions if his Department's review of the safe storage of radioactive waste takes into account the full cost of(a) reprocessing and (b) dry storage options. [48977]

  Mr. Meacher
  The Health and Safety Executive are carrying out a review of storage facilities for intermediate-level waste and my Department have commissioned a study of the research requirements for the disposal of high-level waste. The Government intend to publish a consultation paper on radioactive waste management issues in the first half of next year. The issues to be covered in the paper will depend in part on the issues addressed in the report of the House of Lords Select Committee on nuclear waste, which may include reprocessing and dry storage of spent fuel.

  Ms Walley
  To ask the Secretary of State for the Environment, Transport and the Regions if he will call in the application for draft discharge authorisations in respect of nuclear waste from Sellafield; and if he will make a statement. [49321]

  Mr. Meacher
  The Environment Agency are considering the responses received during the public consultation into the applications for variations to BNFL's discharge authorisations for the Sellafield site which ended in March. There have been requests for Ministers to 'call in' these applications and decide the matter for themselves and these requests are being considered. In deciding whether to exercise the statutory powers of 'call in', all representations on this issue will be carefully considered.

  Endocrine-disrupting Chemicals
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 30 June 1998,Official Report, column 90, what steps he takes to ensure the precautionary principle is applied to the chemicals identified as having, or suspected as having, endocrine disruptive qualities. [49204]

  Angela Eagle
  [holding answer 7 July 1998]: A large number of chemicals are suspected of having endocrine disrupting properties. However as yet no agreed mechanism exists for identifying chemicals which actually cause endocrine disruption. International efforts are underway to agree guidelines by which endocrine disrupting chemicals can be identified. When these are in place and we are able to identify which chemicals are likely to cause endocrine disruption, appropriate action will be taken, including precautionary action where there are risks of serious harm to human health or the environment.

  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions what steps his Department takes to inform the Department of Trade and Industry of the dangers presented by endocrine-disrupting chemicals and their presence in consumer goods. [49156]

  Angela Eagle
  [holding answer 7 July 1998]: The Department of Trade and Industry is advised on the health effects of chemicals used in consumer products, including those with endocrine disrupting properties, by the Department of Health.
  544
  The Department of Trade and Industry is informed by the results of the research on endocrine disrupting chemicals sponsored by the Department of the Environment, Transport and the Regions and other Government Departments and Agencies.

  Interdepartmental Group on Genetic Modification Technology
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions what reporting mechanism exists to ensure his views and those of the Minister for the Environment are fully represented at meetings of IGGMOT. [49157]

  Angela Eagle
  [holding answer 7 July 1998]: The Interdepartmental Group on Genetic Modification Technology (IGGMOT) is organised by the Office of Science and Technology and comprises officials from interested Government Departments. The objectives of the group are to co-ordinate and develop Government policy on biotechnology including the line to be taken by the United Kingdom in negotiations in the European Union and other international forums. Officials from this Department are fully aware of Environment Ministers views and represent them at meetings. After discussion at IGGMOT the proposed Government line is agreed with all Ministers concerned.

  Channel Tunnel Rail Link
  Mr. Snape
  To ask the Secretary of State for the Environment, Transport and the Regions what is the estimated cost of environmental protection works, including tunnelling provided for reasons of environmental protection, involved in phase two of the Channel Tunnel Rail Link between Ebbsfleet and King's Cross. [49466]

  Ms Glenda Jackson
  [holding answer 7 July 1998]: Few CTRL works in phase two are concerned exclusively with environmental protection and decisions on extensive tunnelling were taken for engineering reasons as much as for environmental reasons. It is not practicable, therefore, to separate environmental protection costs from the total.

  Rural Bus Services
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what representations he has received from local authorities about increasing the scope of de minimis agreements as a means of securing early and substantial improvements to rural bus services; and if he will make a statement. [49496]

  Ms Glenda Jackson
  A number of representations have been received proposing an increase in the 'de minimis' exceptions from the tendering requirements for subsidised local bus services. We have been considering them against the background of the substantial new funding which we have made available for the improvement of rural bus services and expect to be bringing forward proposals shortly.

  Housing
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many
  545
  local authorities' development plans currently have policies identifying the appropriate proportion of houses with a specific number of bedrooms to be built in the area; [49497]

  (2) how many local authorities' development plans which proposed policies identifying the appropriate number of houses with a specific number of bedrooms were (a) objected to and (b) not approved by the relevant regional Government office. [49498]

  Mr. Raynsford
  The information requested is not held centrally and could be obtained only at disproportionate cost.

  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what is the average proportion of social and affordable housing required by each local planning authority in its development plan; [49499]

  (2) what is the average proportion of social and affordable housing to be provided in each local authority area in relation to accommodation built for sale on the open market; [49500]

  (3) what is the average proportion of social and affordable housing in relation to all housing which is to be provided in each local authority area as part of planning gain agreements. [49501]

  Mr. Raynsford
  The information requested is not held centrally and depends on the provisions made by individual local planning authorities in their local plans. Under current arrangements local planning authorities prepare assessments of need for affordable housing as a basis for preparing their local plan policies. Such policies should indicate how many affordable homes will be needed in the plan area over the lifetime of the plan, set indicative targets for the amount of affordable housing that would be sought on suitable sites, and indicate the authority's intention to seek the inclusion of an element of affordable housing on such sites. It is, therefore, not feasible at the moment, to assemble such information, except at disproportionate cost.

  Valuation Tribunals
  Mr. Corbett
  To ask the Secretary of State for the Environment, Transport and the Regions what is the current level of full and part-time staff employed by valuation tribunals; and what will be the impact on their numbers when the number of administrative units serving them is reduced to 14. [49474]

  Mr. Raynsford
  Valuation Tribunals in England currently employ 204 full time and 27 part time staff, or 223 full time equivalent (FTE) staff. Of these FTE staff, 111 are Court Taking Officers (CTOs) and 112 are Clerical Officers (COs).

  Numbers of staff are primarily determined by the appeal workload. Current staffing complements, based on planned workload in 1998–99 and the new administrative structure of 14 units, is 89 CTO and 89 CO staff (a total of 178 staff). We have indicated that reductions in staff should be phased in during a 3 to 5 year rationalisation period.

  Local Government
  Helen Jackson
  To ask the Secretary of State for the Environment, Transport and the Regions what proposals he has to ensure greater openness in the conduct of local government. [47943]

  Mr. Raynsford
  Making councils more open and accountable is at the heart of the Government's agenda to modernise local government which we set out in six consultation papers, and on which we now intend to publish a White Paper.

  Fluorescent Tubes (Recycling)
  Ms Rosie Winterton
  To ask the Secretary of State for the Environment, Transport and the Regions if the contract to recycle spent fluorescent tubes across the Government estate has now been let. [49694]

  Mr. Meacher
  The call-off contract has just been awarded to Biffa Waste Services Limited by the Disposal Sales Agency who will manage it on behalf of participating Government departments. I have written to Green Ministers to promote its use across Whitehall. This initiative is in keeping with the Government's consultation paper on the waste strategy for England and Wales.

  Tree Preservation
  Mr. Etherington
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to reform the tree preservation order system. [49976]

  Angela Eagle
  I have today issued a consultation paper, setting out the Government's proposals for reforming the tree preservation order legislation. Copies have been placed in the House library.

  A review of the legislation was completed in July 1994. This revealed widespread support for tree preservation orders as an effective means of protecting selected trees and woodlands in the interests of amenity. But it also identified a number of reforms which would help streamline the system and address its main weaknesses.

  The Government believe that the 1994 review struck a good balance between the need to ensure that local authorities are able to protect trees effectively and the need to provide an open, efficient and fair system in which the general public can have confidence. We therefore propose to reform the system in line with the 1994 review when a suitable opportunity to amend the primary legislation arises.

  In the meantime, we also intend to update the tree preservation order regulations. Draft Regulations are included in the consultation paper. They would implement some of the reforms from the 1994 review and some new proposals which we believe would further improve the system. These include more streamlined procedures for keeping tree preservation orders up to date; new measures to speed up tree preservation order appeals to the Secretary of State; new provisions on the payment of compensation under the tree preservation order system, and clearer procedures for dealing with felling licence applications which involve protected trees.

EDUCATION AND EMPLOYMENT

  Sixth Form Education
  Mr. Chaytor
  To ask the Secretary of State for Education and Employment if he will list the average unit cost of educating 16 to 19-year-old students in(a) school sixth forms, (b) sixth form colleges and (c) tertiary colleges. [47860]

  Dr. Howells
  It is not possible to give unit funding costs for 16 to 19-year-old students in FE colleges or state school sixth forms. An estimate of the average unit cost in FE colleges for the 16–19 age group that takes account of the mixture of full and part-time students is not available; and because the post-16 Standard Spending Assessment is not hypothecated to school sixth forms, the funding they receive cannot be calculated.

  Mr. Chaytor
  To ask the Secretary of State for Education and Employment if he will list the total number of secondary schools with sixth forms of(a) 0 to 50 pupils, (b) 51 to 100 pupils, (c) 101 to 150 pupils, (d) 151 to 200 pupils and (e) 201 to 250 pupils. [47861]

  Dr. Howells
  The latest information is shown in the table.

  Numbers of maintained secondary schools by size of sixth form in England in January 1997

  Size of sixth form (number of pupils)

  Number of schools

  up to 50

  114

  51 to 100

  338

  101 to 150

  439

  151 to 200

  402

  201 to 250

  258

  251 or more

  256

  all schools with sixth form

  1,807

  Education in World Citizenship
  Mr. Hancock
  To ask the Secretary of State for Education and Employment what changes in funding for the Council for Education in World Citizenship he is proposing for the next three years. [48766]

  Ms Estelle Morris
  Funding of £10,000 has been approved so far for 1998–99. We will consider on their merits requests for further funding from the Council for Education in World Citizenship and from others in this field.

  Mr. Hancock
  To ask the Secretary of State for Education and Employment what representations he has received on funding for the Council for Education in World Citizenship. [48767]

  Ms Estelle Morris
  Representations about funding which my right hon. Friend the Secretary of State has received include three letters and four parliamentary questions in addition to this one.

  Mr. Hancock
  To ask the Secretary of State for Education and Employment what assessment he has made of the work of the Council for Education in World Citizenship; and if he will make a statement. [48768]
  548
  Ms Estelle Morris
  The Department is aware of the nature and content of the work carried out by the Council for Education in World Citizenship, and has supported it for some time.

FOREIGN AND COMMONWEALTH AFFAIRS

  Taiwan and China
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the state of relations between Taiwan and China. [47384]

  Mr. Fatchett
  [holding answer 29 June 1998]: We welcome the resumption of cross-Straits talks between Taiwan and the People's Republic of China. This dialogue is important to the economic and political stability of the region.

  Diplomats
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the number of Department of Trade and Industry officials operating from diplomatic posts on(a) 1 May 1997 and (b) 24 June 1998. [48204]

  Mr. Fatchett
  The numbers of DTI officials operating from Diplomatic Posts on 1 May 1997 and 24 June 1998 were 31 and 37 respectively.

  East Timor
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the death in Baucau, East Timor, of Orlando Da Costa during the visit of the European Union Troika; and what provisions have been made to investigate the death of Mr. Da Costa and to publish the findings of the investigation. [49337]

  Mr. Fatchett
  Mr. da Costa was shot during a demonstration in Baucau on 29 June as the EU Troika Heads of Mission to East Timor were going into a meeting with the Bishop of Baucau. As Presidency of the EU we called on the Indonesian authorities for a full investigation into the incident and to ensure those responsible were made accountable. We also asked that Bishop Nascimento and his staff should be closely involved in that investigation. We have also asked to receive the report of the investigation once it is complete.

  Millennium Compliance
  Mr. Nigel Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions in the Council have taken place under the UK presidency of the European Union of the risk posed by nuclear installations which are not millennium compliant(a) within the European Union, (b) in former Warsaw Pact countries and (c) in the rest of the world. [49260]

  Mr. Fatchett
  During the UK Presidency, millennium compliance, including that of nuclear installations and utilities in general, was raised at the Telecoms, Internal Market and Industry Councils, at the European Conference on 12 March, and at the Cardiff
  549
  European Council. The UK also hosted a seminar on 8 May seeking to increase awareness of the problem amongst our EU partners.

  In respect of nuclear installations outside the EU we have been active in the International Atomic Energy Agency, as the responsible international body. We have also been active through our Embassies in raising global awareness of the Year 2000 problem more generally. We continue to encourage all countries to recognise the need to take immediate action to address the problem.

  Kosovo
  Mr. Howard
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on developments in EU policy towards Kosovo, following the recent mission by the US special presidential envoy. [49296]

  Mr. Tony Lloyd
  [holding answer 7 July 1998]: Britain and our EU Partners remain deeply concerned by the increasing tensions in Kosovo. We fully support the policy of the Contact Group that urgent progress needs to be made towards a peaceful, negotiated settlement. We are working closely with the US special envoy, Richard Holbrooke to implement this policy.

  We expect President Milosevic to implement fully and immediately the undertakings which he gave following his meeting with President Yeltsin on 16 June. In particular, we expect the FRY authorities to cooperate fully with the current deployment of additional international, and European, monitors to Kosovo, and attach importance to a comprehensive approach to the refugee issue. The EU intends to work with other international organisations to promote the early return of refugees and displaced persons.

  EU Foreign Ministers on 29 June reiterated their condemnation of all violence and acts of terrorism in pursuit of political goals, and called upon all those in a leadership role in the Kosovar Albanian community to make clear their rejection of violence and commitment to dialogue and a peaceful resolution of the crisis.

  Tibet
  Mr. Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy, following the EU troika visit to Tibet, to demand independent verification of the health, whereabouts and situation of the Panchen Lama, Gedhun Choekyi Nyima; and if he will make a statement. [49502]

  Mr. Fatchett
  We are concerned about the health and safety of Gedhun Choekyi Nyima, the child recognised by the Dalai Lama as Panchen Lama, and have raised his case repeatedly with the Chinese authorities. We will continue to raise such cases, and our wider concerns about the situation in Tibet, with the Chinese authorities at every opportunity.

  Human Rights
  Mr. McNamara
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the means by which his Department will monitor adherence to the human rights provisions of the Amsterdam Treaty. [48318]
  550
  Mr. Doug Henderson
  The adherence to the human rights provisions of the Amsterdam Treaty will be constantly monitored as part of the normal work of the Department in consultation with other Government Departments.

PRIME MINISTER

  Community Hospitals
  Mr. Simon Hughes
  To ask the Prime Minister if he will make a statement on the policy of Her Majesty's Government on community hospitals. [47955]

  The Prime Minister
  I refer the hon. Member to the oral answer I gave to the hon. Member for Torridge and West Devon (Mr. Burnett) today, 8 July 1998,Official Report, column 1070.

  Engagements
  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Wednesday 8 July. [48961]

  The Prime Minister
  This morning I had meetings with Ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

CULTURE, MEDIA AND SPORT

  Broadcasting (Sporting Events)
  Mr. Grogan
  To ask the Secretary of State for Culture, Media and Sport how many representations he has received on the subject of sporting events listed under Part IV of the Broadcasting Act 1996, since May 1997. [49099]

  Mr. Chris Smith
  I have received 1,949 representations, including 261 from hon. Members, on this subject since I announced my review of the list in May 1997.

  Mr. Grogan
  To ask the Secretary of State for Culture, Media and Sport how many representations he has received supporting the Gordon Committee's representations to remove live coverage of cricket test matches played in England from the events listed under Part IV of the Broadcasting Act 1996. [49098]

  Mr. Chris Smith
  I received 67 representations, including 12 from hon. Members, in support of the recommendations of Lord Gordon's advisory group on Test cricket.

  Opera
  Mr. Chaytor
  To ask the Secretary of State for Culture, Media and Sport if he will make a statement on his Department's funding proposals for(a) ENO and (b) the Royal Opera; and if he will make a statement. [48978]

  Mr. Fisher
  Decisions on funding levels for individual arts organisations are a matter for the Arts Council of England.

  Millennium Dome
  Mr. Hoyle
  To ask the Secretary of State for Culture, Media and Sport what plans he has to help tourist boards in promoting London as a tourist destination for the Millennium Experience. [48791]

  Mr. Tom Clarke
  [holding answer 3 July 1998]: Our funding to the British Tourist Authority is enabling it to work with the New Millennium Experience Company to promote the Millennium Experience overseas. In addition, we are providing funds to the BTA to work with the London Tourism Board to market London abroad and as a gateway to Britain. The LTB is now developing plans in partnership with the BTA to promote London as the Millennium City.

  Mr. Fabricant
  To ask the Secretary of State for Culture, Media and Sport what budget has been allocated for 2000 by the English Tourist Board for the promotion of the Dome at Greenwich for the millennium celebrations. [48475]

  Mr. Tom Clarke
  The English Tourist Board does not undertake marketing activities and has, therefore, not allocated a budget for the promotion of the Millennium Dome or the millennium celebrations. The ETB does, however, plan to provide information on the Millennium Dome and other millennium attractions to Regional Tourist Boards, Tourist Information Centres and the travel trade.

  Mr. Fabricant
  To ask the Secretary of State for Culture, Media and Sport what budget has now been allocated for 2000 by the British Tourist Authority for the promotion overseas of the Dome at Greenwich for the millennium celebrations. [48476]

  Mr. Tom Clarke
  The British Tourist Authority has allocated £200,000 in 1998–99, as part of a three-year campaign, for specific new Millennium print and promotional work. This allocation is in addition to the more than £10 million the BTA will spend on other print and promotions directed at markets throughout the world, many of which will devote a proportion of their coverage to presenting the attractions of the Millennium Dome and other millennium celebrations.

  Mr. Fabricant
  To ask the Secretary of State for Culture, Media and Sport what assessment he has made of the effect on ticket receipts for the Dome at Greenwich in 2000 arising from marketing by the English Tourist Board. [48474]

  Mr. Tom Clarke
  The English Tourist Board does not currently undertake any marketing activities.

  Television Licences
  Mr. Webb
  To ask the Secretary of State for Culture, Media and Sport if he will estimate the yield from levying an additional 50 per cent. television licence (i) once per household on all households with(a) two and (b) three or more televisions and (ii) once per television on all households with (1) two or more and (2) three or more televisions. [49269]

  Mr. Fisher
  [holding answer 7 July 1998]: The available statistics on television ownership show only the number of households without television, those with one set and those with more than one set, broken down into
  552
  colour and black and white. Charging all households with more than one television set an additional 50 per cent. of the licence fee would raise an estimated £661 million in additional television licence fee revenue.

  Mr. Webb
  To ask the Secretary of State for Culture, Media and Sport what would be the cost of introducing free television licences for all households containing a pensioner aged over(a) 70 and (b) 75 years of age. [48955]

  Mr. Fisher
  [holding answer 6 July 1998]: The estimated cost of providing free television licences for all 'pensioner only' households where at least one member has reached the age of 70 is £288 million.

HOME DEPARTMENT

  Handguns
  Mr. Evans
  To ask the Secretary of State for the Home Department (1) how many outstanding payments there are under schemes A and B for pistol compensation; [49516]

  (2) what is the expected date when everyone will have been paid their compensation for pistols under schemes A and B; [49514]

  (3) what is the total amount of money which remains to be paid under schemes A and B for pistol compensation. [49515]

  Mr. Michael
  Payments under Options A and B of the large calibre handgun compensation scheme and the parallel ex gratia surrender scheme for small calibre pistols were completed at the end of May, apart from around 300 cases which could not be concluded because inquiries were outstanding. This number has since been reduced to around 130, and will continue to fall as the outstanding matters are dealt with.

  Around 11,000 claims have been received under the statutory surrender scheme for small calibre pistols, some 8,300 of which have been registered on the Firearms Compensation Section computer system. Seven thousand two hundred and fifty of the registered claims have an Option A or B element. Substantive processing of these claims will begin when further progress has been made with the remaining Option C claims under the large calibre scheme. Until the claims have been examined in detail it is not possible to give their value or a firm date for their completion. I outlined progress on all the firearms compensation schemes in the reply I gave to the hon. Member for Thanet, North (Mr. Gale) on 8 June 1998, Official Report, columns 438–39.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department for what reasons it has not been possible to meet the claims in full of Mr. A. Haines of Little Thurrock ref ESS E 097444 of 19 September 1997 and ESS SB17944410 of 10 February 1998; what is the cause of the delay in processing these claims; and if he will make a statement. [49443]

  Mr. Michael
  The Option A and B elements of the claim of 19 September 1997 were paid on 26 March 1998, with an additional payment on 28 May 1998. The Option C element of the claim, which will require individual
  553
  consideration of the evidence of value provided, will be dealt with as soon as possible. The claim of 10 February 1998 is under the separate statutory surrender scheme for small calibre pistols. These claims are currently being registered on the Firearms Compensation Section computer system, and substantive work on them will begin when the overall work position permits. I outlined the position on both schemes in the reply I gave to the hon. Member for Thanet, North (Mr. Gale) on 8 June 1998, Official Report, columns 438–39. As he will recall, I wrote to him and to all hon. and right hon. Members on 30 January to outline progress on the payment of compensation claims under the Firearms Act. As I have said on many occasions, these claims inevitably take time to process because of the wide-ranging and generous nature of the firearms compensation schemes which Parliament approved.

  Access to Information (Medical Records)
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department what measures he is taking to secure freedom of access to medical records by the individual concerned whilst retaining the confidentiality of medical records of other people. [47947]

  Mr. George Howarth
  Individuals may gain access to their medical records under the Data Protection Act 1984 if the records are held on computer, or the Access to Health Records Act 1990 if they are held manually. There are exemptions enabling access to be denied if information relating to a third party (other than a health professional) who could thereby be identified would be disclosed, unless the other individual has consented to the

  Number of defendants prosecuted1 for immigration offences, England and Wales

  1 January 1996 to 30 September 1996

  1 October 19962 to 31 December 1996

  1 January 19973 to 30 April 1997

  1 May 19973, 4 31 December 1997

  Immigration Act 1971 s24(1)(aa) as added by the Asylum and Immigration Act 1996 s4—obtaining leave by deception

  Prosecutions

  *

  —

  1

  —

  Immigration Act 1971 s25(1)(a)—knowingly facilitating or assisting the entry of an illegal entrant

  Prosecutions

  116

  37

  57

  106

  Immigration Act 1971 s25(1)(b) as added by the Asylum and Immigration Act 1996 s5—knowingly facilitating or assisting entry of asylum claimant

  Prosecutions

  *

  —

  1

  2

  Immigration Act 1971 s25(1)(c) as added by the Asylum and Immigration Act 1996 s5—knowingly facilitating or assisting person seeking to obtain leave by deception

  Prosecutions

  *

  —

  1

  2

  1Principal immigration offence

  2Section 4 and 5 of the Asylum and Immigration Act 1996 came into force on 1 October 1996

  31997 data are provisional. Final 1997 information will be available in the autumn

  4Date of General Election

  Mr. Burnett
  To ask the Secretary of State for the Home Department (1) in how many asylum appeals the Refugee Legal Centre acted as legal representative in each year from 1993 to 1997; [49168]

  (2) in how many (a) asylum and (b) immigration appeals the Immigration Advisory Service acted as legal representative in each year from 1995 to 1997. [49167]
  554
  disclosure; or if disclosure would be likely to cause serious harm to the physical or mental health of the patient or of any other individual.

  The Data Protection Bill currently before Parliament brings together the subject access rights of the 1984 and 1990 Acts and implements the access requirements of the 1995 European Communities Data Protection Directive. There will continue to be exemptions where giving subject access would incidentally reveal the identity of a third party without his or her consent, but consistent with European Court of Human Rights requirements, decisions to refuse access on that basis will be able to be challenged by the Data Protection Commissioner or in the courts. The Bill also contains powers to provide exemptions for the avoidance of harm to the patient or other individuals.

  Access to third parties' medical records in other circumstances will continue to be limited by the general law and by the non-disclosure provisions of the data protection regime.

  Immigration and Asylum
  Mr. Burnett
  To ask the Secretary of State for the Home Department how many prosecutions have been launched under section 25 of the Immigration Act 1971 and sections 4 and 5 of the Asylum and Immigration Act 1996, in respect of the offences of(a) facilitating the entry to the United Kingdom of an illegal entrant, (b) obtaining leave to enter the United Kingdom by deception and (c) assisting or facilitating a person in obtaining leave to enter the United Kingdom by deception since (i) the 1996 Act came into force and (ii) 1 May 1997. [49170]

  Mr. Michael
  Information taken from the Home Office Court Proceedings database is given in the table.

  Mr. Mike O'Brien
  The available information for the financial years 1993–94 to 1997–98 is given in the table. These figures reflect cases in which the Immigration Advisory Service and the Refugee Legal Centre acted as representative in appeals heard by the Immigration Appellate Authority. They exclude other activities, such as giving advice that did not lead to an appeal hearing and bail applications etc.
  555

  Immigration appeals in which the Immigration Advisory Service and the Refugee Legal Centre acted as representative, financial years 1993–94 to 1997–98

  Immigration Advisory Service1

  Refugee Legal Centre2

  Financial Year

  Asylum appeals

  Other immigration appeals

  Total

  Asylum appeals

  1993–94

  3—

  3—

  3—

  1,100

  1994–95

  3—

  3—

  3—

  2,204

  1995–96

  4—

  4—

  5,066

  2,159

  1996–97

  667

  2,613

  3,280

  2,534

  1997–98

  1,538

  3,919

  5,457

  3,429

  1Source: Immigration Advisory Service

  2Source: Refugee Legal Centre

  3Not applicable

  4Not available

  Mr. Burnett
  To ask the Secretary of State for the Home Department, pursuant to his answer to the right hon. Member for Sutton Coldfield (Sir N. Fowler) of 8 June 1998,Official Report, column 438, what was the average time taken to reach a decision on an asylum application (a) immediately prior to the enactment of the Asylum and Immigration Appeals Act 1993 and (b), in the case of applications submitted post-July 1993, immediately prior to the enactment of the Asylum and Immigration Act 1996. [49198]

  Mr. Mike O'Brien
  In my reply to the right hon. Member for Sutton Coldfield (Sir N. Fowler), the estimated average time to initial decision in applications for asylum lodged in the United Kingdom was given as 58 months in applications lodged prior to the Asylum and Immigration Appeals Act 1993 and 14 months for those lodged after this Act.

  In comparison, applications were estimated to be taking, on average, 20 months to reach an initial decision immediately prior to the enactment of the Asylum and Immigration Act 1993 on 26 July 1993. Applications lodged after the 1993 Act were estimated to be taking just under 11 months immediately prior to the enactment of the Asylum and Immigration Act 1996 on 24 July 1996.

  The increases of 38 months in pre-1993 Act applications and four months in those lodged after this Act reflect the impact on the average figures of the resolution of old cases within the system as backlogs are cleared.

  Mr. Burnett
  To ask the Secretary of State for the Home Department how many rejected asylum seekers, having exhausted all appeal rights, are currently awaiting removal from the United Kingdom. [49166]

  Mr. Mike O'Brien
  The backlog of failed asylum seekers liable for removal, at May 1998, was approximately 19,500 persons. That figure represents a snapshot, taken from Immigration and Nationality Directorate (IND) port and enforcement databases, of those failed asylum seekers (excluding dependants) who have exhausted their rights of appeal (including any who did not submit an appeal against the refusal of asylum) and who are liable for removal.
  556
  The above figure needs to be qualified. Firstly, it does not cover failed after-entry asylum seekers whose appeal rights have been exhausted, who have no right to remain, but against whom enforcement action has not yet been initiated.

  Secondly, the figure of 19,500 includes a large proportion of cases (estimated at around 90 per cent.) where there are one or more barriers to immediate removal—such as absconding, judicial review, representations by hon. Members and difficulties with removal documentation. Typically, absconding represents a barrier to removal in half of asylum removals backlog cases.

  Furthermore, the figure may include some persons who have actually left the United Kingdom voluntarily but whose departure is unknown to IND.

  Mr. Clappison
  To ask the Secretary of State for the Home Department what assessment he has made of the six asylum seekers acquitted on 17 June of violent disorder at the Campsfield Detention Centre being placed at additional risk of persecution if returned to their own countries as a result of their trial. [49177]

  Mr. Mike O'Brien
  When the court directed that they be found not guilty, those who continued to be subject to detention under the Immigration Act 1971, were found places in our detention estate and were held pending consideration of arrangements for removal. However, I can confirm that the United Nations High Commission for Refugees have been afforded until 13 July to look further at the cases involved, and that we will consider any new information that may come to light in individual cases, together with any other issues, in the normal way, including any information on relevant risks of any kind.

  Immigration Cases
  Mr. Vaz
  To ask the Secretary of State for the Home Department what action he is taking in respect of the case of Nazire Javeed Abdul Gaffar Nazire (date of birth 22.09.76)-ref PO8509/98. [48936]

  Mr. Mike O'Brien
  I wrote to my hon. Friend on 29 June, setting out the action which I proposed the Immigration and Nationality Directorate should take.

  Millennium Compliance
  Mr. David Atkinson
  To ask the Secretary of State for the Home Department what contingency plans his Department is making in the event of the failure of computer systems to recognise the year 2000; when he expects them to be in place, and tested; and if he will make a statement. [48850]

  Mr. Straw
  All the main business areas in my Department have projects under way in response to the Year 2000 problem. Contingency planning is a key activity for all of them, but the timing of the development of contingency plans will vary depending on factors particular to each project and the computer systems concerned. Priority is being given to business critical systems.

  I have asked that contingency plans for my Department should be assessed by the end of August 1998 and that plans for business critical systems should be in place and tested by the end of 1998. Some projects are well ahead of this timetable.

  Appeals
  Mr. Crausby
  To ask the Secretary of State for the Home Department how many cases have been referred by the Criminal Cases Review Commission to the Court of Appeal. [49078]

  Mr. Michael
  By the end of June, the Criminal Cases Review Commission had referred 17 cases to the Court of Appeal.

  Elections
  Mr. Luff
  To ask the Secretary of State for the Home Department what proposals he has to change the day for parliamentary, European or local government elections to Saturday or Sunday; and if he will make a statement. [49265]

  Mr. George Howarth
  We have no present plans to introduce polling at the weekend for parliamentary or European Parliamentary elections. We are, however, considering the possibility of pilot studies of this and other alternative electoral procedures at local elections.

  Prisons (Halal Meat)
  Mrs. Fiona Jones
  To ask the Secretary of State for the Home Department what guidance is given to prisons on the purchase of halal meat. [46084]

  Ms Quin
  Prison Governors were advised in May 1997 that halal meat should only be purchased for consumption by Muslim prisoners. Centrally contracted meat suppliers were obliged only to supply halal meat on request. It has recently come to my attention that some Prison Service establishments were providing halal meat to all prisoners, regardless of their religious beliefs. I have asked the Director General to rectify this.

AGRICULTURE, FISHERIES AND FOOD

  Food Standards Agency
  Mr. Curry
  To ask the Minister of Agriculture, Fisheries and Food when he last met the Chancellor of the Exchequer to discuss the funding of the Food Standards Agency. [48496]

  Dr. John Cunningham
  Food Safety and Standards have been considered as part of the comprehensive spending review, on which I have had a number of meetings with the Chancellor of the Exchequer and other colleagues.

  Organophosphates
  Mr. Jack
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his Department's policy towards the observations in paragraph 10.29 of the Official Group on Organophosphates report to Ministers. [48869]

  Dr. John Cunningham
  Sheep scab mites and other sheep ectoparasites cause serious diseases and it is important to maintain a range of veterinary medicinal products effective against them. We will continue to authorise products that satisfy the statutory criteria of safety, quality and efficacy.

  Beef Labelling
  Mr. Quinn
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the implementation of the Beef Labelling Scheme from 1 July. [49110]

  Mr. Rooker
  [holding answer 6 July 1998]: There has been an excellent response to this initiative from all parts of the industry. Some 11,000 beef outlets in the UK have received approval for the detailed labelling information they supply. The Scheme is good news for consumers who will get better information about the beef they buy. They can now be confident that beef labelled as British will have come from animals born, raised and slaughtered in Britain.

HEALTH

  Drug Users (Devon)
  Mrs. Gilroy
  To ask the Secretary of State for Health (1) what discussions he has recently had about the South and West Devon fast track diversion and stabilisation scheme for drug users; [48148]

  (2) what recent assessment he has made of the funding of the South and West Devon fast track diversion and stabilisation scheme for drug users. [48150]

  Ms Jowell
  Funding for the South and West Devon fast-track diversion and stabilisation scheme for drug users exists to enable the scheme to continue until March 1999 and locally based joint consultative committees are currently considering whether to provide continued funding for the scheme.

  The anti-drug coordinators will be issuing a resource framework document later this year. The framework will set out the resources available for drug services across agencies and how they should be used most effectively.

  Housebound Patients (Medicines)
  Mr. McWalter
  To ask the Secretary of State for Health what plans he has to ensure delivery of medicines to those patients who are housebound. [48234]

  Mr. Milburn
  [holding answer 1 July 1998]: Many community pharmacies operate delivery services, and this is one of the ways in which housebound people are able to obtain the medicines they need. While demand for this service remains, we expect that it will continue to be provided.

  Home delivery by pharmacies is not the only way in which housebound patients may obtain the medicines they need. Informal and formal carers may collect medicines on their behalf, as in some cases do community nurses.

  Asthma
  Mr. Burstow
  To ask the Secretary of State for Health if he will list the numbers of items prescribed for the treatment of asthma in each year since 1993–94. [48311]
  559
  Mr. Milburn
  The number of prescription items dispensed in the community in England used in the treatment of asthma for each of the years from 1993 to 1997 is shown in the table. Information on the use of drugs in hospitals is not available.

  The number of prescription items of drugs dispensed in the community used in the treatment of asthma, 1993 to 1997—England

  Year

  Prescription items (million)

  1993

  31.2

  1994

  32.7

  1995

  33.9

  1996

  34.5

  1997

  35.5

  Note:

  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

  Ambulances
  Mr. Benton
  To ask the Secretary of State for Health what assessment his Department has made of the comparative costs and benefits of a standard Ford ambulance with(a) a Tri Star manufactured in Canada and (b) a Chevrolet manufactured in the US; and if he will make a statement. [48758]

  Mr. Boateng
  None. It is for each Ambulance Service National Health Service trust to specify the suitability of the vehicles it needs to achieve national and local standards based on best value for money.

  Multiple Sclerosis (Dental Services)
  Mr. Gordon Prentice
  To ask the Secretary of State for Health if he will make it his policy to allow people with MS to have their amalgam fillings replaced free of charge with fillings made from other non-mercury based materials. [48921]

  Mr. Milburn
  National Health Service dental treatments are provided on the basis of clinical need. This could include replacing fillings if that is the advice of the responsible medical practitioner. Full or partial exemptions from treatment charges are available for people on a low income.

  Link Services Centres (Kent)
  Mr. Shaw
  To ask the Secretary of State for Health what are the names of the organisations and their senior directors who have formally expressed an interest in running the Link Services Centres for Kent County Council. [48821]

  Mr. Boateng
  We do not regularly gather information on local authorities' tendering processes. My hon. Friend may, therefore, wish to write to the County Council.

  Autism (MMR Vaccine)
  Mr. Llew Smith
  To ask the Secretary of State for Health if he will review the study presented to the American Association of Immunologists and Federation of American Societies for Experimental Biology Conference in San Francisco in May by Dr. V. K. Singh on autism and the MMR Vaccine. [48835]

  Ms Jowell
  The Department is aware of an abstract by a Dr. V. K. Singh which was sent to the annual meeting of the American Association of Immunologists and the Federation of American Societies for Experimental Biology and others which was held in San Francisco in April 1998.

  The United Kingdom health departments are advised on immunisation matters by the Joint Committee on Vaccination and Immunisation, an independent expert group. Dr. Singh's abstract will be considered by the Committee along with other published work in this area when they next meet.

  Family Planning
  Mrs. Brinton
  To ask the Secretary of State for Health how many general practitioners hold the Diploma of the Faculty of Family Planning. [48965]

  Ms Jowell
  The information requested is not collected centrally.

  Maternal Deaths
  Mrs. Brinton
  To ask the Secretary of State for Health what research he has(a) commissioned and (b) evaluated into the relative incidence of deaths in pregnancy according to whether women were users of the contraceptive pill before pregnancy. [48969]

  Ms Jowell
  The triennial Report on Confidential Inquiries into Maternal Deaths undertaken by the Department investigates the causes of all maternal deaths in the United Kingdom. As part of this work, the Report routinely collects and assesses information on use of the contraceptive pill by women who subsequently die during or after pregnancy. To date no association between use of oral contraception and maternal deaths has been noted. The authors of the current Confidential Inquiry into Maternal Deaths 1994–96 are looking at this again and will publish their report later this year.

  Mrs. Brinton
  To ask the Secretary of State for Health for what period following childbirth maternal deaths continue to be classified as due to pregnancy. [48970]

  Ms Jowell
  The tenth International Classification of Diseases, Injuries and Causes of Death which is now used by the Confidential Inquiry into Maternal Deaths in the United Kingdom defines maternal death as the death of a woman while pregnant or within 42 days of termination of pregnancy, from any cause related to or aggravated by the pregnancy or its management, but not from accidental or incidental causes. In addition, the United Kingdom collects information on late maternal deaths which occur between 42 days and one year after abortion, miscarriage or delivery that are due to direct or indirect obstetric causes.
  561
  Information on late maternal deaths is set out in Chapter 15 of the most recent report on Confidential Inquiries into Maternal Deaths in the United Kingdom 1991–93, copies of which are available in the Library.

  Hospital Treatments
  Mr. Hammond
  To ask the Secretary of State for Health how many NHS hospital treatments have been carried out since 1 May 1997 involving procedures which are at 30 June 1998 no longer available on the NHS. [49107]

  Mr. Milburn
  None. No clinically effective procedure should be ruled out in principle by the National Health Service.

  Antibiotic Resistance
  Mr. Gordon Prentice
  To ask the Secretary of State for Health what evidence he has evaluated of the development of antibiotic resistance among those working in hospitals and other medical estabishments. [49077]

  Ms Jowell
  We are not aware of any systematic study which would show whether healthcare personnel are more prone to harbour resistant bacteria than other groups.

  The risk of healthcare personnel becoming colonised, via patient contact, with antibiotic resistant pathogens, and of the transfer from one patient to another, is one we take seriously. Keeping this risk to a minimum is one reason why effective infection control practices are imperative.

  NHS Trusts (Enfield and Haringey)
  Ms Ryan
  To ask the Secretary of State for Health what the payments were in cash terms to National Health Service trust chairs and non-executive directors in the years 1996–97 and 1997–98 in the area covered by Enfield and Haringey Health Authority. [49456]

  Mr. Milburn
  There are five National Health Service trusts in the area covered by Enfield and Haringey Health Authority, each with five non-executive directors and a chairman. In 1996–97 and 1997–98, each non-executive director was entitled to a remuneration of £5,000 a year. Four of the chairmen were entitled to a remuneration of £17,245 a year, and one was entitled to a remuneration of £19,285 a year. Chairmen and non-executive directors of NHS trusts are also entitled to claim travelling expenses but details of these expenses are not available centrally.

  Volatile Substance Abuse
  Mr. Derek Twigg
  To ask the Secretary of State for Health what are the most recent figures available on deaths associated with the practice of volatile substance abuse; and if he will make a statement. [49741]

  Ms Jowell
  Statistics collected by St. George's Hospital Medical School and published today show that there were 75 deaths in the United Kingdom in 1996 associated with volatile substance abuse (VSA). This is the second consecutive year in which there has been an increase over the 58 deaths in 1994 which had been the lowest level of mortality since 1981. We take any death associated with VSA very seriously and will consider whether further action is required which could help prevent such tragedies.
  562
  Copies of the report are available in the Library.

  Tobacco Products
  Mr. Flynn
  To ask the Secretary of State for Health what plans the Government have to introduce legislation requiring tobacco companies to list all the ingredients on the packages of tobacco products offered for sale. [49451]

  Ms Jowell
  We have no such immediate plans.

  Lariam
  Mr. Flynn
  To ask the Secretary of State for Health how many reports of suspected adverse reactions associated with Lariam (Mefloquine) were reported to the Medicines Control Agency, relative to the number of prescriptions written, in each year from 1989 to 1998; and if he will make a statement. [48699]

  Ms Jowell
  The number of suspected adverse reactions reported to the Committee on Safety of Medicines and the Medicines Control Agency from 1 July 1989 to 2 July 1998 for mefloquine (brand name, Lariam) as the suspect drug in the United Kingdom, and the number of prescription items dispensed in the community for mefloquine, from 1989 to 1997 in England are given in the table:

  Year

  Total number of suspected adverse reactions

  Number of reports

  Number of prescriptions dispensed in the community in England (000)

  1989

  0

  0

  —

  1990

  54

  19

  2.8

  1991

  58

  27

  7.0

  1992

  51

  22

  10.6

  1993

  182

  72

  40.3

  1994

  606

  234

  160.7

  1995

  1,251

  458

  56.6

  1996

  1,376

  469

  18.6

  1997

  641

  2,229

  16.9

  Up to 2 July 1998

  179

  65

  —

  A report of a suspected adverse drug reaction (ADR) does not necessarily mean that it was caused by the drug. Each report relates to one patient. Patients may have more than one suspected reaction and the number of reactions given therefore exceeds the number of patients affected as seen in the table. The number of reports received for a medicine is influenced by a number of factors including the extent of its usage and publicity related to the medicine as well as its intrinsic toxicity.

  Mefloquine was first dispensed in 1990. The prescription information was obtained from the prescription cost analysis system. Prescription cost analysis is based on information obtained from the Prescription Pricing Authority. The prescription data for 1990 are not consistent with data from 1991 to 1997. The figure for 1990 is based on prescription fees and on a sample of 1 in 200 prescriptions dispensed by community pharmacists only. Figures for 1991 onwards are based on items and cover all prescriptions dispensed by community pharmacists, dispensing doctors and prescriptions submitted by prescribing doctors for items personally administered.
  563
  The prescription data provided include prescriptions dispensed in England only, whereas the spontaneous ADR data include reactions occurring throughout the UK. Therefore, these data sets are not directly comparable.

  Alcohol (Health Warnings)
  Mr. Flynn
  To ask the Secretary of State for Health what plans the Government have to introduce health warnings on the dangers of alcohol on the containers of alcoholic drinks. [49450]

  Ms Jowell
  We believe that if alcohol is consumed in accordance with the guidance in Sensible Drinking it is not likely to be harmful to a person's health. We, therefore have no plans to require health warnings to be displayed on alcohol containers. However, we fully support the initiative of a number of manufacturers and retailers in introducing unit labelling on their packaged products on a voluntary basis to support our sensible drinking messages.

DUCHY OF LANCASTER

  Executive Agencies
  Dr. Whitehead
  To ask the Chancellor of the Duchy of Lancaster if he will review the organisation of executive agencies to reflect function rather than departmental origin. [47921]

  Mr. Kilfoyle
  Ministers establish agencies by function to discharge their departmental responsibilities, and they keep them under review to take account of changing needs and priorities. Closer working between agencies is an important part of our Better Government agenda.

  Information Technology
  Mr. Dalyell
  To ask the Chancellor of the Duchy of Lancaster pursuant to his oral answer of 10 June 1998,Official Report, column 1064, what assessment he has made of the benefits to United Kingdom citizens of Government use of information technology. [47924]

  Dr. David Clark
  Information technology is an important key in improving government services for everyone in our society. There is great potential for the Government to deliver information and services to our citizens at the time and place of their choosing and by the method that is most convenient to them.

  My officials in the Central Information Technology Unit are currently conducting extensive national market research to test the public's attitude to using electronic services. The first two interim reports have been published on CITU's website. Initial findings suggest that the reaction of both the public and business to the prospect of using electronic mediums to access government services is positive: 74 per cent. of people said they would be quite likely or very likely to use new methods of service delivery.

  Ms Rosie Winterton
  To ask the Chancellor of the Duchy of Lancaster what steps he has taken to use new technology to improve communication between Government Departments. [47945]
  564
  Dr. David Clark
  The Government see new technologies as an important key to the successful delivery of user-friendly Government services to the citizen and business.

  Central government departments now have the potential to access the newly established Government Secure Intranet (GSI), which enables secure interconnections across a range of departmental IT systems. The GSI will facilitate a more coherent, customer-focused and integrated electronic service delivery to citizens and businesses, by providing security for information that is entrusted to the Government and by allowing unrestricted access to the Internet where required.

  The GSI enables departments to communicate securely by e-mail and to benefit from access to, and the ability to receive communications over, the Internet. It will also enable the public to access the service via the Internet by using home PCs and eventually through digital television. It provides a means of linking up and promoting the increasing volume of Government services that are available electronically.

  Open Government
  Mr. Robathan
  To ask the Chancellor of the Duchy of Lancaster what representations he has received on his proposals for open government. [47930]

  Dr. David Clark
  I refer the hon. Member to the oral answer I gave to the hon. Member for Southend, West (Mr. Amess) today,Official Report, column 1062.

  Public Appointments
  Mr. Canavan
  To ask the Chancellor of the Duchy of Lancaster what recent representations he has received about employment in the public service of people from the Commonwealth and the Republic of Ireland; and if he will make a statement. [47931]

  Mr. Kilfoyle
  In the past three months I have received five representations including one from the hon. Member for Portsmouth, South (Mr. Hancock) written with the support of 32 other hon. Members.

  Dr. Tony Wright
  To ask the Chancellor of the Duchy of Lancaster what plans he has to change the system for public appointments. [47939]

  Mr. Kilfoyle
  Proposals for making the public appointments system more transparent and accessible were published on 29 June 1998 in a paper "Quangos: Opening the Doors". This paper, which takes account of the comments received during the Government's recent consultation exercise on quangos, makes further proposals on widening the field of candidates for appointment. A second paper "Quangos: Opening up Public Appointments" was published on the same day. This provides details of the Government's plans to make public appointments more representative of society as a whole.

  Copies of both papers have been sent to all hon. and right hon. Members as well as being placed in the Library.

  Parliamentary Accountability
  Mr. Rhodri Morgan
  To ask the Chancellor of the Duchy of Lancaster what proposals he has for the parallel development of parliamentary accountability and interdepartmental task forces. [47932]
  565
  Mr. Kilfoyle
  Ministers are accountable to Parliament for the policies, decisions and actions of their Departments. This includes accountability for decisions taken on the basis of advice from task forces.

  Deregulation
  Mr. Pike
  To ask the Chancellor of the Duchy of Lancaster what major deregulation proposals are planned to be introduced during the next 12 months. [47933]

  Mr. Kilfoyle
  I would like to thank my hon. Friend for the valuable work he is doing as Chair of the House of Commons Deregulation Committee, who do a very useful job in scrutinising proposals to get rid of outdated legislation. However, it would not be appropriate to announce specific deregulation order proposals at this time, as they are subject to detailed consultation with all interested parties and I would not want to pre-empt announcements by my colleagues with policy responsibility for specific deregulation orders.

  We are also looking at the scope for reform of the Deregulation and Contracting Out Act 1994.

  Internet
  Mr. Sheerman
  To ask the Chancellor of the Duchy of Lancaster what steps he is taking to increase access to Government Departments by persons using the Internet. [47934]

  Dr. David Clark
  While it is a matter for individual Departments to decide whether to establish and publish web sites on the World Wide Web, I am pleased to say all the major Departments of State do indeed already have public web sites. They form part of the over 600 public sector organisations that are accessible on World Wide Web via the Government Information Service run by the Central Computer and Telecommunications Agency.

  Millennium Compliance
  Mr. David Atkinson
  To ask the Chancellor of the Duchy of Lancaster when he expects to make his next quarterly report on the millennium compliance of computer systems in central Government. [47935]

  Dr. David Clark
  The next quarterly report is due in September. As this will fall during the summer recess, I propose to write to all hon. Members during the recess to report the results. I will also arrange for all relevant information to be placed in the Library of the House and published on the Internet.

  Mr. Nicholas Winterton
  To ask the Chancellor of the Duchy of Lancaster what progress has been made in the co-ordination of a strategy to combat the threat of year 2000 computer bugs. [47941]

  Dr. David Clark
  A Ministerial Group, which is chaired by the President of the Board of Trade, has been set up to drive forward action across the private and public sectors to ensure that the national infrastructure is not damaged by the failure of electronic systems as a result of the Millennium date change. I chair a sub-group which is responsible for co-ordinating and driving action in tackling the Millennium bug problem across central government and the wider public sector.
  566
  Mr. Ben Chapman
  To ask the Chancellor of the Duchy of Lancaster what steps he has taken to address the millennium bug problem as it affects central Government. [47946]

  Dr. David Clark
  I chair the Ministerial sub-group which is responsible for co-ordinating and driving forward action to tackle the millennium bug problem within central government and across the wider public sector. I have initiated a system of quarterly reviews to monitor the progress that has been made in tackling the problem in central government departments and agencies. The latest review also included information on the wider public sector. My statement to the House on 8 June 1998,Official Report, columns 716–18, summarised the results. Future statements will cover key elements of the wider public sector in more detail. I am following up concerns highlighted by the latest review with the Departments concerned. Copies and summaries of the completed questionnaires from Departments, and their reports on wider public sector bodies, have been placed in the libraries of both Houses and published on the Internet.

  "Better Government"
  Mr. Ronnie Campbell
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the proposals contained in the "Better Government" White Paper. [47936]

  Dr. David Clark
  The "Better Government" White Paper will set out the Government's vision for modern, effective public services which match the way people live their lives today. New technology is one of the tools we will use to "join up" government and put the citizen first.

  Secondments (Civil Service)
  Mr. Gordon Prentice
  To ask the Chancellor of the Duchy of Lancaster what steps he is taking to encourage secondments from industry, commerce, the professions and other occupations into the(a) home civil service and (b) diplomatic service. [47937]

  Dr. David Clark
  I have established an Interchange Steering Council to offer advice on the exchange of personnel and good practice between the civil service and other sectors. Officials are working with representatives from business, local government, academia and the voluntary sector to increase participation.

  The FCO have specific programmes offering business people opportunities to take up posts or to work on projects overseas.

  Special Advisers
  Mr. Gray
  To ask the Chancellor of the Duchy of Lancaster what regulations govern the shareholdings of special advisers to prevent cases of conflict of interest arising. [47938]

  Dr. David Clark
  Special Advisers—like all civil servants—are required under the terms and conditions of their employment to declare to their department any business interests or shareholdings which they or members of their immediate family hold, which they would be able to further as a result of their official position. They must not be involved in taking any decision which could affect the value of their private
  567
  investments, or the value of those on which they give advice to others; or use information acquired in the course of their work to advance their private financial interests or those of others.

  Electronic Red Box
  Mr. Fabricant
  To ask the Chancellor of the Duchy of Lancaster when his Department plans to introduce the mark 2 version of the prototype electronic red box. [47940]

  Dr. David Clark
  We are currently upgrading the prototype electronic Red Box, which I demonstrated in January, to take account of the latest developments in IT.

  Testing trials on the new prototype will shortly be completed and I expect to be able to make more detailed announcement on the introduction of an upgraded prototype Red Box into my office before the end of the month.

  Mrs. Anne Campbell
  To ask the Chancellor of the Duchy of Lancaster what progress has been made with the virtual red box. [47948]

  Dr. David Clark
  I am pleased to report that we are making good progress with prototype electronic Red Box, which I demonstrated in January.
  568
  A new version is being developed using a small laptop computer, which will be activated by a Smart Card that will allow me to communicate securely with my office from any location in the UK.

  Testing trials on the new prototype will shortly be completed and I expect to be able to make more detailed announcement on the introduction of an upgraded prototype Red Box into my office before the end of the month.

  Government Information and Communication Service
  Mr. Ruffley
  To ask the Chancellor of the Duchy of Lancaster what representations he has received regarding appointments to the Government information service. [47942]

  Mr. Kilfoyle
  I have nothing further to add to the reply that I gave to the hon. Member on 10 June 1998,Official Report, column 619, which covered appointments to the Government Information and Communication Service (GICS) as well as wider issues affecting the GICS.

  Freedom of Information Bill
  Mr. Mitchell
  To ask the Chancellor of the Duchy of Lancaster when he intends to publish the Freedom of Information Bill. [47944]

  Dr. David Clark
  I refer my hon. Friend to the oral answer I gave the hon. Member for Lewes (Mr. Baker) today,Official Report, column 1055.

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

Teacher Training
Lord Quirk Lord Quirk asked Her Majesty's Government:
Whether they are satisfied with progress on improvements in teacher training.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the Government continue to attach great importance to raising the standards of teacher training as this is a key element in raising standards in our schools. We have introduced new standards and a national curriculum for initial teacher training. Ofsted will be inspecting providers to ensure that our requirements are being met and that all training is of a high standard. Her Majesty's Chief Inspector of Schools will be reporting on the effectiveness of those measures. At least a third of the £505 million 1998–99 Standards Fund is for expenditure on in-service training, in recognition of teachers' crucial role in raising standards.
Lord Quirk: My Lords, I am grateful to the Minister for that reply. If it is a truth now universally acknowledged that no one forgets a good teacher, is it not also unfortunately a truth that no teacher can forget a bad teacher trainer? Now that we have from the TTA these admirable teacher-training programmes, does the Minister agree that a great deal still depends upon teacher trainers delivering accordingly? Is the Minister confident that teacher trainers have the ability and, indeed, the willingness so to do?
Baroness Blackstone: My Lords, I entirely agree with the noble Lord, Lord Quirk, that to deliver this ambitious new programme it is vital that teacher trainers are able to rise to the challenge. I believe that they are anxious and willing to do so and welcome that challenge. Of course, the training programmes will be regularly inspected by Ofsted. They will also be monitored by the TTA, which accredits all institutions which provide initial teacher training.
Baroness Macleod of Borve: My Lords, can the Minister say how many men are being recruited to teach young children? In view of the fact that there are so many single parents, many children miss out on having a father. It would be helpful if there were more male teachers at the lower age level.
Baroness Blackstone: My Lords, I entirely accept that it is desirable that we try to increase the number of men who teach in our primary schools, particularly at the lower age level. I believe that approximately
1226
20 per cent. of primary teachers and a rather higher proportion of primary head teachers are men. However, we must do all we can to encourage young men to enter what is an enormously worthwhile profession.
Viscount Chelmsford; My Lords, I believe the Government accept the importance of teaching information and communication technology to teachers, not just so they can handle it, but also so that they can pass the benefits on to pupils. Can the Minister offer us any information on how that is moving forward?
Baroness Blackstone: My Lords, ICT—information and communications technology—is one of the subjects that will be taught from now on to all intending teachers. That is part of the reform in the curricula of teacher training organisations. Both primary and secondary school teachers will be expected to do an ICT course and that will start from this September.
Lord Taylor of Blackburn: My Lords, I thank my noble friend for her earlier reply to the noble Lord, Lord Quirk. Many of us are concerned about the lack of liaison between training colleges and commerce and industry. We are now bringing more such liaison into partnerships with schools. Are we doing the same with the training colleges?
Baroness Blackstone: My Lords, there is increasing contact between the institutions responsible for training teachers and local commerce and industry. That is something the Government welcome and encourage.
Lord Pearson of Rannoch: My Lords, in view of the continuing, worrying shortage of good teachers, have the Government given any further consideration to allowing mothers with good A-levels and degrees to teach with only a minimum of teacher training?
Baroness Blackstone: My Lords, the Government are anxious to encourage mature people, whether men or women, into the teaching profession. Clearly, mothers whose children are old enough to allow them to work full time are in a category that we should be encouraging. But it is the Government's view that they should be properly trained before they become registered teachers working in the classroom. That would require them to take a one-year course. The Government are encouraging the development of more part-time PGCE courses, again to support that category.
Lord Hardy of Wath: My Lords, a long time ago I recall being surprised and somewhat disturbed to read advertisements for people to become lecturers in teacher training and to see in the advertisement that "teaching experience is not essential". Can my noble friend assure the House that those who are to be involved in this ambitious and necessary programme of teacher training are themselves able to show successful teaching experience?
Baroness Blackstone: My Lords, I am grateful to my noble friend for that question. It is essential that those

1227
involved in the training of teachers are well qualified and experienced in teaching. I have not seen advertisements of that kind for a long time. I can reassure my noble friend that the teacher training agency responsible for the accreditation of these courses would not take kindly to an advertisement of that sort.
Baroness Blatch: My Lords, does the noble Baroness agree with the teacher representatives that there is a recruitment and retention problem at the moment? With the endless billions of pounds that will flow from the Treasury next week following the announcement that is to be made to Parliament, should not the teachers enjoy at least a share of that money in order to address specifically the problem of recruitment and retention?
Baroness Blackstone: My Lords, the noble Baroness has anticipated the money that may be flowing from the Treasury next week. She is obviously more familiar with its decisions than I am. However, having said that, it is extremely important that we do everything we can to promote improved recruitment and retention of teachers, especially good teachers. I shall bear in mind what she has said on this matter.
Lord McNally: My Lords, does the Minister agree that one problem with retention and recruitment is that today's teachers have to deal not just with difficult children but with difficult parents as well? How does she think the teaching profession can encourage a sense of partnership so that teaching is not just left to the teachers but that parents are fully involved in making schools successful?
Baroness Blackstone: My Lords, I very much agree that part of the job of a teacher today is not just to work with pupils but to work with their parents. It is important that in preparing teachers for their role that element of the job should be incorporated into the training they are given. It is also important that in-service training provides opportunities for teachers who want to specialise in the pastoral side of the job, especially in secondary schools.

Students in Need: Income Support
2.44 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
Whether they will consider restoring a right to income support and housing benefit during the long vacation to students who are orphaned or estranged from both their parents.
Lord Haskel: My Lords, although this particular group is not mentioned in a recent report by the Social Security Advisory Committee on student provision, a ministerial taskforce was established to consider the support available to care leavers, some of whom may be orphaned or estranged from both parents and in full-time education. The advisory committee's report raised a wide range of student issues. In due course, we will lay
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that report before the House, together with our response and regulations, as a Command Paper. Those regulations will be subject to affirmative resolution in both Houses and your Lordships will have the opportunity to debate them fully at that time.
Earl Russell: My Lords, I thank the Minister for offering a tiny chink of hope. Is he aware that no student can live for 52 weeks without a home to go to on simply grant and loan together? Is he further aware that students looking for work face the same chance of failing to get it as everyone else? Is he aware, therefore, that students who are orphaned or estranged from their families go through their undergraduate years in perpetual danger of having to withdraw from their studies through no fault of their own? Does he think that that is fair on people whose lives are difficult enough already?
Lord Haskel: My Lords, financial support from educational maintenance grants and student loans is intended to provide for the whole year. However, life is not as simple as that, as the noble Earl has pointed out. In these cases help is available from the access funds. Those funds are available to institutions of higher education so that they can provide selective help to certain students who have serious financial difficulties.
Baroness Warnock: My Lords, is the Minister aware that the number of young people between the ages of 19 and 21 seeking to go to university is dropping and that the number of mature students has already dropped considerably? Does he not agree that to disadvantage the most vulnerable students will increase this tendency, which in itself is extremely worrying?
Lord Haskel: My Lords, I cannot agree that the most vulnerable students are disadvantaged because there are special arrangements for vulnerable students. Vulnerable students—for instance, students who are under 19, students who have parental responsibilities and students who have other problems—are entitled to certain social security benefits.
Baroness Park of Monmouth: My Lords, is the Minister aware that the maintenance grant and everything else that is provided by no means cover the whole year? Is he further aware that, although the access funds have been increased, they are far too small to cover this problem, where one is looking at a need for at least £500? Most people receive only about £250 at the most from the access funds and very many people are, for different reasons, entitled to it. I urge the Minister to consider either greatly increasing the access funds or taking action of the kind proposed by the noble Earl.
Lord Haskel: My Lords, access funds have been doubled for the coming academic year. In addition, in the coming academic year access funds will be available to part-time students for the first time. This is a matter for the academic institutions, but I note what the noble Baroness has said.
Baroness Byford: My Lords, the Minister said that the access funds have been increased. Do the Government have any idea of the numbers of students who are affected at the moment? In looking at the problem, will they balance the responsibility on young people to try to find work for themselves with the counterbalance of providing for those who are most vulnerable and need additional help?
Lord Haskel: My Lords, the department estimates that about 60 per cent. of students had part-time work during the summer or winter vacation. Most other students seemed to manage with the help of parental gifts and other help from god-parents, companies or whatever. The matter is under consideration. When the advisory committee reports we shall have the opportunity to debate the matter in more detail.
Earl Russell: My Lords, I thank the Minister for what he said about the increase in the access funds. Is he aware that the experience of the noble Baroness, Lady Park of Monmouth, that what is available is simply nowhere near enough to go round is the universal experience of every academic with whom I have spoken?
Lord Haskel: My Lords, I am aware of the noble Earl's view. This is a matter which the committee is taking into consideration at this very moment.

Horses: EU Medicines Legislation
2.50 p.m.
Lord Sandberg Lord Sandberg asked Her Majesty's Government:
Whether they are considering steps to modify European Union medicine legislation with regard to horses, due to come into effect in January 2000, in light of the tradition of horse welfare in the United Kingdom.
Lord Carter: My Lords, maximum residue limits (MRLs) are set for veterinary medicines in food-producing species in order to protect consumers. We have been guided by a statement by the European Commission that, if a horse is not destined for human consumption, MRLs are not required. We will, of course, continue to play our full part in discussions to address any difficulties. It might be helpful if I quote just two sentences from the Commission statement of March 1994. It states,
"If national authorities are able to guarantee that a horse will not be destined for human consumption MRLs are not required. It is not the intent of the regulatory authorities to deprive veterinarians of the possibility of treating animals. When the guarantees can be given that horses will not be consumed, there is no obligation for any form of MRL".
Lord Sandberg: My Lords, I thank the Minister for that very helpful reply. I am not sure that veterinary practitioners in the country will be entirely reassured. They believe that after the year 2000 the medicines they will be able to administer to horses will be greatly reduced. They do not believe that the producers will
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have the market which will encourage them to seek the MRLs that they need. Can the Minister say what the other EU countries are doing? For instance, France has a thriving racing industry and a thriving industry in horses for consumption. Can the noble Lord say what he feels about that?
Lord Carter: My Lords, the noble Lord is correct. It is a larger problem in certain other member states where we know many more horses are kept for food production. Therefore, it is more difficult to provide a guarantee that a horse is not intended for human consumption. The European Commission recognises that. In most member states the guarantees are likely to be possible only for high value horses. It is a problem in Ireland, France, Spain and Germany in particular. Potentially, it is a difficulty for all member states. We are in discussion with the Commission and it is aware of the matter. We are relying at the moment on the statement of March 1994.
Lord Soulsby of Swaffham Prior: My Lords, despite the statement of the Commission that horses not destined for the food chain can have drugs provided for them, is the Minister aware that, despite the extension of time—which has been called a "derogation"—allowed for medicinal products to comply with Regulation 2377/90 the demands of the European Commission may be such that manufacturers would rather discontinue the production of drugs than expend the amount of money required to determine an MRL, thus depriving the veterinarian of valuable drugs? In view of that, will Her Majesty's Government consider pressing further the European Agency for the Evaluation of Medicinal Products to allow MRLs developed for the major food producing species to be applied to the horse with minimal comparative data?
Lord Carter: My Lords, yes. It is a fact that the market in this country will be substantial, and for certain products it might be sufficient to encourage manufacturers to continue to produce the drugs. It is true that the European Committee for Veterinary and Medicinal Products has developed what is known as the minor species policy, which includes the horse. It allows the MRLs developed for major species such as cattle, sheep and pigs to be extended to horses and other species by providing the relatively cheap comparative data. That should ensure that a range of medicines will be available with MRLs and associated withdrawal periods for use with horses irrespective of their destination, whether or not they are intended for human consumption.
Lord Allenby of Megiddo: My Lords, will Her Majesty's Government consider setting up a working group to consider the whole question of medicines and MRLs for the benefit of horses in future?
Lord Carter: My Lords, I believe that we already have it, but it is not called a working group. The officials

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concerned are working extremely closely with the Commission, which is aware of the differing problems of the member states of the EU.
The Earl of Onslow: My Lords, is the Minister aware that if this directive or regulation were to be fully enforced, according to the views of the British Equine Veterinary Association, it would set back equine medicine by 40 years? For instance, treatments for colic, anaesthesia and a certain amount of antibiotics would not be allowed to be used on horses, but they could be used on their 12 year-old riders. Because in this country we have a large number of immensely sentimental horse owners who care for their horses, does the Minister agree that if Her Majesty's Government wish to retain the votes of the affluent middle classes in the South East this is something they should take very seriously?
Lord Carter: My Lords, this Government are concerned about votes in all parts of the country. This is a problem; the noble Earl is correct. The Commission has recognised that, and I have already quoted from its statement. There should be no problem if the horse is not destined for human consumption. The drugs are available and can be used as long as the vet, at the time of treatment, is satisfied that the horse is not going for human consumption. If it is, then it is correct that the controls should be applied because of the danger to the consumer.
Lord Pearson of Rannoch: My Lords, can the noble Lord tell the House whether this legislation was introduced as a regulation or as a directive and whether it was taken under the qualified majority vote system? If so, how did the votes stack up?
Lord Carter: My Lords, as a regulation it was introduced under QMV. I am not briefed as to the voting on that occasion, which was in 1990. I shall find out and write to the noble Lord.
Baroness Byford: My Lords, does the Minister agree that the problem is not within the bounds of this country, but that it is a European problem? Fortunately, in this country we love our horses and ride and enjoy them. We do not eat them. As regards horses which are exported, there is a suggestion—I do not know whether the Minister will consider it—that the horses can be tagged to indicate that they have received drugs, or the carcass can be kept for three months after the drug was used and then the carcass would be fit for human consumption. Can the Minister say whether any of these measures has been considered?
Lord Carter: My Lords, the prospect of a three months' delay on the use of a horse carcass boggles the imagination. There are four ways in which this matter can be dealt with and they are being investigated. There is the marking of the animal. In farming terms, they are freeze-branded. There is the possibility of a passport to be attached to the animal. There is also the possibility
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of the micro-chip. Various ways are being investigated to ensure that the horse is not destined for human consumption. If that is the case then the vet can treat it.

Women's Sexual and Reproductive Health
2.58 p.m.
Lord Hunt of Kings Heath Lord Hunt of Kings Heath asked Her Majesty's Government:
What priority is being given by the Department for International Development, in relation to women's sexual and reproductive rights, to provide further relevant services, including education, in the poorest countries.
Lord Whitty: My Lords, the Government's White Paper on international development highlighted the priority given by this Government to the international development goals, including reproductive healthcare, information and services for all by 2015, and universal basic education by the same date. We want to ensure that all women, as well as men, can exercise their rights to the education, information and services necessary to control their fertility, protect their sexual health and raise healthy and educated children.
Lord Hunt of Kings Heath: My Lords, I thank my noble friend for that reply. Does he share my concern that the lack of access for millions of couples to family planning and reproductive health services in many parts of the world result in very high maternal mortality rates? Will the Government redouble their efforts to persuade the US and other governments to match our contribution to the development of such services in poorer countries?
Lord Whitty: My Lords, I share the noble Lord's concern that millions of people around the world still do not have access to those basic services. However, there have been some significant improvements; 57 per cent. of couples around the world now use some form of contraception compared with 9 per cent. 30 years ago. In countries such as Bangladesh that has resulted in the number of children per family decreasing from seven to three. With regard to the American position, we regret the restrictions which have been put, through that country's internal political processes, on such provisions. America has historically invested substantially in this area and we hope that it will change its mind and do so again.
Lord Avebury: My Lords, is the noble Lord aware that in Afghanistan women receive no education whatever, as Ms Carol Bellamy of UNICEF re-emphasised this morning at a meeting of the Parliamentary Human Rights Group? Will the Government consult, particularly with Islamic faiths in the OIC, to see whether additional pressure could be brought to bear on the Taliban and whether it could be explained that the education of women is fully compatible with the rules of Islam?
Lord Whitty: My Lords, I am well aware of the desperate situation of many women in Afghanistan. We

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shall use all our diplomatic influence to try to ensure that changes are made there. It is important to recognise that that situation does not appertain in the vast majority of Islamic countries, as is shown by the example of Bangladesh that I have just given.
Baroness Rawlings: My Lords, following the question from the noble Lord, Lord Avebury, does the Minister agree that this is not only a problem in the poorest countries but that, as Mr. Nemir Kidar said recently, it is a problem throughout much of the Arab world? How will the department encourage better education for women in all such countries in order to assist their liberalisation, which is surely at the root of the problem?
Lord Whitty: My Lords, I agree with the central point raised by the noble Baroness and that education plays a major role in this. Encouraging girls to stay on at school for at least as long as boys has a direct effect on their knowledge of this subject and consequently on the number of births in such countries and the safety of those births. There is a particular problem in some Arab countries, but the priority of the British aid programme will remain the poorest countries.
Baroness Lockwood: My Lords, is my noble friend aware that following the Cairo Conference the European Union allocated 300 million ecus for expenditure on women's reproductive health rights by the year 2000? Is he also aware that currently there is insufficient expertise and administrative capacity in the unit controlling that money for it to be able to deploy those sums effectively? Will my noble friend ensure that that matter is put on the agenda of the Council of Europe so that we can be assured that the money is spent effectively, perhaps by bringing in expertise from countries such as the United Kingdom which has considerable experience in this area?
Lord Whitty: My Lords, I am aware of the situation with regard to the European Union's programme. The Commission has exceeded its target expenditure commitment of 300 million ecus, which followed Cairo, but there are some problems over allocation and with regard to the prioritisation of the programme. My right honourable friend the Secretary of State has drawn those problems to the attention of the Commission and other member states. We are helping the network of experts who are helping the Commission to improve the effectiveness of its programmes in this area.
Viscount Craigavon: My Lords, can the Minister comment on the total resources which the Government are devoting to this area of reproductive health? Are the present Government building on what in my opinion was the excellent record of the previous government in increasing the department's total expenditure on this to something like 4 per cent. of the total expenditure on overseas development aid, which is the internationally agreed target? Have we reached that target or are we still aiming at it?
Lord Whitty: My Lords, both the previous government and this Government have increased the
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proportion of our total aid budget which is directed at health education in this area from 1.5 per cent. at the time of the Cairo Conference to almost 4 per cent. now. However, our view is that that is not necessarily the only way to tackle the problem because broader health education and broader education in general contribute to the ultimate success of our policy on reproductive health.
Earl Russell: My Lords, does the Minister agree that the right of women to receive or to refuse contraception is equally a human right? Might it be easier to obtain international agreement if we were to proceed on that human rights basis?
Lord Whitty: My Lords, I agree with the noble Earl. Both are clearly human rights and both should be respected in any health programme that we support.
The Earl of Sandwich: My Lords, is there not a critical link not only between reproductive health and education, but also between population and employment, and particularly the employment of women because of the security that that can bring their families? Are the Government aware that the White Paper says very little about that connection with employment although it says a lot about women and gender equality? Can the Government do more to redress that imbalance and to support more income-generation programmes relating to population?
Lord Whitty: My Lords, the emphasis of the White Paper and of our strategy on the education of women and their role in the economy is clear. The direct effect of Her Majesty's Government's efforts in this area may be a little unclear. Nevertheless, part of our programme is to ensure the full participation of women in developing countries in economic and social life as a whole without, however, the exploitation which has often previously characterised their participation.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lord Gilbert will, with the leave of the House, repeat a Statement that is to be made in another place on the Strategic Defence Review.

Scotland Bill
3.6 p.m.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Sewel.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [The Scottish Parliament]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 1:
Page 1, line 8, at end insert ("which shall consist of two chambers.
(1A) This Act makes provision for the establishment, composition and powers of the lower chamber of the Scottish Parliament, and (other than in subsections (1) to (1B) of this section and in section (Second chamber of the Scottish Parliament)) references to "the Parliament" and "the Scottish Parliament" shall be construed as references to the lower chamber.
(1B) Section (Second chamber of the Scottish Parliament) makes provision relating to the establishment of a second chamber of the Scottish Parliament.").
The noble Lord said: In moving Amendment No. 1, perhaps I should begin by saying that it may be quite some time before we reach Amendment No. 391! This amendment and the others grouped with it essentially seek to introduce a second chamber into the Scottish parliamentary arrangements and a method by which we might arrive at the composition of that second chamber. I decided that it was perhaps wise not to suggest that those of your Lordships with Scottish residence should form the second chamber. I thought that the Government might find that a little too easy to knock down with the usual lines that, as we know, come spinning out of Downing Street from time to time. That is why I have suggested that the Prime Minister, in consultation with the Leader of the Opposition, should set up a commission of not more than 15 members who would take evidence, discuss the issue, and come to conclusions, perhaps with options which they would present to the Government and to Parliament. We could then proceed to create a second chamber for the Scottish parliament.
At Second Reading a number of your Lordships pointed out that the proposals before us did not envisage a second chamber, but a unicameral parliament. A number of your Lordships expressed some concern about that and I have no doubt that we shall hear that concern again today.
We all know the arguments in favour of a revising chamber—although perhaps the noble Lord, Lord Sewel, is not quite as sympathetic to that argument today as he might have been at this time yesterday! However, assuming that the noble Lord takes such matters in reasonably good humour, I believe that he will find the argument for a second Chamber compelling. The very fact that the Government have made it clear that they do not want the current composition of this House to continue but that they do want this House to continue indicates that they believe that there is a place in our system for a second chamber.
One knows that all governments use this House considerably during the passage of legislation, and it is upon that that I wish to concentrate. Noble Lords do other things. This Chamber has Question Time and considers secondary legislation. That is a function that could be performed by a second chamber of the Scottish parliament. Noble Lords also have a particular role regarding European legislation. That is something that
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your Lordships do uniquely among parliaments, unicameral and bicameral, around the rest of the European Union.
However, the main daily task—I nearly said "daily grind"—of noble Lords is to look at legislation. Under all governments in this Chamber amendments have been proposed from the Opposition, the Cross-Benches and the Government. Recently, in a lecture on the House of Lords I learnt—I presume it to be right—that in this Session the Government themselves will have chalked up about 2,000 amendments in your Lordships' House on legislation. That does not include amendments that have been moved from other parts of the House. Most of them have been accepted by the Government without Division, and a few have been forced upon the Government. I do not know whether I have amended this Bill to the extent that the Welsh Bill is being amended, but I have tabled a significant number of amendments in your Lordships' House which are perhaps the result of undertakings in the Commons or points raised in this House.
No one in this House can doubt that this system depends upon the existence of a second chamber in order to iron out the problems of legislation and to give the Government the opportunity to listen to the arguments, and make the necessary changes, not only in this House but outside. In the sister (or cousin) Welsh Bill the Government have tabled a number of very significant and welcome amendments. One day about 37 or 38 of the 70-odd pages of the Marshalled List were taken up by government amendments. It is perfectly clear that in our system the second chamber plays a vitally important role. No doubt the Committee will be told that not every system has two chambers. That is certainly true. There are parts of the world where only one chamber exists and they appear to get along perfectly well; in other parts of the world there are two chambers and they appear to get along perfectly well.
The argument from the Government Benches on a number of constitutional issues that irritates me most is that it is done one way in one country and a different way in another country, that we should copy what everybody else is doing and that we do not have enough confidence to stand by our own traditions and methods. Some of them may appear to be fairly arcane to people outside this country but those methods have grown up over hundreds of years of democracy—which is a lot more than can be said for many of the countries whose constitutional arrangements we are asked to copy.
Every country exercises its democracy in a different way because of its history, size and the way in which its political parties have grown up. All these issues determine how our constitutional arrangements work. I do not believe that just because Norway, Sweden and Finland—to name the three that I suspect we shall hear a good deal about—have unicameral parliaments, we must do the same here. In the wintertime they have endless nights. It does not mean that we should try to do the same here, although some wish to muck about with the clock in order to bring that about in this country. We are all different. I am all for these differences. I do not suggest to these countries that they

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should adopt bicameral parliaments. That is their business. Therefore, it is to our traditions and way of working that we should look.
No doubt the Government will say that a new Scottish parliament, which after all will be a legislature, should look at different ways of working and does not have to carry on the traditions that have been pursued in the United Kingdom Parliament. As the Civil Service and the mindset of most of us is formed by a system that has been in operation for centuries in this country the chances are that the Scottish parliament will continue to operate along the lines of the House of Commons as far as concerns legislation. Even in the case of ordinary legislation, unless it is agreed by all channels—when it is agreed by all channels there is probably greater scrutiny—it takes about three or four months. We are aware from our experience in this Parliament that that is not really enough. Another two or three months are required in the other Chamber if we are to get it right. We do not always succeed even then, given the fact that there are two bites at the cherry. Two different sets of people look at legislation and a bit more time is allowed for the Government to consider and reflect upon what has been said. I suggest to the Committee that in this country legislation is greatly improved by the existence of a second chamber.
I have little doubt that we shall be told that the Scottish parliament can use other methods. Later on we shall be investigating some of those other methods, but I do not believe that we should leave that to chance. The second chamber deserves at least consideration. I am not particularly thirled as to how it should be composed. I do not believe that it should be composed as a reflection of the first chamber. Perhaps it could be elected on a different basis from the first chamber. For example, one person, for every unitary authority may give more weight in the whole system to the rural areas of Scotland than to the heavily populated Central belt. Under that system Glasgow, Orkney and Shetland, the Western Isles and so on would each have one member. It would not be entirely balanced because the Highland Region, which is fairly large, would have one member. I am not thirled to any particular method. But there is one method that we can certainly use. Members could be appointed. Some governments make very sensible appointments to your Lordships' House in the way of Life Peers. I am quite sure that a way can be found whereby a small number of people who represent various interests in Scotland are brought together to perform the role of a second chamber.
However, the object of my amendment is not to determine the composition of the second chamber. That will be decided by a commission which will report on the issue. My main proposition is that we should make provision for that to happen under the Bill and debate whether or not there should be a second chamber. If we are not to have a second chamber, we should debate how the checks and balances that a second chamber would provide under this and many other systems can be provided in the Scottish parliament.
Unlike the Welsh assembly, the Scottish parliament will be passing primary legislation across a very wide field for the people of Scotland. That singles it out as a
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different body from the Welsh assembly. I have not made proposals similar to those of my noble friend Lord Roberts of Conwy in respect of the Welsh Bill because I do not believe that the position is the same. In Scotland one is considering a legislature with considerable powers over a very wide field. For that reason I believe it is right that in this Chamber, if not in the other, we should at least discuss whether or not there is merit in having some form of second chamber in the Scottish parliament.
I look forward to hearing the Minister's response. I hope that he will address the general question of how legislation is to be dealt with. That will be useful for the later stages of the Bill when we try to ensure that any vague promises about how legislation is to be dealt with are put on the face of the Bill and not just left to a wing and a prayer.
This is a useful debate to begin with because the British tradition, as I started by saying and conclude by saying, is that we should have two Houses—a second Chamber that is a revising Chamber which does not compete with the other place but complements it. It would enhance the system of government we are developing in Scotland. I beg to move.
Lord Hughes of Woodside: I listened to the noble Lord with great interest. I might have misunderstood his demeanour or body language from this distance, but I thought I saw a little bit of a twinkle in his eye when he moved the amendment and thought it was a little bit tongue in cheek. If I follow his argument for a second Chamber, it is very thin. He says that the problem is that the parliamentary draftsmen do not always get it right. I cannot speak with any great experience in this House and I would not wish to make a value judgment on how well this House revises legislation. It is my very strong view, having spent 27 years in the other place, that there legislation is very inadequately discussed. The Committee stages can last for days and long nights and seem to have been turned not into revising sessions but into arguments on principle to prevent Bills getting through. This to some extent reflects the adversarial nature of the House of Commons, with a government and an opposition.
All oppositions behave broadly in the same way. Whatever governments put forward, oppositions feel obliged to oppose. The whole purpose of an opposition is to oppose. Other noble Lords may have the same experience. Very little practical discussion takes place. Will the situation be any better in the Scottish parliament? We do not know. There are some intriguing debates to follow on how the Scottish parliament will be elected. Clearly the thrust of the Scotland Bill is that there should be a building up of consensus and working together. I take the point made by the noble Lord that consensus and agreement are not always the best way to proceed, but if there is proper discussion about proceedings before the parliament and the issues to be discussed, we can make a lot of progress.
I am sure that it would be very difficult to do a check, but it would be interesting to know how many of the changes made to a Bill are because of genuine flaws in the operation of a Bill or part of a Bill and how many

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arise because Bills have been rushed before Parliament and inadequately drafted. The proposition which is advanced that there ought to be more legislative discussion is a way of avoiding the necessity for a second Chamber.
Intriguingly, the one point that the noble Lord did not mention is the division of responsibility—where an elected body has an authority which no appointed Chamber has. I do not intend to get into a discussion on the merits of a quango system to replace this Parliament or whether patronage for one generation is better than patronage over several generations, which is the only difference between hereditary and non-hereditary Peers. However, we must think carefully before setting up a body in the Scottish parliament which will rival its power and lead to all kinds of differences.
I am no expert on the American constitution, but my rudimentary knowledge of it is that the initial constitution had an elected congress and an appointed senate. It was always intended that the senate should be the junior partner of the two Houses. But it was said that an appointed system, however well it was defined and arranged to allow for difference in size and influence, would not be democratic. In this case the noble Lord has suggested one from Glasgow, one from Orkney and one from Shetland to redress the balance of the regions, and we will return to that point later.
The Americans therefore arranged to have an elected senate. Whatever the reality of the American constitution, the fact is—although some constitutional experts disagree—that the senate is now the more powerful of the two Houses, which was never the intention.
A second Chamber would bring back into the equation in Scotland an argument that has continued throughout its constitutional history and still continues: which of the two Houses of Parliament is superior? Is it the lower House which is elected or is it this House which is appointed or achieved in other ways? If it is elected the argument about power will become exacerbated.
Leaving aside the theoretical argument, there are attractions to a second Chamber. However, the White Paper makes it quite clear that the new Scottish parliament should be up and running in 2000. There have been many discussions over the years as to whether there should be a Scottish parliament. There are noble Lords on the other side of the House who have blown hot and cold about it. However, during the Second Reading debate in this Chamber there was no head of steam about the necessity for a second Chamber. The matter was not discussed. It was discussed in some detail in the Scottish Convention, on which I served for a year, but it was concluded that we did not need a second Chamber.
If a commission is set up, it will take at least as long, if not longer, to arrive at an acceptable 15 members of the commission than it will to do the work. The noble Lord put the amendment forward in a beguiling manner, not because it is a wrecking amendment, because that would not be allowed and he would never dream of
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doing anything like that. But I am sure that he has at the back of his mind the fact that it is a device to delay the day when the Scottish parliament is up and running.
I have no doubt that the new Scottish parliament will make mistakes—I cannot think of any legislature in the world that has not made mistakes—but it should start as soon as possible, with its powers clearly defined, so that there is no need for a second Chamber, with some degree of consensus and a willingness to ensure that legislation is brought forward with due thought and care and proper drafting.
Lord Steel of Aikwood: It may seem rather churlish after the success of yesterday's Mackay/Steel partnership that I should rise so early in these debates in my more familiar role of disagreeing with the noble Lord, Lord Mackay of Ardbrecknish, but I cannot commend the amendment to my noble friends.
There was one sentence in his remarks with which I did agree—when he said that the issue of a second Chamber ought to be considered. The first point that I should like to make is that it has been considered at length. I remind the noble Lord that the Minister of State during the Second Reading debate told us that the legislation with which we are now proceeding is based on the recommendations of the Constitutional Convention. That convention sat not for weeks or months but for years, and the fact that the Conservative Party chose not to take part is a matter for the Conservative Party and not anyone else. They would have been welcome to participate in those discussions and they would have heard much discussion on this vexed question because it was thoroughly considered.
We rejected the idea of a second Chamber largely on grounds of cost and bureaucracy. We were very concerned, remembering the arguments that raged in the 1970s about extra layers of government; and that was the fundamental reason why it was rejected.
I pray in aid of that argument no less a person than Mr. Michael Ancram. I quote him not only because he is a former constituent of mine and a prospective Member of this place but because he is supposed to be the constitutional spokesman of the Conservative Party. On 19th May in the other place, he said:
"In my view, there is no case for a second chamber in the Scottish context. We would all agree that, if anything, there is too much politics and that there will be all sorts of layers of politicians in Scotland. To create yet another layer would not meet with the approval of the Scottish people, whatever form it might take and whatever its context and powers".—[Official Report, Commons, 19/5/98; col. 744.]
I could not put it better myself. If the noble Lord does not listen to me, he might at least listen to his colleague who is supposed to be the spokesman on these matters in the other place.
The reason is clear when we look at the proposals for the parliament. Mr. Ancram conceded that other parliaments had unicameral legislatures, and those occur in countries with not dissimilar populations from that of Scotland—Denmark, Finland, New Zealand and others. That has to be considered. Moreover, if one looks at the proposals in the Bill and the White Paper, it is intended

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that the consultation process of the Scottish parliament will be infinitely superior to the consultation processes we have here at Westminster.
Every Bill will have a much longer pre-legislative stage, and post-legislative scrutiny will be much more substantial. That should be borne in mind. An important point is that it has been agreed that each session of the Scottish parliament will last for a fixed term of 4 years, and that Bills can be carried over—something that does not happen in this place. There will be more time to scrutinise legislation. There will be no need to rush up against a July or October deadline. That should give us more confidence that the scrutiny of legislation in a unicameral parliament will be better than it is here at Westminster.
For all those reasons, I believe that we would be wise not to accept the amendment. Throughout these Committee proceedings, certainly on these Benches, we may at times be in disagreement with the Government or in disagreement with the Conservative Party, but we start from the proposition that, when in doubt on any issue, we should leave matters to the Scottish parliament itself. In years to come, the Scottish parliament may well look at the suggestions, for example, made by the noble Baroness, Lady Ramsay of Cartvale, on Second Reading, when she talked about the situation in Norway where the elected parliamentarians divide themselves into two groupings. That could be. Let us leave that to the Scottish parliament in the fullness of experience. In the meantime, let us press on with getting it, first, legislated, and then elected.
3.30 p.m.
Lord Lang of Monkton: I support the amendment and the proposal that there should be two chambers to the Scottish parliament. I was asking myself whether it was on cost or democratic grounds that the Government had rejected that option. I find it odd that they should reject it on democratic grounds since they have long complained that there was a democratic deficit so far as concerns Scotland. If indeed it is on the grounds of cost, as the noble Lord, Lord Steel of Aikwood, suggested, I believe that cut-price democracy would lead to second rate legislation.
The very fact that my noble friend Lord Mackay of Ardbrecknish was able to point out how many amendments have been brought forward, not just by opposition parties but indeed by government themselves, and accepted, in this place over the years underlines the value of having a chance to reflect and revise legislation in a second chamber.
It has been suggested that without a second chamber there would be more time to consider legislation. That is an argument that cuts both ways. With a second chamber, the option of introducing legislation in that chamber and enabling it to pass down to the elected chamber applies.
The noble Lord, Lord Hughes, drew a comparison between the US Senate and Congress and what might happen in a Scottish parliament. I do not believe that that comparison is valid for a whole host of reasons which brief reflection would easily bring to the
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Committee's attention. A better comparison might be the relationship between the other place and this place. It is clear that the elected Chamber is the senior Chamber and that this Chamber is secondary to it. That is something that has been acknowledged repeatedly during our debates, not least yesterday.
As I understand it, the Government's arguments centre around three points. The first is the arrangements that exist in various Scandinavian countries. My noble friend Lord Mackay of Ardbrecknish answered that point effectively. We should seek what we believe is best for us in the light of our experience, legislative customs, and what we believe would best allow for reflective and well-considered legislation.
The second argument is the proposal which we heard from the Government Benches on Second Reading and again just now from the noble Lord, Lord Steel. It is that there would be a far longer pre-legislative consultation period, and so legislation would be very much better before it reached the Scottish parliament. I am all in favour of pre-legislative consultation. Indeed, it was a feature of the White Paper, A Partnership for Good, which I laid before Parliament some years ago. It was then my intention that it should be done in the form of a special Standing Committee to take evidence from pressure groups and interested parties before all substantive Scottish legislation.
It was first used in Scotland in the context, as I recall, of the Children (Scotland) Bill. That Bill was the product of many detailed reports, inquiries, causes célèbres and other considerations. The Bill was the subject of extensive consultation before it went into Standing Committee. I do not believe that there is any evidence that the Act, as it finally appeared, has escaped the rigorous post-legislative analysis that so many Acts of Parliament receive, and which found shortcomings in it.
Nor do I believe that it is right to compare pre-legislative consultation with post-legislative consultation. Before legislation, debate is less focused than after legislation. Before legislation, it is a matter of listening to pressure groups and those with vested interests. Post-legislative consideration of legislation in a second chamber allows for a more objective and dispassionate view of the sections in an Act, and also one that is better informed by the arguments that have already taken place, and by the focus on the issues of the legislation that emerge during that period.
The third argument that the Government have advanced against a second chamber is that somehow politics are all going to be different in a new Scottish parliament: they are going to be more inclusive; more consensual; everyone will be less adversarial and more friendly. If the Committee believes that, it will believe anything. I believe that the politics are likely to be more acrimonious, especially if there is only one chamber. One of the benefits that this distinguished Chamber brings to legislation is that debates take place in a less adversarial and a less acrimonious atmosphere. That has led to a substantial improvement in legislation over the years.

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As to what form a second chamber would take, clearly there is here a huge debate which would have to be developed over a period of time, once the principle were accepted. I noted that the noble Lord, Lord Desai, who was in his place today, suggested that the second tier of members—the proportionately elected members—might form the second chamber. That would be an economical way of approaching the matter, but it would not get away from the party list, and the party divisions, and it would replicate, largely, the elected component on a constituency basis in the parliament.
My noble friend Lord Mackay suggests that there should be two separate chambers. That implies a whole new raft of individuals and costs. Clearly, those considerations should be taken into account. I do not believe that the argument that this place should act as a second chamber of the Scottish parliament should be too easily dismissed. It is surely not beyond the wit of Members of this place and the Government to find a way in which the strong interest in the affairs of Scotland, as a component nation within the UK, should have the opportunity to find expression in consideration of Scottish legislation emerging from the Scottish parliament. Clearly, the balance of powers has to be addressed carefully. There would be no purpose in this place acting as a second chamber to override the elected chamber in Scotland, any more than it would ultimately override on important issues of legislation the views of the elected Chamber within these Houses of Parliament.
There is a possibility that this UK Parliament could continue to hold together the UK, so threatened by the Bill that we are debating. Every wall, every archway, and almost every panel in the building, carry on them the emblems of the countries that make up the UK. That is a reflection of the confidence that our Victorian forebears had in the role of these Houses of Parliament to reflect the interests of all the nations that form the UK. I do not believe that we should cast that aside lightly, as we are in danger of doing if we do not allow a second chamber to consider legislation in the Scottish parliament.
Lord Gordon of Strathblane: I support the noble Lord, Lord Steel, and others. I go slightly further in asking the noble Lord, Lord Mackay, to withdraw the amendment in the interests of his party. I think it quite remarkable that the Second Reading debate was the first time that the idea of a second chamber for the Scottish parliament was advanced. The noble Lord, Lord Mackay, is right: we should not simply copy other legislatures. I do not believe that anyone on this side advocates that we copy one or other Scandinavian country just for its own sake. But the argument applies equally to Scotland vis-à-vis Westminster. The fact is that in so far as they could be consulted the Scottish people decided against having a second chamber. The Scottish convention was open to all to participate in. It is the most all-inclusive body I can recall. It went on forever and ever. The Scottish people decided that they did not want a second chamber.
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The Government's White Paper, published before the referendum, did not mention a second chamber. No groundswell of support for a second chamber was reflected in debates running up to the referendum. The Scottish people endorsed the White Paper fairly resoundingly in the referendum.
In the circumstances, for the noble Lord's amendment to be put forward now, effectively delaying the introduction of the Scottish parliament for a minimum of a year or two years, will be construed by the Scottish people, perhaps unfairly, as meaning that the Conservative Party has not changed its spots on the devolution issue. That would be tragic. It is a great pity that the Conservatives are not represented in Scotland. It is not in the interests of democracy. The Scotland Bill throws them a life saver. It pulls them back literally from the grave. Short of an absolute cataclysm, the proportional representation proposals will ensure that the Conservatives have a voice in a Scottish parliament which they have been unable to earn in Westminster by the first-past-the-post electoral principle.
I should have thought that all noble Lords opposite would consider it in their interests to demonstrate that the Conservative Party has reverted to the party, after all, of Ted Heath, who made the Declaration of Perth in 1978, and of the late Lord Home who chaired a constitutional committee. Some eminent members of the committee unfortunately have switched sides on the issue. At the time they were strongly pro-devolution. The Conservative Party has an honourable tradition of devolution.
3.45 p.m.
Lord Renton: The noble Lord is good enough to give way. I remind him that the body over which Lord Home presided recommended merely a deliberative assembly with limited legislative power; namely, to consider the Committee stage of Scottish Bills emanating from Westminster and statutory instruments but on both heads giving Westminster the last word. It was different altogether from what is proposed by the Bill.
Lord Gordon of Strathblane: By no means am I suggesting that the recommendation was a precursor of this Bill. However, in the past the Conservative Party has shown itself more willing to accept devolution, even of a more modest nature, than would appear to be the case at present. I thought that things had changed. Regrettably, the amendment will be interpreted as an attempt by the Conservatives to delay the introduction of a Scottish parliament. That will do the Conservative Party in Scotland no good whatever.
I shall not go over what the noble Lord, Lord Steel, said. It is important to recognise that the parliament will operate differently from Westminster. Quite apart from having fixed terms, and being able to carry over legislation, an all-important and a self-denying factor on the part of the Labour Party putting it forward was the introduction of proportional representation. Until recently the Labour Party could have been assumed a landslide majority in Scotland. Instead of proposing the first-past-the-post system, the Labour Party quite deliberately put forward proportional representation,

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making it virtually impossible for any one party to govern without the co-operation of others. The absence of the adversarial principle, and the need for consensus to get any measure through, will make the Scottish parliament a very different body.
I fully agree with the observations of the noble Lord, Lord Lang. The idea that people will suddenly become a lot nicer to each other is hard to believe. It is difficult to see the Scottish media accepting non-confrontational politics. But at least the structure is in place to encourage it. Let us hope that it is successful.
It is not in the interests of the Conservative Party to put forward the amendment. I hope that the noble Lord, Lord Mackay, will have second thoughts and withdraw it. But let us be clear. The Government White Paper did not mention a second chamber; the Scottish convention did not mention it. Introducing it at this stage will do neither the Conservative Party nor this House any good. I suggest that the amendment be withdrawn.
Lord Beloff: I find it difficult to accept advice to the Conservative Party from the other side of the Chamber. Timeo Danaos et dona ferentes is one of the tags which lingers in most people's minds long after their schooling.
The point I wish to raise is a different one. Many references have been made to the experience of other countries. Scandinavian countries are emblazoned on the banners of the party opposite. I thought it would be of importance and interest to find out what another small country of great antiquity and culture was doing. I therefore left consideration yesterday of what I regard as the schools lowering of standards Bill and went to Chatham House to hear the newly elected president of the Czech Senate. The Czech Republic represents a cultural tradition in Europe as long as Scotland's. The Charles University was flourishing when the ancient Scottish universities, which are under such attack from Her Majesty's Government, were also flourishing.
What did I discover? When the Czechs emerged from communist domination, they created a new democratic constitution. It provided for two chambers, one to be elected by proportional representation—a chamber of deputies, if you like, or a lower house—and a senate. But for some years the Czechs did not proceed to the creation of the senate. However, given the difficulties they were running into with their single chamber government, a senate was then produced. It is an upper house, elected by the much better device of first past the post and therefore possessing greater democratic legitimacy than the lower house.
I heard the lecture along with the noble Lord, Lord Dahrendorf. The powers in legislation are similar: both houses are involved in the legislative process. The important point is that constitutional changes—the electoral system, duration of legislatures—can take place only by agreement between the two houses. I believe that there is something to gained from that, as well as from the bleak wastes of Scandinavia.
Lord Howie of Troon: We are dealing with a matter of principle rather than the detail of what an upper or
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second house should be. I wish to stick entirely to the principle rather than the detail. I sympathise entirely with the amendment. It seems to me perfectly sound. I advise the Government not to oppose it, but to think carefully about it and, under whatever arrangements of consideration are devised, to bring back some form of scrutiny of legislation.
I say that because I have had experience of both Houses. I had only seven years in the other place but I have now had 20 years in this place. I am sure that the lower Chamber in our system is inadequate in its scrutiny of legislation.
It is not to be blamed for that. It is inadequate because of the burdens which are placed upon it, on the one hand, and because of the nature of the adversarial party conflict which prevails in the other place. Because of the adversarial nature of that conflict, scrutiny is not scrutiny about the Bill; in another place, scrutiny is always about politics in some way. I do not wish to be philosophical here. I am referring to party politics, which is wholly and entirely non-philosophical.
The results are quite clear. Legislation comes before us which is inadequate. It may be inadequate because of the shortcomings of the parliamentary draftsman, although I would not say that. It may well be due to the shortcomings of the instructions which they are given. They do their best to transfer those instructions into something in the nature of legislation. We know from experience that legislation that comes before us has been inadequately digested and scrutinised.
I do not know what the figures are. In this House we sometimes complain that the Government pay no attention to the amendments which we make. That is not true. Several hundred amendments go through from this House every Session. In fact, it may be more than a thousand every Session. Almost all of those amendments comes from the Government because they have realised how inadequate the legislation was and how inadequately it had been scrutinised in another place. They then try to put the matter right here. Those thousand or so amendments are usually accepted. There are the more exciting ones which are usually political in nature which cause a certain amount of fuss. We had some amusement just the other day. I voted with the Government then with my teeth gritted and my eyes shut. The Government were wrong, as they so often are. That is a feature of government. The party in government is almost always wrong.
However, the Government get the big picture right. In this case, the big picture is the Scottish parliament. I nearly used the dread word "assembly" but I just managed to avoid it. The Minister is looking at me cunningly. The Government get the big picture right but they then get the framework within which the big picture is supposed to function wrong. They have got it wrong here again.
This matter of scrutiny is essential to our system. The only way in which it can be done is by having a second Chamber of some kind. I shall not attempt to describe what that second Chamber should be like or even to think about it at this moment. I am sure that the noble

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Lord, Lord Mackay, will think about it for me and present some plan to me at which I shall be able to look with my normal gaze.
But the weakness in the proposal is that there is to be some kind of pre-legislative committee which will look at the legislation which is coming forward. After it has looked at it and presented it, it will then be passed. That sounds great if you are very naïve and young, as I am. But it is not wonderful because do not forget that the members of the pre-legislative committee will be the same people who will later pass legislation. If I know politicians—and I certainly do know them in view of the 45 years or so in which I have been in politics—I find it incredible to imagine that they will change their minds in a few months, if ever. If any Member of the Committee knows a politician who has changed his mind, perhaps he will tell me before we take a vote.
Therefore, I believe that the noble Lord, Lord Mackay, has a sound, pronounced, strong and irrefutable point. I plead with my colleagues on the Front Bench to harken to advice just this once. The Government have been in office for only a year or so and they have not listened to too much advice so far. However, the time is coming when advice must be heeded. I suggest that my noble friend begins now.
The Earl of Lauderdale: The noble Lord, Lord Howie of Troon, has breathed a breath of fresh air into this afternoon's discussion. I could not help wondering whether he is not, like myself, a Suez rebel manqué. In any event, he has been willing to challenge the view of his own side.
I turn now to the claim that what is before us has the blessing and even the benediction of the Scottish convention. That was a self-chosen body, worthy and eminent no doubt, but its members were not elected as far as I am aware. Therefore, their authority is at best empirical.
One aspect of the problem has not been raised so far and that is why I dare to rise to my feet. The previous Scottish parliament was a gathering of the Estates. The Estates did not by any means sit together. They represented different interests, including the higher echelons of the Church. The major boroughs had their representation. I wonder whether the reason that we still have right reverend Prelates in our House is not a relic of what was present in most medieval parliaments. Our own Parliament here began in the same way as the Scottish parliament, as a gathering of Estates.
Therefore, my main concern is not the merits of having a second Chamber but the fact that Scottish history is being ignored. I am not aware whether the Scottish Estates ever quarrelled with one another. I am not sure that they did. My research has been rather inadequate in that regard. However, there were separate Estates which did not always sit together, and nor did they always sit at the same time. That was a feature also of medieval parliaments of England.
Therefore, the case for a second Chamber is not something to be laughed out of court. It can be extracted from Scotland's own indigenous history, and on that
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ground, as well as the grounds already advanced by the noble Lord, Lord Beloff, I support my noble friend's amendment.
Lord Ewing of Kirkford: My noble friend Lord Howie asked whether we could show him a politician who had changed his mind. The mover of the amendment changed his mind. My good friend the noble Lord, Lord Steel of Aikwood, laughs. We have had extensive experience of Scottish politics. I can recall the days when the noble Lord, Lord Mackay of Ardbrecknish, was a Liberal candidate. He changed to become a Conservative candidate to win the seat, only to be defeated at the next election by a Liberal candidate. However, that is all in the past.
I should say to the noble Earl, Lord Lauderdale, about the whole question of the Scottish Constitutional Convention that if we should not laugh out of court—and I do not believe we should—the proposal for a second Chamber, we should most certainly not laugh out of court the standing of the Scottish Constitutional Convention. My experience of that body—sharing the chairmanship with the noble Lord, Lord Steel—was that it was held in the highest regard by the people of Scotland and was recognised as a cross-party group, albeit that it excluded the Conservative Party and the Scottish National Party. But there were people from all sections of Scottish opinion working together to produce the document which it eventually produced, Towards Scotland's Parliament.
I suspect that we are today at the beginning of a fairly detailed and long debate. I do not mean that that debate is just for today; indeed, it will be a long debate during the months and years ahead about whether we should have single chamber government in Scotland or whether we should have a second chamber. In his contribution, the noble Lord, Lord Steel, said that the Scottish Constitutional Convention considered the whole question of a second chamber. That is absolutely accurate, there are no "ifs" or "buts" about it. The convention, under my chairmanship at that date, made its position clear when it rejected the proposal for a second chamber.
I am still strongly connected to the convention, although I no longer share the chairmanship with the noble Lord, Lord Steel, because that honour now rests with my noble friend Lady Ramsay of Cartvale. I do not want to pretend or give your Lordships the impression that somehow or other during my time with the convention I thought that a second chamber would be a good idea. But one of my great weaknesses is that I keep thinking and sometimes my thoughts overtake those that I had a few years ago. Sometimes that leads to inconsistencies in my own approach to particular policies. Indeed, it leads me to the position today where I honestly believe that we should not decide the issue today. I have a feeling that the noble Lord, Lord Mackay, will not want the issue decided today because it is far too important to decide on the basis of a debate lasting an hour or so. We need to give the matter the most serious consideration before we come to a decision as to whether or not there should be a second chamber. However, that is not an excuse, far less a reason, for

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delaying the implementation of the Scottish parliament. That parliament is due to be up and running by July 1999, and nothing should stand in the way of it meeting for the first time in July of next year.
I have given some serious consideration to whether or not we should have a bicameral system in Scotland. I do not wish to be dogmatic. I am not imposing my views on anyone; indeed, I am just expressing my views and they may well be rejected and described as nonsense. Nevertheless, that has never stopped me expressing my views in the past and I do not propose to cease doing so today.
I believe that we should have an extensive debate on the matter. I do not like the idea contained in one of the noble Lord's amendments; namely, that we should have a commission. The first job of any appointed commission is to look for the next job. I have never really been in favour of such commissions being appointed. After all, we are all mature enough as politicians to decide the issue over the years ahead.
I have looked at the situation which has developed in Scotland, particularly over the past 8 months since the referendum. I say openly and publicly that one of the great mistakes that my party made in Scotland was sharing a joint platform with the Scottish National Party. When the BBC asked me whether I would share a platform on a television programme with the SNP people, I made it absolutely clear that they had played no part in the convention and that I would not share a platform with them. All we did as a party during the referendum was to throw a lifeline to a party that was dying on its feet. It did not have a good result in the general election in Scotland on 1st May 1997; indeed, it achieved 22 per cent. of the vote while in actual fact it was looking for something like 30 per cent. or 34 per cent. But we revived that party by agreeing to share platforms. Today we see the net result of shared platforms.
I have seen all the opinion polls in the past. I was telling some of my colleagues that, 12 weeks before the 1979 general election, one of Scotland's national newspapers, which I will not name to save it embarrassment, published an opinion poll. It then got the professor of politics at Strathclyde University to extrapolate the poll and then published a front-page headline stating that the SNP was going to win 44 seats at the forthcoming general election. However, if the late Donald Stewart, a much respected Scottish National Party Member for the Western Isles, had not held on to his seat at that time, the SNP would have been completely wiped out in Scotland. The party lost 10 of the 11 seats that it had held just 12 weeks after that opinion poll was published.
So I am not taken in by opinion polls. Nevertheless, I am worried about the unity of the United Kingdom. That leads me to leave with your Lordships my thoughts on a second chamber and how it should be comprised. It is my view that one of our duties is to ensure that a Scottish parliament is viewed in the way we have always intended; namely, as devolved, not independent or separate. The way to ensure that we present it as devolved is to link it inextricably with Westminster, on the one hand, and with Europe on the other.
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Therefore, it is my view that a second chamber should be comprised of the elected Scottish Members of Parliament in the other House, and the eight elected Scottish Members of the European Parliament. Those Members would cost nothing. People worry about the costs involved, but they are already being paid. Those Members would comprise the second chamber. In that process we would link Edinburgh, Westminster and Europe all together. That process would also have another effect. People ask me for the answer to the West Lothian question: "Why can I vote for education in Blackburn, Lancashire, as a Scottish MP, but I cannot vote for education in Blackburn, West Lothian?". They would be able to vote on education in Blackburn, West Lothian, and that would also answer the West Lothian question.
I do not believe that we will decide the issue today—at least, I hope that the noble Lord, Lord Mackay, will not push the matter to a vote. The noble Lord has done Scotland in particular, and the United Kingdom in general, a service by initiating this debate. It is a debate that we can take forward in a constructive fashion. That is why it is important that we do not take such decisions today; indeed, we must not lock ourselves in and compartmentalise ourselves. We must continue the discussion that has been rightly started by the noble Lord, Lord Mackay, as month follows month, and possibly in two or three years' time we will return to the issue.
If we are to preserve the unity of the United Kingdom—and for me that is paramount—the last thing I want to see is an independent Scotland. The last thing I want to see is separation. Nationalism is the most dangerous force in politics. I shall never forget the late Willy Brandt. While I was with the Council of Europe, he came to a Commission meeting and used the phrase that the "graveyards of Europe were littered with the victims of nationalism". We need nationalism like a hole in the head. If we need institutions that prevent us wandering into that kind of situation, we should be prepared to discuss them openly. For that reason, I am grateful that this amendment has been tabled and discussed. However, I plead with the noble Lord, Lord Mackay, not to push the matter to a vote today. This is neither the day nor the time to make a decision on such a vitally important issue.
4 p.m.
Baroness Carnegy of Lour: I shall be very brief. The noble Lord, Lord Ewing, has, not for the first time, made a very important contribution to our debate. He thinks about these matters a lot, as indeed does the noble Lord, Lord Howie of Troon. I hope that the Government are listening. These are not all-party political issues, as the noble Lord, Lord Gordon, will discover during his time in this House. I am sure that he will make an excellent contribution to our future debates.
Those of us who have been here a long time know that legislation has to be tested. The policy within it has to be tested and so does the wording. It needs to be tested more than once. We have been doing this for

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years. We know what would have happened to our legislation in this country if we had not been here. We can feel that.
Civil servants and Ministers are not always right. Scotland, and Edinburgh in particular, are small places. Everyone knows everyone. The civil servants all know each other. They will know the members of the Scottish parliament and the members of the Scottish parliament will know them. Everyone will know the Ministers well. For all its new arrangements, can we be sure that this parliament will be able to stand up to its administration? Will the administration be able to stand up to its civil servants? I do not think for a moment that my noble friend, in moving this amendment, was trying to delay the establishment of the Scottish parliament. That, with respect, is a rather despicable suggestion.
It is reasonable to have this debate. It has been a good debate. I expect it is nearly over. Other great affairs of state are about to be discussed in this Chamber and we do not wish to delay them. I hope that the Government will think of some way out of this problem. The idea of the noble Lord, Lord Ewing, may be a good one. I was attracted to it when I first heard it. I believe it could have a good secondary effect as well as a good primary effect by linking the parliament to the constitution in a way that is acceptable to the people of Scotland. I believe that would be acceptable. We may need a specially created body. A reformed House of Lords may contain a structure which could meet in Scotland to do that job. There are a number of ways it could be done.
I believe that over the summer—if not before—the Government should think hard about this matter. The fact that this suggestion has not been made previously is surely because it has not been considered by this Chamber. We are the people who know about scrutinising legislation. Other people do not worry about it. They do not necessarily know what goes on here. I hope that the Government will think about this matter. I hope that my noble friend will take the advice of the noble Lord, Lord Ewing, at this stage and withdraw the amendment to enable the Government to consider it.
Lady Saltoun of Abernethy: I seek a little clarification following what the noble Lord, Lord Ewing, has said. I refer to the Scottish Constitutional Convention. Did the Conservatives, particularly the Conservative Peers, and, more particularly, the independent Peers, ever have a chance to take part in the Scottish Constitutional Convention? I am certainly not aware that the independent Peers did. Could that be clarified?
Lord Ewing of Kirkford: I hope that the noble Lord, Lord Steel, will allow me to answer the question. The question is easily answered. Every person in Scotland was invited to attend the original meeting that set up the Scottish Constitutional Convention. All our meetings were held in public. People joined us as we went along, whether they were Conservative, SNP, Labour, non-political, members of Churches, trade unions, the
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CBI or the Federation of Small Businesses. Many people came on board. The invitation was open to everyone to join.
Lady Saltoun of Abernethy: What form did the invitation take?
Lord Ewing of Kirkford: We certainly did not send out invitations.
4.15 p.m.
Lord Renton: The noble Lord, Lord Ewing, generously suggested that this matter merits a full discussion. I wonder therefore if I may presume to extend it a little. The noble Lord, Lord Howie of Troon, wisely asked the Government to consider carefully what we are putting forward in view of his 35 years' experience in Parliament. Dare I say I have had 53 years' experience in Parliament, most of that involved with legislation in one way or another?
The first point that I feel it is necessary for us to get right is the following. To what extent should we rely upon the Scottish Constitutional Convention, which was an advisory body? Parliament receives advice from various bodies such as Royal Commissions, specially appointed departmental committees and outside bodies of various kinds. We do not accept that advice more than about 50 per cent. of the time. We have to decide these matters within our own responsibility. We cannot delegate that responsibility merely by saying, "Someone else has decided this. They may be right so we ought to accept that". That is not the spirit in which we legislate.
I warmly support the amendment moved by my noble friend Lord Mackay of Ardbrecknish. I suggest that to have a second chamber would add to the value and importance of a Scottish legislature. I say that for the simple reason that in this long-established Westminster Parliament goodness knows how things would have gone without the revising powers of your Lordships' House. In Scotland we have to remember that they will start off with various disadvantages compared with the position that we have. In the first place—dare I say it?—most of the members of the new Scottish parliament in what is to be called the lower chamber (if we are to have a second chamber) will have had little, if any, parliamentary experience. Some will. Some of my noble friends will stand for that parliament and their contributions will be valuable. But we have to remember that to a great extent it will be a body of people who are tiros, inexperienced in parliamentary matters. How will they be advised on legislation? Of course the Scottish parliamentary draftsmen at present have a great reputation. I dare to say that often Scottish legislation compares favourably with that governing the United Kingdom as a whole.
However, the Scottish draftsmen will have to continue to advise the Scottish Office when legislation which affects Scotland passes through our Parliament at Westminster. There will be quite a lot of that. The Scottish parliamentary draftsmen are not over-manned at the moment. New draftsmen will have to be found and trained. The noble and learned Lord the Lord Advocate is the Minister responsible for that. It

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would be interesting to hear in due course—I do not say necessarily on this amendment—whether he can give us some idea of the number of parliamentary draftsmen who will be needed for a new Scottish parliament. That would be very helpful.
With those limitations and difficulties, surely it would be wise to have a revising chamber. There is just one further point. One of my noble friends said there would be no delay. I am afraid that there will necessarily be some delay in order to ask the body to be appointed by the Prime Minister of the day—after consultation with the Leader of the Opposition—to consider, under these amendments, the composition of a second chamber. It is right that great care should be taken over the matter.
The noble Lord, Lord Ewing, was right in saying that this is not a matter that we should rush into. We should consider it very carefully. We should make provisions in the Bill of the kind proposed by my noble friend Lord Mackay, which ensure that it is done carefully. I hope the Government will give the matter serious consideration. We shall be making history for Scotland with this Bill. We have to make it the best legislation that we can.
Lord Hughes: I must apologise to the noble Lord, Lord Mackay of Ardbrecknish. An outside commitment overran, so I did not hear his speech. I shall read it tomorrow.
At Second Reading, I expressed the opinion that a revising chamber was a desirable thing. That is not surprising. My long membership in Parliament has been entirely in this House. So I have seen the merits of a revising chamber—provided that it confines itself to being a revising chamber. The noble Lord, Lord Steel of Aikwood, made a slight mistake in attributing the Norway suggestion to my noble friend Lady Ramsay of Cartvale. I made that suggestion during my Second Reading speech. I believe I am correct in saying that she gave it not unfavourable consideration.
No matter how much a Bill may be discussed in one House, it nearly always seems to need amendment. The Bill before us today is no exception. I have looked at it roughly, and find that at least 25 amendments have been tabled in the name of my noble friend Lord Sewel, and not all are merely drafting amendments. Some are quite serious, particularly those in relation to reserve powers. So we have a demonstration in relation to the very Bill that we are discussing of the merits of having a different group of people to examine the legislation. The Norway example is one possibility. However, that would be a matter for the Scottish parliament to decide.
We have limited experience here at Westminster of single-chamber government. We had it for a short period under Oliver Cromwell, who abolished the House of Lords. However, before very long he decided he had made a mistake and set it up again.
I cannot support the amendment, although I believe that in the long run the government in Scotland would be better if it, too, had a revising chamber. But that must be a matter for the Scottish parliament. In this country we do not know how a single-chamber parliament would work in modern times. We must accept that there are
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many countries in the world, including the English-speaking world, where a single chamber seems to work effectively.
I therefore suggest that the noble Lord, Lord Mackay of Ardbrecknish, should accept the provision, if it is certain that it would be within the powers of the Scottish parliament to divide itself into two or to recommend a separate elected chamber. However, I am certain that it would not wish to have a second chamber that was other than a revising chamber and with no rights to insist against the will of the other house.
The real merit of this place is that we can examine legislation and do not always arrive at the same political conclusions as Members of another place. Four of my noble friends have spoken on the Bill; three have given support to a revising chamber in one form or another. I would not go so far as my noble friend Lord Howie of Troon in inviting the Government to consider accepting the amendment. However, one of my colleagues was wholehearted in his opposition. He rather over-egged the pudding. He said that the people of Scotland had voted emphatically against a second chamber. I doubt if there was one in 10,000 people who voted for a Scottish parliament who had any idea as to whether it should have one or two chambers. What people wanted was not separation, but a parliament to look after their rights.
I suggest that it would be wise to leave this matter to the body which will meet for the first time, as my noble friend suggested. Let us leave it to the parliament to decide whether the one chamber is working as well as it would like, or whether it would prefer something else. I am certain that its members would not want to rush into any change. They would want to approach the matter with due consideration. The noble Lord, Lord Ewing, suggested long consideration. I suggest that on this particular matter the right place for that long consideration is Edinburgh.
Lord Rowallan: I strongly support the noble Lord, Lord Ewing. He has apparently come up with a suggestion which, apart from anything else, gets round the West Lothian question. However, we must also pay attention to the remarks of the noble Lord, Lord Gordon. He is involved with the media and therefore keeps in close contact with what the Scottish people are saying. I have to disagree with my noble friends Lord Lang and Lady Carnegy of Lour. This House would be totally inappropriate as a second chamber for the Scottish parliament. The Scottish people have voted unanimously for a parliament and laws in Scotland, not in England. That is the reason the parliament is being set up in the first place. Therefore, it is my strong belief that they are wrong.
I venture to say, perhaps rather facetiously, that one of the reasons why a second chamber has not been discussed until this moment is that the other place does not understand what this House does. It is not until Members from the other end of the building come through to this end that they understand the importance of a revising chamber and the process of the law that we conduct in this place.

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I hope that there will be a second chamber in Scotland. It is very important that that happens. However, we must not stop the movement towards the implementation of the parliament. Its success is paramount if we are to have a continued United Kingdom. Any delay will be seen as procrastination on our part and will go against everything that we are trying to do to keep the country united.
I therefore strongly recommend this as the right idea, but we should write into the Bill a provision whereby the parliament itself has to form a second chamber—by the means suggested by the noble Lord, Lord Hughes, and the noble Baroness, Lady Ramsay of Cartvale, or by any other means that we come up with. But we must consider this issue. It would be a great mistake to allow the Scottish parliament to be set up without any sort of revising chamber being a possibility.
Lord Dixon-Smith: Before my noble friend sits down, he might agree with me that the suggestion by the noble Lord, Lord Ewing, answers only half of the West Lothian question. If I remember correctly, the Member of Parliament for Blackburn in Lothian can vote on a matter that affects Blackburn in Lancashire, but cannot vote on a matter possibly affecting schools in Blackburn, Lothian. That will be the situation. Given the noble Lord's suggestion of constituting a second chamber from Members in the other place, that wrong would be corrected. However, if the Member of Parliament for Blackburn in Lancashire cannot vote on a matter affecting a school in Blackburn in Lothian although the Member of Parliament for West Lothian can, that part of the question is not answered.
Lord Desai: I very much sympathise with the idea that the question of a second chamber has to be discussed, and will be discussed. The noble Lord, Lord Hughes, mentioned the suggestion that the Scottish parliament could make itself into two different sections, one to be a revising body.
What is proposed by the noble Lord, Lord Mackay, in particular in Amendment No. 7, need not delay the formation of a Scottish parliament if we decouple that and say that within five years the Prime Minister will appoint a commission to examine the question of a second Chamber for the Scottish parliament. Constitutional reforms have previously been passed by the Westminster Parliament for countries which became independent. I could give examples, but I shall not do so. It would be easy to say that the Scottish parliament should start on time and should have five or 10 years in which to deliberate, within which time it might itself, as the noble Lord, Lord Beloff, suggested, citing the example of the Czech Republic, decide to have a second Chamber. Perhaps the Prime Minister of the day could appoint a commission to consider the question of a second Chamber for the Scottish parliament. That commission might arrive at a decision yea or nay, but we can leave that for a later day and return to this question when we have had experience of the Scottish parliament as a unicameral Chamber. It need not all be done at once.
4.30 p.m.
Lord Sewel: It is clear that we have had a well-measured and constructive debate on this important amendment. It is right that we should take time to explore the arguments on both sides of the case. I have to say though that today is not the best of days to try to persuade me of the value of a second Chamber!
The debate concerns two, often closely related, concepts, those of function and structure. I do not believe that anything divides us on function. There is complete agreement on the need to have a parliamentary structure in which there is proper and robust scrutiny of legislation. The difference between us is on the appropriate and best structure to fulfil that function.
I do not believe, and the Government do not believe, that it is necessary to have a separate second Chamber, following the Westminster model of your Lordships' House, in order to achieve the appropriate and necessary degree of scrutiny. I believe it is valuable to try to move away from the Westminster mind-set and to recognise that there are other ways of organising a legislature.
During the 20 years or so when we were debating this issue in Scotland, there was a growing awareness that it was not appropriate to follow slavishly the procedures and processes that exist in this Parliament. The opportunity arose to try to come up with different types of solutions to what were seen as common and shared problems. That is what happened during the process of the Constitutional Convention.
I appreciate that noble Lords opposite were not part of the Constitutional Convention, and I make no comment about that. Their party thought it was inappropriate to be part of that process. I think it would have been enormously valuable if they had shared in that, but they did not, and that was their choice.
Through the Constitutional Convention, which was widely based, the issue of scrutiny was addressed in great detail, as my noble friend Lord Ewing of Kirkford indicated and the noble Lord, Lord Steel of Aikwood, described. On page 24 of its report, Scotland's Parliament, Scotland's Right, it is made absolutely clear that in the convention's view a second Chamber is not necessary in order to provide for proper parliamentary scrutiny. The Government have built upon that consensus. I see nothing wrong in a government building upon consensus, especially consensus that has been built up over time and has been the product of debate, probing and scrutiny.
It was that thinking that lay behind the detailed recommendations that the Government put to the people of Scotland in the White Paper at the time of the referendum. I believe that the people of Scotland are aware—indeed, more than aware—of the basic shape of the proposals that were put to them in the White Paper at that time. It was clear that the Scottish parliament was to be a unicameral parliament and was not to have a second Chamber.
My noble friend Lord Howie of Troon invited me to hearken to and heed the siren voices in favour of a second Chamber. I say to my noble friend that I have

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greater confidence in listening to the voices, and indeed the votes, of the Scottish people in the referendum which gave their decision.
Throughout my involvement and engagement with the devolution issue in Scotland, I have not been aware of any sustained support for the idea of a second Chamber. Over the 20 years or so, the idea has come up from time to time but has quickly disappeared. It is not a concept that enjoys support in Scotland.
I disagree with my noble friend Lord Ewing of Kirkford. I do not think that institutions should be established in order to prevent certain political objectives from being achieved. Like my noble friend, I am totally opposed to the idea of nationalism as a political creed and to separation as a policy objective. But I do not think that it is right somehow to construct the institutions of the parliament to prevent that. Again, I am prepared to put my faith and my confidence in the people of Scotland. At the end of the day, I have to acknowledge that, if the people of Scotland, through whatever process is decided appropriate, opt for independence or separation, then that is their right and I have to accept it, although I disagree with it. We do not get anywhere by trying to construct institutions that will be seen as artificially thwarting it.
I now turn to the details of the amendments. The amendments are in fact devoid of detail, which is important. They refer to the setting up of a commission but are silent on the issues of the powers of the second Chamber and its composition and membership. It took us 20 years to reach a broadly agreed position on the powers and composition contained in the present proposals. I wonder how long it would take such a commission to reach agreement on the powers and composition of a second Chamber.
I take the point made by my noble friend Lord Gordon that support for this amendment runs the risk—I put it no stronger than that—of being interpreted in Scotland as a means of delaying the implementation of the Scottish parliament. That is something that those who wish to support the amendment will have to take into account when they make their decision. We made clear in the White Paper and subsequently that there is a timetable; that a clock is running. We said that the elections would take place in the first half of 1999. We said that the parliament would be up and running by the year 2000. We now intend to bring that date forward on the basis of agreement among the various political parties. The passing of this amendment as it stands would clearly delay the implementation of the Scottish parliament. I believe that the people of Scotland would find that difficult to understand.
We have had a number of important contributions based on the legislative process—how we can improve and have the most appropriate form of legislation; how it should proceed through parliament. I make one comment on that. I will trust the parliament. Let the parliament decide the processes it wishes to adopt. I believe that we will have a grown-up, mature parliament for a grown-up, mature country. Let us recognise that it is the right of that parliament to decide its own processes and proceedings.
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Throughout the whole of the debate on the role and function of the Scottish parliament there was the greatest determination in every group of which I was a member—I am sure that the noble Lord, Lord Steel, and my noble friend Lord Ewing will agree—to ensure that the parliament adopted procedures which delivered robust scrutiny in the most effective way possible.
The proposals before the Committee have not come out of the ether overnight. They have been developed on the basis of negotiation, discussion and consensus-building over several years. It would be difficult for the people of Scotland to understand the major change in the structure of the parliament which these amendments involve, and much more so a delay in the introduction of the parliament.
Let me deal with the point made by the noble Lord, Lord Mackay of Ardbrecknish, in relation to other countries. As the noble Lord said, the Nordic countries—Norway, Denmark, Iceland, Sweden and Finland, which we all accept are mature, effective, functioning democracies—have unicameral democracies. We do not cite them in any way to argue that we should slavishly follow them. We say that it shows that there can be mature and effective democracies, mature and effective parliaments that are unicameral. If it works in that context, in the context of the vast majority of the Germany Länder and in the context of New Zealand, why should it not work in the context of Scotland?
I make one further reference. The structure for the future government of Northern Ireland enjoys widespread support in this Chamber and between the parties generally. The legislative assembly that is to be established in Northern Ireland is a unicameral parliament and I have heard no argument against that during the whole of the discussions on the future structure of the government of Northern Ireland. Therefore, we have seen already that there is acceptance that in the United Kingdom unicameral legislation is compatible with the way in which we have arranged our political affairs.
There are many ways in which the Scottish parliament will be able to adapt its internal structures and procedures to ensure that there is proper and appropriate scrutiny of the legislation and of the executive itself. We have had an exceedingly good debate on the issue and I hope that the noble Lord, Lord Mackay, will feel able to withdraw his amendment.
4.45 p.m.
Lord Mackay of Ardbrecknish: I am grateful to all Members Of the Committee who took part in this debate and to the Minister for his reply. When I read Hansard, his words in relation to a "mature parliament" will come back and no doubt will be used to haunt him as we go through the Bill. For example, we may well throw his words back at him when we come to Clause 33, among others. However, we will leave that matter until later.
The noble Lord made much of the fact that there was no sustained support in Scotland for a second chamber. I do not believe that there is much sustained opposition either. The noble Lord, Lord Gordon of Strathblane, who seems to have had the notes to defend the Minister on this issue, said that the Scottish people decided not to have a

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second chamber. I was not aware that they had ever been asked, which was a point made by the noble Lord, Lord Hughes. I do not believe they were ever asked. The ballot paper I had contained two questions and a second chamber did not figure in either of them.
We should not allow the Government to hide behind the defence that the question was not asked; therefore it was not answered; and therefore we should not debate it. Nor do I want to hear an argument from the Government, every time we come to a serious amendment, that somehow or other we are attempting to delay the passage of the Bill. I accept that there is a clock ticking towards the end date. I made it perfectly clear that we accept the result of the referendum and the Government's right to take this Bill through Parliament, to implement it and to have the election and the setting up of the parliament on the date they fix. But I hope that every time we come to an amendment we do not hear that we are simply trying to find ways of delaying the passage of the Bill. If the clock is ticking a bit late in the day, it is because it is taking the Government rather a long time to get the Bill into the Committee stage of your Lordships' Chamber. That is not my doing.
Lord Sewel: I am grateful to the noble Lord for giving way. I want to make it absolutely clear that I am not accusing Members opposite of seeking to delay the Bill. I am saying that, if the amendment was passed, it would inevitably delay the implementation and coming into force of the Scottish parliament. That is a different matter.
Lord Mackay of Ardbrecknish: I accept the distinction, but I believe there was a suggestion in relation to the "ticking clock" that the amendments and discussion on them would inevitably delay the Bill. I accept that the last amendment in the group would have that effect, though I did not intend that. Frankly, as this is very much a probing and opening up of the debate, it would not take more than a few minutes to re-phrase the amendments in order to allow the Scottish parliament to start but to make provision for a second chamber.
The Government should listen to what is being said, not just from this side of the Chamber but also from their own Benches. The noble Lord, Lord Ewing, intervened to tell us how I have changed my mind. He keeps saying that. But he went on to say that there was great virtue in changing one's mind. It shows that one has enough brains to have second thoughts. The noble Lord said that he felt this was an important issue and should be discussed and decided, not necessarily before the Scottish parliament is up and running but through some provision allowing it to be discussed in the initial years. That was a view supported by the noble Lord, Lord Desai.
There is a broadly based body of opinion therefore that believes that a second chamber is worth a great deal more consideration than it has been given to date. I fully accept, as the noble Lord, Lord Hughes, said, that the powers of that second chamber would have to be considered. Indeed, my amendment refers to the powers and composition of a second chamber. I fully accept that in America the Senate has moved from being a revising chamber to being arguably the driving chamber, the most powerful
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chamber. That is something I would not recommend, nor do I recommend it for any reform of this Chamber. These are difficult matters. The fact that the Government have not come forward with proper proposals for the reform of your Lordships' Chamber tells us that these matters are not easy to resolve: nor are they in the Scottish context.
I welcome the views from around the Chamber, with one or two exceptions, that there is merit in considering the proposition that we ought to have a second chamber in order to deal with Scottish legislation and the Scottish parliamentary situation. I am not of the view, as are some people—the noble Lord, Lord Steel, hopes for this—that it will all be sweetness and light. My noble friend Lord Lang said that he felt it might be more, not less, acrimonious. Certainly, if Scottish politics at the moment are anything to go by, it is pretty rough. Unfortunately, I have to say that my party and indeed the party of the noble Lord, Lord Steel, are slightly on the sidelines of the roughness, but there is a fair degree of roughness between the governing party and the Scottish National Party. However, we shall have more of that later. I am aware that many of your Lordships wish to get on to the important defence Statement.
Noble Lords: Hear, hear!
Lord Mackay of Ardbrecknish: There is nothing like reading the mood of your Lordships' House.
We have had an excellent debate. We have expressed to the Government from all sides that there is merit in considering the case for a second chamber. I simply say this to the Government. Given the timetable, I accept that it would probably be almost impossible to devise a second chamber solution which would be up and running before 1st May. But we all ought to reflect on how we could incorporate in the Bill a provision for a second chamber to be considered by the Scottish parliament and by this Parliament thereafter so that in two or three years' time we would be able, if we wished, to put in place a second chamber. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Farrington of Ribbleton: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Business
Baroness Farrington of Ribbleton: My Lords, before we move to the Statement on the Strategic Defence Review, I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

Strategic Defence Review
4.50 p.m.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, with permission, I shall repeat a Statement that has recently been made in another place by my right honourable friend the Secretary of State for Defence. The Statement is as follows:
"With permission, Madam Speaker, I should like to make a statement concerning the outcome of the Strategic Defence Review. I am today publishing a White Paper [Cm 3999] setting out the conclusions of the review, and a volume of detailed supporting essays. Copies are available in the Vote Office and I have written to all honourable Members individually, enclosing copies as well.
"However, before I address that issue may I first of all apologise to you and to the House for the unauthorised and improper disclosure to some newspapers last night of the content of the White Paper. I am as angry and as outraged at this leak as any other Member of this House. I have asked the Cabinet Secretary to authorise an immediate and thorough investigation into how this came about. The person or persons responsible will be dealt with severely.
"This is a serious breach of an embargo designed to make sure that the detail of this major review was given first of all to the House of Commons. I regret very much that the House and the Ministry of Defence's own employees heard first from the media. I take full responsibility for this situation, as my office demands, and that is why I apologise to you and to my parliamentary colleagues.
"Madam Speaker, the British people are rightly proud of their Armed Forces. They want, indeed expect, the Government to provide strong defence for their country. The Strategic Defence Review does just that.
"This review is the most radical and far-reaching reshaping and modernisation of our forces for a generation—unique in three key ways. First, it has been foreign policy-led, not Treasury driven; secondly, it has been unprecedentedly open and inclusive; and, thirdly, it has the wholehearted support of all of the service chiefs.
"This review will fundamentally reshape and modernise Britain's Armed Forces, sorting the weaknesses, building on our strengths and providing a structure to deal with tomorrow's threats, not yesterday's enemies. As a result, our forces will be more mobile, better manned, better supported and equipped, and better able to act as a force for good in the world—where we can and when we choose.
"The world has changed out of all recognition since the end of the Cold War. NATO remains the basis for defence and security. But while the threat of major war in Europe is now a remote prospect, new threats confront us—terrorism, the international drugs trade, the proliferation of nuclear, chemical and biological
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weapons, information warfare, ethnic rivalries, population pressures and the break-up of existing states.
"In the Cold War, we needed large forces at home and on the Continent to defend against the constant threat of massive attack from the Soviet Union. Now, instability is the new enemy and the need is increasingly to help prevent or shape crises further away—if necessary, by deploying military forces rapidly before they get out of hand. In other words, we must now be prepared to go to the crisis, rather than have the crisis come to us.
"Yet this review has demonstrated that our forces are not properly adapted to this new environment. In today's world we need to get our troops to trouble spots and crisis areas quickly and safely and make sure they are properly supported when they get there. The review, however, has highlighted the serious weaknesses we have inherited in this area—most notably in heavy transport and in our hollowed out and demoralised defence medical services.
"At the same time, increased commitments since then have taken their toll on morale, recruitment and retention and worsened the already very serious problem of undermanning in our forces.
"The review therefore proposes major new investment and new enhancements to improve the ability of our troops to deploy more rapidly to trouble spots around the world. We will acquire four additional roll-on roll-off container ships and four large C-17 aircraft or their equivalent. To support and supply our troops once they reach these trouble spots, we will enhance the Army's supporting arms so that for the first time they can undertake two operations at the same time. And because we have a solemn duty of care to our servicemen and women whom we ask to put their lives at risk, it will make new money and personnel available to revitalise the defence medical services.
"In total, I am proposing an increase in the size of the regular Army of 3,300, a change which will go a long way to restoring vital parts of our Armed Forces which have been hollowed out.
"Another key theme of the review has been a more integrated or joint service approach to defence to improve the operational effectiveness of the forces. We are therefore introducing a series of radical changes to our Armed Forces. These include bringing together all our battlefield helicopters under a single command and expanding the responsibilities of the Chief of Joint Operations; a new Joint Defence Centre to develop doctrine and other planning on a tri-service basis; and a four-star Chief of Defence Logistics who will co-ordinate and standardise our three support services properly for the first time. I am today pleased to announce that the first such chief will be Lieutenant General Sir Sam Cowan, currently the Quartermaster General.
"I am also responding to an historic proposal by the First Sea Lord and the Chief of the Air Staff by developing a new Joint Force 2000 which will bring

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together Royal Navy and RAF Harrier jets into a single organisation able to operate equally effectively from aircraft carriers or land bases.
"But the most important of these joint initiatives is the creation of a new pool of joint rapid reaction forces. These will be the spearhead of our new modernised front line and will include all of our high readiness forces. Not only will they enable us to respond quickly and effectively to crises of all kinds, and to build up larger forces should that be necessary, but—unlike today—we will be able to mount more than one Bosnia-size operation at a time.
"The review also introduces important new front-line capabilities. We will create a sixth deployable brigade to increase the Army's flexibility and help tackle overstretch. The parachute role of the current airborne brigade will also be transferred to the airmobile brigade, which will become a new, powerful and highly mobile air-manoeuvre brigade or "air cavalry" when the Apache attack helicopter enters service.
"And to meet our longer term needs, I am delighted to be able to tell the House that we plan to replace our current small carriers from around 2012 with two larger, more versatile, carriers—in effect, floating airfields capable of carrying a more powerful force, including a future carrier-borne aircraft to replace the Harrier the cost of which will be spread over some 20 years.
"I can also tell the House that the review confirms that the acquisition of 232 Eurofighters remains central to our long-term plans, providing a step change in the RAF's combat ability.
"But changes in the nature and scale of operations mean that we need two fewer submarines, three fewer destroyers and frigates and 36 fewer combat aircraft.
"These changes, though, will not lead to cuts in the overall strength of our regular forces since the manpower released by these reductions will be used to fill gaps in front line manning, thereby easing overstretch.
"For our reserves, there will also be important enhancements to the Royal Navy Reserve and the Reserve Air Forces.
"I am determined that the Territorial Army should become more relevant, usable and integrated with the rest of our forces. Those who wish to see it languish in an outdated Cold War role do the TA no service at all. Although its numbers will be trimmed to 40,000, it will be given a real heavyweight role in our nation's defences and called up more frequently in times of crisis. And for that we intend also that they be better trained and properly equipped.
"Unlike other recent reviews, this review is designed to put people first. That is why I am today announcing a significant new training and education initiative to boost recruitment and retention. All recruits will be given the opportunity to gain the six key skills needed by all in the workplace, and all personnel will be given the chance to achieve qualifications recognised by civilian employers.
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"In addition, there will be a major new programme, the learning forces' initiative, to expand education and training opportunities for the Armed Forces through new 'learning credits', which may be claimed both during service careers and for sometime afterwards.
"These proposals will boost recruitment and retention by increasing the already considerable benefits of a service career and benefit defence by developing the skills needed for modern warfare. The economy as a whole will also benefit as better qualified personnel return to the civilian employment market after their service career.
"For our service families, we are setting up a task force to address the special problems which arise from their mobile lifestyle. And for Britain's ex-servicemen and women, we are setting up a new veterans' cell to provide an access point for guidance and advice.
"It is of course vital that our Armed Forces are properly resourced. But if defence is to command the support of the nation it must also be seen as good value for money. By 2001–2, in three years' time, we will be spending £747 million more than this year. In real terms, allowing for one-off asset sales, this will be a reduction of £685 million or about 3 per cent. in the defence budget. That compares with a reduction of over 20 per cent. in real terms in the last seven years of the previous government. We will do this primarily through increased efficiency, smarter procurement and better utilisation of assets. And because the review represents a three-year settlement, we will be able to bring a new stability to our defence planning.
"This Government believe that, in addition to caring for our people and defending our rights at home, we must also discharge our responsibilities in the world. We must therefore strengthen the effectiveness of the international community in peace support and humanitarian operations of all kinds, particularly through the United Nations. I can therefore announce that Britain will now make a larger proportion of our front line capabilities potentially available to the UN for peace support and humanitarian deployments, including all of our rapidly deployable forces.
"In what is still an uncertain and unstable world, we must, of course, be able to react quickly to crises as they develop. But we should aim to do more than that. We should aim to prevent conflict from arising in the first place. I therefore intend to elevate conflict prevention—or 'defence diplomacy' as I have called it—to one of the eight core missions which will underpin our defence planning. That commitment will be backed up by a series of practical measures, including new education and training initiatives, to help develop and promote modern, democratically accountable forces around the world.
"I would like to turn now, if I may, to the review's conclusions on our nuclear deterrent. This Government were elected on a promise that we would retain Trident. We have kept and will continue to

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keep that promise. All of us wish to see a safer world in which there is no place for nuclear weapons. But while large nuclear arsenals and risks of proliferation remain, our minimum deterrent remains a necessary and continuing element of our security. We have, though, conducted a rigorous re-examination of our present deterrence requirements. We have concluded that we can safely make further significant reductions form Cold War levels.
"We will, therefore, retain Trident as our sole nuclear system, but the single submarine on patrol at any one time will carry only 48 warheads. This compares with the previous government's announced ceiling of 96. And by reducing our overall stockpile to 200 operationally available warheads, we will have cut the explosive power of the deterrent by 70 per cent. since the end of the Cold War. At the same time we will press ahead with arms control and introduce much greater openness on nuclear issues, including on our stocks of fissile material. AU in all, these are sensible measures which I am sure will be widely welcomed.
"This is a truly radical review which builds on the strengths and successes of our forces. It rectifies the weaknesses we inherited and it modernises our forces to deal with tomorrow's threats rather than yesterday's enemies. It places the skilled, brave and versatile people on whom our defence depends firmly at the centre of our planning and it gives them a clear sense of direction into the next century. Above all, it delivers the modern forces Britain needs for the modern world. This is a good deal for defence and a good deal for the country. I commend it to the House."
My Lords, that concludes the Statement.
5.8 p.m.
Lord Burnham: My Lords, I thank the Minister for repeating the Statement made by his right honourable friend in another place. At the same time I thank him for giving me a copy of the White Paper and of the Statement itself. I must emphasise that my brown envelope was a legitimate one. However, when I said in the defence debate last December that the then forthcoming review was not leaking, I had no conception of the degree to which it would leak thereafter, culminating in what we have seen in today's papers. It really is not acceptable that Peers and MPs in another place should read the Strategic Defence Review in the Daily Telegraph before it is put before Members of both Houses. The remarks with which the Secretary of State's Statement begins are very welcome.
It is essential that this House has a full opportunity of debating the White Paper. I am well aware of the pressure of government business, but it is essential that this House should have at least a full day's debate as soon as possible. It should be before the House rises at the end of this month, or whenever that may be. If this proves impossible—and I do not see why it should be—we must have time in the spill-over period. It is likely that there will be a Scotland Bill-like number of noble Lords wanting to speak and we really need two days for it.
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We have been told that the review has been foreign-policy based, but there can be no doubt that the dead hand of the Treasury has been on it. The Government have never published the foreign policy baseline which would have led them to try to match capabilities to commitments. The White Paper certainly does not do that.
I suppose we should be grateful to the Secretary of State and his advisers that the cuts, amounting to £915 million, have been kept down to that figure. I suppose that is the figure but the White Paper is remarkably light on finance (and incidentally on timing). But however the figures are presented and however the leaks are spin-doctored, there can be no doubt that as a result of this Strategic Defence Review Britain's forces will have fewer men, (in spite of the Regular Army increases), fewer ships and less money.
All the leaks have told us that the review will be foreign-policy led, but the document contains no foreign policy baseline. It says that we cannot predict the crises we will face. While this is self-evident, little has been done about it and the broad benchmarks referred to in the White Paper are very broad indeed. The saving statement is that we must retain the ability to build a bigger force. If that is in the plan, it is well hidden.
The result of this has been to leave plans for the future in an indeterminate state. An indication of this lies in the references to the two new large aircraft carriers which, with Eurofighter, can probably be considered to be the kingplanks of the review. Each time the aircraft carriers are referred to the document says, "we plan to" and this phrase was repeated in the Secretary of State's statement this afternoon. Never does it say, "We will build the aircraft carriers", and the cynics will claim there is too much of a let out if the Chancellor suddenly had a victory and in the light of a changing economic situation, or for any other reason, demanded a major saving.
Because of the leaks, which we have all heard, the contents of the review are well known. This is not the time to go over them in detail, but certain points should be touched on in advance of a full-scale debate in this House. First and most importantly, the timetable seems to be remarkably vague. The Statement seems impeccable but nowhere, with the sole exception of the gloomy figure of 2012 for the completion of the aircraft carriers, is there anything resembling a timetable. There are, as the Statement says, many radical proposals. The costs will very greatly depend on the recruitment of army personnel; the TA cuts; disposal of assets; payments for jointery and a number of other factors. Done quickly they will probably be more expensive but more efficient; done slowly, costs will probably be lower but there will be many other disadvantages.
The discussion of details of the review must await the debate, but there are one or two matters on which I must touch. The Territorial Army is one. Morale is low because of the uncertainty and there is still no indication, even in the White Paper, from where the 19,000 manpower saving is to come. Which units are affected? Which TA centres are to be closed? The Duke of York Barracks have been mentioned. That is an

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obvious target because of the great value of the land on which the barracks stand, but has full consideration been given to the fact that that will tear the heart out of the TA in London? The TA infantry battalions are a genuine general reserve. The review acknowledges there could be a crisis where existing regular forces are not adequate. Has it acknowledged the fact that replacements will be harder to get hold of?
Three armoured regiments are to be brought back from Germany. But where are they to be trained, particularly in the light of the fact that it may be more difficult in future to do this in Scotland or Wales? Can the department successfully deal with the troublesome environmentalists who do not like bangs and force units to carry a Portaloo rather than dig a hole in the ground?
The review and the Statement seem to skate carefully—a difficult task for a Labour Government—with regard to the difficult nuclear issue. The Secretary of State is to be very much congratulated on what is said in the Statement on that. I hope that the Minister will underline the point made that nuclear disarmament would greatly increase the costs of a conventional non-nuclear defence programme.
Recruitment, retention and education are rightly singled out. Retention is particularly important as trained men are at present dropping out of the back as fast as untrained men come in the front. If airlines are having to be bribed not to take on RAF pilots, we are in a desperate position and the ministry is right to do everything it can to keep service personnel and their families happy. The intentions, as set out in the review, are estimable. Let us hope they will be backed up by a fact or two.
Rightly in his Statement the Secretary of State talks about overstretch and undermanning. The plans for welfare and education are designed to help with that, but it will be a slow process. Where is the Army to get the extra 3,500 men for which it is looking? Unless confidence in the Armed Forces as a career can be rebuilt, that will not be easy.
Clearly, an immense amount of work has been done on smart procurement and defence logistics. This is most welcome, as is the news of closer co-operation between the services, particularly the Navy and the RAF. We are to have a four-star Chief of Defence Logistics. Where is he to fit into the service hierarchy? And will he be a logistician or an ordinary high grade quartermaster? We know that the first incumbent is to be Sir Sam Cowan, the existing QMG. I would advise him that the first bit of equipment that he should procure is a shield for his back.
The Strategic Defence Review is planned to cover the defence of this country for the next 15 years. Let us hope that it is successful. Some of the wording worries me and I implore the Government not to fall into the 10-year rule trap of the 1920s and 1930s. Above all, having made their decisions, will the Government now get on with it? Indecision in the past has led to a major loss of morale which in turn has affected service recruiting, retention and the efficiency of the fighting services themselves. That must be put right, even if the
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plans are not perfect. They are not, of course, but service Ministers have been under a great deal of pressure and will continue to be so. I hope that they continue to fight.
5.18 p.m.
Lord Newby: My Lords, in rising to respond from these Benches, I do so first with an apology from my noble friend Lord Wallace of Saltaire who is currently chairing Sub-Committee F of the Select Committee on the European Communities, which is taking evidence from the Minister of State at the Home Office. My noble friend hopes to be able to rejoin our discussions before we conclude them.
In welcoming the Statement, I support the request made by the noble Lord, Lord Burnham, for a full debate on the issues raised as soon as possible. By its own admission, this is a very comprehensive document. It marks a number of radical departures in defence policy and it is difficult to do justice to them in the short time available to us this afternoon.
I welcome a number of the review's components. I welcome first the Government's commitment to "jointery"—a new word to me at least, but a powerful one. To those of us who are not imbued with experience of military matters, the distinctions and the degree of rivalry between the forces comes as something of a shock and a surprise. We are pleased to see that the Government are tackling that in a range of ways. It is slightly surprising to hear the fact that two lots of Harrier aircraft are being brought together described as an historic proposal. To many of us, that seems a sensible and long overdue proposal. We wish all strength to the Government's arm in bringing the forces together where that makes for efficiency and sense.
Secondly, we welcome the rebalancing of the land forces and the decision to create an extra armed brigade. We are pleased that the Government are, in a sense, getting a grip on providing a sensible role for the Territorial Army and ensuring that it is better trained and equipped.
The TA has been in a bit of a limbo. It has been undermanned against targets in many areas and sometimes its equipment has woefully reminded one of a scene from "Dad's Army". While I agree with the noble Lord, Lord Burnham, that further details are required, the concept that the TA will be properly equipped and trained for today's rather than yesterday's tasks is a welcome change.
We welcome the reduction in the number of Trident warheads. Clearly, that is long overdue and the new level better reflects current realities. We also welcome the introduction of more commercial procurement systems for the Armed Forces. This is a vast raft of public expenditure and it is extremely important that value for money is maintained and enhanced by the introduction of more commercial systems.
It is remarkable that a foreign policy-led Statement makes not a single reference to our European partners or to the US. The words "Europe" and "US" do not appear anywhere in the Statement. There is only one reference to NATO. It is almost as though in many respects we are considering our international and global

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role on its own. It is in that area that I want to ask the Minister a number of questions. First, NATO is already committed to the development of a European security and defence identity within the alliance. Can the Minister explain how that development fits in with the proposals in the Strategic Defence Review?
Secondly, to what extent do the Government envisage that the expeditionary capacity will be exercised independently, or will it provide a contribution to combined forces? If so, with whom and in what circumstances do the Government envisage that occurring in the foreseeable future? In particular, do the Government envisage the expeditionary capacity being used beyond the Mediterranean and the Middle East? For example, can they really envisage joining action in the Indian Ocean or the South China Seas some 30 years after the end of our east of Suez policy?
To return to Europe, given that only the UK and France have a residual power projection capability, has the UK had discussions with the French Government about these plans, in particular the development of a possible joint European capability? Is the reality that the UK intends to follow the US lead even if that conflicts with the views of our European partners?
The Government have made much about this being a foreign policy-based strategy. I hope that the Minister will be able further to clarify the foreign policy objectives that underlie this strategy, not least for the generation of young people for whom full-scale European and global conflict is something to be read about in the history books and for whom "Cool Britannia" has a much greater resonance than "Rule Britannia".
5.22 p.m.
Lord Gilbert: My Lords, first, I thank the noble Lord, Lord Burnham, for his generally very helpful remarks—I hope that that does not embarrass him too much—and his endorsement of the comments of the Secretary of State about the scandal of this leak, which mortifies all of us. As the noble Lord has said, it is totally unacceptable.
The noble Lords, Lord Burnham and Lord Newby, whom I welcome to defence debates in this place, asked me about the possibility of a debate on this review. I am certain that we shall have a debate, but as to when that takes place is not within my gift. I relish having such a debate, and the sooner the better, as I shall inform the Chief Whip when I have a chance. But this House is also due a debate on NATO enlargement. That has not been forgotten. I hope that both debates can take place no later than Christmas. I should like them to take place as early as the noble Lord has said, but both he and I are aware of the exigencies of other business.
The noble Lord, Lord Burnham, gently mocked the proposition that this review had not been Treasury-led. I wish only that the noble Lord and other noble Lords had been with me a couple of hours ago when my right honourable friend the Secretary of State gave a press conference. At the end of his statement he invited the Chief of the Defence Staff to make some remarks. The Chief of the Defence Staff informed the assembled
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journalists of what we all knew: namely, that the Ministry of Defence had completed its work on the Strategic Defence Review about three months ago. Since then, the review has quite properly been subject to the most rigorous scrutiny by all the other departments which compete for public funds. It has received the most stringent scrutiny by the Treasury as noble Lords would expect.
The Chief of the Defence Staff confirmed that the package which left the Ministry of Defence in March was identical to that announced by my right honourable friend this afternoon in another place. The Ministry of Defence began by trying to make greater savings than the Treasury had asked for because it was aware, to quote a commentator on the scene, that,
"There is money to be saved in the MoD. Of course it has been through Frontline First and 'defence cost studies' but, as in the private sector, so in government the process of improving performance has to be continuous".
Those remarks were made in an article entitled "The Case For Defence" in the Parliamentary Monitor of autumn 1997 written by Mr. Michael Portillo. Therefore, we recognised that there were savings to be made. From those savings and the sale of assets that are no longer necessary for the defence estate, we hope to finance the huge enhancements that we are making in capability alongside the much more modest reductions in capability.
The noble Lord, Lord Burnham, complained about the absence of a foreign policy baseline. It is an unfortunate accident of politics that he was not engaged in his present responsibilities when the Strategic Defence Review started and therefore was not invited, as were many Members of this House, to a series of seminars hosted by my right honourable friend on the way in which the review should be conducted. The noble Lord's predecessor, the noble Earl, Lord Howe, gave us the benefit of his thoughts on these matters.
I can inform the noble Lord and the House that the Secretary of State has been scrupulous in seeking the opinions of former Chiefs of the Defence Staff, Permanent Secretaries, members of the Armed Forces and many noble Lords in this House, some of whom I have had the pleasure to entertain, in the course of the past 14 months in an attempt to obtain the widest possible range of opinions as to how the foreign policy review should be conducted, what its foreign policy baseline should be and what kinds of resources and assets would be required to implement its conclusions.
I noted one slip in the remarks of the noble Lord, Lord Burnham. He observed that there would be fewer men in the services. I regret to say that the noble Lord is not well informed. He could not have been listening to the particular passage in the Statement of my right honourable friend. The Royal Navy and the Royal Air Force strengths will remain unchanged and the Army's strength will be increased by 3,300. Far from having

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fewer service personnel, there will be more men and women when we have finally succeeded in implementing the decisions of the review.
Lord Burnham: My Lords, I thank the noble Lord for giving way. I believe that I said "with the exception of the increase in the Armed Services". I was taking into account the Territorial Army.
Lord Gilbert: My Lords, so be it. The noble Lord asked me whether or not I was prepared to say that we would build the carriers. I am prepared to say that we will build the carriers. That is the commitment of the whole of this Government, and that also involves Treasury approval. We expect the very earliest expenditure on the longest lead items of research work for the carriers in the next couple of years.
The noble Lord, quite fairly, asked me which Territorial Army units and centres will be closed. I cannot answer that question today because the process of working out the implications for individual units has only just started. Noble Lords will wish to know that in principle we are hoping to enhance the roles of the specialist Territorial Army members. We will make the most modern equipment available for them for the first time for their training.
The noble Lord did not mention this point, but my right honourable friend has made it clear that there will be an increase, albeit a modest one, in the resources available for the Army Cadet Force.
The noble Lord quite rightly said that we needed confidence building within the armed services. I quite agree with him. Had he attended the press conference earlier today to which I have referred he would have heard the Chief of the Defence Staff welcoming, unambiguously, the three-year commitment from the Treasury as giving stability for the future of the services. To quote the Chief of the Defence Staff, it will enable security planning to be carried out,
"in a way unprecedented in the past".
The noble Lord asked whether the Government will now get on with it. That is quite right; that is the test. Although we have sweated a fair amount of blood over the past year or so in producing this review, the acid test will be whether the Government succeed in implementing it, and that will be a matter for your Lordships' scrutiny as the months roll by.
The noble Lord, Lord Newby, paid a compliment to our proposals in "jointery". I should like to pay tribute to the role played by the First Sea Lord personally and the Chief of Air Staff in overcoming old habits, customs and prejudices in both their services. I know that the Secretary of State and other Ministers are intensely grateful to these two distinguished officers and the other military chiefs for their role in helping us to reach the conclusions we did in the defence review and for selling those conclusions to the individual men and women in their services.
I am glad that the noble Lord welcomes the new armoured brigade which we consider will produce a punch that the British Army has never had. I am also
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glad to hear his welcome for our radical overhaul of our procurement systems which I personally hope will very much increase the reliability of the equipment we buy and the sustainability of our forces. However, these matters take a long time to germinate and I can foresee many adverse reports from the National Audit Office in future years, although I hope that the background noise from it will be gradually muted as we feel the benefits of smart procurement feeding into the system.
The noble Lord, Lord Newby, also asked about Europe, the United States and NATO. All our NATO partners were consulted on many occasions in the course of this review. It remains the policy of Her Majesty's Government's to develop the European security and defence identity so long as it is clearly understood that our primary security rests with the North Atlantic Treaty Organisation.
The main thrust of this review, in addition to its developed "jointery", has been to give our forces an expeditionary capability that they have not previously enjoyed. The noble Lord asked whether this would be used independently or with combined forces. We anticipate that overwhelmingly it will be used with other countries in combined forces. He asked whether it is likely to be used beyond the Mediterranean and the Gulf. It is not for me to predict where our forces will be deployed or where the next crisis will arise. However, we have exercised with five power defence agreement countries. We had a magnificent exercise out of the Pacific last year, as I am sure the noble Lord is aware.
In relation to the discussion with the French on joint nuclear capability, I know that my right honourable friend frequently talks with his French colleague and from time to time they no doubt discuss "nuclear questions". But these matters are conducted above my pay grade and I am sure that if I did know about them the noble Lord would not expect me to disclose the details.
5.35 p.m.
Lord Bramall: My Lords, I should like, in the face of that interesting, positive and imaginative Statement, to congratulate Ministers on their brave, effective and apparently successful attempt to conduct this review largely from the top downwards, based on foreign policy commitments and required capability, and not, as so often in the past, from the bottom, regulated almost from the outset on the basis of the resources deemed by the Treasury to be necessary.
Of course it is early days, and there has been no opportunity to study the review. Obviously, not everything in it will satisfy everyone and no doubt some parts of it are better than others. However, the review, commendably, appears to have maintained in our Armed Forces a modern up-to-date combat capability for the kind of commitments, both expected and unexpected, which may well confront us as we move into the 20th century and play our appropriate part in international affairs. It has remembered our historic maritime role and has maintained a modem amphibious capability, which I have always considered to be important. It appears to be tackling our logistic sustainability, Army manpower

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and the medical services, which should never have been allowed to get into that state in the first place. I lose no sleep over the small reduction in our nuclear capability.
However, I ask for three points of clarification. Does the £600 million to be saved annually by 2001 include the amount received from the immense sales of the defence estate? If it does, it seems to me that, after a major review like this, to have held the line at that figure represents a considerable achievement.
Can the Minister enlighten us further on one area that still gives great cause for concern, and that is the substantial reduction, for very small financial reward, of our virtually irreplaceable Army reserve forces? Can he say how much of the reduced figure of 40,000 will be available for combat units of the Territorial Army infantry and yeomanry after the numbers required and earmarked for sustainability and logistic backing have been taken away; and does that figure include the University Training Corps regiments? The former point is important because if too many combat units, which represent the heart and spirit of the Territorial Army as well as the nationwide umbilical cord into the civilian population and the support for cadets, are removed the whole stuffing will go out of the reserve forces.
If this review represents, as is claimed, the most sweeping, radical and most complete review our Armed Forces have ever had, can the Minister give an assurance that uncertainty will now be removed and that they can be left to get on with their professional job, to recruit up to their maximum numbers and to build up their morale? It would be intolerable if, after all that has happened over the past eight to nine years, they were to find themselves next year or the year after going round this buoy all over again on some contrived pretext of value for money. I am sure a statement that there are to be no more reviews either in this Parliament or the next would do a great deal to restore flagging morale and to enhance recruitment.
Lord Gilbert: My Lords, I thank the noble and gallant Lord, whom I hold in great respect and affection, as he knows, for his kind and generous remarks about our review. He is right. Our expeditionary capability and our amphibious capability lie at the heart of our proposals. I am delighted to be able to put them in front of your Lordships.
It might be of interest to your Lordships to have a few more details of what we propose for the Defence Medical Services. We propose to procure, as a matter of urgency, a 200-bed primary casualty receiving ship, with a second one in the longer term; 800 more field beds across all three field hospitals will be brought to a higher state of readiness; the Army's regular ambulance evacuation capability will be enhanced; and an additional regular RAF aero-medical evacuation flight and 18 air escort flights will be established. We hope to recruit some 200 specialists and other medical staff into the Defence Medical Services. Within about three years we expect to be spending an additional £40 million a year on the Defence Medical Services.
The noble and gallant Lord asked me about the £600 million. That £600 million will have to be found by efficiencies, and we are confident that it can be
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found. The chiefs of staff thought that it could be found out of our budgets. That excludes the sales of defence assets. I cannot give him a precise figure of how much of the TA will be available for combat, but I can assure him that it will be much more than at present. I shall have to look into the point about the university training corps regiments, I confess, and I shall write to the noble and gallant Lord as soon as I possibly can.
I agree with the noble and gallant Lord that it is crucial that uncertainty be removed. I can assure him that it is not the intention of anyone at the MoD, or anywhere else in government as far as I know, to have another review in this Parliament, and I hope not in the next one either.
Baroness Farrington of Ribbleton: My Lords, with the exception of the noble and gallant Lord whose expertise the House values, I shall be firm with subsequent speakers.
Lord Mason of Barnsley: My Lords, my noble friend must be aware that it is a great relief that he and the Secretary of State did not have to contend with the Campaign for Nuclear Disarmament, Labour's Action for Peace, the Tribune Group, and the national executive, because this has been a peaceful review. For most of us in the Labour Party there is not a lot for us to quarrel about.
The review has revealed a major change in strategy, including the prospect of airborne military fire brigades, in liaison with our allies, to dampen down trouble spots beyond our shores. It includes of course within the rapid reaction forces, the development of integrated, inter-service Harrier forces, and I am pleased about that.
I am pleased that we have maintained a nuclear capability, and that it is to continue. Is there any timescale? Does my noble friend foresee any fresh nuclear missile developments within the force? I am disappointed at the cut-back in the Terriers. I think that we have gone too far, but there is some consolation in the fact that the Army Cadet Force will increase. I noticed in the press—there is a hint in the White Paper—a reference to private sponsorship. Will my noble friend explain? However, I congratulate my noble friend on his well-conducted foreign policy, led by and shared with the Foreign Office. I think that it has been a good government operation.
Lord Gilbert: My Lords, I am of course immensely obliged to my noble friend who of course occupied a position senior to mine at the MoD for many years with great distinction. I take great comfort from what he said. He and I have a certain amount of experience of wrestling with those within my own party who disagreed with us on things nuclear. Therefore it gives me great pleasure to be able to make the announcements that we have made today.
I shall answer just one of his points, and I hope that he will forgive me for being brief. So far as concerns the nuclear force's future, I can assure him that when it

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comes to considering—it is not yet time to do so—a successor for Trident, we have taken no decision that would in any way make it impossible for us to contemplate a successor system.
Lord Renton: My Lords, will the Minister tell us how the TA is to be reduced by 30 per cent. (19,000 men)? Is it to be done by dismissing a large number or by merely stopping recruiting, in which case it will take a long time? What will be the financial saving from that reduction?
Lord Gilbert: My Lords, it is unlikely that substantial numbers of people will be dismissed. Such is the rate of turnover in the territorial forces that I hope the process can be handled with the greatest of tact and the minimum of disruption to individual people's lives. Of course, at the end of the day, it is possible that certain units will have to be closed. We shall be taking account of regional loyalties, the need to spread the remaining units across the community as a whole, and to sustaining the bonds that those territorial units have with their local communities. I can assure the noble Lord that all those matters are at the forefront of the mind of my honourable friend the Minister for the Armed Forces. I have taken part in many discussions on those points.
The Earl of Carlisle: My Lords, I welcome the emphasis that Her Majesty's Government have placed on defence diplomacy. I am delighted to see the noble Baroness, Lady Symons of Vernham Dean, in her place. There is a cut in the number of destroyers and frigates from 35 to 32 and an increasing need to have frigates available for humanitarian tasks. Does the Minister feel that that weakness in the strategic review needs to be corrected?
Lord Gilbert: My Lords, if you asked me, I should like to double the amount of money spent on defence in almost every direction. I think that I am on record as being the only Member of the other place who voted for an increase in defence expenditure and voted against the Defence Estimates on the ground that they were too low. But we have to be realistic. We have to balance expenditure on defence against other demands on the public purse. So far as concerns the destroyers and frigates, we no longer face a situation, as we did in the 1950s, the 1960s, and the 1970s, where we might have been contemplating blue-water operations against powerful Warsaw Pact naval forces. The situation has changed greatly.
One of the reasons that we took the decisions that we did, which are endorsed by the First Sea Lord—I do not say that he welcomed them, but he thought that it was an acceptable solution—was that we looked at the possibility of submarine warfare, the size of submarine fleets of other navies around the world, where they were, and their capabilities, and we decided that we were not going to need nearly the investment that we have had in the past in the anti-submarine capability. It is as simple as that.
5.49 p.m.
Lord Chalfont: My Lords, I speak for myself, which is all that I can do from these Benches. Like my noble and gallant friend, I welcome this constructive, imaginative and forward-looking Statement. In parenthesis, perhaps I may express the hope that the Government will not consider this leak business to be too tragic. Of course it has been a leak, but it is not a revelation to be placed alongside the Apocalypse. We have known for some time largely what the review was going to contain, because the Government have conducted widespread consultations on it.
What is important is the content. Here, in deference to the need for brevity, I shall make just one point. The continued commitment to an effective nuclear deterrent is an extremely welcome development, and one which I hope will continue. Have serious strategic calculations been made about the nuclear threat from rogue states and possibly from our former enemies and the ability of possible enemies to protect themselves against nuclear strikes? Were all those taken into account in arriving at the new level of armament for the Trident force?
We shall need an answer to that. We shall need answers to many other questions in the future. However, I conclude by saying that at least for those of us who take defence seriously, it is encouraging to note that the Government also are doing just that.
Lord Gilbert: My Lords, once again I am deeply indebted to the noble Lord whom I have known for many years and regard highly for his remarks on these subjects. He will know what enormous pleasure it brings me to be able to stand at this Dispatch Box and confirm that we shall always have a Trident submarine out there 365 days a year, 24 hours a day. It was a commitment I was unable to give the noble Lord, Lord Trefgarne—unfortunately he is not in his place this afternoon—when he asked me about the matter some months ago in your Lordships' House.
I am obliged to the noble Lord for his recognition that the Government take defence very seriously indeed. It should also be taken into account that while we have reduced the number of warheads, and have announced the number of warheads we shall deploy, those should not be compared closely with the previous government's disclosed figure because that was a ceiling figure. The previous government—I do not quarrel with their judgment—saw fit never to disclose the number of warheads being deployed at sea at any one time. I hope that that meets the noble Lord's point.
Lord Jenkins of Putney: My Lords, I thank my noble friend for repeating the Statement made in another place. However, I fail to detect in it any realisation whatever that the world is in grave peril unless something is done to stop the proliferation of nuclear weapons. Our civilisation is in peril, even conceivably the life of humanity itself. Under those circumstances, it is with great regret that I regard the speech which my noble friend was obliged to repeat in this House as inadequate in that respect, if in no other.

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I shall confine myself to this single point. We are told that the review—I have it in my hand—was Foreign Office led. The words "nuclear elimination" are popular in the Foreign Office. I am sure that my noble friend Lady Symons—I am glad to see her in her seat—will confirm that. I understand that those words are not popular in the Ministry of Defence. That was confirmed by the fact that I did not hear my noble friend mention the words "nuclear elimination". Although I have not been able to read it fully, I was unable to discover any mention of those words in the Statement. That is all I have to say. I shall make further comments in the debate to which we all look forward. In the meantime, I ask my noble friend to confirm that the policy of nuclear elimination is not only the policy of the Foreign Office but also of the Ministry of Defence and the Government.
Lord Gilbert: My Lords, it will always be difficult for me to find forms of words which will make my noble friend Lord Jenkins happy on matters nuclear. However, I can confirm that it is the policy of Her Majesty's Government to work towards a nuclear-free world. I also hope that we work towards a world that does not have bombs, bayonets, machine guns and other rather unpleasant instruments in it. I merely point out to my noble friend that far more people have been killed by conventional means in the past 50 years than were killed at Hiroshima and Nagasaki put together.
Baroness Fookes: My Lords, will the Minister assist my memory? If one adds to this review the cuts in costs from the previous review, what is the total cut in the Armed Forces over the past eight years or so?
Lord Gilbert: My Lords, the noble Baroness tempts me. It is a sad story. I was not going to mention such figures because I did not want to bring grief to noble Lords sitting opposite. The fact is that in the last seven years of the previous government defence expenditure in this country was cut by 23.5 per cent. That is why I voted against the Defence Estimates at that time. If one adds to that what my right honourable friend proposes, it represents another modest 3 per cent. over the next three years.

Scotland Bill
5.55 p.m.
House again in Committee on Clause 1.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 2:
Page 1, line 11, leave out subsection (3).
The noble Lord said: In moving the amendment, I speak to the amendments standing in my name on the Marshalled List which are grouped with it.
This is a straightforward amendment. We do not need to worry too much about the consequential amendments that go with it. The amendment relates to the voting system. Not only are the Government proposing major
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constitutional changes to the way we have governed the United Kingdom for many years; they are also proposing major changes to the voting system. It is a system to which we have become accustomed and one which I and many others believe has served this country and the rest of the English-speaking world extraordinarily well over the long march of history.
In this Bill, the European Parliamentary Elections Bill, and the Welsh Bill, the Government intend to replace the traditional first-past-the-post system with a system of proportional representation. The amendment removes from the Bill all those parts which introduce proportional representation. If I were successful, and the Committee were to agree with me, the Bill would have a first-past-the-post electoral system for the Scottish parliament.
I have no doubt that the Minister will tell me—if he does not someone else will—that I am looking a gift horse in the mouth. Earlier today the noble Lord, Lord Gordon of Strathblane, told me that the Government were magnanimously throwing a lifebelt to the Conservative Party in Scotland. That is the weakest of all arguments for a change in electoral systems. (I thought that I might receive support on that!) I do not believe that one should campaign to change electoral systems simply because at one point in time a party would gain some electoral advantage from it; and, conversely, because the electoral system that we have had for many years has worked against a party in one or more elections. That is not a good argument for choosing electoral systems.
The Bill creates two classes of Members of Parliament in the Scottish parliament. Two-thirds will be elected in a conventional first-past-the-post system. The other one third will be wholly unaccountable to the electorate as individuals. Because of that, it will also transfer power from individuals to the political parties. It will add complication to what I believe is a simple democratic system which has served this country well for a long time.
At present—I hope that it may soon end—the case for the first-past-the-post system is not being heard as clearly as it should be. The commission set up by the Government has been told not to consider the merits of the first-past-the-post system. It has only to consider proportional representation—the different methods of fiddling the voting system and what fiddle tune should be chosen. As I have said before to your Lordships, it seems odd that a review of the electoral system should be set up consisting entirely of people who are signed-up members of not first-past-the-post.
6 p.m.
Earl Russell: I have asked the noble Lord before to withdraw that representation of the Jenkins Commission. It is inaccurate. The commission is not designed to review the electoral system. It is designed to produce one runner from a stable to run against first-past-the-post. Any supporter of first-past-the-post

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on the commission would suffer from a severe conflict of interest. I hope the noble Lord will not repeat that argument.
Lord Mackay of Ardbrecknish: I shall, because every time I repeat it I receive the kind of assurance that I have just had. The more times that I have that assurance, the better I am pleased. The fact is that when the Jenkins Commission brings forward its proposals, we can rest assured that the fanatics for PR will not make that fine distinction. It will be said, "That is the proposal these wise men have come up with to knock down first-past-the-post". The fact that the commission has not considered first-past-the-post means that such an argument would be bogus. Therefore, I welcome the noble Earl to my side in that regard. I shall quote him, as I shall be quoting the noble Lord, Lord Williams of Mostyn, when the Jenkins Commission reports. I shall remind the world, or the country at least, in the words of both noble Lords that that commission did not even consider first-past-the-post. It did not look at it merits or demerits. No judgment was made against first-past-the-post. The members of the commission are a narrowly drawn band of brothers and sisters who believe fervently and who have tried to choose the best system to run against first-past-the-post. It is interesting that it is such a complicated world that a commission has to be set up to decide that.
Lord Gordon of Strathblane: I agree with the final point which the noble Lord made. But does he agree that perhaps the best way to test out PR is to see whether it actually works? Perhaps the Scottish parliament proposal that we have part first-past-the-post and part PR might be a very good litmus test.
Lord Mackay of Ardbrecknish: It is an interesting thought that Scotland should be used as a guinea-pig for first-past- the-post. I can see that Members of the Committee appreciate the argument and I shall not go further with that.
First-past-the-post gives us clear accountability at constituency and national level. The accountability is clear. It allows the electorate to remove the governing party if it no longer retains the confidence of the electorate. That is something that my party experienced fairly severely a year ago. Under the British system, by and large, the verdict is decisive. An unpopular government cannot be kept in office by a minor party against the will of the electorate. Nor can a minor party decide to change the government without going to the electorate. There is clear accountability.
I suppose it is my advantage, or sometimes my disadvantage, that I am involved with all three Bills, so I can read across the government case from one to the other. However, it is interesting to note what the noble Lord, Lord Williams of Mostyn, said on the European Parliamentary Elections Bill when advocating the list system, which the Government hope to introduce into the European parliamentary system.
In his comments on the Bill both on Second Reading and in Committee, the noble Lord, Lord Williams of Mostyn, underlined the important difference between
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the European Parliament and the other place and the elections to the European Parliament and the elections to the other place. We must also bracket with the other place both the Welsh assembly and especially the Scottish parliament, which is a much more powerful body than the Welsh assembly.
The noble Lord, Lord Williams, pointed out to me that the European Parliament does not have a government arising from it. Of course, the Scottish parliament will have. The noble Lord pointed out to me when we were discussing the Bill that:
"Different elections require different systems and the key determining factor is the nature and functions of the body or legislature that is being elected".
He added later,
"The European Parliament, unlike our own, is not one from which a government is drawn".
The Scottish parliament will be a body from which a government is drawn, so to that extent it is more akin to the House of Commons and to the arguments used by the noble Lord, Lord Williams of Mostyn, regarding the House of Commons than to the European Parliament.
The noble Lord went on to say:
"We take the view that electoral systems should be appropriate for the particular bodies being elected. Our Parliament has a very different function from that performed by the European Parliament and we believe that different considerations obtain".—[Official Report, 9/4/98; cols. 857–9.]
Amen to that, I say.
Summing up later in the debate he said:
"It is not, I repeat, a Parliament from which a government is chosen".—[Official Report, 9/4/98; col. 899.]
But like the other place, this Scottish parliament is a parliament from which a government is chosen.
I mentioned accountability and direct accountability and the fact that the first-past-the-post system is extremely efficient at removing an unpopular party from power. Proportional representation can keep one party, usually a very small party, in power for almost ever and ever. It just shifts its alliances and partners in an elaborate dance and is never properly accountable to the electorate.
It is interesting that in one or two of the countries where PR has developed there are occasions on which the larger parties get so fed up with the situation that they form grand coalitions in order to overcome the dictatorship of the minnows. Unfortunately, the grand coalitions do not usually last very well and they probably do not provide very good government. But they are an attempt to make sure that the tail does not continually wag the dog.
There is also the question of the accountability of Members of Parliament. Of course, the system that we are looking at today, unlike the European Parliament election system, will have members elected on a constituency basis. To that extent, I can see that the Government will argue that as regards the constituency base the additional member system is something of a compromise.
However, there will be 56 members of the Scottish parliament who will not be elected by constituencies as we know them. They will be elected because they have

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been put on the party list; and unless your Lordships are quite vigilant later on, the party list may not even appear on the ballot paper unless we do something about it. But there will be a party list; the party will decide the list; and there will not be much relationship between the electorate and the individuals. The individuals will have much more interest in keeping in with their party than they will in keeping in with the electorate.
Therefore, while I accept that the system before us has a certain element of constituency link, it is greatly diluted by the 56 additional members. Everybody who has been a Member of the other place knows that that link can sometimes be a bit of a pain on a wet Saturday morning at surgery. But it is a good way of keeping Members of Parliament in touch not just with the people who voted for them but also with a lot of people who did not vote for them. There will not be a single Member of your Lordships' House who was a Member of the other place who would not say that many of the people who came to surgeries in particular and who wrote letters never voted for the Member of Parliament in question. That was certainly my experience. I remember going with one noble Lord in an aeroplane when he was a Member of the other place. We were talking about our surgeries and he said he thought most of his people did not vote at all. I should not go quite as far as that, but certainly in any parliamentary constituency a number of the people who visit the surgery do not vote for the Member.
The problem with the additional member system is that it will be a case of, "Oh well, why don't you go and see Jimmy Smith who is a member of your own party? Why not go and talk to him? He will deal with you". There will be some shuffling about. Or it may be said, "Oh, that's not my expertise. The other regional member, that is his expertise. Why don't you go to see him?"
Members of the other place cannot do that and by and large—I go further—they do not do it. Indeed, if another Member of Parliament encroaches on their territory, they become stroppy about that. There is a convention in the other place that you do not take up cases of other Members of Parliament, because each individual member of Parliament is the sole representative of all his constituents. Therefore, that is an important link that will be lost in relation to the 56 members.
The first-past-the-post system has undoubtedly over time given us stable and effective government in this country. By and large, the governing party has had a working majority in the House of Commons and has been able to take its programme through the full course of a parliament. It has also enabled governing parties to get their business through another place and even to use that argument to get the business through your Lordships' House, even when your Lordships are not too keen on the business in hand. It also tends, because of what is called the "cube rule"—although perhaps now a square rule—to give the winning party a healthy majority. That means that it is able to govern effectively without having to rely on other parties, wherever they come from.
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Therefore, on whatever basis one looks at it, it seems to me that first-past-the-post has served this country well. When it comes to continuing with electoral systems in Scotland and Wales, I believe that what we have in this country is every bit as good as anything that they have in any other part of the world. I am prepared to say that we ought to stick to our current system.
Moreover, it also has the advantage that it forces the the main political parties to take broad views. One of the problems of PR, especially with a multiplicity of small parties, is that the parties involved can become very narrow because they do not have to encompass a broad view. Normally we call it a "broad church" in this country. All the parties are a broad church. I suspect that the Liberal Democrats are a fairly broad church, as, indeed, is the party opposite. We have just had a defence Statement repeated in this Chamber, and you cannot get a broader church than the Labour Party has been over the years on defence. My party is also a broad church and that is only right. If parties narrow themselves, that is certainly bad for them, as well as being bad for democracy in the country. I believe that PR systems encourage that narrowness, whereas our first-past-the-post system discourages it; and, indeed, punishes parties which become too narrow in their appeal.
When it comes to choosing the governing party and selecting constituency representation, I believe that our system is the best one for us. I am not going to say that it is superior, and I do not want to hear anyone say that it is inferior; it is the best one for us. I would not go to those countries that have PR systems and tell them that they ought to change. Indeed, as I said in a previous debate, I do not want to hear about other countries that run PR and how magically they do so. We could trade countries on voting systems, but I believe that the voting system that a country arrives at is the one that suits it. That is what our amendments would do. It is interesting to note that New Zealand, which shifted to PR, is now desperately wondering how it can shift back to first-past-the-post.
Perhaps I may leave the Committee with a few additional words in case anyone in the party opposite or in the party beside me wants to get up and tell me that this is just the Conservative Party making a last ditch stand. I have with me a copy of a letter from the noble Lord, Lord Islwyn, printed in the Western Mail, which has become my morning reading with my interest in the Welsh Bill. Unfortunately, the noble Lord is not in his place today, but he is quite happy about his letter. In fact, the headline in the newspaper reads, "PR Could Be a Trojan Horse, Warns Islwyn", and the letter says:
"As an inveterate supporter of the 'First-Past-the-Post' system I believe that policies for a future government on an elected Assembly"—
that is, the Welsh assembly—
"should be placed before the electorate by the respective parties at an election.
What we have witnessed on the continent and elsewhere is policy decided after an election by a mish-mash of parties behind closed doors. This could now be the result for the Welsh Assembly under the additional member system of proportional representation".

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So the noble Lord is quite clear in that respect. Finally, those noble Lords who take part in the proceedings on the Welsh Bill will not be surprised to know that, on 1st July, after a debate about PR and while the Solicitor-General was replying to the debate and trying to explain all the complexities involved, the noble Lord, Lord Callaghan of Cardiff, was moved to intervene. He said that if anyone could make a subject clear he reckoned that it was the Solicitor-General, but that if he had made anything clear to the noble Lord, it was simply this: it confirmed him in his position that the first-past-the-post system is easily the best system. I concur, I trust that Members of the Committee will. I beg to move.
6.15 p.m.
Lord Mackie of Benshie: I listened with great attention to the noble Lord, especially his generosity in saying that the first-past-the-post system had rightly punished his party by extinguishing it from Scotland and putting the Opposition in with the biggest majority that we have seen for a long time. Those are noble sentiments, which I appreciate.
However, we are discussing the first-past-the-post system. I am a very old man and I remember many things about the system. I remember the time just after the war when we had nationalisation of steel, denationalisation of steel and renationalisation of steel. I also remember that we came out of the war with our industry intact and in a strong position; indeed, better than other countries in Europe. In our good government, through the first-past-the-post system, we have now come to a state where practically every country in Europe is better off than we are. For example, Germany, France and even Italy are much better off than we are under the different system.
As regards New Zealand, if it had had first-past-the-post, analysis says that it would have been in exactly the same position as it has come to under PR. Therefore, I do not believe that the first-past-the-post argument is any good. All the amendment would do is destroy the regional system. I do not want to say that it will benefit us in the Liberal Democrat Party because it will not. The evidence suggests that we will gain a large number of seats under the first-past-the-post system and that under the system proposed we probably would not gain any extra seats. However, despite that, we are still for PR. We are still for the Tory Party being represented in Scotland. It is certainly right and proper that the Tories should be represented, however badly they perform.
I turn now to the question of the 56 members who are elected having a lovely time doing nothing and passing the buck from one to the other. Of course, there may be something in that, but most Members today spend far too much time on constituency matters which should be handled by local government. They are hog-tied to constituency work when they should be thinking of other matters. Indeed, it would not be a bad thing at all to have someone to help in that process.
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I think that this is a bad amendment. I shall not go into all the issues which spring from it because we will be discussing such matters later. We are rather against the amendment; in fact, we are totally against it.
Lord Hughes of Woodside: I listened to what the noble Lord, Lord Mackie, said about constituency responsibility and whether Members or Parliament spend too much time on such work, and that reminded me of an argument which has been going on for a very long time. I remember Nye Bevan once chastising Jennie Lee on the basis that she spent too much time in her constituency and telling her that she had not been elected to be a social worker.
In my experience, constituency work has increased over the years largely because of centralisation of power and many local government councillors have given up the ghost of being able to do anything at all. I have no particular romantic attachment to constituency work. In my view, the only thing worse than the situation described by the noble Lord, Lord Mackay, of being involved in such work on a wet Saturday morning is being involved on a bright Saturday morning; indeed, that is infinitely worse. Of course, there are two schools of thought as to whether constituency work is of any benefit to a sitting Member of Parliament. Some people take the view that the more people you see at a constituency surgery the less chance you have of being re-elected because you satisfy very few people.
However, I shall leave that aside and pass on to the main argument about proportional representation versus first-past-the-post. I must admit that I am at times a little old fashioned. I was certainly brought up in the tradition that the purpose of having an election was to gain a majority of seats in Parliament so that, thereafter, you could implement your election manifesto and exercise power.
Contrary to the views of the noble Lord, Lord Mackay, I am not sure that the first-past-the-post system has punished parties which have become out of touch with the electorate. In my view first-past-the-post kept the previous Conservative government in place long after it should have expired. It appeared that over the 18 years nothing we could do in subsequent elections could budge the then government. None of us knows why people vote as they do at a certain time. Some people say that the Falklands war saved Mrs. Thatcher, now the noble Baroness, Lady Thatcher. However, I must admit that I have a sentimental attachment to first-past-the-post.
However, I am primarily opposed to the amendment of the noble Lord, Lord Mackay, because it does away with regional representation. I know in the part of the world I come from, the city of Aberdeen and its surrounds, there is a great deal of distrust of the central belt. I do not wish to upset my honourable and noble friends who come from the Forth/Clyde Valley. However, in the north east of Scotland we have a healthy disrespect and suspicion of people in the Forth/Clyde Valley. At the time when the SNP was at its height, I received a letter with the heading, "Labour voter turning SNP". The letter contained a great tirade about the great number of people coming to Aberdeen

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to work in the oil industry. They were referred to as foreigners and classic Alf Garnett types. According to the letter writer, these people were simultaneously taking the best jobs and living on the dole. They were causing overcrowding in the schools and lengthening the housing waiting lists. The letter comprised several pages. It finished, "Send them all back where they belong, to Glasgow". That is a true story.
Another anecdote reminds me of how people feel in our part of the world. I recall that during the devolution debates in the other place in the 1970s I made what I thought was a spoof speech to illustrate the way in which the people of Grampian in particular had their own almost sub-nationalist feeling of alienation from the rest of Scotland. In the speech I said that I intended to establish a new political party, the Grampian unilateral independence party, to be known as the GUIDIES for short. I said that if we drew the boundaries correctly—it would be a narrow band along the coast of Grampian, including the city of Aberdeen—we would have a parliamentary socialist majority. If we then projected the lines out in the right way, it would be a case of Grampian's oil and not Scotland's oil. I thought that was a funny speech. Some of my friends—I still had a few in those days—told me they thought it was a funny speech. I thought it was funny until over the next two to three weeks I received about 50 letters from people asking how they could join the party. Irony never comes across on paper.
However, there is a serious point here. Although I do not know Caithness and Sutherland as well as some noble Lords, my wife comes from a small village, Canesbay, in Caithness. I am a frequent visitor there. People in that village have their own culture and are almost sub-nationalists. I am sure that the noble Lord, Lord Mackay, who comes from the southern part of the country, will recognise in his heart of hearts that in the Borders there is also scepticism about the centre. We have to live with the fact that the Scottish population is concentrated in the Forth/Clyde Valley. I can understand that the members for the Forth/Clyde Valley take a great interest in what is happening there. The greatest deprivation in Scotland is to be found in the Forth/Clyde Valley. I have been to some parts of Glasgow where the poverty and deprivation are enormous. It is a culture shock to see that, especially when one comes from the north east of Scotland where we have a first-class health service. However, nothing is perfect. We have to address certain issues. We have nothing in the north east of Scotland. People will argue that rural poverty is worse than urban poverty, but I do not agree with that. If you suffer from poverty and deprivation it does not matter whether you live in a city or in the country. Therefore I can understand that members for the Forth/Clyde Valley will seek to address those problems, but they should not ignore what is happening elsewhere.
People in the new Scottish parliament will want to prove that their actions are effective. It is natural, however, that they will seek to look after the interests of those areas where the majority of the population live. That is where the majority of the members of parliament will come from. Despite my reservations about the arguments for first-past-the-post versus proportional
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representation, I believe that this additional member system with the eight regions and seven additional members from each region is an honest attempt to spread the influence of the parliament to enable it to be truly representative. It is worth while pursuing on those merits alone, and on that basis alone I believe that the amendment of the noble Lord, Lord Mackay, should be defeated.
Baroness Carnegy of Lour: I am trying to envisage what the parliament is likely to look like. As a result of the list system there is likely to be a wider spread of parties in the parliament. It appears that everyone will have to be a little more consensual. We have been discussing the pre-legislative scrutiny of Bills. If a Bill is to go forward in the parliament, both its drafting and its content will have to be examined. I can picture a scene where it will be hardly possible at all to get a Bill about schools in Scotland, for example, launched in the parliament as there will not be sufficient agreement about the content to launch it. Will the Minister reply to that point?
In the report of the Constitution Unit on the way in which different parliaments are set up and whether they have a second chamber, it is stated that PR is a helpful system and that it should be helpful as regards the parliament we are discussing. I can see that working as regards European-type legislation, which is framework legislation within which one administers, but our kind of legislation is precise. It is not just that every word matters but the precise content is clear. Will it be possible to achieve agreement at the start in an evenly balanced body? That is a question that is well worth thinking about.
Earl Russell: When I listened to the noble Lord, Lord Hughes of Woodside, I was reminded that every time I have been in Glasgow I have been complimented on how well I speak English and that I speak it awfully well for a foreigner. In the context of this Bill, whenever I think of the noble Lord, Lord Mackay of Ardbrecknish, I think of Italy. I cannot think why that is the case. I am therefore reminded of an incident right at the end of the war when my parents had an Italian cook. She was a partisan and a refugee with a passionate hatred of fascism. To my parents' great astonishment, on the news of the death of Mussolini, they found her in a profound state of grief. They asked her why she felt such grief. She replied, "He not suffer enough". As Mussolini was hanged with thin wire, this caused my parents some surprise.
When I listened to the noble Lord, Lord Mackay of Ardbrecknish, speaking of his party and first-past-the-post in the Scottish parliament, I am much reminded of that Italian cook. I know the noble Lord, Lord Mackay, says that this is a weak argument and that he has a soul above such things. He reminds me of the magnificent dedication to principle of Sir Stafford Cripps in 1951, arguing that a pre-election Budget must be immoral, and therefore forcing his party into a February election in the most appalling weather, which it lost by a whisker while winning a majority of the votes.

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The noble Lord's principle does him great credit. His self-denying ordinance moves me to some admiration. But even though he is under that inhibition, I am under no such inhibition. I am entitled, even if he is not, to believe that in the Scottish parliament first-past-the-post would work to the systematic disadvantage of the Conservative Party. I believe that that is bad for democracy, even if he does not.
We hear constantly about the virtues of the single-member constituency. Those virtues are sung much more often by single members than they are by voters. When I look at my own postbag, I am constantly reminded of the weakness of the single-member constituency. A great many people write to me and, I am sure, to many other Members of this House because they are not covered by the Bridlington agreement against "poaching" which prevents MPs from taking up each other's cases. I cannot count the number of letters I have received about the Child Support Act from people who have written to their constituency MP and found absolutely no sympathy or understanding whatever. There are a great many people who can get along and communicate with one MP and not with another. There are a great many subjects that can be taken to one MP and not to another. We should have a slightly more open mind about the virtues of the single-member constituency. A choice of members can be very much to the advantage of the voter.
The noble Lord argued, as he always does, about the power of third parties. He appears to think that third parties exist in an electoral vacuum and that they never have to compete for votes. However, if he studies, for example, the history of the Federal Republic of Germany, he will observe that the behaviour of the third party there has been much influenced by the changing attitudes of the electorate. In many parliaments a third party will be given only one option by voters. So in those cases voters must dictate its option. In others, third parties are no more immune to electoral considerations than first or second parties. So the voters will have a considerable input. The hermetic ceiling that the noble Lord, Lord Mackay of Ardbrecknish, supposes is a great deal less likely than he thinks.
The noble Lord talked about stable and effective government. Stable? I am not quite sure that the noble Baroness, Lady Thatcher, would have agreed. Effective? It depends what is meant by the word. I said last Monday that I was dealing with the second measure that I had seen through from Second Reading to repeal; namely, the Child Support Act. The other was the poll tax. There is a certain relativeness about the concept of effectiveness. I am inclined to think that the Government who came to power under the first-past-the-post system were, in practical terms, not quite as effective as the noble Lord thought.
I recommend to the noble Lord the maxim of John Stuart Mill: "When has there been a dominion which has not appeared natural to those who possessed it?".
6.30 p.m.
Lord Waddington: I have been interested to hear some of the comments in this debate about the role of the constituency Member. I remember being told many years ago about the way in which Duncan Sandys responded when he was called to account for rarely turning up in his constituency. He replied robustly that his job was to represent Streatham in Parliament, not Parliament in Streatham. On the whole, I believe that one of the most important of all the activities carried out by a Member of Parliament, and the one which keeps his or her feet on the ground and makes him or her a useful Member of Parliament is contact with ordinary people in the constituencies. I assure the noble Earl that when I was first elected to Parliament for Nelson and Colne, there were not that many Conservatives about the place. My postbag was certainly not full of letters only from Conservatives. I received letters from members of all parties. It did me a lot of good to have to deal with the problems of all manner of people and hold surgeries which often kept me on a Saturday from 9.30 in the morning to three or four o'clock in the afternoon. It was character-forming. I did not like it all the time, but it is certainly an important part of an MP's work.
It is crucially important to bear in mind that this new system of voting will produce two classes of members of parliament—one class whose members will be accountable to the electors and another class who will have no specific responsibilities to any particular group of electors and who will not be accountable to any group of electors within the region.
Lord Hughes of Woodside: Surely the noble Lord has not really examined the Bill. Those from the regional lists will be responsible to the people in the regions. Their duty will be to look after the regions. A false dichotomy is being thrown up.
Lord Waddington: That depends on the size of the region and the part of the region from which the individual comes. Someone who is plucked off the party list, for whom nobody will have voted as an individual, will then be expected to have a relationship with a particular person who comes along and asks him or her for assistance. I cannot believe that that will result in members of the parliament plucked off the regional lists feeling that they have a relationship with the electorate remotely like the relationship between a Member of Parliament and the constituency that he represents on a first-past-the-post basis.
Lord Mackie of Benshie: There are amendments coming up for debate which would connect the voter.
Lord Waddington: I know that very well. But at present we are confronted with a scheme put forward by the Government which does not connect the member of parliament plucked off the party list with any particular voters.
I know that the noble Earl did not raise the argument today but very often one hears Members from the Liberal Benches talking as if the only object of an electoral system is to produce members of parliament

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who reflect with mathematical accuracy the strength of the parties in the country as a whole. That is an absolute nonsense. It may be important to have some equivalence between the votes cast for a party and the number of people who are elected, but it is much more important to finish up with effective government, and with members of parliament who give good service to their electors. Without wishing to repeat myself, my worry is that this scheme, by creating two classes of members of parliament, will in fact create one class of members who will be of very little service to the electors to whom, nominally, they are supposed to be responsible.
I agree with my noble friend's opening remarks. Our traditional system has served us well. We are not in the business of supporting one particular system because we believe it may give us an advantage at this point in time. Shifting coalitions have not produced good government in other countries. I strongly believe that our system of first-past-the-post has created in this country governments which, broadly speaking, have represented the wishes of the public, and when they have ceased to do so at the ensuing general election, the public, have let them know quite forcefully, as they did a short time ago, that they have lost the confidence of the electorate.
It may well be that normally the Free Democrats in Germany manage in some mysterious way to sense the general views of the electorate and throw their weight on the side of this or that larger party. But it seems a very unsatisfactory way of doing things. It seems much more important that there should be absolute clarity in these matters and that when the electorate says clearly, "You, the Government, have lost our confidence", that government disappear simply because they do not have enough seats. I wholeheartedly support the scheme which is proposed by the series of amendments moved from these Benches.
Lord Gray of Contin: I rise to support the amendment moved by my noble friend Lord Mackay of Ardbrecknish. I listened carefully to the noble Earl, Lord Russell, whose speeches in this House I frequently find fascinating, but I have to admit that I found him less than impressive tonight.
I also listened carefully to the noble Lord, Lord Hughes. He and I got into another place at the same election, in 1970. I was elected for a highly marginal seat which I had to nurse for 13 years and to which I hung on by the skin of my teeth at most elections. He was fortunate enough to be elected for a very safe seat and, like all Members for safe seats, had very little worry when an election was announced. The difference between us is reflected in the views which we have put forward this evening. For example, the noble Lord indicated that he did not consider that the constituency link was vitally important. As one who sat for 13 years for a highly marginal seat, I found it extremely important. Indeed, when I lost it, I was out.
However well intentioned the Bill may be in proposing two different types of MP, that situation will have consequences with regard to the constituency link. I believe that that link is of vital importance. You cannot hope to know the down-to-earth problems of your constituency unless you hold regular surgeries and meet
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regularly with those who voted for you and those who did not. Someone said that most of the people who go to surgeries vote for no one, and there may be some truth in that, but one meets a wide cross-section of one's constituency. For that reason, I believe that that link is an essential ingredient which should not be cast aside lightly.
The Bill tries in various ways to do things differently from the way they are done at Westminster. The great idea seems to be, "Let's do it differently from Westminster". The noble Lord, Lord Steel, referred to leaving it to the Scottish parliament to decide various things. That is all very well, but good guidelines must be given in the first instance. The Scottish parliament will have a great many members who have never been members of a parliament before and have no experience of government or parliament. It is up to us in this Parliament to set out as clearly as possible what might be for the best.
I do not want to continue for too long. This has been a fairly lengthy debate for a small amendment, and most of what I had intended to say has already been said. However, I wish to put one point to the Government. If this system is so wonderful and so ideal, why is it not to be introduced for Westminster at the next election? I would have thought that, if it represented the best way forward, the sooner it were introduced, the better. There must be a reason. I have my own theory, but I will not deploy it at the moment.
Lord Hughes of Woodside: Before the noble Lord sits down, I am sorry if I gave the impression that I discounted entirely the constituency connection. I find it extremely valuable. But I am not sure that the best way of learning how a constituency operates is through the Saturday morning surgery. I believe that the value of the constituency link is in the meetings with interests of business, trade and education and the whole panoply of issues which come up in constituency party work. That link will be maintained by the constituency-elected members. I do not think that those who do not have a constituency are any less worthy because they do not have that link.
Lord Gray of Contin: I accept what the noble Lord said, and I know the point he is making. I do not believe that experience in other countries where the constituency link has been dispensed with necessarily indicates that that is a good system. I disagree with those who say that better government has been provided by that system than by first-past-the-post.
Like the noble Lord, the former Member for Aberdeen North, I was brought up on the first-past-the-post system, and I suppose that I have a bias towards it because of that. Where anything in which one believes strongly is concerned, I think that the argument for change must always be made by those who want the change. The argument for change in this case has not convinced me.
6.45 p.m.
Lord Sewel: The Committee will not be surprised to hear that the Government cannot support the

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amendments, which seek to remove the provision in the Bill for regional members. Perhaps it would be useful if at this stage I dealt with the specific questions put to me by the noble Baroness, Lady Carnegy of Lour, and the noble Lord, Lord Gray of Contin.
As far as I understand the question—I hope I have got it right—the noble Baroness, Lady Carnegy of Lour, asked how a Bill could be launched when there was not an automatic majority for it in the Scottish parliament because the electoral system would not produce a straight majority. We see as one of the great merits of what we are proposing the fact that it will be necessary for the executive, in putting forward a Bill, not simply to introduce it and rely on simple majoritarianism to get it through, but to build support and argue its case through the process of scrutiny and deliberation, to which we referred on the earlier amendment. One hopes that the electoral system itself will generate the working together and consensus and support building that is necessary.
Baroness Carnegy of Lour: I do not wish to hold matters up, but I believe that this is a quite different point from any others that have been made. I gave an example of a Bill about schools. I have great difficulty in imagining how one will achieve this lovely consensus for a Bill that will make the radical changes that are perhaps necessary in Scottish schools. I personally think that something has to happen; I am prepared to go in for a lot of give and take. Does the noble Lord really believe that such a Bill would get off the ground? Given the disagreement that will exist, I wonder how many Bills will get started in this parliament.
Lord Sewel: No one is trying to pretend that consensus building is easy; it is not. It involves a lot of hard work and difficulty in persuading people of the nature of the argument and the case that is being made. It is not a case of all being jolly good chaps or "chapesses" together.
Earl Russell: If I may offer a little comfort to the Minister, what he describes is the way in which Bills have gone through the Westminster Parliament for at least seven-eighths of its history; and it has worked.
Lord Sewel: I was going to say, "as always", but, as in the majority of cases, I am enormously grateful to the noble Earl.
I now turn to the point made by the noble Lord, Lord Gray of Contin, about why we are not immediately introducing a similar electoral system into Westminster elections. In this case we are setting up a new parliament and are making a judgment about what is the appropriate electoral system for that parliament. At Westminster we have an established Parliament. We have indicated that the Jenkins Commission is considering an alternative to the present system. That alternative will be put to the people in a referendum and they will be able to decide whether to stay with the status quo or move to a new system. When one is dealing with an established parliament, that seems to be a sensible way in which to proceed.
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Perhaps it would be useful if I reminded noble Lords of the Government's position on this issue. We wish to create a Scottish parliament by means of a combination of the simple-majority system and the additional-member system of proportional representation. That was proposed in the White Paper and endorsed in the referendum. The noble Lord's amendments strike at the heart of the electoral arrangements that were proposed.
We stated in the White Paper that, while a constituency link will be the essential foundation of the parliament, we wanted to provide for greater proportionality to build stability into the overall settlement. We proposed that there will be a significant number of additional members elected on a wider and proportional basis in order to bring a closer relationship between votes cast and seats won. That is what is being delivered in the Bill and I hope that Members of the Committee will be able to support it.
The Government believe that the regional member system in the Bill is an essential part of the arrangements for the Scottish parliament. Its purpose is to reduce the imbalance in political representation which can arise when one depends solely on the simple majority system at elections. As members of the Committee will appreciate, the "winner takes all" aspects of the simply majority mean that a party can secure a significant number of votes but gain no seats. As a result, the electorate can feel disenfranchised and distanced from parliament because they feel there is no one to reflect their views.
It is not simply a matter of which system benefits individual parties; it is the relationship that the elector feels with the political system as a whole. If, somehow, their preference cannot be reflected through the seats gained by the party they support, there is a risk of a deep cynicism and alienation overtaking the electorate and that is something of which we should be wary.
There is also the problem, particularly in a multi-party system—this is the case much more so in Scotland normally, though there is the argument that one could offer a Society for the Preservation of Parties at Risk in Scotland; I do not know how many members would subscribe to it, but it is growing—that a relatively small change in the distribution of votes can result in an enormously disproportionate effect on the number of seats won. That is one of the well-known and recognised problems of multi-party systems.
Perhaps I can refer to the election of 1997, though it is borne out in a number of other elections in Scotland. If we look at the relationship between votes cast and seats won, my party in that election obtained 44.5 per cent. of the vote and secured 78 per cent. of the seats in Scotland. The Conservative Party obtained 17.5 per cent. of the popular vote and obtained no seats. The Liberal Democrats obtained 13 per cent. of the vote and 14 per cent. of the seats. The Scottish National Party obtained 22.1 per cent. of the electoral vote and 8 per cent. of the seats. If that sort of imbalance was sustained over a period of time, there would be a sense of deep unfairness within the electorate of Scotland. People would demand change, and I believe rightly.

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One of the concerns expressed in 1978 was that the parliament then proposed would be dominated by members from the central belt. We have tried to construct an electoral system which answers that sort of case. The system we propose in the Bill will create an opportunity for parties to have members returned from parts of Scotland which have hitherto been a lost cause. There will be no wasted votes in Scotland because of the electoral system. Each region should have representatives from each of the parties, thus ensuring a balance of views in the parliament and avoiding the dominance of one area over another.
We will end what in some elections has been a dramatic, geographical segmentation of party representation in Scotland where one party has been associated with a specific geographical area of Scotland and only with that geographical area. That is wrong. This electoral system means that all the political parties in Scotland will be truly the parties of the whole of Scotland, drawing their support and their representation from all the regions. I believe that that is fundamentally healthy for the Scottish political system.
The Earl of Lauderdale: Before the Minister leaves that subject, can he say whether there is a danger in having two kinds of MSP—regional members and constituency members? Anyone who has sat as such, as I have, and my noble friend, will know that one is chased by constituents with a problem and very often the problem is insoluble. At that point one says, "Ask your regional MSP to deal with it." There is a good deal of passing the buck between the two, if not direct rivalry.
Lord Sewel: I do not believe that there will be a case of passing the buck. What will happen is that the individual constituent will have a choice of people to whom he can go. Again, that is to the good. The individual constituent will decide whether he wishes to write to, or see, the member of the Scottish parliament who is returned for the constituency in which he lives, or whether he writes to, and sees, one of the regional representatives. The point is that regional representatives are also constituency representatives as well as those members who are returned in the first-past-the-post system. Both have constituencies. Nobody will somehow be returned to the Scottish parliament on some sort of national list or something like that. It is the difference between individual first-past-the-post constituencies and regional constituencies.
Lord Simon of Glaisdale: As always, the noble Lord puts his argument most persuasively. But there is another aspect. Are not the party managers the preponderant influence on who is returned in the region for regional votes? Does not that militate against the immediacy of the relationship of the member of the parliament and his constituents?
Lord Sewel: I think not. Nothing fundamentally changes. Parties have always brought their candidates to the electorate and allowed the electorate to make a
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decision. It is exactly the same in the case of the first-past-the-post candidates as it will be with people on the list. Parties bring their candidates to the electorate and the electorate makes a judgment.
Lord Simon of Glaisdale: Surely the noble Lord recognises the difference between what happens at present when the local party organisation chooses the candidate—albeit one proffered by the party—and one where the regional list is graduated according to how far the party managers favour the names on it.
Lord Sewel: It is up to the parties themselves to decide what procedures and processes they will use in selecting both their individual constituency candidates and those who will represent them on the party list. That is a matter for the parties, and rightly so.
We want to ensure that the parliament we are establishing is inclusive and represents the diversity of Scotland. We believe that the electoral arrangements for the Scottish parliament will ensure a fairer balance of representation than would be achieved by reliance on a simple majority system. While the constituency seats will be contested in the traditional manner, the regional seats will be allocated on the basis of proportional representation but with a corrective element. Taken together, that should achieve a fairer distribution of seats and ensure that this is a parliament for all of Scotland representing a wide range of political persuasions.
I agree that the system for returning regional members can be seen as complex. But the actual voting process will be relatively straightforward for the voter. Each elector will be able to vote for a constituency candidate and cast a separate regional vote for the party or independent candidate they favour.
In the White Paper we promised that the electors would have two votes. Members of the Committee are seeking to remove those rights with the amendments before us. We have the opportunity to create a fair and representative parliament for Scotland and I hope that the noble Lord will feel able to withdraw his amendment.
7 p.m.
Lord Mackay of Ardbrecknish: I am grateful to those noble Lords who have taken part in the debate and to my noble friends who have supported me. If it makes up a little for yesterday, perhaps I may tell the Minister that he is the fourth Minister to defend this system to me over the Dispatch Box and he has made by far the best fist of it. He has not convinced me but he has made a far better job of it than his noble friends have done.
I shall not go over the arguments again. They have been gone over. We are coming to the question of the balance in different parts of Scotland, as the noble Lord, Lord Hughes of Woodside, mentioned. In my Amendments Nos. 8 and 9, I try to deal with that specifically. I was interested to have another joust with the noble Earl—I nearly called him my noble friend—Lord Russell. I must say to him that the Free Democrats in Germany are an interesting proposition. They just manage to struggle over the threshold of 5 per cent. on

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many occasions and yet, if one takes a tiny look at it, they have a lot more than 5 per cent. of the time in government in Germany, whether they have it with one party or another. I do not think that is particularly fair. They probably have more time in government than the two major parties because they switch allegiance. As to the noble Lord, Lord Mackie, who hopes that MSPs might spend less of their time on constituency matters, coming from the party that invented pavement politics, I thought that really did take the biscuit for this evening.
The noble Lord, Lord Sewel, has brought to bear the manifesto, the White Paper and the referendum. I know when it is not worth pursuing these matters. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 3:
Page 1 line 15, leave out subsection (4).
The noble and learned Lord said: This is a small drafting amendment which seeks to remove from the Bill what I believe to be an unnecessary provision. At the outset, perhaps I may say with the sense of modesty which characterises members of the Mackay clan in your Lordships' House that this is not my own idea. The amendment is in identical terms to an amendment moved at Report stage on the Government of Wales Bill on 1st July by the noble and learned Lord, Lord Simon of Glaisdale, who I am happy to see is in his place this evening.
Although the legal nature of the assembly for Wales is of a different character from that which the Scottish parliament will have, I believe that the same principle applies; namely, that the statute book should not include any provisions that are unnecessary and merely state the law as it would be. The amendment is focused on subsection (4) of Clause 1, which provides:
"The validity of any proceedings of the Parliament is not affected by any vacancy in its membership".
When one considers the provisions of Clause 8(4) of the Bill, it is obvious that the Scottish parliament is intended to be able to function competently even though there is a vacancy among the constituency members. That subsection provides that a by-election to fill a constituency vacancy should not be held if the latest date for holding the poll would fall within the period of three months ending with the day on which the poll at the next ordinary general election would take place. It is clear from that provision that such a vacancy could exist for up to three months prior to a general election.
It is inconceivable that this Parliament would intend that the Scottish parliament would be powerless to act competently during such a three-month period. Indeed, I would go further. It is inconceivable that Parliament would intend that the Scottish parliament would be afflicted by some form of legal paralysis each and every time a vacancy in its membership might occur. It is equally inconceivable that any court would seriously entertain any such proposition. For those reasons,
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I move the amendment and I look forward to such support as I get for it from the noble and learned Lord, Lord Simon of Glaisdale. I beg to move.
Lord Simon of Glaisdale: Without hesitation, I support the amendment. The subsection is utterly unnecessary and, being unnecessary, it should be removed. An unnecessary provision not only clogs up the statute book but is liable to give rise to undesirable arguments, sometimes very far-fetched.
When I moved a similar amendment to the Government of Wales Bill, I introduced it by describing to your Lordships, and with a statistical basis, how the statute book had swelled inexorably ever since the Renton Committee on the preparation of legislation had described it as already far too prolix. That being so, we should make every effort we can to remove unnecessary provisions.
I take it—perhaps the noble and learned Lord the Lord Advocate will correct me if I am wrong—that this being a Westminster statute, it will fall to be construed by English law, although I cannot imagine that the law in Scotland is any different. By English law, I have no hesitation in saying that the provision is entirely unnecessary. If it were removed, exactly the same events would occur. If there were a vacancy, the parliament would still continue to operate, just as the House of Commons continues to operate, notwithstanding a by-election or the death of a Member, or your Lordships' House, for that matter, notwithstanding a disqualification of a Member or his absence.
The only difference I can see from the Government of Wales Bill is that the Welsh assembly was specifically called a body corporate; in other words, a corporation aggregate. It is a fundamental feature of a corporation aggregate that a decision of the majority binds the whole body. That being so, a vacancy or absence of a member cannot make any difference. The majority decision binds.
So if this provision is unnecessary, I wholly support the amendment of the noble and learned Lord that we should remove it, and with thanks to have at least got rid of a few words from the over-prolix statute book.
Lord Renton: I, too, support the amendment. I am very grateful to the noble and learned Lord, Lord Simon of Glaisdale, for what he has said, although I feel obliged just to modify one of his arguments. He said that this would be interpreted under English law. With deep respect, I say to him that this is a Bill of the Parliament of the United Kingdom and would be interpreted according to the law of the United Kingdom, whatever that may be. If it were to be interpreted according to a law of Scotland, it would not worry me very much because I think that the Scottish courts are so wise that they would realise that the proceedings of the Scottish parliament could not possibly be held up merely because a by-election was pending.

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Whichever view one takes with regard to the interpretation of this subsection, I would say that it is unnecessary. I am very glad that the amendment has been moved.
Lord Steel of Aikwood: Perhaps I may indicate in one sentence that it gives me great pleasure on this occasion to indicate support from these Benches for the Mackay twins and their amendment.
The Lord Advocate (Lord Hardie): As the noble and learned Lord, Lord Mackay of Drumadoon, said, this amendment is similar to the one tabled by the noble and learned Lord, Lord Simon of Glaisdale, at Report stage in the Government of Wales Bill on 1st July. The report appears in Hansard at cols. 671 to 674.
Members of the Committee have suggested that this provision is unnecessary, as did the noble and learned Lord, Lord Simon of Glaisdale on the previous occasion.
Lord Simon of Glaisdale: Does the noble and learned Lord contest that, if this provision were removed, legally exactly the same situation would obtain?
Lord Hardie: I shall come to that. The short answer is: yes, I do contest that. Perhaps I may deal with the point that I was about to make. I share the desire of Members of the Committee for legislative economy, but do not agree that it would be appropriate to omit this provision on this occasion. As my noble and learned friend the Solicitor-General explained at Report stage in the Government of Wales Bill, and as Members of the Committee are aware, this provision has considerable precedent. I would not argue—and nor did my noble and learned friend the Solicitor-General—that we should include the provision simply because in the past we have always done so. However, I believe it is appropriate in this case to have the provision.
By omitting the provision on this occasion we would run a risk of giving someone the opportunity of challenging the parliament's actions by calling into question the validity of its actions because of a vacancy in its membership. That is particularly so, given that the argument to the effect that the provision is unnecessary, was, as I understand it, on the previous occasion based on the law of corporations aggregate.
In this case the Scottish parliament is not declared to be a body corporate, as is the case in Clause 1(2) of the Government of Wales Bill. Indeed, Members of the Committee will see, in reference to the Bill, that it is clear that the parliament is not a body corporate because Clause 20 makes provision for a particular body corporate to act—
Lord Simon of Glaisdale: If it is not a body corporate, is not the nearest analogy the House of Commons?
Lord Hardie: As I was explaining, it is not a body corporate because Clause 20 specifically sets up a body
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corporate entitled "The Scottish Parliamentary Corporate Body", which is obliged to carry out certain functions on behalf of the parliament. The corporate body comprises the presiding officer and four members of the parliament appointed in accordance with standing orders. One of the functions of the body corporate is to take proceedings by or on behalf of the parliament and to defend proceedings instituted against the parliament. It is my position that the parliament itself is an unincorporated body. It would be for the unincorporated association to regulate its own proceedings.
As regards this Bill, we are anxious to ensure that there is never any question of a challenge to the proceedings of the parliament by virtue of a vacancy arising. In answer to the point raised by the noble and learned Lord, Lord Simon of Glaisdale, it is my understanding that the Westminster Parliament is a corporation sole.
Baroness Carnegy of Lour: What does that mean?
7.15 p.m.
Lord Hardie: The position appears to be that it is a parliament regulated by English law. In dealing with the question of the law which would apply to the interpretation of the legislation once it is enacted, I respectfully agree with the noble Lord, Lord Renton, that it would be interpreted in accordance with the law of that part of the United Kingdom where the issue was raised. If it were raised in Scotland, it would be determined in accordance with Scots law; if it were raised in England, it would be interpreted according to English law.
Clause 1(4) of the Bill puts the question of the validity of proceedings beyond any doubt, and that can be no bad thing. In those circumstances, I urge the noble Lord to withdraw this amendment.
Lord Renton: Before my noble friend replies, and the noble and learned Lord, the Lord Advocate sits down, I invite his attention to Schedule 2, which he has already mentioned. On page 60 paragraph 6(1) of the schedule states,
"The validity of any proceedings of the corporation shall not be affected by any vacancy among the members",
and I need not go any further.
If we accept that it is right to put the provision there, surely it becomes unnecessary to include it also in Clause 1(4). What is the point of a phrase being repeated twice in the same Bill?
Lord Hardie: Phrases are often repeated in the same Bill for different purposes, and that is the position here. In Schedule 2 one is dealing with the body corporate which is going to act on behalf of the parliament. Schedule 2, paragraph 6 relates to the proceedings of the corporation. So the validity of the proceedings of the

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corporation cannot be challenged because one of its five members is not available—that is, the presiding officer or one of the four elected members.
Lord Renton: The heading to Schedule 2 is, "Scottish Parliamentary Corporate Body". Is that not the parliament itself?
Lord Hardie: No. I have obviously been unclear in my explanation. Clause 20 sets up the Scottish Parliamentary Corporate Body. Members of the Committee will find that on pages 9 and 10 of the Bill. Clause 20(1) states that,
"There shall be a body corporate to be known as 'The Scottish Parliamentary Corporate Body'".
The members of that body in subsection (2) are,

"(a) the Presiding Officer, and

(b) four members of the Parliament appointed in accordance with standing orders".

If Members of the Committee read on to subsection (9), Schedule 2 is applied. Schedule 2 is related to that corporate body. We are talking about a vacancy which does not invalidate the actions of the corporate body, whereas Clause 1(4) relates to a vacancy in the parliament, which does not invalidate the actions of the parliament.
Lord Renton: I am grateful to the noble and learned Lord. He has got that point absolutely right, but it does not make Clause 1(4) in the least necessary.
Lord Simon of Glaisdale: In the end, the noble and learned Lord's case for Clause 1(4) was that it is there to prevent an argument arising. Does he really think that if the argument arose in England any court would possibly hold that a vacancy in the Scottish parliament invalidated the proceedings? Nor can I believe, unless the noble and learned Lord assures me to the contrary, that if the same question arose in Scotland any Scottish court could possibly hold that the vacancy impugned the validity of the proceedings of the parliament and that a by-election, for example, would render the parliament impotent.
If the aim is to obviate an argument, there is almost no limit to what one can do. Every silly and futile argument, of which that is one, would have to be anticipated—and the statute book would continue to get more and more inflated. In the end, it comes down to this simple point: could any such argument possibly be maintained in any sensible court? The noble and learned Lord said that this provision has appeared in previous statutes. Ever since the earliest statutes, has any such argument even been put forward, much less been successful?
Lord Hardie: I am unable to answer the noble and learned Lord's last question as to whether such an
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argument has ever been advanced in any case, just as my noble and learned friend the Solicitor-General was unable to answer a similar question—
Lord Simon of Glaisdale: Perhaps I may put it more accurately. Have the Government any record of such an argument being advanced, still less of that argument being successful?
Lord Hardie: The answer is the same. I am unable to give the noble and learned Lord an answer because I have no briefing to that effect. However, I shall of course undertake, as did my noble and learned friend the Solicitor-General, to write to the noble and learned Lord on this matter once the necessary research has been undertaken.
On the question of the risk of such an argument being upheld in the courts either in Scotland or in England, with respect to the noble and learned Lord, that is not the Government's initial concern. The Government are concerned lest a challenge be taken which would unnecessarily take up time and cause unnecessary anxiety. This provision which, as I have already said, is consistent with provisions in many previous statutes over the years puts the matter beyond any doubt.
Lord Simon of Glaisdale: Perhaps I may ask the noble and learned Lord whether there is any record of anybody arguing that the House of Commons' proceedings are a nullity because a by-election is pending.
Lord Hardie: I am not aware of any such case but, in my respectful submission, that is not the point. I formally invite the noble and learned Lord, Lord Mackay of Drumadoon, to withdraw his amendment.
Lord Mackie of Benshie: If subsection (4) would stop this kind of legal argument taking place in the Scottish parliament, let us keep it in!
Lord Mackay of Drumadoon: I hope that during the dinner hour the noble Lord, Lord Steel of Aikwood, will seek to convince his noble friend that there are occasions for agreeing with "the Mackay twins", as he happily refers to us!
This has been an interesting trailer to some important discussions that we shall have later in Committee about the relationship between the courts of the land—I include not only the Scottish courts, but also the courts in England, Wales and Northern Ireland—and the legislation emanating from the Scottish parliament.
I am grateful to the noble and learned Lord the Lord Advocate for seeking to explain the Government's position in response to this amendment. I fully accept what the noble and learned Lord said about the legal nature of the Scottish parliament being different from that of the Welsh assembly. It is clear that it is not a "body corporate" as that term is used both in this Bill and in the Government of Wales Bill. I also agree that if this matter fell to be considered in the courts of Scotland, the law of Scotland would be applied. Whether there would be any difference between that law

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and the law of England or the law that applies in Northern Ireland may be open to question. Undoubtedly, however, the law of Scotland would apply.
On corporations sole, I am not in a position to offer any further assistance other than to say that I understand that it is not a type of fish that my noble friend Lord Mackay of Ardbrecknish will be hoping to chase tomorrow!
When the noble and learned Lord, Lord Simon of Glaisdale, referred to this point on the Government of Wales Bill, he made it clear that this is not an issue on which it would be appropriate to seek to divide the House. However, he said that he hoped that the Government would reflect further on the discussions that had taken place. Echoing those words, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 4 and 5 not moved.]
Clause 1 agreed to.
Lord Rowallan Lord Rowallan moved Amendment No. 6:
After Clause 1, insert the following new clause—

REFERENDUM ON SCOTTISH INDEPENDENCE
(".—(1) The Parliament shall not meet until a referendum has been held in Scotland on the single question of whether Scotland should be an independent state rather than continuing to be a part of the United Kingdom.
(2) The referendum referred to in subsection (1) shall be held on such day as Her Majesty may, by Order in Council, appoint.
(3) The Secretary of State shall by order make such further provisions for the conduct of the referendum referred to in subsection (1) as he thinks appropriate.
The power to make an order under this subsection shall be exercised by statutory instrument and any such statutory instrument shall be laid in draft before Parliament for approval by resolution of each House.
(4) Regardless of the outcome of the referendum referred to in subsection (1), the Parliament shall not approve any resolution or otherwise make any decision to hold, or to call upon Her Majesty's Government to hold, any further such referendum for a period of ten years beginning with the day on which the referendum referred to in subsection (1) is held.").
The noble Lord said: I consider this to be a very important issue and it is one that I raised when we discussed the initial Scottish referendum. It relates to the question of independence. I feel strongly that we should have a referendum on independence because the parliament must work. I apologise; I know that I have already said this today, but I shall say it 100 times before we finish this Bill. We must give the Scottish parliament some strength. It would be a very bad thing if the parliament were to have hanging over its head the sword of Damocles of the SNP wanting independence if it gains control.
There has been a great deal of media interest already in this amendment. Scot FM has already been on to me, as have several newspapers. We must discuss this issue fully. I feel strongly that SNP voters do not necessarily want independence. The majority of SNP voters are young, nationalistic (with a lower case "n") and very proud of being Scots. So am I—I may talk with an English accent, but I am a Scot through and through and am very proud of that. Tactical voting has been used to
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a tremendous extent in Scotland and, very undemocratically and very sadly in my opinion, it has cleared the Scottish Conservative Party out of Scotland. I do not think that those voters will appreciate the Government's stance yesterday on student fees. That was playing into the hands of the nationalists. We must be very careful about that.
On Monday 6th June, the Glasgow Herald had the huge headline,
"SNP set to be largest party at Holyrood".
On the following day, Tuesday, it produced a map which was SNP yellow all over. We know that opinion polls are dodgy things, especially when we are close to an election. However, according to the Glasgow Herald, once all the voting has taken place in all the areas and regions, the SNP will have 56 seats; the Labour Party will have 46; the Liberal Democrats will have 15 and the Conservatives will have 12 seats. If that is true, it means that the SNP will have the greatest number of seats.
The SNP has always declared that it will use the Scottish parliament to try to gain independence. That is its raison d'être. It has been trying to make Scotland an independent country. We must not be frightened of the SNP; we must tackle it head on. Many people have said to me that to hold an independence referendum is playing into its hands. I do not believe so. It would be a great pity if this opportunity were not taken. It is also an enormous pity that there is not a Scottish nationalist Peer in this Chamber who can stand up and put that case. Instead of considering a knighthood for Sean Connery perhaps he should have been offered an earldom so that he could sit here prognosticating on the matter.
But the people of Scotland need to be shown how the parliament can work within the United Kingdom. They voted for a particular parliament—a Scottish parliament. However, only 60 per cent. of Scots voted, which means that 40 per cent. did not vote for one reason or another. Of those who voted, a huge majority, 74 per cent., voted for the parliament. However, of the total Scottish population only 45 per cent. voted for a parliament and in Britain only 4 per cent. did so. Therefore, 96 per cent. of the British public did not want a Scottish parliament. We must make this parliament work for the 74 per cent. who bothered to leave their houses and vote for it. If in a referendum there is no call for independence that vote will give the parliament the impetus to succeed. It will remove the spectre of independence for at least 10 years. The parliament can then bed in and prove itself and show the Scottish people that it can work and do everything that the Government and I want it to do. That can be done from within the United Kingdom. If I am wrong and the Scottish people want independence we will still be sorting out what type of parliament should be established, but the arrangements for the reserved powers will be a complete waste of time because they will not be necessary. We cannot put our heads in the sand and forget about it. The spectre of nationalism will not go away; it is growing. We must make quite certain that the Scottish parliament can work. I beg to move.
7.30 p.m.
The Earl of Mar and Kellie: The noble Lord, Lord Rowallan, has tabled an amendment that will strike a chord with many citizens of the kingdom of Scotland. He has grasped the issue of the moment; the question of self-government for Scotland. The referendum held on 11th September last year established that Scotland was a political entity. The widely drawn question about the establishment of the Scottish parliament asked about self-government and did not refer to the limited self-government proposed in the White Paper and now in the Bill. For many, the problem to be addressed is: why can the people of Scotland be overruled by a majority from elsewhere who may have different objectives? Clearly, this is the Westminster question. The Bill answers that question in part for Scotland because Scottish domestic legislation is to be devolved, but the very significant reserved powers keep the Westminster question on the table.
To be in a union must be purposeful. That is true of the British Union, especially if it is not a de facto annexation. Scots may well have to decide between Britain and Europe. The Union of the Crowns in 1603 brought chaos to Scotland's European trading pattern and cultural exchange. Being ensnared in Great Britain has made very difficult the re-establishment of those links with Europe. The reaction of England to Europe fills me with gloom. Scotland is supposed to be a European country.
There is a demographic issue to be resolved; the question of being Scottish or British. The combined sense of Britishness and Scottishness is strongest among those with life experience of the Second World War. Those born subsequently may have increasingly less strong identification with that sense. What is sought generally is political rather than national autonomy. There is a paradoxical demand to be Scottish politically and to retain British links, especially as we all have friends and relations either side of the Border, not to mention trading patterns.
It has been said that Scotland should put up with the pain of disaggregation and any interim budget reductions as a long-term investment that will be worth it. The demand for political autonomy can be non-seccesionist. It ends only the parliamentary union. Such a position gives the Crown a linchpin role as the cement in a social, linguistic and economic union. This amendment allows the people of Scotland to test their real desire for political autonomy both now and in 10 years' time, if necessary building on the useful experience of the devolution project. I support the amendment.
7.45 p.m.
Lord Gordon of Strathblane: The Committee can rest assured that any intervention by me at this hour will be extremely brief. Having had the great pleasure of sharing an aeroplane journey from Scotland with the noble Lord, Lord Rowallan, I am well aware of the sentiments behind his amendment and have a great deal of sympathy for them. In particular, I should very much like to see the Scottish parliament placing a hiatus
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between any referendums that are held on the issue of independence. We do not want to return to this business every year, as tends to happen in Quebec. Where I disagree with the noble Lord is that I believe that this is another issue where the initiative must come from the Scottish parliament. If it comes from Westminster it runs the risk of being misinterpreted. I do not want to become obsessed by appearances, but there is a very great danger that nationalists may portray the amendment of the noble Lord as one that places an unnecessary hurdle between Scots and their ultimate desire for independence. I can see the argument that will be made: "Vote now or you will not have another chance for 10 years". That will be used as a positive argument for independence.
Lord Rowallan: Does the noble Lord accept that if there is no referendum the parliament will have a sword of Damocles suspended over it for 10 years and it will not have a chance to get going because of that?
Lord Gordon of Strathblane: I believe that the Scottish people will become rather impatient with anyone who holds up the provision of better education, health and transport in Scotland by constantly holding out the prospect of a Scottish referendum. I believe that that would be counter-productive from the viewpoint of the SNP. The essence of this parliament is to get it working as well as possible. I believe that very quickly people will realise that what the Scottish parliament is about is not gesture politics but the real business of making the day-to-day life of Scots a better one. The parties who contribute to that will succeed at the second elections and the parties who do not will fail. I have great confidence that the experience of the Scottish parliament will prove to be a good one from that viewpoint. I cannot side with the noble Lord because the outcome of his amendment may be precisely the reverse of what he intends.
Baroness Linklater of Butterstone: I, too, rise to oppose the amendment. I understand the motive and intention behind it and have heard the argument put by both Labour and Tory supporters in Scotland. I believe that the argument is misplaced and that the amendment is both unnecessary and undesirable. It is unnecessary because a referendum on the constitution has already been held on the basis of the White Paper. The Scots delivered their view unequivocally in favour of a devolved parliament within the Union. In the previous year, they also had the opportunity to vote for the SNP and an independent Scotland. They conspicuously failed to vote for it.
I believe that to introduce a further referendum simply on the basis of mid-term opinion polls is to undermine the constitutional process. It is like saying, "Do you really mean it?" On that basis, when would you ever stop?
I believe all Scottish people want a period of calm, and that is what the new Scottish parliament will need. A period of calm and stability will enable it to settle down to its new existence.

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As Jim Wallace said, pulling up the newly planted tree is one sure way of killing the tree if you want to examine its roots. The duty of politicians will be to get on with the business of running Scottish domestic affairs and address issues that really concern people, for example, education, health and employment. Everything will be new and all concerned will be learning as they go on. The eyes of the UK and the world will be on the new parliament to see how it handles its task. The last thing that the country needs at that moment is the prospect of yet another referendum hanging over it which would in any event solve nothing. In Quebec, where there have been repeated referenda on independence, the economy has been seriously undermined. Uncertainty, as we all know, is the enemy of a stable economy.
The time to judge the parliament will be after it has had time to prove itself and has demonstrated how well it is meeting the needs of the Scottish people. Imagine if a referendum did take place. What would the Scots be voting on? The SNP policies have never been properly challenged and tested, certainly not in a parliamentary forum. What does independence really mean? My belief is that it is not very much more than a slogan, and at the very least a period of debate and analysis, and the challenge of what the SNP stands for within the context of a properly established parliament will go some way to determining the issue.
If another referendum was held before the Scottish parliament was established, people would not be voting on the pure constitutional issue of independence: they would use the occasion to express an opinion on new Labour, on Tony Blair, on Donald Dewar's ineffectiveness, on local government mismanagement, on Sean Connery's knighthood and a whole raft of issues which have nothing whatever to do with independence.
As I stated in my speech at Second Reading, I believe that the surge in support for the SNP has everything to do with Scottish dissatisfaction with new Labour and not a lot to do with nationalism and separatism. I do not believe that there has been a sudden surge of belief in this philosophy and those principles. Anecdotal evidence has been referred to showing that most people who say they would vote for the SNP actually want what they are getting through the Bill, a devolved Scottish parliament responsible for its own domestic affairs within the framework of the United Kingdom.
We have a duty to put that to the test first. Referenda are blunt instruments and should only be used very sparingly to test major constitutional issues, above all in a parliamentary democracy like ours where the ballot box is the way people express their views. There is always the possibility that the result will be inconclusive and then nothing will be gained and much damage could be done. We have held a referendum and we have been given the answer. In the next general election the Scots will once again have the chance to express their views on the basis of how the parliament has performed, which is the right and proper way for them to do so.
Lord Sempill: My Lords, I regret that I cannot support my noble friend's amendment. The multi-option
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discussion has been held in some depth here and in another place and it has been rejected. We have moved forward. The forthcoming months will see the issue coming to the fore. Every major political party has an opportunity to put the argument to the Scottish people on the benefits of voting for the parties that are concerned and, one hopes, to diminish the vote of the SNP. I believe this will be won on the hustings and not through a referendum, which, by the nature of its format, is limited in its questions.
7.45 p.m.
Lord Watson of Invergowrie: My Lords, I also oppose the amendment, although for reasons slightly different from those so far advanced. The question as to whether or not there should be a referendum on independence and at what time is very interesting. I do not share the views of the noble Lord, Lord Rowallan, that the amendment would remove a sword of Damocles hanging over the parliament for years on end. It may be his aim equally to shoot the SNP fox by holding a referendum, whereby independence would be beaten and sent scurrying into the woods never to reappear. The latter part of that proposition is quite wrong. The question of independence will never disappear from Scotland; nor should it while 25 per cent. of the people believe in voting for a party that advocates independence.
However, it is also dangerous to argue that the level of support enjoyed by the Scottish National Party at the moment is not an entirely accurate reflection of the people wanting independence. To argue that point one would equally have to argue that the positions of the parties of the noble Lord or the noble Baroness in the opinion polls were similarly suspect, and indeed that of my own party. That argument does not stand up to scrutiny. There is always an element of protest in mid term or in opinion polls between elections. It should not be assumed that people who vote for the SNP are always doing so as a protest; that would be dangerous and would signify complacency, which I would not wish to endorse.
The issue of whether or not there should be a referendum exercised Members in another place at Report stage and Third Reading. There were many exchanges on the subject of whether or not the Scottish parliament could initiate a referendum. Perhaps the Lord Advocate can confirm the position. My reading of paragraph 1(b) of Part 1 of Schedule 5 on the Union between Scotland and England is that it would be impossible, it being a reserved power, to make a change via the Scottish parliament, and the Scottish parliament could not therefore initiate the referendum.
The position could become very difficult if sufficient numbers of people living in Scotland voted for the Scottish National Party and gave it a minimum of 65 seats in the parliament. If the SNP then decided to use what would be a majority in that parliament to decide that there should be a referendum on independence, it could provoke a constitutional crisis. It would be interesting to consider how that situation could be avoided. As the noble Lord, Lord Rowallan said, the most recent opinion poll projected a SNP representation

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of 63 seats, which is not very far from a majority. It would be a very difficult position and would cause real and dangerous friction between the parliament in Holyrood and Parliament here if the majority of the SNP decided to push for an independence referendum.
When faced with the choice, I believe it unlikely that the majority of Scots would vote for independence. I would argue against it. However, I repeat the view I expressed at Second Reading. I would respect the views of a majority of Scots and people living in Scotland voting in a referendum if that is what they wanted. I firmly believe that that is what they should have, not because I do or do not believe in it but because it is democracy. We should not remove that basic right from the people of Scotland.
I oppose the amendment because it would delay the implementation of the parliament. It is not appropriate that we should decide at this stage whether or not there should be a referendum. I do not think there should be a block of 10 years put on until a subsequent referendum is held. For those reasons I oppose the amendment, but this very important issue will not go away and should be clarified. I repeat my request to my noble friend to clarify the position.
Lady Saltoun of Abernethy: My Lords, I am fairly convinced that after the first Scottish parliamentary elections the Scottish Nationalists will probably be the biggest party in the Scottish parliament and that possibly after the following election they will have an overall majority. I know the Government do not like it but they have to face the fact.
Would it not be possible to have a referendum now, organised by the Westminster Parliament, with the Westminster Parliament deciding on the questions to be asked rather than one later, organised by the Scottish Nationalists, with them deciding on the questions to be asked, bearing in mind that those questions will be designed carefully to get the answer that they want?
As one who, I am afraid, regards it as inevitable that Scotland will become independent, probably within the next five or six years, I wonder, first, whether we are not wasting our time taking this Bill through this place. Would we not be better just to let it go through as it stands, since the future seems to me to be inevitable?
If we had a referendum now, and the result was in favour of independence, Scotland might be saved the expense of building a perfectly frightful and perfectly hideous parliament building, possibly totally unsuited to its requirement, because I suspect strongly that the Scottish Nationalists would start off in the old high school and then decide later that they required a new parliament building.
Lord Mackay of Ardbrecknish: This has been a short and interesting debate. If the noble Baroness, Lady Linklater, thinks that the constitutional issue was settled in the referendum last autumn, she did not see the same ballot paper as I did, because it did not put the three options. On 17th June—I would quote my words if it would not take time—I said that it would be an
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unsettled referendum, because it was not asking all the questions. I prayed in aid no less than the current Secretary of State who said in the Daily Telegraph of 13th April that year that the party's 49 Scottish MPs would campaign for a multi-option referendum on the country's political future. They did not do that. They joined, as the noble Lord, Lord Ewing, pointed out this afternoon—foolishly in his view and in mine—with the SNP.
I suggested to the Government last summer that to campaign with the SNP was dangerous. The Secretary of State was saying, "Vote for devolution and you save the Union" and Alex Salmond was saying, "Vote for devolution as the first step to independence". From looking at any public opinion poll, if I were to go to the bookmakers I would be putting my money on Alex Salmond. It is not just one or two opinion polls, but a serious number of them. As recently as last week the Scotsman showed 56 per cent. of my fellow countrymen for independence.
A good reason for not having a referendum, given the Government's incompetence on this issue, is that they would not be able to hold the line. George Robertson gave us the defence review earlier today. I hope that he is a better Defence Secretary than prophet. He said that devolution would kill the nationalists stone dead. Stone dead? With 56 per cent. voting for independence and 48 per cent. voting for the SNP in the latest opinion poll, some stone! Some dead! I say to my noble friend that we will need to do a bit more campaigning before we risk a referendum on the future of the UK.
Baroness Ramsay of Cartvale: The noble Lord, Lord Rowallan, will not be surprised to hear that the Government do not support the amendment which would require the Secretary of State to hold a referendum on independence before the parliament could meet and would prevent the parliament from requesting another referendum for a decade.
The noble Lord believes we need to seek the views of the people of Scotland on independence before we can allow the parliament to meet. I could not disagree more. The task we have in government, and I would say in this place, is to deliver the Scottish parliament for which the Scottish people so overwhelmingly voted last September. We cannot allow ourselves to be distracted by fluctuations in opinion polls, however exciting they might be, from meeting the commitment to establish a functioning Scottish parliament as soon as possible.
For more years than I care to remember there has been feverish press speculation on what the people of Scotland wanted, or did not want, by way of self-government. To formulate views on the future governance of Scotland, the Scottish Constitutional Convention was established in 1989 to draw together a wide range of interests, not just the political parties, to try to reach agreement on a way forward which would secure a broad basis of support.
As the noble Lord, Lord Steel of Aikwood, and my noble friend Lord Ewing explained in great detail, from their first-hand experience, the painstaking work of the convention over the years produced a proposal which

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was set out in Scotland's Parliament, Scotland's Right, presented in 1995. That proposal underpinned the Government's White Paper. It is upon that foundation that the Bill builds.
I can see no reason for this amendment. The people of Scotland have made their views very clear. They voted overwhelmingly in favour of parties supporting the Union at the general election. Out of a possible 72, they returned 66 Members of Parliament in Scotland from parties which were committed to implementing the Scottish Constitutional Convention's proposals. For our part the Government subsequently put our devolution proposals to the people of Scotland in the White Paper, Scotland's Parliament, and received a resounding endorsement of those proposals in the referendum last September. This Bill gives effect to those proposals.
The noble Lord's amendment would simply delay giving effect to those proposals with another round of quite unnecessary consultation, as my noble friends Lord Gordon and Lord Watson said. The noble Lord, Lord Rowallan, seems to argue that the Scots were not given the opportunity to vote on independence. I disagree. I agree with the noble Baroness, Lady Linklater, and disagree with the noble Lord, Lord Mackay of Ardbrecknish. The general election gave them that opportunity, and those advocating independence at that general election were unable to secure the necessary support of the Scottish electorate. The Scottish electorate had an opportunity to vote for the SNP and did not take it; they rejected it. The people of Scotland have made their views clear, and it is time that their expectations were met.
My noble friend Lord Watson asked about a referendum. It is my understanding that it is not for the Scottish parliament to legislate to hold a referendum. That will be dealt with in more detail when we come to Schedule 5. The referendum last September followed years of detailed preparation and consensus-building across a broad range of Scottish opinion. The Scottish people have endorsed overwhelmingly the concept of a Scottish parliament as proposed by the Government in the White Paper and established in the Bill.
We do not need yet another referendum. We need to deliver on what the Scottish people have the right to expect: a devolved parliament within the framework of the UK. That is what the Bill delivers. I urge the noble Lord to withdraw the amendment.
Lady Saltoun of Abernethy: Before the Minister sits down, she said that the people of Scotland voted resoundingly in the general election for the present Government. That is true but we have always been told that a week is a long time in politics. That general election was over 60 weeks ago.
Baroness Ramsay of Cartvale: I said that the people of Scotland voted overwhelmingly—66 members out of a possible 72—for the parties which campaigned for the proposals put forward by the Scottish Constitutional Convention. I do not share the noble Lady's gloomy view about the future of politics in Scotland.
Lord Rowallan: We have had a good debate on this interesting subject. I am delighted that once again the
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noble Baroness, Lady Ramsay of Cartvale, had to answer for the Government. It seems that whenever I put up anything she is always there. However, I welcome her comments. If the noble Lord, Lord Watson, reads Amendment No. 174 in my name, he will find that we are discussing the point that he raised.
I appreciate the comments of the noble Baroness, Lady Linklater of Butterstone. I think that I can call her my kinsman. Whether or not we are kinsmen, we are both related to the noble Earl, Lord Glasgow. Her points were apposite and correct. I agree with her in almost every case.
I put forward the amendment not because I was frightened of the rise of the SNP or of opinion polls, but because I want to see this parliament succeed and work well. I want to prove to the Scottish people that it can work well without having the independence issue continually raised by a rampant SNP.
The arguments have been strong from all sides of the Chamber. It is appropriate that I read Hansard, consider the matter further and perhaps return to it at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Farrington of Ribbleton: I beg to move that the House be now resumed. Perhaps I may suggest that the Committee does not begin again before nine o'clock.
Moved according, and, on Question. Motion agreed to.
House resumed.

Channel Tunnel Links to the North West
8 p.m.
Lord Inglewood Lord Inglewood rose to ask Her Majesty's Government what steps they are taking to ensure that the North West of England is not disadvantaged by their proposals for the rail links to the Channel Tunnel.
The noble Lord said: My Lords, for some hours your Lordships have been considering the affairs of North Britain. I now invite those noble Lords who find the attractions of this House greater than those of the dining room or television set to turn their attentions to the North of England, in particular the North West.
Before outlining the substance of my case, I invite the House to cast its mind back to the beginning of the last century. In that century, one of the greatest British contributions to the historic process of the industrial revolution was the development of the railways. We were a pioneer. While individual railway developments began in the North of England, the rail system in this country has been London centred. One has only to look at a pictogram of the existing rail system in this country to note that every spoke in the wheel centres on London and comes to the great termini of Paddington, Euston, St. Pancras, King's Cross, Waterloo and Victoria. That pattern suited our country in the 19th and 20th centuries, but it is a structure which is inherently unsuited for the next century.
We are moving into a world of vastly improved communications and mobility, with direct access to the Continent via the Channel Tunnel. We are part of the European Union single market. No longer is a railway system modelled on the hub and wheel appropriate for a rail or road system for the next millennium.
The European Commission's diagram of its identified trans-European road and rail networks demonstrates a different pattern. Instead of the hub and wheel model, there are intricate spider's webs of routes. Instead of being at the centre, the termini are at the extremities of the system. In the context of the single market, that development has serious implications for this country, and in particular the regions, not least the North West of England.
If one considers, for example, the road network for London and the North West of England, it is possible to travel south. But it is also possible to go round the capital on the M.25. Those who travel on the M.25 know that on occasions it can be singularly congested. But it is a vast improvement on the North and South Circular roads. The problem is that we have not constructed an M.25 for the trains. Those who wish to travel round London on a railway have to use the rail equivalent of the North and South Circular roads, with all that that entails.
I wish now to look specifically at the North West of England. Those in business, with relatively deep pockets, will use the aeroplane. I gather that it is a rule of thumb that for any journey of more than about four hours the businessman will use the aeroplane because time is valuable to him. In the North West at Manchester we have the seventh busiest airport in Europe, and the premier airport in this country after London.
I have already touched on road transport. There is good access to the South of England down the M.6. It is possible to go round the metropolis on the M.25 and down to the Channel Tunnel on the M.20. The real problem relates to the rail system. The West Coast Main Line takes one down to London, but while it is possible either to go round or through London, for the ordinary passenger the experience is unsatisfactory. It will either be slow or the traveller from the North who wishes to go to the Eurostar terminal at Waterloo will have to take an expensive taxi. Alternatively—it is difficult for the old, the very young or the infirm—travellers have to struggle with their baggage through the London Underground system. Those of us who use that system know that it is one of the least attractive characteristics of our city.
That is not good enough for the next millennium. What should we be aiming for? As I have indicated, I do not believe that the business traveller will be the principal beneficiary of improved rail links between the North West, the Channel Tunnel, and beyond. It is more important for those whom I might describe as being less pressured by time. I refer to pensioners who wish to travel, students who wish to go abroad, and tourists. The argument applies not only to people from the North West who wish to travel to the South, but to those coming from the Continent. The system is not helpful
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to those who wish to come and spend their money and to enjoy the many attractions which tourism offers in this part of England.
Only two nights ago, in a debate instigated by the noble Lord, Lord Morris of Manchester, the point was made that tourism is one of the most important industries in the North West of England. It is an industry which offers some of the best prospects for jobs. In addition, where "just in time" delivery is increasingly important for commerce, it is of the greatest importance that the rail freight network is able to deliver goods in a timely and speedy manner.
Against that background, the arrangements for rail traffic to travel round London from the North are vastly inadequate. The system poses not only the physical problems but a psychological problem. Noble Lords know—none better than the noble Baroness, Lady Farrington—of the efforts being made in the North West of England to attract inward investment. That inward investment is important to the economy of that part of the country. Some of the best examples of American investment in this country were triggered because we in Britain are part of the single market. Yet efforts to encourage inward investment are hampered by the fact that the rail and road links are not as good as they should be. It may be merely a psychological point; but such a psychological point is significant in the minds of those who spend large sums of other people's money encouraging businesses into those parts of the country where they are badly needed.
Against that background, what do I believe should be done? As noble Lords know, Virgin relatively recently took over services on the West Coast Main Line. I am a regular user of that line. I have experienced both good and bad aspects of it. I do not hold any brief for Virgin. However, as your Lordships may know, Virgin proposed that it should be allowed to run certain Eurostar services linking in with the West Coast Main Line. It is no part of my case today specifically to promote the Virgin proposal—partly because I believe that there are serious shortcomings in the proposed coverage as regards the North West. Noble Lords may think that I am bound to say that because that is where I live. Equally, the arrangement of having to change at Watford, which I gather is inherent within it, is itself unsatisfactory.
However, what I should like to hear from the Minister in her remarks later this evening is that she supports the idea that there should be proper Eurostar services from the North to the Continent and that they should serve the whole of the North and there should be no discrimination in the form that they take. Whoever was to run the service, it would be both an actual and a psychological benefit for the North West of England.
I do not believe that there can be many in this House who feel that this country has covered itself in glory in the way in which it has dealt with the problems posed by the Channel Tunnel London link. Too often we see that link simply in terms of London, the Channel and Europe. But as I hope I have explained already, that is a crucial artery serving the whole of the rail communications network for the rest of the country.
I am extremely concerned that that further aspect of the link is not being given the proper priority that it should in the Government's thinking. I merely point out that I raised that point on 3rd June when the noble Baroness repeated the Statement made by the Deputy Prime Minister in another place. In particular, a crucial aspect of the proposals for the infrastructure necessary to get the Channel Tunnel rail link to Stratford is that insufficient attention has been paid to what in my view is the overriding need for the creation of a proper link between the track in and around St. Pancras to that running from Euston, serving the West Midlands and the North West of England.
It should be an integral part of the proposals for the Stratford to St. Pancras link that a proper spur is put in place to become available for use simultaneously with the very link itself. That should be incorporated as an integral part of phase 2. That would send out a clear message to all concerned and interested in this matter that when that link is built in the year 2007, that spur will be included.
This matter unites people from all political persuasions right across the North West of England. There is an impression that the Government in London do not fully understand and appreciate the concerns of the North West. The reason that I have tabled the Question this evening is to draw it to the Government's attention and to urge them to come out saying emphatically that indeed it is desirable that there should be direct Eurostar services for the North West and that when the Stratford-St. Pancras link is built, that will include a proper spur onto the West Coast Main Line.
8.12 p.m.
Lord Cadman: My Lords, I thank my noble friend Lord Inglewood and congratulate him on asking this Question this evening. As a former member of the Select Committee on the CTRL Bill, now enacted, I share his concern that the recent financial problems experienced by London and Continental Railways should result in some delay or even lack of a commitment to complete the link as provided in the Act and the subsequent inability of the North West to benefit from the enhanced transport possibilities that will surely follow.
One of the key features of the CTRL Act was that services from Europe via the Channel Tunnel would be able to serve all parts of the United Kingdom and not just London. Indeed, subsequent to the passing of the Act, London and Continental Railways promoted a transport and works order to provide powers for an international station at Stratford in East London and a connection across the King's Cross railway lines to enable services to access the West Coast Main Line and proceed north without having to enter St. Pancras on their journey to the North West and Scotland. The North East of England would be served via St. Pancras and the connection thence to the East Coast Main Line, already provided for in the Act.
The trains for those services are built and their safety cases are well on the way to being achieved. There is no reason why those north of London services cannot start quite shortly, and I should like to say a few words about the regime under which they will operate.
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We seem to be rather frightened of international trains. However, they have been rambling about Europe now for many years and passengers are used to them, and indeed are encouraged, to make use of services that pass through several countries before they reach their final destination. In many cases, customs and immigration procedures, where necessary, are carried out on the trains themselves and passengers are put to the minimum of inconvenience.
I hope that that procedure will be adopted for those north of London Eurostar services. After all, there will be plenty of time for customs and immigration to carry out their procedures between, let us say, Lille and London. Anyone found without the right papers can be taken off the train at its first stop in the UK, which will most probably be somewhere in or near London. Let us remember that UK departing passengers are a matter for the French authorities, and they seem to have no problem with on-board immigration procedures. I am quite sure that a suitable scheme along those lines can be implemented to enable the service to be attractive to intending passengers and for our immigration procedures to be catered for adequately.
Indeed, there really is no reason why those trains cannot carry domestic passengers for appropriate parts of their journeys within the UK. That would considerably increase the economic viability of the service, especially as their comfort and superior image could well attract a premium fare.
That practice is very common in Europe where high-quality international services in many countries carry domestic passengers, often at a supplementary fare. Indeed, in France, passengers for Brussels and Paris are regularly booked onto Eurostar at Lille, both originating on and changing from regional TGV services. SNCF regards Eurostar as simply an addition to its TGV network, as it does the recently introduced PKBA Thalys trains which connect Paris with Köln and Amsterdam via Brussels. Reservations on those services are all handled by the same system.
I hope that the Minister can provide some assurance that any scheme which is envisaged will not be so expensive that the north of London service is made unviable. From a practical point of view, the proposed exclusion of passengers from the platforms at which Eurostars will call at provincial stations here is bound to cause operating problems in itself. What happens if the Eurostar is delayed for some reason and a domestic service has to precede it? Are domestic passengers to be herded about the station just to make sure that they are not around when the Eurostar appears?
I very much hope that those north of London services can be started as soon as possible. It is most encouraging that Virgin Trains has made an offer to operate those services without public subsidy and under whatever regime Her Majesty's Government might deem to be necessary, although I trust that some thought may be given to my earlier remarks.
It is a start and should go a long way to ensure that the CTRL is completed in its entirety. Without that commitment, the project which we all worked so hard to achieve a couple of years ago will surely not deliver

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its intended benefits, among which are better communications with the North West of England and the freeing up of capacity on the already overcrowded railways of Kent, to say nothing of its intended regenerative aims for the Thames gateway area.
8.17 p.m.
Lord Mountevans: My Lords, it is ironic that during the winter sports season recently finished, Eurostars run to Bourg-St. Maurice, deep in the French Alps. This summer there were plans to run them to the venues where England and Scotland played their World Cup games, although those plans came to nought.
The irony in that lies in the fact that so far, Eurostars have never, on this side of the Channel, taken passengers beyond Waterloo. My noble friend Lord Inglewood has addressed that irony by raising his Question and I am grateful for that. I should like to leave it to the noble Baroness who is to reply to confirm that a proposal exists to link Stratford to the West Coast Main Line, subject to a transport and works order.
In wider terms, we know that demand for high-speed long-distance rail travel is growing on the Continent. The French TGV began by running from Paris to Lyons and it fairly quickly drove Air Inter more or less off the route. The TGV now goes to the Mediterranean coast, the Alps, Switzerland and Turin. Its cousin Thalys links Paris with Amsterdam and Cologne and perhaps, in two years time, it will reach Berlin.
Demand exists on the Continent. I am absolutely certain that that demand exists just as strongly north of London, be it East or West Coast. One must be concerned that earlier efforts to link the regions with Eurostar via Waterloo were virtually unsuccessful, with some of the very few trains that ran each day carrying perhaps only ten passengers. I wonder whether that reflected lack of demand, lack of convenience—because, perhaps, there was only one train a day—or lack of choice, again because there was only one train a day; or, indeed, lack of opportunities, also because there was only one train a day.
I hope that it was the latter three, and that the review commissioned by the right honourable Deputy Prime Minister, and due to be available by December, will establish both demand in the regions and the viability of meeting that demand. If that cannot be done, the seven train sets concerned should be released for other projects, provided that they satisfy the relevant safety cases. Perhaps the Minister can update us on those safety cases.
Given demand and safety, for me the issues come down to two—or really only one and a half because the first leads to the other. First, we must decide how best to proceed as of, say, 1999, using existing infrastructure which is almost all in place thanks—believe it or not—to a previous generation of privatised railways. Secondly, we must decide how to proceed when the Ashford to St. Pancras works are completed. I am sure that we all assume rather than just hope that they will be completed. The first of these, if it can be solved,
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would, I suggest, solve the second because the latter would inherit—and, indeed, improve upon—a going concern.
As far as I understand it, as of now the solution lies in the hands of the British Airways/National Bus/French and Belgian Railway consortium, which has been offered the contract to run the "beyond London trains", if we can call them that; this always depending on the various regulatory bodies allowing that consortium to go ahead as the train operating company.
There is also a proposal from Virgin on the table, which has already been mentioned. However, as far as I can gather, it is only a proposal. There has been no discussion between the consortium and Virgin at present on the offer. Virgin's proposal, with its strong emphasis on freedom from public subsidy, is very welcome as indeed are the service proposals—certainly, I should have thought, to my noble friend Lord Inglewood: daily from Edinburgh and Glasgow, twice daily from Manchester and Birmingham and five times daily from Watford. I realise that there is a Manchester to Glasgow gap, but I am sure that it will sort itself out.
However, there would be some very serious problems despite this proposed running without public funding. I say that because if one looks at Glasgow Central and at one of its more remote platforms, one will see a beautiful glass building that has been there for four or five years. I got to know it when I was the chairman of a British Rail station judging panel. It is obviously the Eurostar facility. That would have to be repeated at all points where Eurostar services from the regions stopped. It would include security and checking and, understandably, Customs and immigration control. All of these are costs which will initially be paid by Eurostar, but which will eventually flow through to the passenger. I assume that every station would have to have all these facilities, because we already know that passenger loadings on Paris services presently justify on-board immigration and Customs controls, but Brussels loadings do not. But, after all, Brussels is now receiving up to 12 trains a day from Waterloo, whereas here we are only talking about five or six.
I feel, therefore, that the latter situation must prevail on the regional services. To eliminate the problem, would it not be better—and here I disagree with my noble friend—to focus on Watford where all Virgin West Coast services will eventually call, and concentrate all security and frontier matters there? A change of train would still be required, but the volume of travel choices—the sheer volume of Virgin's West Coast mainline services converging on Watford and the opportunities to run more trains from Watford round London through the tunnel—and the number of opportunities would still be much greater than that offered by Virgin's proposals in terms of Edinburgh, Glasgow, Manchester and Birmingham.
I appreciate that Watford International would penalise the East Coast main line, but I believe that the East Coast is pro tem until we get St. Pancras better served via Kings Cross and London Transport to Waterloo, which is surely quicker than Peterborough and then a meander around northern London. Whatever approach

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one were to adopt, I hope that we would not allow ourselves to be diverted in this instance by projects involving Heathrow.
To sum up, I must say that I welcome my noble friend's Question and his wish to see the North West enjoy its share of the benefits of the Channel Tunnel rail link. If demand is there, and it can be viably met, we should set out, and set out quickly, to meet it. My own proposal to do this I shall call a variant of Virgin's proposal—matching the best of its West Coast Main Line project with the simplest of interchanges: Watford International.
8.24 p.m.
Lord Newby: My Lords, I congratulate the noble Lord, Lord Inglewood, for tabling this Question. Clearly the question of international rail services north of London is an important one. I hope the noble Lord will not mind if, in considering the matter, I link with the North West, Yorkshire and Humberside, and the North East because it seems to me that many of the same arguments apply. Clearly the establishment of such links north of London starts off with a very strong transport policy justification, both in terms of passengers and freight to the extent that such links can be established and successfully reduce pressure on other parts of the transport network.
However, it seems to me that there are two other principal reasons for wishing to see quick progress being made on such links—one is economic and the other is political. The economic argument relates to the regeneration of the North West and equally Yorkshire, Humberside and the North. We have seen a tremendous economic change there over the past 30 years. Many of the industries which made their names in those areas have in effect gone into reverse. Whether it is textiles and engineering in the North West, or steel and coal in the North East, the industries on which the populations of those regions have depended for their wealth have simply shrivelled to a fraction of their former size and, in some cases, have disappeared altogether.
As the noble Lord, Lord Inglewood, said, there has been a significant amount of success in new industry in those regions, especially in service industries. The noble Lord mentioned tourism which has indeed been a great success story. However, if they are to compete as successful regions within Europe, it seems to me that they must have and be seen to have the very best of transport links. Rail must play a part in that improved transport mix.
If we look, for example, to the North West, it will be seen that its regeneration plans assume better rail services than currently exist. Indeed, when one looks at the growth points that have been established in somewhere like Trafford Park, such developments only make sense as growth points if they have first-class rail services—in that case, principally freight services. As the noble Lord said, the current service from the North West to Europe via the north and south circulars of the British Rail system are simply not adequate for the future.
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As regards the North, I suspect that the biggest economic gains from improved international rail links are likely to be derived from freight rather than passengers, although I would not underestimate the scope for successful passenger services. I do not believe that the previous experiments with passenger trains coming into Waterloo from Scotland or from the West country really told us anything; indeed, the trains were slow, they were not advertised and they did not have the benefit of the marketing that one would wish for.
If one takes a longer view, it seems to me that there is scope in considering providing sleeper carriages and putting cars on trains so that people travelling to southern Europe from the North can do so overnight without spending a tremendous amount of time driving. There is scope for passengers, but I suspect that there is even more scope for freight. I also believe that there is an odd psychological benefit in having good quality international passenger links. As regards London, it is interesting to note that there has clearly been a great improvement in its image among many young French people. They have decided that coming to London and living and working here is more viable because they can have an easy rail journey. Of course, they could otherwise take a relatively easy flight, although I must admit that it would not be as comfortable. I am not suggesting that Manchester is going to spawn a whole new French community, but the fact that it does have absolutely first rate passenger services will be of some benefit.
My second argument for having such links is a political one. As I know only too well, northeners do not need a great excuse to feel aggrieved by decision makers down south. That is particularly so when they feel the decision makers down south, as they will see it, sometimes spend a huge amount of time worrying about second order issues which would not benefit them in any event. The Dome is probably the classic example of that, but it is not the only example. I refer to the lottery money spent on arts establishments and the amount of Cabinet time spent worrying about the Royal Opera House. If you live in Manchester or Leeds those appear not to be proper priorities for government.
It seems to me that the question of the rail links north of London has assumed a political importance which almost goes beyond the economic benefit that such links would provide. Such feelings clearly are bad for a sense of national unity. In my view, there is no better way for the Government to be seen to be batting for the northern regions than if they were seen to be taking these issues rather more seriously than has been the case in the past.
As other noble Lords have mentioned, the history of the CTRL is absolutely dire. I suspect that when the textbooks are written on great failures of British public policy making from 1950 to 2000, after the poll tax the story of the CTRL will be one of the greatest failures and one of the most popular examples chosen to instruct students on how not to do it. I spent three years attempting to get off the ground plans to revive railway land at King's Cross. As your Lordships will remember, there was a King's Cross railways Bill that took literally years to get through another place and this House.

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It was eventually withdrawn at Third Reading in this House because the government decided they did not have the funding to undertake that provision.
Lord Mountevans: My Lords, I am grateful to the noble Lord for giving way. The Bill was not withdrawn in this House. I was one of the two people who took it through this House. It was not given Royal Assent, but the original King's Cross Bill passed through both Houses.
Lord Newby: My Lords, in a sense that strengthens the point I made. The Bill reached the final point in the legislative procedure but was then withdrawn. Years were wasted and by that stage hundreds of millions of pounds had been spent on bringing forward the plans. We were left with a total hiatus of policy making. Clearly, the position today is much more satisfactory in that at least we have a plan for getting the CTRL built, albeit in a slightly fractured way. Anyone who has followed the history of the decision making on that will want to pay tribute to the Deputy Prime Minister and other Ministers for working hard to make that part of the link a reality.
However, I am aware of no plan that looks 10 or 20 years ahead which has any firmness to it—and to which the Government have put their name—and which addresses how we shall get beyond London. That seems to me to be a critical problem. I believe that when making the announcement in another place on 3rd June, the Deputy Prime Minister became slightly exasperated when people asked him what he intended to do about links north of London. He replied, in effect, "For goodness' sake. I have nearly killed myself getting links to London. Don't try my patience and ask me to do the impossible". Although that is an understandable reaction, it is not satisfactory. Having reached this point, I hope that the Government will soon be able to produce at least a vision—if not detailed plans—as to how international rail services might be developed. It is possible, of course, that that will appear in the transport White Paper, but I somehow suspect that it will not.
I conclude with a couple of questions for the Minister. I believe that on 3rd June the Deputy Prime Minister said that he had asked the consortium to consider bringing forward plans for international rail services north of London by the end of the year. Has the Minister any news on the timetable for that? Might something emerge a little earlier than the end of the year? I would also welcome anything the Minister can tell us about the proposals for an international service from Heathrow by 2001. From the point of view of the northern regions, that is an interesting suggestion. But in a sense it is rather a threat because if everyone suddenly becomes terribly enthused about having international rail services going that little bit further to Heathrow rather than further north, all attention will be focused on that. In thinking of that proposal—if one is going that far—has any thought been given to linking up with the North West and thus benefiting that region? We need a fast service with the minimum number of stops to get people from the North West across the Channel. Going via
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Heathrow really is a case of going somewhere via Slough. I cannot believe that going via Heathrow would be the solution.
I refer to the Virgin proposals which have been raised by other noble Lords. Do the Government have a view on these proposals? Are they feasible? Instinctively, I feel that a plan which has at its heart a station called Watford International has something missing. It does not have the brio even of Lille, but perhaps that is pure northern prejudice. Do those proposals cut across the ideas and plans that the consortium is currently developing? If Virgin can do that,- why cannot the consortium?
Railways clearly have a tremendous potential to bind together countries and regions both economically and politically. The Government still have the opportunity to ensure that despite all the delays and confusion to date the Channel Tunnel eventually fulfils its potential for the North West and the other northern regions. I hope that the Minister can give us some reassurance this evening that that opportunity will at last be seized.
8.36 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, I, too, am grateful to the noble Lord, Lord Inglewood, for his introduction to this debate and—if I may say so—for the context in which he set us thinking about the issues before us tonight. As he suggested, it is important that we consider the Channel Tunnel Rail Link in the context of transport links within the European Union.
It is interesting to note that the West Coast Main Line, the East Coast Main Line and the Channel Tunnel Rail Link all form part of the EU's plans for the trans-european network. It is important to view the problems that we are approaching in that context as well as to view them in the economic and regenerative context that the noble Lord, Lord Newby, referred to, and indeed the political context. I can assure the noble Lord that if I had any doubts about the strong feelings of those in the regions of the North of England my noble friend Lady Farrington, sitting beside me, would make sure that I was well aware of those concerns.
We recognise the frustration that has been expressed by I believe everyone who has spoken tonight that the services to the regions for which they have argued not just on this occasion but also on many occasions in the past are not yet in place. It is important to recap briefly the background to the current situation, to which the noble Lord, Lord Newby, referred.
The deal put in place by the previous government with London and Continental Railways to build the CTRL and operate Eurostar was flawed from the start. In January it almost collapsed. The company could not fulfil its contract and requested an additional £1.2 billion of taxpayers' money, on top of £1.8 billion already committed. That was unacceptable.
We were faced with a clear choice. We could have abandoned the contract with LCR and invited new tenders or we could have asked LCR to reconsider the financing of the project and come forward with

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proposals to meet all of its original obligations. We chose the latter option because abandonment of the contract and a further delay of two years or more, would have led to further uncertainty and blight and would have resulted in two-thirds of government grant being spent on Eurostar's debts and continuing losses with nothing in return. The deal we secured will provide a high-speed Channel Tunnel Rail Link. I am grateful for the acknowledgement of the role played by my right honourable friend the Deputy Prime Minister that the noble Lord, Lord Newby, mentioned.
The CTRL project can now proceed without delay. The solution we have negotiated ends the uncertainty about the continuance of the project. I should make the following issue clear as it has been raised specifically by the noble Lord, Lord Inglewood, and by other noble Lords who have spoken. There is a commitment to build the entire railway from the Channel Tunnel to St. Pancras. LCR will remain under a contractual commitment to deliver the whole project. It plans to commence work later this year. The first section of construction should be completed by 2003, with the full CTRL, including the vital connection to the West Coast Main Line, planned for completion in 2007.
I reassure the noble Lords, Lord Mountevans and Lord Inglewood, and others who raised the matter, that once the CTRL is opened the infrastructure will be in place for seamless journeys between the regions and the Continent for which noble Lords have argued. The Government, LCR and Railtrack are working hard to take the proposals forward so that construction can start later this year.
I now turn to the Eurostar service. LCR has chosen a consortium to run Eurostar comprising British Airways, National Express and the national railways of France and Belgium. The consortium members have a strong track record in delivering high-quality passenger services across Europe. I understand that they have plans to maximise growth in Eurostar's existing inter-capital business, to increase frequency of services, to reduce check-in time and to improve on-board service standards. They have already announced their intention to establish a service from Heathrow airport to Paris which, it is hoped, in due course will enable Heathrow to develop as a hub for services across the country and as a gateway to Europe. The Government are committed to a fully integrated transport system. I say to the noble Lord, Lord Mountevans, that the plans proposed by the consortium for a hub at Heathrow are innovative and we hope that they will provide greater choice to those travelling for business or for pleasure.
The noble Lord, Lord Newby, asked specifically about progress. We understand that the consortium is developing those plans urgently for the Heathrow to Paris services. The noble Lord also raised concerns about whether, in the long term, such plans would foster the direct links about which he was concerned. The issue of Watford as a hub rather than Heathrow was mentioned, although not exactly the same view was taken by noble Lords who spoke.
We were asked to give a commitment that the provision of Eurostar services to the north of England would start as soon as possible. The Government understand the desire
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for that commitment and share the desire for direct services to the regions. The noble Lord, Lord Inglewood, put that question directly. However, he acknowledged, as did other noble Lords, that the viability of those services—the length of time they will take; the number of people who would wish to use them; and how attractive a service from Glasgow to Paris which could take around 10 hours would be—has to be considered and an analysis made. Even a service from Manchester to Paris taking around five hours compared with the four hours the noble Lord, Lord Inglewood, mentioned, is considered the crucial journey time in relation to whether business travellers decide to travel by air.
It was because we shared the desire to see those services in place that my right honourable friend the Deputy Prime Minister asked the consortium, as part of the deal arranged to ensure the future of the Channel Tunnel rail link, to review urgently the feasibility of regional services and to put proposals to the Government before the end of the year. The timing remains the end of the year. We cannot prejudge the outcome of the review that has been commissioned.
As several noble Lords mentioned, including the noble Lords, Lord Cadman and Lord Inglewood, a proposal has been put forward by Virgin to run regional Eurostar services. It was acknowledged, certainly in the contribution from the noble Lord, Lord Inglewood, that these matters are sometimes not as simple as they can be made to appear. We have to consider whether the Virgin proposal would in itself divert revenue from the existing Eurostar service, undermining its viability and the viability of the deal that has been struck around CTRL. These matters deserve closer scrutiny. I understand that Virgin made the proposals direct to London and Continental Railways, a company in which, noble Lords will recall, Virgin is a shareholder. I can tell the noble Lord, Lord Mountevans, that London and Continental Railways has asked the consortium to consider Virgin's proposals.
I now turn to the issue of frontier controls raised by the noble Lords, Lord Cadman and Lord Mountevans. The Government recognise that the addition of domestic passengers on regional Eurostar services might make those services more commercially attractive. But, clearly, we have to ensure passenger security. Passengers on international train services must be subject to the same controls used at ports and airports. Provided proper procedures are in place, there are no frontier control reasons why regional Eurostar services which carry both domestic and international passengers should not be operated. The Government would be happy to receive proposals as part of the review that is being undertaken. Whether those controls take place on board the train or at stations is a commercial operating decision for Eurostar. I understand that the original Eurostar plans included on-board Customs and immigration controls.
Noble Lords also asked why it is not possible to begin some services on the West Coast Main Line now, using rolling stock which is not currently being utilised. As was recognised by the noble Lords, Lord Cadman and Lord Mountevans, there are some technical problems which currently prevent the operation of regional Eurostar rolling stock on parts of the existing network. Those

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problems are mainly related to electrical interference associated with track circuits which have prevented the issue of safety clearances required before passenger services can be operated. I understand that Railtrack and Eurostar are working together to ensure that the necessary safety cases can be issued for those trains. The Government have made clear their commitment to the operation of a safe railway network and the need to solve these problems. Until we can guarantee their safe operation it would not be right for the trains to come into use.
The noble Lords, Lord Inglewood and Lord Newby, referred to the issue of rail freight. The Government are determined to put rail freight back at the heart of Britain's rail industry. There has already been considerable traffic growth in freight carried through the Tunnel and, as noble Lords will recall, last year, in return for extension of the Eurotunnel concession, the Government negotiated a valuable package of benefits for rail freight. The opening of the CTRL should also permit an increase in freight on the existing network by freeing up capacity.
In conclusion, the Government recognise the importance to the regions of good international rail links. We believe that the deal that has been agreed around the Channel Tunnel rail link will provide real regenerative and economic opportunities. We look forward eagerly to receiving the review from the consortium later this year on regional services, and I shall inform the House at that time of the outcome of the review.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure until nine o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.48 to 9 p.m.]

Scotland Bill
9 p.m.
House again in Committee.
[Amendment No. 7 not moved.]
The Deputy Chairman (Viscount Allenby of Megiddo): I have to inform the Committee that if Amendment No. 8 is agreed to, I cannot call Amendment No. 10.
Schedule 1 [Constituencies, regions and regional members]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 8:
Page 57, line 7, leave out from ("Islands,") to end of line 9 and insert—
("(c) the Western Isles, and
(d) seventy constituencies covering the mainland of Scotland to be determined by the Boundary Commission for Scotland in a way which ensures that the average electorate for constituencies lying wholly or partly within the unitary local authorities of Highland, Aberdeenshire, Moray, Argyll and Bute, Angus, Perthshire and Kinross,
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Stirling, Dumfries and Galloway and the Scottish Borders are lower than those lying wholly or partly within other unitary local authorities in Scotland.").
The noble Lord said: There are two arguments that I could normally advance on this amendment, but I shall leave one of them until we discuss the next group of amendments. That argument relates to the uncoupling of the membership of the Scottish parliament from the Parliament of the United Kingdom at Westminster. I shall leave that until later and concentrate on another aspect, which I believe is very important.
In bringing forward their proposals, the Government have rightly recognised the special position of Orkney and Shetland and decided—and I agree with them—that in the Scottish parliament Orkney and Shetland should be two separate constituencies. As the Committee will know, they have until now been one constituency from the point of view of membership of the House of Commons. It seems to me that the argument for special consideration extends to the Western Isles, which is in exactly the same position. Yet I can see that a future Boundary Commission review might decide, for example, with some logic, to move Skye into the Western Isles, given the very much improved ferry links. I believe that the Western Isles should be separately considered.
I have some special affection for the Western Isles, having stood there in the Conservative cause at one stage. I did not even manage to save my deposit, but I had a very pleasant time, none the less. I was happy to show that there was no rancour on my part when I decided, as the Scottish Health Minister, that they should have a new hospital, and they were kind enough to invite me to the opening of that to show their appreciation. In fact, they still show their appreciation whenever I visit by happily showing me around what they consider is at least partly my hospital. It shows my magnanimous spirit when not only do I give them a new hospital in exchange for not being allowed to save my deposit but am also prepared to say that in the Scottish parliament they should be given the same consideration as Orkney and Shetland.
Paragraph (d) relates to a slightly different issue. It has always seemed to me that the principal talent of Boundary Commission reviews has been to be innumerate. I am amazed at how they have decided to apply the electoral quota in Scotland, not simply on the last review, but time after time.
The electoral quota in Scotland is 54,000. We shall come to other aspects of that when we deal with the next group of amendments. Aside from the Western Isles, Orkney and Shetland and Caithness and Sutherland, to which a later amendment refers, and Roxburgh and Berwickshire, four clearly rural constituencies, the smallest constituencies in Scotland are those vast tracts of land represented by Glasgow Baillieston, Glasgow Pollok, Glasgow Shettleston, Greenock and Inverclyde, Hamilton South, Midlothian, Paisley North and Cumbernauld and Kilsyth.
At the other extreme, looking at the largest constituencies, in number terms, in Scotland, there is Eastwood. I would not argue about that. It is not as compact as the Glasgow seats which I listed, but it is at

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least reasonably compact. The next one is Inverness, Nairn and Lochaber, where there are 66,500 voters, 12,500 above the Scottish quota, and hugely bigger than any Glasgow seat and, I suspect, than virtually any seat in West Central Scotland. The largest seat in West Central Scotland is Carrick, Cumnock and Doon Valley, with 66,500 electors. That is the largest geographical seat.
It seems ludicrous that we should have these large rural seats with large populations while we have city seats with next to no population in comparison. It is not as though the Boundary Commission has decided that the cities need special attention. The average electorate in Glasgow after the previous boundary review was 51,500. Edinburgh seems to have managed with over 10,000 more, at just over 62,000.
I have no faith in the Boundary Commission to look at the map of Scotland and—as I think the noble Lord, Lord Hughes of Woodside discussed with regard to the previous amendment—to be fair to the rural areas of Scotland. It is for that reason that I suggest that we should say to the Boundary Commission that it should arrange matters so that the average electorate in the constituencies lying in the highland region, in Aberdeenshire, Moray, Argyll and Bute, Angus, Perthshire, Kinross, Stirling, Dumfries and Galloway should have a lower average than those lying wholly or partly within other unitary local authorities, which are largely the ones in West Central Scotland that I mentioned.
The fact that I am making a brief speech on this matter does not in any way mean that I do not feel strongly about it. I have always felt strongly about it. Indeed, when I was a Back Bencher in the Parliament before last in your Lordships' House, I attempted to persuade my Government to amend the Representation of the People Act to give primacy to the quota and take it away from other things which I believe are of less importance. I am afraid that I was unable to prevail on my noble colleagues and my colleagues down the corridor to accept my amendment. I suspect that they perhaps now regret that a little, but that is another matter. The Minister says that it would not have made any difference, but it would have been for the whole of the United Kingdom.
Here we are to have a new Scottish parliament. If we are all aware, as I believe we are, of the feeling in rural Scotland that the constituencies there may well be dominated by Glasgow and the conurbations, it seems to me important that we give a clear signal to the Boundary Commission that it must not follow in the steps of its previous reviews. I could list the largest constituencies in Scotland to make my point, but I shall not do so.
All I will say is this. How can anybody justify Glasgow Baillieston at 49,000; Glasgow Shettleston at 48,000; Hamilton South—goodness knows why it receives special attention—at 47,000; and at the opposite end of the spectrum, Dumfries with 63,500 and Inverness East, Nairn and Lochaber with 66,500. Even if we look at Ross, Skye and Inverness West with 56,000, the figures speak for themselves.
I hope the Minister will at least express understanding of and sympathy with the point I am making and that we might, even if my amendments are not well drafted, find a way of sending an instruction to the Boundary Commission when it comes to make up the boundaries for the new Scottish parliament after the first time round saying, "For goodness sake, please do your sums, both in number of electorate terms and the size of the seats". I beg to move.
Viscount Thurso: I rise principally to speak to my Amendment No. 9, which is grouped with Amendment No. 8. I was tempted to put my name to the amendment moved by the noble Lord, Lord Mackay of Ardbrecknish, but as I did not understand it when I read it, I thought I should wait to hear the explanation first. Having heard it, I am extremely interested.
There was another reason. As the Clan Mackay's traditional tribal homelands would be partly in Caithness and partly in Sutherland, I felt it would be fun to give the noble Lord a little test with my amendment. Also, as he said, it is difficult to address both of those amendments without straying into the arguments touched upon by the next group. I shall try to limit myself specifically to the point in Amendments Nos. 8 and 9, which are closely linked.
In simple terms, Amendment No. 9 merely adds one extra constituency by dividing the current constituency of Caithness, Sutherland and Easter Ross into two. It is not my intention to suggest that there is a particularly strong case for Sutherland and Easter Ross to be divided into two constituencies. My purpose is to probe the Government on the principles underlying both the composition of the parliament as it will be composed when it is first set up and also the principles as it goes further into the future.
I chose Caithness, Sutherland and Easter Ross simply because it is my home. I can at least talk about something of which I know a little. The fact that I am chairman of the Caithness, Sutherland and Easter Ross Liberal Democrats and came second on the Liberal Democrat Highland list has nothing to do with it. However, in case anybody thinks it might, I mention it.
My purpose is to probe the Government and find out a little more about their thinking on the principles underlying the composition of the parliament, particularly with regard to how we see the constituencies. I have argued on a number of occasions in your Lordships' Chamber—particularly with regard to local government when we debated the constitution in the summer of 1996 before the last election—that the relationship between geography and a sense of community as well as population density when working out the areas which people represent is important.
Local government is an interesting example of how that can work for different areas. For instance, we can take the new council that operates in the Highlands. For most people in the outlying areas it has been extremely unsuccessful. It will be difficult to find anybody from any political party in Caithness who thinks that the Inverness Highland Council works to their benefit. On the other hand, it is clear that the new unitary councils

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have worked well in the central belt and that many of those people are happy with them. Clearly, therefore, there is a difference between how geography and a sense of community comes into play as against population density when looking at how people should be represented.
I ask the same question asked by the noble Lord, Lord Mackay of Ardbrecknish—what is so special about Orkney and Shetland? What is the principle behind that which could not be applied to other areas within Scotland? If it is simply a question of numbers, it may be argued that one should not have more than a certain number of people in the Scottish parliament. We have heard people talk about Wales having a certain number and Northern Ireland having more. How many people should be there?
My only comment on that is that I would far rather see people slightly over-represented than under-represented. There is a far greater danger where people feel that there is nobody to whom they can talk; there is nobody to whom they can go—that touches on the earlier argument regarding the links with constituency MPs—there is no one that they feel they own as their member. It is much better if people feel that they can relate to two rather than to none. At the beginning of the parliament I would rather err on the side of having more members than on the side of having too few.
In the debate on the first group of amendments we talked about the systems in other countries. I do not think that we should be looking to other countries for models. I do not think that we should be looking at Westminster for a model. I think we should ask, "What is the new parliament intended to do? What is the function we wish it to achieve?"; and then from that point look at the best way of constructing a model to represent the people. If we found that something that worked in Finland or in the United States of America happened to help us achieve the function which we had determined as being correct, that would be useful. It might even be useful to look at some of the things that happen in Westminster. But it should not be the point of departure. The point of departure should be, "What is the function?", and then we should have the model. It is on that basis that I come back to the question of geography.
When people are represented, certain issues are of a constituency nature. In this connection the question of population is relevant. The work of an MSP who has a constituency of 40,000 may well be less than that of someone who has a constituency of 80,000. Perhaps more important is when one comes to the question of regional interests, which was very much the point made by the noble Lord, Lord Hughes. The regional interest that one will find in one area is of equal importance to the regional interest that one will have in another area, albeit that the size of the population is very different.
Here it is perhaps worth looking at another country. In the United States of America the Senate takes the view that the interests of Vermont or Idaho, which are very small states, or Arkansas, where I worked years ago, are identical to the interests of California or
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Florida, which are extremely large states. Therefore, there is an acceptance of the principle that there are certain interests in a given area which are of importance. I share the concern—I will not put it any stronger than that—that the central belt may have an influence above and beyond that which one would like to see. I am trying to find out what importance the Government attach to the geography and to the sense of community which, as the noble Lord, Lord Hughes, said, an area such as Aberdeen or Caithness has in relation to being represented. That is the core question which the amendment is designed to test.
I wish to make one other brief point. I think there is an error of drafting in line 9 of Schedule 1. Heading (c) states:
"the parliamentary constituencies in Scotland, except a parliamentary constituency including either of those islands",
referring to the Orkney Islands and the Shetland Islands. I think it should say,
"either of those archipelagos",
or,
"any of those islands".
But I think that,
"either of those islands",
is not strictly correct. I leave the Government with that little thought.
What I should like to hear from the Government is some assurance as to the importance of regional and geographical issues—Caithness is very different from Sutherland and Sutherland is very different from Aberdeen—so that we do not get into the Catch-22 of ever-reducing numbers of seats, a point raised by the next group of amendments about which I have nearly managed to avoid speaking, and so that we do have a strong representation that remains strong.
9.15 p.m.
Lord Mackie of Benshie: I should like briefly to back up what my noble friend has said. I have experience of Caithness and Sutherland, and as I no longer have much connection, I can be frank. There is an enormous difference between Sutherland, which is Celtic and Highland, and Caithness, which is part-Highland and more Norse than anything else and very agricultural. The difference is great. They do not care for each other all that much, which makes it very difficult for the representative there. So I think we need two. My noble friend has a very good point.
Viscount Thurso: Perhaps I may say to my noble friend, "You might say that. I couldn't possibly comment".
Lord Sewel: In Amendment No. 8 the noble Lord, Lord Mackay of Ardbrecknish, raises the interesting proposal that if the Bill guarantees separate representation for Orkney and Shetland, then the Western Isles should be treated in the same way. That is a fair point. We had presumed that the geographical nature of the Western Isles would result in their forming a single constituency for all time, although I recognise

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that, the way the Bill is framed, that is not guaranteed. However, I shall be more than happy to take back this matter and consider the point further.
However, before sweetness and light breaks out all round the Chamber, I cannot accept the second leg of the amendment, which would effectively fetter the discretion of the Parliamentary Boundary Commission in drawing up the constituencies for the rest of Scotland. As phrased, it would ensure that areas within the Central Belt were always comparatively under-represented. I accept that some regard should be paid to the special circumstances of rural areas, but the amendment as it stands goes too far.
The noble Viscount, Lord Thurso, has argued for special status to he granted to Caithness, Sutherland and Easter Ross. His knowledge of that area—dare I use the words that he used of "special interest" in that area—is well known. I am not persuaded by his arguments. There have been no calls to divide the existing parliamentary constituency in the way that he suggests. I do not believe that the area would gain by doing so.
Like other parts of the Highlands and Islands, Sutherland and Easter Ross will benefit from the fact that there will be an additional seven members returned from the area thereby ensuring that the interests of Scotland's more remote communities are fully considered by the parliament. Perhaps I may resort to figures for a moment. If we consider the regional constituency of the Highlands and Islands and look at the number of electors per MSP, we shall find that if we split Caithness, Sutherland and Easter Ross, the figure would be 20,456 electors per MSP. For Scotland as a whole, it will be 30,759. I believe that that would create too much of a discrepancy if we went down the road of splitting that individual constituency.
The noble Lord asked me what considerations the Boundary Commission takes into account. The noble Lord, Lord Mackay of Ardbrecknish, gave primacy to the quota. I have some sympathy with that. That is modified by the Boundary Commission in also taking into account geographical considerations although the noble Lord, Lord Mackay, pointed out persuasively that that is not consistently applied throughout Scotland, and rural seats tend to have a smaller electorate than suburban seats in some of the cities.
The Boundary Commission is able to take into account geographical and community factors as well as the quota itself. I am not convinced by the arguments that have been advanced. I am happy to take back the question of the Western Isles. I recognise the importance of rural areas and account should be taken of them. However, I cannot go as far as noble Lords would like me to go.
Viscount Thurso: I am grateful to the Minister for his response. I hope I made it clear that I genuinely chose the case of Caithness, Sutherland and Easter Ross by way of example. I did not for a minute think that he would not find it extremely easy to get a brief together which would allow him to refute the arguments for those areas.
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We both share the same desire to see this Bill through in the fastest possible time and to see it enacted so that we can both get into the Scottish parliament. I believe I am right in saying that. I do not want to hold up the progress of the Bill. I am a little disappointed with the Minister's response to the overall question of the importance of geography.
I know that I am straying into the next group of amendments in saying this, but for years my grandfather's constituency was known as Caithness and Sutherland. It is now Caithness, Sutherland and Easter Ross—and Easter Ross is very different. What happens when that constituency becomes Caithness, Sutherland and Ross-shire or Caithness, Sutherland, Ross-shire and Inverness-shire, as may happen? It takes me four hours, driving at the limit that the law will permit, to get from one end of the constituency diagonally to the other end. That is a long time. There are genuine reasons why geography is important to any MP or MSP serving such a constituency. I shall not move my amendment when we reach it—that is exactly what I said that I would do—but at the moment I am slightly disappointed. I hope that in the course of the Bill's progress a fuller commitment will be made to the importance of geography.
Lord Sewel: I am sorry that the noble Viscount is disappointed. He should not feel alone—90 per cent. of the people to whom I speak are disappointed by what they hear!
Lord Mackay of Ardbrecknish: Perhaps I may intervene between two Members of this Committee who seem keen to get to the Scottish parliament. I presume that it is because they have worked out that they will be better paid than your Lordships. I shall not go so far as to wish them well. They might use that against me when it comes to the election literature. On the other hand, it may damage both of them.
I am grateful to the Minister for his answer on the Western Isles. I do not want to go into this at too great length, but I recall that when the Boundary Commission last met it considered the proposition that Skye could become part of the Western Isles constituency. I thought at the time that that would be wrong, although I can see the numerical argument for it. I am grateful to the Minister for being prepared to take this away and reconsider it.
I am not entirely sure to what extent I should side with the noble Viscount, Lord Thurso, because I suspect that the Sinclairs probably robbed the Mackays of their land in Caithness and Sutherland—or else they were better at cards, which may well be more the case!
The noble Viscount could have gone a little further. The three constituencies in the Highlands area have a total electorate of 165,000, which makes an average of 55,000, which is just above the Scottish quota. As I sat here listening to the Minister, I counted 26 urban constituencies which have fewer than 55,000 electors. That is the point to which I should like to draw the Committee's attention. There can be no justification for such a distribution.

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I think that I have made my point. I believe that I heard the Minister express reasonable sympathy for the general proposition that the Boundary Commission should take such factors into account. I do not think that constituencies in large rural areas, such as Inverness East, Nairn and Lochaber or Carrick, Cumnock and Doon Valley should have electorates so far above the Scottish average. Their electorates are 12,500 above the Scottish average. I have always thought that that is indefensible when at the same time the constituencies to which I have referred and many others, such as the two Paisleys, are the size of postage stamps in comparison and have much smaller electorates.
However, I have made my point and the Minister has been sympathetic on the question of the Western Isles and moderately understanding on the general point of the need for the Boundary Commission to take such numerical factors into account, along with the geography. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
Lord Rowallan Lord Rowallan moved Amendment No. 10:
Page 57, line 9, at end insert (", as they were defined on the day this Act was passed; and any alteration to the number or definition of those constituencies made under the Parliamentary Constituencies Act 1986 for the purposes of the election of members of the House of Commons shall not alter the number or definition of those constituencies for the purposes of this Act.").
The noble Lord said: Our interesting conversation about Orkney and Shetland reminds me that my great-uncle was Jo Grimond, once leader of the party to my right. It is interesting that, apart from my amendment, all the other amendments in this group come from those Benches. I shall speak only to Amendment No. 10 and shall do so quickly.
In this amendment I am seeking to ensure that we do not take away what we gave to the Scottish people in the referendum. It is terribly important that the Scottish people perceive that what we gave to them will be allowed to continue. What concerns me with regard to the West Lothian question—this may have been answered in part a little earlier by the noble Lord, Lord Ewing—is that if the number of Members of Parliament is reduced—I am referring to Members of the mother Parliament here at Westminster—it may be argued that the number of MSPs should be reduced.
After very careful consideration the Government have decided in this Bill to have 129 MSPs. It would be totally wrong to change that in the first few years of the parliament. If the Scottish parliament decides to change that number that is a different story. However, it is wrong that because the number of MPs is reduced so the number of MSPs also reduces. I appreciate this means that there will be two different constituency boundaries: one for the MPs who come to Westminster and one for those who go to Edinburgh. That may cause voters confusion, but it is very important to avoid any unseemly fight for seats in the Scottish parliament at the second election if the number of seats is reduced. The Scottish parliament must be seen to work in the eyes of the public.
What we have given we must not take away. If we are to reduce the number of MPs it must be done very quickly so that it is not seen to be taking place once the process is moving. Please leave alone the number of MSPs. I beg to move.
9.30 p.m.
Lord Steel of Aikwood: As the noble Lord, Lord Rowallan, has said, all the other amendments in this group are tabled in my name and the names of my noble friends on these Benches. I regard this as the most serious debate to be held today on the amendments. Both the Minister of State and the noble Baroness, Lady Ramsay, paid proper tribute to the work of the constitutional convention. They reminded us that the proposal for which we are now legislating was based on the report of the constitutional convention. I can tell the Committee that there was no issue more thoroughly debated, argued and discussed, both formally within the convention and in the corridors outside, than the vexed question of the appropriate number of members of the new Scottish parliament.
There is every indication that the Government propose a major breach of the agreement reached in the constitutional convention. I do not claim for one second that the constitutional convention has the status of holy writ, but it is a serious matter and the Government must produce cogent arguments to depart from something that has been carefully arrived at. We agreed on 129 members of the Scottish parliament: 73 from the first-past-the-post constituencies and 56 through the added member system.
I remind the Committee that at that time there was no commitment from the Labour Party to reduce the number of Scottish MPs at Westminster. On a previous occasion I confessed that that issue had been skilfully side-stepped by the convention on the basis that it was no part of its function to deal with the problems of Westminster. That was a convenient camouflage to conceal the total disagreement between our party and the Labour Party on the question. We said quite openly, as we did during the election, that one consequence of the creation of a Scottish parliament should be a reduction in the number of Scottish Members serving at Westminster. In that respect we followed the recommendations of the Royal Commission on the Constitution way back in the days of Lord Kilbrandon. On the other hand, the Labour Party refused to accept that. That was the position at the last general election.
Following the election but before publication of the White Paper the Labour Party began to see sense and agreed that part of the overall constitutional package should be a reduction in the number of Scottish Members at Westminster. So far so good. But at the initial stages of the passage of the Bill through another place no suggestion was made that there should be any future alteration in the number of members of the Scottish parliament.
I come to my second point. When the issue was debated at Committee stage of the Bill in the other place there were private discussions, which I shall not go into, and also discussions on the Floor of the House on the

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question whether, following the reduction in the number of Scottish MPs at Westminster, there should be a similar reduction as the Government had suggested in the number of first-past-the-post Scottish members of parliament, the argument of the Government being that the constituencies should remain the same so that if the number was reduced from 73 to whatever the number might be, the same number of first-past-the-post constituencies should apply in Edinburgh.
During the progress of the Bill my honourable friend, Jim Wallace, moved an amendment to make sure that the number of Scottish MPs in Holyrood would not be reduced, in accordance with what the noble Lord, Lord Rowallan, was saying. In the light of hints given by the Minister in charge of the Bill in the other place he withdrew his amendment. We were told that this issue would be revisited in this House.
We are revisiting it now. I would regard it as a breach both of the constitutional convention's proposals and a breach of the nods and winks from the Government in the other place that we should now be faced with the possibility of reducing the numbers of Scottish members in the parliament at Holyrood when the Westminster reduction takes place.
It is not for me to give advice to the Labour Party but I must say in passing that every time we read headlines in the Scottish press about Scottish Office ministers being given instructions from south of the Border, whether it be from the Prime Minister, the Labour Party national executive or whoever, we see another slide in the opinion polls. Unfortunately, there have been many headlines. Whether they are justified or not I do not know. The impression has been given to the people in Scotland that the Government have been sat upon from on high and told that the number of Scottish constituencies must be reduced in line with those for Westminster. That is a fundamental mistake.
We have tabled Amendment No. 15 and a number of consequential and paving amendments associated with it which would leave the number of constituencies for the Scottish parliament at 73 when the reduction for Westminster takes place.
The Government may argue that that would be too confusing and that there would be two sets of constituency boundaries in Scotland, one for Westminster and one for Holyrood. I understand that argument, and to meet it we have tabled an alternative amendment, Amendment No. 22, which states that if the number elected by first past the post is reduced in line with the Westminster reduction, then the number of added numbers should be accordingly increased so that the number of Scottish members in Holyrood remains constant at 129.
My first argument is that it is a breach of the constitutional convention; my second argument is that it is a breach of understandings achieved in the other place; and my third argument is that it is simply not sensible to make this reduction. The figure of 129 has been conceived as the right number of members of parliament to carry out the functions bestowed on them by the Bill. It is the right number to service all the committees that will be created. There is no magic about
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it, but the number fits in with the number of regions in the added member system and the number of constituencies that exist now. It is sensible to retain that number, all the time.
For a parliament to be elected next year and then, when it meets, for it to be told that 17 members will have to be culled before the next election, not by the electorate but by Act of Parliament, is complete nonsense. I hope that the Government will listen intently to the debate and agree that we should stick by what was in the Bill originally before any reduction was contemplated and that we should ensure that the parliament in Holyrood goes forward with its full 129 members and sticks with 129 throughout the necessary changes that will be made at Westminster.
Lord Mackay of Ardbrecknish: If it worries the Minister—and I think it should after yesterday—I am in almost total agreement with the noble Lord, Lord Steel of Aikwood. I was not party to conversations on the constitutional convention and, in any case, I do not believe them to be Holy Writ. However, I have come to learn one or two things about the Government. The manifesto is certainly Holy Writ and the White Paper is quite close to it. The White Paper made very clear at paragraph 4(5) that the distribution of seats in the House of Commons would be reviewed by the Boundary Commission and the Government would take away the requirements about minimum number of seats. They have translated that into Clause 81 which says clearly that the Boundary Commission should in the future make the Scottish quota not the 54,000 that I discussed a little while ago but the 65,000 as it is in England. Roughly that means that Members of the other place from Scotland will be reduced by 14.
I have no problem with that. It is not the complete solution to the West Lothian question, but it narrows the angle and is justified as part of this package. The problem then is that we come to Chapter 8.2 where we were promised 73 constituency members and 56 additional members. This is where I disagree with the noble Lord, Lord Steel of Aikwood. I do not believe that 129 was arrived at as the correct number for the job; I think it was arrived at by saying we start off with 73 first-past-the-post, and to achieve a reasonable proportionality using d'Hondt we probably need seven additional members for each one, so we have 73 to 56. Indeed, elsewhere in the Bill that proportion is laid down.
If the Members of the other place are reduced by 14, and the first-past-the-posts are reduced by 14 in Scotland, there will have to be a reduction of seven in the regional members to keep the ratio. Some little twirls will be needed in the mathematics to round up, but I think that we can roughly say that. Therefore 21 members, give or take a member, will have to be removed. As the noble Lord, Lord Steel of Aikwood, said, one cannot think of anything worse as a start to this new parliament: everyone who goes in looks at everyone else and asks, "Well, am I one of the 21 or am I one of the lucky 108?" It is hopeless.

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The other reason why I think it is hopeless is that it is not devolution. It may seem strange that I should start preaching this, but if one is to have devolution one should decouple the number of Members of the Westminster House of Commons from what we have in the Scottish parliament. It seems crazy. I told the Minister that his words would come back to haunt him. They are doing that already. This is a mature Parliament. It should be allowed to decide how many Members it wants to have.
It is mad to suggest that in the first term of this parliament 21 members will have to have their throats cut, so to speak—figuratively of course—not at the behest of a Scottish parliament but at the behest of the UK Parliament. If I use the words "the English Parliament", "the Westminster Parliament" or "the Whitehall English Parliament", those Members of the Committee who come from Scotland will immediately see the considerable tactical advantage the SNP will be given. I just do not understand it. Even if the polls are not right, there will be many more members of the SNP in that new parliament than many people thought there would be when they set out on this devolution track. To hand them a little piece of ammunition like this seems to me to be stark, staring bonkers.
Even before that—the noble Lord, Lord Steel of Aikwood, referred to it—there was a headline in the Scotsman:
"Blair snub for Dewar on seats at Holyrood".
I do not know what causes the Scottish polls to go the way that they are going. At this time of night, I shall not bore the Committee with my theories. But I surely know that headlines like that have a great deal to do with it. It is late and we are making short speeches, but the Minister should not take that in any way as an indication that I at least do not feel strongly about the issue. Equally, I know that the noble Lord, Lord Steel, feels strongly. As I probably will not come back on this, I hope that the Minister will take on board what we are saying. I hope that his colleagues will take on board what we are saying. I hope his colleague in Downing Street will take on board what we are saying.
If I were to give the noble Lord, Lord Steel of Aikwood, any advice from my slightly longer membership of this place than he has had, it is not to call a Division at this time of night but to let the Government think again over the Recess. They will have time before Report stage. Then he can bring this back in rather more prime time, when I suspect that if the Government do not see sense we might be able to repeat our feat of yesterday, give or take a vote or two.
9.45 p.m.
Viscount Thurso: I support the amendment. It goes to the heart of the point that I sought to make in my own amendment. The Catch-22 situation that has been created is, frankly, indefensible. To state that the answer to the West Lothian question is to reduce the number of Members from Scotland in another place, and then to state that for neatness of administration it means that the Scottish parliament which has been created to allow that
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reduction must also be reduced has no logic. As my noble friend and the noble Lord, Lord Mackay, said, it is being taken by all those to whom I have spoken in Scotland as a straightforward slap in the face.
The Minister knows my strength of feeling in seeing the Bill succeed. I earnestly beg the noble Lord to consider the matter again and to return at a later stage with an improvement.
Lord Sewel: Amendments Nos. 11, 12, 14, 15, 19, 20 and 10 seek to break the link between constituencies for the United Kingdom Parliament and constituencies for the Scottish parliament. Amendments Nos. 11, 14, 15, 19 and 20 seek to provide for a separate review of Scottish constituencies and Amendment No. 10 fixes the current UK Parliament constituencies in Scotland as the Scottish parliament constituencies. Amendment No. 12 seeks to fix the number of constituency MSPs.
I cannot accept these amendments. After thinking long and hard on these matters, the Government have concluded that the balance of advantage lies with maintaining the link between Westminster and the Scottish parliament constituencies. We gave careful consideration to the arguments advanced for breaking the link, but have concluded that the disadvantages outweigh the possible advantages.
In the White Paper, we explained that we believed that the integrity of the Union would be strengthened by having common constituencies for the Scottish parliament and the UK Parliament, with the exception of Orkney and Shetland.
If Members of the Committee will allow me, I shall read paragraph 8.7 of the White Paper on which the noble Lord, Lord Steel, and I have campaigned for a "Yes. Yes." vote at the time of the referendum. It reads as follows:
"The integrity of the UK will be strengthened by common UK and Scottish Parliament boundaries. Responsibility for Scottish Parliamentary electoral arrangements and constituencies will be reserved matters; the Parliamentary Boundary Commission for Scotland will continue in being and future changes in electoral arrangements for the Scottish Parliament will therefore be a matter for the UK Parliament subject to consultation with the Scottish Parliament. Any changes in Westminster constituencies will result in changes to Scottish Parliamentary constituencies: and may also lead to consequential adjustments to the size of the Scottish Parliament so as to maintain the present balance between constituency and additional Member seats".
That was in the White Paper. That is what we campaigned on. Having looked at the arguments again, on balance we think that that is the right proposition.
The effect of these amendments could, over time, lead to different parliamentary constituencies for the Scottish parliament and UK Parliament with overlapping boundaries leading to confusion among the electorate—a point that the noble Lord, Lord Steel, recognised. I am not sure that the electorate would appreciate why it was necessary for them to be in one constituency for Westminster but another for the Scottish parliament.
I am confident that once the Scottish parliament is established and its working practices are in place, it could operate perfectly effectively with fewer MSPs. Fewer members would still be able to carry out properly

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the scrutiny of the Scottish administration and the enactment of legislation. We should keep this debate in proportion. We should remember that the other place has only 72 Members representing Scottish constituencies to scrutinise legislation covering both reserved and devolved matters at present. It is anticipated that even after a review, the Scottish parliament would have more than 100 members. It will remain a substantial body.
Lord Mackay of Ardbrecknish: If the Scottish parliament is to end up with 108 members—although I do not suppose the noble Lord, Lord Steel, will agree with me on this—I believe that it would be better for it to start with 108 members and remain at that level rather than for it to go to 129 members and then back to 101 members.
Secondly, I suggest that the Minister is not too enthusiastic about this case because his colleagues in the Scottish parliament will read his advocacy of it and suggest that he is one of the 21.
Lord Sewel: That assumes something that I should not be prepared to assume under any circumstances.
Lord Steel of Aikwood: Before the noble Lord answers that point, perhaps he will answer the point made by the noble Lord, Lord Mackay. Is it the intention that not just the first-past-the-post constituencies should be reduced but also the additional members?
Lord Sewel: It is important to maintain the ratio. The ratio will be maintained between first-past-the-post constituency representatives and regional list representatives. So yes, there is a proportional reduction in the number of list members as well.
The reason for not having 108 members, which the noble Lord, Lord Mackay of Ardbrecknish, anticipates at this stage, is because we do not know that 108 will be the number that the Boundary Commission for Scotland will recommend when it carries out its next review. In any event, it would shatter the thing that we are building upon: namely, the identity of boundaries and the coincidence of constituencies for both the Westminster and Holyrood Parliaments.
Lord Mackie of Benshie: Will the Minister confirm that it is a point of principle that the number of directly elected members is greater than the number of members from the regions?
Lord Sewel: Yes, it is a point of principle for us that the main building block is the directly elected constituency MP.
I turn briefly to the detail of the various amendments. The amendment in the name of the noble Lord, Lord Rowallan, would fix, for all time, the current constituencies and not allow any future changes to be made. Amendment No. 12 also seeks to fix the number of Scottish parliamentary constituencies from the outset. However, I must point out to the noble Lord that it would actually have the effect of increasing the
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constituencies to 75 when one takes account of the provision for Orkney and Shetland. I assume that was unintentional.
The other Liberal Democrat amendments put an additional burden on the Boundary Commission for Scotland to carry out two reviews. That would greatly add to the burden on the commission and make it very difficult for it to administer its already complex process of constituency reviews with potential for delay.
The amendments also try to provide a role for the Scottish parliament in deciding its own electoral boundaries. That is not appropriate and is totally at odds with what was proposed in the White Paper. As Members of the Committee know, electoral arrangements for the parliament are reserved to Westminster, reflecting their importance as part of the overall devolution settlement. This includes the decisions on the parliament's constituencies.
Amendment No. 22 approaches fixing the size of the parliament from a slightly different angle. It maintains the Scottish parliamentary constituencies the same as the Westminster parliamentary constituencies. But it provides for the size of the parliament to be fixed at 129 by increasing the number of regional members to make up for any decrease in constituency members.
I recognise that that is an interesting approach, but, I am afraid, not one that the Government could support. If we made this amendment, then after the first review by the Boundary Commission, the number of regional members would exceed the number of constituency members. That is not what we intend. That is a major point of policy for us.
Chapter 8 of the White Paper made it clear that a constituency link will be the essential foundation of the new Scottish parliament. However, the White Paper also recognised that it was important to provide for greater proportionality to build stability into the system. The additional member scheme was devised to correct the imbalance between a party's share of a vote and the constituency seats won, to ensure a closer relationship between votes cast and seats won. While I understand why noble Lords may support the increased role this amendment would give to the regional members, I do not think it is appropriate that they should outnumber the constituency MSPs.
What we propose is that a reduction in directly elected members should be matched by a reduction in those elected from regional lists. This is a sensible way to preserve the overall shape of the proportional system that we have put forward. That system is the area in which our package is perhaps at its most radical and reforming. It seems odd that the Liberal Democrats, of all people, should be complaining about it.
The Government's view is that Scotland's interests will be best served by a parliament which is more effective and efficient. There is no case for having more MSPs than is necessary for the effective functioning of the parliament and the proper representation of the people. I believe that, even when the parliament does

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reduce in size, it will still be able to function effectively and efficiently. In view of my response, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Steel of Aikwood: I am acutely disappointed by the Minister's reply. Perhaps I may concentrate for a few moments on Amendment No. 22, which the noble Lord said was an interesting proposal. Indeed, it was designed to ensure that, if we are going to use the new reduced number of Westminster seats as the building block for the first-past-the-post system, there should be some compensation in the additional member lists.
If it is the entrenched position of the Government that the additional members should not exceed the first-past-the-post members, I accept that that is a perfectly legitimate point of view. In that case, we could come forward with a revised version of Amendment No. 22 at a later stage of the Bill to ensure that that objection is met.
However, the debate raises a whole new issue. Is it really sensible to embark upon the election of a parliament of 129 members with a view to reducing that number to 108 at the time of the next election? I do not mean that purely in electoral terms; we should perhaps think in hard terms of pounds, shillings and pence. We will be designing a new parliamentary building. Are we designing it for 129 or 108 members? It seems to me that the taxpayer has an interest here in getting the issue right at the beginning of the process. Although I shall not be pressing the amendments tonight, we shall certainly want to re-visit the matter at a later stage. I appeal to the Government to reconsider the matter seriously before we reach the later stages of the Bill.
Lord Desai: Before the noble Lord withdraws the amendment, perhaps I may suggest to him the following alternative. The 21 extra members whose throats will, as it were, be cut could be replaced with 21 appointed members. That way, one would preserve the majority of first-past-the-post members and have 21 people appointed by way of a contribution to art and the culture of Scotland.
Lord Steel of Aikwood: I thought that the noble Lord was going to suggest that they could form a second chamber. Indeed, that would take us back to an earlier debate. In all seriousness, the most constructive course I can take is not to press the amendments and to suggest, in a genuine and constructive spirit, that we should perhaps give further thought to the whole question of numbers before we reach the later stages of the Bill. I do not believe any of us in the Committee regards the present disposition as at all satisfactory.
Lord Rowallan: I, too, am very disappointed with the Minister's reply. I thought that we might have some movement. I am most concerned that this Government seem very intransigent in their views. They seem to be playing more and more into the hands of the more nationalistic of the Scottish people with every move they make. I agree with everything that my noble friend Lord Mackay, the noble Lord, Lord Steel, and other Members
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of the Committee have said in this most interesting debate. This is a fundamental and terribly important point.
I was very tempted initially to divide the Committee on the issue because I consider it to be most serious. However, having listened to the debate, I think that I would prefer to discuss the matter with my noble friend Lord Mackay and the noble Lord, Lord Steel, to see whether we can come forward with sensible ideas and table them jointly on Report. Nevertheless, I must still record my great concern. As I said, this is a most important issue and I believe that we could be making a great mistake.
Lord Steel of Aikwood: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 11 to 17 not moved.]
10 p.m.
The Earl of Balfour The Earl of Balfour moved Amendment No. 18:
Page 57, line 37, after ("before") insert ("both the United Kingdom Parliament and").
The noble Earl said: The Boundary Commission is an ongoing body. It revises the areas, constituencies and numbers for elections to the European Parliament and the Parliament at Westminster. From time to time it will revise the electoral areas of members of the Scottish parliament and may even revise those of candidates for county council elections in Scotland. It is with that in mind that I felt it should not just report to the Scottish parliament. Paragraph 3 to Schedule 1 states,
"This paragraph applies where the Boundary Commission for Scotland… submit a report to the Secretary of State…recommending any alteration in any parliamentary constituencies … The Commission shall lay any report recommending any alteration in parliamentary constituencies before the Parliament".
I suggest to the Committee that the report should be laid before the Parliament at Westminster and the Scottish parliament, particularly as the schedule refers to the Secretary of State whose future, once the Scottish parliament is set up, seems to be a little doubtful. I beg to move.
Lord Mackay of Drumadoon: I rise to support the amendment moved by my noble friend. Not for the first time he has spotted a small but potentially useful amendment to the Bill. I understand that my noble friend had the honour of being the first opposition Peer to have an amendment accepted to the Government of Wales Bill. I look forward to his receiving a similar honour in this Bill.
Lord Hardie: As the noble Earl has explained, this amendment would require the Boundary Commission for Scotland to lay any report recommending changes to the Scottish parliamentary constituencies before the United Kingdom Parliament as well as the Scottish parliament. I assure the noble Earl and the noble and learned Lord, Lord Mackay of Drumadoon, that this amendment is not necessary. The Secretary of State is already required to lay reports of the Boundary

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Commission for Scotland before the United Kingdom Parliament in any case where the report recommends changes together with the Secretary of State's proposals for giving effect to those changes.
However, given the potential significance of such a report for the constituencies and the electoral regions of the Scottish parliament, we thought it was appropriate that the Boundary Commission for Scotland should lay before the Scottish parliament any report it makes recommending alterations in the parliamentary constituencies, and any consequent alteration in the electoral regions. We have therefore made specific provision for that in paragraph 3 to Schedule 1. The short answer is that the Secretary of State will still be obliged to lay the report before the United Kingdom Parliament. But to ensure that the Scottish parliament, which has a clear interest in those matters, also has a copy of the report, it was necessary to have paragraph 3 to Schedule 1. With that explanation I hope that the noble Earl will feel able to withdraw his amendment.
The Earl of Mar and Kellie: Perhaps I might ask the noble and learned Lord about this matter. It strikes me that the report is to be sent to the Scottish parliament merely for its information. If, as the noble Lord, Lord Sewel, told the Committee, parliamentary constituencies will be decided by the Westminster Parliament, what is the point of letting the Scottish parliament know about the matter in advance? How is it to deal with this information when it is a reserved matter?
Lord Hardie: The position is that the Scottish parliament will be able to take into account the recommendations in the report and will be able to consider what representations it should make to the United Kingdom Parliament. There would be consultation between the Scottish parliament and the United Kingdom Parliament, although the ultimate decision as to the alteration of any boundaries in terms of the report and the recommendations of the Secretary of State would be taken by the United Kingdom Parliament in the light of representations made by the Scottish parliament.
The Earl of Balfour: I think I understand this matter now. In other words, the noble and learned Lord is saying that both the Scottish parliament and the United Kingdom Parliament will always be informed. The only matter that concerned me briefly was this. If the commission does not make any recommendation, it appears only to have to report to the Secretary of State, not the Scottish parliament. Am I correct?
Lord Hardie: That is correct—the reason being that, if there is no recommendation for any change, one would not envisage the United Kingdom Parliament taking it upon itself to change the boundaries.
The Earl of Balfour: With that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 19 to 22 not moved.]
Schedule 1 agreed to.
Clause 2 [Ordinary general elections]:
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 23:
Page 2, line 5, at end insert—
("( ) The Secretary of State shall not appoint a day for the first ordinary general election if it is a day on which a parliamentary election, European Parliamentary election or local government election is scheduled to take place.").
The noble and learned Lord said: This amendment is grouped with a number of others which address the same issue; namely, whether it should be competent for elections to the Scottish parliament to take place on the same day as a general election, elections to the European Parliament and local government elections. With the leave of the Committee, I shall speak also to Amendments Nos. 24, 25, 27, 28, 33 and 78.
The Bill proposes that the date on which the first ordinary general election for the membership of the parliament shall be held shall be appointed by order of the Secretary of State. But subsection (2) of Clause 2 provides that,
"subsequent ordinary general elections shall be held on the first Thursday in May in the fourth calendar year following that in which the previous ordinary general election was held".
Noble Lords will be aware that in Scotland local government elections take place on the first Thursday in May. It is obviously competent for a general election to take place on that date; and although, as I understand it, the next European parliamentary elections are scheduled to be in June of next year, it might also be competent for them to take place on the first Thursday in May. The amendments seek, shortly but importantly, to raise the question of whether it would be sensible for elections to the new parliamentary body, namely the Scottish parliament, to take place on the same day as one of the other elections to which I have referred.
In Scotland the proposal to hold more than one election on the same day has given rise to considerable concern, particularly among the representatives of CoSLA. As the Minister will be well aware, on 18th June this year the president of CoSLA, Councillor Keith Geddes, wrote on behalf of CoSLA and on behalf of various group leaders of CoSLA—the Labour group leader, the Liberal Democrat group leader, the SNP group leader, the Conservative group leader and the non-aligned group leader—to the Secretary of State raising CoSLA's concern. In that letter he said, referring to the issue of having the next round of local government elections on the same day as the first elections for the Scottish Parliament:
"As you know, the issue is of substantial concern within the local government community".
He sends this letter on a cross-party basis,
"underlining the extent to which there is a local government consensus about this matter which transcends the normal political divides".
He went on to say:
"We believe that the elections should not take place on the same day, for the following reasons".
First, he says that:
"There is a likelihood of considerable voter confusion. There was evidence of this at the devolution referendum in terms of the requirements to complete two ballot papers; the requirement this time to record three votes simultaneously will be without precedent in Scotland".
One could add to that that, if a Scottish parliamentary election were combined with another election—for example, a local government election—which involved some form of proportional representation, which is not impossible, in the long term confusion might arise not only from the number of votes to be cast but also if some votes were to be cast in accordance with one form of proportional representation and others were to be cast in accordance with another form.
Secondly, he makes an important point which relates primarily to the effect on local government elections. He says:
"Whilst it is highly likely that the combination of the two polls on the one day will result in a higher turnout for the local government election which we would naturally welcome, the cost of this is the likelihood that voters will be voting on national issues and not on local issues. The election of the new Parliament will inevitably take precedence in the public mind. Local government elections need to stand in their own right and have their own justification".
I suggest that that is a sentiment which would find support in all quarters of the Chamber. The third point he makes is as follows:
"There are bound to be enormous pressures on political parties in resourcing two simultaneous elections".
Fourthly, he deals with the position of independent candidates. This is a point which is relevant not only to local government elections but also to the Scottish parliamentary elections. He says:
"We also believe that the combined elections may potentially disadvantage independent candidates, who traditionally stand in rural parts of Scotland. This is because voters will be making party political choices at the Parliamentary election and there is the obvious danger of voting patterns being transferred into local government elections".
It seems to me that there is a great deal of sense in what the president of CoSLA said in his letter to the Secretary of State of 18th June. I understand from press reports that the Government are considering the matter. On that basis, I hope that we shall receive a positive response from the Minister.
I should make it clear that I am in no sense committed to the precise details of moving the elections from the first Thursday to the second Thursday of May. I am open to suggestions for alternative dates. The purpose of the amendment is to seek to establish the principle that the election to the Scottish parliament should be the only election which takes place on a particular day. I beg to move.
10.15 p.m.
Lord Mackie of Benshie: There is no question but that the noble and learned Lord has a point. Extremely complicated voting papers will be involved and it may well be that there is a degree of confusion. But we find that in countries which have adopted complex voting
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systems and PR, the electorates—who are no more intelligent than our electorate—become used to it and make a good job of it.
I do not believe that we should rule out, by inserting it in the Bill, the fact that we could have two elections on one day. That needs to be left to the Scottish parliament. It will save a great deal of money, which is always useful. The Scottish electorate is sophisticated enough to cope with that and the design of the voting papers—to which a great deal more attention needs to be paid—can play a big part.
The point should be left open and I shall be interested to hear the Minister's response. The noble and learned Lord has a point, but there is a point also in being able to hold two elections on one day in certain circumstances.
Baroness Carnegy of Lour: Before the Minister replies, perhaps I can intervene. I am sure that he is in close touch with CoSLA. I wonder whether they appreciate that, in making this request, according to what the Minister has told us already, they are ensuring that the parliament is reduced to 100 or so members, because the boundaries would have to be coterminous.
Baroness Ramsay of Cartvale: Amendments Nos. 23, 28, 33 and 78 are designed to prevent the combination of elections to the Scottish parliament with any other elections in any circumstances.
Members of the Committee will be aware that voters in Scotland face three elections next year: to the parliament, to local councils and to the European Parliament. Local elections are due in May and European elections in June. The thinking behind these amendments appears to be—it is confirmed by what was said by the noble and learned Lord, Lord Mackay of Drumadoon—that electors should have to turn out separately three times in a row in short order to vote in each of these elections. We take the view that that would not be a reasonable demand. We think that we would risk "voter fatigue" and that turnout would suffer. We think we should do what we can to avoid that because all of these elections are important. For that reason, we intend to hold the elections for the new parliament on the same date as has been set for local council elections; that is, 6th May 1999. The election date for the parliament will be formally set by an order to be made by my right honourable friend the Secretary of State under Clause 2 of the Bill.
We are aware that some in local government, in particular, argue that a combined poll will be confusing to voters. I am of course aware of the letter quoted by the noble and learned Lord, Lord Mackay of Drumadoon, and mentioned by the noble Baroness, Lady Carnegy from CoSLA to the Secretary of State. However, we do not agree with the problem raised in relation to confusion among voters. We do not believe that voters will find it difficult to distinguish between the two polls on the day and believe, as was put forward by the noble Lord, Lord Mackie of Benshie, that that argument does not do justice to the electorate. I firmly believe that voters would be much more unhappy at having to make no fewer than three visits to polling

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stations in a matter of months. I am surprised that the noble and learned Lord is not equally concerned about this.
Moreover, we are hopeful that going down the route of a combined poll will substantially increase the turnout for the local elections. We should all be seriously concerned that the turnout in local government elections falls well short of the turnout in general elections. The need to improve local election turnouts was, in our view, one significant reason in favour of combining these elections next May. We are keen to ensure that Scottish local government should enter its new relationship with the Scottish parliament with the strongest possible democratic mandate. That can best be achieved on the basis of a high electoral turnout. This is indeed an opportunity to renew democracy at both national and local level throughout Scotland. It should be welcomed and planned for on those terms and not regarded as an inconvenience.
We accept that it will be a more complex task to manage a combined poll. That goes without saying. But nothing we have heard from election professionals leads us to the view that what is proposed cannot be done. We are working closely with all those involved in the conduct of elections to ensure that we put in place sensible, workable arrangements which will deliver on the day. It is worth remembering that combined polls are not unusual in England. For example, the 1997 general election coincided with local elections and to the best of my knowledge this worked perfectly well.
These amendments seem to be an over-reaction. No one denies that a combined poll is a more complex task to run than a single election from the point of view of those managing the system. But from the point of view of voters, we firmly believe it is a far better option—indeed one bringing some real benefits—than that canvassed by the noble and learned Lord. I therefore invite him to withdraw his amendment.
I turn now to Amendments Nos. 24, 25 and 27, which I understand are drafted with the aim of avoiding the possibility that at some future point the elections for the Scottish parliament could fall on the same date as the elections for local councils, purely as a result of the operation of their two electoral cycles.
I accept that there is a possibility that local government and parliament elections could coincide in future. However, I doubt that providing that in those circumstances there should be two polls, a week apart, as these amendments appear to do, is a particularly sensible answer or one which voters would welcome. For the reasons I have already explained, we do not share the noble and learned Lord's total resistance to combined polls. We believe that there are times when these will be the most sensible way forward.
It may be worth adding that it would in any case be a mistake to legislate in this Bill on the basis of assumptions about the future shape of the local government electoral cycle. The commission chaired by Neil McIntosh is currently looking at the relationship between local government and the parliament, and part of its remit is to make recommendations about the future electoral arrangements for local government. I should
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also add that currently local government elections must take place every three years from 1999 onwards under the Local Government (Scotland) Act 1994. Unless that is varied, they would not coincide with the parliament elections in 2012. In addition, on a technical point, Clause 2(5) already provides the parliament with some limited discretion as to the timing of its own general elections.
I cannot see that simply moving by one week the usual date for Scottish parliament elections would in any way be a sensible answer to whatever concerns noble Lords may have about combined polls. I note the noble and learned Lord said that he was not completely wedded to one of these amendments. I would therefore ask him to withdraw the amendment.
Lord Steel of Aikwood: Before the noble Baroness sits down, although I do not support the amendment moved by the Conservative Party because I believe there should be flexibility in this matter—there may be occasions when it is sensible to run polls concurrently—there was one sentence in what she said that took me a little by surprise. She said that none of the professionals in the Scottish electoral process had made representations on this point, or words to that effect. I certainly read press reports that the electoral administrators had lodged a complaint with the Secretary of State about the local elections and the first parliamentary elections falling on the same day.
I make one serious suggestion to the Government which they might like to consider. There is a difference between the first election and future elections. We are introducing a new system. There will be two ballot papers. We will have discussions later on in the proceedings on the Bill about the nature of those ballot papers. At the moment we are proposing to run local elections on the same day so there will be three ballot papers. Is it not sensible to consider possibly delaying the local elections next year by one month and running them on the same day as the European Parliament elections in June in the hope that we might thereby increase both the turnout for the local elections and the European elections— both of which give us cause for concern—and leave the Scottish parliament election free-standing with its new system and two ballot papers on the same day in May? That is a constructive suggestion which I hope the Government might consider.
Baroness Ramsay of Cartvale: What I said was that nothing we have heard from election professionals leads us to the view that what is proposed cannot be done. We have had representations. I did not wish to lead the House into thinking that I was saying that we had not had discussions and problems raised with us. We do not believe that they are insurmountable.
Lord Steel of Aikwood: Does the noble Baroness agree that it is not impossible, but difficult?
Baroness Ramsay of Cartvale: We said that we do not believe that it cannot be done, but it is difficult.

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I have admitted all the way through that trying to run two elections on one day is much more complex than running one.
We have looked at the specific point of the European elections. We cannot see that the alternative of combining the European elections with the local elections would be any simpler. The next European elections will also take place under a new voting system. It is also a complex matter. We have looked at it. We do not have closed minds on anything. At the moment, we feel, as I said, that this is the best way forward and has advantages apart from the complexity of administration.
Lord Hughes of Woodside: Can my noble friend answer a question to which I should perhaps already know the answer? When she speaks about a combined election, I assume that she means an election on the same day? My limited experience of two different elections taking place on the same day is that the voter has to go to one polling station, get the ballot paper, vote, and put it in the box within the same building. Then he has to go to a different polling station and go through the process again. My only experience of that was that a number of people—I do not know how statistically significant they were—voted once and said, "Och, I have done mae duty, I'm nae going to bother voting again.". That was a local government situation. During the regional council elections there was a city council by-election in Aberdeen.
Has the possibility been examined of the voter collecting the ballot papers for both elections at the same time and putting them in the same box? The separation process at the counting of the votes would be slightly prolonged while the papers were sorted out into the different areas. The complication is that in local government elections the seats will certainly not be coterminous with the parliamentary seats. But it should not be beyond the wit of the returning officer to make sure that ballot papers are provided within each polling station. One does not just wander in and go anywhere. It is all set out where one has to vote. It is possible to have the papers for the local government elections issued in the right place so that there is no confusion in the voter's mind. This may already have been decided in which case my speech is superfluous. It is an issue that came to mind that we should look at the possibility.
Baroness Ramsay of Cartvale: We are quite open in looking at all kinds of possibilities. I note what the noble Lord said and I am sure it will be looked at. The local government elections and the Scottish parliament elections have the advantage of being both on the same franchise. The date for the European elections has been announced as 10th June.
10.30 p.m.
The Earl of Minto: I wonder whether the noble Baroness will take her mind back to the progression through this House of the Local Government etc. (Scotland) Act 1994. It was the will of CoSLA (in an amendment that I moved on its behalf) to make the term
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of office of those in local government in Scotland four years rather than three. We do not know what recommendations we shall receive from the commission. If Mr McIntosh, its chairman, were to raise that issue, perhaps the noble Baroness could refer back to the papers and to the Hansards of that time because we very nearly won that vote. It was very close indeed. There are obviously good reasons for local government periods of office being coterminous with those relating to posts in water and health and for all to have four-year periods, rather than for water and health to have four-year terms and local government to have a three-year term as at present.
I advise the noble Baroness that this matter needs consideration - and not merely in relation to the letter from the president of CoSLA, with a copy of which he kindly furnished me some weeks ago, but also with regard to the history of the 1994 Act.
Baroness Ramsay of Cartvale: I thank the noble Earl for that. His comments will certainly be noted. I believe that that letter from CoSLA was widely distributed. Many noble Lords have probably received a copy. We are considering the whole process. It will be for the McIntosh commission to consider the points which the noble Earl has raised.
Perhaps I may expand a little on my reply to the noble Lord, Lord Hughes. With regard to holding local government and parliamentary elections on the same day, it is expected that voters will attend only one polling station. Together with returning officers, we are considering whether separate ballot boxes could be used.
The Earl of Mar and Kellie: The subject of voter confusion has been raised. Does the noble Baroness agree that since the elector has only to put a single X on each ballot paper, there should not be too much confusion?
Baroness Ramsay of Cartvale: I agree.
Lord Mackay of Drumadoon: Despite the arrival of the noble Baroness at the Dispatch Box, the theme does not seem to have changed very much. One is reminded of the prayer with which the Highland Kirk session began its monthly meetings, "Almighty God, we pray that we may be right because we will never change our minds"!
In all seriousness, CoSLA's letter seems an example of consensus—a consensus debated no doubt at some length by its members. As the noble Baroness is no doubt well aware, that is not the first letter from CoSLA. There was one back in August of last year when CoSLA specifically raised the point of postponing the local government elections for one year to avoid the risk of having to have three elections, on whatever dates they might take place. This is not a matter to press to a vote at this time. No doubt whether he wishes it or not, the Minister's right honourable friend the Secretary of State will have to discuss the matter further with CoSLA. It was very much the views of the representatives of CoSLA, who are all elected representatives, that I placed before the House.

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The idea of the noble Lord, Lord Steel of Aikwood, of combining European and local government elections merits serious consideration. It might well boost the polls of both. We want to avoid any confusion whatsoever in the first ever elections to the Scottish parliament, whether of ballot papers being improperly franked or the wrong ballot paper going in the wrong box, or what have you. Although the amendment is to be withdrawn, I hope that the Government will give the matter serious consideration. I beg leave to withdraw Amendment No. 23.
Amendment, by leave, withdrawn.
[Amendments Nos. 24 and 25 not moved.]
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 26:
Page 2, line 17, leave out ("Presiding Officer") and insert ("First Minister").
The noble and learned Lord said: Amendment No. 26 is grouped with Amendments Nos. 29 and 31. The amendment raises the very short question as to why the responsibility for calling polls in certain situations rests on the presiding officer and not the first minister. It appears to us that, as the first minister will be the political head of the Scottish executive, if situations arise where, for example, the executive no longer commands the support of the parliament, a vote of no confidence having been passed against it, there is no reason why the offer of resignation which the first minister must make to Her Majesty cannot be combined with the request that a poll should take place. The amendment seeks to probe why this responsibility has been placed on the presiding officer and not the first minister.
Lord Steel of Aikwood: Although the noble and learned Lord, Lord Mackay of Drumadoon, moved the amendment briefly it is important in principle. The trouble is that the Conservative Party remains wedded to the translation of the Westminster system to Holyrood. As I read the Bill, there is no question of votes of confidence leading to the right of the leader of the government party to dissolve parliament, as happens here. On the contrary, the Bill clearly provides for a fixed-term parliament. That fixed term can be breached only by a two-thirds vote of parliament itself deciding that there be an exception to that term and that therefore there should be a dissolution. With great respect to the noble and learned Lord, I believe that he is fundamentally wrong in principle. It is right that if the parliament decides to breach that rule the person who dictates the date of the election should be whoever is in the chair of that parliament, not the head of the executive.
Baroness Ramsay of Cartvale: These amendments would give the first minister a limited role in setting the dates for elections to the parliament. The key element of the Bill as regards the timing of elections is that there will be a four-year fixed cycle, proposed in the White Paper and set out in Clause 2(2). However, we envisage that there may be circumstances, albeit rare ones, where for some reason an election on the precise timetable set
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out in that clause may not be appropriate. For that reason we have provided that there should be some limited flexibility available as regards the timing of general elections. The date may be varied by up to one month either side of the day on which the election would usually fall. This is a commonsense provision intended to cover only very exceptional circumstances. The Bill also provides in Clause 3 for extraordinary general elections where clearly the provisions for a four-yearly electoral cycle will not apply.
In both these cases we took the view it was right that it should be the presiding officer who proposed the date of the election. This is wholly in keeping with the thinking behind a fixed cycle, removing decisions on the timing of elections from the control of the executive. It ensures that the decisions are taken in a politically non-partisan manner. I confirm that that was a key element in the thinking of the Scottish Constitutional Convention when it proposed a four-year fixed cycle. Against that background, to give the first minister the ability to influence the timing of elections would be quite out of place. It would mean that we would not in practice deliver the independent arrangements for setting election dates clearly implied by the White Paper and which this Bill has been deliberately drafted to achieve.
I agree with the noble Lord, Lord Steel of Aikwood, that yet again noble Lords opposite appear to be overly-influenced in this matter by their experience at Westminster. I therefore invite the noble and learned Lord to withdraw his amendment.
Lord Mackay of Drumadoon: My Lords, having never been in the other place and only having been here for a few years, I do not consider myself to be over-influenced by anything, certainly nothing that I am prepared to admit to in public.
I take the point made by the noble Lord, Lord Steel of Aikwood, that my amendments are difficult to square with the provisions of Clause 3(1)(a) requiring a two-thirds majority, but he will be aware that that is the next issue to which I seek to turn.
It has been suggested that the presiding officer's powers under Clause 3(1) are to be exercised in a non-political or non-partisan way. When one looks at how that would come about—by either a resolution to dissolve the parliament, presumably passed in the face of opposition by the Scottish executive, or a failure to appoint a first minister—one does not need much imagination to know that there would be a lot of politics involved in such a situation.
It is clearly not a fundamental point but it was one which seemed worth airing. Having aired it, I seek leave to withdraw Amendment No. 26.
Amendment, by leave, withdrawn.
[Amendments Nos.27 and 28 not moved.]
Clause 2 agreed to.
Clause 3 [Extraordinary general elections]:
[Amendment No. 29 not moved.]
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 30:
Page 2, line 30, leave out from ("dissolved") to (", or") in line 33.
The noble and learned Lord said: The amendment seeks to delete from Clause 3(1)(a) the need for a resolution to dissolve the parliament to be passed by a majority on a division with the number of members voting in favour being not less than two-thirds of the total number of seats for members of the parliament. This is not the only occasion in the Bill where more than a simple majority is required, and I will turn to at least one of those examples in the fullness of time.
During the debates on the referendums Bill my noble friend Lord Mackay of Ardbrecknish explored various possibilities as to the form and size of majority that would be required. Time and again back came the answer, particularly from the noble Lord, Lord Sewel, that a simple majority was the only sensible way of doing it, it would command support from the general electorate.
Exactly those arguments apply in this case. If the Scottish Parliament considers a resolution to dissolve the parliament, and there is a majority vote in favour of the resolution, but the majority is not large enough to pass the test set out in Clause 3(1)(a), what will happen? Scotland will be faced with a parliament that can repeatedly pass votes of no confidence in the Scottish executive, and that can repeatedly fail to reach the necessary agreement by vote as to who the replacement first minister will be. Then some 28 days later, once the time limit set out in the Bill has run its course—that is Clause 43(3)—the presiding officer, under the terms of Clause 3(1)(b), will have no alternative but to propose a day for the holding of a poll and make such proposal to Her Majesty. It only postpones the day when an extraordinary general election is required.
I firmly believe that when a parliament votes, the majority of those voting on the day in question should carry the day. Although I argue this matter simply and shortly, I believe it is of fundamental importance. I beg to move.
10.45 p.m.
Lord Steel of Aikwood: My objection to the amendment is the same as to the one we have just discussed. The noble twins on the Front Bench have not grasped the essential difference between the nature of a Scottish parliament and the Westminster system. It was set out in the constitutional convention's proposals, in the White Paper, and is now in the Bill, that this will be a fixed-term parliament.
A fixed-term parliament is different from that at Westminster where there is a maximum-term Parliament of five years, and where the decision upon holding an election within that time is entirely at the convenience of the Prime Minister. We are all familiar with the system. Sometimes the Prime Minister chooses the date voluntarily and sometimes involuntarily when the Government have lost a vote of confidence, as happened in 1979.
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We have deliberately set our minds against such a system in the Holyrood parliament. The other Mackay twin accused me earlier of believing that everything at Holyrood would be sweetness and light. I can assure him that I am not that naive. I do not believe that it will all be sweetness and light, but I hope that it will be sweeter and lighter than what we have at Westminster. That is why the system of a fixed-term parliament is set in the Bill. It follows that it should not be at the convenience of the executive or the first minister to call an election when he wishes, or, indeed, to stage manage an election when he wishes by having a simple vote in the parliament.
Once one accepts the principle of the fixed term, it is right that the Bill should specify that only in special circumstances should that fixed term be breached. Hence the reason for the two thirds majority. If, for example, there were a vote of no confidence passed by the parliament the presiding officer's first obligation, as I understand it, is to recommend to Her Majesty someone else who will form an administration. Only if, after due course of time, that is impossible would there then be a call for a further election; in other words, the Bill deliberately sets itself against a chance election within the four-year period. That is why on principle—not as a matter of detail—we on these Benches are opposed to the amendment.
Lord Hughes of Woodside: Whatever mechanism is built in to the constitution, it is possible for it to be circumvented or used. Due to the lateness of the hour I shall not give a number of examples where I know that to have happened. If the first minister wanted to have an election on a particular day, I am certain that it would be possible by a combination of what the noble and learned Lord, Lord Mackay, described as a "lot of politics". I think that at the other end of this building we called it "the usual channels". It may be the usual channels at this end of the building as well. People met behind the Speaker's Chair and a deal was thrashed out.
The fact that a two-thirds majority is required is no guarantee that people would play the game as the constitutional convention envisaged, as the parliamentary draftsman wrote it, or as we desire that it should operate. I do not believe that this is a significant matter. The amendment would not add to or subtract from the situation, except that, if the amendment were to be carried, the possibility of manufactured instances, where the fixed-term parliament could be breached, would he a great deal easier. There is no guarantee that it cannot be done one way or another.
Lord Sewel: There are a few places in this Bill where we think that the nature of the powers to be exercised by the parliament merit the safeguard of a two-thirds majority, putting a decision beyond the realistic reach of any one party. There are three such places in the Bill. They are the removal of the auditor general at Clause 66, the removal of a judge at Clause 89 and the dissolution of the parliament. It is the last of those which the noble and learned Lord addresses in his amendment.
It may be helpful if I explain why we have included the dissolution of the parliament in this list. The Bill is specifically drafted to separate out decisions on the

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timing of elections from the control of the executive—the point made by the noble Lord, Lord Steel of Aikwood.
This is the thinking behind a cycle of four-yearly elections, the fixed term parliament, and the role given to the presiding officer in the unusual event that the precise four-year timetable does not apply.
By ensuring that a dissolution can happen only with a two-thirds majority, we are ensuring that simply by being able to command a majority of the parliament, an executive does not also gain the ability to bring forward the date of an election to its perceived benefit by forcing a dissolution. This is an important safeguard which underpins the whole approach taken to the setting of election dates in the Bill and which follows directly the proposals of the constitutional convention. Without this provision it is too easy to imagine how in certain circumstances the possibility of dissolution would become a political gambling card.
I accept the observations of my noble friend Lord Hughes of Woodside based on his experience at the other end of the building. I accept that one cannot guarantee in all circumstances that the way in which something is intended to happen will in reality happen. We can try to make it that little bit more difficult. That is what these provisions seek to do.
Another factor is worth considering. We shall have an electoral system where more often than not a single party may not have an overall majority. We know from comparative examination of similar political electoral arrangements that there is a temptation in those circumstances to have a rolling series of dissolutions. We should try to make the situation that little bit more difficult by providing this two thirds requirement. We do not seek to keep a lame duck administration almost against the will of the parliament, but to ensure that we have that degree of separation between the calling of the election and the power of the executive; and to make dissolution a little more difficult in situations where, perhaps because of the electoral system that is being used, there may be the temptation to seek dissolution too often.
In those circumstances, I hope that the noble and learned Lord will feel able to withdraw the amendment.
Lord Mackay of Drumadoon: I understand the argument that the Minister advances but I do not accept it. Equally, I note that he did not have sufficient courage to face up to the point I raised: that if one can change the constitution of a country following a referendum by a simple majority, one cannot bring a parliament to a premature halt by the same majority.
I appreciate that it is a matter on which the Government feel strongly. On these Benches, it is not one about which we wish to go to the wall. Therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 31 not moved.]
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 32:
Page 2, line 44, leave out subsections (3) and (4) and insert—
("( ) If a poll is held under this section, the day on which the next ordinary general election falls to be held (disregarding section 2(5)) shall be the second Thursday in May during the third calendar year after the calendar year in which the poll under this section has taken place.").
The noble and learned Lord said: This amendment deals with a problem which to some extent is already acknowledged by the provisions of Clause 3(3) and (4); namely the occurrence of an extraordinary general election a matter of months before the date on which the next ordinary general election would have taken place in other circumstances. Subsection (3) presently provides that if that extraordinary general election is within a period of six months of the projected date of the next ordinary general election, that next ordinary general election may not occur. But because the date of the period of six months was chosen, one could accordingly have a situation where there were two general elections within a period of seven, eight or nine months of each other. That seems to me undesirable for a variety of reasons.
Amendment No. 32 would have the effect, if I calculate it correctly, of ensuring that where an extraordinary general election took place, the next ordinary general election would be at least some 2½ years further on in time and possibly three years, four months further on in time.
It seems to me that if we are anxious to avoid repetitive general elections, the Bill could be improved by expanding on the period of six months provided in Clause 3(3). For that reason, I bring forward Amendment No. 32. I beg to move.
Lord Mackie of Benshie: The noble and learned Lord, Lord Mackay of Drumadoon, obviously has a point here. However, the solution in the Bill is much simpler and also avoids having close-to general elections. The solution of the noble and learned Lord is rather more complicated. Therefore, I should prefer to leave the matter as it stands in the Bill.
Lord Hardie: I understand that the noble and learned Lord's amendment seeks to provide that a parliament elected at an extraordinary general election will sit for a period of approximately three years. It ranges between the periods indicated by the noble and learned Lord, Lord Mackay of Drumadoon. By contrast, the Bill provides that, except in one limited circumstance, where a parliament is elected at an extraordinary general election, that does not disturb the pattern of four-yearly cycles set out in the Bill. In other words, regardless of any extraordinary general election, the next ordinary election goes ahead as though there had been no extraordinary general election.
The only exception to that is where the extraordinary general election falls less than six months before the date on which the next ordinary election would have taken place, in which case that ordinary election does

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not take place. However, even in those circumstances, the original four-year cycle still rolls on undisturbed in the future. The effect of that is that in that situation, the parliament in that case may sit for a period slightly in excess of four years.
It may be helpful if I outline why we have provided for that. The Bill as drafted severely limits the attraction to any executive of forcing an extraordinary general election. It makes sure that even if an executive succeeded in forcing such an election, the four-yearly cycle will continue regardless.
As I understand the noble and learned Lord's argument, it is that if a parliament is to be elected, then there is a case for ensuring that it sits for some substantial period and thereby avoiding two elections in quick succession. However, we do not believe that those arguments are persuasive when set against the importance of ensuring that there is as little scope or incentive as possible for the executive to influence the timing of elections.
We appreciate that there may be scope for the rare occurrence, which it is hoped would never happen, of a parliament being elected for a period in excess of six months with another election taking place thereafter. It
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is a question of balance and we have concluded that the balance lies in restricting the scope for the executive to manipulate events to its advantage. Our provision in this part of the Bill, therefore, sits with the other provisions of the Bill which seek to ensure that the date of an election is impartially set. In those circumstances and with that explanation, I invite the noble and learned Lord to withdraw the amendment.
Lord Mackay of Drumadoon: In the fullness of time we shall find out whether or not the balance struck by the Government is correct. Again, it is not a matter of earth-shattering importance and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 33 not moved.]
Clause 3 agreed to.
Lord Carter: I believe that we have certain external imperatives this evening. We are not creating a precedent. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at eleven o'clock.

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